Internal Revenue Bulletin 2021-42 (PDF rendition): IRS Revenue Rulings

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Bulletin No. 2021–42
October 18, 2021
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.
ADMINISTRATIVE
REG-100718-21, page 653.
This guidance contains proposed amendments to the reg-
ulations relating to the user fees for the special enrollment
examinations for enrolled agents and enrolled retirement
plan agents, the EA SEE and ERPA SEE, respectively. In
accordance with the guidelines in OMB Circular A-25, the
IRS has re-calculated its cost of overseeing the EA SEE and
determined that the full cost has increased to $99 per part,
plus an amount payable directly to a third-party contractor.
The IRS no longer offers new enrollment as an ERPA or the
ERPA SEE. Therefore, the proposed regulations increase the
amount of the user fee for the EA SEE from $81 to $99 per
part and remove the user fee for the ERPA SEE.
Rev. Proc. 2021-44, page 469.
This procedure publishes the amounts of unused housing
credit carryovers allocated to qualified states under section
42(h)(3)(D) of the Code for calendar year 2021.
EXCISE TAX
REG-107707-21, page 657.
This document sets forth proposed regulations regarding
certain requirements regarding implementation of the protec-
tions against balance billing provided under the No Surprises
Act. The text of the temporary regulations issued jointly with
the Department of Health and Human Services, the Depart-
ment of Labor, and the Office of Personnel Management
serves as the text of these proposed regulations.
T.D. 9955, page 471.
This document, issued jointly with the Department of Health
and Human Services, the Department of Labor, and the Office
of Personnel Management, provides for a federal indepen-
dent dispute resolution process to permit group health plans
and nonparticipating providers, facilities, and providers of air
ambulance services to determine the out-of-network rate for
items and services that are emergency services, nonemer-
gency services furnished by nonparticipating providers at
participating facilities, and air ambulance services furnished
by nonparticipating providers of air ambulance services,
under certain circumstances. Additionally, the temporary
regulations expand the scope of claims eligible for external
review to include adverse benefit determinations related to
compliance with the surprise billing and cost-sharing protec-
tions under the No Surprises Act.
INCOME TAX
Rev. Proc. 2021-32, page 465.
This revenue procedure updates and supersedes Rev. Proc.
2020-15. One country, Chile, is added to the list of coun-
tries with which the United States has in force an information
exchange agreement, such that bank deposit interest paid
to residents of such countries must be reported by payors
to the extent required under Treas. Reg. §§1.6049-8(a) and
1.6049-4(b)(5). Two countries, the Dominican Republic and
Singapore, are added to the list of countries with which Trea-
sury and the IRS have determined it is appropriate to have an
automatic exchange relationship with respect to such bank
deposit interest.
Rev. Rul. 2021-19, page 470.
Fringe benefits aircraft valuation formula. For purposes of
section 1.61-21(g) of the Income Tax Regulations, relating to
the rule for valuing non-commercial flights on employer-pro-
vided aircraft, the Standard Industry Fare Level (SIFL) cents-
per-mile rates and terminal charges in effect for the second
half of 2021 are set forth.
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
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing offi-
cial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of inter-
nal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rul-
ings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
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.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
October 18, 2021 Bulletin No. 2021–42

Part I
26 CFR 601.601: Rules and regulations
(Also Part 1, §§ 6049; 1.6049-4, 1.6049-8)
Implementation of
Nonresident Alien Deposit
Interest Regulations
Rev. Proc. 2021-32
SECTION 1. PURPOSE
This revenue procedure provides a list
of the jurisdictions with which the United
States has in effect a relevant information
exchange agreement such that the report-
ing requirement of §§ 1.6049-4(b)(5) and
1.6049-8(a) of the Income Tax Regula-
tions may apply with respect to certain
deposit interest paid to residents of such
jurisdictions.
This revenue procedure also provides
a list of the jurisdictions with which the
Department of the Treasury (Treasury
Department) and the Internal Revenue
Service (IRS) have determined that it is
appropriate to have an automatic exchange
relationship with respect to the informa-
tion collected under §§ 1.6049-4(b)(5)
and 1.6049-8(a).
These lists are updated and restated
versions of those set forth in Rev. Proc.
2020-15, 2020-23 I.R.B. 905. Chile has
been added in Section 3 of this revenue
procedure to the list of jurisdictions with
which the United States has in effect a
relevant information exchange agree-
ment. The Dominican Republic and
Singapore have been added in Section
4 of this revenue procedure to the list
of jurisdictions with which the Treasury
Department and the IRS have determined
that it is appropriate to have an automatic
exchange relationship.
SECTION 2. BACKGROUND
Sections 1.6049-4(b)(5) and 1.6049-
8(a), as revised by TD 9584, 2012-20
I.R.B. 900, require the reporting of certain
deposit interest paid to nonresident alien
individuals on or after January 1, 2013.
Section 1.6049-4(b)(5) provides that in
the case of interest aggregating $10 or
more paid to a nonresident alien individ-
ual (as defined in section 7701(b)(1)(B))
that is reportable under § 1.6049-8(a), the
payor is required to make an information
return on Form 1042-S, Foreign Person’s
U.S. Source Income Subject to Withhold-
ing, for the calendar year in which the
interest is paid.
Interest that is reportable under
§ 1.6049-8(a) is interest described in sec-
tion 871(i)(2)(A) that relates to a deposit
maintained at an office within the United
States. The regulations also provide that
such deposit interest is reportable only
if paid to a resident of a jurisdiction that
is identified as a jurisdiction with which
the United States has in effect an income
tax or other convention or bilateral agree-
ment relating to the exchange of tax infor-
mation within the meaning of section
6103(k)(4), under which the competent
authority is the Secretary of the Trea-
sury or the Secretary’s delegate and the
United States agrees to provide, as well
as receive, information. Finally, the reg-
ulations provide that jurisdictions are so
identified in an applicable revenue proce-
dure (see § 601.601(d)(2)) as of December
31 before the calendar year in which the
interest is paid. The preamble to the reg-
ulations (at 2012-20 I.R.B. 901-02) notes
that the IRS will not exchange information
with another jurisdiction, even if an infor-
mation exchange agreement is in effect, if
there are concerns about confidentiality,
safeguarding of data exchanged, the use
of the information, or other factors that
would make the exchange of information
inappropriate.
Rev. Proc. 2012-24, 2012-20 I.R.B. 913,
was published contemporaneously with
the publication of TD 9584 to provide a
list of those jurisdictions with which the
United States has in effect an information
exchange agreement, such that interest paid
to residents of such jurisdictions must be
reported by payors to the extent required
under §§ 1.6049-4(b)(5) and 1.6049-8(a),
and to provide a separate list identifying
those jurisdictions with which the auto-
matic exchange of the information col-
lected under the regulations has been deter-
mined by the Treasury Department and the
IRS to be appropriate. Before issuance of
this Rev. Proc. 2021-32, the most current
versions of those lists were set forth in Rev.
Proc. 2020-15.
SECTION 3. JURISDICTIONS OF
RESIDENCE WITH RESPECT TO
WHICH THE DEPOSIT INTEREST
REPORTING REQUIREMENT
APPLIES
The following are the jurisdictions
with which the United States has in effect
an income tax or other convention or bilat-
eral agreement relating to the exchange
of tax information within the meaning of
section 6103(k)(4) pursuant to which the
United States agrees to provide, as well as
receive, information and under which the
competent authority is the Secretary of the
Treasury or the Secretary’s delegate:
Jurisdiction Rev. Proc. First Identifying Jurisdiction
Antigua & Barbuda2012-24
Argentina2018-36
Aruba2012-24
Australia2012-24
Austria2012-24
Azerbaijan2012-24
Bangladesh2012-24
Bulletin No. 2021–42 465 October 18, 2021

Jurisdiction Rev. Proc. First Identifying Jurisdiction
Barbados2012-24
Belgium2012-24
Bermuda2012-24
Brazil2014-64
British Virgin Islands2012-24
Bulgaria2012-24
Canada2012-24
Cayman Islands2014-64
Chile 2021-32
China2012-24
Colombia2014-64
Costa Rica2012-24
Croatia2014-64
Curaçao2014-64
Cyprus2012-24
Czech Republic2012-24
Denmark2012-24
Dominica2012-24
Dominican Republic2012-24
Egypt2012-24
Estonia2012-24
Faroe Islands2017-46
Finland2012-24
France2012-24
Georgia2019-23
Germany2012-24
Gibraltar2012-24
Greece2012-24
Greenland2017-46
Grenada2012-24
Guernsey2012-24
Guyana2012-24
Honduras2012-24
Hong Kong2014-64
Hungary2012-24
Iceland2012-24
India2012-24
Indonesia2012-24
Ireland2012-24
Isle of Man2012-24
Israel2012-24
Italy2012-24
Jamaica2012-24
Japan2012-24
October 18, 2021 466 Bulletin No. 2021–42

Bulletin No. 2021–42 467 October 18, 2021
Jurisdiction Rev. Proc. First Identifying Jurisdiction
Jersey2012-24
Kazakhstan2012-24
Korea, Republic of2012-24
Latvia2012-24
Liechtenstein2012-24
Lithuania2012-24
Luxembourg2012-24
Malta2012-24
Marshall Islands2012-24
Mauritius2014-64
Mexico2012-64
Moldova2018-36
Monaco2012-24
Morocco2012-24
Netherlands2012-24
Netherlands special municipalities: Bonaire, Sint
Eustatius, and Saba
2012-24
New Zealand2012-24
Norway2012-24
Pakistan2012-24
Panama2012-24
Peru2012-24
Philippines2012-24
Poland2012-24
Portugal2012-24
Romania2012-24
Russian Federation2012-24
Saint Lucia2016-56
Singapore2020-15
Sint Maarten 2014-64
Slovak Republic2012-24
Slovenia2012-24
South Africa2012-24
Spain2012-24
Sri Lanka2012-24
Sweden2012-24
Switzerland2012-24
Thailand2012-24
Trinidad and Tobago2012-24
Tunisia2012-24
Turkey2012-24
Ukraine2012-24
United Kingdom2012-24
Venezuela2012-24

October 18, 2021 468 Bulletin No. 2021–42
SECTION 4. JURISDICTIONS WITH WHICH THE TREASURY DEPARTMENT AND THE IRS HAVE DETERMINED
THAT AUTOMATIC EXCHANGE OF DEPOSIT INTEREST INFORMATION IS APPROPRIATE
The following list identifies the jurisdictions with which the automatic exchange of the information collected under §§ 1.6049-4(b)
(5) and 1.6049-8 has been determined by the Treasury Department and the IRS to be appropriate:
JurisdictionRev. Proc. First Memorializing Determination
on Automatic Exchange with Jurisdiction
Australia2014-64
Azerbaijan2016-18
Belgium2017-31
Brazil2015-50
Canada2012-24
Colombia2017-31
Croatia2017-46
Curaçao2019-23
Cyprus 2019-23
Czech Republic2015-50
Denmark 2014-64
Dominican Republic2021-32
Estonia2015-50
Finland2014-64
France2014-64
Germany 2014-64
Gibraltar2015-50
Greece2018-36
Guernsey 2014-64
Hungary2015-50
Iceland2015-50
India2015-50
Ireland2014-64
Isle of Man2014-64
Israel2016-56
Italy2014-64
Jamaica2016-18
Jersey 2014-64
Korea, Republic of2016-56
Latvia2015-50
Liechtenstein2015-50
Lithuania2015-50
Luxembourg2015-50
Malta2014-64
Mauritius2014-64
Mexico2014-64
Netherlands2014-64
New Zealand2015-50
Norway2014-64
Panama2017-46

Bulletin No. 2021–42 469 October 18, 2021
JurisdictionRev. Proc. First Memorializing Determination
on Automatic Exchange with Jurisdiction
Poland2015-50
Portugal2017-31
Saint Lucia2016-56
Singapore2021-32
Slovak Republic2016-18
Slovenia2015-50
South Africa2015-50
Spain2014-64
Sweden2015-50
United Kingdom2014-64
SECTION 5. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2020-15 is superseded.
SECTION 6. EFFECTIVE DATES
For purposes of the reporting
requirement of § 1.6049-4(b)(5), the
list of jurisdictions in Section 3 of this
revenue procedure is effective: (i) with
respect to Chile, for interest paid on
or after January 1, 2022; and (ii) with
respect to each other listed jurisdiction,
for interest paid on or after January 1
of the calendar year following the issu-
ance of the revenue procedure (as cited
in Section 3) first identifying the juris-
diction as having in effect an agreement
with the United States as described in
§ 1.6049-8(a).
The list of jurisdictions in Section 4 of
this revenue procedure is effective from
the date of issuance of this revenue proce-
dure with respect to information reported
to the IRS pursuant to §§ 1.6049-4(b)(5)
and 1.6049-8(a) for any tax year for which
the jurisdiction was included in the list in
Section 3. The revenue procedure cita-
tions in the Section 4 list are included for
historical reference.
SECTION 7. DRAFTING
INFORMATION
The principal authors of this revenue
procedure are Jackie B. Manasterli and
Michelle R. Phillips of the Office of Asso-
ciate Chief Counsel (International). For
further information regarding this revenue
procedure, contact Ms. Manasterli or Ms.
Phillips at (202) 317-6941 (not a toll-free
number).

Rev. Proc. 2021-44
SECTION 1. PURPOSE
This revenue procedure publishes the
amounts of unused housing credit carry-
overs allocated to qualified states under
§ 42(h)(3)(D) of the Internal Revenue
Code for calendar year 2021.
SECTION 2. BACKGROUND
Rev. Proc. 2019-45, 2019-48 I.R.B.
524, provides guidance to state housing
credit agencies of qualified states on the
procedure for requesting an allocation of
unused housing credit carryovers under
§ 42(h)(3)(D). The amount of unused
housing credit carryovers allocated to
qualified states for a calendar year from
a national pool of unused credit authority
(the National Pool) is published by the
Internal Revenue Service in the Internal
Revenue Bulletin. This revenue proce-
dure publishes these amounts for calen-
dar year 2021.
SECTION 3. PROCEDURE
The unused housing credit carryover
amount allocated from the National Pool
by the Secretary to each qualified state for
calendar year 2021 is as follows:
Qualified StateAmount Allocated
Alabama169,738
Arkansas104,519
California1,357,757
Connecticut122,677
Delaware34,034
Florida749,555
Georgia369,375
Idaho63,008
Indiana232,970
Kentucky154,415
Maryland208,857
Massachusetts237,751
Michigan343,734
Minnesota195,115
Nebraska66,824
New Jersey306,342
New Mexico72,644
New York666,902
Oklahoma137,292
Pennsylvania440,879
Rhode Island36,459
South Dakota30,789
Texas1,012,617
Utah112,084
Vermont21,498
Virginia296,278
Washington265,343
West Virginia61,555
Wisconsin201,161

October 18, 2021 470 Bulletin No. 2021–42
EFFECTIVE DATE
This revenue procedure is effective
for allocations of housing credit dollar
amounts attributable to the National Pool
component of a qualified state’s housing
credit ceiling for calendar year 2021.
DRAFTING INFORMATION
The principal author of this revenue
procedure is YoungNa Lee of the Office
of Associate Chief Counsel (Passthroughs
and Special Industries). For further infor-
mation regarding this revenue procedure,
contact Ms. Lee at (202) 317-4137 (not a
toll-free number).
Section 42 — Low-Income
Housing Credit.
26 CFR 1.42-14. Allocation rules for post-1989
State housing credit ceiling amounts.
Guidance is provided to state housing credit
agencies of qualified states that request an alloca-
tion of unused housing credit carryover under sec-
tion 42(h)(3)(D) of the Internal Revenue Code. See
Rev. Proc. 2021-44
Rev. Rul. 2021-19
For purposes of the taxation of fringe
benefits under section 61 of the Internal
Revenue Code, section 1.61-21(g) of the
Income Tax Regulations provides a rule
for valuing noncommercial flights on
employer-provided aircraft. Section 1.61-
21(g)(5) provides an aircraft valuation
formula to determine the value of such
flights. The value of a flight is determined
under the base aircraft valuation formula
(also known as the Standard Industry Fare
Level formula or SIFL) by multiplying
the SIFL cents-per-mile rates applicable
for the period during which the flight was
taken by the appropriate aircraft multiple
provided in section 1.61-21(g)(7) and then
adding the applicable terminal charge. The
SIFL cents-per-mile rates in the formula
and the terminal charge are calculated by
the Department of Transportation (DOT)
and are reviewed semi-annually.
According to DOT, due to the effect
of the COVID-19 pandemic, airline
industry capacity (as measured by air-
line seat miles) was reduced faster than
airline industry expenses were reduced.
Generally, the SIFL rate is the result of
airline industry expenses divided by air-
line seat miles. Because airline seat miles
were reduced faster than airline industry
expenses, the SIFL rate for the 6-month
Tax Period Effective 1/1/2021 increased
substantially.
Furthermore, in March 2020, the Coro-
navirus Aid, Relief, and Economic Secu-
rity Act was enacted, directing the Trea-
sury Department to allot up to $25 billion
for domestic carriers to cover payroll
expenses via grants and promissory notes,
known as the Payroll Support Program
(PSP). The PSP grants and PSP promis-
sory notes offset airline industry expenses.
Accordingly, DOT provided two alterna-
tives to incorporate differing levels of the
PSP into the SIFL rate calculations to both
account for the PSP in the rate calcula-
tions and to mitigate the pandemic impact
on the SIFL rate. One calculation adjusts
the SIFL rates to account for PSP grants
only while the other calculation adjusts
the SIFL rates to account for both the PSP
grants and PSP promissory notes.
This revenue ruling contains these
three SIFL rates: (1) the Unadjusted SIFL
Rate, (2) the SIFL Rate Adjusted for PSP
Grants, and (3) the SIFL Rate Adjusted
for PSP Grants and Promissory Notes.
Taxpayers may use any of the three rates
when determining the value on noncom-
mercial flights of employer-provided air-
craft under section 1.61-21(g).
The following charts set forth the ter-
minal charges and SIFL mileage rates:
Unadjusted SIFL Rate
Period During Which Terminal SIFL Mileage
the Flight Is Taken Charge Rates
7/1/21 - 12/31/21 $81.43 Up to 500 miles
= $.4455 per mile

501-1500 miles
= $.3396 per mile
Over 1500 miles
= $.3265 per mile
SIFL Rate Adjusted for PSP Grants
7/1/21 - 12/31/21 $43.54 Up to 500 miles
= $.2382 per mile

501-1500 miles
= $.1816 per mile
Over 1500 miles
= $.1746 per mile

Bulletin No. 2021–42 471 October 18, 2021
SIFL Rate Adjusted for PSP Grants and Promissory Notes
7/1/21 - 12/31/21 $30.69 Up to 500 miles
= $.1679 per mile
501-1500 miles
= $.1280 per mile
Over 1500 miles
= $.1231 per mile
DRAFTING INFORMATION
The principal author of this revenue rul-
ing is Kathleen Edmondson of the Office
of Associate Chief Counsel (Employee
Benefits, Exempt Organizations and
Employment Taxes). For further informa-
tion regarding this revenue ruling, contact
Ms. Edmondson at (202) 317-6798 (not a
toll-free number).
26 CFR 54.9816-8T: Independent dispute resolution
process (temp); 26 CFR 54.9817-2T: Independent
dispute resolution process for air ambulance ser-
vices (temp)
T.D. 9955
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Part 54
Requirements Related to
Surprise Billing; Part II
AGENCY: Office of Personnel Manage-
ment; Internal Revenue Service, Depart-
ment of the Treasury; Employee Benefits
Security Administration, Department of
Labor; Centers for Medicare & Medic-
aid Services, Department of Health and
Human Services.
ACTION: Interim final rules with request
for comments.
SUMMARY: This document sets forth
interim final rules implementing cer-
tain provisions of the No Surprises Act,
which was enacted as part of the Con-
solidated Appropriations Act, 2021.
These interim final rules implement pro-
visions of the No Surprises Act that pro-
vide for a Federal independent dispute
resolution (IDR) (Federal IDR) process
to permit group health plans and health
insurance issuers offering group or indi-
vidual health insurance coverage and
nonparticipating providers, facilities,
and providers of air ambulance services
to determine the out-of-network rate for
items and services that are emergency
services, nonemergency services fur-
nished by nonparticipating providers at
participating facilities, and air ambu-
lance services furnished by nonpartic-
ipating providers of air ambulance ser-
vices, under certain circumstances. The
Department of Health and Human Ser-
vices (HHS), the Department of Labor
(DOL), and the Department of the Trea-
sury (collectively, the Departments) are
issuing these interim final rules with
largely parallel provisions that apply
to group health plans and health insur-
ance issuers offering group or individual
health insurance coverage and certified
IDR entities, providers, facilities, and
providers of air ambulance services. In
addition to the interim final rules issued
jointly by the Departments, this doc-
ument also includes interim final rules
issued by the Office of Personnel Man-
agement (OPM) to clarify how certain
No Surprises Act provisions apply to
health benefits plans offered by carri-
ers under the Federal Employees Health
Benefits (FEHB) Act. In addition to the
interim final rules issued jointly by the
Departments and OPM, this document
includes interim final rules issued by
HHS that address good faith estimates
of health care items and services for
uninsured or self-pay individuals and
the associated patient-provider dis-
pute resolution process. The HHS-only
interim final rules apply to selected dis-
pute resolution (SDR) entities, provid-
ers, facilities, and providers of air ambu-
lance services.
DATES: Effective date: These regulations
are effective on [INSERT THE DATE
OF PUBLICATION IN THE FEDERAL
REGISTER].
Applicability date: Except as otherwise
specified in this paragraph, the regula-
tions issued jointly by the Departments of
HHS, Labor, and the Treasury are gen-
erally applicable for plan or policy years
beginning on or after January 1, 2022. The
regulations regarding certification of IDR
entities at 26 CFR 54.9816-8T(a) and (e),
29 CFR 2590.716-8(a) and (e), and 45 CFR
149.510(a) and (e) are applicable begin-
ning on [INSERT THE DATE OF PUB-
LICATION IN THE FEDERAL REG-
ISTER]. The OPM-only regulations that
apply to health benefits plans are applica-
ble to contract years beginning on or after
January 1, 2022. The regulations issued by
HHS alone that apply to health care provid-
ers, facilities, providers of air ambulance
services, and SDR entities are applicable
beginning on January 1, 2022, except that
the regulations at 45 CFR 149.620(a) and
(d) are applicable beginning on [INSERT
THE DATE OF PUBLICATION IN THE
FEDERAL REGISTER].
Comment date: To be assured consider-
ation, comments must be received at one
of the addresses provided below, no later
than 5 p.m. on [INSERT DATE 60 DAYS
AFTER DATE OF PUBLICATION IN
FEDERAL REGISTER].
ADDRESSES: Written comments may
be submitted to the addresses specified
below. Any comment that is submitted
will be shared among the Departments.
Please do not submit duplicates.
Comments will be made available to
the public. Warning: Do not include any
personally identifiable information (such
as name, address, or other contact infor-

October 18, 2021 472 Bulletin No. 2021–42
mation) or confidential business infor-
mation that you do not want publicly
disclosed. Comments are posted on the
internet exactly as received and can be
retrieved by most internet search engines.
No deletions, modifications, or redactions
will be made to the comments received,
as they are public records. Comments may
be submitted anonymously.
In commenting, refer to file code RIN
1210-AB00. Because of staff and resource
limitations, we cannot accept comments
by facsimile (FAX) transmission.
Comments, including mass comment
submissions, must be submitted in one
of the following two ways (please choose
only one of the ways listed):
1. Electronically. You may submit
electronic comments on this regulation to
https://www.regulations.gov. Follow the
“Submit a comment” instructions.
2. By mail. You may mail written com-
ments to the following address ONLY:
Office of Health Plan Standards and
Compliance Assistance, Employee
Benefits Security Administration, U.S.
Department of Labor, 200 Constitution
Avenue NW, Room N-5653,
Washington, DC 20210,
Attention: RIN 1210-AB00.
You may mail written comments
regarding the HHS-only regulations
to the following address: Centers
for Medicare & Medicaid Services,
Department of Health and Human Ser-
vices, Attention CMS-9908-IFC, P.O.
Box 8010, Baltimore, MD 21244-8010.
Attention: RIN 0938-AU62.
Please allow sufficient time for mailed
comments to be received before the close
of the comment period.
For information on viewing public com-
ments, see the beginning of the SUPPLE-
MENTARY INFORMATION section.
FOR FURTHER INFORMATION
CONTACT: Padma Babubhai Shah,
Office of Personnel Management, at 202-
606-4056; Kari DiCecco, Internal Reve-
nue Service, Department of the Treasury,
at 202-317-5500; Elizabeth Schumacher
or David Sydlik, Employee Benefits Secu-
rity Administration, Department of Labor,
at 202-693-8335; Deborah Bryant, Cen-
ters for Medicare & Medicaid Services,
Department of Health and Human Ser-
vices, at 301-492-4293.
Customer Service Information: Infor-
mation from OPM on health benefits plans
offered under the FEHB Program can be
found on the OPM website (www.opm.
gov/healthcare-insurance/healthcare/).
Individuals interested in obtaining infor-
mation from the DOL concerning employ-
ment-based health coverage laws may call
the Employee Benefits Security Adminis-
tration (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 HHS on
private health insurance coverage, cover-
age provided by non-Federal governmen-
tal group health plans, and requirements
that apply to health care providers, health
care facilities, and providers of air ambu-
lance services can be found on the Centers
for Medicare & Medicaid Services (CMS)
website (www.cms.gov/cciio), and infor-
mation on health care reform can be found
at www.HealthCare.gov.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: Com-
ments received before the close of the
comment period are available for viewing
by the public, including any personally
identifiable or confidential business infor-
mation that is included in a comment. We
post comments received before the close
of the comment period on the following
website as soon as possible after they
have been received: https://regulations.
gov. Follow the search instructions on that
website to view public comments.
I. Background
A. Preventing Surprise Medical Bills
under the Consolidated Appropriations
Act, 2021
On December 27, 2020, the Consoli-
dated Appropriations Act, 2021 (CAA),
which includes the No Surprises Act, was
enacted.
1
The No Surprises Act provides
Federal protections against surprise bill-
ing and limits out-of-network cost shar-
ing under many of the circumstances in
which surprise bills arise most frequently.
Surprise billing occurs when an individ-
ual receives an unexpected medical bill
from a health care provider or facility
after receiving medical services from a
provider or facility that, usually unknown
to the participant, beneficiary, or enrollee,
is a nonparticipating provider or facility
with respect to the individual’s coverage.
The No Surprises Act added new provi-
sions applicable to group health plans and
health insurance issuers offering group or
individual health insurance coverage in
Subchapter B of chapter 100 of the Inter-
nal Revenue Code (Code), Part 7 of the
Employee Retirement 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 Code section 9816, ERISA sec-
tion 716, and PHS Act section 2799A-1,
2

which contain limitations on cost sharing
and requirements regarding the timing of
initial payments for emergency services
furnished by nonparticipating providers
and emergency facilities, and for none-
mergency services furnished by nonpar-
ticipating providers at certain participat-
ing health care facilities. Section 103 of
the No Surprises Act amended Code sec-
tion 9816, ERISA section 716, and PHS
Act section 2799A-1 to establish a Federal
IDR process that allows plans and issuers
and nonparticipating providers and facil-
ities to resolve disputes regarding out-
of-network rates. Section 105 of the No
Surprises Act created Code section 9817,
ERISA section 717, and PHS Act sec-
tion 2799A-2, which contain limitations
on cost sharing and requirements for the
timing of initial payments for nonpartici-
pating providers of air ambulance services
and allow plans and issuers and providers
of air ambulance services to access the
Federal IDR process described in Code
section 9816, ERISA section 716, and
PHS Act section 2799A-1. The No Sur-
1
Pub. L. 116-260 (December 27, 2020).
2
As discussed later in this preamble, 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 FEHB Program contract must require a carrier to comply with requirements described in section 9816 of the Code, section 716 of ERISA,
and section 2799A-1 (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.

Bulletin No. 2021–42 473 October 18, 2021
prises Act provisions that apply to health
care providers and facilities and providers
of air ambulance services, such as prohi-
bitions on balance billing for certain items
and services and requirements related to
disclosures about balance billing protec-
tions, were added to title XXVII of the
PHS Act in a new part E.
On July 13, 2021, the Departments
of the Treasury, Labor, and Health and
Human Services (Departments) and the
Office of Personnel Management (OPM)
published interim final rules with request
for comments titled, Requirements
Related to Surprise Billing; Part I, which
generally apply to group health plans and
health insurance issuers offering group
or individual health insurance coverage
(including grandfathered health plans)
with respect to plan years (in the indi-
vidual market, policy years) beginning
on or after January 1, 2022; to carriers in
the FEHB Program with respect to con-
tract years beginning on or after January
1, 2022; and to health care providers and
facilities, and providers of air ambulance
services beginning on January 1, 2022
(July 2021 interim final rules).
3
The July
2021 interim final rules implement Code
sections 9816(a)-(b) and 9817(a), ERISA
sections 716(a)-(b) and 717(a), and PHS
Act sections 2799A-1(a)-(b), 2799A-2(a),
2799A-7, 2799B-1, 2799B-2, 2799B-3,
and 2799B-5 to protect consumers from
surprise medical bills for emergency ser-
vices, nonemergency services furnished
by nonparticipating providers at partici-
pating facilities in certain circumstances,
and air ambulance services furnished by
nonparticipating providers of air ambu-
lance services. Among other require-
ments, the July 2021 interim final rules
require plans and issuers that provide or
cover any benefits with respect to services
in an emergency department of a hospital
or with respect to emergency services in
an independent freestanding emergency
department to cover emergency services
without any prior authorization; without
regard to whether the health care pro-
vider furnishing the emergency services
is a participating provider or the services
are provided in a participating emergency
facility; and without regard to any other
term or condition of the plan or coverage
other than the exclusion or coordination
of benefits or a permitted affiliation or
waiting period. With respect to emergency
services furnished by nonparticipating
providers or facilities, nonemergency ser-
vices furnished by nonparticipating pro-
viders at certain participating facilities,
and air ambulance services furnished by
nonparticipating providers of air ambu-
lance services, the July 2021 interim final
rules generally limit cost sharing for out-
of-network services to in-network levels,
require such cost sharing to count toward
any in-network deductibles and out-of-
pocket maximums, and prohibit balance
billing.
The July 2021 interim final rules
also specify that consumer cost-sharing
amounts for emergency services fur-
nished by nonparticipating providers or
facilities, and for nonemergency services
furnished by nonparticipating providers
at certain participating facilities, must be
calculated based on one of the following
amounts: (1) an amount determined by
an applicable All-Payer Model Agree-
ment under Social Security Act section
1115A; (2) if there is no such applicable
All-Payer Model Agreement, an amount
determined by a specified state law; or (3)
if there is no such applicable All-Payer
Model Agreement or specified state law,
the lesser of the billed charge or the plan’s
or issuer’s median contracted rate, the lat-
ter referred to as the qualifying payment
amount (QPA). Cost-sharing amounts for
air ambulance services provided by non-
participating providers of air ambulance
services must meet the same standards as
would apply if the services were provided
by a participating provider of air ambu-
lance services and must be calculated
using the lesser of the billed charges or the
QPA.
Under the July 2021 interim final rules,
balance billing for services subject to the
requirements in those interim final rules
generally is prohibited.
4
In general, the
protections in the July 2021 interim final
rules that limit cost sharing and prohibit
balance billing do not apply to certain
post-stabilization services, or to certain
nonemergency services performed by
nonparticipating providers at participat-
ing health care facilities, if the provider
makes certain disclosures to the partici-
pant, beneficiary, or enrollee, and obtains
the individual’s consent to waive balance
billing protections. However, this excep-
tion to the prohibition on balance billing
is narrow. In particular, it is not available
in certain circumstances where surprise
bills are likely to occur, such as for ancil-
lary services provided by nonparticipating
providers in connection with nonemer-
gency care in a participating health care
facility. The July 2021 interim final rules
also include a number of other specific
requirements regarding notice and consent
that must be met in order for a provider
or facility to be permitted to balance bill
a participant, beneficiary, or enrollee for
items and services that would otherwise
be subject to the prohibition on balance
billing.
The Departments are issuing regula-
tions in several phases implementing pro-
visions of title I (No Surprises Act) and
title II (Transparency) of Division BB of
the CAA. These interim final rules build
upon the protections in the July 2021
interim final rules and implement the Fed-
eral IDR provisions under Code sections
9816(c) and 9817(b), ERISA sections
716(c) and 717(b), and PHS Act sections
2799A-1(c) and 2799A-2(b). OPM is also
issuing regulations in phases to implement
5 U.S.C. section 8902(p).
The Departments and OPM also pub-
lished a notice of proposed rulemaking on
September 16, 2021, titled Requirements
Related to Air Ambulance Services, Agent
and Broker Disclosures, and Provider
Enforcement.
5
The proposed rule would,
if finalized, implement reporting require-
ments for air ambulance claims data;
requirements on health insurance issu-
ers offering individual health insurance
coverage or short term, limited-duration
insurance to disclose and report infor-
mation regarding direct or indirect com-
pensation provided to agents and brokers
(section 202(c) of title II of Division
BB of the CAA); as well as provisions
3
86 FR 36872 (July 13, 2021).
4
45 CFR 149.410(a), 149.420(a) and 149.440(a).
5
86 FR 51730 (Sept. 16, 2021).

October 18, 2021 474 Bulletin No. 2021–42
related to HHS enforcement of require-
ments on issuers, non-Federal govern-
mental group health plans, providers,
facilities, and providers of air ambulance
services. Later this year, the Departments
intend to undertake rulemaking to imple-
ment reporting requirements related to
pharmacy benefits and prescription drug
costs (section 204 of title II of Division
BB of the CAA).
The provisions of the No Surprises Act
that are applicable to group health plans
and health insurance issuers offering
group or individual health insurance cov-
erage in the Code, ERISA, and the PHS
Act apply to grandfathered health plans.
Section 1251 of the Affordable Care Act
provides that grandfathered health plans
are not subject to certain provisions of the
Code, ERISA, and the PHS Act, as added
by the Affordable Care Act, for as long as
they maintain their status as grandfathered
health plans.
6
For example, grandfathered
health plans are neither subject to the
requirement to cover certain preventive
services without cost sharing under PHS
Act section 2713 nor to the annual limita-
tion on cost sharing set forth under PHS
Act section 2707(b). If a plan or coverage
were to relinquish its grandfathered sta-
tus, it would be required to comply with
both provisions, in addition to several
other requirements. However, the CAA
does not include an exception for grand-
fathered health plans that is comparable to
section 1251 of the Affordable Care Act.
Furthermore, section 102(d)(2) of the No
Surprises Act amended section 1251(a)
of the Affordable Care Act to clarify that
the new and recodified patient protec-
tions provisions of the No Surprises Act,
including those related to choice of health
care professional, apply to grandfathered
health plans. Therefore, not only do the
provisions of these interim final rules and
the provisions of the July 2021 interim
final rules that apply to group health plans
and issuers of group or individual health
insurance coverage apply to grandfathered
plans, so do the other provisions applica-
ble to group health plans and issuers of
group or individual health insurance cov-
erage in titles I and II of Division BB of
the CAA.
B. PHS Act Section 2719 and Scope of
Claims Eligible for External Review
PHS Act section 2719, as added by
the Affordable Care Act, applies to group
health plans that are not grandfathered
health plans and health insurance issu-
ers offering non-grandfathered coverage
in the group and individual markets, and
sets forth standards for plans and issu-
ers regarding both internal claims and
appeals and external review. With respect
to external review, PHS Act section 2719
provides for both state external review
processes and a Federal external review
process that applies in the absence of an
applicable state process that meets the
requirements of section 2719. Non-grand-
fathered group health plans that are not
self-insured plans (as self-insured plans
are not subject to state insurance regula-
tions) and health insurance issuers offer-
ing non-grandfathered group or indi-
vidual health insurance coverage must
comply with an applicable state external
review process if that process includes,
at a minimum, the consumer protections
set forth in the Uniform Health Carrier
External Review Model Act issued by the
National Association of Insurance Com-
missioners (the NAIC Uniform Model
Act). If a state’s external review process
does not meet the minimum consumer
protection standards set forth in the
NAIC Uniform Model Act (or if a plan
is self-insured and not subject to state
insurance regulation), group health plans
and health insurance issuers in the group
and individual markets in that state are
required to implement an effective exter-
nal review process that meets minimum
standards established by the Departments
through rulemaking.
The Departments issued interim final
regulations to implement PHS Act section
2719, including the provisions related to
external review, in 2010.
7
An amendment
to the interim final rules was issued in
2011.
8
In 2015, the Departments issued
final rules to finalize the interim final reg-
ulations.
9
Among other things, the 2015
final rules address the scope of claims eli-
gible for external review.
10
State external
review processes that meet the minimum
standards must provide for the external
review of adverse benefit determinations
that are based on requirements for medi-
cal necessity, appropriateness, health care
setting, level of care, or effectiveness of
a covered benefit. The Federal external
review process must be available for any
adverse benefit determination by a plan or
issuer that involves medical judgment, as
well as rescissions. Section 110 of the No
Surprises Act directs the Departments, in
applying section 2719(b) of the PHS Act,
to require the external review process to
apply with respect to any adverse deter-
mination by a plan or issuer under Code
section 9816 or 9817, ERISA section 716
or 717, or PHS Act section 2799A-1 or
2799A-2.
C. Protecting Uninsured Individuals
Through Transparency and Patient-
Provider Dispute Resolution
On July 9, 2021, President Biden
signed Executive Order 14036, Promot-
ing Competition in the American Econ-
omy in order to promote the interests of
American workers, businesses, and con-
sumers.
11
The executive order acknowl-
edges that robust competition is critical to
providing consumers with more choices,
better service, and lower prices and
directs the Secretary of HHS to support
existing price transparency initiatives for
hospitals, other providers, and insurers
along with any new price transparency
initiatives or changes made necessary by
the No Surprises Act or any other statues.
6
For a list of the market reform provisions applicable to grandfathered health plans under title XXVII of the PHS Act that the Affordable Care Act added or amended and that were incorporated
into ERISA and the Code, visit https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/grandfathered-health-plans-provi-
sions-summary-chart.pdf.
7
75 FR 43329 (July 23, 2010).
8
76 FR 37207 (June 10, 2011).
9
80 FR 72191 (Nov. 18, 2015).
10
26 CFR 54.9815-2719(d)(1); 29 CFR 2590.715-2719(d)(1); 45 CFR 147.136(d)(1).
11
86 FR 36987 (Jul 9, 2021).

Bulletin No. 2021–42 475 October 18, 2021
Consistent with Executive Order 14036,
these interim final rules implement pro-
visions of the No Surprises Act that will
provide individuals with more pricing
information prior to seeking care, allow-
ing them to shop for the care that is best
for them and increase competition in the
health care market.
The No Surprises Act also adds a
new Part E of title XXVII of the PHS
Act establishing requirements applica-
ble to health care providers, providers of
air ambulance services, and health care
facilities. Section 112 of the No Surprises
Act adds PHS Act sections 2799B-6 and
2799B-7. PHS Act section 2799B-6
requires providers and facilities to fur-
nish a good faith estimate of expected
charges upon request or upon scheduling
an item or service. Providers and facilities
are required to inquire if an individual is
enrolled in a group health plan, group
or individual health insurance cover-
age, an FEHB plan,
12
or a Federal health
care program, and, if enrolled in a group
health plan, or group or individual health
insurance coverage, or a health benefits
plan under chapter 89 of title 5,
13
whether
the individual is seeking to have a claim
for such item or service submitted to such
plan or coverage. In the case that the
individual is enrolled in such a plan or
coverage (and is seeking to have a claim
for such an item or services submitted to
such plan or coverage), PHS Act section
2799B-6(2)(A) requires that the provider
or facility furnish the good faith estimate
to the individual’s plan or issuer of such
coverage to inform the advanced expla-
nation of benefits that plans and issuers
are required to provide a participant,
beneficiary, enrollee, or FEHB covered
individual under Code section 9816(f),
ERISA section 716(f), PHS Act section
2799A-1(f), and 5 U.S.C. 8902(p). In
the case that the individual requesting a
good faith estimate for an item or service
or seeking to schedule an item or service
to be furnished who is not enrolled in a
plan or coverage, or is not seeking to file
a claim with such plan or coverage (self-
pay), PHS Act section 2799B-6(2)(B)
and these interim final rules at 45 CFR
149.610 require providers and facilities
to furnish the good faith estimate to the
individual.
These interim final rules do not
include requirements regarding PHS Act
section 2799B-6(2)(A), which require
providers and facilities to furnish good
faith estimates to plans or issuers. Under
Code section 9816(f), ERISA section
716(f), and PHS Act section 2799A-1(f)
and 5 U.S.C. 8902(p), plans and issuers
are required to include the good faith
estimates in an advanced explanation of
benefits provided to participants, bene-
ficiaries, enrollees, and FEHB covered
individuals. As stated in the August 20,
2021, FAQs issued by the Departments,
the Departments have received feedback
from the public about the challenges of
developing the technical infrastructure
necessary for providers and facilities
to transmit to plans and issuers starting
January 1, 2022, the good faith estimates
required under PHS Act section 2799B-
6, which plans and issuers must then
include in the advanced explanation of
benefits. Accordingly, until rulemaking
to fully implement this requirement to
provide such a good faith estimate to an
individual’s plan or coverage is adopted
and applicable, HHS will defer enforce-
ment of the requirement that providers
and facilities provide good faith estimate
information for individuals enrolled in a
health plan or coverage and seeking to
submit a claim for scheduled items or
services to their plan or coverage. Addi-
tionally, stakeholders have requested that
the Departments delay the applicability
date of Code section 9816(f), ERISA
section 716(f), and PHS Act section
2799A-1(f) until the Departments have
established standards for the data trans-
fer between providers and facilities and
plans and issuers and have given enough
time for plans and issuers and provid-
ers and facilities to build the infrastruc-
ture necessary to support the transfers.
The Departments agree that compliance
with this section is likely not possible by
January 1, 2022, and therefore intend to
undertake notice and comment rulemak-
ing in the future to implement this provi-
sion, including establishing appropriate
data transfer standards. Until such time,
the Departments will defer enforcement
of the requirement that plans and issuers
must provide an advanced explanation
of benefits. HHS will consider whether
additional interim solutions for insured
consumers are feasible. The Depart-
ments note that any rulemaking to fully
implement Code section 9816(f), ERISA
section 716(f), and PHS Act sections
2799A-1(f) and 2799B-6(2)(A) will
include a prospective applicability date
that provides plans, issuers, providers,
and facilities with a reasonable amount
of time to comply with new require-
ments. HHS encourages states that are
primary enforcers of these requirements
with regard to providers and issuers to
take a similar enforcement approach, and
will not determine that a state is failing to
substantially enforce these requirements
if it takes such an approach.
Nonetheless, providers and facilities
will be subject to enforcement action for
failure to provide a good faith estimate to
individuals not enrolled in a plan or cov-
erage, or not seeking to have a claim for
such item or services submitted to such
plan or issuer of such coverage, as spec-
ified under these interim final rules. HHS
seeks comment on this approach.
On November 12, 2020, the Depart-
ments issued the Transparency in Cov-
erage final rules,
14
which require group
health plans and health insurance issu-
ers of group or individual health insur-
ance coverage to make price comparison
information available to participants,
beneficiaries, and enrollees through an
internet-based self-service tool and in
12
HHS interprets the requirements described in PHS Act section 2799B-6 to apply with respect to FEHB covered individuals as they would to other individuals enrolled in a group health
plan, group or individual health insurance coverage offered by a health insurance issuer. Although PHS Act section 2799B-6 does not reference health benefits plans under chapter 89 of title
5, the definition of “uninsured individual” at PHS Act section 2799B-7 does include individuals who do not have benefits under these health benefits plans, and these sections work together
to provide protections for the uninsured (or self-pay) population. Moreover, the requirement for the provision of an advance explanation of benefits required by Code section 9816(f), ERISA
section 716(f), and PHS Act section 2799A-(1)(f) , as well as 5 U.S.C. 8902(p) cannot be accomplished by a FEHB carrier unless it receives a good faith estimate from a provider in accordance
with PHS Act section 2799B-6(2)(A).
13
A health benefits plan offered under chapter 89 of title 5, United States Code is also known as an FEHB plan.
14
26 CFR 54.9815-2715A2(b), 29 CFR 2590.715-2715A2(b), and 45 CFR 147.211(b).

October 18, 2021 476 Bulletin No. 2021–42
paper form, upon request. This informa-
tion must be available for plan years—
or in the individual market, for policy
years—beginning on or after January 1,
2023 with respect to 500 specified items
and services, and with respect to all
covered items and services, for plan or
policy years beginning on or after Janu-
ary 1, 2024. The Departments are of the
view that the disclosure requirements to
participants, beneficiaries, and enrollees
under the Transparency in Coverage final
rules, and those required under Code
section 9816(f), ERISA section 716(f),
and PHS Act section 2799A-1(f), are
substantially similar and therefore the
Departments seek comment on whether
there are ways to leverage the Transpar-
ency in Coverage requirements, includ-
ing whether there are ways for plans
and issuers to provide the information
required in the Transparency in Cover-
age final rules to participants, beneficia-
ries, and enrollees during plan or policy
years beginning in 2022. The Depart-
ments also seek comment on whether
it would be feasible for providers and
facilities to provide an estimate or range
of estimated costs for insured consumers
upon request for 2022.
Section 112 of the No Surprises Act
also adds PHS Act section 2799B-7,
which directs the Secretary of HHS to
establish a process under which uninsured
(or self-pay) individuals can avail them-
selves of a patient-provider dispute reso-
lution process if their billed charges after
receiving an item or service are substan-
tially in excess of the expected charges
listed in the good faith estimate furnished
by the provider or facility, pursuant to
PHS Act section 2799B-6. Under PHS
Act section 2799B-7, an uninsured (or
self-pay) individual means, with respect
to an item or service, an individual who
does not have benefits for such item or
service under a group health plan, group
or individual health insurance coverage
offered by a health insurance issuer, Fed-
eral health care program (as defined in
section 1128B(f) of the Social Security
Act), or a health benefits plan under chap-
ter 89 of title 5, United States Code (or an
individual who has benefits for such item
or service under a group health plan or
individual or group health insurance cov-
erage offered by a health insurance issuer,
but does not seek to have a claim for such
item or service submitted to such plan or
coverage).
II. Executive Summary
A. Departments of the Treasury, Labor,
and HHS: Federal IDR Process and
External Review
In order to implement the Federal
IDR provisions under Code sections
9816(c) and 9817(b), ERISA sections
716(c) and 717(b), and PHS Act sec-
tions 2799A-1(c) and 2799A-2(b), as
added by sections 103 and 105 of the No
Surprises Act, these interim final rules
establish a Federal IDR process that
nonparticipating providers or facilities,
nonparticipating providers of air ambu-
lance services, and group health plans
and health insurance issuers in the group
and individual market may use following
the end of an unsuccessful open negoti-
ation period to determine the out-of-
network rate for certain services. More
specifically, the Federal IDR provisions
may be used to determine the out-of-
network rate for certain emergency ser-
vices, nonemergency items and services
furnished by nonparticipating providers
at participating health care 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.
Under Code sections 9816(c)(1)(A)
and 9817(b)(1)(A), ERISA sections 716(c)
(1)(A) and 717(b)(1)(A), PHS Act sec-
tions 2799A-1(c)(1)(A) and 2799A-2(b)
(1)(A), and these interim final rules, upon
receiving an initial payment or notice of
denial of payment from a plan or issuer
with respect to such items or services,
such provider or facility or provider of
air ambulance services (as applicable) or
plan or issuer (as applicable) may initiate
an open negotiation period within 30 busi-
ness days beginning on the date the pro-
vider or facility receives the initial pay-
ment or notice of denial of payment. The
open negotiation period may continue for
up to 30 business days beginning on the
date that either party first initiates the open
negotiation period. The parties may dis-
continue the negotiation if they agree on
an out-of-network rate before the last day
of the 30-business-day open negotiation
period. If the parties cannot agree on an
out-of-network rate, they must exhaust the
30-business-day open negotiation period
before initiating the Federal IDR process.
Either party may initiate the Federal IDR
process during the 4-business-day period
beginning on the 31st business day after
the start of the open negotiation period.
The parties may select a certified IDR
entity, or if the parties do not select a cer-
tified IDR entity, the Departments will
do so. The No Surprises Act and these
interim final rules specify that the certified
IDR entity selected cannot be a party to
the determination or an employee or agent
of such a party, or have a material familial,
financial, or professional relationship with
such party.
In resolving the disputes through the
Federal IDR process, the No Surprises
Act and these interim final rules provide
that each party must submit to the cer-
tified IDR entity an offer for a payment
amount for the qualified IDR item or
service in dispute and other information
related to the offer as requested by the
certified IDR entity within 10 business
days of selection of the certified IDR
entity and may submit additional infor-
mation for the certified IDR entity to con-
sider. In making a determination of which
payment offer to select, these interim
final rules specify that the certified IDR
entity must begin with the presumption
that the QPA is the appropriate out-of-
network rate for the qualified IDR item
or service under consideration. These
interim final rules further provide that
the certified IDR entity must select the
offer closest to the QPA unless the cer-
tified IDR entity determines that credible
information submitted by either party
clearly demonstrates that the QPA is
materially different from the appropriate
out-of-network rate, based on the addi-
tional factors set forth in Code sections
9816(c)(5)(C)(ii) and 9817(b)(5)(C)(ii),
ERISA sections 716(c)(5)(C)(ii) and
717(b)(5)(C)(ii), and PHS Act sections
2799A-1(c)(5)(C)(ii) and 2799A-2(b)(5)
(C)(ii). The certified IDR entity may not
consider usual and customary charges,
the amount that would have been billed
(including billed charges that are directed
to the plan or issuer) if the protections of

Bulletin No. 2021–42 477 October 18, 2021
45 CFR 149.410, 149.420, or 149.440
15

(as applicable) had not applied, or any
public payor payment or reimbursement
rates.
16
As discussed more fully in section
III.D.4.ii. of this preamble, this approach
is consistent with the No Surprises Act’s
emphasis on the QPA, both as the basis
of the surprise billing protections also
included in the statute and implemented
by the July 2021 interim final rules and
as the sole factor identified without any
qualification by the statute.
17
The Depart-
ments are of the view that implementing
the Federal IDR process in this manner
encourages predictable outcomes, which
will reduce the use of the Federal IDR
process over time and the associated
administrative fees born by the parties,
while providing equitable and clear stan-
dards for when payment amounts may
deviate from the QPA, as appropriate.
The No Surprises Act and these interim
final rules also set forth requirements for
certification of IDR entities by the Depart-
ments. To become certified IDR entities,
IDR entities must provide written docu-
mentation demonstrating that they meet
the eligibility criteria, including having
sufficient expertise and staffing to con-
duct determinations on a timely basis,
being free of conflicts of interest, being
accredited by a nationally recognized and
relevant accrediting body (such as URAC)
or otherwise ensuring that IDR entity
personnel possess the requisite training
to conduct payment determinations (for
example, providing documentation that
personnel employed by the IDR entity
have completed arbitration training by the
American Arbitration Association (AAA),
the American Health Law Association
(AHLA), or a similar organization), ensur-
ing policies and procedures are in place to
maintain confidentiality of individually
identifiable health information, providing
a fixed fee for single determinations and
a separate fee for batched determinations,
having a procedure in place to retain cer-
tified IDR entity fees and retain and remit
administrative fees, meeting appropriate
indicators of fiscal integrity and stability,
evidencing its ability to collect and trans-
mit the information required to be reported
to the Departments, and properly carrying
out the requirements of the Federal IDR
process in accordance with the law. These
interim final rules also establish a process
whereby members of the public, provid-
ers, facilities, providers of air ambulance
services, plans, or issuers may petition for
the denial or revocation of certification of
an IDR entity. Finally, these interim final
rules require the collection of information
related to the Federal IDR process from
certified IDR entities in order to allow the
Departments to quarterly publish informa-
tion on IDR payment determinations.
The Departments are also establishing
a Federal IDR portal to administer the
Federal IDR process. The Departments’
Federal IDR portal will be available at
https://www.nsa-idr.cms.gov and will be
used throughout the Federal IDR process
to maximize efficiency and reduce burden.
As discussed throughout this preamble, the
Federal IDR portal may be used to satisfy
various requirements under these interim
final rules, including provision of notices,
Federal IDR initiation, submission of an
application to be a certified IDR entity, as
well as satisfying reporting requirements.
These interim final rules also amend
final regulations issued by the Depart-
ments in 2015 related to external review
in order to implement section 110 of the
No Surprises Act. Section 110 requires
that “[i]n applying the provisions of sec-
tion 2719(b) of the [PHS Act] to group
health plans and health insurance issuers
offering group or individual health insur-
ance coverage, the Secretary of [HHS],
Secretary of Labor, and Secretary of the
Treasury, shall require, beginning not later
than January 1, 2022, the external review
process described in paragraph (1) of
such section to apply with respect to any
adverse determination by such a plan or
issuer under Code section 9816 or 9817,
ERISA section 716 or 717, or PHS Act
section 2799A-1 or 2799A-2, including
with respect to whether an item or service
that is the subject to such a determination
is an item or service to which such respec-
tive section applies.” Accordingly, these
interim final rules amend the final regu-
lations regarding external review in two
ways. First, the scope of adverse benefit
determinations eligible for external review
is amended to ensure that issues related to
compliance with the specified provisions
of the No Surprises Act fall within that
scope. Several examples are also added
to provide greater clarity to stakeholders
regarding the expanded scope. Second,
applicability provisions are amended to
require that grandfathered health plans,
which generally are exempt from require-
ments related to external review, must
nonetheless provide for external review of
adverse benefit determinations for claims
subject to the cost-sharing and surprise
billing protections in the No Surprises
Act. The Departments seek comment on
all aspects of these interim final rules.
B. Office of Personnel Management:
Federal IDR Process for FEHB Carriers
The OPM interim final rules amend
existing 5 CFR 890.114(a) to include ref-
erences to the Treasury, DOL, and HHS
interim final rules to clarify that pursuant
to 5 U.S.C. 8902(p), FEHB carriers are
also subject to the Federal IDR process
set forth in those regulations with respect
to an item or service eligible for determi-
nation through open negotiation or the
Federal IDR process furnished by a FEHB
carrier offering a health benefits plan in
the same manner as those provisions apply
to a group health plan or health insurance
15
The July 2021 interim final rules prohibit nonparticipating emergency facilities and nonparticipating providers furnishing emergency services from billing participants, beneficiaries, or
enrollees for payment amounts that exceed the cost-sharing requirement for those items or services. The July 2021 interim final rules also generally prohibit nonparticipating providers fur-
nishing nonemergency items and services at participating facilities from balance billing participants, beneficiaries, or enrollees for those items or services. In addition, the July 2021 interim
final rules prohibit nonparticipating providers of air ambulance services furnishing air ambulance services for which benefits are available under a group health plan or group or individual
health insurance coverage from balance billing participants, beneficiaries, or enrollees for those items or services.
16
Public payor payment and reimbursement rates include reimbursement rates under the Medicare program under title XVIII of the Social Security Act, under the Medicaid program under
title XIX of such Act, under the Children’s Health Insurance Program under title XXI of such Act, under the TRICARE program under chapter 55 of title 10, United States Code, and under
chapter 17 of title 38, United States Code.
17
The No Surprises Act limits the certified IDR entity’s consideration of additional factors by prohibiting the certified IDR entity from considering certain other factors, such as usual and
customary charges and billed charges, in making a payment determination.

October 18, 2021 478 Bulletin No. 2021–42
issuer offering group or individual health
insurance coverage, subject to 5 U.S.C.
8902(m)(1) and the provisions of the
FEHB carrier’s contract. Through new 5
CFR 890.114(d), OPM adopts the Depart-
ments’ interim final rules as conformed by
terms unique to the FEHB Program. In 5
CFR 890.114(d), OPM adopts the Depart-
ments’ rules as necessary to properly inte-
grate with existing FEHB Program struc-
ture and sets forth circumstances in which
OPM will enforce these rules as applied
to FEHB carriers. The OPM interim final
rules require FEHB carrier notice to the
OPM Director (herein, the Director) of
an FEHB carrier’s notice of initiation, or
receipt of a provider’s notice of initiation,
of the Federal IDR process. The Director
will coordinate with the Departments in
matters regarding FEHB carriers requir-
ing resolution under the Federal IDR
process and with respect to oversight of
certified IDR entities’ reports regarding
FEHB carriers. As discussed in the July
2021 interim final rules, all out-of-net-
work rate determinations regarding IDR
items or services eligible for determina-
tion through open negotiation or the Fed-
eral IDR process under the No Surprises
Act with respect to FEHB plans or carriers
that are not resolved by open negotiation
are subject to the Federal IDR process
unless OPM contracts with FEHB carriers
include terms that adopt state law as gov-
erning for this purpose.
C. Department of HHS: Protections for
the Uninsured
To ensure that uninsured (or self-pay)
individuals are also afforded protections
against surprise health care costs, the No
Surprises Act includes provisions that
require providers and facilities to furnish
good faith estimates to uninsured (or self-
pay) individuals upon their request and at
the time of scheduling the item or service.
In order to implement these provisions
under PHS Act sections 2799B-6(1) and
2799B-6(2)(B), HHS is adding 45 CFR
149.610 to establish requirements for pro-
viders and facilities to specifically inquire
about an individual’s health coverage
status and requirements for providing a
good faith estimate to uninsured (or self-
pay) individuals. These interim final rules
define uninsured (or self-pay) individuals
to include those who do not have bene-
fits for an item or service under a group
health plan, group or individual health
insurance coverage offered by a health
insurance issuer, a Federal health care
program (as defined in section 1128B(f)
of the Social Security Act), or a health
benefits plan under chapter 89 of title
5, United States Code, or an individual
who has benefits for such item or service
under a group health plan or individual or
group health insurance coverage offered
by a health insurance issuer, but who does
not seek to have a claim for such item or
service submitted to such plan or cover-
age.

PHS Act section 2799B-6, added by
section 112 of the No Surprises Act, does
not specifically define a Federal health
care program and also does not reference
health benefits plans under chapter 89 of
title 5. However, PHS Act section 2799B-
7, which was also added by section 112
of the No Surprises Act, and which pro-
vides protections related to the good faith
estimate required under PHS Act section
2799B-6, defines an uninsured individual
to include individuals not enrolled in a
Federal health care program (as defined
in section 1128B(f) of the Social Secu-
rity Act) and individuals not enrolled in
health benefits plans under chapter 89
of title 5. To align these two related sec-
tions, HHS is adopting the definition of
an uninsured (or self-pay) individual at
PHS Act section 2799B-7 for the pur-
poses of the interim final rules at 45 CFR
149.610 which implements PHS Act sec-
tion 2799B-6(1) and 2799B-6(2)(B) and
45 CFR 149.620 which implements PHS
Act section 2799B-7.
The definition of uninsured (or self-
pay) individuals in these interim final
rules includes individuals enrolled in indi-
vidual or group health insurance cover-
age offered by a health insurance issuer,
or a health benefits plan under chapter 89
of title 5, but not seeking to have a claim
for such item or service submitted to such
plan or coverage. These individuals are
often referred to as self-pay individuals,
therefore these interim final rules include
the term self-pay when discussing unin-
sured individuals.
Under PHS Act section 2791(b)(5),
short-term, limited-duration insurance is
excluded from the definition of individual
health insurance coverage. Therefore, for
purposes of 45 CFR 149.610 and 45 CFR
149.620, uninsured (or self-pay) individu-
als include individuals who are enrolled in
short-term, limited-duration insurance and
not also enrolled in a group health plan,
group or individual health insurance cov-
erage offered by a health insurance issuer,
Federal health care program (as defined
in section 1128B(f) of the Social Security
Act), or a health benefits plan under chap-
ter 89 of title 5, United States Code. Thus,
providers and facilities will be required to
provide to such individuals a good faith
estimate and such individuals will be able
to avail themselves of the patient-provider
dispute resolution process, where applica-
ble.
PHS Act section 2799B-6(2) and these
interim final rules specify that a provider
or facility must provide a notification (in
clear and understandable language) of
the good faith estimate of the expected
charges for furnishing the items or ser-
vices listed on the good faith estimate
(including any items or services that
are reasonably expected to be provided
in conjunction with such scheduled or
requested items or services and such items
or services reasonably expected to be so
provided by another health care provider
or health care facility), with the expected
billing and diagnostic codes for any such
items or services.
As discussed in section I.C. of this
preamble, requirements to implement
PHS Act section 2799B-6(2)(A) are not
included in these interim final rules given
the challenges of developing the technical
infrastructure necessary to transmit such
data from providers and facilities to plans
and issuers. The requirements in these
interim final rules apply only to good
faith estimate notifications for uninsured
(or self-pay) individuals as described in
PHS Act section 2799B-6(2)(B) and in
these interim final rules. HHS acknowl-
edges that PHS Act section 2799B-6 also
requires providers and facilities to make
certain disclosures to an individual’s plan
or coverage if the individual is enrolled
in such a plan or coverage and is seeking
to have a claim for such items or services
submitted to such plan or coverage. Spe-
cifically, section 2799B-6(2)(A) requires a

Bulletin No. 2021–42 479 October 18, 2021
provider or facility to provide such a plan
or issuer notification of the good faith esti-
mate of expected charges for furnishing an
item or service on the same terms as pro-
vided to individuals.
Health care providers and health care
facilities are required under PHS Act
section 2799B-6 to furnish a notification
of the good faith estimate of expected
charges to an uninsured (or self-pay)
individual who schedules an item or ser-
vice, and to an individual who has not
yet scheduled an item or service, but
requests a good faith estimate. PHS Act
section 2799B-6 requires providers and
facilities to furnish a good faith estimate
to an uninsured (or self-pay) individual
who schedules an item or service at least
3 business days before the date such
item or service is to be so furnished, not
later than 1 business day after the date of
such scheduling (or, in the case of such
an item or service scheduled at least 10
business days before the date such item
or service is to be so furnished (or if
requested by the uninsured (or self-pay)
individual), not later than 3 business
days after the date of such scheduling
or such request). As further discussed in
section VI of this preamble, in instances
where an uninsured (or self-pay) indi-
vidual requests a good faith estimate of
expected charges, but the item or service
has not been scheduled, these interim
final rules require that the treating pro-
vider furnish a good faith estimate to the
uninsured (or self-pay) individual, within
3 business days of such request. For
example, if an uninsured (or self-pay)
individual schedules an item or service
on Monday, January 3 to be provided on
Thursday, January 6, the provider and
facility must furnish a good faith esti-
mate no later than Tuesday, January 4. If
scheduling occurs on Monday, January 3
for items or services to be provided on
Thursday, January 13, the provider and
facility must furnish a good faith esti-
mate no later than Thursday, January 6.
If an uninsured (or self-pay) individual
requests a good faith estimate on Mon-
day, January 3 for items or services not
yet scheduled, the provider and facility
must furnish the good faith estimate no
later than Thursday, January 6.
These interim final rules include defi-
nitions relating to good faith estimates of
expected charges for uninsured (or self-
pay) individuals for scheduled items or
services and upon request. These interim
final rules also include requirements for
providers and facilities regarding the con-
tents of the good faith estimates and the
manner in which good faith estimates
must be provided.
PHS Act section 2799B-7 provides fur-
ther protections for the uninsured (or self-
pay) individual by requiring the Secretary
of HHS to establish a process (in this sec-
tion referred to as patient-provider dispute
resolution) under which an uninsured (or
self-pay) individual who received from a
provider or facility a good faith estimate
of the expected charges, and who, after
being furnished the item or service, is
billed an amount that is substantially in
excess of the expected charges in the good
faith estimate, may seek a determination
from a certified dispute resolution entity
of the amount to be paid to the provider
or facility.
HHS is adding new 45 CFR 149.620
to implement this patient-provider dispute
resolution process, including specific defi-
nitions related to the process. HHS is also
codifying provisions related to eligibility
for the patient-provider dispute resolution
process, and selection of an SDR entity.
HHS clarifies that while SDR entities
provide a similar function and must meet
similar requirements as certified IDR
entities, SDR entities are specific to the
patient-provider dispute resolution pro-
cess. These interim final rules also codify
requirements related to the determination
of payment amounts by SDR entities, fees
associated with the patient-provider dis-
pute resolution process, certification of
SDR entities, and deferral to state-estab-
lished patient-provider dispute resolution
processes that meet certain minimum Fed-
eral standards.
III. Overview of the Interim Final
Rules Regarding the Federal
Independent Dispute Resolution
Process for Plans, Issuers, Providers,
Facilities, and Providers of Air
Ambulance Services – Departments of
the Treasury, Labor, and HHS
A. Definitions
Code section 9816, ERISA section
716, and PHS Act sections 2799A-1 and
2799A-2 include defined terms that are
specific to the law’s requirements and
implementation.
18
The definitions in 26
CFR 54.9816-3T, 29 CFR 2590.716-
3, and 45 CFR 149.30 apply to these
interim final rules; these interim final
rules also define additional terms spe-
cific to the Federal IDR process. Under
these interim final rules, “batched items
and services” means multiple qualified
IDR items or services that are considered
jointly as part of one payment determina-
tion by a certified IDR entity for purposes
of the Federal IDR process. For a quali-
fied IDR item or service to be included
as a batched item or service, the quali-
fied IDR item or service must satisfy the
criteria for batching set forth in 26 CFR
54.9816-8T(c)(3), 29 CFR 2590.716-8(c)
(3), and 45 CFR 149.510(c)(3). “Certified
IDR entity” means an entity responsible
for conducting determinations under 26
CFR 54.9816-8T(c), 29 CFR 2590.716-
8(c), and 45 CFR 149.510(c) that meets
the certification criteria specified in 26
CFR 54.9816-8T(e), 29 CFR 2590.716-
8(e), and 45 CFR 149.510(e) and that has
been certified by the Departments. Sepa-
rately, “IDR entity” means an entity that
may apply or has applied for certification
to conduct determinations under 26 CFR
54.9816-8T(c), 29 CFR 2590.716-8(c),
and 45 CFR 149.510(c) and currently is
not certified by the Departments pursu-
ant to 26 CFR 54.9816-8T(e), 29 CFR
2590.716-8(e), and 45 CFR 149.510(e).
If a certified IDR entity’s certification has
expired or has been revoked as a result of
the process described in 26 CFR 54.9816-
18
To implement these interim final rules regarding the Federal IDR process under the PHS Act, HHS is amending 45 part CFR 149 by adding new Subparts F and G. Additionally, the Depart-
ments are amending 26 CFR 54.9816-1T and 54.9816-2T, 29 CFR 2590.716-1 and 2590.716-2 and 45 CFR 149.10 and 149.20 to expand the scope and applicability of this part to include
IDR entities and the Federal IDR process. HHS is also amending 45 CFR 149.10 and 149.20 to expand the scope and applicability of this part to include SDR entities, the good faith estimate
requirements, and patient-provider dispute resolution process.

October 18, 2021 480 Bulletin No. 2021–42
8T(e)(6), 29 CFR 2590.716-8(e)(6), and
45 CFR 149.510(e)(6), upon the date of
the expiration or revocation, the former-
ly-certified IDR entity will be referred to
as an IDR entity.
These interim final rules also define
certain terms related to conflict-of-inter-
est standards applicable to certified IDR
entities. Stakeholders have emphasized
the importance of ensuring a broad con-
flict-of-interest standard in order to avoid
the risk of biased IDR payment determi-
nations (or the appearance of biased IDR
payment determinations). In general, a
“conflict of interest” means, with respect
to a party to a payment determination, a
certified IDR entity, a material relation-
ship, status, or condition of the party, or
certified IDR entity that impacts the abil-
ity of a certified IDR entity to make an
unbiased and impartial payment determi-
nation. For purposes of these interim final
rules, a conflict of interest exists when a
certified IDR entity is a group health plan;
a health insurance issuer offering group
health insurance coverage, individual
health insurance coverage or short-term,
limited-duration insurance; an FEHB car-
rier; or a provider, a facility,
19
or a pro-
vider of air ambulance services. While the
statute does not specify that the IDR entity
must not be a health insurance issuer offer-
ing short-term, limited-duration insur-
ance, the Departments have determined
that such entities should not be eligible
for certification, due to their similarity to
health insurance issuers offering group
and individual health insurance coverage
and their inherent interest as issuers in
keeping reimbursement rates for provid-
ers, facilities, and providers of air ambu-
lance services low. A conflict of interest
also exists when a certified IDR entity
is an affiliate or a subsidiary of a group
health plan; a health insurance issuer
offering group health insurance coverage,
individual health insurance coverage or
short-term, limited-duration insurance; an
FEHB carrier; or provider, facility, or pro-
vider of air ambulance services. A conflict
of interest also exists when a certified IDR
entity is an affiliate or subsidiary of a pro-
fessional or trade association representing
group health plans; health insurance issu-
ers offering group health insurance cover-
age, individual health insurance coverage
or short-term, limited-duration insurance;
FEHB carriers; or providers, facilities, or
providers of air ambulance services. Addi-
tionally, a conflict of interest exists when a
certified IDR entity has, or any personnel
assigned to a determination have a mate-
rial familial, financial, or professional
relationship with a party to the payment
determination being disputed, or with any
officer, director, or management employee
of the plan, issuer or carrier offering a
health benefits plan under 5 U.S.C. 8902;
the plan administrator, plan fiduciaries, or
plan, issuer, or carrier’s employees; the
health care provider, the health care pro-
vider’s group or practice association; the
provider of air ambulance services, the
provider of air ambulance services’ group
or practice association, or the facility that
is a party to the dispute. The Departments
are of the view that an officer, director, or
management employee of the plan issuer,
or carrier offering a health benefits plan
under 5 U.S.C. 8902; the plan adminis-
trator, plan fiduciaries, or plan, issuer or
carrier employees; the health care pro-
vider, the health care provider’s group
or practice association; the provider of
air ambulance services, the provider of
air ambulance services’ group or practice
association, or the facility that is a party
to the dispute are individuals who could
have significant involvement with the dis-
pute. Relationships with these individuals
could therefore improperly affect the cer-
tified IDR entities’ ability to be impartial.
These interim final rules also define
what constitutes a material familial rela-
tionship, a material financial relationship,
or material professional relationship with
a party to the payment determination. In
developing these definitions, the Depart-
ments looked to states’ conflict-of-interest
standards for external review and arbi-
trations of surprise billing claims. These
state standards typically use terms that
are similar to those used in Code sec-
tion 9816(c)(4)(F)(i)(II), ERISA section
716(c)(4)(F)(i)(II), and PHS Act section
2799A-1(c)(4)(F)(i)(II).
20
By adopt-
ing definitions that largely mirror these
state standards, the Departments seek
to ensure that the definitions are work-
able and increase the likelihood that IDR
entities may be familiar with these stan-
dards, if they have performed services in
these states. Accordingly, these interim
final rules provide that the term “material
familial relationship” means any relation-
ship as a spouse, domestic partner, child,
parent, sibling, spouse’s or domestic part-
ner’s parent, spouse’s or domestic part-
ner’s sibling, spouse’s or domestic part-
ner’s child, child’s parent, child’s spouse
or domestic partner, or sibling’s spouse or
domestic partner. “Material financial rela-
tionship” means any financial interest of
more than five percent of total annual rev-
enue or total annual income of a certified
IDR entity or an officer, director, or man-
ager thereof, or of a reviewer or review-
ing physician employed or engaged by a
certified IDR entity to conduct or partici-
pate in any payment determination under
the Federal IDR process. Under the defi-
nition of “material financial relationship,”
annual revenue and annual income do not
include mediation fees received by medi-
ators who are also arbitrators, provided
that the mediator acts in the capacity of
a mediator and does not represent a party
in the mediation. Finally, with respect to
terms related to the conflict-of-interest
standards, “material professional rela-
tionship” means any physician-patient
relationship, any partnership or employ-
ment relationship or affiliation, any share-
holder or similar ownership interest in a
professional corporation, partnership, or
other similar entity, or any independent
contractor arrangement that constitutes a
material financial relationship with any
expert used by the certified IDR entity or
any officer or director of the certified IDR
19
Similar to the July 2021 interim final rules, the term “facility” indicates a facility that furnishes health care services that is subject to the surprise billing protections of the No Surprises
Act, such as a hospital (including a hospital’s emergency department), urgent care center, or ambulatory surgical center. For purposes of good faith estimates under 45 CFR 149.610 and
the Patient-Provider dispute resolution process in 45 CFR 149.620 "facility" includes an institution (such as a hospital or hospital outpatient department, critical access hospital, ambulatory
surgical center, rural health center, federally qualified health center, laboratory, or imaging center) in any state in which state or applicable local law provides for the licensing of such an
institution, that is licensed as such an institution pursuant to such law or is approved by the agency of such state or locality responsible for licensing such institution as meeting the standards
established for such licensing.
20
See e.g., WAC 284-43A-010; N.Y. Comp. Codes R. & Regs. tit. 11 section 410.2.

Bulletin No. 2021–42 481 October 18, 2021
entity. The Departments solicit comment
on whether the defined terms related to
the conflict-of-interest standards should
include threshold requirements to further
define the level of relationship that would
rise to the level of a conflict of interest.
Additionally, under these interim final
rules, the Departments define certain
terms related to confidentiality, informa-
tion security, and privacy requirements
that apply to an IDR entity seeking cer-
tification under these interim final rules.
Code section 9816(c)(4)(A)(v), ERISA
section 716(c)(4)(A)(v), and PHS Act sec-
tion 2799A-1(c)(4)(A)(v) require certified
IDR entities to maintain the confidenti-
ality of individually identifiable health
information (IIHI) obtained while making
payment determinations and engaging
in other activities related to the Federal
IDR process. In establishing definitions
for these terms, the Departments looked
to existing Federal standards, particu-
larly the Health Insurance Portability and
Accountability Act of 1996 (HIPAA), the
Health Information Technology for Eco-
nomic and Clinical Health (HITECH)
Act, and the privacy, security, and breach
notification standards under 45 CFR part
160 A and subparts A, C, D, and E of part
164, because the Departments are of the
view that these provisions are industry
standards. The Departments have mod-
ified these standards in some cases to fit
the circumstances of IDR entities.
These interim final rules define “Indi-
vidually identifiable health information
(IIHI)” to mean any information, includ-
ing demographic data, that relates to the
past, present, or future physical or mental
health or condition of an individual; the
provision of health care to an individual;
or the past, present, or future payment for
the provision of health care to an individ-
ual; and that identifies the individual; or
with respect to which there is a reasonable
basis to believe the information can be
used to identify the individual.
21
Finally,
these interim final rules define “Unsecured
IIHI” to mean IIHI that is not rendered
unusable, unreadable, or indecipherable
to unauthorized persons through the use
of a technology or methodology specified
by the Departments. For technologies and
methodologies approved for this purpose,
certified IDR entities should refer to the
HHS Guidance to Render Unsecured
Protected Health Information Unusable,
Unreadable, or Indecipherable to Unau-
thorized Individuals.
22
These interim final rules provide that
the term “breach” means the acquisition,
access, use, or disclosure of IIHI in a man-
ner not permitted under 26 CFR 54.9816-
8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)
(v), and 45 CFR 149.510(e)(2)(v) that
compromises the security or privacy of
the IIHI. Under these interim final rules, a
breach excludes any unintentional acqui-
sition, access, or use of IIHI by personnel,
including a contractor or subcontractor,
acting under the authority of a certified
IDR entity, if the acquisition, access, or
use was made in good faith and within the
scope of authority and does not result in
further use or disclosure in a manner not
permitted under 26 CFR 54.9816-8T(e)
(2)(v), 29 CFR 2590.716-8(e)(2)(v), and
45 CFR 149.510(e)(2)(v). Also excluded
is any inadvertent disclosure by a person
who is authorized to access IIHI as per-
sonnel of a certified IDR entity to another
person authorized to access IIHI as per-
sonnel of the same certified IDR entity
(including a contractor or subcontractor of
the certified IDR entity), and the informa-
tion received as a result of such disclosure
is not further used or disclosed in a man-
ner not permitted under 26 CFR 54.9816-
8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v),
and 45 CFR 149.510(e)(2)(v). Finally,
also excluded is a disclosure of IIHI
when a certified IDR entity has a good
faith belief that an unauthorized person to
whom the disclosure was made would not
reasonably have been able to retain such
information. For example, if, while con-
ducting an IDR payment determination, a
certified IDR entity sends paperwork con-
taining IIHI to the wrong address and the
paperwork is returned by the post office,
unopened, as undeliverable, the certified
IDR entity can conclude that the entity
at the improper address could not rea-
sonably have retained the information.
The definition of breach additionally pro-
vides that an acquisition, access, use, or
disclosure of IIHI in a manner not per-
mitted under 26 CFR 54.9816-8T(e)(2)
(v), 29 CFR 2590.716-8(e)(2)(v), and 45
CFR 149.510(e)(2)(v) is presumed to be
a breach unless the certified IDR entity
demonstrates that there is a low probabil-
ity that the security or privacy of the IIHI
has been compromised based on a risk
assessment of at least the following fac-
tors: (1) the nature and extent of the IIHI
involved, including the types of identifi-
ers and the likelihood of re-identification;
(2) the unauthorized person who used the
IIHI or to whom the disclosure was made;
(3) whether the IIHI was actually acquired
or viewed; and (4) the extent to which the
risk to the IIHI has been mitigated.
Additionally, “qualified IDR item or
service” means an item or service that is
either an emergency service furnished by
a nonparticipating provider or nonpartic-
ipating emergency facility subject to the
protections of 26 CFR 54.9816-4T, 29
CFR 2590.716-4, or 45 CFR 149.110, for
which the conditions of 45 CFR 149.410(b)
(regarding receipt of notice of surprise bill-
ing protections and providing consent to
waive them) are not met. The term also
means an item or service furnished by
a nonparticipating provider at a partici-
pating health care facility subject to the
requirements of 26 CFR 54.9816-5T, 29
CFR 2590.716-5, and 45 CFR 149.120,
for which the conditions of 149.420(c)-
(i) (regarding receipt of notice of surprise
billing protections and providing consent
to waive them) are not met, for which the
provider or facility (as applicable) or plan
or issuer submits a valid Notice of IDR Ini-
tiation initiating the Federal IDR process.
For the Notice of IDR Initiation to be valid,
the open negotiation period under 26 CFR
54.9816-8T(b)(1), 29 CFR 2590.716-8(b)
(1), and 45 CFR 149.510(b)(1) must have
lapsed, and an agreement on the payment
amount must not have been reached. The
term qualified IDR item or service includes
air ambulance services provided by non-
participating providers of air ambulance
services subject to the protections of 26
CFR 54.9817-1T, 29 CFR 2590.717-1,
and 45 CFR 149.130, as these services are
21
Note that this definition is broader than the definition of IIHI set forth in the Health Insurance Portability and Accountability Act (HIPAA) Rules at 45 CFR 160.103.
22
HHS Office for Civil Rights, “Guidance to Render Unsecured Protected Health Information Unusable, Unreadable, or Indecipherable to Unauthorized Individuals,” available at https://
www.hhs.gov/guidance/document/guidance-render-unsecured-protected-health-information-unusable-unreadable-or

October 18, 2021 482 Bulletin No. 2021–42
defined in 26 CFR 54.9816-3T, 29 CFR
2590.716-3, and 45 CFR 149.30, for which
the open negotiation period under 26 CFR
54.9816-8T(b)(1), 29 CFR 2590.716-8(b)
(1), and 45 CFR 149.510(b)(1) has lapsed,
and no agreement on the payment amount
has been reached.
The term “qualified IDR item or ser-
vice” does not include items and services
for which the out-of-network rate is deter-
mined by an All-Payer Model Agreement
under section 1115A of the Social Secu-
rity Act, or by reference to a specified
state law. Additionally, this term does
not include items or services submitted
by the initiating party that are subject to
the 90-calendar-day suspension period
under 26 CFR 54.9816-8T(c)(4)(vii)(B),
29 CFR 2590.716-8(c)(4)(vii)(B), and 45
CFR 149.510(c)(4)(vii)(B). However, the
term may include items or services that
are subject to the 90-calendar-day suspen-
sion period if they are submitted during
the subsequent 30-business-day period,
as allowed under these interim final rules.
The Departments solicit comment on
these definitions, including whether other
terms should be defined.
B. The Term “Days”
The No Surprises Act specifies a num-
ber of time periods that providers, facili-
ties, providers of air ambulance services,
plans, issuers, certified IDR entities, and
the Departments must abide by through-
out the course of the Federal IDR process,
including time periods for initiation of the
Federal IDR process, selection of a certi-
fied IDR entity, submission of documents,
and payment determinations. The statute is
largely silent on whether the term “days”
used in these provisions means business
days or calendar days. However, in certain
provisions, the No Surprises Act specifies
the use of calendar days or business days,
indicating that where the statute is silent
the Departments may choose either mean-
ing. The Departments received feedback
from stakeholders that meeting various
deadlines under the Federal IDR process
may be challenging (for example, depend-
ing on a certified IDR entity’s case load
or the number of claims that a provider or
facility batches together) and that, if pos-
sible, additional time should be provided
for the parties and the certified IDR entity
to meet these deadlines. The Departments
are of the view that in order to provide
parties with the most time permitted under
the statute to meet the various deadlines
under the Federal IDR process as set forth
in the No Surprises Act, business days
should be used, unless there is a reason
to use calendar days. For example, these
interim final rules provide that calendar
days are used for the timing requirement
for the non-prevailing party to make pay-
ment after the certified IDR entity issues
a written determination, as well as the
requirement barring the initiation of the
Federal IDR process for a payment dis-
pute that concerns the same or similar
qualified IDR item or service that was the
subject of the initial notification during
the 90-calendar-day period following the
initial determination discussed later in this
preamble. In these instances, the Depart-
ments are of the view that once a decision
has been rendered, these interim final
rules should not unduly delay the payment
entitled under that decision. Moreover, in
terms of the 90-day suspension period, the
Departments are of the view that using a
business day standard here has the poten-
tial to create an unnecessary barrier to
accessing the Federal IDR process.
Furthermore, the Departments are of the
view that using business days will avoid
issues that may arise if deadlines were to fall
on weekends or Federal holidays. There-
fore, business days (Monday through Fri-
day, not including Federal holidays) instead
of calendar days are used throughout these
interim final rules for the Federal IDR pro-
cess unless otherwise indicated, regardless
of whether a nonparticipating provider or
facility, or a plan or issuer’s business typi-
cally operates on weekend days.
C. Open Negotiation and Initiation of the
Federal IDR Process
Code section 9816(c)(1)(A), ERISA
section 716(c)(1)(A), PHS Act section
2799A-1(c)(1)(A), and these interim final
rules provide that with respect to an emer-
gency service, a nonemergency item or
service furnished by a nonparticipating
provider at a participating facility sub-
ject to the surprise billing protections for
which the notice and consent exceptions
do not apply, and for which the out-of-net-
work rate is not determined by reference
to an All-Payer Model Agreement under
section 1115A of the Social Security Act
or specified state law as defined in 26 CFR
54.9816-3T, 29 CFR 2590.716-3, and 45
CFR 149.30, the provider or facility, or
plan or issuer, may engage in open nego-
tiations to determine the total out-of-net-
work rate (including any cost sharing).
If the parties fail to reach an agreement
through open negotiation, they may ini-
tiate the Federal IDR process. Code sec-
tion 9817(b), ERISA section 717(b), and
PHS Act section 2799A-2(b) provide
that out-of-network rates for air ambu-
lance services may be determined through
open negotiation or an IDR process that
is largely identical to the process provided
for in Code section 9816(c), ERISA section
716(c), and PHS Act section 2799A-1(c),
provided the out-of-network rate is not
determined by reference to an All-Payer
Model Agreement under section 1115A of
the Social Security Act or specified state
law as defined in 26 CFR 54.9816-3T, 29
CFR 2590.716-3, and 45 CFR 149.30.
Therefore, where applicable, providers
of air ambulance services are included
in the preamble and regulatory language
text describing open negotiations and the
Federal IDR process. The primary distinc-
tions between air ambulance services and
other health care services apply in how the
certified IDR entity should select an offer
and in the obligations on the certified IDR
entity regarding reporting of information
relating to the Federal IDR process.
1. Open Negotiation
The open negotiation period may be
initiated by any party during the 30-busi-
ness-day period beginning on the day the
nonparticipating provider, facility, or non-
participating provider of air ambulance
services receives either an initial payment
or a notice of denial of payment for an
item or service.
23
If the provider, facil-
ity, or provider of air ambulance services
23
As clarified in 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, prior to the beginning of any open negotiations or initiation of the Federal IDR process.

Bulletin No. 2021–42 483 October 18, 2021
accepts such initial payment as the total
payment, that initial payment combined
with the cost-sharing amount for the item
or service is the out-of-network rate, as
defined in 26 CFR 54.9816-3T, 29 CFR
2590.716-3, and 45 CFR 149.30. Under
the July 2021 interim final rules, the plan
or issuer must provide in writing, with
each initial payment or notice of denial of
payment, certain information, including
a statement that if the provider, facility,
or provider of air ambulance services, as
applicable, wishes to initiate a 30-busi-
ness-day open negotiation period for pur-
poses of determining the out-of-network
rate, the provider, facility, or provider of
air ambulance services may contact the
appropriate person or office to initiate
open negotiation, and that if the 30-busi-
ness-day open negotiation period does not
result in an agreement on the out-of-net-
work rate, generally, the provider, facility,
or provider of air ambulance services may
initiate the Federal IDR process. The plan
or issuer must also provide contact infor-
mation, including a telephone number and
email address, for the appropriate person
or office to initiate open negotiations for
purposes of determining an amount of
payment (including cost sharing) for the
item or service.
In order for a plan, issuer, provider,
facility, or provider of air ambulance ser-
vices to know when it is a party to an open
negotiation period and which items or
services are subject to negotiation, these
interim final rules require that the party
initiating the open negotiation must pro-
vide written notice to the other party of its
intent to negotiate, referred to as an open
negotiation notice. The open negotiation
notice must include information sufficient
to identify the items or services subject to
negotiation, including the date the item or
service was furnished, the service code,
the initial payment amount or notice of
denial of payment, as applicable, an offer
for the out-of-network rate, and contact
information of the party sending the open
negotiation notice. The open negotiation
notice must be sent within 30 business
days of the initial payment or notice of
denial of payment from the plan or issuer
regarding such item or service and must
be provided in writing. The party sending
the open negotiation notice may satisfy
this requirement by providing the notice to
the opposing party electronically (such as
by email) if the following two conditions
are satisfied: (1) the party sending the
open negotiation notice has a good faith
belief that the electronic method is read-
ily accessible to the other party; and (2)
the notice is provided in paper form free
of charge upon request. For example, if a
provider sends an open negotiation notice
to the email address identified by the
group health plan or issuer in the notice of
denial or initial payment, such electronic
delivery would satisfy this requirement
(as long as the provider also sends the
notice in paper form free of charge upon
request). Similarly, if a provider, facility,
or provider of air ambulance services sub-
mits a claim electronically, this could pro-
vide the plan or issuer with a good faith
belief that the electronic method is readily
accessible to the other party.
The 30-business-day open negotia-
tion period begins on the day on which
the open negotiation notice is first sent
by a party. The Departments expect that
most open negotiation notices will be
sent electronically, and that, in general,
the date the notice is sent will also be the
date the notice is received. Furthermore,
given that the parties have already made
initial contact (namely that the provider or
facility has transmitted a bill to the plan
or issuer, and the plan or issuer has sent
a notice of denial or initial payment to
the provider or facility), the Departments
anticipate that the parties should be able
to provide effective notice without prob-
lems, and encourage the parties to take
reasonable measures to ensure that actual
notice is provided, such as confirming that
the email address is accurate. The Depart-
ments caution that if the open negotiation
notice is not properly provided to the
other party (and no reasonable measures
have been taken to ensure actual notice
has been provided), the Departments may
determine that the 30-business-day open
negotiation period has not begun. In such
case, any subsequent payment determi-
nation from a certified IDR entity may
be unenforceable due to the failure of the
party sending the open negotiation notice
to meet the open negotiation requirement
of these interim final rules. Therefore, the
Departments encourage parties submitting
open negotiation notices to take steps to
confirm the other party’s contact informa-
tion and confirm receipt by the other party,
through approaches such as read receipts,
especially where a party does not initially
respond to an open negotiation notice. The
Departments solicit comment on whether
there are any challenges or additional clar-
ifications needed to ensure the parties are
afforded the full open negotiation period,
including whether there are any chal-
lenges regarding designating the date the
notice is sent as the commencement date
of the open negotiation period.
To facilitate communication between
parties and compliance with this notice
requirement, the Departments are concur-
rently issuing a standard notice that the
parties must use to satisfy the open nego-
tiation notice requirement.
Negotiation during the open negotia-
tion period will occur without the involve-
ment of the Departments or a certified
IDR entity. The Departments note that this
requirement for a 30-business-day open
negotiation period prior to initiating the
Federal IDR process does not preclude
the parties from reaching an agreement
in fewer than 30 business days. However,
in the event the parties do not reach an
agreement, the parties must still exhaust
the 30-business-day open negotiation
period before either party may initiate the
Federal IDR process. The Departments
encourage parties to negotiate in good
faith during this time period to reach an
agreement on the out-of-network rate. To
the extent parties reach agreement during
this period, they can avoid the administra-
tive costs associated with the Federal IDR
process.
2. Initiating the Federal IDR Process and
the Notice of IDR Initiation
Code section 9816(c)(1)(B), ERISA
section 716(c)(1)(B), PHS Act section
2799A-1(c)(1)(B), and these interim final
rules provide that with respect to items or
services that were subject to open nego-
tiation, if the parties have not reached
an agreed-upon amount for the out-of-
network rate by the last day of the open
negotiation period, either party may ini-
tiate the Federal IDR process during the
4-business-day period beginning on the
31st business day after the start of the
open negotiation period. A party may not
initiate the Federal IDR process if, with

October 18, 2021 484 Bulletin No. 2021–42
respect to an item or service, the party
knows or reasonably should have known
that the provider or facility provided
notice and obtained consent from a par-
ticipant, beneficiary, or enrollee to waive
surprise billing protections consistent with
PHS Act sections 2799B-1(a) and 2799B-
2(a) and the implementing regulations at
45 CFR 149.410(b) and 149.420(c)-(i).
To initiate the Federal IDR process,
the initiating party must submit a notice
to the other party and to the Departments
(Notice of IDR Initiation) through the
Federal IDR portal. The Notice of IDR
Initiation must include: (1) information
sufficient to identify the qualified IDR
items or services (and whether the quali-
fied IDR items or services are designated
as batched items and services), includ-
ing the dates and location of the items or
services, the type of qualified IDR items
or services (such as emergency services,
post-stabilization services, professional
services, hospital-based services), cor-
responding service and place-of-service
codes, the amount of cost sharing allowed
and the amount of the initial payment
made by the plan or issuer for the quali-
fied IDR items or services, if applicable;
(2) the names and contact information
of the parties involved, including email
addresses, phone numbers, and mailing
addresses; (3) the state where the quali-
fied IDR items or services were furnished;
(4) the commencement date of the open
negotiation period; (5) the initiating par-
ty’s preferred certified IDR entity; (6) an
attestation that the items or services are
qualified IDR items and services within
the scope of the Federal IDR process; (7)
the QPA; (8) information about the QPA
as described in 26 CFR 54.9816-6T(d),
29 CFR 2590.716-6(d), and 45 CFR
149.140(d); and (9) general information
describing the Federal IDR process. This
general information will help ensure that
the non-initiating party is informed about
the process and is familiar with the next
steps. Such general information should
include a description of the scope of the
Federal IDR process and key deadlines
in the Federal IDR process, including the
dates to initiate the Federal IDR process,
how to select a certified IDR entity, and
the process for selecting an offer. The
Departments have developed a form that
parties must use to satisfy this requirement
to provide general information describing
the Federal IDR process.
As with the open negotiation notice, the
initiating party may provide the Notice of
IDR Initiation to the opposing party elec-
tronically (such as by email) if the follow-
ing two conditions are satisfied: (1) the
initiating party has a good faith belief that
the electronic method is readily accessi-
ble by the other party; and (2) the notice
is provided in paper form free of charge
upon request.
In addition to furnishing notice to the
non-initiating party, the initiating party
must also furnish the Notice of IDR Initi-
ation to the Departments on the same day
the notice is furnished to the non-initiating
party. The initiating party must provide
its Notice of IDR Initiation through the
Departments’ Federal IDR portal. More-
over, IDR entities, certified IDR entities
and disputing parties will be required to
use the Federal IDR portal to perform cer-
tain functions related to the Federal IDR
process. The Federal IDR portal will be
used to facilitate and support IDR entity
certification, the initiation of the Federal
IDR process, the selection of certified
IDR entities, the submission of supporting
documentation to certified IDR entities,
and the submission of certified IDR entity
reporting metrics, as required by these
interim final rules.
Under Code section 9816(c)(1)(B),
ERISA section 716(c)(1)(B), and PHS
Act section 2799A-1(c)(1)(B), the date
of initiation of the Federal IDR process
will be the date of the submission or such
other date specified by the Departments
that is not later than the date of receipt of
the Notice of IDR Initiation by both the
other party and the Departments. Con-
sistent with the flexibility provided by
the statute to specify an alternate date of
initiation, these interim final rules specify
that the initiation date of the Federal IDR
process is the date of receipt of the Notice
of IDR Initiation by the Departments. As
noted, since the Departments will moni-
tor the Federal IDR portal, submitting the
Notice of IDR Initiation through the Fed-
eral IDR portal will provide a clear date
on which the Notice of IDR Initiation has
been received by the Departments. This
approach will better enable the Depart-
ments to meet the statutory requirement
to select a certified IDR entity within 6
business days of the initiation of the IDR
process in instances in which the parties
have not jointly selected a certified IDR
entity. The Departments will acknowl-
edge and confirm the initiation date with
both parties upon receipt of the Notice
of IDR Initiation. Given that the Depart-
ments expect most of these notices to be
provided electronically, and that the par-
ties will have been in continuous contact
by this point in the process (through the
submission of the initial bill, the remit-
tance of the initial payment of the claim or
notice of denial of payment, the submis-
sion of the open negotiation notice, and
negotiations during the open negotiation
period), the Departments expect minimal
delay between when the Departments are
notified through the portal and when the
opposing party is notified (either by the
initiating party or the Departments). The
Departments solicit comment on both the
content of the Notice of IDR Initiation
as well as the manner for providing the
notices as set forth under these interim
final rules.
D. Federal IDR Process Following
Initiation
1. Selection of Certified IDR Entity
Under Code section 9816(c)(4)(F),
ERISA section 716(c)(4)(F), and PHS
Act section 2799A-1(c)(4)(F), the plan or
issuer and the nonparticipating provider,
nonparticipating emergency facility, or
nonparticipating provider of air ambu-
lance services (as applicable) that are
parties to the Federal IDR process may
jointly select a certified IDR entity no
later than 3 business days following the
date of the IDR initiation. As stated above,
in initiating the Federal IDR process, the
initiating party will indicate its preferred
certified IDR entity in the Notice of IDR
Initiation. Under these interim final rules,
the party in receipt of the Notice of IDR
Initiation may agree or object to the selec-
tion of the preferred certified IDR entity
identified in the Notice of IDR Initiation.
If the non-initiating party in receipt of the
Notice of IDR Initiation fails to object
within 3 business days of the date of ini-
tiation of the Federal IDR process, the
preferred certified IDR entity identified
in the Notice of IDR Initiation will be the

Bulletin No. 2021–42 485 October 18, 2021
selected certified IDR entity, provided that
the certified IDR entity does not have a
conflict of interest. If the party in receipt
of the Notice of IDR Initiation timely
objects, that party must timely notify the
initiating party of the objection, including
an explanation of the reason for objecting,
and propose an alternative certified IDR
entity. The initiating party must then agree
or object to the alternative certified IDR
entity. In order to jointly select a certified
IDR entity, the plan or issuer and the non-
participating provider, nonparticipating
emergency facility, or nonparticipating
provider of air ambulance services must
agree on a certified IDR entity not later
than 3 business days after the date of ini-
tiation of the Federal IDR process. Due to
the short timeframe for this selection, the
Departments anticipate that communica-
tion between the parties regarding certi-
fied IDR entity selection will typically be
conducted through electronic mail to the
email addresses used to send and receive
the Notice of IDR Initiation. The Depart-
ments anticipate that most users of the
Federal IDR process will be providers,
facilities, providers of air ambulance ser-
vices, plans, and issuers, which are likely
to use electronic communications regu-
larly. If both parties agree on and select a
certified IDR entity, or fail to agree upon
a certified IDR entity within the specified
timeframe, the initiating party must notify
the Departments by electronically submit-
ting the notice of the certified IDR entity
selection or failure to select (as applica-
ble), no later than 1 business day after
the end of the 3-business-day period (or
in other words, 4 business days after the
date of initiation of the Federal IDR pro-
cess) through the Federal IDR portal. In
addition, in instances where the non-initi-
ating party believes that the Federal IDR
process is not applicable, the non-initi-
ating party must notify the Departments
through the Federal IDR portal within the
same timeframe that the notice of selec-
tion (or failure to select) is required and
provide information regarding the lack of
applicability. Based upon this information
and any additional information requested
by the selected certified IDR entity, the
selected certified IDR entity will deter-
mine whether the Federal IDR process is
applicable. The Departments seek com-
ment on this approach and whether any
challenges exist in relying solely upon
electronic notifications.
The Departments will make available
on the Federal IDR portal a list of certified
IDR entities among which parties to the
Federal IDR process may select, including
basic information about the certified IDR
entities, such as contact information, cer-
tified IDR entity numbers (unique identifi-
cation numbers assigned to each certified
IDR entity by the Departments), websites,
and service areas. The Departments seek
comment on this approach, including
whether additional information about the
certified IDR entities should be made
public, and whether any challenges exist
in relying solely upon electronic notifica-
tions.
Under these interim final rules, the
selected certified IDR entity must not have
a conflict of interest as defined in 26 CFR
54.9816-8T(a)(2), 29 CFR 2590.716-
8(a)(2), and 45 CFR 149.510(a)(2). The
selected certified IDR entity must also
ensure that assignment of personnel to the
dispute and decisions regarding hiring,
compensation, termination, promotion, or
other similar matters related to personnel
assigned to the dispute are not made based
upon the likelihood that the assigned per-
sonnel will support a particular party or
type of party (that is, provider, facility,
provider of air ambulance services, plan,
or issuer) to the determination being dis-
puted other than as outlined under 26 CFR
54.9816-8T(c)(4)(iii), 29 CFR 2590.716-
8(c)(4)(iii), and 45 CFR 149.510(c)(4)
(iii). Also, as agents of the certified IDR
entity, personnel responsible for handling
individual payment determinations must
comply with the certification requirements
of these interim final rules as set forth by
their principal, the certified IDR entity, in
its procedures. Therefore, the personnel
assigned to disputes by the certified IDR
entity must not have a conflict of interest,
as defined by 26 CFR 54.9816-8T(a)(2),
29 CFR 2590.716-8(a)(2), and 45 CFR
149.510(a)(2). In addition, any person-
nel assigned to the matter must not have
been a party to the determination being
disputed or an employee or agent of such
a party within the 1 year immediately pre-
ceding the dispute resolution assignment,
similar to the “revolving door” laws
24

laid out in 18 U.S.C. 207(b), 207(c), and
207(e). Under 18 U.S.C. 207(b), 207(c),
and 207(e), former officers or employees
of the executive branch, including inde-
pendent agencies, are prohibited from
aiding or advising on matters with which
they were involved while in the execu-
tive branch for 1 year. These interim final
rules adopt the same 1-year timeframe by
prohibiting former employees’ or agents’
involvement in dispute resolution pro-
cesses involving former employers for
1 year. The Departments are of the view
that this approach provides a reasonable
and appropriate standard for preventing
conflicts of interest. Although 18 U.S.C.
207(b), 207(c), and 207(e) are typically
used in reference to trade or treaty nego-
tiations, the 1-year prohibition is also a
standard applied generally to employees
of the executive and legislative branches
and independent agencies. These statutes
represent conflict-of-interest standards
that the Departments view as reasonable
and appropriate for developing standards
for preventing conflicts of interest involv-
ing certified IDR entities that are resolv-
ing disputes in the Federal IDR process.
Certified IDR entities are expected to
ensure staff compliance with the standards
of these interim final rules, and as such,
attestations of no conflict of interest at the
organization level are intended also to rep-
resent the absence of conflicts of interest
among the employees and agents of the
certified IDR entity.
The Departments anticipate that cer-
tified IDR entities will likely be limited
to organizations with sufficient staff who
have arbitration and health care claims
experience, including entities currently
providing services for external review
or state IDR determinations. To further
ensure that personnel assigned to any
determination in the Federal IDR pro-
cess do not have a conflict of interest, the
Departments have included additional
safeguards for personnel, as well as an
additional requirement that the certified
IDR entity have procedures in place to
ensure adherence by personnel with these
additional safeguards. Accordingly, at the
time of application for certification, the
24
Maskell, J., Post-Employment, “Revolving Door,” Laws for Federal Personnel. Congressional Research Service. 2014. https://fas.org/sgp/crs/misc/R42728.pdf.

October 18, 2021 486 Bulletin No. 2021–42
IDR entity must attest that it has proce-
dures in place to ensure that no conflicts
of interest exist or will exist, as set forth
in the discussion of certification require-
ments later in this preamble. As an addi-
tional requirement, certified IDR entities
will have had to submit, as part of their
application to be certified IDR entities,
policies and procedures for conducting
ongoing audits for conflicts of interest, to
ensure that should any arise, the certified
IDR entity procedures in place to inform
the Departments of the conflict of interest
and mitigate the risk by reassigning the
dispute to other personnel in the event that
any personnel previously assigned have a
conflict of interest.
If the parties have agreed on a cer-
tified IDR entity, the notice of the certi-
fied IDR entity selection must include the
following information: (1) the name of
the certified IDR entity; (2) the certified
IDR entity number; and (3) an attestation
by both parties (or by the initiating party
if the other party has not responded) that
the selected certified IDR entity does not
have a conflict of interest. The attestation
must be submitted based on conducting a
conflicts of interest check using informa-
tion available (or accessible using reason-
able means) to the parties (or the initiating
party if the other party has not responded)
at the time of the selection.
As stated earlier in this preamble, upon
receipt of notification that the parties
failed to agree on a certified IDR entity,
the Departments will select a certified IDR
entity. In such instances, the Departments
will randomly select a certified IDR entity
that charges a fee within the allowed range
provided for in guidance and defined
further in section III.D.4.viii of this pre-
amble. If there are insufficient certified
IDR entities that charge a fee within the
allowed range available to adjudicate the
payment determination, the Departments
will randomly select a certified IDR entity
that has received approval to charge a fee
outside of the allowed range. The Depart-
ments will make the random selection not
later than 6 business days after the date
of initiation of the Federal IDR process,
and will notify the parties of the selection.
The Departments considered alternative
approaches to randomly selecting a cer-
tified IDR entity, including whether the
Departments should consider the specific
fee of the certified IDR entity or look to
other factors, such as how often the certi-
fied IDR entity chooses the amount clos-
est to the QPA. Following consideration
of various approaches, the Departments
have chosen to utilize a random selection
method to select a certified IDR entity
that charges a fee within the allowed
range (or has received approval from the
Departments to charge a fee outside of the
allowed range, if there are insufficient cer-
tified IDR entities that charge a fee within
the allowed range available) and that
does not have a conflict of interest with
either party. The Departments are of the
view that this approach will help ensure
that requests for IDR and workload asso-
ciated with making determinations for
such requests are appropriately distrib-
uted across the certified IDR entities, will
result in an efficient and timely assign-
ment of a certified IDR entity to payment
determinations, and will protect against
bias in the types of cases a certified IDR
entity reviews while encouraging certified
IDR entities to charge reasonable fees for
their services. Additionally, the Depart-
ments are of the view that this approach
will provide predictability to the parties
regarding the fees they will be expected to
pay if they do not select the certified IDR
entity. The Departments seek comment on
this approach, including whether the ran-
dom selection method should be limited
only to certified IDR entities that charge a
fee within the allowed range. The Depart-
ments may issue future guidance regard-
ing whether entities that have received
approval from the Departments to charge
a fee outside of the allowed range may
be selected by the Departments under the
random selection method.
After selection by the parties (includ-
ing when the initiating party selects a
certified IDR entity and the other party
does not object), or by the Departments,
the certified IDR entity must also review
its selection to ensure that it meets the
requirements of 26 CFR 54.9816-8T(c)(1)
(ii), 29 CFR 2590.716-8(c)(1)(ii), and 45
CFR 149.510(c)(1)(ii) related to potential
conflicts of interest. If the selected certi-
fied IDR entity meets these requirements,
the certified IDR entity must attest to
meeting these requirements. If the certi-
fied IDR entity is unable to attest that it
meets these requirements, the certified
IDR entity must notify the Departments
through the Federal IDR portal within 3
business days, after which the Depart-
ments will notify the parties. Upon noti-
fication, the parties will have 3 business
days to select another certified IDR entity
under the process described in 26 CFR
54.9816-8T(c)(1), 29 CFR 2590.716-8(c)
(1), or 45 CFR 149.510(c)(1). If the par-
ties notify the Departments that they have
not agreed on a certified IDR entity, the
Departments may randomly select another
certified IDR entity.
The certified IDR entity must also
review the information submitted by the
parties to determine whether the Federal
IDR process applies, including whether
an All-Payer Model Agreement or speci-
fied state law applies. If the Federal IDR
process does not apply, the certified IDR
entity must notify the Departments and
the parties within 3 business days of mak-
ing this determination.
2. Authority to Continue Negotiation
Code sections 9816(c)(2)(B) and
9817(b)(2)(B), ERISA sections 716(c)(2)
(B) and 717(b)(2)(B), PHS Act sections
2799A-1(c)(2)(B) and 2799A-2(b)(2)(B),
and these interim final rules provide that,
in instances in which the parties agree on
an amount for a qualified IDR item or ser-
vice after the Federal IDR process is initi-
ated but prior to a determination by a cer-
tified IDR entity, the agreed-upon amount
will be treated as the out-of-network rate
and will be treated as resolving the dis-
pute. If the parties to the Federal IDR
process agree on an out-of-network rate
for a qualified IDR item or service after
providing to the Departments the Notice
of IDR Initiation, but before the certified
IDR entity has made its payment determi-
nation, the initiating party must notify the
Departments and the certified IDR entity
(if selected) by electronically submitting
notification of such agreement through
the Federal IDR portal as soon as possi-
ble but no later than 3 business days after
the date of the agreement. As is the case
in instances where the parties do not come
to an agreement before the certified IDR
entity selects the amount submitted by one
of the parties, the amount by which this
agreed-upon out-of-network rate exceeds
the cost-sharing amount for the qualified

Bulletin No. 2021–42 487 October 18, 2021
IDR item or service is the total plan or
coverage payment.
25
The plan or issuer
must pay the balance of the total plan or
coverage amount of the agreed-upon out-
of-network rate (with any initial payment
made counted towards the total plan or
coverage payment) to the nonparticipat-
ing provider, nonparticipating emergency
facility, or nonparticipating provider of air
ambulance services not later than 30 busi-
ness days after the agreement is reached.
As noted in section III.D.4.viii of this
preamble regarding costs of the Federal
IDR process, when there is an agreement
after initiation and a certified IDR entity
is selected but prior to a determination
by the certified IDR entity, each party
must pay half of the certified IDR entity
fee, unless the parties agree otherwise
on a method for allocating the applicable
fee. In no instance may either party seek
additional payment from the participant
or beneficiary, including in instances in
which the out-of-network rate exceeds
the QPA. When an agreement is reached,
either before or after a certified IDR entity
is selected, notification to the Departments
must include the out-of-network rate (that
is, the total payment amount, including
both cost sharing and the total plan or
coverage payment) and signatures from an
authorized signatory for each party.
3. Treatment of batched items and
services
Code section 9816(c)(3), ERISA sec-
tion 716(c)(3), and PHS Act section
2799A-1(c)(3) direct the Departments
to specify criteria under which multiple
qualified IDR items and services may be
considered jointly as part of one payment
determination (batching). Under these
interim final rules, multiple claims for
qualified IDR items and services may be
submitted and considered jointly as part
of one payment determination by a cer-
tified IDR entity (batched items and ser-
vices) only if certain conditions are met.
Batched items and services submitted and
considered jointly as part of one payment
determination under 26 CFR 54.9816-
8T(c)(3)(i), 29 CFR 2590.716-8(c)(3)(i),
45 CFR 149.510(c)(3)(i) are subject to the
fee for batched determinations under these
interim final rules.
First, the qualified IDR items and ser-
vices must be billed by the same provider
or group of providers or facility or same
provider of air ambulance services. Items
and services are billed by the same pro-
vider or group of providers or facility or
same provider of air ambulance services
if the items or services are billed with the
same National Provider Identifier (NPI) or
Taxpayer Identification Number (TIN).
Second, the payment for the items and
services would be made by the same group
health plan or health insurance issuer.
Third, the qualified IDR items and ser-
vices must be the same or similar items
or services. The definition of a same or
similar item or service in these interim
final rules is consistent with the definition
under the July 2021 interim final rules.
The Departments defined a same or sim-
ilar item or service in 26 CFR 54.9816-
6T(a)(13), 29 CFR 2590.716-6(a)(13),
and 45 CFR 149.140(a)(13) as those
items and services that are billed under
the same service code, or a comparable
code under a different procedural code
system, and the Departments defined the
service codes as the code that describes an
item or service using Current Procedural
Terminology (CPT), Healthcare Common
Procedure Coding System (HCPCS), or
Diagnosis-Related Group (DRG) codes.
Finally, all the qualified IDR items
and services must have been furnished
within the same 30-business-day period,
or the 90-calendar-day suspension period
described later in this preamble. There-
fore, if items or services are furnished
within the 90-calendar-day suspension
period and meet the other applicable
requirements, they may be submitted and
considered jointly as part of one pay-
ment determination by a certified IDR
entity, once the suspension period has
ended. Under Code section 9816(c)(9),
ERISA section 716(c)(9), and PHS Act
section 2799A-1(c)(9), the Departments
may provide an alternative period to the
aforementioned 30-business-day period
as determined by the Departments for cer-
tain circumstances, such as low-volume
items and services. The Departments are
using this authority to ensure that items
and services delivered during the 90-cal-
endar-day suspension period are eligible
for the Federal IDR process and may be
included in the same batch.
The Departments are of the view that
the approach set forth to allow for batch-
ing of multiple qualified IDR items and
services will avoid combinations of unre-
lated claims, providers, facilities, provid-
ers of air ambulance services and plans
and issuers in a single dispute that could
unnecessarily complicate an IDR payment
determination and create inefficiencies
in the Federal IDR process. The Depart-
ments solicit comment on this approach
and whether there is a need to prescribe
an alternative period for other qualified
IDR items and services different from the
30-business-day period discussed earlier
in the discussion of the batching require-
ments and what circumstances should be
considered in defining any alternative
period.
Additionally, in some cases, a plan
or issuer may pay a provider, facility,
or provider of air ambulance services a
single payment for multiple services an
individual received during an episode
of care (bundling). In the case of quali-
fied IDR items or services that are billed
by a provider, facility, or provider of air
ambulance services as part of a bundled
arrangement, or where a plan or issuer
makes an initial payment as a bundled
payment (or specifies that a denial of
payment is made on a bundled payment
basis), these interim final rules provide
that those qualified items or services may
be submitted and considered as part of one
payment determination by a certified IDR
entity (and is subject to the fee for single
determinations under 26 CFR 54.9816-
8T(c)(3)(ii), 29 CFR 2590.716-8(c)(3)(ii),
45 CFR 149.510(c)(3)(ii) ).
The Departments recognize that cer-
tain batched items and services may
have different QPAs. For example, if a
determination includes multiple batched
claims for Service A furnished by Pro-
vider B to individuals covered by Issuer
C, with some individuals covered by plans
in the individual market and others cov-
ered by plans in the large group market,
25
See 26 CFR 54.9816-4T, 54.9816-5T, and 54.9817-1T; 29 CFR 2590.716-4, 2590.716-5, and 2590.717-1; and 45 CFR 149.110, 149.120, and 149.130.

October 18, 2021 488 Bulletin No. 2021–42
there likely would be two different QPAs
for the certified IDR entity to consider
– one QPA for the services furnished to
individuals enrolled in individual market
coverage, and one QPA for individuals
with large group market coverage. As dis-
cussed elsewhere in this preamble, when
this is the case, the parties must provide
the relevant information for each QPA,
and the certified IDR entity must con-
sider each QPA for each item or service
separately. However, since batched items
and services involve the same or simi-
lar medical procedure, batching is likely
to reduce redundant IDR proceedings as
well as streamline the certified IDR enti-
ty’s decision-making, as some of the con-
siderations relate to factors not specific to
the individual encounter.
The Departments seek comment on all
aspects of the criteria for batching claims
and bundling, including whether addi-
tional conditions should be added to limit
batching or whether the conditions should
be amended to facilitate broader batching
of qualified IDR items and services. The
Departments also seek comment on how
frequently nonparticipating providers,
nonparticipating emergency facilities, or
nonparticipating providers of air ambu-
lance services will be reimbursed through
a bundled payment and whether allow-
ing items or services included in a bun-
dled payment by a provider or facility to
be treated as one payment determination
could be used to circumvent the batching
requirements by not requiring precise con-
sideration of what specific claims within
the batch should be arbitrated and which
claims should not, thereby resulting in
potential overuse of the Federal IDR pro-
cess in a manner that creates inefficien-
cies.
4. Payment Determination
i. Submission of Offers
Code section 9816(c)(5)(B), ERISA
section 716(c)(5)(B), and PHS Act sec-
tion 2799A-1(c)(5)(B) provide that,
not later than 10 days after the date of
selection of the certified IDR entity with
respect to a determination for a qualified
IDR item or service, the plan or issuer
and the nonparticipating provider, non-
participating emergency facility, or pro-
vider of air ambulance services must
each submit to the certified IDR entity
an offer for a payment amount for such
qualified IDR item or service. Under
these interim final rules, the offer must
be submitted not later than 10 business
days after the selection of the certified
IDR entity and must be expressed as both
a dollar amount and the corresponding
percentage of the QPA represented by
that dollar amount, to facilitate the cer-
tified IDR entity reporting the offer as
a percentage of the QPA to the Depart-
ments. Where batched items and services
have different QPAs, the parties should
provide these different QPAs and may
provide different offers for these batched
items and services, provided that the
same offer should apply for all items and
services with the same QPA.
Parties to the Federal IDR process must
also submit information requested by the
certified IDR entity relating to the offer
. The Departments intend for the Federal
IDR portal to collect this information as
part of the offer submission process, such
that certified IDR entities will not have
to directly request this information. Pro-
viders and facilities must also indicate
the size of their practices and facilities
at the time the information is submitted.
This will enable certified IDR entities to
report on the size of the provider practices
and facilities, as required under 26 CFR
54.9816-8T(f)(1)(ii), 29 CFR 2590.716-
8(f)(1)(ii), and 45 CFR 149.510(f)(1)(ii).
Specifically, the provider must specify
whether the provider practice or organi-
zation has fewer than 20 employees, 20
to 50 employees, 51 to 100 employees,
101 to 500 employees, or more than 500
employees. For facilities, the facility must
specify whether the facility has 50 or
fewer employees, 51 to 100 employees,
101 to 500 employees, or more than 500
employees. Providers and facilities must
also provide information on the practice
specialty or type, respectively (if appli-
cable). Similarly, plans and issuers must
provide the coverage area of the plan or
issuer, the relevant geographic region
for purposes of the QPA, and, for group
health plans, whether they are fully-in-
sured, or partially or fully self-insured.
26

FEHB carriers must identify if a particu-
lar item or service relates to FEHB plans.
The information such as practice or facil-
ity size, coverage area, geographic region,
and whether a plan is fully-insured or par-
tially or fully self-insured is required to be
submitted as part of an offer so that the
certified IDR entities can report this infor-
mation to the Departments. This infor-
mation will inform the reports required
from the Departments under Code section
9816(c)(7), ERISA section 716(c)(7), and
PHS Act section 2799A-1(c)(7). Both par-
ties must submit any other information
requested by the certified IDR entity relat-
ing to such offer. In addition, parties may
submit any information relating to the
offer, except that the information may not
include information that relates to usual
and customary charges, billed amounts,
and public payor rates as discussed later
in this preamble.
With regard to the number of employ-
ees of a provider or facility, the Depart-
ments understand that hospitals and
facilities may use a variety of methods
for staffing, such as through contracting
with physicians’ practices or foundations
whose physicians or medical staff are
not considered employees of the hospital
or facility. The Departments seek com-
ment on whether additional guidance is
needed to account for these situations in
the reporting of provider and facility size.
ii. Selection of Offer for Qualified
IDR Items or Services that are Not Air
Ambulance Services
These interim final rules provide 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
and the provider or facility to be the out-
of-network rate for the qualified IDR item
or service. For each qualified IDR item
or service, the amount by which this out-
of-network rate exceeds the cost-sharing
amount for the qualified IDR item or ser-
vice is the total plan or coverage payment
26
Pursuant to OPM contracts with FEHB carriers under 5 U.S.C. Ch. 89, all FEHB carriers offer fully insured health benefits plans in consideration of premium payments pursuant to contract
terms, and no health benefits plan is self-insured by OPM or the federal government.

Bulletin No. 2021–42 489 October 18, 2021
(with any initial payment made counted
towards the total plan or coverage pay-
ment). In selecting the offer, the certified
IDR entity must presume that the QPA is
an appropriate payment amount but must
also consider the additional circumstances,
following the requirements of 26 CFR
54.9816-8T(c)(4)(iii)(B) through (D), 29
CFR 2590.716-8(c)(4)(iii)(B) through
(D), and 45 CFR 149.510(c)(4)(iii)(B)
through (D), only if the information is
submitted by the parties. However, to be
considered by the certified IDR entity,
information submitted by the parties must
be credible and relate to the offer submit-
ted by either party, and must not include
information on the prohibited factors
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). After considering the
QPA, additional information requested by
the certified IDR entity from the parties,
and all of the credible information that the
parties submit that is consistent with the
requirements in 26 CFR 54.9816-8T(c)(4)
(i)(A), 29 CFR 2590.716-8(c)(4)(i)(A), or
45 CFR 149.510(c)(4)(i)(A), the certified
IDR entity must select the offer closest to
the QPA, unless the credible information
submitted by the parties clearly demon-
strates that the QPA is materially different
from the appropriate out-of-network rate,
based on the additional circumstances
allowed under 26 CFR 54.9816-8T(c)(4)
(iii)(B) through (D), 29 CFR 2590.716-
8(c)(4)(iii)(B) through (D), or 45 CFR
149.510(c)(4)(iii)(B) through (D) with
respect to the qualified IDR item or ser-
vice. In these cases, or when the offers
are equally distant from the QPA but in
opposing directions, the certified IDR
entity must select the offer that the certi-
fied IDR entity determines best represents
the value of the items or services, which
could be either party’s offer.
These interim final rules define infor-
mation as credible if upon critical analysis
the information is worthy of belief and is
trustworthy. These interim final rules also
specify that a material difference exists
where there is substantial likelihood that
a reasonable person with the training and
qualifications of a certified IDR entity
making a payment determination would
consider the information important in
determining the out of network rate and
view the information as showing that the
QPA is not the appropriate out-of-network
rate under such additional circumstances.
If the certified IDR entity determines
that credible information about additional
circumstances clearly demonstrates that
the QPA is materially different from the
appropriate out-of-network rate, the cer-
tified IDR entity must select the offer
that the certified IDR entity determines
best represents the appropriate out-of-
network rate for the qualified IDR items
or services, which could be either par-
ty’s offer. Not later than 30 business days
after the selection of the certified IDR
entity, the certified IDR entity must also
notify the plan or issuer and the provider
or facility of the selection of the offer,
and provide the written decision required
under 26 CFR 54.9816-8T(c)(4)(vi), 29
CFR 2590.716-8(c)(4)(vi), and 45 CFR
149.510(c)(4)(vi).
The Departments are of the view that
the best interpretation of Code section
9816, ERISA section 716, and PHS Act
section 2799A-1 is that when selecting an
offer, a certified IDR entity must look first
to the QPA, as it represents a reasonable
market-based payment for relevant items
and services, and then to other consider-
ations. This presumption that the QPA is
the appropriate out-of-network rate can be
rebutted by presentation of credible infor-
mation about additional circumstances,
following the requirements of 26 CFR
54.9816-8T(c)(4)(iii)(B) through (D), 29
CFR 2590.716-8(c)(4)(iii)(B) through
(D), and 45 CFR 149.510(c)(4)(iii)(B)
through (D), that clearly demonstrate that
the QPA is materially different from the
appropriate out-of-network rate. The stat-
utory text lists the QPA as the first factor
that the certified IDR entity must con-
sider in determining which offer to select.
The “additional circumstances” that the
certified IDR entity must consider if rel-
evant, credible information is provided
are described in a separate paragraph, and
the certified IDR entity’s consideration
of additional circumstances is subject to
a prohibition on considering certain fac-
tors. Additionally, whereas the statute
provides relatively limited guidance on
how to consider or define these additional
circumstances, the statute sets out detailed
rules for calculating the QPA, suggesting
that an accurate and clear calculation of
the QPA is integral to the application of
consumer cost sharing and to the certified
IDR entity’s determination of the out-of-
network rate. For example, the statute
includes a requirement that when plans
and issuers do not have sufficient infor-
mation to calculate their own median con-
tracted rates, they utilize a database free
of conflicts of interest.
27
Plans and issuers
must also provide specific information on
how the QPA is calculated to nonpartic-
ipating providers and facilities, ensuring
that they are aware of how this amount
is calculated.
28
Plans and issuers are also
subject to audit requirements that will be
enforced by the Departments to ensure
that they follow these rules.
29
Cost sharing
for participants, beneficiaries, and enroll-
ees for items and services will be based on
the recognized amount, which will gener-
ally be the QPA for services eligible for
the Federal IDR process, indicating that
the QPA is a reasonable out-of-network
rate. The Departments are also required to
report how payment determinations com-
pare to the corresponding QPA, reflecting
that the QPA is a benchmark for determin-
ing the appropriate out-of-network rate.
30

Taken together, these statutory elements
reflect the importance the No Surprises
Act assigns to the QPA in the Federal IDR
process, and show that the statute contem-
plates that typically the QPA will be a rea-
sonable out-of-network rate.
The Departments are also of the view
that policy considerations support the
approach taken under these interim final
rules regarding which offer a certified
IDR entity must select. Generally, the
QPA should reflect standard market rates
arrived at through typical contract negotia-
tions and should therefore be a reasonable
out-of-network rate under most circum-
27
Code section 9816(a)(2), (3)(E); ERISA section 716(a)(2), (3)(E), and PHS Act section 2799A-1(a)(2), (3)(E); 26 CFR 54.9816-6T, 29 CFR 2590.716-6, and 45 CFR 149.140.
28
Id.
29
86 FR 36872, 36899 (July 13, 2021).
30
Code section 9816(c)(7)(A)(v), (B)(iii) and (iv); ERISA section 716(c)(7)(A)(v), (B)(iii) and (iv); and PHS Act section 2799A-1(c)(7)(A)(v), (B)(iii) and (iv).

October 18, 2021 490 Bulletin No. 2021–42
stances. The QPA is generally based on
the median of contracted rates, and these
contracted rates are established through
arms-length negotiations between pro-
viders and facilities and plans and issuers
(or their service providers). Anchoring the
determination of the out-of-network rate
to the QPA will increase the predictabil-
ity of IDR outcomes, which may encour-
age parties to reach an agreement outside
of the Federal IDR process to avoid the
administrative costs, and will aid in reduc-
ing prices that may have been inflated due
to the practice of surprise billing prior to
the No Surprises Act. Finally, anchoring
the determination to the QPA will help
limit the indirect impact on participants,
beneficiaries, and enrollees that would
occur from higher out-of-network rates if
plans and issuers were to pass higher costs
on to individuals in the form of increases
in premiums.
Accordingly, the certified IDR entity
must begin with the presumption that the
QPA is the appropriate out-of-network
rate for the qualified IDR item or service
under consideration. Therefore, in deter-
mining which offer to select, these interim
final rules provide that the certified IDR
entity must select the offer closest to the
QPA, unless credible information pre-
sented by the parties rebuts that presump-
tion and clearly demonstrates the QPA is
materially different from the appropriate
out-of-network rate, as discussed earlier
in this section of the preamble.
The Departments clarify that it is not
the role of the certified IDR entity to deter-
mine whether the QPA has been calculated
by the plan or issuer correctly, to make
determinations of medical necessity, or
review denials of coverage.
31
Rather, the
certified IDR entity is responsible for con-
sidering only the information presented
by the parties to determine whether either
party has presented credible information
regarding additional circumstances, fol-
lowing the requirements set forth in para-
graphs 26 CFR 54.9816-8T(c)(4)(iii)(B)
through (D), 29 CFR 2590.716-8(c)(4)(iii)
(B) through (D), and 45 CFR 149.510(c)
(4)(iii)(B) through (D), demonstrating
that the QPA is materially different from
the appropriate out-of-network rate, in
order to rebut the presumption that the
QPA is the appropriate out-of-network
rate. For batched items and services, the
certified IDR entity may select different
offers, from either or both parties, when
the QPAs for the qualified IDR items or
services within the batch are different.
The certified IDR entity may do so even
if it does not select the offer closest to the
QPA for a particular qualified IDR item
or service due to the factors listed later in
this section of the preamble, and instead
selects the offer closest to the QPA for
other qualified IDR items and services
within the batch.
In the Departments’ view, the require-
ments set forth in these interim final rules
regarding which offer a certified IDR
entity must select, based on the presump-
tion that the QPA is the appropriate pay-
ment amount and on the parties’ ability to
rebut that presumption, will help promote
efficiency and predictability in the Federal
IDR process, and will increase the likeli-
hood that a certified IDR entity will gen-
erally select the offer closest to the QPA.
While the QPA is the presumptive factor,
the Departments are of the view that a
clear standard indicating how a certified
IDR entity may select an offer that is not
closest to the QPA is necessary to help
ensure consistency in how different cer-
tified IDR entities evaluate offers, which
will help ensure that the Federal IDR
process yields predictable outcomes and
reduces administrative costs. Establishing
a standard framework for certified IDR
entities to evaluate factors furthers the
intent of these interim final rules to create
equity and consistency in the Federal IDR
process and aligns with other policies set
forth in these interim final rules, such as
the conflict-of-interest standards and the
certification standards for IDR entities.
Ensuring that all certified IDR entities
apply the same standards will help ensure
that the Federal IDR process is appropri-
ately predictable, fair, and equitable.
Although these interim final rules
establish the QPA as the presumptive fac-
tor, these interim final rules and the under-
lying statute also specify additional cir-
cumstances that certified IDR entities must
consider in selecting an offer, if a party
submits information about the additional
circumstance that the certified IDR entity
determines is credible. These interim final
rules also require that the parties provide
certain information to the certified IDR
entity, described previously in this pre-
amble, regarding practice size, practice
specialty or type; information about the
plan or issuer’s coverage area; informa-
tion about the QPA; and, if applicable,
information showing that the Federal IDR
process is inapplicable to the dispute. In
addition, the certified IDR entity may
request additional information relating to
the parties’ offers and must consider cred-
ible information submitted to determine if
it demonstrates that the QPA is materially
different from the appropriate out-of-net-
work rate (unless the information relates
to a factor that the certified IDR entity is
prohibited from considering).
Regarding those factors, first, to the
extent credible information is submitted
by a party, the certified IDR entity must
consider whether the credible informa-
tion about the level of training, experi-
ence, and quality and outcome measure-
ments (such as those endorsed by the
consensus-based entity authorized under
section 1890 of the Social Security Act)
of the provider or facility that furnished
the qualified IDR item or service clearly
demonstrates that the QPA is materially
different from the appropriate out-of-
network rate for the qualified IDR item
or service. In order for a certified IDR
entity to consider this additional infor-
mation submitted by a party, the credible
information must clearly demonstrate
that the QPA failed to take into account
that the experience or level of training of
a provider was necessary for providing
the qualified IDR item or service to the
patient or that the experience or train-
ing made an impact on the care that was
provided. The Departments are of the
view that qualified IDR items or services
should not necessitate an out-of-network
31
However, if either the certified IDR entity or one of the parties believes the QPA has not been calculated in accordance with the requirements in 26 CFR 54.9816-6T, 29 CFR 2590.716-6,
or 45 CFR 149.140, the Departments encourage the certified IDR entity or the provider or facility to notify the applicable state or federal authority, or submit a complaint against the plan or
issuer as set forth in 26 CFR 54.9816-7T, 29 CFR 2590.716-7, or 45 CFR 149.150, as applicable.

Bulletin No. 2021–42 491 October 18, 2021
rate higher than the offer closest to the
QPA, simply based on the level of expe-
rience or training of a provider, as this
would lead to an increase in prices with-
out a valid reason and does not align with
the goals of the No Surprises Act. For
instance, the out-of-network payment
amount for the simple repair of a superfi-
cial wound (CPT codes 12001-12007) in
most cases would not necessitate a rate
higher than the QPA just because a pro-
vider has 30 years of experience versus
10 years of experience. Alternatively,
if the plan’s or issuer’s contracted rates
included risk-sharing, bonus, penalty,
or other incentive-based or retrospec-
tive payments that were excluded for
purposes of calculating the QPA for the
items and services as required by the July
2021 interim final rules, a party may pro-
vide evidence as to why the provider’s
or facility’s quality or outcome measures
support an out-of-network rate that is
different from the QPA and the certified
IDR entity should consider whether this
requires selecting an out-of-network rate
that is higher (in the case of a bonus) or
lower (in the case of a penalty) than the
offer closest to the QPA.
Second, to the extent credible infor-
mation is submitted by a party, the cer-
tified IDR entity must consider whether
the credible information about the market
share held by the nonparticipating pro-
vider or facility or the plan (including,
for self-insured plans, the market share
of their third-party administrator (TPA)
in instances where the self-insured plan
relies on the TPA’s networks) or issuer in
the geographic region in which the qual-
ified IDR item or service was provided,
clearly demonstrates that the QPA is
materially different from the appropriate
out-of-network rate for the qualified IDR
item or service. Research suggests that the
market dominance of a provider or facil-
ity, or that of a plan or issuer, can drive
reimbursement rates up or down in a given
region.
32
For instance, a plan or issuer
having the majority of the market share in
a geographic region may signal a QPA that
is unreasonably low, as plans and issuers
with a large market share may drive down
rates,
33
in which case an out-of-network
rate higher than the offer closest to the
QPA may be appropriate. Alternatively, a
provider having the majority of the market
share in a geographic region may signal a
QPA that is unreasonably high, as provid-
ers with a large market share may drive up
rates, in which case an out-of-network rate
lower than the offer closest to the QPA
may be appropriate.
Third, to the extent credible informa-
tion is submitted by a party, the certified
IDR entity must consider whether the
credible information about patient acu-
ity or the complexity of furnishing the
qualified IDR item or service to the par-
ticipant, beneficiary, or enrollee clearly
demonstrates that the QPA is materially
different from the appropriate out-of-net-
work rate for the qualified IDR item or
service. In many cases, 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
reflect patient acuity and the complexity
of the service provided,
34
these factors will
already be reflected in the QPA. There-
fore, the Departments anticipate that there
would only be rare 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 typ-
ical for a service code, the certified IDR
entity may conclude that the QPA does not
adequately take the factor into account.
Similarly, the QPA for a qualified IDR
item or service may be considered too
high for items or services that become less
complex or are furnished more frequently
over time, such as items for which the
QPA reflects reimbursement for a product
with a patent that expires after 2019, in
instances where the QPA is based off the
median of the contracted rates from 2019.
A certified IDR entity may also conclude
that the QPA does not adequately account
for patient acuity, or the complexity of fur-
nishing 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 ser-
vice. For instance, the Departments are
aware that some plans and issuers review
claims and alter the service code or mod-
ifier 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 “downcoding” when the adjustment
results in lower reimbursement).
35
If a
plan or issuer has altered the service code
or modifier(s) for a submitted claim and
applies a QPA that uses a different service
code or modifier(s) than the service code
or modifier(s) submitted by the provider or
facility, the provider or facility could sub-
mit credible information to the certified
IDR entity demonstrating that the QPA
applied by the plan or issuer to the claim
is based on a service code or modifier that
did not properly encompass patient acuity,
the complexity of furnishing the quali-
fied IDR item or service. If the certified
IDR entity agrees that either of the par-
ties have presented credible information
that clearly demonstrates that the QPA is
materially different from the appropriate
out-of-network rate, and adequately takes
into account the considerations allowed
under 26 CFR 54.9816-8T(c)(4)(iii)(B)
through (D), 29 CFR 2590.716-8(c)(4)(iii)
(B) through (D), and 45 CFR 149.510(c)
(4)(iii)(B) through (D), then it could select
either offer, but must select the offer that
the certified IDR entity determines best
32
Schwartz, K., Lopez, E., Rae, M., Neuman, T. What We Know About Provider Consolidation. Kaiser Family Foundation. September 2020. https://www.kff.org/health-costs/issue-brief/
what-we-know-about-provider-consolidation/.
33
See Richard M. Scheffler and Daniel R. Arnold. “Insurer Market Power Lowers Prices in Numerous Concentrated Provider Markets.” Health Affairs. 2017 36:9, 1539-1546; Glenn Melnick,
Yu-Chu Shen and Vivian Wu. “The Increased Concentration Of Health Plan Markets Can Benefit Consumers Through Lower Hospital Prices.” Health Affairs 30, no. 9.
34
https://www.medicalbillingandcoding.org/cpt-modifiers/.
35
The Departments clarify that the July 2021 interim final rules do not require the plan or issuer to calculate the participant’s, beneficiary’s, or enrollee’s cost sharing using a QPA for the
service code submitted by the provider or facility. The plan or issuer could instead calculate the participant’s, beneficiary’s, or enrollee’s cost sharing using a QPA for the service code that the
plan or issuer determined was more appropriate. However, the QPA methodology under 26 CFR 54.9816-6T, 29 CFR 2590.716-6, and 45 CFR 149.140 requires plans and issuers to calculate
the median contracted rate for an item or service using contracted rates for the same or similar item or service. A plan or issuer would be considered out of compliance with these requirements
if the plan or issuer calculated a QPA using a service code that does not reasonably reflect the furnished item or service.

October 18, 2021 492 Bulletin No. 2021–42
represents the value of the qualified IDR
item or service.
36

Fourth, to the extent credible informa-
tion is submitted by a party, the certified
IDR entity must also consider whether
the credible information about the teach-
ing status, case mix, and scope of services
of the nonparticipating facility, clearly
demonstrates that the QPA is materially
different from the appropriate out-of-
network rate for the qualified IDR item
or service. Similar to the other factors, it
is the view of the Departments that the
QPA, which is intended to reflect the mar-
ket-driven rate, should be considered the
prevailing rate unless a party provides
credible information that the characteristic
of the teaching status, case mix, or scope
of services of the nonparticipating facility
was in some way critical to the delivery
of the qualified IDR item or service, and
not adequately accounted for in the QPA,
thereby rebutting the presumption that the
QPA is the appropriate out-of-network
rate. For example, a certified IDR entity
could consider the trauma level of a hospi-
tal when the dispute involves trauma care
or qualified IDR items or services that
could not be performed at a lower-level
hospital, but only to the extent the QPA
does not otherwise reflect this factor. The
Departments seek comment on whether
additional requirements should be con-
sidered to address any potentially abusive
scenarios, including scenarios in which
parties could potentially distort informa-
tion that informs the enumerated consid-
erations, such as overestimating the teach-
ing experience of providers at the facility
or upcoding the costs for items or ser-
vices, and seek comment on the potential
for gaming of the Federal IDR process.
Fifth, to the extent credible informa-
tion is submitted by a party, the certified
IDR entity must also consider whether the
credible information about any demon-
strations of good faith efforts (or lack
thereof) made by the nonparticipating
provider, nonparticipating facility, or non-
participating provider of air ambulance
services or the plan or issuer, as applica-
ble, to enter into network agreements and,
if applicable, contracted rates between the
provider or facility and the plan or issuer,
as applicable during the previous 4 plan
years, clearly demonstrates that the QPA is
materially different from the appropriate
out-of-network rate for the qualified IDR
item or service. For example, a certified
IDR entity must consider what the con-
tracted rate might have been had the good
faith negotiations resulted in the nonpar-
ticipating provider, facility, or provider of
air ambulance services being in-network,
if a party is able to provide related credi-
ble information of good faith efforts or the
lack thereof.
Beyond these enumerated factors, the
certified IDR entity must also generally
consider additional information submit-
ted by a party, provided the information is
credible and relates to the offer submitted
by either party. The certified IDR entity
is not permitted to consider that informa-
tion if it includes information on 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). This prohibition is dis-
cussed further in the next section of this
preamble.
The Departments intend to provide
additional guidance to certified IDR enti-
ties as necessary to clarify how the allow-
able factors should be considered and seek
comment on this approach, including the
appropriateness and scope of the factors
previously discussed.
iii. Selection of Offer 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 ambu-
lance services is essentially the same as
the process applicable to disputes related
to qualified IDR items or services that are
not air ambulance services. As with dis-
putes related to qualified IDR items or ser-
vices that are not air ambulance services,
in determining which offer to select, these
interim final rules provide that the certi-
fied IDR entity must consider the QPA
for the applicable year for the qualified
IDR services that are air ambulance ser-
vices. However, Code section 9817(b)(5)
(C), ERISA section 717(b)(5)(C), PHS
Act section 2799A-2(b)(5)(C), and these
interim final rules specify additional cir-
cumstances, in addition to the QPA, that
the certified IDR entity must also consider
in making the determination for air ambu-
lance services, to the extent the parties
provide credible information on such cri-
teria. As with qualified IDR items or ser-
vices, the certified IDR entity should only
consider this information to the extent the
certified IDR entity determines that either
party submitted credible information that
clearly demonstrates that the QPA is mate-
rially different from the appropriate out-
of-network rate. If a party presents credi-
ble information clearly demonstrating that
the QPA is materially different from the
appropriate out-of-network rate, the cer-
tified IDR entity must consider the addi-
tional circumstances.
To the extent credible information is
submitted by a party, the certified IDR
entity must consider whether credible
information about the quality and out-
comes measurements of the provider of
air ambulance services that furnished the
services clearly demonstrates that the QPA
is materially different from the appropri-
ate out-of-network rate. Additionally, to
the extent credible information is sub-
mitted by a party, the certified IDR entity
must consider whether credible informa-
tion about the acuity of the condition of
the participant, beneficiary, or enrollee
receiving the services, or the complex-
ity of providing the services to the par-
ticipant, beneficiary, or enrollee, clearly
demonstrates that the QPA is materially
different from the appropriate out-of-net-
work rate. Further, to the extent credible
information is submitted by a party, the
certified IDR entity must consider credi-
ble information submitted by a party about
whether the level of training, experience,
and quality of medical personnel that fur-
nished the air ambulance services clearly
36
The Departments note that in instances in which the certified IDR entity selects an offer based on a determination that a service code other than the one upon which the QPA was based more
accurately describes the qualified IDR item or service, neither the plan or issuer nor provider or facility is permitted to adjust the participant’s, beneficiary’s, or enrollee’s cost-sharing amount.
The cost-sharing amount remains the same as originally calculated in accordance with 26 CFR 54.9816-4T(b)(3)(ii) and (iii), 29 CFR 2590.716-4(b)(3)(ii) and (iii), and 45 CFR 149.110(b)
(3)(ii) and (iii); 26 CFR 54.9816-5T(c)(1) and (2), 29 CFR 2590.717-1(c)(1) and (2), and 45 CFR 149.120(c)(1) and (2); or 26 CFR 54.9817-1T(b)(1) and (2), 29 CFR 2590.717-1(b)(1) and
(2), and 45 CFR 149.130(b)(1) and (2).

Bulletin No. 2021–42 493 October 18, 2021
demonstrates that the QPA is materially
different from the appropriate out-of-net-
work rate for the air ambulance services.
To the extent a party submits any such
credible information, the certified IDR
entity must also consider whether credible
information about the ambulance vehi-
cle type, including the clinical capability
level of the vehicle, clearly demonstrates
that the QPA is materially different from
the appropriate out-of-network rate for the
air ambulance services. In considering the
ambulance vehicle type, the certified IDR
entity may not consider whether the air
ambulance is fixed wing or rotary wing,
because the QPA will reflect this differ-
ence, as different service codes are used
to bill for air ambulance services depend-
ing on whether fixed wing or rotary wing
vehicles are used. Instead, the certified
IDR entity should consider air ambulance
vehicle type only to the extent that it is not
already taken into account by the QPA.
To the extent a party submits any such
credible information, the certified IDR
entity must also consider whether credi-
ble information about the population den-
sity of the point of pick-up (as defined in
42 CFR 414.605) for the air ambulance
(such as urban, suburban, rural, or fron-
tier
37
), clearly demonstrates that the QPA
is materially different from the appropri-
ate out-of-network rate for a particular air
ambulance service. Under the July 2021
interim final rules, the QPA is calculated
by reference to the geographic region,
which for air ambulance services distin-
guishes between one region containing all
metropolitan statistical areas (as described
by the U.S. Office of Management and
Budget (OMB) and published by the U.S.
Census Bureau) in a state and one region
consisting of all other portions of the state,
determined based on the point of pick-up
(as defined in 42 CFR 414.605). If these
geographic regions do not provide suffi-
cient information, the QPA is calculated
in reference to Census divisions, with
one region consisting of all metropolitan
statistical areas in each Census division,
and one region consisting of all other por-
tions of the Census division, determined
at the point of pick-up. Therefore, the
QPA for these geographic regions may
already reflect the population density of
the pick-up location. Nevertheless, in cer-
tain circumstances, the QPA for air ambu-
lance services may not adequately capture
the population density, due to additional
distinctions, such as between metropoli-
tan areas within a state, or between rural
and frontier areas. To the extent that there
is credible information about additional
circumstances clearly demonstrating that
the QPA is materially different from the
appropriate out-of-network rate for a par-
ticular air ambulance service, the certified
IDR entity must consider these distinc-
tions.
Finally, to the extent credible informa-
tion is submitted by a party, the certified
IDR entity must consider whether credi-
ble information about demonstrations of
good faith efforts (or lack thereof) made
by the nonparticipating provider of air
ambulance services or the plan or issuer to
enter into network agreements, as well as
contracted rates between the provider and
the plan or issuer, as applicable, during the
previous 4 plan years, clearly demonstrate
that the QPA is materially different from
the appropriate out-of-network rate for
such air ambulance services.
As with qualified IDR items or ser-
vices that are not air ambulance services,
the certified IDR entity must begin with
the presumption that the amount closest to
the QPA is the appropriate out-of-network
rate for the air ambulance service under
consideration and select the offer closest
to the QPA, unless credible information
submitted by the parties clearly demon-
strates that the QPA is materially different
from the appropriate out-of-network rate,
or unless the offers are equally distant
from the QPA but in opposing directions.
In those cases, the certified IDR entity
must select the offer that the certified IDR
entity determines best represents the value
of the qualified IDR items or services,
which could be either party’s offer.
iv. Prohibition on Consideration of
Certain Factors
Code section 9816(c)(5)(D), ERISA
section 716(c)(5)(D), PHS Act section
2799A-1(c)(5)(D), and these interim
final rules provide that the certified IDR
entity may not consider certain factors in
determining which offer is the out-of-net-
work rate. First, the certified IDR entity
may not consider usual and customary
charges. This term, also known as usual,
customary and reasonable charges, refers
to the amount providers in a geographic
area usually charge for the same or similar
medical service.
38
This provision also pro-
hibits consideration of payment or reim-
bursement rates expressed as a proportion
of usual and customary charges. Second,
certified IDR entities cannot consider the
amount that would have been billed to
either a plan or issuer, or a participant,
beneficiary, or enrollee by a provider,
facility, or provider of air ambulance ser-
vices if the provider, facility, or provider
of air ambulance services were not sub-
ject to a prohibition on balance billing.
The Departments recognize that 45 CFR
149.410, 149.420, and 149.440 prohibit
providers, facilities, and providers of air
ambulance services from billing partici-
pants, beneficiaries, or enrollees for the
full charge for items and services to which
these provisions apply, but do not limit the
amount that may be billed to the plan or
issuer. However, the Departments are of
the view that the intent of Code section
9816(c)(5)(D), ERISA section 716(c)(5)
(D), and PHS Act section 2799A-1(c)(5)
(D) is to prohibit the certified IDR entity
from considering the billed charge for a
qualified IDR item or service. Therefore,
the Departments interpret this prohibition
to include consideration of billed charges
to the plan or issuer for the qualified IDR
item or service. Finally, certified IDR enti-
ties must not consider payment or reim-
bursement 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. This
37
For these purposes, the term “frontier” should be understood as including those ZIP codes where the point of pick-up is in a rural area determined to be in the lowest 25 percent of rural pop-
ulation arrayed by population density (also known as super rural ZIP codes for purposes of determining ground ambulance base rates). See 42 CFR 414.610(c)(5)(ii) and 42 CFR 414.626(c)
(1)(ii).
38
See Uniform Glossary of Coverage and Medical Terms, available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-
advisers/sbc-uniform-glossary-of-coverage-and-medical-terms-new.pdf and https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/Uniform-Glossary-01-
2020.pdf.

October 18, 2021 494 Bulletin No. 2021–42
prohibition includes payments or reim-
bursement rates under the Medicare pro-
gram under title XVIII of the Social Secu-
rity Act, the Medicaid program under title
XIX of the Social Security Act, the Chil-
dren’s Health Insurance Program under
title XXI of the Social Security Act, and
the TRICARE program under chapter 55
of title 10, United States Code, chapter 17
of title 38, United States Code. This pro-
hibition also applies to payment rates for
demonstration projects under section 1115
of the Social Security Act, as these are
payment or reimbursement rates payable
by a public payor. This provision prohibits
consideration of payment or reimburse-
ment rates expressed as a proportion of
rates payable by public payors. Thus, the
certified IDR entity must not consider, for
example, which offer is closest to 150 per-
cent of the Medicare reimbursement rate
for a certain item or service.
39
The Depart-
ments solicit comment regarding whether
any additional guidance or clarification is
needed on these prohibited factors.
v. Written Decision
Once the certified IDR entity has made
a determination, the certified IDR entity
must provide the underlying rationale for
its determination in a written decision sub-
mitted to the parties and the Departments.
The certified IDR entity must submit the
decision and the underlying rationale
through the Federal IDR portal in a form
and manner specified by the Departments
in guidance. This rationale will inform the
reports required from the Departments
under Code section 9816(c)(7), ERISA
section 716(c)(7), and PHS Act section
2799A-1(c)(7), and will assist in ensuring
that the certified IDR entities comply with
the requirements of this process, includ-
ing the requirements of 26 CFR 54.9816-
8T(c)(4)(iii), 29 CFR 2590.716-8(c)(4)
(iii), and 45 CFR 149.510(c)(4)(iii). If a
certified IDR entity does not choose the
offer closest to the QPA, the written deci-
sion’s rationale must include a detailed
explanation of the additional consider-
ations relied upon, whether the informa-
tion about those considerations submit-
ted by the parties was credible, and the
basis upon which the certified IDR entity
determined that the credible information
demonstrated that the QPA is materially
different from the appropriate out-of-net-
work rate
v. Effect of Determination
Code section 9816(c)(5)(E), ERISA
section 716(c)(5)(E), PHS Act section
2799A-1(c)(5)(E), and these interim final
rules provide that a determination made by
a certified IDR entity is binding upon all
parties involved, in the absence of fraud
or evidence of intentional misrepresenta-
tion of material facts to the certified IDR
entity by any party regarding the claim. A
certified IDR entity’s determination is not
subject to judicial review, except as set
forth in 9 U.S.C. 10(a)(1)-(4).
40
Under Code section 9816(c)(5)(E)(ii),
ERISA section 716(c)(5)(E)(ii), PHS Act
section 2799A-1(c)(5)(E)(ii), and these
interim final rules, when a certified IDR
entity makes a determination, the party
that submitted the initial Notice of IDR
Initiation may not submit a subsequent
Notice of IDR Initiation involving the
same other party with respect to a claim
that is the same as or similar to a quali-
fied IDR item or service that was the sub-
ject of the initial determination during
the 90-calendar-day period following the
initial determination. The Departments
interpret the 90-day period in the statute
to refer to 90 calendar days. The Depart-
ments are of the view that this interpreta-
tion balances the statutory intent to pro-
vide for a “cooling-off” period between
disputes that relate to the same or similar
items or services while ensuring that the
initiating party is able to resolve outstand-
ing payment disputes through the Federal
IDR process as soon as permitted under
the statute. The Departments interpret the
statutory phrase of “such item or service”
in this context to refer to the same or sim-
ilar item or service, in order to maintain
consistency with the statutory provisions
related to the QPA and the provisions
allowing batching of items and services.
Additionally, such an interpretation clar-
ifies the meaning of the statutory provi-
sions at Code section 9816(c)(5)(E)(iii),
ERISA section 716(c)(5)(E)(iii), and PHS
Act section 2799A-1(c)(5)(E)(iii), which
allow subsequent submission of such an
item or service only if the open negotia-
tion period ended during such a 90-day
period (as the open negotiation period for
the particular item or service under dispute
would have already ended). For claims
for the same or similar item or service
for which the end of the open negotiation
period occurs during the 90-calendar-day
suspension period, after the end of the
90-calendar-day suspension period, either
party may initiate the Federal IDR process
for the items and services affected by the
suspension. For these items or services,
the initiating party must submit the Notice
of IDR Initiation within 30 business days
following the end of the 90-calendar-day
suspension period, as opposed to the stan-
dard 4-business-day period following the
end of the open negotiation period. The
30-business-day period begins on the day
after the last day of the 90-calendar-day
period.
The plan or issuer must make any
additional payment, if applicable, of the
amount of the offer selected by the certified
IDR entity directly to the provider, facil-
ity, or provider of air ambulance services
not later than 30 calendar days after the
determination by the certified IDR entity.
This amount will be the offer selected,
reduced by the sum of any initial payment
the plan or issuer has paid to the provider,
facility, or provider of air ambulance ser-
vices and any cost sharing paid or owed
by the participant, beneficiary, or enrollee
to the provider, facility, or provider of air
ambulance services. If the offer selected
by the certified IDR entity is less than
the sum of the initial payment and any
39
The Departments recognize that contracted rates are frequently based off a percentage of the Medicare payment rate. The Departments clarify that even in instances where the QPA is
calculated using contracted rates that are expressed as a proportion of rates payable by a public payor (or other prohibited considerations), the certified IDR entity is required to consider the
QPA. In the Departments’ view, this does not constitute consideration of the payment or reimbursement rate payable by a public payor.
40
Subparagraphs (1) through (4) of 9 U.S.C. 10(a) provide that courts may vacate an arbitration: where the award was procured by corruption, fraud, or undue means; where there was evi-
dent partiality or corruption in the arbitrators; where the arbitrators were guilty of misconduct in refusing to postpone the hearing, in refusing to hear evidence pertinent and material to the
controversy; or of any other misbehavior prejudicing the rights of the parties; or where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite
award was not made.

Bulletin No. 2021–42 495 October 18, 2021
cost sharing paid by the participant, ben-
eficiary, or enrollee, the provider, facil-
ity, or provider of air ambulance services
will be liable to the plan or issuer for the
difference. This difference must be paid
directly to the plan or issuer not later than
30 calendar days after the determination
by the certified IDR entity. The Depart-
ments note that this determination of the
out-of-network rate does not change the
participant’s, beneficiary’s, or enrollee’s
cost sharing, which is based on the rec-
ognized amount. The cost-sharing amount
remains the same as originally calculated
in accordance with 26 CFR 54.9816-4T(b)
(3)(ii) and (iii), 29 CFR 2590.716-4(b)(3)
(ii) and (iii), and 45 CFR 149.110(b)(3)
(ii) and (iii); 26 CFR 54.9816-5T(c)(1)
and (2), 29 CFR 2590.716-5(c)(1) and (2),
and 45 CFR 149.120(c)(1) and (2); or 26
CFR 54.9817-1T(b)(1) and (2), 29 CFR
2590.717-1(b)(1) and (2), and 45 CFR
149.130(b)(1) and (2).
vi. Recordkeeping Requirement
These interim final rules require that the
certified IDR entity must maintain records
of relevant documentation associated with
any Federal IDR process determination
for 6 years. The 6-year recordkeeping
requirement is similar to other recordkeep-
ing requirements under the Code, ERISA,
and the PHS Act. For example, indepen-
dent review organizations involved in the
Federal external review process under 26
CFR 54.9815-2719, 29 CFR 2590.715-
2719, and 45 CFR 147.136 must retain
records for 6 years. This recordkeeping
requirement will help ensure that state
and Federal oversight agencies are able to
audit past determinations of certified IDR
entities and that parties are able to obtain
records of the determinations. Certified
IDR entities must make these records
available for examination by all parties to
the dispute, except when disclosure would
violate state or Federal privacy laws and
regulations, as well as to state or Federal
oversight agencies upon request for over-
sight purposes.
vii. Costs of the Federal IDR Process and
Payment
At the time that a certified IDR entity
is selected by both of the parties or by the
Departments, each party to a determina-
tion must pay to the certified IDR entity
the administrative fee due to the Depart-
ments for participating in the Federal IDR
process. At the time of submission of the
offer by each party to a determination, the
certified IDR entity fee must be paid to
the certified IDR entity. Each party will be
able to view the certified IDR entity fees
and administrative fees in the Federal IDR
portal when engaging in the certified IDR
entity selection process. As discussed later
in this preamble, certified IDR entities
must set the certified IDR entity fee within
a pre-determined range (or as otherwise
approved by the Departments) specified
by the Departments through guidance.
The Departments anticipate issuing this
guidance annually. For a discussion of
the considerations the Departments will
review when setting the certified IDR
entity fee range, see section III.D.5 of this
preamble.
These interim final rules require each
party to pay the entire certified IDR entity
fee at the time the parties provide their
offer 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). Certified IDR enti-
ties are required to hold these funds in a
trust or escrow account until the certified
IDR entity makes a determination of the
out-of-network rate, or in instances in
which the parties agree on an out-of-net-
work rate, until the Departments notify
the certified IDR entity that it may remit
the funds as specified in these interim
final rules. The certified IDR entity may
(but is not required to) accrue interest on
the funds. The certified IDR entity is not
required to remit any accrued interest to
any other party. Within 30 business days
of making the determination, the certified
IDR entity must refund to the prevailing
party the amount the party submitted for
the certified IDR entity fee. The certified
IDR entity will retain the certified IDR
entity fee submitted by the non-prevail-
ing party, as the non-prevailing party is
required to pay the certified IDR entity
fee. In the case of batched determina-
tions, the certified IDR entity may make
different payment determinations for each
qualified IDR item or service under dis-
pute. In these cases, the party with fewest
determinations in its favor is considered
the non-prevailing party and is responsi-
ble for paying the certified IDR entity fee.
In the event that each party prevails in an
equal number of determinations, the cer-
tified IDR entity fee will be split evenly
between the parties. The Departments are
of the view that this approach reduces the
administrative burden of fee collections
and ensures payment of certified IDR
entities. This approach also eliminates
any concerns that certified IDR entities
will make determinations based on which
party is more likely to pay the certified
IDR entity fee. The Departments may
issue additional guidance if abusive situ-
ations or other issues related to the pay-
ment of the administrative fee or the certi-
fied IDR entity fee arise. The Departments
also solicit comment on whether addi-
tional requirements, including procedures
to offset against or make adjustments to
amounts owed under a payment determi-
nation, are necessary to ensure payment
or collection of the administrative fee and
the certified IDR entity fee.
If the parties negotiate an out-of-net-
work rate before the certified IDR entity
makes a determination, the certified IDR
entity is required to return half of each
party’s payment for the certified IDR
entity fee, unless directed otherwise by
both parties to distribute the total amount
of that refund in different shares.
Under Code section 9816(c)(8), ERISA
section 716(c)(8), PHS Act section 2799A-
1(c)(8), and these interim final rules, each
party to a determination must pay an
administrative fee for participating in the
Federal IDR process. The statute further
indicates that the administrative fee must
be paid to the Departments at the time and
in the manner specified by the Depart-
ments. These interim final rules require
each party to pay the administrative fee
to the certified IDR entity at the time the
certified IDR entity is selected, regardless
of whether that certified IDR entity was
selected by the parties or by the Depart-
ments. Having the certified IDR entity
collect both the administrative fee and the
certified IDR entity fee will help ensure
efficiency by streamlining the process and
will facilitate administrative convenience
for the parties and the Departments. These
interim final rules also specify that the
administrative fee is non-refundable, even
in instances where the parties negotiate
an out-of-network rate before the certi-

October 18, 2021 496 Bulletin No. 2021–42
fied IDR entity makes a determination
or where the certified IDR entity deter-
mines that the case does not qualify for
the Federal IDR process. Code section
9816(c)(8)(B), ERISA section 716(c)(8)
(B), and PHS Act section 2799A-1(c)(8)
(B) specify that the administrative fee is
established such that the total amount of
fees is approximately equal to the amount
of expenditures estimated by the Depart-
ments in carrying out the Federal IDR pro-
cess. Because the Departments expect that
a large part of the expenditures in carrying
out the Federal IDR process will come
from the initiation of the Federal IDR pro-
cess, the Departments will have incurred
expenditures in instances in which the
parties reach an agreement before the
certified IDR entity makes a determina-
tion or in which the certified IDR entity
determines that the case does not qualify
for the Federal IDR process, and thus, it is
appropriate that the parties should still be
expected to pay the fee.
As explained in the following section
on certification, the certified IDR entity
must remit the administrative fee to the
Departments at the time and in the man-
ner specified in guidance. The adminis-
trative fee amount will be established in
guidance published by the Departments in
a manner so that the total administrative
fees collected by the certified IDR entities
and remitted to the Departments during a
calendar year are approximately equal to
the estimated amount of expenditures by
the Departments for that calendar year in
carrying out the Federal IDR process. In
setting the administrative fee, the Depart-
ments will consider the estimated costs
for the Departments to administer the
Federal IDR process for the following
calendar year, including the staffing and
contracting costs related to certifying and
providing oversight to certified IDR enti-
ties; the costs of developing and publish-
ing reports as required under Code sec-
tions 9816 and 9817, ERISA sections 716
and 717, and PHS Act sections 2799A-1
and 2799A-2; the costs of collecting the
administrative fees from certified IDR
entities; and the cost of maintaining the
Federal IDR portal. In future years, such
projected costs will be informed by the
actual costs incurred by the Departments
to date to administer the Federal IDR pro-
cess. The Departments expect that certain
resources related to the Federal IDR pro-
cess will also be used for the patient-pro-
vider dispute resolution process, such as
the Federal IDR portal, certain staffing,
and contracts. In setting the administra-
tive fee, the Departments will consider
the expected volume for the Federal IDR
process and the patient-provider dispute
resolution process and apportion the IDR
administrative fee such that it reflects the
appropriate usage of the Federal IDR pro-
cess by providers, facilities, providers of
air ambulance services, plans, and issuers.
5. Certification of IDR Entities
Under Code section 9816(c)(4), ERISA
section 716(c)(4), and PHS Act section
2799A-1(c)(4), an IDR entity must meet
certain standards and be certified by the
Departments to be selected for the Federal
IDR process. Consistent with these provi-
sions, these interim final rules provide that
an IDR entity must provide through the
Federal IDR portal written documenta-
tion to the Departments that demonstrates
the entity satisfies certain standards and
procedures outlined in these interim final
rules and set forth in guidance issued by
the Departments. Specifically, the Depart-
ments will indicate through guidance the
types of documentation that should be
submitted for each certification standard,
in what manner they should be submit-
ted, and how the documentation will be
reviewed for certification. An IDR entity
that satisfies the standards in the interim
final rules and guidance issued by the
Departments will be provided a certified
IDR entity number and will be certified
for a 5-year period, subject to the petition
and revocation process, discussed later in
this preamble.
41
Once certified, the certi-
fied IDR entity must continue to satisfy
these requirements.
IDR entities will be expected, as part
of their application for certification, to
submit general information about their
organization, including contact infor-
mation, Taxpayer Identification Number
(TIN), and website information, as well as
the service area in which the IDR entity
intends to conduct payment determina-
tions under the Federal IDR process. IDR
entities may choose to apply to operate in
all states or self-limit to a particular subset
of states. Further, anyone submitting the
application for certification must have the
legal and financial authority to bind the
IDR entity. An IDR entity that the Depart-
ments certify must enter into an agree-
ment with the Departments. That agree-
ment will include specified provisions
encompassed by these interim final rules,
including, but not limited to, the require-
ments applicable to certified IDR entities
when making payment determinations as
well as the requirements regarding certi-
fication and revocation (such as specifica-
tions for wind down activities and reallo-
cation of certified IDR entity fees, where
warranted).
In order to be certified, an IDR entity
must possess (directly or through con-
tracts or other arrangements) and demon-
strate sufficient arbitration and claims
administration of health care services,
managed care, billing, coding, medical,
and legal expertise. With regard to med-
ical expertise, where the payment deter-
mination depends on the patient acuity or
the complexity of furnishing the qualified
IDR item or service, or the level of train-
ing, experience, and quality and outcome
measurements of the provider or facility
that furnished the qualified IDR item or
service, the IDR entity should have avail-
able medical expertise with the appropri-
ate training and experience in the field of
medicine involved in the qualified IDR
item or service. Additionally, the IDR
entity must employ (directly or through
contracts or other arrangements) suffi-
cient personnel to make determinations
within the 30 business days allowed for
such determinations. To satisfy this stan-
dard, the written documentation the IDR
entity submits must include a description
of its organizational structure and capa-
bilities, including an organizational chart
and the credentials, responsibilities, and
number of personnel employed to make
determinations. The Departments consid-
ered requiring IDR entities to have per-
sonnel (either hired directly or through a
41
As discussed in the section on Economic Impact and Paperwork Burden, the Departments estimate there will be 50 IDR entities that will seek certification by the Departments.

Bulletin No. 2021–42 497 October 18, 2021
contract) with air space law knowledge
for making determinations related to air
ambulance cases, but are concerned that
such a requirement may limit the number
of eligible entities and increase the likeli-
hood of conflicts of interests in air ambu-
lance cases. The Departments seek com-
ment on whether IDR entities should be
required to have air space law knowledge
for IDR entity certification to make deter-
minations for air ambulance cases.
Next, an IDR entity must also maintain
a current accreditation from a nationally
recognized and relevant accreditation
organization, such as URAC, or ensure
that its personnel otherwise possess the
requisite training to conduct payment
determinations (for example, providing
documentation that personnel employed
by the IDR entity have completed arbitra-
tion training by the AAA, the AHLA, or
a similar organization). This requirement
will ensure the IDR entity has the opera-
tional ability to perform its primary func-
tions as set forth in the No Surprises Act
and these interim final rules. States have
imposed similar requirements on inde-
pendent review organizations for external
review processes under PHS Act section
2719 (which is incorporated by reference
into Code section 9815 and ERISA sec-
tion 715), or for their state IDR processes.
Similar to independent review organi-
zations, certified IDR entity personnel
should have the skills and training nec-
essary to conduct unbiased and impartial
determinations between plans or issuers
and providers, facilities, or providers of
air ambulance services, and similar bill-
ing, coding, and medical expertise. The
Departments expect that many of the orga-
nizations with current experience in arbi-
tration or dispute resolution will already
have such accreditation and will employ
personnel with relevant experience. The
Departments seek comment on whether
any additional accreditation or training
standards would meet this requirement,
including whether additional flexibility
is needed to help encourage innovation
in the provision of IDR services and new
entrants as IDR entities that may be certi-
fied for the Federal IDR process.
Additionally, as a condition of certifi-
cation, the IDR entity must have a process
to ensure that no conflicts of interest exist
between the parties and the personnel
the certified IDR entity assigns to each
dispute, and to screen for any material
relationships between the parties and the
personnel assigned to each dispute. This
process will allow certified IDR entities to
comply with the requirements of 26 CFR
54.9816-8T(c)(1)(ii), 29 CFR 2590.716-
8(c)(1)(ii), and 45 CFR 149.510(c)(1)(ii).
While conducting the Federal IDR pro-
cess, a certified IDR entity will be entrusted
with IIHI. Code section 9816(c)(4)(A)(v),
ERISA section 716(c)(4)(A)(v), and PHS
Act section 2799A-1(c)(4)(A)(v) require a
certified IDR entity to maintain the confi-
dentiality of IIHI obtained in the course of
conducting payment determinations. This
IIHI is often protected under Federal and
state law, but certain laws, such as the pri-
vacy and security regulations promulgated
under HIPAA, as amended, may not apply
to IIHI when it is held by a certified IDR
entity.
Therefore, these interim final rules
specify that a certified IDR entity must
provide written documentation to the
Departments that demonstrates that the
certified IDR entity satisfies, among
other things, the confidentiality standards
set forth in 26 CFR 54.9816-8T(e)(2)
(v), 29 CFR 2590.716-8(e)(2)(v), and 45
CFR 149.510(e)(2)(v). These provisions
include standards for certified IDR enti-
ties to maintain the confidentiality of IIHI
obtained in the course of conducting the
Federal IDR process. Because IIHI is sen-
sitive, private information about consum-
ers and their health, including information
that is identifiable to a particular individ-
ual, IIHI warrants strong protection by the
parties that will be handling this informa-
tion. Therefore, the Departments are of the
view that certified IDR entities must have
procedures in place to protect consumers
from improper storage, use, handling, or
transmission of this information. The con-
fidentiality standards in these interim final
rules are informed by the privacy, secu-
rity, and breach notification regulations
issued under HIPAA and the HITECH
Act, because the Departments are of the
view that these provisions are industry
standards.
42
Drawing from those standards
for these interim final rules promotes con-
tinuity in the way consumer information
is protected and secured throughout sys-
tems involved in health care. The Depart-
ments have drawn mainly from relevant
HIPAA standards because these are the
predominant federal standards that apply
to identifiable consumer health informa-
tion, when possessed by some of the par-
ties to the Federal IDR process. Therefore
the Departments are of the view that these
standards are the most appropriate privacy
standards for certified IDR entities. The
Departments have tailored these require-
ments to the particular functions of certi-
fied IDR entities to ensure that they have
clear, workable, and appropriate standards
to implement.
These interim final rules set forth the
confidentiality requirements applicable
to certified IDR entities and include pro-
visions regarding privacy, security, and
breach notification. The Departments
begin by discussing the general privacy
requirement in 26 CFR 54.9816-8T(e)(2)
(v)(A), 29 CFR 2590.716-8(e)(2)(v)(A),
and 45 CFR 149.510(e)(2)(v)(A) that spec-
ify that a certified IDR entity may create,
collect, handle, disclose, transmit, access,
maintain, store, and/or use IIHI only
to perform two categories of activities,
described in 26 CFR 54.9816-8T(e)(2)
(v)(A)(1) through (2), 29 CFR 2590.716-
8(e)(2)(v)(A)(1) through (2), and 45 CFR
149.510(e)(2)(v)(A)(1) through (2): (1) to
perform the certified IDR entity’s required
duties under these sections of the interim
final rules; and (2) to perform functions
related to carrying out additional obliga-
tions as may be required under applicable
Federal or state laws or regulations.
Additionally, certified IDR entities are
required to maintain the security of the
IIHI they obtain by ensuring the confi-
dentiality of all IIHI they create, obtain,
maintain, store, and transmit; protect-
ing against any reasonably anticipated
threats or hazards to the security of this
information; protecting against any rea-
sonably anticipated unauthorized uses or
disclosures of this information; and by
ensuring compliance by any of their per-
sonnel, including their contractors and
subcontractors (as applicable), assigned
to a payment determination. To satisfy
this requirement, certified IDR entities are
42
45 CFR part 160 subpart A and subparts A, C, D, and E of part 164.

October 18, 2021 498 Bulletin No. 2021–42
required to have policies and procedures
in place to properly use and disclose IIHI,
identify when IIHI should be destroyed or
disposed of, properly store and maintain
confidentiality of IIHI that is accessed
or stored electronically, and identify the
steps the certified IDR entities will take in
the event of a breach regarding IIHI. The
Departments based these requirements on
the similar rule applicable to HIPAA cov-
ered entities under 45 CFR 164.306(a)(1),
but because the rule for HIPAA covered
entities applies specifically with regard
to electronic protected health information
(PHI), the requirements in these interim
final rules specify that certified IDR enti-
ties must ensure the confidentiality of all
IIHI they create, obtain, maintain, store, or
transmit in accordance with Code section
9816(c)(4)(A)(v), ERISA section 716(c)
(4)(A)(v), and PHS Act section 2799A-
1(c)(4)(A)(v). A certified IDR entity’s
responsibility to comply with these confi-
dentiality requirements shall survive revo-
cation of the IDR entity’s certification for
any reason, and IDR entities must comply
with the record retention and disposal
requirements described in these interim
final rules.
The Departments also require certified
IDR entities to securely destroy or dis-
pose of IIHI in an appropriate and reason-
able manner 6 years from either the date
of its creation or the first date on which
the certified IDR entity had access to it,
whichever is earlier. In determining what
is appropriate and reasonable, certified
IDR entities should assess potential risks
to participant, beneficiary, or enrollee pri-
vacy, as well as consider such issues as the
form, type, and amount of IIHI to be dis-
posed. The Departments are of the view
that 6 years is a reasonable timeframe for
destruction of such information since rel-
evant business procedures should be com-
plete well before this deadline, including
IDR payment determinations and certified
IDR entity compliance with the Depart-
ments’ audits as applicable. Furthermore,
the 6-year timeframe matches the record
retention requirements for certified IDR
entities under these interim final rules as
well as other record retention require-
ments under ERISA. These standards
are also similar to HIPAA Security Rule
requirements
43
under 45 CFR 164.310(d)
(2)(i) and (ii), except that the Departments
have tailored the requirements in section
26 CFR 54.9816-8T(e)(2)(v)(B)(4), 29
CFR 2590.716-8(e)(2)(v)(B)(4), and 45
CFR 149.510(e)(2)(v)(B)(4) to apply to
IIHI.
Next, the Departments require certified
IDR entities to develop and utilize secure
electronic interfaces when transmitting
IIHI electronically, including through data
transmission with the Federal IDR por-
tal, and between disputing parties during
the Federal IDR process and the certified
IDR entity. In addition, the Departments
are of the view that certified IDR entities
must have in place requirements for their
personnel, including their contractors and
subcontractors (as applicable), similar
to those required under HIPAA Rules to
make sure IIHI is only handled by appro-
priate staff who are trained to handle IIHI,
and that proper protocol is followed if a
breach of IIHI occurs.
Finally, 26 CFR 54.9816-8T(e)(2)(v)
(D), 29 CFR 2590.716-8(e)(2)(v)(D), and
45 CFR 14.510(e)(2)(v)(D) require that
all confidentiality requirements applica-
ble to certified IDR entities also apply to
certified IDR entities’ contractors and sub-
contractors with access to IIHI perform-
ing any duties related to the Federal IDR
process. For example, if a breach rises to
the level of requiring a breach notifica-
tion, the contractor or subcontractors must
notify the certified IDR entity to inform it
of the risk assessment results, and the cer-
tified IDR entity must notify the provider,
facility, or provider of air ambulance ser-
vices; plan and issuer; the Departments;
and each individual whose unsecured IIHI
has been, or is reasonably believed to have
been, subject to the breach, to the extent
possible, as required by these interim final
rules.
In addition to the privacy and security
requirements discussed in this section of
this preamble, these interim final rules con-
tain breach notification requirements, sim-
ilar to the HIPAA breach notification stan-
dards (the “HIPAA Notification Rule”) at
45 CFR 164.402 and 164.404, to address
steps that a certified IDR entity must take
following the discovery of a breach of
unsecured IIHI as defined in these interim
final rules. The Departments are of the
view that adopting breach notification
standards similar to the HIPAA breach
notification standards for certified IDR
entities provides important protections
for IIHI. For purposes of these interim
final rules, the Departments made changes
from the HIPAA breach notification stan-
dards to account for IIHI and certified IDR
entities, as opposed to PHI and covered
entities, in accordance with Code section
9816(c)(4)(C), ERISA section 716(c)(4)
(C), and PHS Act section 2799A-1(c)(4)
(C). The Departments require a certified
IDR entity, upon discovery of a potential
breach of unsecured IIHI, to conduct a
risk assessment to determine the proba-
bility that the security or privacy of IIHI
has been compromised based on at least
the nature and extent of the IIHI involved,
including the types of identifiers and the
likelihood of re-identification; the unau-
thorized person who used the IIHI or to
whom the disclosure was made; whether
the IIHI was actually acquired or viewed;
and the extent to which the risk to the IIHI
has been mitigated. The Departments also
require a breach to be treated as discov-
ered by the certified IDR entity as of the
first day on which such breach is known
to the certified IDR entity or, by exer-
cising reasonable diligence, should have
been known to the certified IDR entity.
A certified IDR entity shall be deemed to
have knowledge of a breach if the breach
is known, or by exercising reasonable dil-
igence should have been known, to any
person, other than the person committing
the breach, who is an employee, officer,
or other agent of the certified IDR entity.
The Departments are also including
requirements for timing, content, and
method of providing the breach notifi-
cation in these interim final rules. Under
these provisions, a certified IDR entity
must provide notification without unrea-
sonable delay and in no case later than 60
calendar days after the discovery of the
breach. The Departments are of the view
that 60 calendar days provides sufficient
time for a certified IDR entity to discover
a potential breach, conduct a risk assess-
43
U.S. Dept. of Health and Human Servs., Office for Civil Rights, “The HIPAA Privacy and Security Rules: Frequently Asked Questions About the Disposal of Protected Health Information,”
available at https://www.hhs.gov/sites/default/files/disposalfaqs.pdf.

Bulletin No. 2021–42 499 October 18, 2021
ment, and send notification as required
in these interim final rules, in line with
the requirements in 45 CFR 164.404 that
allow up to 60 calendar days for such a
notification to be sent. Since a condition
for IDR entity certification involves sub-
mission of policies and procedures to:
properly create, obtain, maintain, store,
or transmit IIHI in accordance with Code
section 9816(c)(4)(A)(v), ERISA section
716(c)(4)(A)(v), and PHS Act section
2799A-1(c)(4)(A)(v); monitor, periodi-
cally assess, and update the security con-
trols and related system risks to ensure the
continued effectiveness of these controls;
and guard against, detect, and report mali-
cious software, the Departments are of the
view that 60 calendar days are sufficient
for proper identification, risk assessment,
and notification of a breach.
When a certified IDR entity sends
a breach notification, the content must
include similar information as that required
under 45 CFR 164.404, but focused on
IIHI. Certified IDR entities must include,
to the extent possible, the identification
of each individual whose unsecured IIHI
has been, or is reasonably believed by the
certified IDR entity to have been, subject
to the breach; a brief description of the
breach, including the date of the breach
and the date of the discovery of the breach,
if known; a description of the types of
unsecured IIHI that were involved in the
breach (for example, whether full name,
Social Security number, date of birth,
home address, account number, diagnosis,
disability code, or other types of infor-
mation were involved); a brief descrip-
tion of what the certified IDR entity is
doing to investigate the breach, to miti-
gate harm to the affected parties, and to
protect against any further breaches; and
contact procedures for individuals to ask
questions or learn additional information,
which must include a toll-free telephone
number, email address, website, or postal
address. The Departments are of the view
that this level of detail is necessary for full
transparency for those who are potentially
affected by such a breach.
Finally, a certified IDR entity must
submit such notification in written form
(in clear and understandable language)
either on paper, electronically through
the Federal IDR portal, or by email to the
Departments; the plan, issuer or FEHB
carrier; the provider, facility, or provider
of air ambulance services; and, when pos-
sible, each individual whose unsecured
protected IIHI has been, or is reason-
ably believed by the certified IDR entity
to have been, subject to the breach. The
Departments understand that a certified
IDR entity may not have access to contact
information for each individual whose
unsecured protected IIHI has been, or is
reasonably believed by the certified IDR
entity to have been, subject to a breach. In
these cases, IDR entities must work with
issuers, plans, providers, and facilities to
ensure that these individuals are appropri-
ately notified.
The Departments seek comment on
the confidentiality requirements enumer-
ated in 26 CFR 54.9816-8T(e)(2)(v), 29
CFR 2590.716-8(e)(2)(v), and 45 CFR
149.510(e)(2)(v), which are based on cer-
tain provisions of the HIPAA Rules, and
whether any additional or different protec-
tions are warranted.
Additionally, the certified IDR entity
must ensure the fiscal integrity and sta-
bility of its organization. In order to meet
this standard, the IDR entity must demon-
strate that it has a system of safeguards
and controls in place to prevent and detect
improper financial activities by its employ-
ees and agents and to assure fiscal integrity
and accountability for all fees received
and held. To demonstrate financial stabil-
ity, IDR entities must also submit 3 years
of financial statements, or other documen-
tation that demonstrates fiscal stability
as directed by the Departments if 3 years
of financial statements are unavailable.
This financial disclosure requirement is
informed by similar requirements under
the Sarbanes-Oxley Act.
44
The Depart-
ments are of the view that, because the
Sarbanes-Oxley Act represents the pri-
mary standard for corporate disclosure of
financial information, it is appropriate to
mirror its standard as a means of ensur-
ing certified IDR entity compliance with
the statutory requirements related to fiscal
integrity. The Departments are also of the
view that the disclosure of these financial
statements will enable the Departments
to assess whether the IDR entity is finan-
cially viable and capable of maintaining
its operations, independent of any future
revenue earned under the Federal IDR
process as a certified IDR entity.
As a condition of certification, an IDR
entity must indicate to the Departments
the fees it intends to charge for payment
determinations, which are limited to a
fixed fee amount for single determinations
(including determinations for bundled
arrangements) and a separate fixed fee
amount for batched determinations under
paragraph (c)(3)(i) of these interim final
rules. These fixed fees must be within a
range set forth in guidance by the Depart-
ments, unless the IDR entity receives writ-
ten approval from the Departments for a
fee outside that range. The Departments
are of the view that setting a range of
permitted flat amounts, including a lower
and upper limit, will permit certified IDR
entities to charge a reasonable certified
IDR entity fee for IDR payment deter-
minations, while also making IDR costs
clear to parties in advance of the Federal
IDR process. Setting a minimum and a
maximum rate will mitigate potential con-
cerns regarding overuse of the Federal
IDR process due to low fees and poten-
tial concerns regarding overcharging by
certified IDR entities. For batched items
and services, setting a separate range that
is higher to account for the potential for
a larger number of claims and increased
complexity will help ensure that certified
IDR entities are compensated adequately
for their services. The certified IDR entity
may update its fees and seek approval
from the Departments to charge a flat rate
beyond the upper or lower limits for fees
annually, as provided in guidance.
The Departments considered whether
to allow certified IDR entities to set their
fees without limitations and also con-
sidered imposing anti-abuse provisions
to prevent certified IDR entities from
charging unreasonable amounts, while
also taking into account the statutory
intent to discourage the overuse of the
Federal IDR process and incentivize IDR
entity participation in the process. The
Departments are of the view, however, that
44
Pub. L 107-204, available at https://www.govinfo.gov/content/pkg/PLAW-107publ204/html/PLAW-107publ204.htm.

October 18, 2021 500 Bulletin No. 2021–42
requiring certified IDR entities to set fees
within fixed ranges will reduce the poten-
tial for excessive certified IDR entity fees
that could result in inflated health care and
insurance costs that could ultimately be
passed on to consumers. The Departments
are also setting a lower bound for certified
IDR entity fees to ensure that certified
IDR entity fees do not lead to the over-
use of the Federal IDR process, thereby
encouraging parties to exhaust other paths
to agreement, such as open negotiation,
before entering the Federal IDR process.
In setting the allowable certified IDR
entity fee range, the Departments will
consider current IDR entity fees for
state-managed IDR processes that are
similar to the Federal IDR process. Based
on the Departments’ research on existing
IDR processes in states that have imple-
mented similar surprise billing legisla-
tion, IDR entity fees generally range from
$300-$600 per payment determination.
45

The Departments acknowledge that in
some states, individual arbitrators charge
as little as $270 and as much as $6,000 per
arbitration.
46
However, the Departments
are of the view that such drastic ranges
of IDR entity fees risk inflating costs of
care that could ultimately be passed on to
consumers.
The Departments will also consider the
anticipated time and resources needed for
certified IDR entities to meet the require-
ments of these interim final rules, such as
the time and resources needed to obtain
certification, making payment determi-
nations (including determining whether
the dispute belongs in the Federal IDR
process), data reporting, and audits. The
Departments will also consider factors
such as the anticipated volume of payment
determinations under the Federal IDR pro-
cess and adequacy of the Federal IDR pro-
cess capacity to efficiently handle the vol-
ume of IDR initiations and payment deter-
minations. The Departments will review
and update the allowable fee range annu-
ally based on these factors and the impact
of inflation and other cost increases. The
Departments seek comment on these fac-
tors and any additional factors that should
be considered when determining the range
for allowable certified IDR entity fees.
The certified IDR entity may not charge
a fee that is beyond the upper or lower
limits for fees set forth in annual guidance
published by the Departments as approved
fixed fees, unless the IDR entity or certified
IDR entity requests and can provide jus-
tification for the higher or lower fee, and
the Departments provide written approval
for the certified IDR entity to charge a fee
beyond the upper or lower limits for fees
set forth in guidance. For example, if the
IDR entity or certified IDR entity is able to
show that, due to matters the Department
has not considered, the cost of making
determinations under 26 CFR 54.9816-
8T(c)(4), 29 CFR 2590.716-8(c)(4), and 45
CFR 149.510(c)(4) will be higher than the
upper limit for fees set forth in guidance,
the certified IDR entity may charge a higher
fee for determinations in that calendar year
with the Departments’ written approval in
accordance with 26 CFR 54.9816-8T(e)
(2)(vii), 29 CFR 2590.716-8(e)(2)(vii),
45 CFR 149.510(e)(2)(vii). Certified IDR
entities will not be permitted to vary their
fees from any approved higher fees during
the year for which such higher fees were
approved.
Specifically, in order for the certified
IDR entity to receive the Departments’
written approval to charge a fee beyond
the upper or lower bounds for fees as set
forth in guidance, the IDR entity or certi-
fied IDR entity must submit a written pro-
posal that includes: (1) the alternative flat
fee the IDR entity or certified IDR entity
believes is appropriate; (2) a description
of the circumstances that require the alter-
native flat fee; and (3) a description of
how the alternative flat fee will be used
to mitigate such circumstances. A fee
other than the higher (or lower) fee previ-
ously approved, including one outside the
allowable range, will be permitted only
upon the Departments’ written approval
to charge the fee documented in the IDR
entity’s or certified IDR entity’s written
proposal. The Federal IDR portal will pro-
vide the functionality for IDR entities and
certified IDR entities to request a fixed
fee beyond the lower and upper limits set
forth in guidance. As discussed earlier
in this preamble, in instances where the
disputing parties do not select a certified
IDR entity, the Departments will select
a certified IDR entity that charges a fee
within the allowed range as provided for
in guidance by the Departments. Only if
there are insufficient certified IDR entities
that charge a fee within the allowed range
available to make the payment determina-
tion will the Departments select a certified
IDR entity that charges a fee that has been
approved by the Department but that is
outside the allowed range.
A certified IDR entity must also have
procedures in place to retain the certified
IDR entity fees paid by both parties at the
initiation of the Federal IDR process in
a trust or escrow account separate from
other funds and to return the certified IDR
entity fees paid by the prevailing party
of an IDR payment determination, or a
portion of the fees paid by both parties
should they agree on an out-of-network
rate through ongoing open negotiations,
within 30 business days of the determi-
nation, as specified in these interim final
rules. The certified IDR entity may (but
is not required to) accrue interest on the
funds held in a trust or escrow account and
is not required to include accrued interest
with the returned fee. Additionally, the
IDR entity must also have a procedure
in place to retain the administrative fee
required under 26 CFR 54.9816-8T(e)(2)
(ix), 29 CFR 2590.716-8(e)(2)(ix), and
45 CFR 149.510(e)(2)(ix), and to remit
it to the Departments in accordance with
the timeframe and procedures set forth in
guidance.
As a condition of certification, the IDR
entity must show that it is able to con-
duct the Federal IDR process as required
under these interim final rules. As part
of this requirement, the IDR entity must
have processes and procedures in place to
ensure that it will not make a determina-
tion under the Federal IDR process with
respect to which the certified IDR entity
would not be eligible for selection due to
a conflict of interest.
45
Hoadley, J., and Maanasa, K. “How States are Using Independent Dispute Resolution to Resolve Out-of-Network Payment in Surprise Billing,” To the Point 9blog), Commonwealth Funds,
Feb. 27, 2020. https://doi.org/10.26099/pqt4-vy24.
46
https://www.kff.org/private-insurance/fact-sheet/surprise-medical-bills-new-protections-for-consumers-take-effect-in-2022/amp/.

Bulletin No. 2021–42 501 October 18, 2021
Therefore, in order to be certified, an
IDR entity must provide written docu-
mentation that shows the IDR entity sat-
isfies certain standards related to conflicts
of interest. Under 26 CFR 54.9816-8T(e)
(3)(i), 29 CFR 2590.716-8(e)(3)(i), and
45 CFR 149.510(e)(3)(i) the IDR entity
must attest that it does not have a conflict
of interest as defined in 26 CFR 54.9816-
8T(a)(2)(iv), 29 CFR 2590.716-8(a)(2)
(iv), and 45 CFR 149.510(a)(2)(iv). Addi-
tionally, to be certified, an IDR entity
must demonstrate that it has procedures
in place to ensure that the specific person-
nel assigned to a payment determination
do not have conflicts of interest regarding
any party to the dispute within the 1 year
immediately preceding an assignment of
dispute determination. This requirement
is similar to the requirements set forth in
18 U.S.C. 207(b) and, as discussed earlier
in this section of the preamble, provides
a reasonable and appropriate standard for
preventing conflicts of interest.
47

Finally, to preserve the integrity of the
Federal IDR process, following certifica-
tion, if a certified IDR entity, at any time
acquires control of, becomes controlled
by, or comes under common control with
any entity described in paragraphs 26 CFR
54.9816-8T(e)(3)(i), 29 CFR 2590.716-
8(e)(3)(i), and 45 CFR 149.510(e)(3)(i),
the certified IDR entity must notify the
Departments in writing no later than 3
business days after the acquisition or exer-
cise of control. As the certified IDR entity
would no longer meet the certification cri-
teria, it will have its certification revoked
under the processes set forth in 26 CFR
54.9816-8T(e)(6), 29 CFR 2590.716-8(e)
(6), and 45 CFR 149.510(e)(6) (including
the prohibition on accepting new payment
determinations). The Departments seek
comment on whether any additional pro-
tections are necessary.
Certified IDR entities must also adhere
to audit standards set forth in these interim
final rules and by the Departments in guid-
ance to ensure that certified IDR entities
are adhering to the requirements of these
interim final rules, including those regard-
ing certification as a certified IDR entity
and those outlining how entities must con-
duct payment determinations as defined
in Code section 9816(c), ERISA section
716(c), and PHS Act section 2799A-1(c).
To ensure adherence, the Departments
intend to perform audits on a select num-
ber of certified IDR entities. Certified IDR
entities may be randomly selected by the
Departments for an audit or selected based
upon stakeholder complaints (includ-
ing those received in connection with a
petition for revocation of certification)
received by the Departments. Resulting
findings may be used for revocation of
certification or in re-certification decisions
made by the Departments.
Finally, the IDR entity must collect
and provide the information required to
be reported to the Departments under 26
CFR 54.9816-8T(f), 29 CFR 2590.716-
8(f), and 45 CFR 149.510(f) and report
such information about the Federal IDR
process on a timely basis to the Depart-
ments in the form and manner provided by
the Departments in guidance.
6. Petition for Denial or Revocation of
IDR Entity Certification
An individual, provider, facility, pro-
vider of air ambulance services, plan,
or issuer may petition for the denial of a
certification of an IDR entity or a revo-
cation of a certification of a certified IDR
entity for failure to meet the requirements
of Code section 9816(c), ERISA section
716(c), PHS Act section 2799A-1(c), or
these interim final rules, through the Fed-
eral IDR portal in the form and manner
set forth in guidance to be issued by the
Departments. The petitioner must submit
a written petition to the Departments that
identifies the IDR entity seeking certifi-
cation or the certified IDR entity that is
the subject of the petition and outlines
the reasons for the petition. The petition
must also specify whether the petition
seeks denial or revocation of a certifica-
tion and must be signed by the petitioner.
The petitioner may use the standard peti-
tion notice issued by the Departments and
submit any supporting documentation for
consideration by the Departments. The
Departments will make public the list of
IDR entities seeking certification, as well
as the list of certified IDR entities, to help
facilitate the petition process. Petitioners
submitting a petition for denial of a cer-
tification will have 5 business days from
the announcement that an IDR entity is
seeking certification to submit the writ-
ten petition. This 5-business-day period
is applicable until the Departments issue
guidance outlining a different period for
petitions for a denial of certification.
The Departments will acknowledge
receipt of the petition within 10 busi-
ness days of receipt. If, after review, the
Departments find that the petition ade-
quately shows a failure to comply with
the requirements of Code section 9816(c),
ERISA section 716(c), PHS Act section
2799A-1(c), or these interim final rules,
the Departments shall notify the IDR entity
seeking certification or the certified IDR
entity by providing a de-identified copy of
the petition. Following this notification,
the IDR entity seeking certification or the
certified IDR entity will have 10 business
days to provide a response. After the time
period for providing the response has
passed, the Departments will review the
response (if any) and determine whether
a denial or a revocation of certification is
warranted. The decision will be subject
to the appeal requirements of 26 CFR
54.9816-8T(e)(6)(v), 29 CFR 2590.716-
8(e)(6)(v), and 45 CFR 149.510(e)(6)
(v). If the Departments, after reviewing
a certified IDR entity’s response, find
that the petition shows a failure to com-
ply with the requirements of Code section
9816(c), ERISA section 716(c), or PHS
Act section 2799A-1(c) but have not yet
made a final decision pending appeal, a
certified IDR entity may continue to work
on previously assigned determinations.
However, the certified IDR entity will
not be permitted to accept new requests
for IDR payment determinations unless
and until the Departments issue a notice
of the decision to the certified IDR entity
finding that a revocation of certification is
not warranted. If the entity is seeking cer-
tification, and the Departments find that
denying certification is warranted, then
the Departments will deny certification.
The IDR entity certification require-
ments included in these final rules are
developed to ensure the integrity of the
47
18 U.S.C. § 207 provides for certain restrictions on former officers, employees, and elected officials of the executive and legislative branches of the federal government.

October 18, 2021 502 Bulletin No. 2021–42
Federal IDR process. Failure to meet
these standards puts at risk the Depart-
ments’ ability to ensure providers, facili-
ties, providers of air ambulance services,
plans, and issuers can avail themselves of
an equitable and efficient process. There-
fore, the Departments may deny an IDR
entity certification if, during the process
of certification, including as a result of
a petition, the Departments determine
the IDR entity fails to meet the applica-
ble standards required for certification.
Additionally, these interim final rules set
forth other reasons that certification may
be denied. For example, if the IDR entity
has knowingly committed or participated
in fraudulent or abusive activities such as
by submitting to the Departments fraud-
ulent data or information during the cer-
tification process or submitting data or
information that the IDR entity knows
to be false, certification may be denied.
Another situation in which an IDR enti-
ty’s application for certification might be
denied for knowingly committing or par-
ticipating in fraudulent or abusive activ-
ities would be when an IDR entity has
engaged in fraudulent practices related
to activities conducted outside the Fed-
eral IDR process. Additionally, if the
IDR entity submits information as part
of the certification process that demon-
strates that the IDR entity cannot fulfill
the responsibilities required of certified
IDR entities, certification will be denied.
Also, to the extent the IDR entity has
failed to comply with requests for infor-
mation from the Departments as part of
the certification process, certification may
be denied. The Departments expect that
as part of the certification process, the
Departments may need to contact the IDR
entities and request clarifying informa-
tion.
Moreover, if in conducting payment
determinations, including those conducted
outside the Federal IDR process, the IDR
entity has failed to meet the standards
that applied to those determinations or
reviews, including standards of indepen-
dence and impartiality, certification may
be denied. With respect to certified IDR
entities applying for recertification, the
Departments will also consider whether,
in conducting payment determinations
under the Federal IDR process, the cer-
tified IDR entity has met the standards
applicable to those payment determina-
tions. It is the Departments’ view that,
although certain conduct (for example,
unethical conduct regarding payment
determinations conducted outside the
Federal IDR process) may not constitute
a violation of the Federal IDR process,
this conduct could indicate that the IDR
entity may be unable to comply with the
requirements of the Federal IDR process.
Additionally, to the extent it is otherwise
determined that the IDR entity is not fit or
qualified to make determinations, certifi-
cation may be denied.
If the Departments find, after review
of the evidence, that a certified IDR entity
is no longer qualified to make determina-
tions due to an audit, a petition, or other-
wise, the certification of the IDR entity
may be revoked. A certified IDR entity’s
certification may be revoked prior to the
end of the 5-year term for the following
reasons.
First, a certified IDR entity’s certifica-
tion may be revoked prior to the end of the
5-year term if the Departments determine
that the certified IDR entity has a pattern
or practice of noncompliance with any of
the requirements applicable to certified
IDR entities under the Federal IDR pro-
cess.
Second, if the certified IDR entity is
operating in a manner that hinders the effi-
cient and effective administration of the
Federal IDR process, its certification may
be revoked prior to the end of the 5-year
term. For example, if a certified IDR entity
consistently fails to meet the deadline for
rendering its decisions as set forth in these
interim final rules, its certification may
be revoked. Also, if a certified IDR entity
repeatedly fails to check for a conflict of
interest between itself, its personnel, and
third parties with which the certified IDR
entity contracts, and the disputing parties,
its certification may be revoked prior to
the end of the 5-year term.
Third, if the certified IDR entity no lon-
ger meets the applicable certification stan-
dards set forth in these interim final rules
under 26 CFR 54.9816-8T(e)(1), 29 CFR
2590.716-8(e)(1), and 45 CFR 149.510(e)
(1), its certification may be revoked prior
to the end of the 5-year term.
Fourth, if the certified IDR entity has
committed or knowingly participated in
fraudulent or abusive activities, includ-
ing submission of false or fraudulent data
to the Departments, its certification may
be revoked prior to the end of the 5-year
term. A situation in which an IDR enti-
ty’s application for certification might
be revoked for knowingly committing
or participating in fraudulent or abusive
activities would be where a certified IDR
entity has engaged in fraudulent practices
related to activities conducted outside the
Federal IDR process.
Fifth, if the certified IDR entity no
longer possesses the financial viability
to provide dispute resolution under the
Federal IDR process, its certification may
be revoked prior to the end of the 5-year
term. The Departments are of the view
that a certified IDR entity must possess
the requisite level of fiscal stability that
demonstrates the entity is a viable entity
able to continue to carry out the Federal
IDR process in a timely and efficient man-
ner as set forth in the No Surprises Act and
these interim final rules.
Sixth, if the certified IDR entity has
failed to comply with requests from the
Departments made as part of an audit,
including submission of records, its cer-
tification may be revoked prior to the
end of the 5-year term. The audit pro-
cess plays an important part in helping to
ensure that certified IDR entities are abid-
ing by the requirements set forth in these
interim final rules. In order to ensure that
the Federal IDR process is fair, equita-
ble, and does not have an inflationary
effect on health care costs due to certified
IDR entities failing to properly apply the
factors as set forth in these interim final
rules, the Departments are of the view
that it will be prudent to review certified
IDR entities’ processes and procedures.
Therefore, failure to comply with such
audits will be a basis for revocation of
certification.
Seventh, if it is otherwise determined
that the certified IDR entity is no longer
fit or qualified to make payment determi-
nations, its certification may be revoked
prior to the end of the 5-year term. For
example, the Departments may determine
that an IDR entity is unfit to participate in
the Federal IDR process if the IDR entity
is engaged in actions that risk the integrity
of the Federal IDR process.
If the Departments make a prelimi-
nary determination that an IDR entity’s

Bulletin No. 2021–42 503 October 18, 2021
certification should be denied or that a
certified IDR entity’s certification should
be revoked, the Departments will issue
a notice of proposed denial to the IDR
entity seeking certification or a notice
of proposed revocation to the certified
IDR entity within 10 business days of the
preliminary determination. The notice
will include the proposed effective date
of denial or revocation, explain the rea-
sons for denial or revocation, and pro-
vide an opportunity to request an appeal
of the proposed denial or revocation. The
Departments seek comment on whether
final rules should include additional
bases for revocation. The Departments
also seek comment on whether certain
facts and circumstances should result in
immediate revocation of certification of
the certified IDR entity and reassignment
of any pending payment determinations
prior to completion by that certified IDR
entity.
In order for an IDR entity that has
received a notice of proposed denial or
certified IDR entity that has received a
notice of proposed revocation to request
an appeal of its proposed denial or revo-
cation, as applicable, it must submit its
request for an appeal to the Departments
within 30 business days of the date of the
notice and in the manner prescribed by the
notice. During the period when the IDR
entity or certified IDR entity may appeal
the denial or revocation, the Departments
will not issue a notice of final denial or
revocation. Furthermore, until a final
decision on the appeal is rendered by
the Departments, the certified IDR entity
may complete any open IDR payment
determinations assigned to it at the time
of notification, but may not receive new
assignments until a final decision regard-
ing revocation has been made. Relevant
information to support a request for appeal
may include a statement of the facts, law,
and arguments that negate or mitigate the
evidence provided in support of the IDR
entity’s certification denial or the revoca-
tion of a certified IDR entity’s certifica-
tion, including a description of the actions
the certified IDR entity or IDR entity has
taken, is taking, or intends to take to cure
the failures identified in the notice (if
possible) and to prevent the failures from
reoccurring.
In the event the IDR entity or certi-
fied IDR entity does not timely submit a
request for appeal of the proposed denial
or revocation, the Departments will issue
a final notice of denial or revocation as
described under 26 CFR 54.9816-8T(e)(6)
(ii), 29 CFR 2590.716-8(e)(6)(iii), and 45
CFR 149.510(e)(6)(iii). Similarly, if the
Departments reach a final determination
upon appeal that the IDR entity’s certifi-
cation is denied or the certified IDR enti-
ty’s certification is revoked, the Depart-
ments will issue a final notice of denial or
revocation including an explanation of the
reasons for final denial or revocation and
consequences of such denial or revoca-
tion of certification to the IDR entity and
the petitioner. Upon final notice of denial
or revocation, the IDR entity shall not
be considered a certified IDR entity and
therefore shall not be eligible to accept
payment determinations under the Federal
IDR process. If, following a final decision
denying or revoking a certification, the
IDR entity comes into compliance with
the requirements of 26 CFR 54.9816-
8T(e), 29 CFR 2590.716-8(e), and 45
CFR 149.510(e), the IDR entity may
again apply for certification beginning on
the 181st calendar day after the date of the
final notice of denial or revocation. The
Departments are of the view that provid-
ing a 180-calendar-day cooling-off period
provides adequate time for an IDR entity
to correct and improve its processes to
comply with the standards of these interim
final rules, ensuring that IDR entities are
afforded an opportunity to come into com-
pliance and re-apply for certification. The
Departments are using calendar days for
this standard rather than business days for
consistency with other, similar suspension
periods, such as those in the guaranteed
availability provisions under PHS Act
section 2702(d)(2), as implemented at 45
CFR 147.104(c)(2).
The Departments will monitor the
implementation of the Federal IDR pro-
cess, as well as the petition process, to
determine whether certified IDR entities
are abiding by the applicable require-
ments. The Departments seek comment
on any additional requirements regarding
denial and revocation, and whether other
steps may be required to prevent patterns
and practices of noncompliance.
7. Reporting of Information Relating to
the Federal IDR Process for Qualified
IDR Items and Services that are not Air
Ambulance Services
Code section 9816(c)(7), ERISA sec-
tion 716(c)(7), and PHS Act section
2799A-1(c)(7) direct the Departments to
make certain information related to the
Federal IDR process available on a pub-
lic website for each calendar quarter in
2022 and each calendar quarter in subse-
quent years. Code section 9816(c)(7)(C),
ERISA section 716(c)(7)(C), and PHS
Act section 2799A-1(c)(7)(C) specifi-
cally require the certified IDR entities to
provide information to the Departments
as determined necessary to carry out the
requirements regarding publication of
information related to the Federal IDR
process. To ensure the Departments have
the information needed to satisfy this
requirement, these interim final rules pro-
vide that, within 30 business days of the
close of each month, each certified IDR
entity must report certain data and infor-
mation in a form and manner specified by
the Departments for qualified IDR items
and services furnished on or after Janu-
ary 1, 2022 that were subject to payment
determinations. Such reporting will be
required as an ongoing condition of cer-
tification. The Departments anticipate that
much of this information will be captured
by the certified IDR entities during the
normal course of the Federal IDR process.
As discussed elsewhere in this preamble,
the Departments expect that many of these
reporting requirements will be captured as
information submitted through the Federal
IDR portal. To the extent the necessary
information is captured directly through
the portal, the Departments do not intend
for certified IDR entities to report dupli-
cative information. The Departments will
provide additional guidance to certified
IDR entities on their reporting obligations.
Under these interim final rules, the cer-
tified IDR entity must report the number
of Notices of IDR Initiation submitted to
the certified IDR entity during the imme-
diately preceding month. In instances
where the provider or facility submits
the initial Notice of IDR Initiation, the
certified IDR entity must submit to the
Departments information on the size of

October 18, 2021 504 Bulletin No. 2021–42
the provider practice and the size of the
facilities submitting Notices of IDR Ini-
tiation. Specifically, the certified IDR
entity must specify whether the provider
practice has fewer than 20 employees, 20
to 50 employees, 51 to 100 employees,
101-500 employees or more than 500
employees. For facilities, the certified
IDR entity must specify whether the facil-
ity has 50 or fewer employees, 51 to 100
employees, 101-500 employees, or more
than 500 employees. This information
will allow the Departments to determine
whether smaller providers and facilities
have the resources necessary to make use
of the Federal IDR process and will assist
the Departments in determining whether
larger organizations may have an unfair
advantage in the process. It also will assist
the Departments in determining the effect
of the Federal IDR process on horizontal
and vertical integration of providers and
facilities, and in reporting on this effect to
Congress, as required by statute in Code
section 9816(c), ERISA section 716(c),
PHS Act section 2799A-1(c), and section
109 of the No Surprises Act.
Additionally, with respect to Notices
of IDR Initiation submitted during the
immediately preceding month, certified
IDR entities must report the number of
Notices of IDR Initiation for which a final
determination was made by the certified
IDR entity under these interim final rules.
The certified IDR entity also must report a
description of the qualified IDR items and
services for each Notice of IDR Initiation
submitted during the immediately preced-
ing month for which a payment determi-
nation was made. This information should
include the relevant billing and service
codes, such as the CPT, HCPCS, DRG
codes, or National Drug Codes (if appli-
cable). The certified IDR entity must also
report the relevant geographic region for
purposes of the QPA for the qualified IDR
items and services with respect to which
the Notice of IDR Initiation was provided.
These interim final rules also require
that for each determination issued in
relation to a Notice of IDR Initiation
submitted during the immediately pre-
ceding month, the certified IDR entity
must report the offers submitted by each
party expressed as both a dollar amount
and the corresponding percentage of the
QPA represented by that dollar amount,
and whether the offer selected by the cer-
tified IDR entity was submitted by the
plan or issuer, or the provider or facility.
Where batched items and services have
multiple QPAs, the certified IDR entities
must report the offer as a percentage of
each QPA that applied with respect to the
batched items and services to which the
offer applied. For example, if one batch
of services included services to which
two different QPAs applied, and the par-
ties each submitted the same offer for all
batched services, then the certified IDR
entity must report each offer as a dollar
amount and as a percentage of both QPAs.
However, if instead each party submitted
two offers – one that applied to the ser-
vices for which one QPA applied and one
that applied to the services for which the
other QPA applied – then the certified IDR
entity is required to report each offer sep-
arately and must express each offer as a
dollar amount and as a percentage of the
applicable QPA. As discussed earlier in
this preamble, in making the determina-
tion, the certified IDR entity must provide
a rationale for its decision, including the
extent to which a decision relied on cri-
teria other than the QPA. The certified
IDR entity must also report the number of
times the out-of-network rate determined
exceeded the QPA. Where the QPA differs
within a group of batched items and ser-
vices, the certified IDR entity also must
include whether the out-of-network rate
(or various out-of-network rates, when
more than one out-of-network rate is
selected) exceeded the applicable QPA.
For each determination issued in rela-
tion to a Notice of IDR Initiation sub-
mitted during the immediately preced-
ing month, the certified IDR entity must
also report certain additional information
on the parties involved. Specifically, the
certified IDR entity must report the prac-
tice specialty or type of each provider or
facility involved in furnishing the qual-
ified IDR items or services at issue with
respect to the determination. Additionally,
the certified IDR entity must provide each
party’s name and address.
The certified IDR entity also must
report the number of business days taken
between the selection of the certified IDR
entity and the selection of the payment
amount by the certified IDR entity for
each determination issued in relation to a
Notice of IDR Initiation submitted during
the immediately preceding month. Finally,
the certified IDR entity must report the
total amount of certified IDR entity fees
paid to the certified IDR entity during the
immediately preceding month. This total
amount of certified IDR entity fees should
not include amounts refunded by the cer-
tified IDR entity to the prevailing party or
the administrative fees that are collected
on behalf of the Departments.
8. Reporting of Information Relating to
the Federal IDR Process for Qualified
IDR Items or Services that are Air
Ambulance Services
Under Code section 9817, ERISA sec-
tion 717, and PHS Act section 2799A-2,
the Departments must publish on a pub-
lic website for each calendar quarter in
2022 and each calendar quarter in a sub-
sequent year certain information regard-
ing disputes about air ambulance services
that differs from the information required
under Code section 9816, ERISA sec-
tion 716, and PHS Act section 2799A-1
regarding disputes for other items and ser-
vices to which the protections of the No
Surprises Act apply. Therefore, 26 CFR
54.9817-2T(b)(3), 29 CFR 2590.717-2(b)
(3) and 45 CFR 149.520(b)(3) specify that
in applying the requirements of 26 CFR
54.9816-8T(f), 29 CFR 2590.716-8(f),
and 45 CFR 149.510(f) to air ambulance
services, the information that the certified
IDR entity must report within 30 busi-
ness days of the close of each month, for
services furnished on or after January 1,
2022, in a form and manner specified by
the Departments, is as follows.
The certified IDR entity must report
the number of Notices of IDR Initiation
submitted to the certified IDR entity that
pertain to air ambulance services during
the immediately preceding month. Addi-
tionally, with respect to Notices of IDR
Initiation submitted during the immedi-
ately preceding month, the certified IDR
entity must report the number of Notices
of IDR Initiation for which there was a
determination under 26 CFR 54.9816-
8T(c)(4)(ii), 29 CFR 2590.716-8(c)(4)(ii),
and 45 CFR 149.510(c)(4)(ii), as applied
by 26 CFR 54.9817-2T(b)(1), 29 CFR
2590.717-2(b)(1), and 45 CFR 149.520(b)
(1) for air ambulance services. The certi-

Bulletin No. 2021–42 505 October 18, 2021
fied IDR entity must also report the num-
ber of times the out-of-network rate deter-
mined (or agreed to) exceeded the QPA
for air ambulance services.
With respect to each Notice of IDR
Initiation submitted during the immedi-
ately preceding month, the certified IDR
entity must provide a description of each
air ambulance service, including the rele-
vant billing and service codes and point of
pick-up (as defined in 42 CFR 414.605)
for the services included in such Notice
of IDR Initiation. For each Notice of IDR
Initiation, the certified IDR entity must
also provide the amount of the offer sub-
mitted by a plan or issuer (as applicable)
and by the nonparticipating provider of
air ambulance services, expressed as both
a dollar amount and the corresponding
percentage of the QPA represented by
that dollar amount. Of these amounts, the
certified IDR entity must also indicate
whether the offer selected by the certified
IDR entity was the offer submitted by the
plan or issuer or by the provider of air
ambulance services and the amount of the
offer so selected, expressed as both a dol-
lar amount and a percentage of the QPA.
The certified IDR entity must also report
the rationale for the certified IDR entity’s
decision, including the extent to which
the decision relied on the criteria listed
under 26 CFR 54.9817-2T(b)(2), 29 CFR
2590.717-2(b)(2), and 45 CFR 149.520(b)
(2). Additionally, the certified IDR entity
must identify the air ambulance vehicle
type, including whether the vehicle is
fixed wing or rotary wing (information
which should be included in the relevant
service code), and the clinical capability
level of the vehicle (if the parties have
provided such information). The certified
IDR entity must also report the identity
of each plan or issuer, and provider of air
ambulance services, with respect to the
Notice of IDR Initiation submitted during
the immediately preceding month. Spe-
cifically, each certified IDR entity must
provide each party’s name and address, as
applicable. The certified IDR entity must
report the number of business days taken
between the selection of the certified IDR
entity and the certified IDR entity’s selec-
tion of the payment amount. Finally, the
certified IDR entity must also report the
total amount of certified IDR entity fees
paid to the certified IDR entity for the
immediately preceding month. This total
amount of certified IDR entity fees should
not include amounts refunded by the certi-
fied IDR entity to prevailing parties or the
administrative fees that are collected on
behalf of the Departments.
9. Extension of Time Periods for
Extenuating Circumstances
Under Code section 9816(c)(9),
ERISA section 716(c)(9), PHS Act section
2799A-1(c)(9), and these interim final
rules, the time periods specified in these
interim final rules (other than the timing
of the payments, including, if applicable,
payments to the provider, facility or pro-
vider of air ambulance services) may be
extended in the case of extenuating cir-
cumstances at the Departments’ discre-
tion. The Departments may extend time
periods on a case-by-case basis if the
extension is necessary to address delays
due to matters beyond the control of the
parties or for good cause. Such extension
may be necessary if, for example, a natu-
ral disaster impedes efforts by plans, issu-
ers, providers, facilities, and providers of
air ambulance services to comply with the
terms of these interim final rules. Addi-
tionally, for the extension to be granted,
the parties must attest that prompt action
will be taken to ensure that the payment
determination under this section is made
as soon as administratively practicable.
Parties may request an extension by sub-
mitting a Request for Extension due to
Extenuating Circumstances through the
Federal IDR portal, including an explana-
tion about the extenuating circumstances
that require an extension and why the
extension is needed.
E. Applicability of the Rules Regarding
the Federal IDR Process
The applicability of these interim final
rules with respect to the items and services,
plans and issuers, and providers, facilities,
and providers of air ambulance services
subject to these interim final rules, paral-
lels that of the July 2021 interim final rules
to ensure that the surprise billing protec-
tions of the No Surprises Act are imple-
mented in a consistent manner. Finally,
these interim final rules provide standards
for certifying IDR entities, and standards
for certified IDR entities. Accordingly,
these interim final rules amend 26 CFR
54.9816-2T, 29 CFR 2590.716-2, and
45 CFR 149.20 to include references to
26 CFR 54.9816-8T and 54.9817-2T; 29
CFR 2590.716-8 and 2590.717-2; and 45
CFR 149.510 and 149.520 to ensure that
the items and services, as well as entities
subject to the balance billing protections
under the July 2021 interim final rules, are
eligible for the Federal IDR process under
these interim final rules. The Departments
solicit comment on whether any differ-
ences or departures from the approach
taken in the July 2021 interim final rules
are warranted.
These interim final rules implementing
the Federal IDR process 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 certified IDR entities, health
care providers and facilities, and provid-
ers of air ambulance services beginning
on January 1, 2022. The interim final rules
regarding IDR entity certification at 26
CFR 54.9816-8T(a), 26 CFR 54.9816-
8T(e), 29 CFR 2590.718-8(a), 29 CFR
2590.718-8(e), 45 CFR 149.510(a) and
45 CFR 149.510(e), are applicable begin-
ning on [INSERT THE DATE OF PUB-
LICATION IN THE FEDERAL REGIS-
TER] so that the Departments can begin
certifying IDR entities before the Federal
IDR process becomes applicable. The
term “group health plan” includes both
insured and self-insured group health
plans. Group health plans include private
employment-based group health plans
subject to ERISA, non-Federal govern-
mental plans (such as plans sponsored
by states and local governments) subject
to the PHS Act, and church plans subject
to the Code. Individual health insurance
coverage includes coverage offered in the
individual market, through or outside of
an Exchange, and includes student health
insurance coverage as defined at 45 CFR
147.145. In addition, under the OPM
interim final rules, FEHB carriers must
comply with the Departments’ interim
final rules, subject to OPM regulation and
contract provisions. The No Surprises Act
amended section 1251(a) of the Afford-

October 18, 2021 506 Bulletin No. 2021–42
able Care Act to specify that PHS Act
sections 2799A-1, 2799A-2, and 2799A-7
apply to grandfathered health plans for
plan years beginning on or after January 1,
2022. Therefore, these interim final rules
apply to grandfathered health plans (as
defined in 26 CFR 54.9815-1251, 29 CFR
2590.715-1251, and 45 CFR 147.140) for
plans years beginning on or after January
1, 2022. In addition, these interim final
rules implementing the Federal IDR pro-
cess apply to certain non-grandfathered
health insurance coverage in the individ-
ual and small group markets with respect
to which CMS has announced it will not
take enforcement action with respect to
certain specified market requirements
even though the coverage is out of com-
pliance with those requirements (some-
times referred to as grandmothered or
transitional plans). These interim final
rules implementing the Federal IDR pro-
cess do not apply to health reimbursement
arrangements (HRAs), or other account-
based group health plans, as described in
26 CFR 54.9815-2711(d)(6)(i), 29 CFR
2590.715-2711(d)(6)(i), and 45 CFR
147.126(d)(6)(i), that make reimburse-
ments subject to a maximum fixed dollar
amount for a period, as the benefit design
of these plans makes concepts related
to surprise billing, including the IDR
process, inapplicable. Additionally, the
Departments expect that account-based
group health plans typically will be inte-
grated with other coverage that will have
protections against surprise billing (such
as individual coverage HRAs) or will be
otherwise exempt from these requirements
(such as excepted benefit HRAs). There-
fore, under these interim final rules, these
requirements do not apply to individual
coverage HRAs and other account-based
plans, consistent with the existing appli-
cability provisions in 26 CFR 54.9816-2T,
29 CFR 2590.716-2, and 45 CFR 149.20
with respect to other requirements in 26
CFR part 54, 29 CFR subpart D, and 45
CFR part 149. The Departments note
that by statute certain plans and coverage
are not subject to the interim final rules
implementing the Federal IDR process.
This includes a plan or coverage consist-
ing solely of excepted benefits
48
as well as
short-term, limited-duration insurance as
defined under PHS Act section 2791(b)
(5).
49
Excepted benefits are described in
Code section 9832, ERISA section 733
and PHS Act section 2791. Under PHS
Act section 2791(b)(5), short-term, lim-
ited-duration insurance is excluded from
the definition of individual health insur-
ance coverage and is therefore exempt
from these interim final rules regarding
the Federal IDR process and the statu-
tory provisions these interim final rules
implement. In addition, these interim final
rules do not apply to retiree-only plans,
because ERISA section 732(a) and Code
section 9831(a) generally provide that
part 7 of ERISA and chapter 100 of the
Code respectively do not apply to plans
with fewer than two participants who are
current employees (including retiree-only
plans, which cover fewer than two partic-
ipants who are current employees). Title
XXVII of the PHS Act, as amended by the
Affordable Care Act, no longer contains
a parallel provision at section 2721(a) of
the PHS Act. However, as explained in
prior rulemaking, HHS will not enforce
the requirements of title XXVII of the
PHS Act with respect to non-Federal gov-
ernmental retiree-only plans and encour-
ages states to adopt a similar approach
with respect to health insurance coverage
of retiree-only plans.
50
HHS intends to
continue to follow this same approach,
including with respect to the new market
reforms established in the No Surprises
Act.
IV. External Review and Section 110 of
the No Surprises Act
Section 110 of the No Surprises Act
states that “[i]n applying the provisions
of section 2719(b) of the [PHS Act] to
group health plans and health insurance
issuers offering group or individual health
insurance coverage, the Secretary of HHS,
Secretary of Labor, and Secretary of the
Treasury, shall require, beginning not later
than January 1, 2022, the external review
process described in paragraph (1) of
such section to apply with respect to any
adverse determination by such a plan or
issuer under Code section 9816 or 9817,
ERISA section 716 or 717 or PHS Act sec-
tion 2799A-1 or 2799A-2, including with
respect to whether an item or service that
is the subject to such a determination is an
item or service to which such respective
section applies.” The statute defines the
terms group health plan and health insur-
ance issuer by reference to PHS Act sec-
tion 2791, ERISA section 733, and Code
section 9832, as applicable.
These interim final rules implement
section 110 of the No Surprises Act in two
ways. First, these interim final rules amend
the scope of claims eligible for external
review set forth in the regulations imple-
menting PHS Act section 2719 to include
adverse benefit determinations related to
compliance with the surprise billing and
cost-sharing protections under the No
Surprises Act. Additionally, these interim
final rules clarify the scope of external
review in light of new surprise billing and
cost-sharing protections under the No Sur-
prises Act and provide examples of which
types of adverse benefit determinations
will be eligible for external review. Sec-
ond, these interim final regulations extend
the external review requirement to grand-
fathered health plans and health insurance
issuers for adverse benefit determinations
involving items and services covered by
requirements of Code section 9816 or
9817, ERISA section 716 or 717, or PHS
Act section 2799A-1 or 2799A-2, as added
by the No Surprises Act. The Departments
solicit comment on whether and to what
extent additional guidance or changes to
the existing regulations are needed to pro-
tect participants, beneficiaries, and enroll-
ees from surprise medical bills, consistent
with section 110 of the No Surprises Act.
A. Scope of Claims Eligible for External
Review
Under PHS Act section 2719 and its
implementing regulations, non-grandfa-
thered group health plans and health insur-
ance issuers offering non-grandfathered
group or individual health insurance
coverage must comply with any applica-
48
Code section 9831, ERISA section 732, and PHS Act section 2722; 26 CFR 54.9831-1(c), 29 CFR 2590.732(c), and 45 CFR 146.145(b).
49
26 CFR 54.9801-2, 29 CFR 2590.701-2, and 45 CFR 144.103.
50
75 FR 34537, 34540 (June 17, 2010).

Bulletin No. 2021–42 507 October 18, 2021
ble state external review process, if that
process includes, at a minimum, the con-
sumer protections set forth in the NAIC
Uniform External Review Model Act.
51

However, if the state external review pro-
cess does not meet this standard, or if a
plan or issuer is not subject to state insur-
ance regulation, the plan or issuer must
comply with the Federal external review
process, as described in 26 CFR 54.9815-
2719(d), 29 CFR 2590.715-2719(d), and
45 CFR 147.136(d).
State external review processes that
meet the minimum standards must provide
for the external review of adverse benefit
determinations based on requirements for
medical necessity, appropriateness, health
care setting, level of care, or effectiveness
of a covered benefit. The Federal external
review process must be available for any
adverse benefit determination by a plan
or issuer that involves medical judgment,
as well as a rescission of coverage. In the
Departments’ view, the scope of claims
eligible for external review under state
processes that meet the minimum stan-
dards for approval is substantially similar
to the scope of claims eligible for external
review under the Federal process.
In 2010, the Departments issued
interim final rules that set forth the orig-
inal scope of claims eligible for external
review under the Federal external review
process.
52
Specifically, any adverse bene-
fit determination (including final internal
adverse benefit determinations) could be
reviewed unless it was related to a par-
ticipant’s or beneficiary’s failure to meet
the requirements for eligibility under the
terms of a group health plan (for example,
worker classification and similar issues
were not within the scope of the Federal
external review process). In response to
stakeholder comments, the Departments
issued an amendment in 2011 suspending
the original rule and narrowing the scope
to claims that involve: (1) medical judg-
ment (including, but not limited to, those
based on the plan’s or issuer’s require-
ments for medical necessity, appropriate-
ness, health care setting, level of care, or
effectiveness of a covered benefit, or its
determination that a treatment is experi-
mental or investigational), as determined
by the external reviewer; and (2) a rescis-
sion of coverage (whether or not the
rescission has any effect on any particu-
lar benefit at the time).
53
The Departments
finalized the narrowed scope in the 2015
final rules.
54

Although the scope of Federal external
review was narrowed in comparison to the
scope as outlined in the 2010 interim final
regulations, the Departments note that the
scope of claims that are eligible for exter-
nal review in general is broad, as many
adverse benefit determinations involve
medical judgment. The 2015 final regu-
lations issued by the Departments include
the following examples: (1) whether treat-
ment by a specialist is medically necessary
or appropriate (pursuant to the plan’s stan-
dard for medical necessity or appropri-
ateness); (2) whether treatment involved
“emergency care” or “urgent care,” affect-
ing coverage or the level of coinsurance;
(3) a determination that a medical condi-
tion is a preexisting condition; (4) whether
a participant or beneficiary is entitled to
a reasonable alternative standard for a
reward under the plan’s wellness program;
and (5) whether a plan or issuer is com-
plying with the nonquantitative treatment
limitation provisions of the Mental Health
Parity and Addiction Equity Act.
55

The Departments have similarly pro-
vided a number of additional examples in
preambles to rulemaking under PHS Act
section 2719 to provide further clarifica-
tion on the broad scope of the external
review process. In the preamble to interim
final rules issued in 2011, the Depart-
ments stated that examples of medical
judgment would include the appropriate
health care setting for providing medical
care to an individual (such as outpatient
versus inpatient care or home care versus
rehabilitation facility); a plan’s general
exclusion of an item or service (such as
speech therapy), if the plan covers the
item or service in certain circumstances
based on a medical condition (such as,
to aid in the restoration of speech loss
or impairment of speech resulting from
a medical condition); and the frequency,
method, treatment, or setting for a recom-
mended preventive service, to the extent
not specified in the recommendation or
guideline of the U.S. Preventive Services
Task Force, the Advisory Committee on
Immunization Practices of the Centers for
Disease Control and Prevention, or the
Health Resources and Services Admin-
istration.
56
In the preamble to final rules
issued in 2015, the Departments also clar-
ified that issues related to how a claim is
coded may also involve medical judgment
because “[m]edical judgment is necessary
to determine whether the correct code was
used in the patient’s case.”
57
Consistent with this principle, the
Departments are of the view that many
claims that result in an adverse benefit
determination involving items and ser-
vices subject to the surprise billing and
cost-sharing protections under the No Sur-
prises Act generally would be eligible for
external review under the current scope
as specified in the 2015 final regulations.
However, as stated above, section 110 of
the No Surprises Act directs the Depart-
ments to require the external review pro-
cess under PHS Act section 2719 to apply
with respect to any adverse determination
by a plan or issuer under PHS Act sec-
tion 2799A-1 or 2799A-2, ERISA sec-
tion 716 or 717, or Code section 9816 or
9817, including with respect to whether
an item or service that is subject to such
a determination is an item or service to
which the respective section applies. The
Departments are of the view that it is
important to ensure that consumers can
avail themselves of external review in
these situations and ensure that they are
afforded full protection against surprise
medical costs (including cost sharing), as
intended by the No Surprises Act. Accord-
ingly, these interim final rules amend the
2015 final rules to broaden the scope of
51
Available at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/naic-uniform-review-model-act.pdf.
52
75 FR 43329 (July 23, 2010).
53
76 FR 37207 (June 10, 2011).
54
80 FR 72191 (Nov. 18, 2015).
55
26 CFR 54.9815-2719(d)(1); 29 CFR 2590.715-2719(d)(1); 45 CFR 147.136(d)(1).
56
76 FR 37207, 37216 (June 10, 2011).
57
80 FR 72191, 72209 (Nov. 18, 2015).

October 18, 2021 508 Bulletin No. 2021–42
external review requirements and explic-
itly require, to the extent not already cov-
ered, that any adverse determination that
involves consideration of whether a plan
or issuer is complying with PHS Act sec-
tion 2799A-1 or 2799A-2, ERISA section
716 or 717, or Code section 9816 or 9817
is eligible for external review.
These interim final rules also amend
the 2015 final regulations to add five new
examples (examples number 3 through 7
in the regulation text) to clarify how the
external review requirements apply to
certain adverse benefit determinations
involving items and services within the
scope of the surprise billing and cost-shar-
ing protections for out-of-network emer-
gency services, nonemergency services
performed by nonparticipating providers
at participating facilities, and air ambu-
lance services furnished by nonparticipat-
ing providers of air ambulance services
under section Code section 9816 or 9817,
ERISA section 716 or 717, or PHS Act
section 2799A-1 or 2799A-2. The first
new example illustrates that any determi-
nation of whether a claim is for treatment
for emergency services that involves med-
ical judgment or consideration of compli-
ance with the cost-sharing and surprise
billing protections is eligible for external
review.
The second new example clarifies that
whether a claim for items and services
furnished by a nonparticipating provider
at an in-network facility is subject to the
protections under the No Surprises Act
is eligible for external review because
adjudication of the claim requires consid-
eration of health care setting and level of
care or compliance with cost-sharing and
surprise billing protections.
The third new example clarifies that
whether an individual was in a condition
to receive a notice about the availability of
the protections under the No Surprises Act
and give informed consent to waive those
protections is a claim eligible for external
review because adjudication of the claim
involves consideration of compliance with
the cost-sharing and surprise billing pro-
tections and medical judgment.
The fourth new example illustrates that
whether a claim for items and services is
coded correctly, consistent with the treat-
ment an individual actually received, is a
claim eligible for external review because
adjudication of the claim involves medical
judgment.
The fifth new example illustrates that
consideration of whether cost-sharing was
appropriately calculated for claims for
ancillary services provided by an out-of-
network provider at an in-network facility
involves consideration of compliance with
the cost-sharing and surprise billing pro-
tections and is a claim eligible for external
review.
The Departments solicit comment on
these examples and whether any addi-
tional examples are needed. The Depart-
ments intend to ensure that this provision
is implemented in a manner that affords
consumers broad protection under section
110 of the No Surprises Act.
B. Application to Grandfathered Plans
and Coverage
PHS Act section 2719 and its imple-
menting regulations do not currently
apply to coverage offered by health insur-
ance issuers and group health plans that
are grandfathered health plans because
section 1251 of the Affordable Care Act
provides that PHS Act section 2719 does
not apply to grandfathered plans and cov-
erage.
These interim final rules amend the
regulations under PHS Act section 2719 to
require grandfathered plans and coverage
to provide for external review of claims
covered by the protections of the No Sur-
prises Act for plan years (or, in the indi-
vidual market, policy years) beginning on
or after January 1, 2022. This change is
grounded in the text of section 110 of the
No Surprises Act, in addition to the pol-
icy reasons stated earlier in this pream-
ble regarding the Departments’ intent to
implement this provision broadly. Section
110 states that external review require-
ments shall “apply with respect to any
adverse determination by such a plan or
issuer under section 2799A-1 or 2799A-2
of the PHS Act, section 716 or 717 of
ERISA, or section 9816 or 9817 of the
Code[.]” These sections of the PHS Act,
ERISA, and the Code, as well as all the
other provisions of the No Surprises Act,
as discussed in section I.A of this pream-
ble, are all applicable to grandfathered
plans and coverage. Thus, to ensure that
adverse benefit determinations under
grandfathered plans and coverage for
claims subject to those provisions are eli-
gible for external review, external review
requirements must be applicable to grand-
fathered plans and coverage for those
claims. The Departments solicit comment
on this amendment, including whether
any additional guidance is warranted to
help grandfathered plans and issuers com-
ply with these requirements.
The Departments recognize that the
internal claims and appeals rules under
29 CFR 2560.503-1, as incorporated
under regulations implementing PHS
Act section 2719,
58
do not apply to issu-
ers offering grandfathered coverage in
the individual market, or grandfathered
non-Federal Government plans. Those
grandfathered plans and issuers offering
that grandfathered coverage must make
external review available for adverse
benefit determinations under PHS Act
section 2799A-1 or 2799A-2 when an
enrollee has exhausted applicable appeal
rights under state law or under the terms
of the enrollee’s coverage. In cases where
these plans and issuers are not subject to
a requirement to have an internal appeals
process and have not otherwise instituted
such a process, they must allow a claimant
to request external review of an adverse
benefit determination of claims covered
by the protections under PHS Act sections
2799A-1 or 2799A-2 upon receipt of the
adverse benefit determination.
V. Federal IDR Process for FEHB
Carriers – Office of Personnel
Management
OPM amends existing 5 CFR
890.114(a) to include references to the
Departments’ regulations to clarify that
FEHB carriers are also subject to the Fed-
eral IDR process set forth in those regu-
lations with respect to a qualified IDR
item or service furnished by an FEHB car-
rier offering a health benefits plan in the
same manner as those provisions apply
to a group health plan or health insur-
ance issuer offering group or individual
58
26 CFR 54.9815-2719; 29 CFR 2590.715-2719(c)(2)(i); 45 CFR 147.136.

Bulletin No. 2021–42 509 October 18, 2021
health insurance coverage, subject to 5
U.S.C. 8902(m)(1) and the provisions of
the FEHB carrier’s contract. Through new
paragraph 5 CFR 890.114(d), OPM adopts
the Departments’ rules as necessary to
properly integrate the new standards
with existing FEHB Program structure
and sets forth the circumstances in which
OPM will enforce these rules as applied
to FEHB carriers, including by requiring
carrier notice to the Director, in addition
to the Departments, of an FEHB carrier’s
notice of initiation, or receipt of a provid-
er’s notice of initiation, the Federal IDR
process. OPM will coordinate with the
Departments in matters regarding FEHB
carriers requiring resolution under the
Federal IDR process and with respect to
oversight of certified IDR entities’ reports
regarding FEHB carriers.
As discussed in the July 2021 interim
final rules, all out-of-network rate deter-
minations regarding qualified IDR items
or services with respect to FEHB plans
or carriers that are not resolved by open
negotiation are subject to the Federal IDR
process unless OPM contracts with FEHB
carriers include terms that adopt state law
as governing for this purpose.
VI. Overview of the Interim Final
Rules Regarding Protections for the
Uninsured – The Department of Health
and Human Services
A. Good Faith Estimates for Uninsured
(or Self-Pay) Individuals
1. Scope
The No Surprises Act adds PHS Act
section 2799B-6(2), which requires health
care providers and health care facilities,
upon scheduling an item or service to be
furnished to an individual or upon request
of an individual, to inquire about such
individual’s health coverage status and to
provide a notification (in clear and under-
standable language) of the good faith esti-
mate of the expected charges for furnish-
ing such item or service (including any
item or service that is reasonably expected
to be provided in conjunction with such
scheduled or requested item or service and
such item or service reasonably expected
to be so provided by another provider or
facility), with the expected billing and
diagnostic codes for any such item or ser-
vice.
In the case that the individual request-
ing a good faith estimate for an item or
service or seeking to schedule an item or
service to be furnished, is not enrolled in
a certain type of plan or coverage or is not
seeking to file a claim with such type of
plan or coverage, PHS Act section 2799B-
6(2)(B), and these interim final rules at 45
CFR 149.610, require providers and facil-
ities to furnish the good faith estimate to
the individual. These requirements under
45 CFR 149.610 apply only to good faith
estimate notifications for uninsured (or
self-pay) individuals as described in 45
CFR 149.610(a)(2)(xii) of these interim
final rules. As discussed in section I.C of
this preamble, these interim final rules do
not include requirements implementing
PHS Act section 2799B-6(2)(A), which
requires providers and facilities to furnish
good faith estimates to individuals’ plans
or issuers.
2. Definitions
For purposes of 45 CFR 149.610,
HHS is defining certain terms at 45 CFR
149.610(a). Specifically, “authorized rep-
resentative” means an individual autho-
rized under state law to provide consent
on behalf of the uninsured (or self-pay)
individual, provided that the individual is
not a provider affiliated with the facility
or an employee of the facility represented
in the good faith estimate, unless such
provider or employee is a family member
of the uninsured (or self-pay) individual.
HHS considered defining authorized rep-
resentative using the same definition as in
45 CFR 149.410 and 149.420; however,
the definition in these interim final rules
contain amendments to account for con-
cepts that are not relevant to uninsured (or
self-pay) individuals such as removing
references to nonparticipating providers,
participants, beneficiaries, and enrollees.
These interim final rules define, “con-
vening health care provider or convening
health care facility (convening provider
or convening facility)” as the provider or
facility who receives the initial request for
a good faith estimate from an uninsured
(or self-pay) individual and who is or, in
the case of a request, would be responsible
for scheduling the primary item or service
as defined in these interim final rules. As
discussed elsewhere in this preamble, the
convening provider is responsible for pro-
viding the good faith estimate to an unin-
sured (or self-pay) individual.
HHS considered putting the responsi-
bility for providing the good faith estimate
on the “treating health care provider,” as
defined in 45 CFR 149.30, but for many
scheduled items or services, multiple pro-
viders and facilities could participate in
delivering an individual’s care, or be con-
sidered, a “treating health care provider”.
Because it is likely that an individual
would only schedule an item or service or
request a good faith estimate from one of
the treating providers or facilities, the con-
vening provider or facility would likely
need to request additional scheduling
from other providers or facilities to par-
ticipate in delivering care. Therefore, such
a provider or facility would need to alert
the other providers or facilities who are
providing items or services in conjunction
with the scheduled item or service, when
items or services are scheduled or a good
faith estimate is requested. Furthermore,
HHS understands that multiple providers
and facilities may bill an individual for
the respective items or services provided
during a period of care. Therefore, it is
important to define who is responsible for
furnishing the good faith estimate to the
individual that is inclusive of all the items
or services to be provided by co-providers
and co-facilities involved in the sched-
uled items or services or the items or ser-
vices for which a good faith estimate is
requested.
In these interim final rules, “co-health
care provider or co-health care facility
(co-provider or co-facility)” means a pro-
vider or facility other than a convening
provider or a convening facility that fur-
nishes items or services that are custom-
arily provided in conjunction with a pri-
mary item or service (as defined for pur-
poses of this section). Because PHS Act
section 2799B-6(2) requires that the good
faith estimate include any item or service
that is reasonably expected to be provided
in conjunction with such scheduled item
or service (or such item or service for
which a good faith estimate is requested)
and such an item or service reasonably
expected to be so provided by another
health care provider or health care facility,

October 18, 2021 510 Bulletin No. 2021–42
HHS is distinguishing co-providers and
co-facilities from the convening provider
or convening facility who will furnish the
good faith estimate inclusive of estimates
from co-providers and co-facilities.
“Diagnosis code” means the code that
describes an individual’s disease, disor-
der, injury, or other related health condi-
tions using the International Classification
of Diseases (ICD) code set. In establish-
ing requirements for implementation of
HIPAA’s Administrative Simplification
provisions, HHS adopted specific code
sets for diagnoses and procedures for use
in standard health care transactions. The
definition of diagnosis code used in this
section aligns with the definition con-
tained in the HIPAA Administrative Sim-
plification standards at 45 CFR Part 162.
59
For purposes of 45 CFR 149.610,
“expected charge” means, for an item or
service, the cash pay rate or rate estab-
lished by a provider or facility for an unin-
sured (or self-pay) individual, reflecting
any discounts for such individuals, where
the good faith estimate is being provided
to an uninsured (or self-pay) individual; or
the amount the provider or facility would
expect to charge if the provider or facility
intended to bill a plan or issuer directly for
such item or service when the good faith
estimate is being furnished to a plan or
issuer.
HHS understands that providers and
facilities establish gross charges or charge-
master rates that are considered their stan-
dard charge for an item or services and then
often discounts are applied depending on
the payer (with the exception of state laws
that specify payment rates). For instance,
in providing a good faith estimate to a
plan or issuer, the provider or facility may
include as the expected charge the undis-
counted gross charge or chargemaster
rate, which would then be used by the plan
or issuer to determine the out-of-pocket
payment amount of an insured individual.
HHS understands that providers and facil-
ities often make adjustments to their gross
charges or chargemaster rates to establish
a self-pay rate for uninsured (or self-pay)
individuals. HHS is of the view that if
an individual is not enrolled in a plan or
coverage or is enrolled but is not seeking
to have a claim for such item or service
submitted to their plan or coverage, the
expected charges included in the good
faith estimate should reflect what the pro-
vider or facility expects to bill or charge
the payer (in this case the uninsured or
self-pay individual), and therefore for the
purpose of these interim final rules, HHS
has defined expected charges specific to
what the uninsured (or self-pay) individ-
ual would be expected to pay.
HHS is of the view that the esti-
mate of expected charges must reflect
the anticipated billed charges, including
any expected discounts or other relevant
adjustments that the provider or facility
expects to apply to an uninsured (or self-
pay) individual’s billed charges because
of the role of the good faith estimate in the
patient-provider dispute resolution pro-
cess under PHS Act section 2799B-7 and
as specified in 45 CFR 149.620. Under
PHS Act section 2799B-7, an uninsured
(or self-pay) individual can seek a deter-
mination from an SDR entity if the total
billed charge from a provider or facility
is substantially in excess of the expected
charges listed in the good faith estimate
for the provider or facility. Therefore, as
discussed in detail below, these interim
final rules require that for each item or
service listed in the good faith estimate,
a provider or facility must include the
expected charge for each item or service,
reflecting any available discounts or other
relevant adjustments that the provider or
facility expects to apply to an uninsured
(or self-pay) individual’s billed charges.
For instance, certain hospital organiza-
tions that meet the general requirements
for tax exemption under Code section
501(c)(3), are also required to meet
the Financial Assistance Policy (FAP)
requirements under Code sections 501(r)
(4) through (6).
60
In this example, any
adjustments expected to be applied under
the FAP would be factored in and reflected
in the amount reported in the good faith
estimate for items or services. To pro-
mote more transparency, HHS considered
requiring both undiscounted list prices
and discounted prices to be included when
discounted prices apply. HHS seeks com-
ment on whether providers and facilities
should be required to include both the list
price and discounted price for an item or
service when discounts apply.
Consistent with PHS Act section
2799B-6(2), these interim final rules
define the term “good faith estimate” to
mean a notification of expected charges
for a scheduled or requested item or ser-
vice,
61
including items or services that
are reasonably expected to be provided
in conjunction with such scheduled or
requested item or service, provided by a
convening provider, convening facility,
co-provider, or co-facility.
“Health care facility (facility)” is
defined more broadly than the definition
in 45 CFR 149.30, which applies in the
context of balance billing protections for
non-emergency services. For purposes
of 45 CFR 149.610, “health care facility
(facility)” means an institution (such as
a hospital or hospital outpatient depart-
ment, critical access hospital, ambulatory
surgical center, rural health center, fed-
erally qualified health center, laboratory,
or imaging center) in any state in which
state or applicable local law provides for
the licensing of such an institution, that
is licensed as such an institution pursuant
to such law or is approved by the agency
of such state or locality responsible for
licensing such institution as meeting the
standards established for such licensing.
While HHS considered applying the defi-
nition of health care facility from 45 CFR
149.30, doing so would limit the scope of
providers and facilities for which 45 CFR
149.610 applies to only those providers
relevant to the balance billing protections
related to nonemergency items or services
furnished by participating providers in
nonparticipating facilities. The provisions
in PHS Act section 2799B-6 do not spec-
ify such limitations.
For purposes of 45 CFR 149.610,
“health care provider (provider)” means
a physician or other health care provider
who is acting within the scope of practice
of that provider’s license or certification
under applicable State law, including a
provider of air ambulance services. As the
59
https://www.cms.gov/regulations-and-guidance/administrative-simplification/code-sets
60
Financial Assistance Policy and Emergency Medical Care Policy. https://www.irs.gov/charities-non-profits/financial-assistance-policy-and-emergency-medical-care-policy-section-501r4.
61
For purposes of simplicity of language, these interim final rules in some instances refer to a requested good faith estimate for an item or service, as a requested item or service.

Bulletin No. 2021–42 511 October 18, 2021
Departments noted in the July 2021 interim
final rules, the No Surprises Act does not
define “provider.” Some provisions use
the word in a manner that includes provid-
ers of air ambulance services, while other
provisions that use the word are inapplica-
ble to providers of air ambulance services
by the terms of the provisions. In this case,
HHS is of the view that interpreting the
term to include providers of air ambu-
lance services in this context is critical to
ensuring individuals obtain the benefits
of a good faith estimate for a service that
can be extremely costly. HHS recognizes
that individuals will likely not be able
to obtain a good faith estimate for emer-
gency air ambulance services, as these are
not generally scheduled in advance. How-
ever, making these requirements applica-
ble to providers of air ambulance services
helps to ensure that individuals can obtain
a good faith estimate upon request or at
the time of scheduling non-emergency air
ambulance services, for which coverage
often is not provided by a plan or issuer
and thus even individuals with coverage
often must self-pay.
“Items or services” has the same mean-
ing given the term in 45 CFR 147.210(a)
(2), which includes all encounters, proce-
dures, medical tests, supplies, prescription
drugs, durable medical equipment, and
fees (including facility fees), provided or
assessed in connection with the provision
of health care. The definition of items or
services in 45 CFR 147.210(a)(2) encom-
passes and accurately defines the types
of items or services that are expected to
be reported in the good faith estimate
including items or services such as those
related to dental health, vision, substance
use disorders and mental health. HHS also
clarifies that some items or services may
not be included in a good faith estimate
because they are not typically scheduled
in advance and are not typically the sub-
ject of a requested good faith estimate,
such as urgent, emergent trauma, or emer-
gency items or services; however, HHS
clarifies that to the extent an urgent care
appointment is scheduled at least 3 days in
advance, these interim final rules require a
provider or facility to provide a good faith
estimate.
62

These interim final rules also define the
term “period of care” to mean the day or
multiple days during which the good faith
estimate for scheduled or requested item
or service (or set of scheduled or requested
items or services) are furnished or are
anticipated to be furnished, regardless of
whether the convening provider, conven-
ing facility, co-providers, or co-facilities
are furnishing such items or services, and
also includes the period of time during
which any facility equipment and devices,
telemedicine services, imaging services,
laboratory services, and preoperative and
postoperative services that would not be
scheduled separately by the individual, are
furnished. HHS considered using the term
episode of care but understands that the
term episode of care is used within many
different contexts regarding the provision
of health care items or services.
63
In the
context of this section, HHS is of the view
that it is important to use the term period
of care in order to clarify which items or
services are expected to be provided in a
good faith estimate.
“Primary item or service” means the
item or service to be furnished by the
convening provider or convening facil-
ity that is the initial reason for the visit.
HHS is of the view that additional dis-
tinctions beyond the definition of “items
or services” must be made in order for
providers and facilities to furnish clear
and understandable good faith estimates.
HHS considered using the term “sched-
uled item or service” which would more
directly align with the statutory language.
However, such distinction would have
excluded the statutory provision whereby
a good faith estimate must be issued upon
the request of an uninsured (or self-pay)
individual when items or services have
not been scheduled. HHS is of the view
that using the term “primary item or ser-
vice” provides clarity for providers and
facilities to establish and identify a main
item or service for which a good faith
estimate is being issued. Based on the
primary item or service, the provider or
facility could subsequently identify and
include all items or services that would be
furnished in conjunction with the primary
item or service, and such items or services
reasonably expected to be provided by a
co-provider or co-facility.
“Service code” means the code that
identifies and describes an item or service
using the CPT, HCPCS, DRG or National
Drug Code (NDC) code sets. As noted
earlier, in establishing requirements for
implementation of HIPAA’s Adminis-
trative Simplification provisions, HHS
adopted specific code sets for diagnoses
and procedures for use in standard health
care transactions. The definition of service
code used in this section aligns with the
definition contained in the HIPAA Admin-
istrative Simplification standards at 45
CFR Part 162.
64
These interim final rules define the
term “uninsured (or self-pay) individ-
ual” to mean an individual who does not
have benefits for an item or service under
a group health plan, group or individual
health insurance coverage offered by a
health insurance issuer, Federal health
care program (as defined in section
1128B(f) of the Social Security Act), or
a health benefits plan under chapter 89
of title 5, United States Code; or an indi-
vidual who has benefits for such item or
service under a group health plan or indi-
vidual or group health insurance coverage
offered by a health insurance issuer, or a
health benefits plan under chapter 89 of
title 5, United States Code but who does
not seek to have a claim for such item or
service submitted to such plan or cover-
age. These individuals are often referred
to as self-pay individuals, therefore these
interim final rules include the term self-
pay when discussing uninsured individu-
als. As discussed elsewhere in this pream-
ble, for the purposes of the interim final
rules at 45 CFR 149.610 that implement
PHS Act sections 2799B-6(1) and 2799B-
6(2)(B), HHS is adopting the definition of
uninsured (or self-pay) individuals from
PHS Act sections 2799B-7 in order to
align these two related sections.
HHS understands, and is of the view
that it is appropriate, that consumers may
request a good faith estimate without actu-
ally scheduling items or services to com-
pare costs and make a decision about from
which provider or facility they will seek
care, or whether they will submit a claim
62
Certain urgent, emergent trauma, or emergency care services may be subject to other protections discussed in the July 2021 interim final rules (86 FR 36872).
63
https://www.healthaffairs.org/do/10.1377/hblog20190326.202031/full/
64
https://www.cms.gov/regulations-and-guidance/administrative-simplification/code-sets

October 18, 2021 512 Bulletin No. 2021–42
to insurance or self-pay. These individu-
als would be considered self-pay for pur-
poses of the requirement on the provider
or facility to provide a good faith estimate.
HHS clarifies that if an individual requests
a good faith estimate as a self-pay individ-
ual and then ultimately decides to submit
a claim to the individual’s plan or issuer
for the billed charges, the individual is no
longer considered a self-pay individual
as defined in these interim final rules and
would not be eligible to use the patient-pro-
vider dispute resolution process as defined
in 45 CFR 149.620. HHS also clarifies
that for purposes of 45 CFR 149.610 and
149.620, the definition of uninsured (or
self-pay) individuals includes individuals
enrolled in short-term, limited-duration
insurance, as defined in regulations at 26
CFR 54.9801-2, 29 CFR 2590.701-2, and
45 CFR 144.103, and not also enrolled in
a group health plan, group or individual
health insurance coverage offered by a
health insurance issuer, Federal health care
program (as defined in section 1128B(f) of
the Social Security Act), or a health bene-
fits plan under chapter 89 of title 5, United
States Code.
HHS seeks comment on the terms
defined in these interim final rules for pur-
poses of this section. HHS is particularly
interested in receiving information related
to the appropriateness and usability of
these definitions and whether additional
terms should be included or defined.
3. Requirements for Providers and
Facilities
For purposes of PHS Act sections
2799B-6, 2799B-6(1), and 2799B-6(2)
(B) that are being implemented in these
interim final rules, providers and facilities
must meet certain requirements related to
uninsured (or self-pay) individuals. Sec-
tion 2799B-6 places the requirement to
provide a good faith estimate, within the
statutorily defined timeframes, upon pro-
viders and facilities with whom an individ-
ual schedules an item or service, or from
whom an individual requests a good faith
estimate for an item or service, defined in
these interim final rules as the convening
provider or facility. However, HHS notes
that section 2799B-6(2) requires that a
good faith estimate of expected charges
include any item or service that is reason-
ably expected to be provided in conjunc-
tion with such scheduled item or service
and such items or services reasonably
expected to be so provided by another pro-
vider or facility, defined in these interim
final rules as a co-provider or co-facility.
In order for good faith estimates to
provide individuals with the most accu-
rate information available, HHS is of the
view that it is not feasible to fully imple-
ment the statutory provisions under PHS
Act section 2799B-6(2) without establish-
ing certain requirements for convening
providers and facilities and co-providers
and co-facilities. In implementing these
provisions, HHS is of the view that to the
extent possible, an uninsured (or self-pay)
individual is entitled to receive a clear and
understandable document that informs the
uninsured (or self-pay) individual of the
expected costs associated with the care
that they are considering or are sched-
uled to receive, and in order to do so, the
expected charges that inform the good
faith estimate should be provided by all
providers and facilities who are reasonably
expected to furnish the items or services
that would be billed to the uninsured (or
self-pay) individual. HHS seeks comment
on publicly available resources, methods,
and potential standardized formatting or
design that could facilitate communica-
tion of good faith estimate information in
a clear and understandable manner.
To this end, HHS is of the view that
issuance of separate good faith estimate
documents from each provider and facil-
ity involved in furnishing care for a pri-
mary item or service would place undue
administrative burden upon uninsured (or
self-pay) individuals to then aggregate
various good faith estimates received in
order to obtain a clear and understandable
representation of all expected charges for
an item or service. However, HHS also
acknowledges that in some instances,
it would not be practical nor feasible to
expect a convening provider or facility to
have sufficient knowledge of the expected
charges for each item or service provided
by a co-provider or co-facility. HHS is
also of the view that convening providers
and facilities should not be held responsi-
ble for the accuracy of expected charges
for items or services for which the con-
vening provider or facility does not bill
the uninsured (or self-pay) individual (for
instance, under the patient-provider dis-
pute resolution process as described in 45
CFR 149.620).
HHS notes that the accuracy of the
good faith estimate is relevant because
if the actual billed charges substantially
exceed the amounts reported in the good
faith estimate, an uninsured (or self-pay)
individual could seek a determination
under the patient-provider dispute res-
olution process under 45 CFR 149.620.
HHS is also of the view that it would not
be appropriate to solely require that a con-
vening provider or facility be accountable
through the patient-provider dispute res-
olution process for items or services for
which the convening provider or facility
did not bill the uninsured (or self-pay)
individual.
Therefore, HHS is using its general
rulemaking authority to establish require-
ments under 45 CFR 149.610, discussed
in detail below, for convening providers
and facilities as well as co-providers and
co-facilities for issuance of good faith
estimates for uninsured (or self-pay) indi-
viduals. HHS is of the view that use of its
general rulemaking authority to establish
such requirements is necessary in order
to implement the provisions of PHS Act
section 2799B-6 in a manner that balances
the statutory intent of providing uninsured
(or self-pay) individuals with clear and
understandable information regarding the
expected costs of items or services, the
responsibilities of various providers and
facilities, and the inherent accountability
established in the statute through the inter-
action between the issuance of good faith
estimates under PHS Act section 2799B-6
and the patient-provider dispute resolution
process under PHS Act section 2799B-7.
i. Requirements for Convening Providers
and Facilities
These interim final rules establish in 45
CFR 149.610(b)(1) certain requirements
for the convening provider or facility to
verify whether an individual meets the
definition of an uninsured (or self-pay)
individual, to provide oral and written
communication regarding the requirement
to provide good faith estimates to unin-
sured (or self-pay) individuals upon sched-
uling an item or service or upon request,
and to provide timely good faith estimates

Bulletin No. 2021–42 513 October 18, 2021
to uninsured (or self-pay) individuals. To
determine whether a good faith estimate
must be provided to an individual under
45 CFR 149.610(b)(1), the convening pro-
vider or facility must inquire and deter-
mine if the individual meets the definition
of an uninsured (or self-pay) individual as
established in 45 CFR 149.610(a)(2).
HHS is of the view that conveying
information about the availability of good
faith estimates prior to or upon schedul-
ing an item or service aligns with and is
most relevant when uninsured (or self-
pay) individuals are considering whether
to proceed with medical care while inter-
acting with their providers or facilities.
Requiring that providers and facilities
notify uninsured (or self-pay) individuals
of the availability of good faith estimates
will help ensure that all uninsured (or self-
pay) individuals understand that they can
request a good faith estimate and will also
receive a good faith estimate upon sched-
uling an item or service and upon request.
Therefore, HHS is using its general
rulemaking authority to establish in 45
CFR 149.610(b)(1)(iii) that the convening
provider or facility must inform uninsured
(or self-pay) individuals that good faith
estimates of expected charges are avail-
able to uninsured (or self-pay) individu-
als upon scheduling an item or service or
upon request. Information regarding the
availability of good faith estimates for
uninsured (or self-pay) individuals must
be provided in writing and orally. The con-
vening provider or facility must provide
written notice in a clear and understand-
able manner prominently displayed (and
easily searchable from a public search
engine) on the convening provider’s or
convening facility’s website, in the office,
and on-site where scheduling or questions
about the cost of items or services occur.
In addition, the convening provider or
facility must orally inform uninsured (or
self-pay) individuals of the availability
of a good faith estimate when questions
about the cost of items or services occur.
Information regarding the availability of a
good faith estimate must be made avail-
able in accessible formats and languages
spoken by individuals considering or
scheduling items or services with such
convening provider or convening facility.
HHS anticipates providing a model
notice for notifying uninsured (or self-
pay) individuals of the availability of
good faith estimates. However, HHS is
not requiring the use of such model notice
in order to allow providers or facilities
flexibility to develop notices that would
be most effective for their patient popu-
lations. HHS also recognizes the potential
value in having a standardized notice that
uninsured (or self-pay) individuals can
anticipate across providers and facilities.
Therefore, HHS seeks comment on the
potential for standardizing notices for use
by all convening providers and convening
facilities and other alternative or concur-
rent options for informing uninsured (or
self-pay) individuals of the availability of
good faith estimates that would meet the
requirements under this section.
HHS notes that uninsured (or self-pay)
individuals may use different terminology
other than “good faith estimate” when
requesting a good faith estimate. There-
fore, these interim final rules at 45 CFR
149.610(b)(1)(iv) specify that convening
providers and convening facilities shall
consider any discussion or inquiry regard-
ing the potential cost of items or services
under consideration as a request for a
good faith estimate.
PHS Act section 2799B-6(2) requires
that the good faith estimate include any
item or service that is reasonably expected
to be provided in conjunction with a
scheduled or requested item or service
by another provider or facility. There-
fore, these interim final rules at 45 CFR
149.610(b)(1)(v) require that the conven-
ing provider or facility contact all appli-
cable co-providers and co-facilities no
later than 1 business day after the request
for the good faith estimate is received or
after the primary item or service is sched-
uled, and request submission of expected
charges for items or services that meet the
requirements for co-providers and co-fa-
cilities under 45 CFR 149.610(b)(2) and
(c)(2). The convening provider or conven-
ing facility must indicate in their request
the date that the good faith estimate infor-
mation must be received from the co-pro-
vider or co-facility. The co-provider or
co-facility is responsible for providing
timely information to the convening pro-
vider or convening facility as discussed
later in this preamble. HHS is of the view
that the convening provider or convening
facility would not have accurate estimates
to include in the good faith estimate with-
out information being provided in a timely
manner by the co-provider or co-facility.
HHS seeks comments on methods and
standardized processes, including use of
HIPAA standard transactions, that could
facilitate accurate and efficient transmis-
sion of good faith estimate information
from co-providers or co-facilities to con-
vening providers or convening facilities.
PHS Act section 2799B-6 requires that
providers and facilities furnish the good
faith estimate of the expected charges
within certain defined timeframes. Specif-
ically, PHS Act section 2799B-6 states that
in the case of an individual who schedules
an item or service to be furnished to such
individual by such provider or facility at
least 3 business days before the date such
item or service is to be so furnished, that
the notification of the good faith estimate
of expected charges shall be provided no
later than 1 business day after the date of
such scheduling; in the case of such an
item or service scheduled at least 10 busi-
ness days before the date such item or ser-
vice is to be so furnished (or if requested
by the individual), that the notification
of the good faith estimate of expected
charges shall be provided no later than 3
business days after the date of such sched-
uling or such request. These interim final
rules at 45 CFR 149.610(b)(1)(vi) codify
these timeframes for good faith estimates.
HHS recognizes that circumstances
may arise where the scope of informa-
tion included in a good faith estimate
changes (such as, a provider or facility
represented in the good faith estimate is
no longer able to furnish the items or ser-
vices reported in the good faith estimate).
In such circumstances, these interim final
rules establish at 45 CFR 149.610(b)(1)
(vii) and (viii) that the convening pro-
vider or convening facility must issue an
uninsured (or self-pay) individual with a
new good faith estimate no later than 1
business day before the item or service is
scheduled to be furnished. If any changes
in expected providers or facilities repre-
sented in a good faith estimate occur less
than 1 business day before that the item
or service is scheduled to be furnished,
the replacement provider or replacement
facility must accept the good faith esti-
mate as their expected charges for the
items or services being furnished that

October 18, 2021 514 Bulletin No. 2021–42
were provided by the original provider or
facility and represented in the good faith
estimate. These interim final rules also
establish at 45 CFR 149.610(b)(2)(ii) and
(iii) similar requirements for co-providers
and co-facilities. HHS acknowledges the
challenges these requirements impose on
providers and facilities, and the potential
disincentive that such a requirement could
have on a provider’s or facility’s willing-
ness to provide an item or service under
such circumstances due to the fact that the
patient-provider dispute resolution pro-
cess, at 45 CFR 149.620, uses the good
faith estimate to determine the eligibility
of an item or service for dispute resolu-
tion. However, HHS is of the view that
such requirements are necessary for con-
sumer protections against facing surprise
medical bills and without such a require-
ment an uninsured (or self-pay) individ-
ual would be unable to avail themselves
of the patient-provider dispute resolution
process in these circumstances.
HHS expects that any replacement pro-
vider or facility considering whether to
furnish items or services will review the
applicable good faith estimate and use that
information to determine whether to fur-
nish the applicable items or services. HHS
is of the view that requiring the replace-
ment providers or facilities to accept as
their good faith estimate the expected
charges reported in the existing good faith
estimate mitigates the risk of providers or
facilities circumventing the requirements
of PHS Act 2799B-6 through the sub-
stitution of providers or facilities. Such
requirements also provide important con-
sumer protections intended by PHS Act
2799B-6 that are aimed to protect unin-
sured (or self-pay) individuals from unex-
pected medical bills. However, HHS seeks
comment on whether this approach could
have unintended consequences, such as
delays in care if providers were to refuse
to serve as replacements, and ways in
which to alleviate any such effects.
In instances where a good faith esti-
mate is provided upon the request of an
uninsured (or self-pay) individual, upon
the subsequent scheduling of the item or
service to be furnished, these interim final
rules at 45 CFR 149.610(b)(1)(ix) estab-
lish that a new good faith estimate must
be provided to the uninsured (or self-pay)
individual for the now scheduled item or
service, and within the timeframes speci-
fied for good faith estimates for scheduled
items or services under 45 CFR 149(b)
(1)(vi)(A) and (B). HHS recognizes that
uninsured (or self-pay) individuals might
choose to request a good faith estimate
in order to better understand anticipated
costs, for instance in situations where an
individual may wish to compare costs
across providers or facilities. If an unin-
sured (or self-pay) individual had not
previously scheduled the primary item or
service, the individual may not have been
evaluated for underlying conditions that
could impact the accuracy of the good
faith estimate. HHS encourages conven-
ing providers or facilities to review any
previously issued good faith estimate
related to the primary item or service and
make all applicable changes when pro-
viding the new good faith estimate. HHS
also encourages convening providers or
convening facilities to communicate these
changes upon delivery of the new good
faith estimate to help patients understand
what has changed between the initial good
faith estimate and the new good faith esti-
mate.
HHS acknowledges that there are
circumstances where recurring items or
services are expected to be furnished to
an uninsured (or self-pay) individual (for
example, an uninsured (or self-pay) indi-
vidual may need multiple physical ther-
apy visits that would occur outside of the
period of care for a surgical procedure).
These interim final rules establish at 45
CFR 149.610(b)(1)(x) that the convening
provider or facility may issue a single
good faith estimate for recurring primary
items or services if certain requirements
are met. The good faith estimate for
recurring items or services must include
in a clear and understandable man-
ner the expected scope of the recurring
items or services (such as: timeframes,
frequency, and total number of recur-
ring items or services) in the good faith
estimate. The scope of such a good faith
estimate must not exceed 12 months. If
additional recurrences of furnishing such
items or services are expected beyond 12
months, a convening provider or conven-
ing facility must provide an uninsured
(or self-pay) individual a new good faith
estimate. Providers must also communi-
cate such changes (such as timeframes,
frequency, and total number of recurring
items or services) upon delivery of the
new good faith estimate to help patients
understand what has changed between
the initial good faith estimate and the
new good faith estimate.
ii. Requirements for Co-Providers and
Co-Facilities
Under these interim final rules at 45
CFR 149.610(b)(2)(i), a co-provider or
co-facility must submit, upon the request
of the convening provider or convening
facility, good faith estimate information
for items or services that are reasonably
expected to be furnished by the co-pro-
vider or co-facility in conjunction with the
primary item or service (as specified under
the content requirements discussed later in
this section of the preamble). Good faith
estimate information submitted by co-pro-
viders or co-facilities must be received by
the convening provider or facility no later
than 1 business day after the co-provider
or co-facility receives the request. In addi-
tion, co-providers and co-facilities must
notify and provide new good faith esti-
mate information to a convening provider
or convening facility if the co-provider or
co-facility anticipates any changes to the
scope of good faith estimate information
previously submitted to a convening pro-
vider or convening facility (such as antic-
ipated changes to the expected charges,
items, services, frequency, recurrences,
duration, providers, or facilities). If any
changes in the expected co-providers or
co-facilities represented in a good faith
estimate occur less than 1 business day
before that the item or service is scheduled
to be furnished, the replacement co-pro-
vider or co-facility must accept as its good
faith estimate of expected charges the
good faith estimate for the relevant items
or services included in the good faith
estimate for the item or service being fur-
nished that was provided by the replaced
provider or facility.
These interim final rules at 45 CFR
149.610(b)(2)(iv) also establish that in the
event that an uninsured (or self-pay) indi-
vidual separately schedules or requests
a good faith estimate from a provider or
facility that would otherwise be a co-pro-
vider or co-facility, that provider or facil-
ity is considered a convening provider or

Bulletin No. 2021–42 515 October 18, 2021
convening facility for such item or service
and must meet all requirements in para-
graphs (b)(1) and (c)(1) for issuing a good
faith estimate to an uninsured (or self-pay)
individual.
4. Content of a Good Faith Estimate for
an Uninsured (or Self-Pay) Individual
In 45 CFR 149.610(c), these interim
final rules establish requirements for the
content that must be included in a good
faith estimate that is issued to an uninsured
(or self-pay) individual. As discussed
later in this section of the preamble, these
interim final rules at 45 CFR 149.610(c)
(1) establish the elements that must be
included in the good faith estimate issued
by the convening provider or convening
facility and 45 CFR 149.610(c)(2) estab-
lishes the content requirements for good
faith estimate information that must be
submitted by co-providers or co-facilities
to the requesting convening provider or
convening facility.
Specifically, the good faith estimate
issued by the convening provider or con-
vening facility to the uninsured (or self-
pay) individual must include:
• Patient name and date of birth;
• Description of the primary item or
service in clear and understandable
language (and if applicable, the date
the primary item or service is sched-
uled);
• Itemized list of items or services,
grouped by each provider or facility,
reasonably expected to be provided
for the primary item or service, and
items or services reasonably expected
to be furnished in conjunction with
the primary item or service, for that
period of care including: (1) those
items or services reasonably expected
to be furnished by the convening pro-
vider or convening facility, and (2)
those items or services expected to be
furnished by co-providers or co-facil-
ities;
• Applicable diagnosis codes, expected
service codes, and expected charges
associated with each listed item or
service;
• Name, NPI, and TIN of each provider
or facility represented in the good
faith estimate, and the state(s) and
office or facility location(s) where the
items or services are expected to be
furnished by such provider or facility;
• List of items or services that the con-
vening provider or convening facil-
ity anticipates will require separate
scheduling and that are expected
to occur before or following the
expected period of care for the pri-
mary item or service. The good faith
estimate must include a disclaimer
directly above this list that states that
separate good faith estimates will be
issued to an uninsured (or self-pay)
individual upon scheduling or upon
request of the listed items or services
and that for items or services included
in this list, information such as diag-
nosis codes, service codes, expected
charges and provider or facility iden-
tifiers do not need to be included as
that information will be provided in
separate good faith estimates upon
scheduling or upon request of such
items or services; and include instruc-
tions for how an uninsured (or self-
pay) individual can obtain good faith
estimates for such items or services;
• A disclaimer that informs the unin-
sured (or self-pay) individual that
there may be additional items or
services the convening provider or
convening facility recommends as
part of the course of care that must
be scheduled or requested separately
and are not reflected in the good faith
estimate;
• A disclaimer that informs the unin-
sured (or self-pay) individual that
the information provided in the good
faith estimate is only an estimate of
items or services reasonably expected
to be furnished at the time the good
faith estimate is issued to the unin-
sured (or self-pay) individual and that
actual items, services, or charges may
differ from the good faith estimate;
• A disclaimer that informs the unin-
sured (or self-pay) individual of their
right to initiate the patient-provider
dispute resolution process if the
actual billed charges are substantially
in excess of the expected charges
included in the good faith estimate,
as specified in 45 CFR 149.620; this
disclaimer must include instructions
for where an uninsured (or self-pay)
individual can find information about
how to initiate the patient-provider
dispute resolution process and state
that the initiation of the patient-pro-
vider dispute resolution process will
not adversely affect the quality of
health care services furnished to an
uninsured (or self-pay) individual by
a provider or facility; and
• A disclaimer that the good faith esti-
mate is not a contract and does not
require the uninsured (or self-pay)
individual to obtain the items or ser-
vices from any of the providers or
facilities identified in the good faith
estimate.
Given that good faith estimate informa-
tion submitted by co-providers or co-facil-
ities must be included as part of the good
faith estimate issued to the uninsured (or
self-pay) individual, these interim final
rules establish under 45 CFR 149.610(d)
(2) that good faith estimate information
submitted by co-providers or co-facili-
ties to convening providers or convening
facilities must include:
• Patient name and date of birth;
• An itemized list of items or ser-
vices expected to be provided by the
co-provider or co-facility that are rea-
sonably expected to be furnished in
conjunction with the primary item or
service as part of the period of care;
• Applicable diagnosis codes, expected
service codes, and expected charges
associated with each listed item or
service;
• Name, NPI, and TIN of the co-pro-
vider or co-facility, and the state(s)
and office or facility location(s) where
the items or services are expected to
be furnished by the co-provider or
co-facility; and
• A disclaimer that the good faith esti-
mate is not a contract and does not
require the uninsured (or self-pay)
individual to obtain the items or ser-
vices from any of the providers or
facilities identified in the good faith
estimate.
HHS expects that these requirements,
along with the required methods and for-
mat for providing good faith estimates (see
45 CFR 149.610(e)) will result in good
faith estimates that inform uninsured (or
self-pay) individuals about the expected
charges for the primary item or service,
including the items or services reasonably

October 18, 2021 516 Bulletin No. 2021–42
expected to be furnished in conjunction
with the primary item or service during a
period of care.
The itemized list of items or services
contained in a good faith estimate to an
uninsured (or self-pay) individual must
reflect the expected charges from the con-
vening provider or facility and co-provid-
ers or co-facilities during a period of care.
As discussed earlier, these interim final
rules define a “period of care” as the day
or multiple days during which the good
faith estimate for scheduled or requested
items or services (or a set of items or ser-
vices) are furnished or are anticipated to
be furnished, regardless of whether the
convening provider or convening facility
or co-providers or co-facilities are fur-
nishing such items or services, and also
includes the period of time during which
any facility equipment and devices, tele-
medicine services, imaging services, lab-
oratory services, and preoperative and
postoperative services that would not be
scheduled separately by the individual, are
furnished. It is the intent of this definition
of “period of care” to clarify that the good
faith estimate should include all of the
items or services that are typically sched-
uled as part of a primary item or service
for which an individual does not need to
engage in additional scheduling.
These interim final rules also estab-
lish at 45 CFR 149.610(c)(1)(vi) that in
instances where a convening provider or
convening facility anticipates that certain
items or services will need to be separately
scheduled (such as those items or services
typical of the standard of care), the con-
vening provider or facility must include a
separate list of items or services that the
convening provider or facility anticipates
will require separate scheduling and that
are expected to occur either prior to or
following the expected period of care for
the primary item or service. Additionally,
the good faith estimate must include a dis-
claimer directly above this list that noti-
fies the uninsured (or self-pay) individual
that: (1) separate good faith estimates
will be issued to an uninsured (or self-
pay) individual upon scheduling of the
listed items or services or upon request;
and (2) for items or services included in
this list, information such as diagnosis
codes, service codes, expected charges,
and provider or facility identifiers may
not be included as that information will be
provided in separate good faith estimates
upon scheduling of such items or services
or upon request; and (3) include instruc-
tions for how an uninsured (or self-pay)
individual can obtain good faith estimates
for such items or services.
HHS also considered requiring that the
good faith estimate include contact infor-
mation for a provider’s or facility’s finan-
cial assistance office. HHS seeks comment
on whether or not such information should
be required on the good faith estimate.
HHS understands the value in having
one good faith estimate that includes all
items or services furnished prior to, as
part of, and following the primary item or
service, regardless of whether the items
or services must be separately scheduled.
HHS also understands that including all
this information in one good faith estimate
could potentially be helpful in allowing an
uninsured (or self-pay) individual to fully
understand their anticipated costs. How-
ever, HHS also appreciates the complexity
in obtaining such information by a conven-
ing provider or convening facility, as the
convening provider or convening facility
may not be privy to or be able to reason-
ably predict which additional providers or
facilities an uninsured (or self-pay) indi-
vidual may choose to engage with outside
of the period of care for the primary item or
service. HHS seeks comment on whether
the good faith estimate content should be
expanded to include additional informa-
tion and expected charges for items or ser-
vices that are anticipated to be furnished
prior to or following the period of care
for the primary item or service but require
separate scheduling by the uninsured (or
self-pay) individual. HHS is particularly
interested in the benefits, challenges, and
resources that could facilitate provision of
good faith estimates that include items or
services beyond the period of care for the
scheduled or requested primary items or
services.
HHS provides the following example
for illustrative purposes only and notes
that this example should not be consid-
ered or construed to be comprehensive
or applicable to any specific individual or
set of circumstances. In the instance of a
knee surgery, a good faith estimate could
include an itemized list of items or ser-
vices in conjunction with and including
the actual knee surgery (such as physician
professional fees, assistant surgeon profes-
sional fees, anesthesiologist professional
fees, facility fees, prescription drugs,
and durable medical equipment fees) that
occur during the period of care. An indi-
vidual would not typically schedule days
in the hospital post-procedure separately
from scheduling the primary service of a
knee surgery. HHS would therefore expect
that all the items or services that are rea-
sonably expected to be provided from
admission through discharge as part of
that scheduled knee surgery, from all phy-
sicians, facilities, or providers be included
in the good faith estimate.
Additionally, in this illustrative exam-
ple, a provider or facility would furnish
separate good faith estimates upon sched-
uling or upon request for any items or
services that are necessary prior to or fol-
lowing provision of the primary item or
service beyond the period of care. Exam-
ples could include certain pre-operative or
post-operative items or services that are
not typically scheduled during the period
of care for the knee surgery, such as cer-
tain laboratory tests or post-discharge
physical therapy as discussed earlier.
HHS acknowledges that unforeseen
factors could occur during the course of
treatment, which could involve additional
services, resulting in higher actual billed
charges after receipt of care than was
anticipated at the time the good faith esti-
mate was provided to the uninsured (or
self-pay) individual. These interim final
rules do not require the good faith esti-
mate to include charges for unanticipated
items or services that are not reasonably
expected and that could occur due to
unforeseen events.
HHS expects that providers and facili-
ties will use the coding that best describes
the item or service for each item or service
listed in the good faith estimate. When a
single service code is available that cap-
tures reporting and billing for the compo-
nent parts of an item or service, the single
service code and expected charge for that
single service code would be reported in
the good faith estimate to capture the most
comprehensive coding level; the compo-
nent parts would not be included in the
good faith estimate as they would not be
separately reported or billed. For example,
CPT code 85027 (complete (CBC), auto-

Bulletin No. 2021–42 517 October 18, 2021
mated (Hgb, Hct, RBC, WBC and platelet
count)) represents a laboratory test that
measures a patient’s hematocrit, hemoglo-
bin, red blood cell count, leukocyte (white
blood cell) counts, and platelet count.
There are also individual CPT codes for
each of the component parts of the service
represented by CPT code 85027 (CPT
codes: 85014 (hematocrit (Hct)), 85018
(hemoglobin (Hgb)), 85041 (red blood
cell (RBC), automated), 85048 (leukocyte
(WBC), automated), and 85049 (platelet,
automated)). However, HHS expects that
the good faith estimate would include
expected charges for CPT code 85027,
not expected charges for each component
part since there is a single CPT code avail-
able that better captures reporting for all
of the component parts of the laboratory
service.
65

Items or services included in the good
faith estimate must be itemized (by each
applicable service code), and clearly
grouped and displayed as corresponding
to the respective provider or facility that
is expected to furnish those items or ser-
vices. For each provider or facility rep-
resented in the good faith estimate, the
total amount of expected charges must
be included and displayed. HHS is of the
view that certain identifying information
(such as the provider’s or facility’s NPI
and TIN) must be included in the good
faith estimate to ensure that each pro-
vider or facility is accurately identified,
particularly in instances where more
than one provider or facility have the
same name, but are separate and distinct
entities for purposes of billing for items
or services.
Chart 1 provides a visual example of
how itemized lists of expected items or
services could be displayed in the good
faith estimate as suggested in the HHS
model notice. HHS notes that this exam-
ple is included for demonstration purposes
only, is not required, and is not a manda-
tory or standardized format. HHS seeks
comment on options for displaying and
methods for standardizing the formatting
for the itemized lists of items or services,
and the required disclaimers. HHS also
seeks comment regarding the potential
benefits and challenges of using a stan-
dardized form that could serve as a base for
good faith estimates issued to uninsured
(or self-pay) individuals. As uninsured (or
self-pay) individuals may be unfamiliar
with reading and understanding itemized
lists of items or services typically charged
for by providers or facilities, HHS seeks
comment regarding whether the notice
should be required to include additional
information to explain concepts such as
itemized lists of items or services, content
within the required disclaimers, or other
information included within the good faith
estimate. HHS is also interested in infor-
mation regarding publicly available meth-
ods for displaying required information in
good faith estimates in a clear and under-
standable manner.
65
CPT codes and descriptions are copyright 2020 American Medical Association. All Rights Reserved. CPT is a registered trademark of the American Medical Association (AMA).
Chart 1: Example of How Itemized Lists of Expected Items or Services Could be Displayed in a Good Faith Estimate for
Uninsured (or Self-Pay) Individuals
Details of Services and Items for [Provider/Facility 1]
Service/ItemAddress where service/
item will be provided
Diagnosis CodeService CodeQuantityExpected Cost
[Street, City, State, ZIP][ICD code][Service Code
Type: Service
Code Number]
Total Expected Charges from [Provider/Facility 1]$
Additional Health Care Provider/Facility Notes
Details of Services and Items for [Provider/Facility 2]
Service/ItemAddress where service/
item will be provided
Diagnosis CodeService CodeQuantityExpected Cost
[Street, City, State, ZIP][ICD code][Service Code
Type: Service
Code Number]
Total Expected Charges from [Provider/Facility 1]$
Additional Health Care Provider/Facility Notes

October 18, 2021 518 Bulletin No. 2021–42
5. Required Methods for Providing Good
Faith Estimates for Uninsured (or Self-
Pay) Individuals
In 45 CFR 149.610(e), these interim
final rules establish required methods for
providing good faith estimates to unin-
sured (or self-pay) individuals. Consistent
with statutory requirements, these interim
final rules establish at 45 CFR 149.610(e)
(1) that the good faith estimate must be
provided in written form either on paper
or electronically (for example, electronic
transmission of the good faith estimate
through the convening provider’s patient
portal or electronic mail), pursuant to
the uninsured (or self-pay) individual’s
requested method of delivery, and within
the timeframes specified under 45 CFR
149.610(b). For good faith estimates pro-
vided electronically, the good faith esti-
mate must be provided in a manner that
the uninsured (or self-pay) individual can
both save and print, and must be provided
and written using clear and understand-
able language and in a manner calculated
to be understood by the average uninsured
(or self-pay) individual.
66

HHS notes that the good faith estimate
is necessary for initiating the patient-pro-
vider dispute resolution process under 45
CFR 149.620, and thus must be issued
in written form. Additionally, 45 CFR
149.610(e)(2) of these interim final rules
establishes that to the extent that an unin-
sured (or self-pay) individual requests a
good faith estimate be provided other than
by paper or electronically (for example,
by phone or orally in person), the con-
vening provider or facility may orally
discuss the information included in the
good faith estimate. However, in order to
meet the requirements of this section, the
convening provider or convening facil-
ity must issue the good faith estimate in
written form. The good faith estimate may
be provided to an uninsured (or self-pay)
individual’s authorized representative
instead of the individual, to the extent
not prohibited under state law. HHS notes
that authorized representatives from state
Consumer Assistance Programs (CAPs)
or legal aid organizations may also be
resources for assisting individuals with
good faith estimates. HHS recognizes and
notes that similar discussions related to
authorized representatives (and commu-
nication needs of underserved populations
discussed elsewhere in this preamble)
were also discussed in the July interim
final rules. These interim final rules adopt
similar standards for authorized represen-
tatives as the July 2021 interim final rules,
with amendments to account for concepts
that are not relevant to uninsured (or self-
pay) individuals such as removing refer-
ences to nonparticipating providers, par-
ticipants, beneficiaries and enrollees.
In interpreting the statutory require-
ments regarding the use of clear and
understandable language, HHS recognizes
that communication, language, and liter-
acy barriers are associated with decreased
quality of care, poorer health outcomes,
and increased utilization.
67
The use of
appropriate language services and appro-
priate literacy levels in health care set-
tings is associated with increased quality
of care, improved patient safety outcomes,
and lower utilization of costly medical
procedures.
68
HHS is of the view that it
is imperative that providers and facilities
make these efforts to provide good faith
estimate information in a manner under-
standable to the uninsured (or self-pay)
individual to help achieve the goal of the
statute and ensure that uninsured (or self-
pay) individuals are aware of the good
faith estimate information and the options
available to them. HHS is of the view that
when providing a good faith estimate,
providers or facilities should also take
into account any vision, hearing, or lan-
guage limitations; communication needs
of underserved populations; individuals
with limited English proficiency; and per-
sons with health literacy needs. These fac-
tors meaningfully contribute to whether
the uninsured (or self-pay) individual can
understand and ask any questions about
the total expected costs for items or ser-
vices.
Providers and facilities are also
required to comply with other state and
Federal laws regarding language access,
to the extent applicable. HHS reminds
providers and facilities that are recipients
of Federal financial assistance that they
must comply with Federal civil rights laws
that prohibit discrimination. These laws
include Section 1557 of the Patient Pro-
tection and Affordable Care Act,
69
Title
VI of the Civil Rights Act of 1964,
70
and
Section 504 of the Rehabilitation Act of
1973.
71
Section 1557 and Title VI require
covered entities to take reasonable steps
to ensure meaningful access to individuals
with limited English proficiency, which
may include provision of language assis-
tance services such as providing qualified
interpreters, written or sight translation of
written good faith estimates in paper or
electronic form into languages other than
English. When language assistance ser-
vices are provided, they must be provided
free of charge and be accurate and timely.
Section 1557 and Section 504 require
covered entities to take appropriate steps
to ensure effective communication with
individuals with disabilities, including
provision of appropriate auxiliary aids
and services in a timely manner and free
of charge to the individual. Auxiliary aids
and services may include sign language
interpreters, large print materials, accessi-
ble information and communication tech-
nology, open and closed captioning, and
other aids or services for persons who are
blind or have low vision, or who are deaf
or hard of hearing. Information provided
through information and communication
technology also must be accessible to
individuals with disabilities, unless cer-
tain exceptions apply.

HHS seeks comment from persons
in and representatives of racial/ethnic
minority and underserved communities,
including those with limited English
proficiency and those with disabilities
who require information in alternate and
accessible formats, lesbian, gay, bisex-
ual, transgender, and queer (LGBTQ+)
persons, and stakeholders who serve such
66
For additional resources, see Federal Plain Language Guidelines at https://www.plainlanguage.gov/guidelines/.
67
Flores G. Language barriers to health care in the United States. N Engl J Med 2006; 355:229-231.
68
Id.
69
42 U.S.C. § 18116.
70
42 U.S.C. § 2000d et seq.
71
29 U.S.C. § 794.

Bulletin No. 2021–42 519 October 18, 2021
communities, on whether the provisions
and protections related to communication,
language, and literacy sufficiently address
barriers that exist to ensuring all individu-
als can read, understand, and consider their
options related to good faith estimates.
HHS also seeks comment on how to best
provide additional help and resources for
these individuals, including state CAPs,
legal services or other aid that may help
patients with good faith estimates. HHS
also seeks comment on additional or alter-
nate policies HHS may consider to help
address and remove such barriers. In fur-
therance of the goal of reducing disparities
in health care and coverage, HHS intends
to analyze data related to individuals’ use
of the patient-provider dispute resolution
process described under 45 CFR 149.620,
as added by PHS Act section 2799B-7,
and the appeals process described under
45 CFR 147.136, as added by PHS Act
section 2719, to understand where barri-
ers to coverage or accessible information
persist. HHS is seeking comment on how
to use data related to these two processes
to understand, analyze, and address con-
tinued disparities.
HHS is seeking comment on how the
required methods for providing a good
faith estimate to uninsured (or self-pay)
individuals established under 45 CFR
149.610 may affect small or rural provid-
ers or facilities. HHS is particularly inter-
ested in whether there are alternatives to
these interim policies that HHS could con-
sider for potential future rulemaking that
could meet the statutory requirements for
provision of good faith estimates to unin-
sured (or self-pay) individuals.
6. Additional Compliance Provisions
HHS is of the view that compliance pro-
visions (established at 45 CFR 149.610(f)
of these interim final rules) are necessary
to ensure that providers and facilities
have taken reasonable steps to ensure the
accuracy of the information included in a
good faith estimate. These interim final
rules further clarify in 45 CFR 149.610(e)
(1) that a good faith estimate issued to an
uninsured (or self-pay) individual is con-
sidered part of the patient’s medical record
and must be maintained in the same man-
ner as a patient’s medical record, and that
convening providers and facilities must
provide a copy of any previously issued
good faith estimate furnished within the
last 6 years to an uninsured (or self-pay)
individual upon the request of the unin-
sured (or self-pay) individual.
While HHS acknowledges that some
states have existing state laws related to
the furnishing of good faith estimates,
HHS is of the view that uninsured (or
self-pay) individuals should still have
access to a good faith estimate that meets
the minimum requirements established
in these interim final rules. Therefore at
45 CFR 149.610(f)(2) these interim final
rules establish that providers or facilities
that issue good faith estimates under state
processes that do not meet the minimum
requirements under this section fail to
comply with the requirements of 45 CFR
149.610.
In circumstances in which a provider
or facility, acting in good faith, makes
an error or omission in a good faith esti-
mate, HHS is establishing at 45 CFR
149.610(f)(3) that a provider or facility
will not fail to comply with this section
solely because, despite acting in good
faith and with reasonable due diligence,
the provider or facility makes an error or
omission in a good faith estimate required
under this section, provided that the pro-
vider or facility corrects the information
as soon as practicable. However, if the
services are furnished before the error in
the good faith estimate is addressed, the
provider or facility may be subject to
patient-provider dispute resolution if the
billed charges are substantially in excess
of the good faith estimate (as described in
45 CFR 149.620).
Additionally, to the extent compliance
with this section requires a provider or
facility to obtain information from any
other entity or individual, these interim
final rules specify at 45 CFR 149.610(f)
(4) that the provider or facility will not
fail to comply with this section because
it relied in good faith on the information
from the other entity, unless the provider
or facility knows, or reasonably should
have known, that the information is
incomplete or inaccurate. HHS notes that
providers and facilities (including con-
vening providers, convening facilities,
co-providers or co-facilities) who experi-
ence other providers’ or facilities’ failures
to comply with the requirements in these
interim final rules may file a complaint
for enforcement investigation under 45
CFR 149.450. If the provider or facility
learns that the information is incomplete
or inaccurate, the provider or facility must
provide corrected information to the unin-
sured (or self-pay) individual as soon as
practicable, and as noted above, may be
subject to patient-provider dispute resolu-
tion if items or services furnished before
a corrected good faith estimate could be
issued to an uninsured (or self-pay) indi-
vidual.
7. Applicability of the Good Faith
Estimate Requirements
These interim final rules establish
under 45 CFR 149.610(g)(1) that the
requirements of this section are appli-
cable for good faith estimates requested
on or after January 1, 2022 by uninsured
(or self-pay) individuals or for good faith
estimates required to be provided to unin-
sured (or self-pay) individuals in connec-
tion with items or services scheduled on
or after January 1, 2022. HHS recognizes
that some providers or facilities may need
to establish efficient and secure communi-
cation channels for transmission of good
faith estimate information between con-
vening providers or facilities and co-pro-
viders and co-facilities. While HHS notes
that there are longstanding established
standards for data exchange between pro-
viders established under HIPAA,
72
HHS
is seeking comment on any existing chal-
lenges related to secure transmission of
good faith estimate information between
providers and facilities. HHS is also
interested in whether publicly available
standardized processes exist or could be
developed that would facilitate and sup-
port efficient and timely transmission of
good faith estimate information. HHS also
seeks comments on how the Hospital Price
Transparency requirements for hospitals
to display standard charges in a consum-
er-friendly manner (45 CFR 180.60), and,
specifically, the voluntary use of online
price estimator tools (45 CFR 180.60(a)
72
https://www.cms.gov/regulations-and-guidance/administrative-simplification/hipaa-aca

October 18, 2021 520 Bulletin No. 2021–42
(2)), may be leveraged to provide a good
faith estimate under these final rules. HHS
also seeks comments on whether there are
other opportunities for the convening pro-
vider to use the Hospital Price Transpar-
ency machine-readable file requirements
(45 CFR 180.50) to inform good faith esti-
mates with expected charges of co-provid-
ers or co-facilities from the comprehensive
machine-readable files, whether or not the
comprehensive machine-readable files can
assist uninsured (or self-pay) individuals
in determining if the good faith estimate
charges are reasonable and/or accurate,
and what limitations exist in using the
comprehensive machine-readable files for
purposes of meeting the requirements of
this section for provision of the good faith
estimates to uninsured (or self-pay) indi-
viduals. General information regarding
relevant interoperability or data exchange
standards would also be of interest.
These interim final rules at 45 CFR
149.610(g)(2) establish that nothing in 45
CFR 149.610 alters or otherwise affects
a provider’s or facility’s duty to comply
with requirements under other applica-
ble state or Federal laws, including those
governing the accessibility, privacy, or
security of information required to be
disclosed under this section, or those gov-
erning the ability of properly authorized
representatives to access uninsured (or
self-pay) individuals’ information held by
providers or facilities, except to the extent
a state law prevents the application of this
section.
HHS understands that it may take time
for providers and facilities to develop
systems and processes for receiving and
providing the required information from
co-providers and co-facilities. There-
fore, for good faith estimates provided to
uninsured (or self-pay) individuals from
January 1, 2022 through December 31,
2022, HHS will exercise its enforcement
discretion in situations where a good
faith estimate provided to an uninsured
(or self-pay) individual does not include
expected charges from co-providers or
co-facilities. HHS notes that nothing pro-
hibits a co-provider or co-facility from
furnishing the information before Decem-
ber 31, 2022, and nothing would prevent
the uninsured (or self-pay) individual
from separately requesting a good faith
estimate directly from the co-provider or
co-facility, in which case the co-provider
and co-facility would be required to pro-
vide the good faith estimate for such items
or services. Otherwise during this period,
HHS encourages convening providers and
convening facilities to include a range of
expected charges for items or services
reasonably expected to be provided and
billed by co-providers and co-facilities. To
the extent states are the primary enforcer
of these requirements, HHS encourages
states to take a similar approach, and will
not consider a state to be failing to sub-
stantially enforce these requirements if it
takes such an approach from January 1,
2022 through December 31, 2022.
8. Applicability of Requirements to
Notices Provided under 45 CFR 149.420
The July 2021 interim final rules
included provisions at 45 CFR 149.420(d)
establishing the information that must be
included in a written notice, if a non-par-
ticipating provider or non-participating
emergency facility seeks to obtain con-
sent from a participant, beneficiary, or
enrollee (or their authorized representa-
tive) to waive the balance bill protections.
Specifically, the written notice must be
provided in a form and manner specified
by HHS in guidance, and must, among
other things, include the good faith esti-
mated amount that such nonparticipat-
ing provider may charge the participant,
beneficiary, or enrollee for the items and
services involved (including any item or
service that is reasonably expected to be
furnished by the nonparticipating pro-
vider in conjunction with such items or
services). In the July 2021 interim final
rules, HHS stated that in calculating the
good faith estimated amount required to
be included in the notice under 45 CFR
149.420(d)(2), the provider or facility is
expected to apply the same process and
considerations used to calculate the good
faith estimate that is required under PHS
Act section 2799B-6(2).
HHS recognizes that providers and
facilities have some discretion in the
assumptions that they make regarding
which items or services to include in a
good faith estimate, and that some natu-
ral variation may occur across providers
and facilities in terms of which items or
services they would include in an esti-
mate. However, HHS is of the view that
it is critical for providers and facilities to
apply the same process and considerations
in developing the good faith estimate
required under PHS Act section 2799B-
6(2) (as partially implemented in these
interim final rules at 45 CFR 149.610) as
in 45 CFR 149.420(d)(2) to avoid con-
sumers receiving two different estimates
describing care from the same provider or
facility for the same care.
73

Under 45 CFR 149.610, the “expected
charge” for an item or service may vary
depending on whether the good faith esti-
mate is being provided to an uninsured
(or self-pay) individual, or to a plan or
issuer. HHS clarifies that the good faith
estimate in the notice described in 45
CFR 149.420(c) must be developed using
the definition of the expected charge that
would apply when the good faith estimate
is provided to a plan or issuer (that is, the
amount the provider or facility would
expect to charge if the provider or facility
intended to bill a plan or issuer directly for
such item or service). Because the notice
in 45 CFR 149.420(c) would only be pro-
vided with respect to individuals enrolled
in a group health plan or health insurance
coverage, HHS is of the view that requir-
ing the good faith estimate to align with
the good faith estimate that would be pro-
vided under PHS Act section 2799B-6(2)
(A) to a plan or issuer will help to avoid
situations in which participants, benefi-
ciaries, or enrollees subsequently receive
an advanced explanation of benefits from
their plan or issuer that is generated from
a different estimate than the one pro-
vided in the notice, or in which partici-
pants, beneficiaries, or enrollees receive
differing estimates regarding notice and
consent under 45 CFR 149.420(d)(2) and
regarding self-pay liability under 45 CFR
149.610. In instances where an individ-
73
For individuals who are seeking to submit a claim to their plan or coverage, the second estimate would be sent to the plan or issuer and used to develop the advanced explanation of ben-
efits required to be provided under Code section 9816(f), ERISA section 716(f), and PHS Act section 2799A-1(f). As discussed previously, the Departments will defer enforcement of these
requirements until the Departments have issued rulemaking regarding the requirements. The Departments recognize that participants, beneficiaries, and enrollees would not receive a second
estimate (in the advanced explanation of benefits) from their plan or issuer until this rulemaking goes into effect.

Bulletin No. 2021–42 521 October 18, 2021
ual receives a notice with a good faith
estimate reflecting the amount that would
be billed to a plan or issuer but intends to
self-pay and the item or service is sched-
uled in advance, the individual would
separately receive a good faith estimate
reflecting the amount they would be
charged as a self-pay individual under
the requirements in 45 CFR 149.610.
HHS acknowledges that the Depart-
ments are not codifying requirements
regarding PHS Act section 2799B-6(2)
(A), which requires providers and facil-
ities to furnish good faith estimates to
plans or issuers, and that HHS will defer
enforcement of this requirement until
rulemaking is effective to fully imple-
ment this requirement. That non-en-
forcement position does not extend to the
requirement to provide a good faith esti-
mate as part of the notice under 45 CFR
149.420(c). However, HHS seeks com-
ment on whether providers and facilities
should be allowed to calculate the good
faith estimate under 45 CFR 149.420(d)
(2) using the expected charge applicable
to an uninsured (or self-pay) individual
until such rulemaking occurs. HHS also
seeks comment on whether it would be
feasible for providers and facilities to
provide an estimate or range of estimated
costs for insured consumers upon request
during this period of non-enforcement.
HHS recognizes that the good faith esti-
mates required under 45 CFR 149.420(d)
(2) and 45 CFR 149.610 may also differ
if items or services from different provid-
er(s) or facilities are included in the esti-
mate. For example, an estimate required
in the notice under 45 CFR 149.420(d)(2)
would only include items or services pro-
vided by a nonparticipating provider that
seeks to obtain consent to balance bill. In
contrast, the good faith estimate required
under these interim final rules would not
be limited to items or services furnished
by such providers. However, HHS expects
that the estimates regarding items or ser-
vices provided by a specific provider or
facility in the notice provided under 45
CFR 149.420(c) would include the same
items or services for that specific provider
or facility as the good faith estimate pro-
vided under 45 CFR 149.610. Although
the grand total of a good faith estimate
under each of the two rules might differ
depending on the number of providers
furnishing estimates as part of one good
faith estimate, HHS is of the view that
the requirements in each of the two rules
generally take into account the same pro-
cess and considerations for calculating the
good faith estimate.
B. Patient-Provider Dispute Resolution
1. Scope
PHS Act section 2799B-7 directs the
Secretary of HHS to establish a process
called a patient-provider dispute reso-
lution process. Under this process an
uninsured (or self-pay) individual who
received a good faith estimate of the
expected charges for an item or service,
pursuant to PHS Act section 2799B-6,
implemented at 45 CFR 149.610, may
seek a determination from an SDR entity
for the amount to be paid by the uninsured
(or self-pay) individual to the provider or
facility for such item or service. Unin-
sured (or self-pay) individuals are eligible
for the patient-provider dispute resolution
process after being furnished an item or
service for which they received a good
faith estimate if the individual is billed,
by the provider or facility, charges that are
substantially in excess of the good faith
estimate.
HHS is adding new 45 CFR 149.620
to implement this patient-provider dis-
pute resolution process. These interim
final rules include specific definitions
related to the patient-provider dispute
resolution process; specify the items and
services eligible for the process; establish
requirements for what uninsured (or self-
pay) individuals must provide to initiate
the process; and specify the information
providers and facilities must provide to
an SDR entity to inform payment deter-
minations. These interim final rules also
establish requirements for SDR entities
contracted to resolve the patient-pro-
vider dispute, including how SDR entities
determine the payment amount, and cer-
tification standards that HHS will con-
sider when contracting with SDR entities.
These interim final rules also specify the
administrative fee associated with the
patient-provider dispute resolution pro-
cess, and the minimum requirements for
state patient-provider dispute resolution
processes to operate in place of the Fed-
eral patient-provider dispute resolution
process.
2. Definitions
For purposes of these interim final
rules, the definitions under 45 CFR
149.610 apply. Definitions related to
confidentiality set forth in § 149.510(a)
(2), including the definitions for breach,
individually identifiable health informa-
tion (IIHI), and unsecured IIHI also apply
to this section. These interim final rules
also define three additional terms: “billed
charge,” “substantially in excess,” and
“total billed charges” under new 45 CFR
149.620(a)(2).
These interim final rules define “billed
charge” to mean the amount billed by
a provider or facility for an item or ser-
vice. These interim final rules define “total
billed charges” to mean the total of billed
charges, by a provider or facility, for all
primary items or services and all other
items or services furnished in conjunction
with the primary items or services to an
uninsured (or self-pay) individual, regard-
less of whether such items or services
were included in the good faith estimate.
These interim final rules define the
term “substantially in excess” to mean
with respect to the total billed charges by
a provider or facility, an amount that is
at least $400 more than the total amount
of expected charges for the provider or
facility listed on the good faith estimate.
In defining “substantially in excess,” HHS
notes that PHS Act section 2799B-7 does
not include a definition for “substantially
in excess.” HHS reviewed other uses
of the term in existing Federal law. For
example, section 1128(b)(6) of the Social
Security Act provides that the Secretary of
HHS may exclude any individual or entity
from participation in any Federal health
care program if the Secretary determines
that the individual or entity submitted bills
or requests for payment (where such bills
or requests are based on charges or cost)
under title XVIII of the Social Security Act
or a state health care program containing
charges (or, in applicable cases, requests
for payment of costs) for items or services
furnished substantially in excess of such
individual’s or entity’s usual charges (or,
in applicable cases, substantially in excess
of such individual’s or entity’s costs)

October 18, 2021 522 Bulletin No. 2021–42
unless the Secretary finds there is good
cause for such bills or requests contain-
ing such charges or costs. However, HHS
notes that section 1128(b)(6) of the Social
Security Act similarly does not include a
definition for “substantially in excess.”
Regardless, HHS is of the view that the
term “substantially in excess” as used in
PHS Act section 2799B-7 should be dis-
tinguished from the language of section
1128(b)(6) of the Social Security Act, as
the provisions operate differently. Specif-
ically, PHS Act section 2799B-7 specifies
that an uninsured (self-pay) individual is
eligible to seek a payment determination
regarding the amount to be paid when the
total billed charges substantially exceed
the total expected charges in the good
faith estimate. HHS is of the view that
such a process should provide clear crite-
ria that would make it easy for uninsured
(or self-pay) individuals, providers, facil-
ities, SDR entities, and HHS to determine
eligibility for dispute resolution. HHS is
also of the view that such eligibility cri-
teria should be based on objective factors
that are known in advance and are simple
for providers, facilities, and uninsured (or
self-pay) individuals to understand, which
will reduce uncertainty over which items
or services are subject to dispute resolu-
tion and which are not.
HHS considered establishing a defini-
tion for “substantially in excess” to mean
that the total billed charges are greater
than the total expected charges in the
good faith estimate by a percentage of the
total expected charges in the good faith
estimate (for example, 20 percent of the
total expected charges). However, HHS
is mindful of the limitations in relying on
percentages for determining the threshold
of eligibility for dispute resolution. In par-
ticular, when using percentages, the dollar
thresholds would vary significantly based
on the magnitude of the expected charges
in the good faith estimate. For example, if
for an item or service, the expected charge
in the good faith estimate is $300, 20 per-
cent would equal $60, meaning the billed
charges would need to equal or exceed
$360 to be eligible for dispute resolu-
tion. However, if for an item or service,
the expected charge in the good faith esti-
mate is $25,000, the difference between
the billed charge and the expected charge
in the good faith estimate would need to
be $5,000 or greater to be eligible for dis-
pute resolution. In other words, basing the
definition of “substantially in excess” on
a percentage of the total expected charges
in the good faith estimate would make
dispute resolution easier to access in cases
where the associated dollar amounts are
small. Conversely, in cases where the
associated dollar amounts are very large,
the threshold would be significantly larger
in terms of dollars and more difficult for
the claims to meet, which could result in
many uninsured (or self-pay) individuals
being unable to access dispute resolution
despite receiving bills for items or ser-
vices in amounts far greater, in absolute
value, than the expected charges in the
good faith estimate.
To address these limitations, HHS
considered alternative approaches that
included defining “substantially in excess”
to mean that the total billed charges are
greater than the total expected charges in
the good faith estimate by the lesser of a
percentage of the total expected charges in
the good faith estimate or a flat maximum
dollar amount. While this approach would
mitigate concerns over higher cost items
and services meeting the “substantially in
excess” threshold, it would not address
concerns over the uninsured (or self-pay)
individual being easily able to bring dis-
pute resolution claims for lower cost items
or services. HHS is concerned that under
such an approach, dispute resolution for
lower cost items or services could be
overused, thus potentially increasing costs
for providers and facilities which could be
passed on to individual consumers in the
form of higher prices.
Similarly, HHS considered defin-
ing “substantially in excess” to mean
an amount that is the greater of either a
percentage of the total expected charges
in the good faith estimate or a flat mini-
mum dollar amount. By specifying a flat
minimum dollar threshold amount, such
an approach would address concerns over
overuse of the patient-provider dispute
resolution process for items or services
at the lower end of costs. However, HHS
remains concerned that such an approach
could effectively put dispute resolution
out of reach for uninsured (or self-pay)
individuals in situations where the total
expected charges for items or services
are high, particularly for those who need
to undergo more complex procedures. As
an example, under this approach, when
the total billed charges must be either
equal to or greater than a flat minimum
amount or predefined percentage above
the expected charges, if the applicable
flat amount is $400 and the applicable
percentage of the expected charges in the
good faith estimate were equal to 10 per-
cent, total expected charges of $25,000
would mean the total billed charges must
exceed the total expected charges in the
good faith estimate by $2,500 or more in
order to access dispute resolution. If, in
this example, the total billed charges are
less than $27,500, the uninsured (or self-
pay) individual would be unable to resolve
the unexpected bill using the patient-pro-
vider dispute resolution process. Even
for individuals with sufficient savings or
income, such a threshold would likely
pose a major financial burden, and such a
situation would be exacerbated for lower
income individuals and those who lack
sufficient savings. HHS is of the view that
whether an individual needs to receive a
high cost item or service is independent
from an individual’s income or assets or
coverage status, and basing the definition
of “substantially in excess” for the pur-
poses of eligibility for the patient-pro-
vider dispute resolution process on the
expected charges of an item or service
without any consideration for the financial
means of the uninsured (or self-pay) indi-
vidual would create a massive gap in the
consumer protections intended under PHS
Act section 2799B-7. To provide another
example, suppose an uninsured (or self-
pay) individual has total expected charges
in the good faith estimate equal to $2,100
and the “substantially in excess” standard
is the greater of 10% of the total expected
charges in the good faith estimate or $400.
Under such a definition, the substantially
in excess threshold would be $400, and
if the total billed charges are $2,500 or
greater, then the items or services are eli-
gible for dispute resolution. Now, consider
another uninsured (or self-pay) individual
with total expected charges of $21,000; in
this uninsured (or self-pay) individual’s
case, the total billed charges would need
to exceed the total expected charges in the
good faith estimate by $2,100 or more in
order to be eligible for dispute resolution.
The uninsured (or self-pay) individual

Bulletin No. 2021–42 523 October 18, 2021
with expected charges of $21,000 is in
no less need of protection from surprise
medical bills than the uninsured (or self-
pay) individual with expected charges of
$2,100, but in practice such individual
would more likely be unable to access
these important protections intended by
the patient-provider dispute resolution due
to the higher threshold.
HHS also considered a tiered percent-
age approach in which lower-cost services
must exceed a higher percentage value,
with a lower percentage value applicable
for higher-cost items or services. How-
ever, HHS is of the view that such an
approach would add undue complexity
to the patient-provider dispute resolution
process in determining whether items or
services meet the “substantially in excess”
threshold and would present the same
concerns previously described.
HHS also considered basing the defini-
tion of “substantially in excess” on billed
charges that exceed a certain percentile for
the same or similar services using an inde-
pendent database. However, such a mech-
anism appears inconsistent with the stat-
ute, which contemplates costs for items or
services to be determined “substantially in
excess” based on the good faith estimate
provided, rather than based on a specific
benchmark, such as an independent data-
base.
HHS is of the view that basing the defi-
nition of “substantially in excess” on a flat
dollar amount, such as $400, allows for a
straightforward way to calculate the eligi-
bility of an item or service for patient-pro-
vider dispute resolution, and reduces the
concerns described earlier regarding low-
er-cost items or services too easily meet-
ing the eligibility threshold for dispute
resolution and making it more difficult for
higher-cost items and services to meet the
eligibility threshold. HHS acknowledges
that such an approach may result in situa-
tions in which the difference between the
total billed charges and the total expected
charges in the good faith estimate is small
in relative terms but the item or service
is eligible for dispute resolution. As an
example, if the expected charge for an
item or service in the good faith estimate
is $100,000, basing “substantially in
excess” on a flat $400 threshold, a billed
charge of $100,400 (0.4% difference) or
more would make the item or service eli-
gible for dispute resolution, which could
be argued by some as not “substantially
in excess.” However, as discussed earlier
in this section of the preamble, HHS is of
the view that while the definition of “sub-
stantially in excess” should encompass
the difference between the total billed
charges and the total expected charges in
the good faith estimate, focusing solely
on the expected costs of items or services
risks shutting out many uninsured (or self-
pay) individuals from the patient-provider
dispute resolution process and undermines
the intended protections in PHS Act sec-
tion 2799B-7. Additionally, even when
the total expected charges are high, a rel-
atively small additional charge may still
create significant financial difficulties
for the uninsured (or self-pay) individ-
ual. HHS did consider whether to have
different flat dollar thresholds based on
the uninsured (or self-pay) individual’s
income, however, HHS is of the view that
such a policy would be confusing to unin-
sured (or self-pay) individuals who would
need to provide documentation to verify
their income, which increases the bur-
dens placed on such individuals and could
pose a deterrent to participation. Based on
consideration of the different approaches
discussed earlier in this section of the
preamble, HHS determined that the best
approach for defining “substantially in
excess” would be to base it on a flat dollar
difference between the total billed charges
and the total expected charges in the good
faith estimate.
Because HHS views the patient-pro-
vider dispute resolution process estab-
lished under PHS Act section 2799B-7 to
be intended to protect uninsured (or self-
pay) individuals from unexpected higher
health care costs, it is appropriate to
determine whether an amount is substan-
tially in excess based on the perspective
of individuals who are likely to be unin-
sured or underinsured, and not only the
perspective of the average individual or
the provider or facility. To that end, HHS
looked to existing research to assess what
amount Americans may struggle to cover
in unexpected expenses. HHS is of the
view that looking to Americans’ ability to
cover unexpected expenses is an import-
ant consideration when establishing pro-
tections for unexpected medical expenses,
which remain a common unexpected
expense for many. In a 2016 survey, the
Federal Reserve reported that 22 percent
of respondents experienced what they
described as a major unexpected medical
expense that they had to pay out-of-pocket
in the previous 12 months.
74
Further, con-
cerns over the potential costs of medical
care may result in many Americans choos-
ing to forego needed care.
75
Another recent
study found that in 2020, 17.8 percent of
individuals had medical debt reported to
a credit bureau, the study also found that
individuals collectively had greater med-
ical debt in collections than all forms of
nonmedical debt combined (the authors
defined nonmedical debt as other sources
of debt in collections, including credit
cards, personal loans, utilities, and phone
bills).
76

In 2019, the Federal Reserve found
that nearly 4 in 10 adults would have dif-
ficulty covering an emergency expense
costing $400, with 12 percent of adults
unable to pay their current month’s bills
if they also had an unexpected $400
expense.
77
The ability to cover an unex-
pected expense also varies significantly
by social risk and demographic factors,
for example, income, race, perceived
health, and depression.
78
A 2016 survey
74
Board of Governors of the Federal Reserve System, Report on the Economic Well-Being of U.S. Households in 2015 (May 2016), available at: https://www.federalreserve.gov/2015-report-
economic-well-being-us-households-201605.pdf.
75
For example, 24 percent of adults went without some form of medical care due to an inability to pay, down from 27 percent in 2017 and well below the 32 percent reported in 2013.
Dental care was the most frequently skipped treatment (17 percent), followed by visiting a doctor (12 percent) and taking prescription medicines (10 percent). Board of Governors of the
Federal Reserve System, Report on the Economic Well-Being of U.S. Households in 2018 (May 2019), available at: https://www.federalreserve.gov/publications/2019-economic-well-be-
ing-of-us-households-in-2018-dealing-with-unexpected-expenses.htm.
76
Kluender R, Mahoney N, Wong F, Yin W. Medical Debt in the US, 2009-2020. JAMA. 2021;326(3):250–256. doi:10.1001/jama.2021.8694.
77
Board of Governors of the Federal Reserve System, Report on the Economic Well-Being of U.S. Households in 2018 (May 2019), available at: https://www.federalreserve.gov/publica-
tions/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm.
78
Board of Governors of the Federal Reserve System, Report on the Economic Well-Being of U.S. Households in 2015 (May 2016), available at: https://www.federalreserve.gov/2015-report-
economic-well-being-us-households-201605.pdf.

October 18, 2021 524 Bulletin No. 2021–42
by the Federal Reserve found that among
respondents with a family income under
$40,000, only 34 percent reported they
would be able to pay an unexpected $400
expense using cash or its functional equiv-
alent (including money currently in their
checking/savings accounts, or available
on a credit card that they would pay in full
at their next statement). In addition, the
Federal Reserve found that while 61 per-
cent of non-Hispanic white respondents
said that they would pay for an unexpected
$400 expense using cash or its functional
equivalent, for Hispanic and non-Hispanic
black respondents, only 38 percent and 36
percent respectively reported that they
would be able to pay for an unexpected
$400 expense using cash or its functional
equivalent.
79

Other surveys have found results that
were consistent with the Federal Reserve’s
findings. One such survey found that only
39 percent of Americans would cover an
unexpected $1,000 expense using their
savings.
80
The same survey also found that
this number varied significantly with age
and income, finding that only 33 percent
of those in the millennial generation and
only 21 percent of those making less than
$30,000 per year would cover a hypotheti-
cal $1,000 expense using savings.
81
A sur-
vey by the Robert Wood Johnson Founda-
tion found that 67 percent of those making
less than $35,000 per year reported they
would have difficulty paying off a hypo-
thetical $1,000 expense.
82
Research by the
Pew Charitable Trust also found that 55
percent of Americans to be “savings-lim-
ited, meaning they can replace less than
one month of their income through liquid
savings.”
83
For Americans at the bottom
quintile of income, this amount is even
less, with the typical family having less
than 2 weeks of income in savings.
84

While research shows that some
Americans are financially prepared to
cover unexpected costs, many Americans
are unable to weather such unexpected
expenses.
85
The Pew Charitable Trust
found that more than half of families that
experienced a financial shock (such as
an unplanned expense or loss of income)
reported having trouble making ends meet,
and this number increased for younger,
minority, and low-income households.
The Pew Charitable Trust also found that
households that experienced such events
typically had lower savings and higher
credit card debts than those that did not.
86

While health care costs are not the
only unexpected expenses people face,
they constitute a large source of surprise
expenses. The Robert Wood Johnson
Foundation found that 38 percent of low-
er-income Americans and 31 percent of
middle-income Americans reported expe-
riencing significant problems with paying
medical bills.
87
Many Americans, par-
ticularly those who are uninsured, report
that they went without needed care, or
delayed care, due to costs. For example,
the Federal Reserve found that 38 per-
cent of those with incomes below $40,000
went without some form of medical care
in 2019.
88
Among uninsured individuals,
47 percent went without some form of
medical care due to concerns over costs.
89

Research reinforces the findings of the
Federal Reserve and indicates that addi-
tional risk factors such as perceived health
and depression increase an individual’s
likelihood of reporting that health care is
unaffordable.
90,91
For these groups facing
high health care related financial burdens,
which include those most likely to be
uninsured and underinsured,
92
unexpected
expenses of $400 or more would reason-
ably constitute a substantial amount.
HHS also considered setting the flat
dollar lower than $400. However, as dis-
cussed in greater detail in section VI.B.8
of this preamble, HHS expects to contract
with SDR entities directly and will pay
the SDR entity costs. Based on conver-
sations with stakeholders and research of
similar state processes, HHS found that
the amount that dispute resolution enti-
ties charge for similar dispute resolution
processes is around $400 per case. A study
by the Commonwealth Fund similarly
found costs for dispute resolution ranging
between $300 and $600.
93
HHS found that
other state dispute resolution processes
could potentially charge the uninsured (or
self-pay) individual high fees to initiate a
dispute. For example, in New York, the
cost to the uninsured (or self-pay) indi-
vidual for dispute resolution could be as
much as $395, and in Maine as much as
$450.
94
However, as is further discussed
in section VI.B.8 of this preamble, HHS
will only charge a small administrative
fee, meaning that uninsured (or self-
pay) individuals will be mostly insulated
from the costs of dispute resolution. HHS
acknowledges that the costs to the gov-
ernment for conducting dispute resolution
would not be a consideration for the unin-
sured (or self-pay) individual in determin-
ing whether to initiate a dispute, as they
79
Board of Governors of the Federal Reserve System, Report on the Economic Well-Being of U.S. Households in 2015 (May 2016), available at: https://www.federalreserve.gov/2015-report-
economic-well-being-us-households-201605.pdf.
80
https://www.bankrate.com/banking/savings/financial-security-january-2021/
81
https://www.bankrate.com/banking/savings/financial-security-january-2021/
82
https://www.rwjf.org/en/library/research/2019/12/life-experiences-and-income-inequality-in-the-united-states.html
83
https://www.pewtrusts.org/~/media/Assets/2015/01/FSM_Balance_Sheet_Report.pdf
84
https://www.pewtrusts.org/~/media/Assets/2015/01/FSM_Balance_Sheet_Report.pdf
85
https://www.pewtrusts.org/~/media/assets/2015/10/emergency-savings-report-1_artfinal.pdf
86
https://www.pewtrusts.org/~/media/assets/2015/10/emergency-savings-report-1_artfinal.pdf
87
https://www.rwjf.org/en/library/research/2019/12/life-experiences-and-income-inequality-in-the-united-states.html
88
https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm
89
https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm
90
Kielb ES, Rhyan CN, Lee JA. Comparing Health Care Financial Burden With an Alternative Measure of Unaffordability. Inquiry. 2017;54:46958017732960. doi:10.1177/0046958017732960.
91
Amin K, Claxton G, Ramirez G, Cox C. How Does Cost Affect Access to Care? Peterson-KFF Health System Tracker. January 2021. Available at https://www.healthsystemtracker.org/
chart-collection/cost-affect-access-care/#item-start.
92
Kielb ES, Rhyan CN, Lee JA. Comparing Health Care Financial Burden With an Alternative Measure of Unaffordability. Inquiry. 2017;54:46958017732960. doi:10.1177/0046958017732960.
Also see, Amin K, Claxton G, Ramirez G, Cox C. How Does Cost Affect Access to Care. Peterson-KFF Health System Tracker. January 2021. Available at https://www.healthsystemtracker.
org/chart-collection/cost-affect-access-care/#item-start. Also see, Tolbert J, Orgera K, Key Facts About the Uninsured Population. Kaiser Family Foundation. November 2020. Available at
https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/.
93
https://www.commonwealthfund.org/blog/2020/how-states-are-using-independent-dispute-resolution-resolve-out-network-payments-surprise
94
https://www.dfs.ny.gov/system/files/documents/2020/10/idr_patient_application.pdf and https://dispute.maximus.com/me/indexME.

Bulletin No. 2021–42 525 October 18, 2021
would not be required to pay those costs.
However, HHS is of the view that it would
not make sense to conduct dispute resolu-
tion cases where the amount in dispute is
less than the cost for the dispute resolution
entity. As a result, HHS is of the view that
setting the substantially-in-excess floor
equal to $400 is a reasonable and appro-
priate approach and would ensure that
the minimum amount in dispute for the
patient-provider dispute resolution pro-
cess is comparable to the expected costs
for dispute resolution.
In addition, HHS considered whether
to set the substantially-in-excess thresh-
old floor at a higher amount than $400.
However, HHS remains concerned that
setting the flat dollar floor for the sub-
stantially-in-excess threshold greater
than $400 could ultimately result in many
uninsured (or self-pay) individuals, par-
ticularly those who received lower cost
items or services, being unable to access
the patient-provider dispute resolution
process. As a result, HHS is of the view
that limiting patient-provider dispute res-
olution to items or services where the total
billed charges exceed the total expected
charges in the good faith estimate by $400
or greater strikes the appropriate balance
that helps ensure that amounts in dispute
are sufficiently large to justify the costs of
maintaining and operating the dispute res-
olution process; that burdens on provid-
ers, facilities, and the Federal Government
are minimized; and that all uninsured (or
self-pay) individuals are able to access
the dispute resolution process to resolve
unexpected billed amounts.
As HHS obtains additional experience
with the patient-provider dispute resolu-
tion process, HHS intends to review data
on the use of the process, such as the vol-
ume of dispute resolution cases, differ-
ences between the total expected charges
in the good faith estimate and the total
billed charges in cases that go to dispute
resolution, data on payment determination
amounts by SDR entities, the success rate
for uninsured (or self-pay) individuals
who initiate dispute resolution, and char-
acteristics of initiation requests that are
determined ineligible, and in future years
may propose adjustments to the definition
of “substantially in excess.”
HHS seeks comment on the definition
for “substantially in excess,” including
whether the $400 amount should be set
higher or lower, whether there is any other
specific dollar value that would be more
appropriate, or whether a different method
for determining “substantially in excess”
should be considered. HHS also seeks
comment on the terms defined in these
interim final rules, including the appro-
priateness and usability of the definitions,
and whether additional terms should be
defined in future rulemaking. HHS also
seeks comment on how these definitions
may impact market incentives, including
the accuracy of good faith estimates.
3. Eligibility for Patient-Provider Dispute
Resolution
The patient-provider dispute resolu-
tion process in PHS Act section 2799B–7
applies to uninsured (or-self-pay) indi-
viduals who received, pursuant to PHS
Act section 2799B–6, a good faith esti-
mate of the expected charges for sched-
uled or requested items or services from
a provider or facility, and who after being
furnished such item or service is billed
by such provider or facility charges sub-
stantially in excess of such estimate. To
clarify what items and services are eligi-
ble for the patient-provider dispute res-
olution process, HHS is adding 45 CFR
149.620(b) which specifies that items or
services provided by a convening pro-
vider, convening facility, co-provider, or
co-facility are eligible for the patient-pro-
vider dispute resolution process if the
total billed charges (by the particular
convening provider, convening facility,
or co-provider or co-facility listed in the
good faith estimate), are substantially in
excess of the total expected charges for
that specific provider or facility listed on
the good faith estimate, as required under
45 CFR 149.610, regardless of whether
the items or services included in the total
billed charges were listed in the good faith
estimate, or whether the co-provider or
co-facility was listed on the good faith
estimate.
Good faith estimates for scheduled
items or services, or when requested, as
specified in 45 CFR 149.610, are intended
to provide a comprehensive estimate of
expected charges for items or services
furnished during the period of care. PHS
Act section 2799B-6 and 45 CFR 149.610
require providers or facilities to include
any item or service that is reasonably
expected to be provided in conjunction
with an item or service, including an item
or service reasonably expected to be so
provided by another provider or facility.
HHS is of the view that an uninsured
(or self-pay) individual should be able to
initiate the patient-provider dispute reso-
lution process when the total billed charge
for an item or service from a particular
provider or facility represented in the good
faith estimate exceeds the substantially
in excess threshold defined at 45 CFR
149.620(a)(2). Therefore, these interim
final rules specify that an item or service
provided by a convening provider, con-
vening facility, co-provider or co-facility
are eligible for the patient-provider dis-
pute resolution process if the total billed
charges (by the particular convening pro-
vider or facility, or co-provider or co-fa-
cility listed in the good faith estimate),
are substantially in excess of the of total
expected charges for that specific provider
or facility listed on the good faith esti-
mate, as required under 45 CFR 149.610.
As an example, an uninsured (or self-
pay) individual receives a good faith
estimate that lists expected charges for 3
services, A, B, and C. Services A and B
are provided by provider Y and service
C is provided by co-provider Z. The total
billed charges for services A and B must
exceed the total expected charges for ser-
vices A and B by at least $400 more than
the amount listed in the good faith esti-
mate in order for the uninsured (or self-
pay) individual to be eligible to initiate
patient-provider dispute resolution against
provider Y. Similarly, the billed charge
for service C must exceed the expected
charges for service C by at least $400
more than the amount listed in the good
faith estimate in order for the uninsured
(or self-pay) individual to be eligible for
the patient-provider dispute resolution
against co-provider Z.
An item or service is eligible for
patient-provider dispute resolution based
on the total billed charges from the pro-
vider or facility, regardless of whether
such items or services are included in a
good faith estimate. HHS recognizes that
unforeseen factors during the course of
treatment may occur, which could involve
additional items or services from provid-

October 18, 2021 526 Bulletin No. 2021–42
ers and facilities, and may result in higher
billed charges after receipt of care than
was anticipated at the time the good faith
estimate was provided to the uninsured
(or self-pay) individual. However, HHS
is of the view that if an item or service is
eligible for patient-provider dispute reso-
lution only if it is explicitly listed in the
good faith estimate, providers and facil-
ities may be incentivized to omit items
and services from the good faith estimate
in order to avoid the patient-provider dis-
pute resolution process. It is HHS’s view
that Congress intended to create a process
which allows uninsured (or self-pay) indi-
viduals to dispute the final billed charges,
if such charges are substantially in excess
of the expected charges in the good faith
estimate; and therefore any item or ser-
vice that was not included in the good
faith estimate, yet resulted in total billed
charges substantially in excess of the total
expected charges in the good faith esti-
mate, should be eligible for patient-pro-
vider dispute resolution.
Therefore, if the total billed charges,
which includes charges for new items
or services, exceeds the total expected
charges by at least $400 more than the
amount in the good faith estimate, the items
or services are eligible for patient-pro-
vider dispute resolution, despite the new
items or services not being itemized in the
good faith estimate. For example, co-pro-
vider Z bills an uninsured (or self-pay)
individual for services C, D, and E, even
though services D and E were not included
in the good faith estimate. If the differ-
ences between the total billed charges for
services C, D, and E are substantially in
excess of the total expected charges in the
good faith estimate for service C, then the
uninsured (or self-pay) individual is eligi-
ble to initiate patient-provider dispute res-
olution against co-provider Z for services
C, D, and E.
Although convening providers and
convening facilities are required to
include expected charges from co-pro-
viders and co-facilities in the good faith
estimate, HHS understands that there may
be instances when an uninsured (or self-
pay) individual may receive a bill that
includes providers or facilities that were
not included in the good faith estimate:
specifically, if a co-provider or co-facility
that is reflected on the good faith estimate
is substituted at the last moment to a dif-
ferent co-provider or co-facility. While
PHS Act section 2799B-7 requires that
an item or service where the total billed
charges are substantially in excess of the
total expected charges in the good faith
estimate will be eligible for patient-pro-
vider dispute resolution, expected charges
for the replacement co-provider or co-fa-
cility may not be available. Regardless,
HHS is of the view that the consumer
protections of PHS Act section 2799B-7
should still apply in these circumstances
as they are aimed to protect uninsured (or
self-pay) individuals from unexpected
medical bills, and allowing a co-provider
or co-facility to circumvent these protec-
tions simply due to not being directly rep-
resented on the good faith estimate would
undermine these protections. Therefore,
HHS is adding 45 CFR 149.620(b)(2) that
specifies that an item or service billed by a
co-provider or co-facility that replaced the
original co-provider or co-facility covered
under a good faith estimate is eligible for
dispute resolution if the total billed charge
is substantially in excess of the expected
charges included on the good faith estimate
for the original co-provider or co-facility.
However, if the replacement co-provider
or co-facility provides the uninsured (or
self-pay) individual with a new good faith
estimate of expected charges in accor-
dance with 45 CFR 149.610(b)(2) then the
determination of whether an item or ser-
vice billed by the replacement co-provider
or co-facility is eligible for dispute reso-
lution is based on whether the total billed
charges for the replacement co-provider
or co-facility are substantially in excess
of the total expected charges included in
the good faith estimate provided by the
replacement co-provider or co-facility.
HHS is of the view that had the con-
vening provider known that the items or
services from these particular co-pro-
viders or co-facilities would be needed,
they would have been included on the
good faith estimate. Therefore, HHS is
of the view that such an approach for an
item or service billed by a replacement
co-provider or co-facility is necessary and
appropriate to ensure such item or service
is eligible for dispute resolution if the total
billed charges are substantially in excess
of the total expected charges in the good
faith estimate even if the billing provider
or facility did not provide the original
estimate of expected charges in the good
faith estimate. HHS acknowledges the
challenges these requirements impose on
providers and facilities, and the potential
disincentive that such a requirement could
have on a provider’s or facility’s willing-
ness to provide an item or service under
such circumstances given the patient-pro-
vider dispute resolution process, at 45
CFR 149.620, uses the expected charges
contained in the good faith estimate to
determine the eligibility of an item or
service for patient-provider dispute reso-
lution. However, HHS is of the view that
such requirements are necessary for the
intended consumer protections regarding
surprise medical bills, and that, without
such a requirement, an uninsured (or self-
pay) individual may be unable to avail
themselves of the patient-provider dispute
resolution process in these circumstances.
HHS also recognizes that these particu-
lar situations may be more complex for
an uninsured (or self-pay) individual to
determine eligibility for dispute resolu-
tion. HHS seeks comment on the approach
for eligibility in cases where the co-pro-
vider or co-facility has been replaced with
a different co-provider or co-facility, com-
ments on whether there are other com-
plex situations where clarification would
be helpful, and the feasibility of such an
approach to eligibility, as well as com-
ments on alternative approaches.
HHS considered whether to base eli-
gibility for patient-provider dispute res-
olution on whether an individual item or
service listed on a good faith estimate is
billed an amount substantially in excess
of the expected charge for the item or
service. However, HHS is of the view
that basing the eligibility for patient-pro-
vider dispute resolution on each individ-
ual item or service would add complexity
as each item or service listed on the good
faith estimate would need to be assessed
separately for eligibility. Additionally,
by basing the eligibility for patient-pro-
vider dispute resolution on an individual
item or service, providers and facilities
could potentially avoid dispute resolution
by ensuring that no single billed charge
exceeds the estimate provided on the good
faith estimate by more than the substan-
tially in excess threshold, even though the
total of all billed charges for a provider

Bulletin No. 2021–42 527 October 18, 2021
or facility might substantially exceed the
total expected charges in the good faith
estimate. As a result, to fully protect
the uninsured (or self-pay) individual,
the individual items and services would
need to be totaled by provider or facility,
with the total billed charges by provider
or facility subject to the substantially in
excess standard. HHS is of the view that,
because the uninsured (or self-pay) indi-
vidual understood the items or services to
most likely cost the amount listed in the
good faith estimate with respect to each
provider or facility, focusing on the total
billed charges by each provider or facility
ensures that patient-provider dispute res-
olution is available when the total billed
charges for each provider or facility sub-
stantially exceeds the amount that the
individual expects to pay.
HHS also considered basing the eli-
gibility on the total billed charges for
all items or services and all providers
or facilities listed on the good faith esti-
mate. However such an approach would
be significantly more complex given that
the good faith estimate could consist of
estimates from multiple providers and
facilities who would bill the uninsured (or
self-pay) individual separately. It could
also potentially increase the burden on
the uninsured (or-self pay) individual who
would likely need to submit multiple bills
from multiple providers or facilities. Addi-
tionally, such an approach could require a
provider or facility to respond to a notice
requesting additional documentation from
an SDR entity due to the billing of other
providers, even when the provider or
facility did not bill an uninsured (or self-
pay) individual an amount substantially in
excess of the good faith estimate.
As discussed in section VI.A.2 of this
preamble, these interim final rules define
expected charges, for an item or service,
as, the cash pay rate or rate established
by a provider or facility for an uninsured
(or self-pay) individual, reflecting any
discounts for such individuals, where the
good faith estimate is being provided to
an uninsured (or self-pay) individual; or
the amount the provider or facility would
expect to charge if the provider or facility
intended to bill a plan or issuer directly for
such item or service when the good faith
estimate is being furnished to a plan or
issuer. Therefore, HHS would anticipate
that the expected charges in the good faith
estimate include applicable discounts and
rates the provider or facility would ulti-
mately charge an uninsured (or self-pay)
individual rather than a standard list price
or chargemaster rate. However, HHS
remains concerned about the potential
incentives for providers and facilities to
inflate good faith estimates, for example,
by overestimating the costs for items or
services, providing a higher list price (or
chargemaster rate) rather than the price the
uninsured (or self-pay) individual would
be expected to pay when accounting for
any discounts, upcoding to a more expen-
sive service, or adding additional unnec-
essary services which could lead to higher
good faith estimates overall and could dis-
courage uninsured (or self-pay) individu-
als from obtaining needed care. Further-
more, HHS is also concerned that provid-
ers or facilities may interpret an individ-
ual’s decision to seek care after receiving
the good faith estimate as their ability to
pay the expected charges and therefore be
disincentivized to offer the uninsured (or
self-pay) individuals with charity care or
discounted rates. HHS acknowledges that
the availability of the patient-provider dis-
pute resolution process may lead provid-
ers or facilities to estimate prices higher
than they otherwise would have. However,
HHS is very concerned that a provider or
facility may increase the good faith esti-
mate amount specifically to circumvent
the ability of the uninsured (or self-pay)
individual to access the patient-provider
dispute resolution process, resulting in
uninsured (or self-pay) individuals being
charged higher prices and as a result the
uninsured (or self-pay) individual forego-
ing needed care due to concerns over the
potential costs. Additionally, this behavior
could potentially lead to a situation where
an uninsured (or self-pay) individual ulti-
mately receives an inflated good faith
estimate, but after receiving treatment is
billed an amount higher than the good
faith estimate yet less than the substan-
tially in excess threshold, and is therefore
unable to access dispute resolution due to
the expected charges in the good faith esti-
mate being overestimated. HHS acknowl-
edges that an uninsured (or self-pay) indi-
vidual may not necessarily know if a good
faith estimate is inflated. However, as dis-
cussed in section VI.A.4 of this preamble,
the good faith estimate will provide an
itemized list of the expected items or ser-
vices in advance, including the applicable
diagnosis codes, expected service codes,
and expected charges associated with each
listed item or service. HHS is of the view
that this will provide needed transparency
for uninsured (or self-pay) individuals
about the items or services they expect to
be provided and the estimated costs with
which they can compare with good faith
estimates from other providers or through
price transparency information such as
the Hospital Price Transparency require-
ments described in 45 CFR Part 180. HHS
seeks comment on what other resources
are available to assist individuals in deter-
mining the reasonableness of the good
faith estimates they receive, particularly
those who are uninsured (or self-pay) and
with low health literacy. HHS also seeks
comments on ways to raise awareness of
these resources and on other resources
that could be utilized by uninsured (or
self-pay) individuals.
HHS notes that a provider or facility
intentionally providing expected charges
they know to be incomplete or inaccurate
in the good faith estimate could violate the
requirements in PHS Act section 2799B-
6, which requires that the estimates being
provided be good faith estimates, and thus
could be subject to enforcement actions
under PHS Act section 2799B-4. HHS is
of the view that it is important for an unin-
sured (or self-pay) individuals to be able
to file complaints regarding a provider or
facility who they believe is not complying
with the good faith estimate requirements
and patient-provider dispute resolution
process requirements, such as in cases
where an individual believes a provider
or facility is inflating the good faith esti-
mate. Therefore, HHS is amending the
regulations at 45 CFR 149.450 to expand
the scope to include subpart G of part 149,
which includes 45 CFR 149.610 and 45
CFR 149.620, among the provisions for
which HHS can receive and resolve com-
plaints concerning a provider’s or facility’s
failure to meet the specified requirements.
HHS seeks comment on this approach.
HHS also considered whether there
should be an additional backstop that
would allow an uninsured (or self-pay)
individual to access patient-process dis-
pute resolution based on allegations that

October 18, 2021 528 Bulletin No. 2021–42
the provider or facility willfully overes-
timated the expected charges in the good
faith estimate in order to avoid dispute
resolution. Under such an approach, the
good faith estimate would be reviewed to
ensure that the good faith estimate reason-
ably reflect only the expected charges for
the item or service, and that the good faith
estimate did not include items or services
extraneous to those that were reasonably
expected to be provided in conjunction
with such scheduled item or service. If
HHS were to determine that such require-
ments had not been met, the uninsured
(or self-pay) individual would be deemed
eligible to initiate the patient-provider
dispute resolution process for such items
or services. However, these interim final
rules do not include such an approach as
HHS was concerned this approach would
add significantly more complexity to the
patient-provider dispute resolution pro-
cess. HHS seeks comment on this poten-
tial approach of allowing uninsured (or
self-pay) individuals to initiate dispute
resolution for good faith estimates they
believe to have been overinflated in order
for providers and facilities to avoid dis-
pute resolution.
As noted elsewhere in this preamble,
with regards to an item or service fur-
nished by co-providers and co-facilities,
providers and facilities subject to these
interim final rules may need additional
implementation time to develop appropri-
ate communication channels that may not
yet exist among various co-providers or
co-facilities. As stated in section VI.A.7
of this preamble, with respect to good
faith estimates provided to uninsured (or
self-pay) individuals on or after January
1, 2022 through December 31, 2022, HHS
will exercise its enforcement discretion
in situations where the good faith esti-
mate does not include expected charges
for items and services from a co-provider
or co-facility. During this period, HHS
encourages convening providers and
facilities to include a range of expected
charges for such items and services during
the period of care. HHS understands that
it may take time for providers and facil-
ities to develop systems and processes
for receiving and providing the required
information regarding items and services
provided by co-providers and co-facili-
ties. HHS is of the view that without hav-
ing such processes in place, co-providers
and co-facilities who provide items or ser-
vices may be subjected to patient-provider
dispute resolution in situations where the
co-providers or co-facilities were unable
to provide complete and accurate pricing
information to the convening provider or
facility, and as a result would not provide
sufficient detail to provide accurate good
faith estimates. As a result, during the
period of enforcement discretion, further
discussed in section VI.A.7 of this pream-
ble, items or services to be provided by a
co-provider or co-facility that appear on
the good faith estimate that do not include
an estimate of expected charges or that
appear as a range of expected charges
would not be eligible for the patient-pro-
vider dispute resolution process. How-
ever, HHS emphasizes that this particular
application for patient-provider dispute
resolution eligibility would apply only
in 2022 to allow additional time for the
convening provider and convening facil-
ity to build the necessary systems and
processes to receive accurate estimates
from co-providers and co-facilities. HHS
notes, that nothing prevents a co-provider
or co-facility from furnishing the informa-
tion as required in 45 CFR 149.610 before
December 31, 2022, and under such cir-
cumstances, a co-provider or co-facility
must comply with the patient-provider
dispute resolution requirements in 45 CFR
149.620. Additionally, nothing would pre-
vent the uninsured (or self-pay) individual
from separately requesting a good faith
estimate directly from the co-provider or
co-facility in which case the patient-pro-
vider dispute resolution requirements in
45 CFR 149.620 would apply. HHS seeks
comment on the approach for eligibility
for the patient-provider dispute resolution
process, including the feasibility of such
approach, including the approach for eli-
gibility for co-providers and co-facilities
in 2022, as well as comment on alterna-
tive approaches to increase consumer pro-
tections against unexpected medical bills
from co-providers and co-facilities during
2022.
HHS also recognizes that uninsured
(or self-pay) individuals in underserved
and racial/ethnic minority communities,
including individuals with vision, hear-
ing, or language limitations, individuals
with limited English proficiency, lesbian,
gay, bisexual, transgender, and queer
(LGBTQ+) individuals, and persons with
health literacy needs, may face additional
barriers to paying for high unexpected
health care costs, understanding their
rights related to good faith estimates,
patient-provider dispute resolution, and
how and when to initiate the dispute reso-
lution process. HHS seeks comment from
underserved and racial/ethnic minority
communities on additional barriers indi-
viduals from these communities may
face in understanding and exercising their
rights related to these topics, and how to
address them. HHS also seeks feedback
on outreach and education activities,
efforts, and resources available for under-
served and racial/ethnic minority commu-
nities, including individuals with vision,
hearing, or language limitations, individ-
uals with limited English proficiency, les-
bian, gay, bisexual, transgender, and queer
(LGBTQ+) individuals, and persons with
health literacy needs, to help ensure that
these rights and tools are available, acces-
sible, and understood such that they can
be used equitably by all uninsured (or self-
pay) individuals in appropriate circum-
stances. HHS also recognizes that groups
such as CAPs and legal aid organizations
play an important role in helping con-
sumers, particularly those in underserved
and racial/ethnic minority communities,
including individuals with vision, hearing,
or language limitations; individuals with
limited English proficiency; and persons
with health literacy needs, with complex
heath care issues, which may also include
assistance with the patient-provider dis-
pute resolution process. HHS seeks com-
ment on how to best to support the efforts
of these organizations in assisting unin-
sured (or self-pay) individuals throughout
the patient-provider dispute resolution
process.
4. Initiation of Patient-Provider Dispute
Resolution
PHS Act section 2799B-7 requires
patient-provider dispute resolution be
available when an uninsured (or self-pay)
individual is billed by a provider or facil-
ity for items or services in an amount that
is “substantially in excess” of the expected
charges in the good faith estimate for the
provider or facility.

Bulletin No. 2021–42 529 October 18, 2021
HHS is specifying under 45 CFR
149.620(c) that when an uninsured (or
self-pay) individual is billed for items or
services where the total billed charges
for a provider or facility is substantially
in excess of the total expected charges in
the good faith estimate for the provider
or facility, the uninsured (or self-pay)
individual or their authorized represen-
tative (excluding any providers or facili-
ties directly represented in the good faith
estimate, providers associated with such
providers or facilities, or non-clinical staff
associated with such providers or facili-
ties), may submit a notification (initiation
notice) to the Secretary of HHS to initi-
ate the patient-provider dispute resolution
process. HHS is of the view that a provider
should generally not be permitted to repre-
sent the uninsured (or self-pay) individual
in dispute resolution for items or services
where the provider was represented on the
good faith estimate, even if the provider
would not be a party to the dispute. HHS
is of the view that there is a likelihood
of an inherent financial or professional
conflict of interest. These same concerns
extend to employees of the facility at
which the items or services are furnished.
However, HHS acknowledges that many
providers would generally not be inclined
to assist the uninsured (or self-pay) indi-
viduals with initiating a dispute resolution
even without this restriction. HHS fur-
ther clarifies that providers may serve as
authorized representatives for uninsured
(or self-pay) individuals, provided they do
not meet the previously described exclu-
sion criteria. HHS also clarifies that CAPs
and legal aid organizations can also serve
as authorized representatives for the pur-
pose of the patient-provider dispute reso-
lution process as such organizations may
have experience assisting consumers with
billing issues. Additionally, all materials
created for the patient-provider dispute
resolution process, including the Federal
IDR portal, will be compliant with the
language access requirements of section
508 of the Rehabilitation Act of 1973 to
meet accessibility needs.
95
HHS seeks
comment on what additional supports are
necessary for community organizations,
such as CAPs and legal aid organizations,
to assist uninsured (or self-pay) individ-
uals with the dispute resolution process.
Providers and facilities are also required
to comply with other state and Federal
laws regarding language access, to the
extent applicable. HHS reminds providers
and facilities that are recipients of Federal
financial assistance that they must comply
with Federal civil rights laws that prohibit
discrimination. These laws may include
Section 1557 of the Patient Protection and
Affordable Care Act, Title VI of the Civil
Rights Act of 1964, and Section 504 of the
Rehabilitation Act of 1973, as applicable.
Section 1557 of the Patient Protection and
Affordable Care Act and Title VI of the
Civil Rights Act of 1964 require covered
entities to take reasonable steps to ensure
meaningful access for individuals with
limited English proficiency, which may
include provision of language assistance
services, such as providing qualified inter-
preters or written translation of written
good faith estimates in paper or electronic
form into languages other than English.
When language assistance services are
provided, they must be provided free of
charge and be accurate and timely. Section
1557 of the Affordable Care Act and Sec-
tion 504 of the Rehabilitation Act of 1973
require covered entities to take appropriate
steps to ensure effective communication
with individuals with disabilities, includ-
ing provision of appropriate auxiliary aids
and services in a timely manner and free
of charge to the individual. Auxiliary aids
and services may include interpreters,
large print materials, accessible infor-
mation and communication technology,
open and closed captioning, and other aids
or services for persons who are blind or
have low vision, or who are deaf or hard
of hearing. Information provided through
information and communication technol-
ogy also must be accessible to individuals
with disabilities, unless certain exceptions
apply. HHS also seeks comment on what
additional supports are necessary for per-
sons in and representatives of minority
and underserved communities, including
those with limited English proficiency,
those with disabilities who require infor-
mation in alternate and accessible formats,
and stakeholders who serve such commu-
nities.
The initiation notice must be submitted
to the Secretary of HHS, and postmarked
within 120 calendar days of receiving the
initial bill containing charges for the item
or service that is substantially in excess
of the expected charges in the good faith
estimate, for the provider or facility. HHS
is specifying calendar days instead of
business days in this instance, because it
is HHS’ experience in administering other
consumer-facing programs such as the
Federally Facilitated Marketplace, that
consumers have an easier time calculat-
ing and responding to deadlines that are
measured by calendar days rather than
business days. HHS considered whether
to specify a timeframe shorter than 120
calendar days. However, HHS is con-
cerned that requiring the initiation notice
to be submitted in less than 120 calendar
days would not provide sufficient time
for an uninsured (or self-pay) individual
to collect and submit the required infor-
mation. HHS also considered a timeframe
greater than 120 calendar days, or no time
limit; but HHS is of the view that due to
the requirement, as discussed later in this
section, that once the patient-provider dis-
pute resolution process has been initiated,
a provider or facility must not move the
bill for the disputed item or service into
collection or threaten to do so, or if the
bill has already moved into collection, the
provider or facility should cease collection
efforts, as well as the requirement that the
provider or facility suspend the accrual
of any late fees on unpaid bill amounts
until after the dispute resolution process
has concluded, providing for a longer
timeframe could increase uncertainty for
a provider or facility over whether an
uninsured (or self-pay) individual will file
a dispute resolution request. As a result,
HHS is of the view that having a clear
timeframe with which an uninsured (or
self-pay) individual can initiate a dispute
resolution request is both necessary and
appropriate. HHS seeks comment on the
appropriateness of allowing individuals
120 calendar days to initiate the dispute
95
For 508 standards, see the US Access Board’s final rule at: https://www.federalregister.gov/documents/2017/01/18/2017-00395/information-and-communication-technology-ict-stan-
dards-and-guidelines; see also Information and Communication Technology Revised 508 Standards and 255 Guidelines, U.S. Access Board, https://www.access-board.gov/ict/ (last visited
Sept. 10, 2021).

October 18, 2021 530 Bulletin No. 2021–42
resolution process, and whether more or
less time should be allowed for an unin-
sured (or self-pay) individual to initi-
ate dispute resolution, or whether there
should not be a time limit at all.
The initiation notice may be submitted
through the Federal IDR portal, electron-
ically, or on paper, in a form and manner
specified by the Secretary of HHS. The
initiation notice must include: (1) infor-
mation sufficient to identify the items or
services under dispute, including the date
of service or date the item was provided
and a description of the item or service;
(2) a copy of the bill for the items and
services under dispute (the copy can be a
photocopy or an electronic image so long
as the document is readable); (3) a copy of
the good faith estimate for the items and
services under dispute (the copy can be a
photocopy or an electronic image so long
as the document is readable); (4) the con-
tact information of the parties involved,
including name, email address, phone
number and mailing address; (5) the state
where the items or services in dispute
were furnished; and (6) the uninsured
(or self-pay) individual’s communication
preference, through the Federal IDR Por-
tal, or electronic or paper mail.
In addition to the required informa-
tion, the uninsured (or self-pay) individ-
ual must submit with the initiation notice
an administrative fee to the SDR entity as
described in 45 CFR 149.620(g) and sec-
tion VI.B.8 of this preamble. The amount
of the administrative fee, as well as the
manner in which it must be submitted,
will be clarified in guidance by HHS. PHS
Act section 2799B-7(c) contemplates that
the uninsured (or self-pay) individual pay
an administrative fee, and that such fee
should be set in a manner not to create a
barrier to access the process. While HHS
acknowledges that requiring an uninsured
(or self-pay) individual to pay an admin-
istrative fee upfront may discourage some
individuals from initiating the patient-pro-
vider dispute resolution process, HHS
is of the view that requiring a nominal
upfront administrative fee will help pre-
vent the submission of unnecessary claims
to the patient-provider dispute resolution
process and ensure that dispute resolution
resources are available in necessary cases.
HHS also notes that as further discussed
in section VI.B.8 of this preamble, if the
uninsured (or self-pay) individual pre-
vails in the dispute resolution process, the
SDR entity will adjust the final payment
determination amount to include a reduc-
tion in the final payment determination
amount that accounts for the uninsured (or
self-pay) individual’s administrative fee
payment, thus allowing the uninsured (or
self-pay) individual to recoup the admin-
istrative fee paid.
The date of initiation of the patient-pro-
vider dispute resolution process will be
the date of receipt of such initiation notice.
HHS will provide additional information
in guidance on how the uninsured (or self-
pay) individual can submit the initiation
notice, including necessary steps for the
process and a standard notification form
to ensure the uninsured (or self-pay) indi-
vidual is able to include all the necessary
information to initiate the dispute resolu-
tion process. In addition to the guidance,
uninsured individuals will be informed
of how to initiate the patient-provider
dispute resolution process through infor-
mation that providers and facilities must
include on the good faith estimates, as dis-
cussed in section VI.A.4 of this preamble.
HHS also intends to conduct outreach and
education to consumer advocates, CAPs,
legal aid organizations and other stake-
holders to assist consumers through this
process.
HHS expects to leverage the Federal
IDR portal described in section III of this
preamble to facilitate the operation of the
patient-provider dispute resolution pro-
cess. The Federal IDR portal will allow
uninsured (or self-pay) individuals or
their authorized representatives to submit
the initiation notices, upload documenta-
tion, receive notices from HHS and the
SDR entity, upload additional supporting
documentation, and view the SDR entity’s
payment determination. HHS expects that
providers and facilities will also utilize the
Federal IDR portal to receive notices from
HHS and the SDR entity, upload docu-
mentation, upload additional supporting
documentation, and view the SDR entity’s
determination. HHS intends for the SDR
entity to utilize the Federal IDR portal in
all cases, as HHS is of the view that utiliz-
ing the Federal IDR portal to facilitate the
patient-provider dispute resolution pro-
cess is preferable and will allow for more
efficient operation of the process, faster
and easier receipt of notices and submis-
sion of documentation, and would allow
all the relevant information on a specific
patient-provider dispute resolution case to
be accessible in one place. HHS is aware
that an individual or a provider or facility
may not be able to utilize the Federal IDR
portal depending on various factors and as
a result the individual, provider, or facility
may choose to communicate with HHS
or the SDR entity using other methods,
including electronic or paper mail. Addi-
tionally, HHS recognizes that minority
and underserved communities, including
those with limited English proficiency and
those with disabilities may prefer infor-
mation in alternate and accessible formats
and may not be best served by using the
Federal IDR portal. HHS intends to put
in place processes to ensure accessibility
of the system for these communities, and
HHS seeks comments on this approach.
Once the initiation notice has been
received, HHS will select an SDR entity
according to the process further described
in section VI.B.6 of this preamble. After
the SDR entity has been selected, the
SDR entity will provide notice to the
uninsured (or self-pay) individual and the
provider or facility through the Federal
IDR portal, or electronic or paper mail,
that a patient-provider dispute resolution
initiation request has been received and
is under review, the SDR entity will also
include information identifying the item
or service under dispute, and the date the
initiation notice was received. The SDR
entity will also notify the uninsured (or
self-pay) individual, and the provider or
facility, that while the dispute resolution
process is pending, the provider or facility
must not move bills for the disputed items
or services into collection or threaten to do
so, or if the bill has already moved into
collection, the provider or facility should
cease collection efforts until the dispute
has been settled. The provider or facility
must also suspend the accrual of any late
fees on unpaid bill amounts until after the
dispute resolution process has concluded.
Additionally, the provider or facility must
not take or threaten to take retributive
action against an uninsured (or self-pay)
individual for utilizing the patient-pro-
vider dispute resolution process. The
notice will also provide information to the
uninsured (or self-pay) individual about

Bulletin No. 2021–42 531 October 18, 2021
the availability of consumer assistance
resources that can assist them with the
dispute.
The SDR entity will review the initia-
tion notice submitted by the uninsured (or
self-pay) individual to ensure that the dis-
puted items or services meet the eligibility
criteria for the patient-provider dispute
resolution process and that the initiation
notice contains all the required informa-
tion. The SDR entity will notify the unin-
sured (or self-pay) individual electroni-
cally or by mail, depending on the indi-
vidual’s preference, of the outcome of the
review including in cases where the ini-
tiation notice is determined to be incom-
plete or the item or service is determined
ineligible for dispute resolution, in which
case the uninsured (or self-pay) individ-
ual would be provided 21 calendar days
to submit any missing information or pro-
vide supplemental information to demon-
strate the item or service is eligible for the
dispute resolution process. To assist con-
sumers with understanding the timeline to
submit the supplemental information, such
insufficiency notice will provide a date by
which the additional information must be
postmarked or submitted electronically.
HHS is of the view that providing the
uninsured (or self-pay) individual with 21
calendar days is appropriate as it provides
consumers with an opportunity to resolve
any deficiencies in the initiation notice
and access the dispute resolution process
if eligible. If the insufficiency notice is
not made available to an individual in a
format that is accessible to individuals
with disabilities or with low-English pro-
ficiency within 14 calendar days of such a
request from the individual, a 14-calendar
day extension will be granted to allow suf-
ficient time for document submission, so
that the individual, in this situation, will
have a total of 35 calendar days to submit
supplemental information. HHS also con-
sidered a timeframe greater than 21 calen-
dar days, or no time limit, however, HHS
is concerned that due to the requirement
that a provider or facility must not move
the bill for the disputed item or service
into collection or threaten to do so, or if
the bill has already moved into collection,
the provider or facility should cease col-
lection efforts, and the provider or facil-
ity suspend the accrual of any late fees on
unpaid bill amounts until after the dispute
resolution process has concluded, provid-
ing for a longer timeframe could increase
burdens and uncertainty for a provider or
facility. The 21-calendar-day timeframe
is also consistent with external review
processes in some states.
96
HHS seeks
comments on whether 21 calendar days
is a sufficient timeframe for uninsured (or
self-pay) individuals to submit additional
documentation through the mail or elec-
tronically, or whether a different time-
frame should be considered.
Once the SDR entity has determined
that an item or service is eligible for dis-
pute resolution, the SDR entity must pro-
vide notification of the determination to
both parties (the uninsured (or self-pay)
individual and the provider or facility)
through the Federal IDR portal, or elec-
tronic or paper mail, and must request
that the provider or facility provide cer-
tain information within 10 business days
as described in 45 CFR 149.620(d) and in
section VI.B.7.ii of this preamble.
While the dispute resolution process is
pending, the provider or facility must not
move bills for the disputed items or ser-
vices into collection or threaten to do so
until after dispute resolution process has
concluded, or if the bill has already moved
into collection, the provider or facility
should cease collection efforts until the
dispute has been settled. The provider
or facility must also suspend the accrual
of any late fees on unpaid bill amounts
until after the dispute resolution process
has concluded. PHS Act section 2799B-7
established a process that would provide a
mechanism for an uninsured (or self-pay)
individual who is billed an amount for
an item or service that is substantially in
excess of the expected charges in the good
faith estimate to seek a determination on
the amount to be paid. If the provider or
facility were to move the bill, if fully or
partially unpaid, to collection or to accrue
late fees prior to the SDR entity deter-
mining a payment amount, the consumer
protections intended in PHS Act section
2799B-7 would be undermined. In order
for an uninsured (or self-pay) individual
to avoid moving the bill into collection
or the accrual of late fees, the uninsured
(or self-pay) individual would effectively
be required to pay the bill in full prior to
determination and seek a refund from the
provider or facility if the individual pre-
vails. HHS is of the view that through
the patient-provider dispute resolution
process, the uninsured (or self-pay) indi-
vidual is actively working in good faith to
resolve a payment dispute and should not
be effectively punished for utilizing such
process by the accrual of late fees or move-
ment of the bill into collections. HHS is of
the view that use of its general rulemaking
authority to establish such requirements
is necessary and appropriate in order to
implement the provisions of PHS Act
section 2799B-7 in a manner that furthers
the statutory intent to protect consumers
by ensuring that uninsured (or self-pay)
individuals can use the patient-provider
dispute resolution process without being
penalized for utilizing such process or
being required to pay the billed charges
upfront to avoid late fees or collections
activities. HHS seeks comment on this
approach of disallowing the movement of
a bill into collections and the suspension
of the accrual of late fees.
In addition, HHS is using its gen-
eral rulemaking authority to establish
requirements under 45 CFR 149.620 to
prohibit a provider or facility from tak-
ing or threatening to take any retributive
action against an uninsured (or self-pay)
individual for utilizing the patient-pro-
vider dispute resolution process to seek
resolution for a disputed item or service.
If a provider or facility were to take or
threaten to take retributive action against
an uninsured (or self-pay) individual, such
action could create a chilling effect for the
uninsured (or self-pay) individual to uti-
lize the dispute resolution process, which
would undermine the consumer protec-
tions intended in PHS Act section 2799B-
7. As a result, HHS is of the view that it
is necessary and appropriate to require a
provider or facility to not take or threaten
to take any retributive action against an
uninsured (or self-pay) individual for uti-
lizing the patient-provider dispute resolu-
tion process.
96
Some state processes have a 15-business day time frame which would generally translate to 21 calendar days. See e.g., https://insurance.mo.gov/consumers/health/externalreviewprocess.
php.

October 18, 2021 532 Bulletin No. 2021–42
5. Certification of Selected Dispute
Resolution Entities
PHS Act section 2799B-7 requires the
Secretary of HHS to recognize or establish
a process to contract with and certify enti-
ties to resolve payment disputes between
uninsured (or self-pay) individuals.
Additionally, PHS Act section 2799B-7
requires entities certified under this pro-
cess to satisfy, at a minimum, the crite-
ria in PHS Act section 2799A-1(c). HHS
intends to contract with and certify only
that number of entities it believes will be
necessary to timely resolve the volume of
patient-provider disputes, rather than pur-
sue an open process under which all enti-
ties who meet IDR entity requirements
will be certified to resolve patient-provider
payment disputes. Moreover, HHS will
compensate SDR entities directly for their
services under a contract that complies
with the Federal Acquisition Regulation
(FAR) as further implemented or supple-
mented by the HHS Acquisition Regula-
tion.
97
Through this contract process, HHS
will assess the dispute resolution entity
for compliance with all applicable SDR
entity certification requirements. HHS is
of the view that this approach will reduce
the overall cost of the program, which is
funded primarily through appropriations
to HHS, reduce the administrative bur-
den associated with collecting fees from
a large number of certified entities who
may have differing fee schedules, and will
allow for HHS to control the cost of the
program to ensure that low-income indi-
viduals are able to access the patient-pro-
vider dispute resolution process. For the
first year of the patient-provider dispute
resolution program under PHS Act section
2799B-7, HHS anticipates contracting
with between 1 and 3 SDR entities. HHS
is of the view that 1 to 3 SDR entities will
be sufficient in the first year to conduct the
dispute resolution process for the antici-
pated number of cases outlined in the
Economic Impact and Paperwork Burden
section of these interim final rules. It will
also ensure through the contracting pro-
cess that the volume estimates are tenable
for the contracted SDR entities. Addition-
ally, given the timeline required by statute
to implement the patient-provider dispute
resolution process and the timeline under
which these rules will become effective,
HHS is of the view that contracting with a
limited number of entities may be neces-
sary to ensure the timely launch of the pro-
gram.
98
HHS is of the view that attempting
to procure SDR entity services from more
than 3 entities will increase the burden
associated with certifying IDR entities
for the Federal IDR process discussed in
section III of this preamble and with con-
tracting SDR entities for the patient-pro-
vider dispute resolution process, and will
limit HHS’ ability to effectively launch
the programs in accordance with statu-
tory deadlines. HHS also is of the view
that contracting with more than 3 SDR
entities in the first year will unsustainably
increase the administrative burden asso-
ciated with launching both programs, and
may impose sufficient risk to cause delays
in implementation.
For these reasons, HHS is of the view
that contracting with a limited number of
SDR entities is preferable to adopting an
“any willing provider” model. Accord-
ingly, through this contract process, HHS
will assess an entity’s compliance with the
SDR entity certification requirements to
ensure the entity satisfies the certification
criteria discussed later in this section of
the preamble.
SDR entities will be assessed on
whether they meet the applicable certifi-
cation requirements during the contracting
process with HHS and such process will
be separate and distinct from the certifica-
tion process applicable to IDR entities that
will provide IDR services for providers,
providers of air ambulance services, facil-
ities, plans and issuers as required under
26 CFR 54.9816-8T and 54.9817-2T, 29
CFR 2590.716-8 and 2590.717-2, and
45 CFR 149.510, and 45 CFR 149.520.
Although an SDR entity may apply for
certification as an IDR entity, SDR enti-
ties are not required to do so. However,
consistent with the statutory requirement,
SDR entities will be required to meet the
same requirements as certified IDR enti-
ties, with a few exceptions outlined later
in this section of this preamble. SDR enti-
ties will be required to report on those data
elements from providers and facilities
that HHS deems necessary to accurately
describe and assess the administration of
the patient-provider dispute resolution
program. Therefore, the requirements laid
out in section III.D.5 of this preamble will
also apply to SDR entities as a condition
of receiving a contract award from HHS
for the patient-provider dispute resolution
program
For example, PHS Act section 2799A-
1(c)(4)(A)(v) requires a certified IDR
entity to maintain the confidentiality of
individually identifiable health infor-
mation (IIHI) obtained in the course of
conducting determinations. Under these
interim final rules, HHS outlines certain
standards related to confidentiality, includ-
ing security, privacy, and breach notifica-
tion requirements that apply to an IDR
entity seeking certification. See section
III.D.5 of this preamble for further dis-
cussion on the applicable confidentiality
requirements. Under 45 CFR 149.620(d)
(1), HHS specifies that an SDR entity must
satisfy the Federal IDR entity certification
criteria specified in 45 CFR 149.510(e),
with a few exceptions specified in 45 CFR
149.620(d)(2). As part of this requirement,
an SDR entity must comply with all the
confidentiality requirements that apply to
certified IDR entities in 26 CFR 54.9816-
8T(e)(2)(v), 29 CFR 2590.716-8(e)(2)(v)
and 45 CFR 149.510(e)(2)(v). Similarly,
the definitions related to confidentiality in
45 CFR 149.510(a)(2) also apply for 45
CFR 149.620. Therefore, the definitions
for “breach,” “individually identifiable
health information (IIHI)” and “unsecured
IIHI” that apply for IDR entities also
apply for SDR entities. HHS seeks com-
ment on the confidentiality requirements
for an SDR entity, including whether addi-
tional requirements should be considered.
In addition, like IDR entities, SDR
entities are required to comply with other
state and Federal laws regarding language
access, to the extent applicable. HHS
reminds SDR entities that they, along with
providers and facilities that are recipients
of Federal financial assistance, must com-
ply with Federal civil rights laws that pro-
hibit discrimination. These laws include
Section 1557 of the Patient Protection and
97
See 48 CFR, Chapter 3 (HHS-specific regulations governing federal acquisitions for services).
98
See FAR 6.302-2 (allowing less than full and open competition where an agency’s need for services is of an unusual and compelling urgency).

Bulletin No. 2021–42 533 October 18, 2021
Affordable Care Act, Title VI of the Civil
Rights Act of 1964, and Section 504 of the
Rehabilitation Act of 1973. Section 1557
of the Patient Protection and Affordable
Care Act and title VI of the Civil Rights
Act of 1964 require covered entities to
take reasonable steps to ensure meaningful
access to individuals with limited English
proficiency, which may include provision
of language assistance services, such as
providing qualified interpreters or written
translations in paper or electronic form
into languages other than English. When
language assistance services are provided,
they must be provided free of charge and
be accurate and timely. Section 1557 of
the Patient Protection and Affordable
Care Act and Section 504 of the Rehabil-
itation Act of 1973 require covered enti-
ties to take appropriate steps to ensure
effective communication with individuals
with disabilities, including provision of
appropriate auxiliary aids and services
in a timely manner and free of charge to
the individual. Auxiliary aids and services
may include sign language interpreters,,
large print materials, accessible infor-
mation and communication technology,
open and closed captioning, and other aids
or services for persons who are blind or
have low vision, or who are deaf or hard
of hearing. Information provided through
information and communication technol-
ogy also must be accessible to individuals
with disabilities, unless certain exceptions
apply. HHS also seeks comment on what
additional measures are necessary for per-
sons in racial/ethnic minority and under-
served communities, including those with
limited English proficiency, those with
disabilities who require information in
alternate and accessible formats, lesbian,
gay, bisexual, transgender, and queer
(LGBTQ+) persons, and stakeholders
who serve such communities.
Unlike the process for certifying IDR
entities, HHS intends to contract only with
SDR entities that will be able to conduct
patient-provider dispute resolution in all
applicable states where the patient-pro-
vider dispute resolution process will
apply. As such, SDR entities will need
to submit information on their ability to
operate nationwide through the contract
process. Additionally, IDR entity fees that
certified IDR entities will charge as the
cost for providing dispute resolution ser-
vices will not apply in the case of SDR
entities, which will be paid for their ser-
vices through contracts with HHS. There-
fore, SDR entities will not be required to
submit a fee schedule for batched and non-
batched claims. Additionally, SDR entities
will not be required to submit policies and
procedures regarding holding IDR entity
fees in a trust or escrow account, though
they will still be required to submit pol-
icies and procedures regarding holding
administrative fees and remit them to
HHS in a manner specified by HHS.
Additionally, an SDR entity must also
submit a conflict-of-interest mitigation
policy that will not apply to IDR entities.
Given that HHS intends to contract with a
limited number of SDR entities under this
program, HHS is of the view that addi-
tional standards for conflict-of-interest
mitigation should apply to SDR entities, as
there will likely be fewer entities available
to conduct dispute resolution. Therefore,
in addition to the requirement for certified
IDR entities to submit policies and proce-
dures for the ongoing auditing, mitigation,
and reporting of conflicts of interest within
their organizations, SDR entities will be
expected to include a mitigation plan for
situations when no one in the entire orga-
nization will be able to conduct dispute
resolution on a case due to an entity-level
conflict of interest, which could include
utilizing a subcontractor without a conflict
of interest that meets SDR entity require-
ments to conduct the patient-provider dis-
pute resolution for that case. Since there is
a possibility that a single SDR entity will
be contracted for this process, or that all
available SDR entities indicate a conflict
of interest that cannot be mitigated, HHS
is of the view that additional requirements
must be applied through these regulations
and the contracting process to ensure that
in the event that an entity-level conflict of
interest occurs, SDR entities will be able
to initiate strategies to fairly and impar-
tially resolve disputes in the absence of
another available SDR entity. Through
the acquisition process, HHS will ensure
compliance with FAR subpart 9.5 regard-
ing organizational and consultant conflicts
of interest in order to mitigate the poten-
tial for entity-level conflicts of interest
that may preclude all available SDR enti-
ties from fairly and impartially resolving
disputes.
While details on expectations for doc-
umentation and review for certified IDR
entities will come through guidance, sim-
ilar details and documentation requests
will be done through the acquisition pro-
cess for SDR entities. As such, all require-
ments laid out in this section and the
applicable requirements outlined in sec-
tion III.D.5 of this preamble for certified
IDR entities will be assessed through the
Federal acquisition process to ensure SDR
entities have sufficient expertise and capa-
bilities to conduct dispute resolution cases
for the patient-provider dispute resolution
process.
In subsequent years, case volume and
other factors as necessary will be used by
HHS to determine and adjust the number
of contracted SDR entities needed for the
patient-provider dispute resolution pro-
cess. HHS is of the view that this approach
will reduce the overall cost and adminis-
trative oversight burdens of the program,
which is funded primarily through appro-
priations to HHS. Since contracting will
allow HHS to negotiate lower rates for
conducting dispute resolution cases with
a limited number of entities, rather than
paying set fee schedules associated with
each SDR entity as in the Federal IDR
process, HHS will be able to reduce both
costs to HHS and administrative burdens
associated with collecting varying fees
from a large number of entities. HHS
also is of the view that this approach will
allow HHS to control the fees assessed to
uninsured (or self-pay) individuals enter-
ing the patient-provider dispute resolution
process to ensure that low-income indi-
viduals can participate in the process.
HHS seeks comment on the SDR entity
contracting process, including the applica-
ble certification requirements, specifically
as to whether these are the appropriate
standards regarding the patient-provider
dispute resolution process, if additional
standards should be applied, and if so,
what those standards should be.
6. Selection of an SDR Entity for Patient-
Provider Dispute Resolution
PHS Act section 2799B-7 requires the
Secretary of HHS to provide a method to
select a patient-provider dispute resolution
entity to conduct individual dispute reso-
lutions between patients and providers. As

October 18, 2021 534 Bulletin No. 2021–42
described more fully in section VI.B.5 of
this preamble, during the first year of the
program, HHS expects to contract with
between 1 to 3 SDR entities to conduct
patient-provider dispute resolutions.
Similar to the IDR process and for
the same reasons described in section
III.B.1 of this preamble, the general con-
flict-of-interest standards laid out in sec-
tion III.B.1 of this preamble will also
apply to SDR entities contracted by HHS
for the patient-provider dispute resolution
process. These standards include the man-
datory period which prohibits personnel
who have been a party to the payment
determination being disputed, or who
were employees or agents of such a party
within 1 year immediately preceding dis-
pute resolution assignment, from being
assigned to a case.
As discussed in section VI.B.5 of
this preamble, SDR entities will also be
required to have in place an approved
mitigation plan for addressing conflicts
of interest. For example, such a mitiga-
tion plan could include processes under
which any specific dispute resolution per-
sonnel who presents a conflict of interest
could be walled off from having any role
in or knowledge of the relevant payment
dispute. To address conflicts of interest
that exist at the entity level, the SDR
entity could design a plan under which
it would subcontract payment disputes to
a different entity that meets SDR entity
requirements. As part of the contract pro-
cess, and as discussed in section VI.B.5
of this preamble, the SDR entity must
submit specific mitigation plans such as
proof of a subcontractor who meets the
SDR entity requirements for HHS to
assess, and approve as part of the acqui-
sition process, and in accordance with the
conflict-of-interest requirements set forth
in FAR subpart 9.5. HHS is of the view
that this approach will sufficiently miti-
gate the potential that conflicts of interest
that exist to the extent that a case may not
able to be resolved fairly and impartially,
because having a subcontractor provides
an avenue for cases to be sent for dis-
pute resolution when the SDR entity has
a conflict of interest. HHS also is of the
view that ensuring that processes are in
place to identify and address potential
conflicts of interest is important to ensure
impartiality in payment determinations
and the timely and efficient resolution of
disputes.
Upon receiving a request to initiate
patient-provider dispute resolution case
from an uninsured (or self-pay) individual,
HHS will select 1 of the contracted SDR
entities to serve as the entity to conduct
the dispute resolution process. Selection
of an SDR entity that will resolve a par-
ticular dispute will occur in round robin
fashion to ensure equal allocation of cases
to SDR entities, unless conflicts of interest
arise. In the event that the assigned SDR
entity has a conflict of interest that cannot
be sufficiently mitigated by applying the
SDR entity’s conflicts mitigation plan, the
next SDR entity in line will be selected.
HHS is of the view that this approach will
help ensure the selection process runs
smoothly, supports the timely resolution
of disputes consistent with applicable reg-
ulations, and that SDR entity caseloads
are allocated efficiently. Upon receiving
an assignment from the Secretary of HHS
to make a determination for an item or ser-
vice, the SDR entity shall ensure that no
conflict of interest exists, and in such case
no conflict exists, the SDR entity shall
notify the uninsured (or self-pay) indi-
vidual and the provider or facility of the
selection of the SDR entity as described in
section VI.B.4 of this preamble.
In the event that an SDR entity attests
that a conflict of interest exists in relation
to an assigned payment dispute, the SDR
entity must notify the Secretary of HHS
no later than 3 business days following
selection. Additionally, either party (the
uninsured (or self-pay) individual, or the
provider or facility) may attest that a con-
flict of interest exists in relation to the
SDR entity assigned to a payment dispute,
in which case the SDR entity must notify
the Secretary of HHS no later than 3 busi-
ness days following receipt of the attesta-
tion.
In the event a conflict of interest exists,
HHS will then automatically select a dif-
ferent SDR entity from the remaining
pool of contracted entities using a round
robin approach. If no other contracted
SDR entity, and no subcontracted entity,
is able to provide the patient-provider dis-
pute resolution services due to conflicts
of interest that cannot be sufficiently mit-
igated or any other reason, HHS may seek
to contract with an additional SDR entity
as needed, to conduct dispute resolution in
this case. HHS recognizes that while the
Department expects these particular sit-
uations to be very rare, contracting with
an additional SDR entity could take time
and would make meeting the required
patient-provider dispute resolution time-
frames challenging. HHS notes that, as
discussed in section VI.B.10 of this pre-
amble, the time periods specified in these
interim final rules may be extended in
the case of extenuating circumstances at
HHS’ discretion on a case-by-case basis
if the extension is necessary to address
delays due to matters beyond the control
of the parties or for good cause. In these
rare cases, HHS anticipates that it may
be appropriate to exercise such discretion
if needed. For example, in the event that
HHS needs to contract with an additional
SDR entity, the time periods specified in
this section may be extended at HHS’ dis-
cretion to allow for HHS to contract with
that SDR entity. HHS seeks comment on
this approach, including comment on the
feasibility of such approach and comment
on alternative approaches HHS should
consider. HHS also seeks comment on
whether it is feasible or appropriate to
seek assistance from the pool of certified
IDR entities to provide patient-provider
dispute resolution services in these cir-
cumstances.
These interim final rules also define
certain terms related to conflict-of-interest
standards applicable to SDR entities certi-
fied and contracted to resolve patient-pro-
vider disputes. Such an approach to con-
flict of interest is similar to the approach
taken by the Federal IDR process dis-
cussed in section III.D.5 of this preamble.
HHS is of the view that maintaining con-
sistent standards between the Federal IDR
process and the patient-provider dispute
resolution process is a straightforward
approach and serves to minimize stake-
holder confusion over what the applicable
standard will be. In general, a “conflict of
interest” means, with respect to a party to
a payment determination, or SDR entity, a
material relationship, status, or condition
of the party, or SDR entity that impacts
the ability of the SDR entity to make an
unbiased and impartial payment determi-
nation. For purposes of the patient-pro-
vider dispute resolution process, a conflict
of interest exists when an SDR entity is:

Bulletin No. 2021–42 535 October 18, 2021
a provider or a facility, an affiliate or a
subsidiary of a provider or facility, or an
affiliate or subsidiary of a professional or
trade association representing a provider
or facility. A conflict of interest also exists
when an SDR entity, or any personnel
assigned to a determination, has a mate-
rial familial, financial, or professional
relationship with a party to the payment
determination being disputed, or with any
officer, director, or management employee
of the provider, the provider’s group or
practice association, or the facility that is
a party to the dispute. HHS is of the view
that these requirements are necessary to
ensure that payment disputes between
an uninsured (or self-pay) individual and
a provider or facility are conducted by
impartial third parties. HHS seeks com-
ment on this approach, including the fea-
sibility of such approach, and whether
additional requirements related to conflict
of interest should be considered.
7. Payment Determination for Patient-
Provider Dispute Resolution
i. Determination of Payment Amount
Through Settlement
While the SDR entity payment deter-
mination is pending, HHS recognizes that
the two parties to the patient-provider dis-
pute resolution process (the uninsured (or
self-pay) individual and the provider or
facility) may agree to resolve the dispute
by settling on a payment amount. There-
fore, new 45 CFR 149.620(f)(1) states that
at any point after the dispute resolution
process has been initiated but before the
date on which a determination is made by
the SDR entity, the parties can settle the
payment amount through either an offer of
financial assistance or an offer to accept
a lower amount, or an agreement by the
uninsured (or self-pay) individual to pay
the billed charges in full.
In the event that the parties agree to
settle on a payment amount, the pro-
vider or facility should notify the SDR
entity through the Federal IDR Portal,
electronically, or in paper form, as soon
as possible, but no later than 3 business
days after the date of the agreement. The
settlement notification must contain at
a minimum, the settlement amount, the
date upon which settlement was reached,
and documentation demonstrating that the
provider or facility and uninsured (or self-
pay) individual have agreed to the set-
tlement. The settlement notice must also
document that the provider or facility has
applied a reduction to the uninsured (or
self-pay) individual’s settlement amount
that is equal to at least half the amount of
the administrative fee paid as discussed in
section VI.B.8 of this preamble. Once the
SDR entity receives the notification of the
settlement, the SDR entity shall close the
dispute resolution case as settled and the
agreed upon payment amount will apply
for the items or services.
HHS also clarifies that payment of the
billed charges (or a portion of the billed
charges) by the uninsured (or self-pay)
individual (or by another party on behalf
of the uninsured (or self-pay) individual)
does not demonstrate agreement by the
uninsured (or self-pay) individual to settle
at that amount or any other amount. For
example, if the uninsured (or self-pay)
individual has already made payment
or entered into a payment plan and then
chooses to enter dispute resolution, the
fact that they previously paid, or agreed to
pay, all or part of the billed charges may
not be used by the provider or facility to
prove that a settlement has been reached
to avoid the patient-provider dispute res-
olution process.
HHS is of the view that providing an
opportunity for the uninsured (or self-pay)
individual and the provider or facility
to come to terms on a payment amount
that is mutually agreeable for the parties
involved is appropriate as it may help
resolve payment disputes quickly without
the need for a determination by an SDR
entity. Such a process can also incentiv-
ize a provider or facility to offer to accept
a lower amount or to provide financial
assistance to the uninsured (or self-pay)
individual. However, HHS clarifies that
neither party (the uninsured (or self-pay)
individual or the provider or facility) is
required to negotiate a settlement for the
billed charges, and the decision to enter
into a settlement on the payment amount
is optional. In cases where there is no set-
tlement, the SDR entity will make a deter-
mination as discussed in section VI.B.7.iii
of this preamble.
HHS recognizes that to the extent that
a provider or facility believes that a set-
tlement may be more beneficial for them
than the SDR entity determination, the
provider or facility may be incentivized to
seek a settlement. While such an outcome
may be desirable in that it can lead to a
quick resolution and could lead to pro-
vider or facility offering to accept a lower
payment amount or other financial assis-
tance to the uninsured (or self-pay) indi-
vidual, HHS is concerned that the unin-
sured (or self-pay) individual, particularly
those without representation, would be at
a disadvantage when negotiating with the
provider or facility. HHS seeks comment
on these concerns, including whether
additional consumer protections should be
considered, and ways HHS can increase
an uninsured (or self-pay) individual’s
access to effective representation, through
legal aid organizations or other groups.
ii. Determination of Payment Amount
Through Patient-Provider Dispute
Resolution
As part of the SDR determination pro-
cess, 45 CFR 149.620(f)(2) requires that
the health care provider or health care
facility must submit information to the
SDR entity not later than 10 business
days after the receipt of the notice from
the SDR entity initiating the patient-pro-
vider dispute resolution process described
in section VI.B.4. This information must
include: (1) a copy of the good faith esti-
mate provided to the uninsured (or self-
pay) individual for the items or services
under dispute (the copy can be a photo-
copy or an electronic image so long as
the document is readable); (2) a copy of
the billed charges provided to the unin-
sured (or self-pay) individual for items
or services under dispute (the copy can
be a photocopy or an electronic image so
long as the document is readable); and
(3) documentation demonstrating that
the difference between the billed charges
and the expected charges in the good faith
estimate reflects the costs of a medically
necessary item or service and is based on
unforeseen circumstances that could not
have reasonably been anticipated by the
provider or facility when the good faith
estimate was provided. While the stat-
ute does not specify what a provider or
facility should provide to the SDR entity
to inform the SDR entity’s determination

October 18, 2021 536 Bulletin No. 2021–42
decision or how long a provider or facility
should have to report such information,
HHS is of the view that it is both necessary
and appropriate to require the provider or
facility to provide the copies of the bill
and good faith estimate for the item or
service in question as such information
can be helpful for the SDR entity to verify
the eligibility of the dispute in question.
Although the uninsured (or self-pay) indi-
vidual will provide a copy of the bill and
good faith estimate, requiring the provider
or facility to also provide the bill and good
faith estimate will allow the SDR entity to
verify the information in the bill and good
faith estimate provided by the uninsured
(or self-pay) individual and identify any
potential discrepancies. HHS believes it is
also necessary and appropriate to provide
a means for a provider or facility to submit
documentation or an explanation to sup-
port the billed charges, such as informa-
tion related to the patient’s relevant med-
ical history that is necessary to demon-
strate that the item or service is medically
necessary and is based on unforeseen
circumstances that could not have reason-
ably been anticipated by the provider or
facility when the good faith estimate was
provided. HHS is of the view that such
documentation from the provider or facil-
ity would assist the SDR entity with mak-
ing a fair assessment whether the billed
charge is appropriate because otherwise
the SDR entity would be unfamiliar with
the facts that would allow the SDR entity
to assess medical necessity, and whether
the need for the items or services was
foreseeable. The interim final rules require
that this information be submitted within
10 business days, this time period is sim-
ilar to the Federal IDR process require-
ments for submitting documentation to
support a dispute resolution determination
as outlined in PHS Act section 2799B-1.
HHS is of the view that a 10-business-day
time period is sufficient for a provider or
facility to gather and submit the required
information, as this information should
be documented as part of the individual’s
patient record.
Not later than 30 business days after
receipt of the information from the provider
described in section 45 CFR 149.620(f)(2)
(i), the SDR entity must make a determi-
nation on the amount to be paid by such
uninsured (or self-pay) individual taking
into account the requirements described
in section VI.B.7.iii of this preamble. The
30-business day timeframe is also simi-
lar to the requirement in the Federal IDR
process in PHS Act section 2799A-1(c)(5)
where 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
and the provider or facility to be the out-
of-network rate for the item or service.
HHS is of the view that 30 business days
should provide sufficient time for an SDR
entity to review the submitted informa-
tion and issue a determination. The SDR
entity is required to assess the informa-
tion submitted by the provider or facility
according to the requirements described
in 45 CFR 149.620(f)(3) and discussed in
section VI.B.7.iii of this preamble.
iii. Requirements for Determination
45 CFR 149.620(f)(3) sets forth the
requirements for SDR entities in making
payment determinations. As described in
section VI.A.3 of this preamble, the item-
ized list of items or services in a good
faith estimate must reflect the expected
charges from the convening provider or
facility and items and services reasonably
expected to be provided by co-providers
or co-facilities and must be built upon
accurate information that was known at
the time the good faith estimate was given
to the uninsured (or self-pay) individual.
As a result, the SDR entity should use the
expected charges in the good faith esti-
mate as the presumed appropriate amount
and unless the provider or facility pro-
vides credible information justifying the
difference between the total billed charges
and the good faith estimate by demonstrat-
ing that the difference between the billed
charges and the expected charges in the
good faith estimate for the item or service
reflects the costs of a medically necessary
item or service and is based on unforeseen
circumstances that could not have reason-
ably been anticipated by the provider or
facility when the good faith estimate was
provided. For this purpose, information
is credible if upon critical analysis the
information is worthy of belief and con-
sists of trustworthy information. This is
the same standard the Departments are
adopting at 26 CFR 54.9816-8T, 29 CFR
2590.716-8, and 45 CFR 149.510 for the
Federal IDR processes discussed in sec-
tion III.D.4 of this preamble. HHS is of
the view that maintaining a consistent
standard of review among IDR entities
and SDR entities, while still recognizing
the inherent differences in the respective
processes based on the applicable par-
ties, minimizes program complexity and
reduces the potential for confusion among
providers and facilities over the applicable
standards for review.
As stated previously, HHS acknowl-
edges that unforeseen factors during the
course of treatment could result in addi-
tional items or services furnished and
could result in higher billed amounts after
receipt of care than was anticipated at
the time the good faith estimate was pro-
vided. HHS does not expect that the good
faith estimate would include charges for
unanticipated items or services that could
occur due to unforeseen events. In cases
where changes in the underlying circum-
stances occur during treatment and would
reasonably result in higher than expected
charges, the SDR entity may consider
additional factors that support charges for
medically necessary items or services. As
information to demonstrate that the differ-
ence between the billed charges and the
expected charges for an item or service in
the good faith estimate reflects the costs
of a medically necessary item or service
and is based on unforeseen circumstances
that could not have reasonably been antic-
ipated by the provider or facility when
the good faith estimate was provided,
providers or facilities should provide doc-
umentation, which can include a written
explanation, detailing any change in cir-
cumstances, how that change resulted in
a higher billed charge than the expected
charge for the item or service in the good
faith estimate, and why the billed charge
reflects the cost of a medically necessary
item or service. HHS considered requiring
the provider or facility to provide only
evidence that the difference between the
billed charges and the expected charges
for the item or service in the good faith
estimate reflects the costs of a medically
necessary item or service, and not require
the provider or facility demonstrate the
item or service is based on unforeseen
circumstance that could not have reason-
ably been anticipated when the good faith

Bulletin No. 2021–42 537 October 18, 2021
estimate was provided. However, HHS is
of the view that an item or service that is
medically necessary and could reasonably
have been anticipated should already be
included on the good faith estimate and
without such information the uninsured
(or self-pay) individual would not have
been provided with an accurate estimate
of the expected charges. HHS is of the
view that not requiring the provider or
facility to demonstrate that the item or
service could not have been anticipated
could incentivize a provider or facility to
not list all items or services on the good
faith estimate which could lead to less-ac-
curate estimates provided to uninsured (or
self-pay) individuals.
Uninsured (or self-pay) individuals
may also submit additional documentation
through the Federal IDR portal, although
they are not required to provide documen-
tation beyond the information included in
the initiation notice, such as the good faith
estimate and the billed charges.
The SDR entity must review any docu-
mentation submitted by the uninsured (or
self-pay) individual or their authorized
representative, and a provider or facil-
ity, and must make a determination as to
whether the provider or facility has pro-
vided credible information for each billed
item or service to demonstrate that the dif-
ference between the billed charge and the
expected charge in the good faith estimate
reflects the costs of a medically necessary
item or service and is based on unforeseen
circumstances that could not have reason-
ably been anticipated by the provider or
facility when the good faith estimate was
provided. The SDR entity should make
this determination separately for each
unique billed item or service. HHS is of
the view that this helps ensure that the
SDR entity review is comprehensive and
that the facts and circumstances for each
billed charge are considered by the SDR
entity. HHS is also of the view that this
approach ensures that the uninsured (or
self-pay) individual is only billed charges
that reflect medically necessary items or
services and are based on unforeseen cir-
cumstances that could not have reason-
ably been anticipated by the provider or
facility when the good faith estimate was
provided.
For any item or service where the billed
charge is equal to or less than the expected
charge in the good faith estimate, the SDR
entity will determine the payment amount
to be the billed charge. If the billed charge
is higher than the expected charge for an
item or service in the good faith estimate
and the SDR entity determines the pro-
vider or facility has not provided credible
information that the difference between
the billed charge and the expected charge
for the item or service in the good faith
estimate reflects the costs of a medically
necessary item or service and is based on
unforeseen circumstances that could not
have reasonably been anticipated by the
provider or facility when the good faith
estimate was provided, the SDR entity
must determine the amount to be paid
by the uninsured (or self-pay) individual
for the item or service to be equal to the
expected charge for the item or service
listed in the good faith estimate. If the
SDR entity determines that the provider
or facility has provided credible informa-
tion that the difference between the billed
charge and the expected charge for the
item or service in the good faith estimate
reflects the costs of a medically necessary
item or service and is based on unforeseen
circumstances that could not have reason-
ably been anticipated by the provider or
facility when the good faith estimate was
provided, the SDR entity must select as
the amount to be paid by the uninsured
(or self-pay) individual to be the lesser
of: (1) the billed charge; or (2) the median
payment amount for the same or similar
service in the geographic area, as defined
in 45 CFR 149.140(a)(7), that is reflected
in an independent database as defined in
45 CFR 149.140(a)(2), or if the amount
reflected in the independent database is
less than the expected charge in the good
faith estimate, the good faith estimate
amount.
In cases in which the SDR entity deter-
mines that the provider or facility has
provided credible information that dif-
ference between the billed charge and the
expected charge for the item or service in
the good faith estimate reflects the costs
of a medically necessary item or service
that could not have reasonably been antic-
ipated by the provider or facility when the
good faith estimate was provided, HHS
considered whether to always require the
SDR entity to set the payment amount
equal to the billed charge. However, HHS
is concerned that such an approach may
increase the incentive for providers and
facilities to inflate their billed charges,
particularly in cases where the provider or
facility believes they can justify the addi-
tional billed charge. Requiring the SDR
entity to select as a payment amount the
median payment amount for the same or
similar item or service in a geographic
area, if lower than the billed charge but
higher than the expected charge in the
good faith estimate, ensures that the
uninsured (or self-pay) individual is pro-
tected from billed charges that are above
the market rate for items or services pro-
vided. HHS acknowledges that under this
approach an SDR entity can determine a
payment amount lower than the original
billed charge in circumstances where a
provider or facility submits credible infor-
mation justifying the additional item or
service as reflecting a medically necessary
item or service and is based on unforeseen
circumstances that could not have reason-
ably been anticipated by the provider or
facility when the good faith estimate was
provided. HHS also recognizes that such
an approach could increase the incentive
for the uninsured (or self-pay) individual to
initiate patient-provider dispute resolution
even in cases where the uninsured (or self-
pay) individual believes the extra billed
charges to be justified. However, HHS is
of the view that PHS Act section 2799B-7
establishes important consumer protec-
tions from unexpected billed charges that
are substantially in excess of the expected
charges in the good faith estimate, even
in cases where the difference between the
billed charge and the expected charges
in the good faith estimate may reflect the
costs of a medically necessary item or ser-
vice and is based on unforeseen circum-
stances that could not reasonably been
anticipated when the good faith estimate
was provided. These protections ensure
that the uninsured (or self-pay) individual
is protected from excessive billed charges
even when such billed charges reflect a
medically necessary item or service and
are based on unforeseen circumstances
that could not reasonably been anticipated
when the good faith estimate was pro-
vided. In addition, HHS is of the view that
the median payment amount is a reason-
able payment amount, as the methodology
was established to calculate a fair market

October 18, 2021 538 Bulletin No. 2021–42
rate for an item or service, and although
this methodology was developed for group
health plans and health insurance issuers
offering group or individual health insur-
ance coverage, it can also be leveraged to
determine whether the billed charge is less
than a fair market price, instead of creat-
ing separate standards regarding median
rates as applied to the QPA and payment
amounts applied to the patient provider
dispute resolution process.
For new items or services not origi-
nally listed on the good faith estimate, if
the SDR entity determines the provider
or facility did not provide credible infor-
mation that demonstrates that the billed
charge for the new item or service reflects
the costs of a medically necessary item
or service and is based on unforeseen cir-
cumstances that could not have reason-
ably been anticipated by the provider or
facility when the good faith estimate was
provided, the SDR entity will determine
a payment amount equal to $0. HHS is of
the view that PHS Act section 2799B-7
establishes consumer protections for unin-
sured (or self-pay) individuals in the event
they receive surprise charges that are not
reflected in the good faith estimate. HHS
is of the view that requiring the uninsured
(or self-pay) individual to pay for items
or services they did not anticipate, absent
a determination that such a billed charge
is supported by credible information that
the billed charge reflects a medically nec-
essary item or service and is based on
unforeseen circumstances that could not
have reasonably been anticipated by the
provider or facility when the good faith
estimate was provided, would run counter
to the protections intended in PHS Act
section 2799B-7. If the SDR entity deter-
mines that a provider or facility has pro-
vided credible information that the billed
charge for new items or services that did
not appear on the good faith estimate
reflects the costs of a medically necessary
item or service that is based on unforeseen
circumstances that could not have reason-
ably been anticipated by the provider or
facility when the good faith estimate was
provided, then the SDR entity must deter-
mine the charge to be paid by the unin-
sured (or self-pay) individual for the new
item or service as the lesser of two pay-
ment amounts: (1) the billed charge; or (2)
the median payment amount for the same
or similar service in the geographic area,
as defined in 45 CFR 149.140(a)(7), that
is reflected in an independent database as
defined in 45 CFR 149.140(a)(2).
After making a determination for all
items or services subject to patient-pro-
vider dispute resolution, the SDR entity
must add together the amounts to be paid
for all items and services. As further dis-
cussed in section VI.B.8 of this preamble,
in cases in which the final amount deter-
mined by the SDR entity is lower than the
total billed charges, the SDR entity must
reduce the final amount by an amount
equal to the administrative fee amount
paid by the individual (to account for the
administrative fee charged to the provider
or facility) to calculate the final payment
determination amount to be paid by the
uninsured (or self-pay) individual for the
items or services subject to the SDR entity
determination. HHS acknowledges that
under this approach, particularly in cases
where the provider or facility submits
credible information to justify the addi-
tional billed charges, the SDR entity may
still determine a lower payment amount
than the billed charge and the provider or
facility would end up paying an adminis-
trative fee in a large portion of patient-pro-
vider dispute resolution cases. However,
HHS is of the view that the intent behind
the consumer protections in PHS Act sec-
tion 2799B-7 is to protect the uninsured
(or self-pay) individual from unexpected
billed charges that are substantially in
excess of the expected charges in the good
faith estimate, and as a result, the unin-
sured (or self-pay) individual should be
held harmless in cases where the process
results in a lower payment amount.
Once the final payment determination
amount has been calculated, the SDR
entity must inform the uninsured (or self-
pay) individual and the provider or facility
using the Federal IDR portal, and depend-
ing on the individual’s or provider’s or
facility’s preference, electronically or by
paper mail, of such determination, along
with the SDR entity’s justification for
making such a determination.
To provide an example of how the
payment determination would operate in
practice, consider a situation in which an
uninsured (or self-pay) individual initiates
the dispute resolution process against a
provider for services A, B, C, and D. Ser-
vices A and B were listed on the good faith
estimate. The expected charge for service
A was higher than the billed charge for
service A, the expected charge for ser-
vice B was lower than the billed charge
for service B, and services C and D were
not included on the good faith estimate
and are thus new services. The difference
between the total of the billed charges
for services A, B, C, and D and the total
expected charges for services A and B
(services C and D were new services and
not included in the good faith estimate)
was determined to be at least $400 more
than the amount listed in the good faith
estimate, and thus these services were
found to be eligible for patient-provider
dispute resolution. When the SDR entity
reviews the documentation submitted by
the provider, because the billed charge for
service A is less than the expected charge
for service A, the SDR entity determines
the amount to be paid to be equal the
billed charge for service A. If the SDR
entity determines the provider did not
provide credible information that the dif-
ference between the higher billed charge
and the expected charge for service B
reflects the costs of a medically necessary
item or service and is based on unforeseen
circumstances that could not have reason-
ably been anticipated by the provider or
facility when the good faith estimate was
provided, then the SDR entity determines
the amount to be paid for service B to be
equal to the expected charge for service
B on the good faith estimate. If the SDR
entity determines the provider did provide
credible information that billed charges
for services C and D reflects the costs of
medically necessary items or services and
are based on unforeseen circumstances
that could not have reasonably been antic-
ipated by the provider or facility when
the good faith estimate was provided, the
SDR entity would determine the amounts
to be paid for services C and D. Due to
services C and D being new services, and
as a result not having a corresponding
expected charges in the good faith esti-
mate, the SDR entity shall determine the
payment amounts for services C and D to
be the lesser of: (1) the billed charge; or
(2) the median payment amount for the
same or similar service in that geographic
area, as defined in 45 CFR 149.140(a)(7),
that is reflected in an independent data-

Bulletin No. 2021–42 539 October 18, 2021
base as defined in 45 CFR 149.140(a)(2)
(had expected charges for services C or D
been included in the good faith estimate,
the median payment amount for the same
or similar service in that geographic area,
as defined in 45 CFR 149.140(a)(7), that
is reflected in an independent database as
defined in 45 CFR 149.140(a)(2) should
not be considered if less than the expected
charges for the services contained in the
good faith estimate). The SDR entity
would then add together all the payment
amounts determined for services A, B, C,
and D. Due to the uninsured (or self-pay)
individual’s payment amount being deter-
mined to be lower than the initial billed
charge, the SDR entity adjusts the final
determination amount to reduce it by an
amount equal to the uninsured (or self-
pay) individual’s administrative fee pay-
ment, to calculate the final determination
amount. The SDR entity then notifies the
uninsured (or self-pay) individual and the
provider of the determination, the deter-
mination amount, and the reasons for the
determination and closes the case.
In determining the median payment
amount from an independent database,
the requirements and methodology set
forth in 45 CFR 149.140(c)(3) apply.
HHS is of the view that utilizing the
same methodology for the calculation of
median rates for the QPA, when a plan
or issuer does not have sufficient internal
information to calculate the QPA, as the
methodology for calculating the median
payment amounts under the patient-pro-
vider dispute resolution process is rea-
sonable and appropriate. This approach
will allow an equivalent standard to be
applied across multiple instances where
the regulation refers to median rates, and
will reduce confusion that may result
from conflicting standards or definitions.
HHS is of the view that creating a sep-
arate methodology specifically for the
calculation of median payment amounts,
using an independent database, as they
pertain to the patient-provider dispute res-
olution process is unnecessary and there-
fore SDR entities must use this method-
ology when determining a median pay-
ment amount. HHS seeks comment on
this methodology as a reasonable way to
calculate median payment amounts for
purposes of the patient-provider dispute
resolution process.
HHS considered whether to allow the
SDR entity to have discretion to deter-
mine a payment amount lower than the
expected charges in the good faith esti-
mate. However, HHS is of the view that
such an approach would result in less
transparency and predictability for the
uninsured (or self-pay) individuals, pro-
viders, and facilities regarding the out-
come of the patient-provider dispute reso-
lution process. PHS Act sections 2799B-6
and 2799B-7 establishes a backstop for
an uninsured (or self-pay) individual that
protects them from unexpected bills that
substantially exceed the expected charges
in the good faith estimate. Given that the
provider or facility is required to provide
the uninsured (or self-pay) individual with
a good faith estimate upon scheduling or
upon request prior to furnishing the items
or services to the individual. HHS is of
the view that the good faith estimate rep-
resents charges the uninsured (or self-pay)
individual would likely expect to pay for
the items or services. Therefore, the good
faith estimate represents an appropriate
amount to be determined as the payment
amount when the uninsured (or self-pay)
individual prevails. Additionally, setting
the payment amount equal to the good
faith estimate protects the uninsured (or
self-pay) individual from unexpected
billed charges in cases where the extra
charges do not reflect the costs of a med-
ically necessary item or service that is
based on unforeseen circumstances that
could not have reasonably been antici-
pated by the provider or facility when
the good faith estimate was provided
while providing predictability to unin-
sured (or self-pay) individuals, providers
and facilities on what to expect from the
patient-provider dispute resolution pro-
cess. However, HHS recognizes that such
an approach may encourage providers or
facilities to be overinclusive regarding the
list of expected charges in the good faith
estimate, thus leading to higher good faith
estimates than they otherwise would have
provided.
HHS seeks comment on the approach
for the determination of payment amounts
by the SDR entity, including the feasibil-
ity of the approach, as well as comment
on alternative approaches. HHS also seeks
comment on ways to reduce the incen-
tives for providers and facilities to over
include items or services on the good faith
estimate, and the circumstances, if any,
in which requiring the SDR entity to set
a payment amount below the expected
charges in the good faith estimate would
be appropriate. HHS also seeks comment
on the use of the median amount for the
same or similar service in the geographic
area, as defined in 45 CFR 149.140(a)(7),
that is reflected in an independent data-
base as defined in 45 CFR 149.140(a)
(2), including comment on the feasibility
of such an approach, and comment on
whether a different methodology should
also be considered.
iv. Effects of Determination
Under the Federal IDR process estab-
lished in PHS Act sections 2799A-1(c)
(5)(E) and 2799A-2(c)(5)(D), determina-
tions made by a certified IDR entity are
binding upon the parties involved, in the
absence of a fraudulent claim or evidence
of misrepresentation of facts presented to
the IDR entity involved. PHS Act section
2799B-7 establishes a separate dispute
resolution process to determine payment
amounts made to a provider or facility by
an uninsured (or self-pay) individual when
the uninsured (or self-pay) individual is
billed charges substantially in excess of
the expected charges in the good faith esti-
mate; however, the statute is silent regard-
ing the effects of such determinations.
HHS is of the view that it is both neces-
sary and appropriate to similarly require
that determinations made by SDR entities
be binding upon all parties involved, in
the absence of a fraudulent claim or evi-
dence of misrepresentation of facts pre-
sented to the SDR entity involved regard-
ing such claim. HHS is of the view that
use of its general rulemaking authority to
establish such requirements is necessary
and appropriate in order to implement the
provisions of PHS Act section 2799B-7
to ensure the consumer protections estab-
lished under PHS Act section 2799B-7
operate as intended. Without making the
determination binding, the consumer pro-
tections established in PHS Act section
2799B-7 would be significantly dimin-
ished and the cost for administering the
program may outweigh the benefits.
Therefore, under 45 CFR 149.620(f)(4), a
determination made by an SDR entity will

October 18, 2021 540 Bulletin No. 2021–42
be binding upon the parties involved, in
the absence of a fraudulent claim or evi-
dence of misrepresentation of facts pre-
sented to the SDR entity regarding such
claim, except that the provider or facility
may provide financial assistance or agree
to an offer for a lower payment amount
than the SDR entity’s determination, or
the individual may agree to pay the billed
charges in full, or the uninsured (or self-
pay) individual and the provider or facility
may agree to a different payment amount.
HHS seeks comment on the approach
regarding SDR entity determinations
being binding, including the feasibility of
such approach, as well comment on alter-
native approaches. HHS also seeks com-
ment on subject of judicial review. PHS
Act section 2799A-1(c)(5)(E) requires
that determinations not be subject to judi-
cial review, except in a case described in
any paragraphs (1) through (4) of section
10(a) of title 9, United States Code. HHS
seeks comment on the feasibility or desir-
ability of adopting a similar application
for the patient-provider dispute resolution
process, as well as comment on alternative
approaches.
8. Costs of Patient-Provider Dispute
Resolution Process
PHS Act section 2799B-7, as added by
the No Surprises Act, directs the Secretary
of HHS to establish an administrative fee
“to participate in the patient-provider dis-
pute resolution process in such a manner
as to not create a barrier to an uninsured
(or self-pay) individual’s access to such
process.” Aside from the administrative
fee, discussed later in this section, the No
Surprises Act does not specifically address
requirements for how the costs for the
SDR entity to conduct patient-provider
dispute resolution determinations (dispute
resolution costs) should be funded.
HHS considered various approaches
with respect to how the dispute resolution
costs should be treated for the patient-pro-
vider dispute resolution process. HHS
recognizes that it is important for the SDR
entity to be appropriately compensated for
providing patient-provider dispute reso-
lution services. HHS considered main-
taining a similar fee structure as in the
Federal IDR process where the non-pre-
vailing party would be required to pay all
the costs of the IDR entity. However, HHS
is of the view that requiring an uninsured
(or self-pay) individual to pay the entire
dispute resolution costs in cases where the
provider or facility prevails in the dispute
resolution process could be prohibitive
for individuals to access the dispute res-
olution process. HHS is also concerned
that requiring a provider or facility to pay
dispute resolution costs when they do not
prevail could impose a burden on the pro-
vider or facility and potentially provide
an incentive for the provider or facility
to raise prices for uninsured (or self-pay)
individuals to account for potential dis-
pute resolution costs or avoid treating
uninsured (or self-pay) individuals alto-
gether.
HHS is also of the view that while
the patient-provider dispute resolution
process is similar to the Federal IDR
process in several important ways, the
patient-provider dispute resolution pro-
cess does have unique distinctions. In
particular, while in the Federal IDR pro-
cess, both the providers (and providers of
air ambulance services) and the payers
can initiate the IDR process, and both
parties have an incentive to resolve the
dispute, in the patient-provider dispute
resolution process only the uninsured (or
self-pay) individual can initiate the dis-
pute resolution process, and HHS is con-
cerned that the provider or facility would
not have the same incentive to participate
in the dispute resolution process as the
uninsured (or self-pay) individual. Sim-
ilarly, there will likely be a significant
imbalance in both power and knowledge
between the provider or facility and the
uninsured (or self-pay) individual initi-
ating the dispute resolution process. As
a result, HHS is of the view that a dif-
ferent approach to dispute resolution
costs is needed for the patient-provider
dispute resolution process. As a result,
HHS determined that an approach where
HHS would pay dispute resolution costs
by directly contracting with SDR entities
is the appropriate approach, as it would
address the concerns discussed earlier in
this section of the preamble. HHS is also
of the view that such an approach will
streamline the patient-provider dispute
resolution process and minimize poten-
tial burdens on uninsured (or self-pay)
individuals, and providers and facilities.
HHS is adopting an approach for the
patient-provider dispute-resolution pro-
cess in which HHS will pay dispute res-
olution costs through contracts with SDR
entities. Such an approach ensures that the
uninsured (or self-pay) individual would
not be required to pay dispute resolution
costs, and as a result, such costs would
not pose a barrier to accessing the dis-
pute resolution process. Adopting such
an approach in which HHS pays the dis-
pute resolution costs would minimize the
burdens placed on uninsured (or self-pay)
individuals and on providers or facili-
ties, and reduce the incentives for pro-
viders and facilities to increase prices or
restrict an uninsured (or self-pay) individ-
ual’s access to needed care. Adopting an
approach where the individual would not
be required to bear the dispute resolution
costs would help ensure that such costs
would not be a barrier to the uninsured (or
self-pay) individual’s access to the dispute
resolution process.
Aside from dispute resolution costs,
PHS Act section 2799B-7 requires that the
Secretary of HHS establish an administra-
tive fee to participate in the patient-pro-
vider dispute resolution process in such
a manner as to not create a barrier to an
uninsured (or self-pay) individual to par-
ticipate in such process. HHS is aware
that not requiring the uninsured (or self-
pay) individual to pay dispute resolution
costs could lead to overutilization of the
patient-provider dispute resolution pro-
cess; however, this concern is mitigated by
limiting the availability of the patient-pro-
vider dispute resolution only to cases
where the total billed charge for items or
services per provider or facility are billed
in excess of the expected charges by at
least $400 more than the amount listed
in the good faith estimate, as discussed in
section VI.B.2 of this preamble. In addi-
tion, HHS is of the view that requiring
parties to the dispute resolution process to
pay an administrative fee to offset some
of the Federal costs for implementing the
patient-provider dispute resolution pro-
gram is appropriate. Such a requirement
is also similar to the Federal IDR process,
which requires all parties to pay an admin-
istrative fee to cover Federal costs; how-
ever, under that process, the fee is required
to equal the estimated costs to the Federal
Government, while in the patient-provider

Bulletin No. 2021–42 541 October 18, 2021
dispute resolution process the administra-
tive fee is required to be established so
that it would not create a burden for the
uninsured (or self-pay) individual to par-
ticipate in the dispute resolution process.
HHS intends to assess an adminis-
trative fee on the non-prevailing party
(providers, facilities, and uninsured (or
self-pay) individuals) to the patient-pro-
vider dispute resolution process. For
purposes of the patient-provider dispute
resolution process, the prevailing party
means the provider or facility when the
SDR entity determines the total amount
to be paid to be equal to the total billed
charges, whereas the prevailing party
means the uninsured (or self-pay) individ-
ual when the SDR entity determines the
total amount to be paid to be less than the
total billed charges. Upon the SDR entity
determination, if the uninsured (or self-
pay) individual is the prevailing party, the
SDR entity would apply a reduction, equal
to the administrative fee amount paid by
the individual, to the final determination
amount to be paid by the individual for the
items or services. HHS is of the view that
requiring the non-prevailing party to pay
the entire administrative fee (either in a
payment made directly to the SDR entity
in the case of the uninsured (or self-pay)
individual, or in a reduction in the final
payment determination amount as in the
case of the provider or facility) ensures
that both parties are treated the same with
regards to the administrative fee assessed.
Additionally, requiring only the non-pre-
vailing party to pay the administrative fee
will help ensure that the party that prevails
in dispute resolution is not penalized for
participating in the process. Under this
approach, the uninsured (or self-pay) indi-
vidual who is the initiating party in the
patient-provider dispute resolution pro-
cess will pay the administrative fee at the
process initiation through the SDR entity.
HHS is of the view that since the unin-
sured (or self-pay) individual is the initiat-
ing party, waiting for the provider or facil-
ity to submit the administrative fee prior
to the SDR entity making a determination
may result in undue delays to the process.
In cases in which the uninsured (or self-
pay) individual prevails in dispute resolu-
tion, the SDR entity would apply a reduc-
tion equal to the administrative fee paid by
the individual to the final determination
amount to be paid by the individual for the
items or services. HHS is of the view that
requiring the provider or facility to pay
the administrative fee to the uninsured (or
self-pay) individual through a reduction in
the final determination amount to be paid
is the appropriate approach as it simplifies
the number of transactions, rather than
requiring the provider or facility to pro-
vide a payment directly to the SDR entity.
This approach also ensures that in cases
in which the uninsured (or self-pay) indi-
vidual prevails, the SDR entity will reduce
the amount the uninsured (or self-pay)
individual ultimately is required to pay
for an item or services by the amount of
the administrative fee paid so that it is not
left to the provider or facility to apply the
reduction equal to the administrative fee
paid to the final payment amount. In cases
where the provider or facility prevails in
dispute resolution, the SDR entity would
not reduce the final payment amount by an
amount equal to the amount of the admin-
istrative fee paid by the uninsured (or self-
pay) individual.
In cases described in section VI.B.7.i
of this preamble where the parties to dis-
pute resolution agree to settle the payment
amount prior to the SDR entity mak-
ing a determination, both parties will be
responsible for paying half the amount
of the administrative fee. In this case,
the provider or facility will document in
the settlement notice described in sec-
tion VI.B.7.i of this preamble that it has
reduced the settlement amount by at least
half of the administrative fee amount paid
by the uninsured (or self-pay) individual.
HHS intends to establish an adminis-
trative fee in guidance in a manner that
will not create a barrier to an uninsured
(or self-pay) individual’s access to the
patient-provider dispute resolution pro-
cess. In setting the fee HHS is considering
expected costs to HHS for operating the
patient-provider dispute resolution pro-
gram, including contractor costs, and costs
to HHS for utilizing the Federal IDR por-
tal for patient provider dispute resolution
cases. However, due to the requirements
in PHS Act section 2799B-7 that such
administrative fee must not pose a burden
to participate for uninsured (or self-pay)
individual to participate in the patient-pro-
vider dispute resolution process, HHS is
of the view that it is necessary and appro-
priate to limit the size of the adminis-
trative fee. As a result, HHS expects the
fee to be no more than $25, which HHS
believes would allow HHS to offset some
of the costs of operating the dispute reso-
lution process while keeping the adminis-
trative fee low enough to ensure uninsured
(or self-pay) individuals are able to access
the dispute resolution process. HHS con-
sidered whether to base the administrative
fee on annual household income but is
concerned that such an approach would
require an uninsured (or self-pay) indi-
vidual to submit financial documentation
to verify their income which could sig-
nificantly increase complexity to initiate
the dispute resolution process and could
create additional burdens for an uninsured
(or self-pay) individual to participate.
HHS intends to evaluate patient-provider
dispute resolution case volume, contract
costs, and other Federal costs for the
program and may adjust this fee in sub-
sequent years through guidance to ensure
that the fee continues to mitigate over-
utilization of the patient-provider dispute
resolution process, offsets some of HHS’s
costs of operating the dispute resolution
process, and also does not pose a burden
for uninsured (or self-pay) individuals
regarding participation in the process.
HHS seeks comment on this approach,
including comment on whether the admin-
istrative fee should be higher or lower, the
feasibility of the approach to collecting
the administrative fee, including com-
ment on alternative approaches that HHS
should consider. HHS also seeks comment
on ways to ensure public awareness of the
dispute resolution process, including the
administrative fee and how payments are
handled, as well as comment on potential
unintended or disparate impacts of admin-
istrative costs on underserved and under-
represented populations.
9. Deferral to State Patient-Provider
Dispute Resolution Processes
The No Surprises Act establishes
strong consumer protections for uninsured
(or self-pay) individuals to have access
to the patient-provider dispute resolution
process in cases in which billed charges
substantially exceed expected charges in
the good faith estimate. HHS is of the view
that PHS Act section 2799B-7 operates

October 18, 2021 542 Bulletin No. 2021–42
in such a way that all uninsured (or self-
pay) individuals, regardless of state, are
required to have at least the minimum pro-
tections set forth in the statute. However,
HHS has considered circumstances where
states may wish to develop their own
processes for resolving disputes between
uninsured (or self-pay) individuals and
providers or facilities. HHS is of the view
that when a state law is in effect that pro-
vides a process for resolving disputes
between an uninsured (or self-pay) indi-
vidual and a provider or facility that meets
or exceeds the consumer protections con-
tained in PHS Act section 2799B-7, such a
process should continue to apply. In addi-
tion, HHS believes that such an approach
is consistent with other provisions of the
No Surprises Act such as allowing allow
the application of a state law established to
determine the total amount payable under
such a plan, coverage, or issuer for certain
emergency services. HHS is adding new
45 CFR 149.620(h) to establish a process
by which HHS will determine whether a
state patient-provider dispute resolution
process provides at least the same level of
consumer protections as does the Federal
process. HHS will communicate with the
state and determine whether a state law
provides for such a dispute resolution pro-
cess, and ensure that such process meets or
exceeds certain minimum Federal require-
ments. If HHS determines that the state has
in effect a state law that meets or exceeds
the minimum Federal requirements, then
HHS will defer to the state process. In
such case the patient-provider dispute res-
olution process operated by HHS will not
be available in that state. As further dis-
cussed in section VI.B.5 of this preamble,
as part of the contracting and certification
process for an SDR entity, the entity must
demonstrate the ability to operate nation-
wide, including the ability to operate in
states where a state process is terminated
so that uninsured (or self-pay) individuals
continue to have access to a process that
meets Federal standards. HHS will direct
any patient-provider dispute resolution
requests received by HHS from uninsured
(or self-pay) individuals in that state to the
state process to adjudicate the dispute res-
olution initiation request according to the
state process. HHS will assess such state
process for compliance with the minimum
Federal standards to ensure any such state
process includes the same or greater level
of consumer protection as would apply
under the Federal patient-provider dispute
resolution process. If HHS determines
that such state process meets or exceeds
the minimum Federal standards, HHS will
discuss such determination with the state
as well as notify the state in writing of
such determination.
HHS considered what minimum
requirements a state law must include in
order for HHS to determine that the state’s
law is at least as consumer protective as
the protections contained in the No Sur-
prises Act. At a minimum, the state process
should: (1) be binding, unless the provider
or facility offers for the uninsured (or
self-pay) individual to pay lower amount
than the determination amount; (2) take
into consideration a good faith estimate,
that meets the minimum standards estab-
lished under 45 CFR 149.610, provided
by the provider or facility to the uninsured
(or self-pay) individual; (3) have a fee to
participate in the patient-provider dispute
resolution process that is equal to or lower
than the Federal administrative fee; and
(4) have in place conflict-of-interest stan-
dards that at a minimum meet the require-
ments set forth in 45 CFR 149.620(d) and
(e)(3).
In order to ensure that a state process
continues to meet or exceed the consumer
protections contained in the No Surprises
Act, HHS will review changes to the state
process on an annual basis (or at other
times if HHS receives information from
the state that would indicate the state pro-
cess no longer meets the minimum Federal
requirements) to ensure the state process
continues to meet or exceed the minimum
Federal standards. HHS is of the view
that having a process to reassess state dis-
pute resolution processes is important for
ensuring that uninsured (or self-pay) indi-
viduals receive at least the same level of
protection as the Federal standard. In the
event that the state process is terminated,
or HHS determines that it no longer meets
the minimum Federal requirements, HHS
will make the Federal process available
to ensure that ensures the state’s residents
have access to a dispute resolution process
that meets the minimum Federal require-
ments.
Although the Federal process will be
available for uninsured (or self-pay) indi-
viduals except in states where HHS has
made a determination that the state has
established a State process that includes
the same or greater level of consumer
protection as would apply under the Fed-
eral process, HHS recognizes that some
states may have in place other programs
that seek to resolve payment disputes
between uninsured (or self-pay) individu-
als and providers or facilities that do not
meet the minimum Federal standards and
thus would not take the place of the Fed-
eral dispute resolution process. However,
HHS notes that nothing would prevent the
uninsured (or self-pay) individual from
voluntarily choosing to use such state
programs to resolve a payment dispute
instead of utilizing the Federal dispute
resolution process. HHS seeks comment
on the approach to allow the HHS to defer
to a state established patient-provider dis-
pute resolution process that meets certain
minimum Federal standards, including the
feasibility and appropriateness of such
approach, and whether additional mini-
mum Federal standards should be consid-
ered.
10. Extension of Time Periods for
Extenuating Circumstances
Similar to the provisions set forth in
section III.D.8 in this preamble for the
Federal IDR process under Code section
9816(c)(9), ERISA section 716(c)(9),
PHS Act section 2799A-1(c)(9), and cod-
ified at 26 CFR 54.9816-8T(g), 29 CFR
2590.716-8(g), and 45 CFR 149.510(g),
the time periods specified in these interim
final rules (other than the time for pay-
ment of the administrative fees discussed
in section VI.B.4 of this preamble) may
be extended in the case of extenuating cir-
cumstances at HHS’ discretion on a case-
by-case basis if the extension is necessary
to address delays due to matters beyond
the control of the parties or for good cause.
Such extension may be necessary if, for
example, a natural disaster impedes efforts
by individuals, providers, and facilities to
comply with the terms of these interim
final rules. Additionally, for the extension
to be granted, the parties must attest that
prompt action will be taken to ensure that
the payment determination under this sec-
tion is made as soon as administratively
practicable. The parties may request an

Bulletin No. 2021–42 543 October 18, 2021
extension by submitting a request for an
extension due to extenuating circum-
stances, such as a natural disaster or other
circumstances impeding efforts to comply
with the terms of these interim final rules,
through the Federal IDR portal if the
extension is necessary to address delays
due to matters beyond the control of the
parties or for good cause.
11. Applicability of the Patient-Provider
Dispute Resolution Process
The provisions in PHS Act section
2799B-7 require the patient-provider dis-
pute resolution process to be established
by the Secretary of HHS no later than Jan-
uary 1, 2022. Consistent with this statutory
provision, the requirements under 45 CFR
149.620 are applicable to uninsured (or
self-pay) individuals; providers, facilities,
and providers of air ambulance services;
and SDR entities, beginning on or after
January 1, 2022. The interim final rules
regarding SDR entity certification at 45
CFR 149.620(a) and 45 CFR 149.620(d),
are applicable beginning on [INSERT
THE DATE OF PUBLICATION IN THE
FEDERAL REGISTER] so that HHS
can begin certifying SDR entities before
the patient-provider dispute resolution
process becomes applicable.
VII. Waiver of Proposed Rulemaking
Code section 9833, ERISA section
734, and PHS Act section 2792 authorize
the Secretaries of the Treasury, Labor,
and HHS (collectively, the Secretaries),
respectively, to promulgate any interim
final rules that they determine are neces-
sary or appropriate to carry out the pro-
visions of chapter 100 of the Code, part 7
of subtitle B of title I of ERISA, and title
XXVII of the PHS Act.
Under the Administrative Procedure
Act (APA) (5 U.S.C. 551 et seq.), a gen-
eral notice of proposed rulemaking is not
required when an agency for good cause
finds that notice and comment proce-
dures are impracticable, unnecessary, or
contrary to the public interest and incor-
porates a statement of the finding and its
reasons in the rule issued. 5 U.S.C. 553(b)
(B). In addition, section 553(d) ordinarily
requires a 30-day delay in the effec-
tive date of a final rule from the date of
its publication in the Federal Register.
This 30-day delay in effective date can be
waived, however, if an agency finds good
cause to support an earlier effective date.
Finally, Subtitle E of the Small Business
Regulatory Enforcement Fairness Act of
1996 (also known as the Congressional
Review Act or CRA) requires a delay in
the effective date for major rules unless
an agency finds good cause that notice
and public procedure are impracticable,
unnecessary, or contrary to the public
interest, in which case the rule shall take
effect at such time as the agency deter-
mines. 5 U.S.C. 801(a)(3), 808(2).
The Secretaries and the OPM Direc-
tor have determined that it would be
impracticable and contrary to the public
interest to delay putting the provisions
in these interim final rules in place until
a full public notice and comment process
has been completed and find that there is
good cause to waive the delay in effective
date for certain provisions of these interim
final rules.
The No Surprises Act was enacted on
December 27, 2020, as title I of Division
BB of the Consolidated Appropriations
Act, 2021. The IDR and internal claims
appeals and external review provisions
generally apply for plan years (in the indi-
vidual market, policy years) beginning on
or after January 1, 2022. The provisions
related to protections for the uninsured
generally apply beginning on January 1,
2022. Although this effective date may
have allowed for the regulations, if pro-
mulgated with the full notice and com-
ment rulemaking process, to be applicable
in time for the applicability date of the
provisions in the No Surprises Act, this
timeframe would not provide sufficient
time for the regulated entities to imple-
ment the requirements. The provisions
related to the certification of IDR and
SDR entities, as described in the Appli-
cability Dates section of this final rule,
apply beginning [INSERT THE DATE
OF PUBLICATION IN THE FEDERAL
REGISTER].
These interim final rules require plans,
issuers, providers, facilities, and provid-
ers of air ambulance services to follow
a certain process in determining out-of-
network payment amounts for certain
specified services. These regulations are
intended to work in concert with the pro-
tections against surprise billing already
instituted in the July 2021 interim final
rules. Group health plans and health insur-
ance issuers offering group or individual
health insurance coverage will have to
account for these changes in establish-
ing premium or contribution rates and in
making other changes to benefit designs.
In some cases, issuers will need time to
secure approval for required changes in
advance of plan or policy years.
These interim final rules also set up
certification requirements for IDR enti-
ties and requirements to which they must
adhere in selecting payment offers. IDR
entities will need time to acquire the nec-
essary expertise and evidence of qualifica-
tion to apply for certification in order to be
prepared to conduct payment determina-
tions for plan years beginning on or after
January 1, 2022.
The Departments and OPM anticipate
that plans and issuers will have already
taken into consideration the statutory pro-
visions in the No Surprises Act as they
developed plan designs for 2022 and
preliminary rates. Issuing these rules as
interim final rules, rather than as a notice
of proposed rulemaking, will allow plans
and issuers to account for the regulations
as they finalize rates and plan offerings
and will allow IDR entities to seek certifi-
cation and be available to take part in the
Federal IDR process when these interim
final rules go into effect.
Health plans and issuers, and provid-
ers, facilities and providers of air ambu-
lance services, require these rules to be
in place to determine the out-of-network
rates for emergency services, services by
out-of-network providers at in-network
facilities in certain circumstances, and air
ambulance services. Without these final
rules, providers, facilities and providers
of air ambulance services will not be able
to resort to the Federal IDR process (and
are no longer able to balance bill patients),
leaving the possibility that they will be
undercompensated for their services. Such
undercompensation could threaten the
viability of these providers, facilities and
providers of air ambulance services. This
in turn, could lead to participants, benefi-
ciaries and enrollees not receiving needed
medical care, undermining the goals of
the No Surprises Act. Additionally, and
for the same reasons, the failure to pro-

October 18, 2021 544 Bulletin No. 2021–42
mulgate this rule in a timely fashion could
lead to additional industry consolidation,
potentially driving health costs higher.
The Departments considered whether
they could exercise enforcement discre-
tion while a rule was proposed and then
finalized. However, the No Surprises Act
requires that the government set up and
administer a Federal IDR process to deter-
mine out-of-network rates. Therefore, the
Department must establish set rules for
this process, including for the certification
of certified IDR entities, in order that cer-
tified IDR entities, rather than the Depart-
ments, may determine out-of-network
rates as contemplated by the No Surprises
Act.
These interim final rules place new
requirements on providers, facilities
and providers of air ambulance services
regarding how they must initiate open
negotiation and the Federal IDR process,
as well as what information they must pro-
vide to certified IDR entities when engag-
ing in the Federal IDR process. Providers,
facilities, and providers of air ambulance
services require time to implement these
new requirements to ensure compliance
by January 1, 2022.
In addition to the requirements for the
Federal IDR process, these interim final
rules require providers and facilities to
furnish a good faith estimate of expected
charges upon request or upon scheduling
an item or service. Providers and facili-
ties are required to inquire if an individual
is enrolled in a group health plan, group
or individual health insurance coverage,
or a Federal health care program, and if
enrolled in such plan or coverage, if the
individual is seeking to have a claim for
such item or service submitted to such plan
or coverage. In the case that the individ-
ual is enrolled in such a plan or coverage
(and is seeking to have a claim for such
an item or services submitted to such plan
or coverage), PHS Act section 2799B-6
requires that the provider or facility fur-
nish the good faith estimate to the individ-
ual’s plan or the issuer of the coverage to
inform the advanced explanation of ben-
efits that plans and issuers are required
to provide a participant, beneficiary or
enrollee under PHS section 2799A-1(f),
Code section 9816(f), and ERISA section
716(f).
99
In the case that the individual
requesting or scheduling a good faith esti-
mate for an item or service is uninsured
(or self-pay), these interim final rules at
45 CFR 149.610 require providers and
facilities to furnish the good faith estimate
to the individual. Providers and facilities
will need time to implement requirements
for furnishing good faith estimates to
uninsured (or self-pay) individuals and
time to develop processes for sharing and
receiving information required for the
good faith estimate with co-providers and
co-facilities. Issuing these rules as interim
final rules, rather than as a notice of pro-
posed rulemaking, should allow providers
and facilities to account for the regulations
as they implement requirements to inquire
about an individual’s enrollment in health
care coverage and to furnish a good faith
estimate to an uninsured (or self-pay)
individual when these interim final rules
goes into effect.
These interim final rules provide fur-
ther protections for uninsured (or self-pay)
individuals by requiring the Secretary of
HHS to establish a process (patient-pro-
vider dispute resolution) under which an
uninsured (or self-pay) individual may
seek a determination from a certified dis-
pute resolution entity for billed charges in
excess of the good faith estimate. These
interim final rules also place new require-
ments on uninsured (or self-pay) individ-
uals, and providers or facilities regarding
how they must initiate patient-provider
dispute resolution, what information they
must provide to dispute resolution enti-
ties for the dispute resolution process,
and costs associated with patient-provider
dispute resolution. Similar to the Federal
IDR process, these interim final rules also
establish certification requirements for
SDR entities and requirements to which
they must adhere in determining payment
amounts. SDR entities will need time
to acquire the necessary expertise, and
enter into a contract with HHS to provide
patient-provider dispute resolution. Issu-
ing these rules as interim final rules, rather
than as a notice of proposed rulemaking
and waiving the delay in effective date for
the provisions related to SDR certification
will allow SDR entities to account for the
regulations as they seek to contract with
HHS and be available for patient-provider
dispute resolution determinations when
the related provisions in these interim
final rules go into effect. Further, unin-
sured (or self-pay) individuals, provid-
ers, and facilities will need to understand
what is required of them to engage in the
patient-provider dispute resolution pro-
cess when the interim final rules go into
effect.
For the foregoing reasons, the Depart-
ments and OPM have determined that it
is impracticable and contrary to the public
interest to engage in full notice and com-
ment rulemaking before these interim final
rules become effective, and that it is in the
public interest to promulgate interim final
rules. Further, for the same reasons as
authorized by section 808(2) of the CRA,
the Departments find it is impracticable
and contrary to the public interest not to
waive the delay in effective date for cer-
99
As stated in the August 20, 2021 FAQs issued by the Departments, the Departments have received feedback from the public about the challenges of developing the technical infrastructure
necessary for providers and facilities to transmit to plans and issuers starting January 1, 2022 the good faith estimates required under PHS Act section 2799B-6, which plans and issuers must
then include in the advanced explanation of benefits. Accordingly, until rulemaking to fully implement this requirement to provide such a good faith estimate to an individual’s plan or cover-
age is adopted and applicable, HHS will defer enforcement of the requirement that providers and facilities provide good faith estimate information for individuals enrolled in a health plan or
coverage and seeking to submit a claim for scheduled items or services to their plan or coverage. Additionally, stakeholders have requested that the Departments delay the applicability date of
Code section 9816(f), ERISA section 716(f), and PHS Act section 2799A-1(f) until the Departments have established standards for the data transfer between providers and facilities and plans
and issuers and have given enough time for plans and issuers and providers and facilities to build the infrastructure necessary to support the transfers. The Departments agree that compliance
with these sections is likely not possible by January 1, 2022, and therefore intend to undertake notice and comment rulemaking in the future to implement these provisions, including estab-
lishing appropriate data transfer standards. Until that time, the Departments will defer enforcement of the requirement that plans and issuers must provide an advanced explanation of benefits.
HHS will investigate whether additional interim solutions for insured consumers are feasible. The Departments note that any rulemaking to fully implement Code section 9816(f), ERISA sec-
tion 716(f), and PHS Act sections 2799A-1(f) and 2799B-6(2)(A) will include a prospective applicability date that provides plans, issuers, providers, facilities, and providers of air ambulance
services with a reasonable amount of time to comply with new requirements. HHS encourages states that are primary enforcers of these requirements with regard to providers and issuers to
take a similar enforcement approach, and will not determine that a state is failing to substantially enforce these requirements if it takes such an approach. See FAQs about Affordable Care Act
and Consolidated Appropriations Act, 2021 Implementation Part 49 (August 20, 2021), available at https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/
faqs/aca-part-49.pdf and https://www.hhs.gov/guidance/document/faqs-about-affordable-care-act-and-consolidated-appropriations-act-2021-implementation.

Bulletin No. 2021–42 545 October 18, 2021
tain provisions of this IFC under section
801 of the CRA. Therefore, the Depart-
ments find there is good cause to waive
the CRA’s delay in effective date pursuant
to section 808(2) of the CRA and establish
certain policies in this IFC applicable as
of the date of display at the Office of the
Federal Register.
VIII. Economic Impact and Paperwork
Burden
A. Summary
The Departments and OPM have exam-
ined the effects of these interim final rules
as required by Executive Order 13563
(76 FR 3821, January 21, 2011, Improv-
ing Regulation and Regulatory Review);
Executive Order 12866 (58 FR 51735,
October 4, 1993, Regulatory Planning and
Review); the Regulatory Flexibility Act
(September 19, 1980, Pub. L. 96–354);
section 1102(b) of the Social Security Act
(42 U.S.C. 1102(b)); section 202 of the
Unfunded Mandates Reform Act of 1995
(March 22, 1995, Pub. L. 104–4); Execu-
tive Order 13132 (64 FR 43255, August
10, 1999, Federalism); and the Congres-
sional Review Act (5 U.S.C. 804(2)).
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 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 significant”);
(2) creating a serious inconsistency or oth-
erwise interfering with an action taken or
planned by another agency; (3) materially
altering the budgetary impacts of entitle-
ment grants, user fees, or loan programs
or the rights and obligations of recipients
thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the
President’s priorities, or the principles set
forth in the Executive Order. Based on the
Departments’ estimates, OMB’s Office of
Information and Regulatory Affairs has
determined this rulemaking is “econom-
ically significant” as measured by the
$100 million threshold, and hence also a
major rule under Subtitle E of the Small
Business Regulatory Enforcement Fair-
ness Act of 1996 (also known as the Con-
gressional Review Act). Accordingly, the
Departments have prepared a Regulatory
Impact Analysis that, to the best of our
ability, presents the costs and benefits of
this rulemaking.
1.1. Need for Regulation
A surprise medical bill is an unex-
pected bill from a health care provider
or facility that occurs when a participant,
beneficiary, or enrollee receives medical
services from a provider or facility that,
generally unbeknownst to the participant,
beneficiary, or enrollee, is a nonpartici-
pating provider or facility with respect
to the individual’s coverage. In the con-
text of this discussion, medical services
include air ambulance services. Surprise
bills usually occur in situations where a
patient is unable to choose a health care
provider, emergency facility, or provider
of air ambulance services. When they
are unable to choose, they are unable to
ensure they only receive care from provid-
ers or emergency facilities participating in
their plan’s or coverage’s network.
Surprise bills can cause significant
financial hardship and cause individuals
to forgo care. A recent survey revealed
that two-thirds of adults worry about
being able to afford unexpected medical
bills for themselves and their families,
and 41 percent of adults with health insur-
ance received a surprise medical bill in
the previous 2 years.
100
A project carried
out by Vox, a news and opinion website,
which collected emergency department
medical bills reported instances of acci-
dent victims who received care at out-of-
network hospitals and received bills of
over $20,000.
101
These challenges may be
more keenly experienced by minority and
underserved communities, which are more
likely to experience poor communication,
underlying mistrust of the medical system,
and lower levels of patient engagement
than other populations.
102
Communities
experiencing poverty and other social risk
factors are particularly impacted as sur-
prise medical bills can negatively affect
consumers’ abilities to eliminate debt and
create wealth, and ultimately can impact
a family for generations.
103
Policies that
address the social risk factors and other
barriers underserved communities face
to accessing, trusting, and understanding
health care costs and coverage can reduce
disparities and promote health equity.
104

100
Pollitz K., et al., US Statistics on Surprise Medical Billing. JAMA. 2020;323(6):498. doi:10.1001/jama.2020.0065.
101
Kliff S., Surprise medical bills, the high cost of emergency department care, and the effects on patients [published online August 12, 2019]. JAMA Intern Med. doi:10.1001/jamaint-
ernmed.2019.3448.
102
Butler S., Sherriff N. How poor communication exacerbates health inequities and what to do about it. Brookings Institution: Report (February 22, 2021). https://www.brookings.edu/
research/how-poor-communication-exacerbates-health-inequities-and-what-to-do-about-it/; Hamel, L., Lopes, L., Muñana, C., Artiga, S., Brodie, M. Race, Health, and COVID-19: The
Views and Experiences of Black Americans. Kaiser Family Foundation (October 2020). https://files.kff.org/attachment/Report-Race-Health-and-COVID-19-The-Views-and-Experiences-of-
Black-Americans.pdf; and Shen M.J., Peterson E.B., Costas-Muñiz R. et al. The Effects of Race and Racial Concordance on Patient-Physician Communication: A Systematic Review of the
Literature. J. Racial and Ethnic Health Disparities 5, 117–140 (2018). https://doi.org/10.1007/s40615-017-0350-4.
103
Taylor, J., Racism, inequality, and health care for African Americans. The Century Foundation: Report (December 19, 2019). https://tcf.org/content/report/racism-inequality-health-care-af-
rican-americans/; and Chavis, B., Op-Ed: Big insurance must help end surprise medical billing. blackpressUSA (February 24, 2020). https://blackpressusa.com/op-ed-big-insurance-must-
help-end-surprise-medical-billing/.
104
Pérez-Stable E.J., El-Toukhy S., Communicating with diverse patients: How patient and clinician factors affect disparities. Patient Educ Couns. 2018;101(12):2186-2194. doi:10.1016/j.
pec.2018.08.021; McNally, M., Confronting disparities in access to health care for underserved populations. MedCity News (February 22, 2021). https://medcitynews.com/2021/02/confront-
ing-disparities-in-access-to-healthcare-for-underserved-populations-in-2021/.

October 18, 2021 546 Bulletin No. 2021–42
It has become common practice in the
health care system for plans, issuers, and
FEHB carriers to negotiate with health
care providers. Plans, issuers, and FEHB
carriers offer preference to these provid-
ers by listing them as “in-network pro-
viders,” and in return, providers charge
discounted rates to the plans, issuers, and
FEHB carriers.
105
Joining a plan’s, issu-
er’s, or FEHB carrier’s network assures
providers of patient volume in exchange
for lower reimbursements. However, for
specialties for which consumers typically
do not shop, such as services rendered by
emergency departments, patient volume
does not depend on whether specific pro-
viders are in-network.
106
There is less of
an incentive for these providers to engage
in negotiations with plans, issuers, and
FEHB carriers.
107
One study looked at
claims data from a large commercial issuer
for the period 2010-2016 and found that
over 39 percent of emergency department
visits to in-network hospitals resulted in
an out-of-network bill, and 37 percent of
inpatient admissions to in-network hospi-
tals resulted in at least one out-of-network
bill.
108
Since the passage of the Emergency
Medical Treatment and Labor Act
(EMTALA) in 1986, Medicare-participat-
ing hospitals are required to provide emer-
gency services, regardless of patients’ abil-
ities to pay.
109
Because of emergency phy-
sicians’ legal obligation under EMTALA,
and the inability of patients to make treat-
ment decisions, including by selecting
providers, in emergency settings, there are
fewer incentives for emergency providers
to contract with issuers.
110
A large portion
of emergency providers’ costs are distrib-
uted to patients with health benefits, pro-
viding justification for plans, issuers, and
FEHB carriers to offer smaller networks.
Consequently, in recent years, plans, issu-
ers, and FEHB carriers have been offering
narrower networks alongside larger dis-
counts, resulting in lower premiums but
with fewer in-network options for con-
sumers.
111
An additional factor contributing to
the current environment is the increasing
participation of private equity groups in
the health care market through the acqui-
sition of physician groups.
112
Anesthesiol-
ogy, emergency medicine, family practice,
and dermatology were the most common
medical specialties in acquired physician
groups.
113
The private equity business
model often centers on risky investments
with short-term horizons. These firms
often take on large amounts of debt to
acquire an asset, then introduce structural
and operational changes to extract value
or increase revenue growth potential in the
aim of selling the asset for a higher valu-
ation.
114
These firms often take on legally
complex governance structures designed
to protect the private equity firms from
regulatory liability.
115
By 2013, two private
equity firms accounted for 30 percent of
the physician staffing market.
116
One study
found that in 2017, hospitals acquired by
private equity groups accounted for 7.5
percent of all nongovernmental hospitals
and 11 percent of all discharges from non-
governmental hospitals.
117
Private equity
groups are also involved in air ambu-
lance transport services. In 2018, two of
the three largest air ambulance transport
companies were owned by private equity
firms.
118

In addition, some private equity firms
may choose not to participate in plans’ and
issuers’ networks in order to reap higher
payments.
119
Private equity-owned hos-
pitals have been found to charge higher
prices.
120
According to one study, 204 pri-
vate equity-owned hospitals had an annual
net income averaging $8.5 million prior
105
Greaney, Thomas. “Surprise Billing: a Window into the U.S. Health Care System.” American Bar Association. (September 2020). https://www.americanbar.org/groups/crsj/publications/
human_rights_magazine_home/health-matters-in-elections/surprise-billing/#:~:text=The%20%E2%80%9Csurprise%E2%80%9D%20typically%20occurs%20when,the%20difference%20
between%20what%20the.
106
Cooper, Z. et al. “Surprise! Out-of-Network Billing for Emergency Care in the United States.” National Bureau of Economic Research: Working Paper 23623 (July 2017). https://www.
nber.org/papers/w23623.
107
Greaney, Thomas. “Surprise Billing: a Window into the U.S. Health Care System.” American Bar Association. (September 2020). https://www.americanbar.org/groups/crsj/publications/
human_rights_magazine_home/health-matters-in-elections/surprise-billing/#:~:text=The%20%E2%80%9Csurprise%E2%80%9D%20typically%20occurs%20when,the%20difference%20
between%20what%20the.
108
Sun EC, Mello MM, Moshfegh J, Baker LC, Assessment of Out-of-Network Billing for Privately Insured Patients Receiving Care in In-Network Hospitals. JAMA Intern Med. 2019;
179(11):1543–1550 (2019). doi:10.1001/jamainternmed.2019.3451.
109
Centers for Medicare and Medicaid Services. “Emergency Medical Treatment & Labor Act (EMTALA).” (March 2021). https://www.cms.gov/Regulations-and-Guidance/Legislation/
EMTALA#:~:text=In%201986%2C%20Congress%20enacted%20the,regardless%20of%20ability%20to%20pay.
110
Brannon, Ike and David Kemp. “The Potential Pitfalls of Combatting Surprise Billing.” CATO Institute. (Fall 2019). https://www.cato.org/sites/cato.org/files/2019-10/regula-
tion-v42n3-1-updated.pdf.
111
Brannon, Ike and David Kemp. “The Potential Pitfalls of Combatting Surprise Billing.” CATO Institute. (Fall 2019). https://www.cato.org/sites/cato.org/files/2019-10/regula-
tion-v42n3-1-updated.pdf. See also Polsky, D, Cidav Z., Swanson A. “Marketplace Plans With Narrow Physician Networks Feature Lower Monthly Premiums Than Plans With Larger
Networks.” Health Affairs. (October 2016). https://www.healthaffairs.org/doi/10.1377/hlthaff.2016.0693.
112
Zhu, Jane M., Lynn M. Hua, and Daniel Polsky. “Private Equity Acquisitions of Physician Medical Groups across Specialties, 2013-2016.” 323 JAMA 7 (2020): 663-665.
113
Zhu, Jane M., Lynn M. Hua, and Daniel Polsky. “Private Equity Acquisitions of Physician Medical Groups across Specialties, 2013-2016.” 323 JAMA 7 (2020): 663-665.
114
Konda S, Francis J, Motaparthi K, Grant-Kels JMGroup for Research of Corporatization and Private Equity in Dermatology. “Future Considerations for Clinical Dermatology in the Setting
of 21st Century American Policy Reform: Corporatization and the Rise of Private Equity in Dermatology.” Journal of the American Academy of Dermatology, 2019;81(1):287–296.e8. https://
www.jaad.org/article/S0190-9622(18)32667-7/fulltext.
115
Appelbaum E, Batt R. “Private Equity Buyouts in Healthcare: Who Wins, Who Loses?” Institute for New Economic Thinking. (March 2020). https://www.ineteconomics.org/research/
research-papers/private-equity-buyouts-in-healthcare-who-wins-who-loses.
116
Appelbaum E, Batt R. “Private Equity Buyouts in Healthcare: Who Wins, Who Loses?” Institute for New Economic Thinking. (March 2020). https://www.ineteconomics.org/research/
research-papers/private-equity-buyouts-in-healthcare-who-wins-who-loses.
117
Offodile II, Anaeze C., et al. “Private Equity Investments in Health Care: An Overview of Hospital and Health System Leveraged Buyouts, 2003-17.” Health Affairs, Vol. 40(5), (May
2021). https://www.healthaffairs.org/doi/10.1377/hlthaff.2020.01535.
118
Appelbaum E, Batt R. “Private equity buyouts in healthcare: who wins, who loses?” Institute for New Economic Thinking. (March 2020). https://www.ineteconomics.org/research/
research-papers/private-equity-buyouts-in-healthcare-who-wins-who-loses.
119
Cooper, Zack, Fiona Scott Morton, and Nathan Shekita. “Surprise! Out-Of-Network Billing for Emergency Care in the United States.” 128 Journal of Political Economy 9. (2020).
120
Bruch, Joseph D., Suhas Gondi, and Zirui Song. “Changes in Hospital Income, Use, and Quality Associated with Private Equity Acquisition.” 180 JAMA Internal Medicine 11 (2020):
1428-1435.

Bulletin No. 2021–42 547 October 18, 2021
to their acquisition. After private equity
groups purchased the hospitals, their net
income rose to $12.9 million.
121
This
represents a 52 percent increase in net
income, on average. Another study found
that the entry of two private equity firms
into the hospital sector increased out-of-
network billing rates by more than 30 and
80 percentage points, respectively, from
2011 to 2015.
122
The study also found
that the payments that one private equity
firm received for emergency department
physicians from insurers increased by
122 percent and patient cost-sharing pay-
ments to emergency department (ED)
physicians increased by 83 percent. Fur-
thermore, some hospitals and providers
do not accept private health insurance
coverage. For example, one study found
that 5 percent of physicians participated
in cash-only practices in 2020.
123
When
billing out-of-network, these providers
who choose to remain out-of-network can
charge much higher fees than what public
or private payers typically allow.
124

The Departments and OPM seek com-
ment on how private equity ownership
structures may be affected by the Federal
IDR process.
Surprise billing represents a market
failure, as often patients either do not
have the option to seek care elsewhere
or must make decisions based on incom-
plete information about the network status
of providers and associated costs.
125
This
market failure is exacerbated by the fact
that patients must rely on the guidance of
the provider, insurer, or plan, which have
financial incentives that can be contrary to
the patient’s financial interests.
126

As of February 28, 2021, 18 states had
implemented comprehensive legislation
127

regulating surprise billing, 15 states had
implemented limited legislation, and 14
states had implemented an IDR system
regarding out-of-network payments.
128

However, even in states that have passed
legislation, states cannot regulate health
plans that are self-insured by employers.
129

On December 27, 2020, the Consoli-
dated Appropriations Act, 2021 (CAA),
which includes the No Surprises Act, was
enacted.
130
The No Surprises Act provides
Federal protections against surprise bill-
ing and limits out-of-network cost shar-
ing under many of the circumstances in
which surprise bills arise most frequently.
The No Surprises Act added new provi-
sions applicable to group health plans and
health insurance issuers offering group
or individual health insurance coverage
in Subchapter B of chapter 100 of the
Code, Part 7 of ERISA, and Part D of
title XXVII of the PHS Act. Section 102
of the No Surprises Act added Code sec-
tion 9816, ERISA section 716, and PHS
Act section 2799A-1, which contain lim-
itations on cost sharing and requirements
regarding the timing of initial payments
for emergency services furnished by non-
participating providers and emergency
facilities, and for nonemergency services
furnished by nonparticipating providers at
certain participating health care facilities.
Section 102 of the No Surprises Act also
added 5 U.S.C. section 8902(p) requiring
FEHB carriers, facilities, and providers
to comply with requirements described
in applicable provisions with respect to
FEHB covered individuals. Section 103 of
the No Surprises Act amended Code sec-
tion 9816, ERISA section 716, and PHS
Act section 2799A-1 to establish a Federal
IDR process that allows plans and issuers
and nonparticipating providers and facil-
ities to resolve disputes regarding out-
of-network rates. Section 105 of the No
Surprises Act created Code section 9817,
ERISA section 717, and PHS Act sec-
tion 2799A-2, which contain limitations
on cost sharing and requirements for the
timing of initial payments for nonpartici-
pating providers of air ambulance services
and allow plans and issuers and providers
of air ambulance services to access the
Federal IDR process described in Code
section 9816, ERISA section 716, and
PHS Act section 2799A-1. The No Sur-
prises Act provisions that apply to health
care providers and facilities, and providers
of air ambulance services, such as prohi-
bitions on balance billing for certain items
and services and requirements related to
disclosures about balance billing protec-
tions, were added to title XXVII of the
PHS Act in a new part E.
On July 13, 2021, the Departments
and OPM published the July 2021
interim final rules.
131
The July 2021
interim final rules implemented provi-
sions of the No Surprises Act to protect
participants, beneficiaries, and enrollees
in group health plans and group and indi-
vidual health insurance coverage from
surprise medical bills when they receive
emergency services, non-emergency ser-
vices from nonparticipating providers at
certain participating facilities, and air
ambulance services, under certain cir-
cumstances.
121
Bruch, Joseph D., Suhas Gondi, and Zirui Song. "Changes in Hospital Income, Use, and Quality Associated with Private Equity Acquisition." 180 JAMA Internal Medicine 11 (2020):
1428-1435.
122
Cooper, Zack, Fiona Scott Morton, and Nathan Shekita. “Surprise! Out-Of-Network Billing for Emergency Care in the United States.” 128 Journal of Political Economy 9. (2020).
123
Oliver, Eric. “What Percent Of Physicians are in a Cash-Only Practice? — 9 Stats.” Becker’s ASC Review (2021). https://www.beckersasc.com/benchmarking/what-percent-of-physicians-
are-in-a-cash-only-practice-9-stats.html .
124
Cooper, Zack, Fiona Scott Morton, and Nathan Shekita. “Surprise! Out-Of-Network Billing for Emergency Care in the United States.” 128 Journal of Political Economy 9. (2020).
125
Assistant Secretary for Planning and Evaluation. “HHS Secretary’s Report on: Addressing Surprise Medical Billing.” Office of Health Policy. (July 2020). https://aspe.hhs.gov/system/
files/pdf/263871/Surprise-Medical-Billing.pdf.
126
Assistant Secretary for Planning and Evaluation. “HHS Secretary’s Report on: Addressing Surprise Medical Billing.” Office of Health Policy. (July 2020). https://aspe.hhs.gov/system/
files/pdf/263871/Surprise-Medical-Billing.pdf.
127
The states that have passed comprehensive legislation include California, Colorado, Connecticut, Florida, Georgia, Illinois, Maine, Maryland, Michigan, New Hampshire, New Jersey, New
Mexico, New York, Ohio, Oregon, Texas, Virginia, and Washington. The Commonwealth Fund. “State Balance-Billing Protections.” (February 2021). https://www.commonwealthfund.org/
sites/default/files/2021-03/Hoadley_state_balance_billing_protections_table_02052021.pdf.
128
The states that have passed limited legislation include Arizona, Delaware, Indiana, Iowa, Massachusetts, Minnesota, Mississippi, Missouri, Nebraska, Nevada, North Carolina, Penn-
sylvania, Rhode Island, Vermont, and West Virginia. The Commonwealth Fund. “State Balance-Billing Protections.” (February 2021). https://www.commonwealthfund.org/sites/default/
files/2021-03/Hoadley_state_balance_billing_protections_table_02052021.pdf.
129
The Commonwealth Fund. “State Balance-Billing Protections.” (November 2020). https://www.commonwealthfund.org/sites/default/files/2020-12/Hoadley_state_balance-billing_pro-
tections_11302020.pdf.
130
Pub. L. 116-260 (December 27, 2020).
131
86 FR 36872 (July 13, 2021).

October 18, 2021 548 Bulletin No. 2021–42
These interim final rules build upon
the protections in the July 2021 interim
final rules and implement the Federal IDR
provisions under Code sections 9816(c)
and 9817(b), ERISA sections 716(c) and
717(b), PHS Act sections 2799A-1(c)
and 2799A-2(b), and 5 U.S.C. section
8902(p). The Federal IDR process will
permit group health plans, health insur-
ance issuers offering group or individual
health insurance coverage, FEHB carriers,
and nonparticipating providers, facilities,
and providers of air ambulance services
to determine the out-of-network rate for
items and services that are emergency ser-
vices, nonemergency services furnished
by nonparticipating providers at partici-
pating facilities, and air ambulance ser-
vices furnished by nonparticipating pro-
viders of air ambulance services, under
certain circumstances.
Furthermore, these interim final rules
extend the balance billing protections
related to external reviews to grandfa-
thered plans, including non-Federal gov-
ernmental plans and individual market
plans. The definitions of group health
plan and health insurance issuer that are
cited in section 110 of the No Surprises
Act include both grandfathered and
non-grandfathered plans and coverage.
Accordingly, the practical effect of section
110 of the No Surprises Act is that grand-
fathered health plans must provide exter-
nal review for adverse benefit determina-
tions involving benefits subject to these
surprise billing protections. Grandfathered
and non-grandfathered plans must comply
either with a state external review process
or the Federal external review process.
The disclosure requirements of the Fed-
eral external review process require: (1)
a preliminary review by plans of requests
for external reviews; (2) Independent
Review Organizations (IROs) to notify
claimants of eligibility and acceptance
for external review; (3) the plan or issuer
to provide IROs with documentation and
other information considered in making
adverse benefit determination; (4) the
IRO to forward to the plan or issuer any
information submitted by the claimant; (5)
plans to notify the claimant and IRO if it
reverses its decision; (6) the IRO to notify
the claimant and plan of the result of the
final external review; and (7) the IRO to
maintain records for 6 years.
Additionally, these interim final rules
implement provisions of the No Surprises
Act that require health care providers and
health care facilities to furnish good faith
estimates upon request or upon the sched-
uling of items or services for uninsured (or
self-pay) individuals. In order to imple-
ment these good faith estimate provisions
under PHS Act section 2799B-6(1) and
2799B-6(2)(B), as added by section 112
of the No Surprises Act, HHS is adding
45 CFR 149.610 to establish requirements
for providers and facilities to specifically
inquire about an individual’s health cover-
age status and establish requirements for
providing a good faith estimate to unin-
sured (or self-pay) individuals.
PHS Act section 2799B-6(2) and these
interim final rules specify that a provider
or facility must provide a notification (in
clear and understandable language) of
the good faith estimate of the expected
charges for furnishing such items or ser-
vices (including any items or services that
are reasonably expected to be provided
in conjunction with such scheduled items
or services and such items or services
reasonably expected to be so provided
by another health care provider or health
care facility), with the expected billing
and diagnostic codes (i.e., ICD, CPT,
HCPCS, DRG and/or NDC codes) for
any such items or services. These interim
final rules include definitions of certain
terms, requirements for the providers and
facilities, content requirements, and meth-
ods and manner requirements for issuing
good faith estimates consistent with the
provisions of PHS Act sections 2799B-6,
2799B-6(1), and 2799B-6(2)(B).
PHS Act section 2799B-7, as added
by section 112 of the No Surprises Act,
provides further protections for uninsured
(or self-pay) individuals by requiring the
Secretary of HHS to establish a process
(in this section referred to as patient-pro-
vider dispute resolution) under which an
uninsured (or self-pay) individual who
received a good faith estimate of expected
charges from a provider or facility, and
who, after being furnished the item or
service, is billed for charges that are sub-
stantially in excess of the estimate, may
seek a determination from a SDR entity
of the amount to be paid. HHS is adding
new 45 CFR 149.620 to implement this
patient-provider dispute resolution pro-
cess including specific definitions related
to the patient-provider dispute resolution
process. HHS is also codifying provisions
related to the eligibility of an item or ser-
vice for the patient-provider dispute reso-
lution process, certification and selection
of SDR entities, fees associated with the
patient-provider dispute resolution pro-
cess, and deferral to state patient-provider
dispute resolution processes.
Consistent with Executive Orders
13985 and 13988, and all civil rights laws
and protections cited previously, these
interim final rules include provisions
designed to address and increase the HHS’
understanding of barriers underserved and
minority communities face in access-
ing the protections established in the No
Surprises Act, including the provision
of good faith estimates for uninsured (or
self-pay) individuals, and the process for
patient-provider dispute resolution.
The Departments seek comment from
individuals from racial/ethnic minority
and underserved communities, including
individuals with vision, hearing, or lan-
guage limitations, individuals with limited
English proficiency, lesbian, gay, bisex-
ual, transgender, and queer (LGBTQ+)
persons, and individuals with health lit-
eracy needs, and providers who serve
these individuals, to help identify emerg-
ing, persistent, or perceived barriers to
individuals accessing and understanding
these processes, rights, and protections,
and other provisions of the No Surprises
Act included in this rule, and policies to
address and remove these barriers.
1.2. Summary of Impacts
Plans, issuers, FEHB carriers, health
care providers, facilities, and providers
of air ambulance services will incur costs
to comply with the requirements in these
interim final rules, as discussed later in
this section of this preamble. However,
the Departments and OPM have deter-
mined that the benefits of these interim
final rules justify the costs.
The provisions in these interim final
rules will help ensure that participants,
beneficiaries, and enrollees with health
coverage are protected from surprise med-
ical bills. When plans, issuers, and FEHB
carriers participate in the Federal IDR pro-
cess, individuals with health coverage will

Bulletin No. 2021–42 549 October 18, 2021
gain peace of mind, experience a reduc-
tion in out-of-pocket expenses, be able to
meet their deductible and out-of-pocket
maximum limits sooner, and may experi-
ence increased access to care. One study
found that surprise billing decreased by 34
percent in New York State between 2015
and 2018, when the state implemented
an IDR process.
132
The study also found
that New York’s Out-of-Network Law
133

saved consumers over $400 million from
the date of implementation with respect to
emergency services alone.
134

The information regarding the good
faith estimates furnished by providers and
facilities will allow uninsured (or self-pay)
individuals to have access to information
about health care pricing before receiving
care. This information will allow unin-
sured (or self-pay) individuals to evaluate
options for receiving health care, make
cost-conscious health care purchasing
decisions, and reduce surprises in relation
to their health care costs for those items
and services. Additionally, uninsured (or
self-pay) individuals may use the good
faith estimate for comparison with actual
billed charges received after items or ser-
vices are furnished. If the billed charges
are substantially in excess of the good
faith estimate, an uninsured (or self-pay)
individual may seek a determination from
an SDR entity under the patient-provider
dispute resolution process.
HHS will request information from
uninsured (or self-pay) individuals in
order to initiate the patient-provider dis-
pute resolution process. This information
will be used to help determine eligibility
for the patient-provider dispute resolution
process and is necessary for determin-
ing which provider or facility should be
contacted for dispute resolution. Provid-
ers and facilities are required to submit
information to an SDR entity to inform
the SDR entity’s payment determination
decisions.
In accordance with OMB Circular A–4,
Table 1 depicts an accounting statement
summarizing the Departments’ assess-
ment of the benefits, costs, and transfers
associated with this regulatory action.
The Departments are unable to quantify
all benefits, costs, and transfers of these
interim final rules but have sought, where
possible, to describe these non-quantified
impacts. The effects in Table 1 reflect
non-quantified impacts and estimated
direct monetary costs resulting from the
provisions of these interim final rules.
132
Marion Mass. “Surprise Billing Legislation Should Put Independent Dispute Resolution at Its Heart.” Morning Consult. (March 2020). https://morningconsult.com/opinions/surprise-bill-
ing-legislation-should-put-independent-dispute-resolution-at-its-heart/.
133
NY Fin Serv L § 605 (2014).
134
New York State Department of Financial Services. “New York’s Surprise Out-Of-Network Protection Law Report on the Independent Dispute Resolution Process.” (September 2019).
TABLE 1: Accounting Statement
Benefits:
Non-quantified benefits of the Federal IDR process for the population with health coverage:
• Increased protection for participants, beneficiaries, and enrollees from surprise bills from out-of-network providers by creating
a process for plans, issuers, FEHB carriers, and nonparticipating providers and facilities to resolve disputes regarding certain
out-of-network rates. Note that, unless specified otherwise, providers include providers of air ambulance services.
• Increased awareness of expected charges for items or services, reduction in financial anxiety and out-of-pocket expenses for
individuals with health coverage because individuals will be able to meet their deductibles and out-of-pocket maximum limits
sooner.
• Increased access to care for individuals with health coverage that may have otherwise forgone or delayed needed treatment due
to concerns over the potential for high out-of-pocket expenses.
Non-quantified benefits of the patient-provider dispute resolution process for uninsured (or self-pay) individuals:
• Increased awareness of expected charges for items or services, reduction in financial anxiety, more informed health care deci-
sions, and protection for uninsured (or self-pay) individuals by requiring providers and facilities to furnish good faith estimates
for scheduled or requested items and services.
• Improved access to care for uninsured (or self-pay) individuals that may have otherwise forgone or delayed needed treatment
due to concerns over receiving unexpected large bills.
• Protection for uninsured (or self-pay) individuals from excessive surprise bills from providers or facilities by establishing a
patient-provider dispute resolution process that may result in lower payments if the SDR entity determines the amount to be
paid by the uninsured (or self-pay) individual to the provider or facility are lower than the billed charges.
Non-quantified benefits regarding external review:
• Increased access to benefits for some individuals.
• Reduced incidence of excessive delays and inappropriate denials, averting serious, avoidable lapses in access to quality health
care and resultant injuries and losses to participants, beneficiaries, enrollees, and FEHB covered individuals.
• Potential increase in confidence and satisfaction among participants, beneficiaries, and enrollees in their health care benefits.
• Improved awareness among plans, issuers, and FEHB carriers of participant, beneficiary, enrollee, FEHB covered individuals,
and provider concerns.

October 18, 2021 550 Bulletin No. 2021–42
Costs to Plans, Issuers, and FEHB Carriers:
Costs (in millions)EstimateYear dollarDiscount RatePeriod Covered
Annualized Monetized
($/Year)
$517.1220217 percent2022-2031
$491.4420213 percent2022-2031
The annualized cost estimates reflect estimated costs associated with the Federal IDR process for nonparticipating providers or
nonparticipating emergency facilities, the Federal IDR process for providers of air ambulance services, IDR entity certification
and reporting requirements, the Federal IDR process for the uninsured, SDR entity certification, and the extension of the external
review to grandfathered plans and claims under certain provisions of the No Surprises Act. The Departments estimate a total cost
of $760.95 million in the first year and $440.67 million going forward.
Costs to the Government:
The Federal Government will incur costs to build and maintain the Federal IDR portal and to implement and administer the
patient-provider dispute resolution process. The maintenance costs for the Federal IDR portal are split between the Federal IDR
process and the patient-provider dispute resolution process, based on anticipated volume for each program. The costs associated
with the Federal IDR portal are estimated to be a one-time cost of $6 million in fiscal year 2021 and annual costs of $1 million going
forward. The costs associated with the patient provider dispute resolution process are estimated to be a one-time cost of $10 million
in fiscal year 2021 and an annual cost of $12 million going forward. Additionally, the costs associated with the Federal external
review costs are estimated to be $1.16 million in fiscal year 2021 and $567,000 annually going forward.
Transfers:
Non-quantified transfers associated with the Federal IDR process for the population with health coverage:
• Potential transfers from providers who had previously balance billed for out-of-network claims to individuals who are no lon-
ger responsible for paying these balance bills.
• Potential transfers from plans, issuers, and FEHB carriers who were previously not responsible for out-of-network balance
bills to providers and facilities that will submit out-of-network balance bills to plans, issuers, and FEHB carriers as a result of
the interim final rules.
• Potential transfers from plans, issuers, and FEHB carriers to participants, enrollees, and beneficiaries if the Federal IDR pro-
cess results in lower premiums.
• Potential transfers from participants, enrollees, and beneficiaries to plans, issuers, and FEHB carriers if the Federal IDR pro-
cess results in higher premiums.
• Potential transfers to the Federal Government in the form of reduced Premium Tax Credits if the Federal IDR process results
in the lower premiums.
• Potential transfers from the Federal Government to eligible enrollees, in the form of increased Premium Tax Credits payments
if the Federal IDR process results in an increase in premiums.
• Potential transfers from individuals with health coverage who pay premiums to individuals with large out-of-network bills and
uninsured individuals if the Federal IDR process results in an increase in premiums.
• Potential transfers from providers, facilities, and providers of air ambulance services to plans, issuers, and FEHB carriers if
some providers, facilities, and providers of air ambulance services collect lower out-of-network payments.
• Potential transfers between providers, facilities, and providers of air ambulance services and individuals with health coverage,
depending on the weight place on the QPA in payment determinations under the Federal IDR process. The presumption in
favor of the QPA in the Federal IDR process may result in transfers from providers and facilities to participants, beneficiaries,
and enrollees.
Non-quantified transfers associated with the patient-provider dispute resolution process for uninsured (or self-pay) individuals:
• Potential transfer of the patient-provider dispute resolution administrative fee from the provider or facility to the uninsured (or
self-pay) individuals if the SDR entity makes a payment determination in favor of the uninsured (or self-pay) individual.
• Potential transfer from uninsured (or self-pay) individuals to providers or facilities if the SDR entity makes a payment deter-
mination that is higher than the good faith estimate.
Non-quantified transfers associated with external review:
• Potential transfer from plans, issuers, and FEHB carriers to participants, beneficiaries, and enrollees now receiving payment
for denied benefits.

Bulletin No. 2021–42 551 October 18, 2021
1.3. Affected Entities
These interim final rules will affect
health care patients, health care provid-
ers, health care facilities, providers of air
ambulance services, self-insured plans,
issuers, and FEHB carriers.
In 2019, there were 1,553 issuers in the
U.S. health insurance market, of which
1,298 issuers serve the individual market,
586 issuers serve the small group mar-
ket, and 788 issuers serve the large group
market.
135
Additionally, the Departments
and OPM estimate that 46 issuers are
FEHB carriers. While there is a signifi-
cant amount of research that demonstrates
the prevalence of surprise billing, as dis-
cussed in the July 2021 interim final rules,
the Departments do not have data on what
percentage of health insurance issuers
cover individuals who experience surprise
billing. However, given the size and scope
of insurance companies, the Departments
assume that all health insurance issuers
will be affected by these interim final
rules. The Departments estimate that 8.5
percent, or approximately 132 issuers are
considered small under the Small Business
Administration’s (SBA) size standards.
136
Of the plans that filed a Form 5500 in
2018, 25,500 plans were self-insured.
137

The Departments do not have data on
what percentage of self-insured group
health plans cover individuals who have
received a surprise bill. The Departments
request comment on how many group
health plans will be affected by these
interim final rules.
In 2018, 296.2 million individuals
had health insurance. Of the 213.2 mil-
lion individuals with private insurance,
178.4 million had employer-sponsored
insurance and 34.8 million had other
private insurance, including individual
market coverage.
138
One study looked
at claims data from a large commercial
issuer for the period 2010-2016 and
found that over 39 percent of emer-
gency department visits to in-network
hospitals resulted in an out-of-network
bill, and 37 percent of inpatient admis-
sions to in-network hospitals resulted in
at least one out-of-network bill.
139
The
Departments estimate that these interim
final rules will directly affect individ-
uals with private health coverage who
visit an emergency room, visit a hospi-
tal, or are transported by an air ambu-
lance.
The Departments expect that the Fed-
eral IDR process will have overflow
effects of decreasing the incidence of
surprise medical bills in general, even
for patients who do not have a claim that
goes to the Federal IDR process. The
Federal IDR process relies on a “base-
ball-style” arbitration, in which each
party submits their desired amount, and
the certified IDR entity selects one of the
two offers submitted. This differs from
other types of arbitration, in which the
arbitrator would often select a value
between the two submissions. Accord-
ingly, this process encourages each party
to submit a reasonable offer. Further,
the parties involved will need to weigh
the costs associated with the Federal
IDR process, including payment of the
administrative fee and the certified IDR
entity fee if their offer is not chosen. The
Departments are of the view this may
serve as an incentive to not only submit
reasonable offers once the Federal IDR
process has been initiated, but also to
conduct business in a way to avoid end-
ing up in the Federal IDR process alto-
gether. The Departments cannot estimate
how large these overflow effects will be
on a national basis; however, the expe-
rience in New York State provides a
point of reference. In 2018, in New York
State, surprise billing decreased by 34
percent after the IDR process was imple-
mented.
140
Surprise billing occurs more often
in specialties that are not shopped.
141
A
recent survey looked at 13.8 million vis-
its to 35,000 unique providers in six spe-
cialties in 2017 to estimate the percent of
providers with at least one out-of-network
claim by specialty and whether the proce-
dure was inpatient or outpatient. The sur-
vey found that less than half of specialist
providers surveyed billed at least once
on an out-of-network basis. Their find-
ings are shown in the last four columns in
Table 2.
142
The second column provides
the number of active physicians in each
specialty from the American Association
of Medical Colleges.
143
As set forth in
Table 2, the prevalence of providers who
bill on an out-of-network basis and the
average frequency of visits that are billed
out-of-network among providers who do
bill on an out-of-network basis varies by
specialty.
The Departments estimate that 16,992
emergency and other health care facili-
ties will be affected by these interim final
rules, including 6,090 hospitals,
144
29,227
135
Centers for Medicare and Medicaid Services. “Medical Loss Ratio Data and System Resources” (2019). https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.
136
The issuers affected by these interim final rules are expected to fall under the industry of Direct Health and Medical Insurer Carries, NAICS 524114. According to the SBA Table of Size
Standards, an issuer is considered small if its annual receipts are less than $41.5 million. (See Small Business Administration. “Table of Size Standards.” (August 2019). https://www.sba.gov/
document/support--table-size-standards.) Applying this standard to the 2017 County Business Patterns and Economic Census uniformly across establishments, the Departments estimate that
132, or 8.5 percent of issuers are small. (See 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/susb/2017-susb-annual.html.)
137
Stewart, Al. “Report to Congress: Annual Report on Self-Insured Group Health Plans.” (March 2021). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/statistics/retirement-bul-
letins/annual-report-on-self-insured-group-health-plans-2021.pdf.
138
Employee Benefits Security Administration. “Health Insurance Coverage Bulletin.” (March 2019). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/
health-insurance-coverage-bulletin-2019.pdf.
139
Sun EC, Mello MM, Moshfegh J, Baker LC, Assessment of Out-of-Network Billing for Privately Insured Patients Receiving Care in In-Network Hospitals. JAMA Intern Med. 2019;
179(11):1543–1550 (2019). doi:10.1001/jamainternmed.2019.3451.
140
. Marion Mass. “Surprise Billing Legislation Should Put Independent Dispute Resolution at Its Heart.” Morning Consult. (March 2020). https://morningconsult.com/opinions/surprise-bill-
ing-legislation-should-put-independent-dispute-resolution-at-its-heart/.
141
Greaney, Thomas. “Surprise Billing: A Window into the U.S. Health Care System.” American Bar Association. (September 2020). https://www.americanbar.org/groups/crsj/publications/
human_rights_magazine_home/health-matters-in-elections/surprise-billing/.
142
Fugelsten Biniek, Jean, et al. “How Often Do Providers Bill Out of Network?” Health Care Cost Institute. (May 2020). https://healthcostinstitute.org/out-of-network-billing/how-often-
do-providers-bill-out-of-network.
143
American Association of Medical Colleges. “Active Physicians by Age and Specialty. Physician Specialty Data Report. (December 2019). https://www.aamc.org/data-reports/workforce/
interactive-data/active-physicians-age-and-specialty-2019.
144
American Hospital Association. “Fast Facts on U.S. Hospitals, 2021.” (January 2021). https://www.aha.org/statistics/fast-facts-us-hospitals.

October 18, 2021 552 Bulletin No. 2021–42
diagnostic and medical laboratories,
145

270 independent freestanding emergency
departments,
146
9,280 ambulatory surgical
centers,
147
and 1,352 critical access hospi-
tals. The Departments acknowledge that
this estimate double counts some entities,
particularly with regard to facilities that
have laboratories in-house.
TABLE 2: Physicians with Out-of-Network Claims
Number
of Active
Physicians
148
Percent of Providers with at Least
One Out-of-Network Claim, 2017
149
Mean Percent of Visits with
Services Billed Out-of-Network
for Providers Who Billed Out-of-
Network at Least Once
150
InpatientOutpatientInpatientOutpatient
Emergency45,13444.1 percent49.3 percent14.7 percent34.3 percent
Pathology12,64044.0 percent33.0 percent44.3 percent31.4 percent
Radiology28,01727.7 percent32.5 percent11.0 percent17.9 percent
Anesthesiology42,24957.0 percent31.8 percent11.3 percent28.4 percent
Behavioral Health / Psychiatry38,77829.8 percent14.9 percent21.4 percent24.4 percent
Cardiovascular22,51417.9 percent17.0 percent6.8 percent8.3 percent
As seen in Table 2, among the spe-
cialist providers considered, emergency
physicians were most likely to bill on an
out-of-network basis at least once; how-
ever, emergency physicians account for
less than 5 percent of total physicians.
151

The Departments estimate that 15 percent,
or 140,270, of physicians,
152
on average,
bill on an out-of-network basis and will be
affected by these interim final rules. The
Departments estimate that 44.1 percent, or
approximately 61,890 physicians, practice
in a small business under the SBA size
standards.
153
The Departments seek com-
ment on these estimates.
Physician staffing companies, which
allow for medical facilities to hire the ser-
vices of a medical professional without
hiring the medical professional themselves,
may also be affected by these interim final
rules, as they provide services in medical
specialties that are not shopped, including
emergency, radiology, and anesthesiol-
ogy.
154
Physician staffing companies often
bill patients directly for services rendered.
155

Within recent years, the growth of the health
care staffing industry has accelerated,
driven by staffing shortages in health care
facilities as the population ages.
156
A survey
of 200 health care executives found that
85 percent of surveyed health care facility
managers used temporary physicians within
the last year, and 72 percent were seeking
more temporary physicians.
157
There are
approximately 40 health care staffing firms
providing these services.
158

145
IBIS World. Definitive Healthcare. “Diagnostic & Medical Laboratories Industry in the US - Market Research Report?” (May 2021). https://www.ibisworld.com/industry-statistics/num-
ber-of-businesses/diagnostic-medical-laboratories-united-states/.
146
Emergency Medicine Network. “2018 National Emergency Department Inventory.” (2021). https://www.emnet-usa.org/research/studies/nedi/nedi2018/.
147
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.
148
See American Association of Medical Colleges. “Active Physicians by Age and Specialty. Physician Specialty Data Report.

(December 2019). https://www.aamc.org/data-reports/
workforce/interactive-data/active-physicians-age-and-specialty-2019.
149
See Fugelsten Biniek, Jean, et al. “How Often Do Providers Bill Out of Network?” Health Care Cost Institute. (May 2020). https://healthcostinstitute.org/out-of-network-billing/how-
often-do-providers-bill-out-of-network.
150
Id.
151
American Association of Medical Colleges. “Active Physicians by Age and Specialty.” Physician Specialty Data Report. (December 2019). https://www.aamc.org/data-reports/workforce/
interactive-data/active-physicians-age-and-specialty-2019. The American Association of Medical Colleges estimated that among the 935,136 active physicians in the U.S. in 2019, 45,134
were emergency physicians (4.8 percent).
152
The Departments do not have data on the percentage of physicians who bill out of network across all specialties; however, it is likely lower than the percentage of physicians who bill
out of network across the six specialties cited in the cited study. The six specialties cited account for approximately 20 percent of physicians. Based on the information presented in Table 2,
the Departments estimate that on average, just over 30 percent of physicians in these specialties had at least one out-of-network claim. The Departments assumes that the other 80 percent
of physicians bill on an out-of-network basis just 10 percent of the time. The Departments approximate the percent of physicians who bill on an out-of-network basis to be: (20 percent x 32
percent) + (10 percent x 80 percent) = 14.4 percent. As an approximation, the Departments round this to 15 percent.
153
The physicians affected by these interim final rules are expected to fall under the industry of Offices of Physicians, NAICS 62111. According to the SBA Table of Size Standards, an office of
physicians is considered small if its annual receipts are less than $12.0 million. (See Small Business Administration. “Table of Size Standards.” (August 2019). https://www.sba.gov/document/
support--table-size-standards.) Applying this standard to the 2017 County Business Patterns and Economic Census uniformly across employees, the Departments estimate that 61,890, or 44.1
percent of physicians work in an office considered a small business. (See 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/susb/2017-susb-annual.html.
154
Appelbaum, Eileen and Rosemary Batt. “Private Equity and Surprise Medical Billing.” (2021). Institute for New Economic Thinking. https://www.ineteconomics.org/perspectives/blog/
private-equity-and-surprise-medical-billing.
155
Moody’s Investor Service. “Surprise Billing Ban to Constrain Physician Firms’ Cash Flow, Curb Negotiating Clout for Air Ambulances.” (2021). https://www.moodys.com/research/
Moodys-Surprise-billing-ban-to-constrain-physician-staffing-firms-cash--PBC_1263184.
156
Schwartz, Chris. “Overview of the Temporary Healthcare Staffing Sector.” Blue Pencil Strategies. https://healthywork.uic.edu/wp-content/uploads/sites/452/2019/08/Temporary-Health-
care-Staffing-Fact-Sheet.pdf.
157
Gooch, Kelly. “Temporary Physicians Staffing: Why and How Often It Occurs.” Becker’s Hospital Review. (2020). https://www.beckershospitalreview.com/workforce/temporary-physi-
cian-staffing-why-and-how-often-it-occurs.html.
158
Schwartz, Chris. “Overview of the Temporary Healthcare Staffing Sector.” Blue Pencil Strategies. https://healthywork.uic.edu/wp-content/uploads/sites/452/2019/08/Temporary-Health-
care-Staffing-Fact-Sheet.pdf.

Bulletin No. 2021–42 553 October 18, 2021
Furthermore, in 2014, it was estimated
that there were 1,073 businesses in the air
ambulance service industry.
159
One study
estimated that between 2014 and 2017, 77
percent of air ambulance claims were out-
of-network.
160
The Departments do not
have data on the number of providers of
air ambulance services that submit out-of-
network claims; however, given the prev-
alence 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
interim final rules. The Departments esti-
mate that 59.2 percent, or approximately
635 providers of air ambulance services,
are considered small under the SBA size
standards.
161
IDR entities must be certified under
the standards and procedures set forth in
guidance by the Departments. In order to
be certified, an entity must have sufficient
expertise in arbitration and claims admin-
istration, managed care, billing and coding,
medical, and legal matters, with sufficient
staffing to make determinations within 30
business days allowed for such payment
determinations. Additionally, IDR enti-
ties must meet appropriate indicators of
fiscal integrity and stability and maintain
a current accreditation from a nationally
recognized and relevant accrediting orga-
nization, such as URAC, or ensure that it
otherwise possesses the requisite training
to conduct payment determinations (for
example, providing documentation that
personnel employed by the IDR entity
have completed arbitration training by the
AAA, the AHLA, or a similar organiza-
tion), among other requirements.
The National Association of Indepen-
dent Review Organizations is an associ-
ation of URAC-accredited independent
review organizations, and in 2021, they
had 29 members.
162
While this does not
represent the entire pool of independent
review organizations, this offers insight
into the number of potential entities that
may seek certification as IDR entities. In
2019, New York had certified three IDR
entities to handle the state’s IDR pro-
cess.
163
In 2018, the state of New York
accounted for 5.8 percent of the private
insurance market.
164
The Departments
recognize that the health care and sur-
prise billing experiences across states
are heterogeneous; however, if this pro-
portion were uniform across the country,
there would be approximately 52 IDR
entities. Based on these two benchmarks,
the Departments estimate that there will
be 50 IDR entities that will seek certifi-
cation by the Departments. Within these
50 entities, HHS estimates that there will
be between one and three contracted
SDR entities, depending on the antic-
ipated volume of patient-provider dis-
pute resolution cases and other factors
necessary for administering an efficient
program.
Health care providers and health care
facilities are required to furnish a good
faith estimate of expected charges to
uninsured (or self-pay) individuals for
scheduled items and services and upon
request. In 2019, there were approxi-
mately 938,966 active physicians,
165
6,090
hospitals,
166
9,280 ambulatory surgical
centers,
167
and 1,352 critical access hos-
pitals.
168
As of 2019, there were approxi-
mately 29,349,300 uninsured individuals
in the United States.
169
HHS estimates that
approximately 3,498,942 uninsured (or
self-pay) individuals will be impacted by
this rule requirement
170
based on the num-
ber of nonemergency elective procedures
(surgical and non-surgical) performed
annually multiplied by the percentage of
uninsured (or self-pay) individuals (9.2%),
and HHS assumes that some uninsured
individuals will forego elective proce-
dures because of cost. HHS also assumes
that a certain number of good faith esti-
mates will be furnished only upon request,
increasing the number of good faith esti-
mates from that of the total for scheduled
items and services.
These interim final rules also imple-
ment a patient-provider dispute resolu-
tion process that applies to uninsured (or
self-pay) individuals whose billed charges
exceed the expected charges in the good
faith estimate for a provider or facility by
$400 or greater. HHS does not have data
on the percentage of how many uninsured
159
IBIS World. “Air Ambulance Service Industry in the US – Market Research Report.” (December 2020). https://www.ibisworld.com/united-states/market-research-reports/air-ambu-
lance-services-industry/.
160
Brown, Erin, et al. “The Unfinished Business of Air Ambulance Bills.” Health Affairs Blog, March 26, 2021. https://www.healthaffairs.org/do/10.1377/hblog20210323.911379/full/.
161
The providers of air ambulance services affected by these interim final rules are expected to fall under the industry of Ambulance Services, NAICS 621910. According to the SBA Table of
Size Standards, an air ambulance service provider is considered small if its annual receipts are less than $16.5 million. (See Small Business Administration. “Table of Size Standards.” (August
2019). https://www.sba.gov/document/support--table-size-standards.) Applying this standard to the 2017 County Business Patterns and Economic Census uniformly across establishments,
the Departments estimate that 635, or 59.2 percent of providers of air ambulance services are small. See 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/susb/2017-susb-annual.html.
162
Lacewell, Linda. “New York’s Surprise Out-of-Network Protection Law.” Patient Choice Coalition.” (September 2019). http://www.patientchoicecoalition.com/blog/2019/11/22/
report-on-the-independent-dispute-resolution-process/.
163
Id.
164
In 2018, 10.5 million individuals had employer-sponsored insurance and 1.8 million individuals had other private insurance in New York State, while 178.4 million individuals had employ-
er-sponsored insurance and 34.8 million individuals had other private insurance nationally. The Departments estimates New York accounts for 5.8 percent of the private insurance market
((10.5 + 1.8) / (178.4 + 34.8) = 5.8 percent). See Employee Benefits Security Administration. “Health Insurance Coverage Bulletin.” (March 2019). https://www.dol.gov/sites/dolgov/files/
EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2019.pdf.
165
https://www.aamc.org/data-reports/workforce/interactive-data/active-physicians-us-doctor-medicine-us-md-degree-specialty-2019.
166
https://www.aha.org/statistics/fast-facts-us-hospitals.
167
https://blog.definitivehc.com/how-many-ascs-are-in-the-us#:~:text=Currently%2C%20there%20are%20more%20than,Healthcare’s%20platform%20on%20surgery%20centers.
168
https://www.flexmonitoring.org/historical-cah-data-0).
169
This figure includes those without health insurance and those who have coverage under the Indian Health Service only. Source: https://www.kff.org/other/state-indicator/total-pop-
ulation/?dataView=1&currentTimeframe=0&selectedDistributions=uninsured&selectedRows=%7B%22wrapups%22:%7B%22united-states%22:%7B%7D%7D%7D&sortMod-
el=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D.
170
The number is estimated as follows: 51,744,200 nonemergency elective procedures (surgical and non-surgical) performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes that
some uninsured populations will forego elective procedures because of costs. Therefore, a 30% decrease adjustment was included resulting in 3,332,326. HHS also assumes a 5% adjustment
for good faith estimate inquires only resulting in a final value of 3,498,942. See Squitieri, Lee et al. “Resuming Elective Surgery during Covid-19: Can Inpatient Hospitals Collaborate with
Ambulatory Surgery Centers?.” Plastic and reconstructive surgery. Global open vol. 9,2 e3442. 18 Feb. 2021, doi:10.1097/GOX.0000000000003442 (The study estimates 4,297,850 none-
mergency elective procedures (surgical and non-surgical) are performed each month. This value was multiplied by 12 months = 51,574,200. HHS adjusted by approximately one-third of one
percent to account annual increase in volume since study publication resulting in 51,744,200). See also KFF Health Insurance Coverage of the Total Population.

October 18, 2021 554 Bulletin No. 2021–42
(or self-pay) individuals will initiate the
patient-provider dispute resolution pro-
cess. For the purposes of the estimates in
this section, HHS relied on the experience
of New York State. From 2015 to 2018,
New York State had a total of 1,486 dis-
putes involving surprise bills submitted to
the state IDR process, and 31% of these
disputes (457 in all) were found ineligi-
ble for IDR for various reasons including
8% (approximately 36 cases) due to being
self-insured.
171
For the purposes of this
analysis, HHS assumes that, going for-
ward, New York State will continue to see
40 IDR adjudications each year involving
surprise medical bills for self-insured indi-
viduals. Accordingly, HHS estimates that
there will be 26,659 claims that result in
patient-provider dispute resolution cases
each year.
172
These interim final rules
establish requirements that an SDR entity
must meet the same certification standards
as a certified IDR entity. HHS estimates
that there will be between one and three
contracted SDR entities depending on the
anticipated volume of patient-provider
dispute resolution cases and other factors
necessary for administering an efficient
program. HHS will assess if a potential
SDR entity meets the certification stan-
dards as part of the contracting process.
Furthermore, the interim final rules
extend the balance billing protections
related to external review to grandfathered
plans. Prior to the interim final rules,
the Departments estimate that there are
approximately 8.1 million participants in
ERISA-covered plans in states that have
no external review laws or whose laws do
not meet the Federal minimum require-
ments.
173
These estimates lead to a total
of 92.5 million participants not having
access to external review. Among the 92.5
million participants, 80.5 million partic-
ipants in non-grandfathered plans and
12 million participants in grandfathered
plans will be required to be covered by the
external review requirement.
The Departments estimate that there
are approximately 1.3 external reviews for
every 10,000 participants
174
and that there
will be approximately 12,304 external
reviews annually. Experience from North
Carolina indicates that about 75 percent of
requests for external reviews are actually
eligible to proceed to an external review.
175

Therefore, the Departments expect that
there will be about 15,942 requests for
external review.
176

1.4. Benefits
Federal IDR Process
In the past, information asymmetries
regarding health care costs and provider
or facility network status between individ-
uals and plans, issuers, and providers have
left individuals vulnerable to surprise bill-
ing. These interim final rules will provide
a structure to guide the resolution of pric-
ing disparities in a way that will prevent
a patient’s information asymmetry from
resulting in a surprise bill, thus alleviating
the market failure.
As a result of these interim final rules,
individuals with health coverage will only
be liable for their in-network cost-shar-
ing amounts when receiving care from
nonparticipating providers at participat-
ing facilities (in certain circumstances),
nonparticipating emergency facilities,
and nonparticipating providers of air
ambulance services. Accordingly, these
individuals are likely to see lower out-of-
pockets costs, reduced anxiety, reduced
financial stress, and lower medical debt.
Further, these payments will now count
towards their deductible and maximum
out-of-pocket limits, allowing individu-
als to reach those limits sooner. A signifi-
cant number of individuals forgo or delay
care due to the cost of care.
177
A reduc-
tion in out-of-pocket expenses is likely to
improve access to care and allow individ-
uals to obtain needed treatment that they
may otherwise have neglected or foregone
due to concerns about the cost of care.
Further, these interim final rules cre-
ate a system in which disputes may be
resolved in a consistent and efficient man-
ner. These interim final rules are intended
to minimize reliance on the Federal IDR
process and encourage parties to submit
reasonable offers and allow for more effi-
cient price discovery. By requiring the
non-prevailing party to pay the certified
IDR entity fees, these interim final rules
increase the financial stakes for parties
that submit an offer that is unreasonably
high or low. However, if the parties agree
upon a settlement, after initiation, but
prior to determination by the certified
IDR entity, each party must pay half of
the certified IDR entity’s fees, unless the
parties agree otherwise on a method for
allocating the fees. Thus, parties have an
incentive to choose a settlement compared
to the Federal IDR process. During nego-
tiations, providers may be more willing to
accept a lower price and similarly, plans,
issuers, and FEHB carriers may be more
willing to offer a higher price.
Similarly, these interim final rules are
intended to encourage the settlement of
multiple claims. Under these interim final
rules, the party that initiates the Federal
IDR process is suspended from taking
the same party to arbitration for an item
or service that is the same or similar item
or service as the qualified IDR item or
service already subject to a certified IDR
entity’s determination for 90 calendar
days following a payment determination.
Furthermore, these interim final rules
171
https://www.dfs.ny.gov/system/files/documents/2019/09/dfs_oon_idr.pdf.
172
The number is estimated as follows: 51,744,200 nonemergency elective procedures (surgical and non-surgical) performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes that
some uninsured (or self-pay) individuals will forego elective procedures because of costs. Therefore, a 30% decrease adjustment was included resulting in 3,332,326. HHS assumes that
10% of uninsured (or self-pay) individuals who undergo a nonemergency elective procedure will receive a billed charge that is $400 or more than the total expected charges in the good faith
estimate for the provider or facility, therefore 3,332,326 x 10% = 333,232. HHS assumes that 8% will engage the provider-patient dispute resolution process, therefore 333,232 x 8% = 26,659.
173
These states are Alabama, Florida, Georgia, Pennsylvania, Texas, and Wisconsin. See Affordable Care Act: Working with States to Protect Consumers, available at https://www.cms.gov/
CCIIO/Resources/Files/external_appeals.html.
174
AHIP Center for Policy and Research, “An Update on State External Review Programs, 2006,” July 2008.
175
North Carolina Department of Insurance. “Health Insurance Smart NC: Annual Report on External Review Activity 2013.” https://digital.ncdcr.gov/digital/collection/p249901coll22/
id/730531.
176
12,304/0.75 = 15,942.
177
According to a Kaiser Family Foundation analysis of National Health Interview Survey data, in 2019, 10.5 percent of adults reported forgoing or delaying medical care due to costs. Refer-
ence: Krutika, Amin, Gary Claxton, Giorlando Ramirez, and Cynthia Cox (2021). “How Does Cost Affect Access to Care?” Peterson-KFF Health System Tracker. Available at https://www.
healthsystemtracker.org/chart-collection/cost-affect-access-care/.

Bulletin No. 2021–42 555 October 18, 2021
permit multiple qualified IDR items and
services to be batched together in a sin-
gle payment determination proceeding
to encourage efficiency; however, the
batched items and services must involve
the same provider or group of providers,
the same facility, the same provider of
air ambulance services, the same plan or
issuer, treatments involving the same or
similar items or services (as determined by
service codes), and have to occur within a
single 30-business-day period (or during
the 90-calendar-day suspension period).
By batching similar qualified IDR items
and services, these interim final rules may
reduce the per-service cost of the Federal
IDR process and potentially the aggregate
administrative costs, since the Federal
IDR process is likely to exhibit at least
some economies of scale.
178
For example,
the per-service cost of a payment deter-
mination involving ten services is likely
to be lower than the per-service cost of
a payment determination involving five
services. Thus, these interim final rules
may result in cost savings for plans, issu-
ers, and providers. The Departments do
not have data or a way to estimate how
prevalent batching will be, and thus the
potential cost savings that may result, in
comparison to a hypothetical IDR process
without batching. The Departments seek
comment and data on this topic, if avail-
able.
In addition, these interim final rules
prohibit conflicts of interest in the selec-
tion of certified IDR entities. The selected
certified IDR entity cannot be a group
health plan; a health insurance issuer
offering group health insurance coverage,
individual health insurance coverage or
short-term, limited-duration insurance;
an FEHB carrier; or a provider, a facility
or a provider of air ambulance services.
Additionally, the selected certified IDR
entity cannot be an affiliate of a group
health plan; a health insurance issuer
offering group health insurance coverage,
individual health insurance coverage or
short-term, limited-duration insurance; an
FEHB carrier; or a provider, a facility or
a provider of air ambulance services. The
selected certified IDR entity cannot be an
affiliate or subsidiary of a professional
or trade association representing group
health plans; health insurance issuers;
FEHB carriers; or providers, facilities, or
providers of air ambulance services. Also,
the selected certified IDR entity and its
personnel cannot have a material famil-
ial, financial, or professional relationship
with a party to the payment determination
being disputed. By prohibiting conflicts
of interest, these interim final rules will
help ensure that the selected certified IDR
entity will take both parties into full con-
sideration during arbitration and ensure
that the resolution of the dispute is con-
ducted fairly.
Furthermore, these interim final rules
dictate what factors the certified IDR enti-
ties may consider for their decisions. Spe-
cifically, these interim final rules require
that certified IDR entities consider the
QPA and requires them to consider other
relevant factors, to the extent credible
information is provided by the parties,
while not allowing for the consideration of
usual and customary rates, billed charges
of the provider, or public payor rates,
such as those of Medicare, Medicaid, the
Children’s Health Insurance Program,
TRICARE, chapter 17 of title 38, United
States Code, or demonstration projects
under title XI of the Social Security Act.
The Departments seek comment
addressing the benefits that will be asso-
ciated with these interim final rules. The
Departments also seek comment on how
the interim final rules will affect individ-
uals from minority and underserved com-
munities and providers who serve these
individuals.
Protections for the Uninsured
Health insurance and health care
costs are critical determinants of access
to health care and are central reasons for
existing health inequities.
179
In the past
decade, while overall rates of health insur-
ance coverage have increased, the rates
of health insurance coverage among most
minority groups continue to be dispropor-
tionately lower than among non-minority
groups. Estimates from the Centers for
Disease Control and Prevention (CDC)
National Health Interview Survey (NHIS)
, suggest that approximately 30 million
U.S. residents lacked health insurance
in the first half of 2020.
180
Prior to the
COVID-19 pandemic, according to infor-
mation collected in the Current Popula-
tion Survey Annual Social and Economic
Supplement (CPS ASEC) and the Ameri-
can Community Survey (ACS), in 2019,
8.0% of people, or 26.1 million individ-
uals, did not have health insurance at any
point during the year.
181
Additionally, the
most recent ACS data documents the larg-
est annual increase in the number of unin-
sured children from 2018 to 2019 since
the survey began asking about health
insurance in 2008. The child uninsured
rate increased from 5.2% in 2018 to 5.7%
in 2019.
182

The provisions in these interim final
rules will protect uninsured (or self-pay)
individuals by allowing them to obtain a
good faith estimate of expected charges
from providers and facilities prior to
receiving scheduled items and services
and upon request. With this information,
uninsured (or self-pay) individuals may
be more likely to consider and compare
costs across providers or facilities prior
to or upon scheduling an item or service
to help inform decisions regarding costs
for an item or service. Additionally, these
interim final rules protect these uninsured
(or self-pay) individuals from receiving
excessive surprise bills from providers
and facilities, and allow an uninsured (or
self-pay) individual to seek a determi-
nation through the patient-provider dis-
pute resolution process if billed charges
for items or services from a provider or
facility are substantially in excess of the
expected charges listed on the good faith
estimate.
178
Fielder, Matthew, Loren Adler, and Benedic, Ippolito. “Recommendations for Implementing the No Surprises Act.” USC-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/
179
“Mirror, Mirror 2021: Reflecting Poorly.” The Commonwealth Fund (2021). https://www.commonwealthfund.org/publications/fund-reports/2021/aug/mirror-mirror-2021-reflecting-poorly
180
“Trends in the US Uninsured Population 2010-2020.” APSE Office of Health Policy (2020). https://aspe.hhs.gov/system/files/pdf/265041/trends-in-the-us-uninsured.pdf.
181
Keisler-Starkey, Katherine and Lisa N. Bunch. “Health Insurance Coverage in the United States: 2019.” (2020) https://www.census.gov/library/publications/2020/demo/p60-271.html.
182
“Census Data Show Largest Annual Increase in Number of Uninsured Children in More Than a Decade.” https://ccf.georgetown.edu/2020/09/15/census-data-show-decades-largest-annu-
al-increase-in-number-of-uninsured-children/.

October 18, 2021 556 Bulletin No. 2021–42
The patient-provider dispute resolution
process further protects uninsured (or self-
pay) individuals as the process may result
in lower payments. During the dispute
resolution process, the SDR entity must
review any documentation submitted by
the uninsured (or self-pay) individual or
their authorized representative, or a pro-
vider or facility, and must make a determi-
nation as to whether the health care pro-
vider or health care facility has provided
credible information for each billed item
or service, including an item or service
that did not originally appear on the good
faith estimate, to demonstrate that the dif-
ference between the billed charge and the
expected charge in the good faith estimate
reflects the costs of a medically necessary
item or service and is based on unforeseen
circumstances that could not have reason-
ably been anticipated by the provider or
facility when the good faith estimate was
provided. HHS is of the view that this
helps ensure that the SDR entity review is
comprehensive and that the facts and cir-
cumstances for the billed charge for each
item or service are considered by the SDR
entity. HHS is also of the view that this
approach ensures that the uninsured (or
self-pay) individual is only billed charges
that reflect medically necessary items or
services and are based on unforeseen cir-
cumstances that could not have reason-
ably been anticipated by the provider or
facility when the good faith estimate was
provided. This dispute resolution process
protects the uninsured (or self-pay) indi-
vidual from unexpected charges in cases
where there are extra charges based on
items or services that are not medically
necessary, or could have been reasonably
foreseen and thus included on the good
faith estimate.
These provisions also provide pro-
tections when an uninsured (or self-pay)
individual receives a bill that includes
providers or facilities that were not
included in the good faith estimate, spe-
cifically if a co-provider or co-facility is
replaced at the last moment by a different
co-provider or co-facility. These interim
final rules provide important consumer
protections that are aimed to protect
uninsured (or self-pay) individuals from
unexpected medical bills by not allowing
a provider or facility to essentially cir-
cumvent these protections simply due to
not being directly represented on the good
faith estimate. Therefore, HHS is of the
view that it is necessary and appropriate
for billed items or services of providers
or facilities to be eligible for dispute reso-
lution if the billed charge is substantially
in excess of the total expected charges
included in the good faith estimate for the
original co-provider or co-facility. If the
replacement provider or facility provides
the uninsured (or self-pay) individual with
an updated good faith estimate in accor-
dance with 45 CFR 149.610(b)(2) then the
determination of whether an item or ser-
vice billed by the replacement co-provider
or co-facility is eligible for dispute reso-
lution is based on whether the total billed
charges for the replacement co-provider
or co-facility is substantially in excess
of the total expected charges included in
the good faith estimate provided by the
replacement co-provider or co-facility.
HHS recognizes that these particular situ-
ations may be more complex for an unin-
sured (or self-pay) individual to determine
eligibility for dispute resolution since the
provider or facility may not be reflected in
the good faith estimate.
HHS is of the view that requiring an
uninsured (or self-pay) individual to pay
the entire cost of dispute resolution in cases
where the provider or facility prevails in
dispute resolution could be prohibitive for
such an uninsured (or self-pay) individual
to access the dispute resolution process.
HHS is also concerned that requiring a
provider or facility to pay dispute resolu-
tion costs when they do not prevail could
impose a burden on the provider or facil-
ity and potentially provide an incentive
for the provider or facility to raise prices
on uninsured (or self-pay) individuals
to account for potential dispute resolu-
tion costs or avoid treating uninsured (or
self-pay) individuals altogether. There-
fore, HHS is adopting an approach in
which HHS will cover dispute resolution
costs through contracts with SDR enti-
ties for the patient-provider dispute-res-
olution process. HHS estimates that the
total costs to be paid for patient-provider
dispute resolution to SDR entities to be
$10,633,600.
183
Such an approach ensures
that the uninsured (or self-pay) individual
would not be required to pay dispute reso-
lution costs and as a result would not face
a barrier to accessing the dispute resolu-
tion process. Additionally, as the provider
or facility would not be required to pay
dispute resolution costs, such approach
would reduce the provider’s or facility’s
incentives to increase prices or restrict an
uninsured (or self-pay) individual’s access
to needed care.
In addition, PHS Act section 2799B-7
requires that the Secretary of HHS estab-
lish an administrative fee to participate
in the patient-provider dispute resolution
process in such a manner as to not create a
barrier to an uninsured (or self-pay) indi-
vidual to participate in such process. HHS
intends to establish an administrative fee
in guidance in a manner that will not cre-
ate a barrier to an uninsured (or self-pay)
individual’s access to the patient-provider
dispute resolution process. For the first
year, HHS expects the fee to be no more
than $25.
Although HHS is of the view that
requiring all parties to the dispute resolu-
tion to pay an administrative fee to offset
some of the Federal costs for administer-
ing the patient-provider dispute resolution
program is appropriate, only the non-pre-
vailing party will be required to pay the
administrative fee (either as a payment
made directly to the SDR entity in the
case of the uninsured (or self-pay) indi-
vidual, or in a reduction in the final pay-
ment determination amount as in the case
of the provider or facility). In cases where
the SDR entity determines the payment
amount the uninsured (or self-pay) indi-
vidual pays is less than the billed charge,
the SDR entity would apply a reduction
equal to the administrative fee amount
paid by the uninsured (or self-pay) indi-
vidual to the payment amount to calculate
the final payment determination amount
183
The number is estimated as follows: 51,744,200 nonemergency elective procedures (surgical and non-surgical) performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes that
some uninsured (or self-pay) individuals will forgo elective procedures because of costs. HHS assumes that 333,232 of uninsured (or self-pay) individuals who undergo a nonemergency
elective procedure will receive a billed amount that is $400 or greater more than the total expected charges listed in the good faith estimate for the provider or facility, therefore 3,332,326 x
10% = 333,232. The Department assumes that 8% of these individuals will engage the provider-patient dispute resolution process, therefore 333,232 x 8% = 26,659. For the first year, HHS
expects the SDR fee per arbitration to be about $400 therefore $400x26,659 = $10,633,600.

Bulletin No. 2021–42 557 October 18, 2021
to be paid by the uninsured (or self-pay)
individual for the items or services. HHS
is of the view that requiring the SDR entity
to apply a reduction equal to the adminis-
trative fee paid by the uninsured (or self-
pay) individual to the payment amount is
the appropriate approach as it simplifies
the number of transactions. HHS antic-
ipates collecting $666,475
184
in admin-
istrative fees from an anticipated 26,659
cases, which will offset some of the costs
of the patient-provider dispute resolution
process, which is estimated to be $12.6
million (which includes IDR portal sys-
tem maintenance and contracting fees for
SDRs) beginning in 2022, resulting in a
total cost to the Federal Government of
approximately $12 million.
External Review Requirements
These interim final rules will help
transform the external review process into
a more uniform and structured process.
As stated earlier in this preamble, these
interim final rules extend the balance bill-
ing protections related to external review
to grandfathered plans. Grandfathered
health plans must provide external review
for adverse benefit determinations involv-
ing benefits subject to these surprise billing
protections. Additionally, for non-grandfa-
thered health plans these interim final rules
clarify that, to the extent not already cov-
ered, that any adverse determination that
involves consideration of whether a plan
or issuer is complying with PHS Act sec-
tion 2799A-1 or 2799A-2, ERISA section
716 or 717, or Code section 9816 or 9817
is eligible for external review. Grandfa-
thered and non-grandfathered plans must
comply either with a state external review
process or the Federal external review pro-
cess. A more uniform external review pro-
cess will provide a broad range of direct
and indirect benefits that will accrue to
varying degrees to all affected parties. In
general, the Departments expect that these
interim final rules will improve the extent
to which group health plans, issuers, and
FEHB carriers provide benefits consistent
with the established terms of individual
plans or coverages. This change will cause
some participants to receive benefits that
they might otherwise have been denied.
Furthermore, expenditures by plans may
be reduced as a fuller system of claims
and appeals processing helps facilitate
enrollee acceptance of cost management
efforts.
Furthermore, the more uniform stan-
dards for handling appeals and external
review provided by these interim final
rules will reduce the incidence of inappro-
priate denials, averting serious, avoidable
lapses in access to health care and resultant
injuries and losses to participants, benefi-
ciaries, and enrollees. These changes also
will enhance participants’, beneficiaries’,
and enrollees’ level of confidence in and
satisfaction with their health care benefits
and improve plans’ awareness of partici-
pant, beneficiary, enrollee, and provider
concerns. These changes could prompt
plan and issuer responses that improve
health care quality.
1.5. Costs
These interim final rules seek to protect
patients from surprise billing, while also
seeking to minimize the costs to provid-
ers, facilities, plans, issuers, and individ-
uals.
The ultimate effect of the Federal IDR
process on health care costs is uncertain.
Discussions of the uncertainty and poten-
tial transfers that the Departments expect
are included in the Transfers and Uncer-
tainty sections.
1.5.1. Federal IDR Process for
Nonparticipating Providers or
Nonparticipating Emergency Facilities
The Departments and OPM do not
have data on how many claims will be
submitted to the Federal IDR process.
For the purposes of the estimates in this
section, the Departments and OPM rely
on the experience of New York State. In
2018, New York State had 1,014 IDR
decisions, up from 650 in 2017 and 396
in 2016.
185
The Departments do not know
what is causing the increasing trend or
whether the trend is likely to continue
to increase. The Departments seek com-
ments on this trend for analytic purposes.
In 2018, the state of New York accounted
for 5.8 percent of the private insurance
market.
186
For purposes of this analysis,
the Departments assume that, going for-
ward, 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. Accordingly, the
Departments estimate that there will be
approximately 17,000 claims that are sub-
mitted to the Federal IDR process each
year.
187
The Departments seek comment
on this estimate.
Surprise billing decreased by 34 per-
cent in New York State between 2015 and
2018 when the state implemented an IDR
process.
188
While the number of IDR cases
has been trending up, the decline in sur-
prise billing is likely to result in a decline
in IDR cases. Additionally, the usage and
cost of certified IDR entities is likely to
decrease when certified IDR entities use
the QPA as the rebuttable presumption
in payment determination, particularly
after the first instance of using the QPA.
The Departments do not have any data or
184
The number is estimated as follows: 51,744,200 nonemergency elective procedures (surgical and non-surgical) performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes that
some uninsured (or self-pay) individuals will forego elective procedures because of costs. HHS assumes that 333,232 of uninsured (or self-pay) individuals who undergo a nonemergency
elective procedure will receive a billed charge that is at least $400 more than the total expected charges listed in the good faith estimate for the provider or facility, therefore 3,332,326 x 10%
= 333,232. The Department assumes that 8% will engage the provider-patient dispute resolution process, therefore 333,232 x 8% = 26,659. For the first year, HHS expects the SDR fee per
arbitration to be $25 therefore $25x26,659 = $666,475.
185
Adler, Loren. “Experience with New York’s Arbitration Process for Surprise Out-of-Network Bills.” USC-Brookings Schaeffer on Health Policy. (October 2019). https://www.brookings.
edu/blog/usc-brookings-schaeffer-on-health-policy/2019/10/24/experience-with-new-yorks-arbitration-process-for-surprise-out-of-network-bills/.
186
In 2018, 10.5 million individuals had employer-sponsored insurance and 1.8 million individuals had other private coverage in New York State, while 178.4 million individuals had employ-
er-sponsored coverage and 34.8 million individuals had other private coverage nationally. The Departments estimate that New York accounts for 5.8 percent of the private insurance market
((10.5 + 1.8) / (178.4 + 34.8) = 5.8 percent). See Employee Benefits Security Administration. “Health Insurance Coverage Bulletin.” (March 2019). https://www.dol.gov/sites/dolgov/files/
EBSA/researchers/data/health-and-welfare/health-insurance-coverage-bulletin-2019.pdf.
187
This is calculated as: 1,000 / 0.058 = 17,333.
188
Marion Mass. “Surprise Billing Legislation Should Put Independent Dispute Resolution at Its Heart.” Morning Consult. (March 2020). https://morningconsult.com/opinions/surprise-bill-
ing-legislation-should-put-independent-dispute-resolution-at-its-heart/.

October 18, 2021 558 Bulletin No. 2021–42
experiences on which to base an estimate
of how much use of the Federal IDR pro-
cess will decline over time. Accordingly,
in these estimates, prevalence of the use of
the Federal IDR process is assumed to be
constant; however, the Departments rec-
ognize that this is likely an overestimate.
The Departments estimate that the cost
associated with the Federal IDR process
for nonparticipating providers or non-
participating emergency facilities will
be $38.4 million. This includes an esti-
mated cost of $21.1 million for paperwork
requirements. For more details, please
refer to the Paperwork Reduction Act sec-
tion of this preamble.
In addition to the paperwork costs
for the Federal IDR process, the Depart-
ments estimate that it will take, a medical
and health services manager 2 hours and
a clerical worker 15 minutes on average
to prepare materials for open negotiation
for each plan, issuer, or FEHB carrier
and provider or facility. The Departments
estimate that 25 percent of disputes will
be resolved in open negotiation before
entering the Federal IDR process. The
Departments request data or comments on
this assumption. Accordingly, the Depart-
ments estimate that 23,111 claims will go
through open negotiation.
189
This results
in a cost of $10.3 million.
190

If the plan, issuer, or FEHB carrier
and the provider or facility fail to select
a certified IDR entity, the Departments
will select a certified IDR entity through
a random selection method. The Depart-
ments assume that in 25 percent of IDR
payment determinations, a certified IDR
entity will not be selected by the parties.
The Departments request comment on this
assumption.
Furthermore, the party whose offer
was not chosen by the certified IDR
entity must pay the certified IDR entity
fee, in addition to the administrative fee
(required to be paid by both parties upon
initiation of the IDR process). However, if
the parties agreed upon an out-of-network
rate, the certified IDR entity fee must
be divided equally between the parties,
unless otherwise agreed to by the parties.
In New York, IDR entities included inde-
pendent review organizations who con-
tracted with board certified physicians and
other insurance contract experts.
191
The
fees charged by IDR entities in New York
ranged from $300 to $600.
192
In Texas, the
state contracted with individual attorneys
to provide IDR entities. In Texas, fixed
fees ranged from $270 to $6,000.
193
Based
on these ranges, the Departments estimate
that on average the certified IDR entity
fees will be approximately $400. This
results in a cost of $6.9 million.
194
1.5.2. IDR Process for Air Ambulances
In 2018, 178.4 million individuals had
employer-sponsored health insurance and
34.8 million individuals had other private
insurance, including individual market
coverage.
195
In 2017, the Health Cost Insti-
tute (HCCI) estimated that, on average,
there were 33.3 air ambulance uses per
100,000 people,
196
and the Government
Accountability Office (GAO) estimated
that approximately 69 percent of air trans-
ports resulted in an out-of-network bill.
197

The Departments do not have data on
what percent of out-of-network bills will
proceed to the Federal IDR process; how-
ever, given the nature of air ambulances
services, the Departments assume that it
will be substantially higher than for hospi-
tal or emergency department claims. The
Departments assume that 10 percent of
out-of-network claims for air ambulance
services will be submitted to the Federal
IDR process,
198
which would result in
nearly 4,900 air transport payment deter-
minations in the Federal IDR process each
year.
199
The Departments seek comment
on this estimate.
The Departments estimate that the cost
associated with the Federal IDR process
for nonparticipating providers or nonpar-
ticipating providers of air ambulance ser-
vices will be $11.1 million. This includes
an estimated cost of $5.3 million for
paperwork requirements. For more details,
please refer to the Paperwork Reduction
Act section.
In addition to the paperwork costs, the
Departments estimate that it will take, a
medical and health services manager 2
hours and a clerical worker 15 minutes
on average to prepare materials for open
negotiation for each plan, issuer, or FEHB
carrier and provider of air ambulance
services. The Departments estimate that
25 percent of disputes will be resolved
in open negotiation before entering the
Federal IDR process. The Departments
request data or comments on this assump-
tion. Accordingly, the Departments esti-
mate that 6,532 claims will go through
189
This is calculated 17,333/ (1 - 0.25) = 23,111.
190
The burden is estimated as follows: 23,111 claims x 2 hours + 23,111 claims x 0.25 hour = 51,999 hours. A labor rate of $105.01 is used for a medical and health services manager and a
labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: 23,111 claims x 2 hours x $105.01 + 23,111 claims x 0.5 hour x $55.23 = $5,172,803.
2 x $5,172,803 = $10,345,605. Labor rates are EBSA estimates.
191
Kaiser Family Foundation. “Surprise Medical Bills: New Protections for Consumers Take Effect in 2022.” (2019). https://www.kff.org/private-insurance/fact-sheet/surprise-medi-
cal-bills-new-protections-for-consumers-take-effect-in-2022/.
192
The Commonwealth Fund. “How States are Using Independent Dispute Resolution to Resolve Out-of-Network Payments in Surprise Billing.” (February 2020). https://www.common-
wealthfund.org/blog/2020/how-states-are-using-independent-dispute-resolution-resolve-out-network-payments-surprise.
193
Kaiser Family Foundation. “Surprise Medical Bills: New Protections for Consumers Take Effect in 2022.” (2019). https://www.kff.org/private-insurance/fact-sheet/surprise-medi-
cal-bills-new-protections-for-consumers-take-effect-in-2022/.
194
The cost is estimated as follows: (17,333 x $400) = $6,933,200.
195
Employee Benefits Security Administration. “Health Insurance Coverage Bulletin.” (March 2019). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/
health-insurance-coverage-bulletin-2019.pdf.
196
Hargraves, John and Aaron Bloschichak. “Air Ambulances-10-Year Trends in Costs and Use.” Health Care Cost Institute. (2019). https://healthcostinstitute.org/emergency-room/air-am-
bulances-10-year-trends-in-costs-and-use.
197
Government Accountability Office. “Air Ambulance: Available Data Show Privately-Insured Patients are at Financial Risk.” (2019). https://www.gao.gov/assets/gao-19-292.pdf.
198
The Departments utilize 10 percent as an assumption to estimate the overall number of physicians billing out-of-network at least once in a year.
199
The Departments estimate that of the 213.2 million individuals with employer-sponsored and other private health insurance (178.4 million individuals with employer-sponsored health
insurance and 34.8 million individuals with other private insurance), 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 IDR. (213,200,000 x 0.000333 x 0.69 x 0.1= 4,899).

Bulletin No. 2021–42 559 October 18, 2021
open negotiation.
200
This results in a cost
of $3.8 million.
201

As stated above, if the plan, issuer, or
FEHB carrier, and the nonparticipating
provider of air ambulance services fail to
select a certified IDR entity, the Depart-
ments will select a certified IDR entity
through a random selection method. The
Departments estimate that in 25 percent
of IDR payment determinations, a certi-
fied IDR entity will not be selected by the
parties.
Furthermore, the party whose offer
was not chosen by the certified IDR entity
must pay the certified IDR entity fee, in
addition to the administrative fee (initially
required to be paid by both parties upon
initiation of the Federal IDR process).
However, if the parties agree upon an out-
of-network rate, the costs must be divided
equally between the parties, unless oth-
erwise agreed to by the parties. In New
York, IDR entities included independent
review organizations that contracted with
board certified physicians and other insur-
ance contract experts.
202
The fees charged
by IDR entities in New York ranged from
$300 to $600.
203
In Texas, the state con-
tracted with individual attorneys to pro-
vide IDR entities. In Texas, fixed fees
per case ranged from $270 to $6,000.
204

Based on these ranges, the Departments
estimate that on average the certified IDR
entity fees will be approximately $400.
This results in a cost of approximately $2
million.
205
This results in a cost of approx-
imately $2 million.
206
1.5.3. Requests Extension of Time Periods
for Extenuating Circumstances
A plan, issuer, FEHB carrier, provider,
facility, or provider of air ambulance ser-
vices may request an extension regarding
the time periods set forth in these interim
final rules, other than for the timing of
the payments, including payments to the
provider, facility, or air ambulance ser-
vices, under extenuating circumstances.
To request an extension, entities will need
to submit the Request for Extension due to
Extenuating Circumstances form through
the Federal IDR portal, if the extension is
necessary to address delays due to matters
beyond the control of the parties or for
good cause. Additionally, they must attest
that prompt action will be taken to ensure
that the required action is made as soon as
administratively practicable. The Depart-
ments estimate that the costs associated
with requests for the extension of time
periods will be $1,381 annually. For more
details, please refer to the Paperwork
Reduction Act section of this preamble.
1.5.4. Requirements for Certified IDR
Entities
An IDR entity must be certified under
standards and procedures set forth in
these interim final rules and in guidance
promulgated by the Departments. For
each month, certified IDR entities will
be required to report information on their
activity to the Departments. The Depart-
ments estimate that there will be 50
entities seeking IDR certification, as dis-
cussed earlier in this analysis of economic
and paperwork burdens.
The Departments estimate that the cost
associated with the IDR entity certification
process and reporting requirements will
be $149,616 in the first year and $124,491
in the subsequent years. For more details,
please refer to the Paperwork Reduction
Act section.
1.5.5. External Review Requirements
The interim final rules require grand-
fathered health plans to provide external
review for adverse benefit determinations
involving benefits subject to these surprise
billing protections.
The Departments estimate that there are
approximately 84.4 million participants in
self-insured ERISA-covered plans. Prior
to the interim final rules, the Departments
estimate that there were approximately
8.1 million participants in ERISA-covered
plans in the states which currently have no
external review laws or whose laws do not
meet the Federal minimum requirements.
These estimates lead to a total of 92.5 mil-
lion participants. Among the 92.5 million
participants, 80.5 million participants in
non-grandfathered plans and 12 million
participants in grandfathered plans will
be required to be covered by the external
review requirement.
The Departments estimate that there
are approximately 1.3 external reviews
for every 10,000 participants and that
there will be approximately 12,304 exter-
nal reviews annually. Experience from
North Carolina indicates that about 75
percent of requests for external review are
actually eligible to proceed to an exter-
nal review.
207
Therefore, the Departments
expect that there will be about 15,942
requests for external review. The Depart-
ments estimate that the cost associated
with the external review requirements for
ERISA-covered plans will be $3.3 mil-
lion.
Additionally, HHS estimates that
there are approximately 13.5 million
individual market enrollees and 19.3
million non-Federal governmental plans
enrollees.
208
These estimates lead to a
200
This is calculated 4,899/ (1 - 0.25) = 6,532.
201
The burden is estimated as follows: 6,532 claims x 2 hours + 6,532 claims x 0.25 hour = 39,190 hours. A labor rate of $105.01 is used for a medical and health services manager and a labor
rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: 6,532 claims x 2 hours x $105.01 + 6,532 claims x 0.5 hour x $55.23 = $1,895,077. 2 x
$1,895,077 = $3,790,154. Labor rates are EBSA estimates.
202
Kaiser Family Foundation. “Surprise Medical Bills: New Protections for Consumers Take Effect in 2022.” (2019). https://www.kff.org/private-insurance/fact-sheet/surprise-medi-
cal-bills-new-protections-for-consumers-take-effect-in-2022/.
203
The Commonwealth Fund. “How States are Using Independent Dispute Resolution to Resolve Out-of-Network Payments in Surprise Billing.” (February 2020). https://www.common-
wealthfund.org/blog/2020/how-states-are-using-independent-dispute-resolution-resolve-out-network-payments-surprise.
204
Kaiser Family Foundation. “Surprise Medical Bills: New Protections for Consumers Take Effect in 2022.” (2019). https://www.kff.org/private-insurance/fact-sheet/surprise-medi-
cal-bills-new-protections-for-consumers-take-effect-in-2022/.
205
The cost is estimated as follows: (4,899 x $400) = $1,959,600.
206
The cost is estimated as follows: (4,899 x $400) = $1,959,600.
207
North Carolina Department of Insurance. “Health Insurance Smart NC: Annual Report on External Review Activity 2013.” https://digital.ncdcr.gov/digital/collection/p249901coll22/
id/730531.
208
Individual market based on data from MLR annual report for the 2019 MLR reporting year, available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr. Non-federal govern-
ment plans data from Agency for Healthcare Research and Quality, Center for Financing, Access and Cost Trends. 2019 Medical Expenditure Panel Survey-Insurance Component.

October 18, 2021 560 Bulletin No. 2021–42
total of 32.8 million total enrollees in
individual market and non-Federal Gov-
ernment plans. Among the 32.8 million
participants, 2.6 million are in grand-
fathered plans and 30.1 million are in
non-grandfathered plans. HHS also
added a 2 percent increase in the number
of out-of-networks claims to capture the
increase in burden on non-grandfathered
plans resulting from the surprise billing
and cost sharing protections of the exter-
nal review requirements, resulting in an
adjusted total of 30.7 million partici-
pants for non-grandfathered plans and an
adjusted total of 33.3 million participants
for all individual market and non-Federal
Government plans.
HHS also estimates there are an esti-
mated 1.3 external reviews for every
10,000 participants and that there will
be approximately 4,337 total external
reviews annually for individual mar-
ket and non-Federal Government plans.
This amount includes 3,994 reviews for
non-grandfathered plans and 343 for
grandfathered plans. Experience from
North Carolina indicates that about 75 per-
cent of requests for external reviews are
actually eligible to proceed to an external
review, therefore it is expected that there
will be about 5,783 requests for exter-
nal review. This amount includes 5,326
requests for non-grandfathered plans and
457 requests for grandfathered plans. HHS
estimates that the cost associated with the
external review requirements for individ-
ual market and non-Federal Government
plans will be $241,850.
In summary, the Departments estimate
that the total annual cost associated with
the External Review for DOL will be $3.3
million and the total annual cost associated
with the External Review for HHS will be
will be $0.2 million. For more details, see
the Paperwork Reduction Act section.
1.5.6. Protections for the Uninsured
These interim final rules seek to pro-
tect uninsured (or self-pay) individuals
from surprise billing through two mech-
anisms: the provision of good faith esti-
mates from providers and facilities and
the patient-provider dispute resolution
process to resolve billing disputes when an
uninsured (or self-pay) individual receives
a bill for charges that are substantially in
excess of the expected charges listed in
the good faith estimates.
1.5.7. Good Faith Estimates
As discussed in the Paperwork Reduc-
tion Act section of this preamble, HHS
estimates the total annual burden to con-
vening providers or facilities to notify
uninsured (or self-pay) individuals of
the availability of good faith estimates
to be approximately 2,743,283 hours
with an equivalent cost of $320,250,167.
HHS estimates the annual cost to a con-
vening provider or facility to provide a
good faith estimate of expected charges
to uninsured (or self-pay) individuals for
scheduled items and services and upon
requests between 2022 and 2024 to be
$356,727,765 and total burden hours of
3,538,305.
1.5.8. Patient-Provider Dispute
Resolution Process
As discussed in the Paperwork Reduc-
tion Act section of this preamble, HHS
estimates the total annual burden associ-
ated with the patient-provider dispute res-
olution process for uninsured (or self-pay)
individuals and health care providers and
health care facilities to be approximately
255,524 hours with an equivalent cost of
$29,764,646.
1.5.9. Patient-Provider SDR Entity
Certification
As discussed in the Paperwork
Reduction Act section of this preamble,
HHS estimates the total annual burden
associated with the SDR entity certi-
fication to be 16 hours with an equiva-
lent cost of $1,873 in the first year. In
subsequent years, the total hour burden
associated with the SDR entity certifi-
cation or recertification is 2.25 hours
with an equivalent cost of $257. HHS
seeks comment on the assumptions and
calculations made in the corresponding
Information Collection Request (ICR).
The Departments also seek comment
on the estimates presented in this sec-
tion and on any additional costs incurred
by patients, providers, providers of air
ambulance services, facilities and unin-
sured (or self-pay) individuals.
1.5.10. Summary
The Departments estimate the total
cost burden associated with these interim
final rules to be $760.95 million in the
first year, with $38.43 million attributable
to the Federal IDR process for nonpar-
ticipating providers or nonparticipating
emergency facilities or group health plans
or health insurance issuers offering health
insurance coverage, $11.08 million attrib-
utable to the Federal IDR process for air
ambulance services; $149,616 attributable
to costs associated with certification and
recordkeeping requirements for certified
IDR entities, $4.02 million attributable to
the external review process, and $706.7
million attributable to the patient-provider
dispute resolution process.
The Departments seek comment
addressing the costs that will be associ-
ated with these interim final rules. The
Departments also seek comment on how
these interim final rules will affect indi-
viduals from minority and underserved
communities, and providers and facilities
who serve these individuals.
1.6. Transfers
These interim final rules will protect
patients from surprise bills for emergency
and nonemergency medical services
and air ambulance services. The Depart-
ments and OPM recognize this as trans-
fers between individuals, plans, issuers,
FEHB carriers, and providers, facilities,
and providers of air ambulance services.
The Departments and OPM expect that
these interim final rules will result in
some transfers from providers, facilities,
and providers of air ambulance services
to individuals, some transfers from plans,
issuers, and FEHB carriers to providers,
facilities, and providers of air ambulance
services, and some transfers from individ-
uals to plans, issuers, and FEHB carriers
and providers, facilities, and providers of
air ambulance services. The magnitude of
each of these transfers is uncertain, and
as such, the ultimate effect of the Federal
IDR process on each of entity is largely
uncertain.
These interim final rules may result in
lower out-of-pocket spending by individu-
als, as these interim final rules are expected
to decrease surprise billing. This result

Bulletin No. 2021–42 561 October 18, 2021
would follow from two types of transfers:
transfers from providers, facilities, and
providers of air ambulance services who
had previously balance billed individuals
for out-of-network claims to individuals
who would have received those balance
bills, and transfers from plans, issuers,
and FEHB carriers who were previously
not responsible for out-of-network bills
to providers who would submit out-of-
network bills to plans, issuer, and FEHB
carriers as a result of these interim final
rules. The Departments request comment
or data on how large each of these trans-
fers might be.
As shown in Table 3, the mean pro-
vider charges relative to Medicare pay-
ment rates differ across physician special-
ties, and the ratios for specialties in which
surprise billing is more common have
a higher ratio of mean provider charges
relative to Medicare payments rates than
those specialties for which surprise billing
is less common. These higher rates have
been linked to the fact that patients are
not able to select providers in these spe-
cialties, leaving patients more vulnerable
to surprise billing.
209
The Departments
expect that the proposed interim final
rules will lead to the ratio of mean pro-
vider charges to Medicare payment rates
to converge with specialties with compar-
atively infrequent surprise billing.
209
See Hannick, Kathleen and Loren Adler. “Provider Charges Relative to Medicare Rates, 2012-2018.” USC-Brookings Schaeffer on Health Policy. (May 2021). https://www.brookings.edu/
blog/usc-brookings-schaeffer-on-health-policy/2021/05/03/provider-charges-relative-to-medicare-rates-2012-2018/.
210
See Hannick, Kathleen and Loren Adler. “Provider Charges Relative to Medicare Rates, 2012-2018.” USC-Brookings Schaeffer on Health Policy. (May 2021). https://www.brookings.
edu/blog/usc-brookings-schaeffer-on-health-policy/2021/05/03/provider-charges-relative-to-medicare-rates-2012-2018/.
211
NY Fin Serv L § 605 (2014).
212
New York State Department of Financial Services. “New York’s Surprise Out-Of-Network Protection Law Report on the Independent Dispute Resolution Process.” (September 2019).
https://www.pacep.net/assets/documents/NYReportontheIDRProcess.pdf.
213
Cooper, Zack, Fiona Scott Morton, and Nathan Shekita. “Surprise! Out-Of-Network Billing for Emergency Care in the United States.” 128 Journal of Political Economy 9. (2020).
214
Congressional Budget Office. “Estimate for Divisions O Through FF. H.R. 133, Consolidated Appropriations Act, 2021. Public Law 116-260.” https://www.cbo.gov/system/files/2021-01/
PL_116-260_div%20O-FF.pdf.
215
The OACT analysis assumed that an individuals’ cost-sharing is limited to their in-network cost-sharing amounts and that plans and issuers are responsible for any excess of the allowed
amounts for nonparticipating providers over in-network reimbursement rates. OACT assumed that that the average allowed amounts for services provided by nonparticipating providers will
remain higher than in-network reimbursement rates after the No Surprises Act takes effect. OACT estimated a range of values for out-of-network allowed charges between 125 percent and
150 percent of average network rates. OACT assumed that these estimated levels reflected the Federal IDR process but did not make any explicit assumptions about the separate impact of
the Federal IDR process.
TABLE 3: Ratio of Mean Provider Charges to Medicare Payment Rates by Specialty
SpecialtyMean Ratios, 2018
210
Specialties with infrequent surprise billing
Family Practice2.1
Internal Medicine2.2
Primary Care2.2
Dermatology2.1
Specialties with frequent surprise billing
Anesthesiology7.0
Emergency Medicine5.7
Diagnostic Radiology4.0
Pathology2.7
Further, research finds that New York’s
Out-of-Network Law
211
has saved con-
sumers over $400 million from the date
of implementation, March 2015, through
the end of 2018 with respect to emergency
services alone.
212
These savings have been
realized in part through a reduction in
costs associated with emergency services
and an increased incentive for network
participation. By establishing an IDR pro-
cess for out-of-network emergency ser-
vices, the Out-of-Network Law reduced
out-of-network billing by 34 percent and
lowered in-network emergency physician
payments by 9 percent.
213
The interim final rules are expected to
have an effect on premiums, although there
is uncertainty around how premiums will
ultimately be affected. The Congressional
Budget Office estimated the provisions in
the No Surprises Act are likely to reduce
premiums by 0.5 percent to 1 percent in
most years.
214
In comparison, the CMS’s
Office of the Actuary (OACT) estimated
the provisions are likely to increase pre-
miums by 0.00 percent to 0.35 percent.
215

Neither of these estimates isolate the effect
attributable to the Federal IDR process.
The ultimate effect on premiums will
depend on how much plans, issuers, FEHB
carriers, and providers, facilities, and pro-
viders of air ambulance services will use
the Federal IDR process and how the
Federal IDR process affects plan, issuer,
and FEHB carrier liability. If payments to
providers decrease, this change may result
in a decrease in premiums. This decrease
in premiums will result in a transfer from
providers and facilities to participants,
enrollees, or beneficiaries through plans,
issuers, and FEHB carriers. Additionally,
this could result in a transfer from eligi-
ble enrollees to the Federal Government
in the form of reduced payment of the
Premium Tax Credits (PTC). Conversely,

October 18, 2021 562 Bulletin No. 2021–42
if payments to providers increase, the
expenditures for plans, issuers, and FEHB
carriers may be passed on to consumers
in the form of increased premiums. This
could result in three types of transfers: (1)
from the participants, enrollees, and ben-
eficiaries to the plans, issuers, and FEHB
carriers; (2) from the Federal Govern-
ment to eligible enrollees in the form of
increased PTC; and (3) from insured indi-
viduals who pay premiums to individuals
with large out-of-network bills.
In addition, these interim final rules
may affect in-network and out-of-network
rates received by physicians. It is possible
that the out-of-network rates collected by
some providers, facilities, and providers
of air ambulance services will be lower
than they would have been if not for the
provisions in these interim final rules.
There is also uncertainty around how
these interim final rules will affect the
negotiation dynamics between providers,
facilities, plans, issuers, and FEHB carri-
ers regarding health care costs.
As evidenced in states where arbitra-
tors are directed to base their determina-
tions on billed charges, there have been
increased health care costs as a result of
the out-of-network payment standard
being higher than that in-network rate.
216

However, as noted in an analysis by the
USC-Brookings Schaeffer Initiative
for Health Policy, if certified IDR enti-
ties base their determinations on median
in-network rates, which are typically
lower than billed charges, the IDR pro-
cess could place downward pressure on
health care costs and premiums. If certi-
fied IDR entities choose amounts that are
above median in-network rates, this could
result in a potential increase in costs and
premiums.
217
For example, in New York,
providers prevailed in IDR at nearly twice
the rate that issuers prevailed. In the state,
arbiters are told to consider the 80th per-
centile of billed charges in their decision
process. A study found that even when
deciding in favor of health plans, arbitra-
tions averaged just 11 percent below the
80
th
percentile of charges, which is con-
sistently above the typical in-network or
out-of-network rates. This result implies
that plans, issuers, and FEHB carriers
only won in arbitration when paying
above-market rates.
217

Further, in the Federal IDR process,
certified IDR entities are required to con-
sider credible information about addi-
tional factors such as providers’ expertise
and patient characteristics after beginning
with a presumption in favor of the QPA,
making it beneficial for a provider or
facility to initiate the process when they
expect to be paid more than the median
in-network rate. A report from the Con-
gressional Budget Office noted that some
providers, particularly those with more
specialized services, may be able to nego-
tiate for larger payments from insurers
by threatening to initiate the Federal IDR
process.
218
This outcome could result in
a transfer from plans, issuers, and FEHB
carriers to providers. Furthermore, this
outcome could also result in higher pre-
miums, which could ultimately result in a
transfer from patients to providers.
219

In addition, these interim final rules
may affect provider and facility payments
and revenue. It is possible that the pay-
ments collected by some providers and
facilities will be lower than they would
have been if not for the provisions in these
interim final rules. These interim final
rules set standards requiring certified IDR
entities to consider the QPA (typically the
median in-network rate) when making
payment determinations; the Departments
expect this approach to have a downward
impact on health care costs, potentially
resulting in transfers from providers and
facilities to individuals with health cover-
age.
Furthermore, the external review
requirements of these interim final rules
may result in a transfer from plans, or
issuers to participants and beneficiaries
now receiving payment for denied bene-
fits. These transfers will improve equity,
because incorrectly denied benefits will
be paid.
These interim final rules also estab-
lish requirements for the uninsured (or
self-pay) individual to submit an admin-
istrative fee payment when initiating the
patient-provider dispute resolution pro-
cess as provided in 45 CFR 149.620(g)
and described in section IV.B.8 of this
preamble. This requirement may result in
a transfer to the uninsured (or self-pay)
individual from the provider or issuer
if the uninsured (or self-pay) individual
prevails in the dispute resolution process.
Under such circumstances, the SDR entity
must apply a reduction equal to the admin-
istrative fee amount paid by the individ-
ual to the final determination amount for
charges to be paid by the individual for the
items or services.
1.7. Regulatory Alternatives
Section 6(a)(3)(C)(iii) of Executive
Order 12866 requires an economically
significant regulation to include an assess-
ment of the costs and benefits of poten-
tially effective and reasonable alternatives
to the planned regulation. The Depart-
ments considered whether the certified
IDR entity was required to consider the
QPA and permitted to consider other stat-
utory factors only when a party presents
clear and convincing evidence that the
value of the qualified IDR item or service
materially differs from the QPA due to
those factors, or whether the certified IDR
entity should be required to consider all
factors equally.
The Departments are of the view, how-
ever, that applying a clear and convincing
evidence standard does not afford enough
weight to the statutory requirement that
certified IDR entities consider the addi-
tional permissible factors. Such a stan-
216
Ollove, Michael. Laws to Curb Surprise Medical Bills Might Be Inflating Health Care Costs. PEW. (2021. https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2021/05/20/
laws-to-curb-surprise-medical-bills-might-be-inflating-health-care-costs.
217
Adler, Loren, et al. “Understanding the No Surprises Act.” USC-Brookings Schaeffer on Health Policy. (2021). https://www.brookings.edu/blog/usc-brookings-schaeffer-on-health-pol-
icy/2021/02/04/understanding-the-no-surprises-act/.
218
Adler, Loren. “Experience with New York’s Arbitration Process for Surprise Out-of-Network Bills.” USC-Brookings Schaeffer on Health Policy. (October 2019). https://www.brookings.
edu/blog/usc-brookings-schaeffer-on-health-policy/2019/10/24/experience-with-new-yorks-arbitration-process-for-surprise-out-of-network-bills/.
219
Congressional Budget Office Cost Estimate. “H.R. 2328, Reauthorizing and Extending America’s Community Health Act.” (September 2019). https://www.cbo.gov/system/files/2019-09/
hr2328.pdf.
220
Congressional Budget Office Cost Estimate. “H.R. 2328, Reauthorizing and Extending America’s Community Health Act.” (September 2019). https://www.cbo.gov/system/files/2019-09/
hr2328.pdf.

Bulletin No. 2021–42 563 October 18, 2021
dard could result in a certified IDR entity
failing to consider credible information
a party provides, even where it clearly
demonstrates that the QPA is materially
different from the appropriate out-of-net-
work rate. On the other hand, permitting
consideration of all permissible factors
equally disregards the weight that the
No Surprises Act places on the QPA. For
example, Code section 9816(c)(7)(B)(iii)-
(iv), ERISA section 716(c)(7)(B)(iii)-(iv),
and PHS Act section 2799A-1(c)(7)(B)
(iii)-(iv) require the Departments to report
the offers as a percentage of the QPA and
the amount of the offer selected, expressed
as a percentage of the QPA. The statute
also provides strict rules for calculating
the QPA and creates disclosure and audit
requirements regarding the QPA.
The Departments, therefore, are of the
view that starting with a rebuttable pre-
sumption that the QPA is the appropriate
payment amount properly emphasizes the
QPA while requiring the consideration of
the permissible additional factors when
appropriate. The QPA generally is based
on the median of contracted rates, which
are the product of contract negotiations
between providers and facilities and plans
(and their service providers) and issuers,
and therefore generally reflect market
rates. The statute sets out detailed rules for
calculating the QPA, including a require-
ment that when plans, issuers, and FEHB
carriers do not have sufficient informa-
tion to calculate their own median con-
tracted rates, they utilize a database free
of conflicts of interests.
221
Plans, issuers,
and FEHB carriers must provide specific
information on how the QPA is calculated
to nonparticipating providers and facili-
ties, ensuring that they are aware of how
this rate was calculated.
222
Plans, issuers,
and FEHB carriers are also subject to
audit requirements that will be enforced
by the Departments and OPM to ensure
that they follow these standards.
223
The
Departments are also required to report
how the out-of-network rates compare to
the QPA, suggesting that Congress saw it
as an appropriate analogue for the out-of-
network rate.
224
Moreover, starting with
the QPA as the rebuttable presumption
for the appropriate payment amount will
increase the predictability of dispute res-
olution outcomes which may encourage
parties to reach an agreement outside of
the Federal IDR process to avoid the
administrative costs and will aid in reduc-
ing prices that may have been inflated due
to the practice of surprise billing prior to
the No Surprises Act. Finally, the Depart-
ments are of the view that this approach
will protect participants, beneficiaries,
and enrollees from excessive costs, either
through reduced costs for items and ser-
vices or through decreased premiums.
Therefore, in determining which offer to
select, these interim final rules provide
that the certified IDR entity must begin
with the presumption that the QPA for
the applicable year is the appropriate pay-
ment amount for the qualified IDR items
or services. The certified IDR entity must,
however, consider the other factors when
a party provides credible information, and
must choose the offer closest to the QPA,
unless the credible evidence submitted
by the parties clearly demonstrates that
the QPA is materially different from the
appropriate out-of-network rate.
As noted previously, emphasizing
the QPA will allow for predictability. As
mentioned earlier in this preamble, when
the recognized amount is the QPA, plans,
issuers, and FEHB carriers must provide
the QPA to providers and facilities when
submitting an initial payment amount
or denial of payment, and must provide
additional information regarding the QPA
upon request. Thus, even before begin-
ning negotiations, all parties involved will
know that the QPA is the primary factor
that the certified IDR entity will always
consider (while other factors may be con-
sidered, depending on the circumstances).
This certainty will encourage plans, issu-
ers, providers, and facilities to make offers
that are closer to the QPA, and to the
extent another factor could support devi-
ation from the QPA, to focus on evidence
concerning that factor. This certainty may
also encourage parties to avoid the Fed-
eral IDR process altogether and reach an
agreement during the open negotiation
period. Finally, it is anticipated that focus-
ing on the QPA will help mitigate costs
and reduce government expenditures once
the Federal IDR process is fully imple-
mented, as projected by the Congressional
Budget Office.
225
Therefore, after care-
fully considering both interpretations, the
Departments chose to emphasize the QPA.
Furthermore, as discussed earlier in
this preamble, the Departments consid-
ered how to select a certified IDR entity if
the parties fail to do so. Academic litera-
ture is inconclusive regarding whether the
selection process of an arbitrator has an
effect on the arbitration results. One study
found significant consistency between
factors affecting an arbitrator’s deci-
sion,
226
suggesting that the selection of a
certified IDR entity by parties to the IDR,
or the selection process of a certified IDR
entity by the government if the parties fail
to select a certified IDR entity, should not
have a significant effect on the outcome.
Contrarily, another study found large dif-
ferences among arbitrator decisions; how-
ever, the authors attributed these differ-
ences to information disparities between
parties.
227
As the parties in the Federal
IDR process under these interim final
rules are all professionals with specialized
knowledge in health care, these informa-
tion disparities are expected to be minimal
in the context of the Federal IDR process.
221
Code section 9816(a)(2), (3)(E); ERISA section 716(a)(2), (3)(E) and PHS Act section 2799A-1(a)92), (3)(E); 26 CFR 54.9816-6T, 29 CFR 2590.716-6, and 45 CFR 149.140.
222
Id.
223
86 FR 36872, 36899 (July 13, 2021).
224
Code section 9816(c)(7)(A)(v), (B)(iii) and (iv); ERISA section 716(c)(7)(A)(v), (B)(iii) and (iv); and PHS Act section 2799A-1(c)(7)(A)(v), (B)(iii) and (iv).
225
Congressional Budget Office, Estimate for Divisions O Through FF, H.R. 133, Consolidated Appropriations Act, 2021, Public Law 116-260, Enacted on December 27, 2020. https://www.
cbo.gov/publication/56962.
226
Farber, Henry and Max Bazerman. “The General Basis of Arbitrator Behavior: An Empirical Analysis of Conventional and Final-Offer Arbitration.” The Econometric Society. Vol. 54(4)
(July 1986). https://www.jstor.org/stable/1912838.
227
Egan, Mark, Gregor Matvos, and Amit Seru. “Arbitration with Uniformed Consumers.” National Bureau of Economic Research. (October 2018). https://www.nber.org/system/files/working_
papers/w25150/w25150.pdf.

October 18, 2021 564 Bulletin No. 2021–42
Although the academic literature sug-
gests that the selection of an IDR entity is
unlikely to have a significant effect on the
IDR entity’s determination, the Depart-
ments explored options to minimize this
risk. The Departments considered alter-
native approaches, including whether the
Departments should consider the specific
fee of the certified IDR entity, or look to
other factors, such as how often the certi-
fied IDR entity chooses the amount clos-
est to the QPA. However, looking to how
often the certified IDR entity chooses the
amount closest to the QPA could unfairly
penalize certified IDR entities that have
correctly handled decisions when there
is credible information clearly demon-
strating that the QPA is materially differ-
ent from the appropriate out-of-network
rate. Using this as a factor in assigning
certified IDR entities could incentivize
decisions that do not adequately take into
account the other factors set forth in the
statute and these interim final rules, even
when there is credible information clearly
demonstrating that the QPA is materially
different from the appropriate out-of-net-
work rate. Moreover, the consideration
of other factors may encourage plans,
issuers, FEHB carriers, or providers and
facilities, to decline to agree to a particu-
lar certified IDR entity, thinking that the
Departments will favor certain criteria.
Given the cost controls applicable to the
certification process, it is unlikely that
the cost of a specific certified IDR entity
will be a significant factor in the inability
of the parties to choose a certified IDR
entity.
Thus, after carefully considering the
alternatives, the Departments have chosen
to use a random selection method to select
a certified IDR entity with a fee within the
allowed range. If there is an insufficient
number of certified IDR entities with a fee
within the allowed range available to arbi-
trate the case, the Departments will use a
random selection method to select a certi-
fied IDR entity that has received approval
from the Departments to charge a fee out-
side of the allowed range.
External Review
The Departments considered differ-
ent amendments to the regulations for
external review to address the scope
for non-grandfathered plans and issu-
ers in light of section 110 of the No
Surprises Act. Under the existing rules,
a claim is eligible for external review
under the Federal external review pro-
cess if it involves medical judgement.
The Departments note that the scope
of claims that are eligible for external
review in general is broad, as many
adverse benefit determinations involve
medical judgment. The examples the
Departments have provided of questions
involving medical judgement (described
in more detail earlier in the preamble)
include questions involving health care
setting, level of care, or effectiveness
of a covered benefit, whether treatment
involved “emergency care” or “urgent
care,” affecting coverage, and how a
claim is coded. The Departments note
that the state external review process
also extends to questions involving the
requirements for medical necessity,
appropriateness, health care setting,
level of care, or effectiveness of a cov-
ered benefit. The Departments are of the
view that many claims that result in an
adverse benefit determination involving
items and services subject to the surprise
billing and cost-sharing protections
under the No Surprises Act generally
would be eligible for external review
under the current scope as specified in
the 2015 final regulations. However,
as stated above, section 110 of the No
Surprises Act directs the Departments
to require the external review process
under PHS Act section 2719 to apply
with respect to any adverse determina-
tion by a plan or issuer under PHS Act
section 2799A-1 or 2799A-2, ERISA
section 716 or 717, or Code section
9816 or 9817, including with respect to
whether an item or service that is sub-
ject to such a determination is an item
or service to which the respective sec-
tion applies. The Departments are of
the view that it is important to ensure
that consumers can avail themselves of
external review in these situations and
ensure that they are afforded full pro-
tection against surprise medical costs
(including cost sharing), as intended
by the No Surprises Act. Accordingly,
these interim final rules amend the 2015
final rules to broaden the scope of exter-
nal review requirements and explicitly
require, to the extent not already cov-
ered, that any adverse determination
that involves consideration of whether
a plan or issuer is complying with
PHS Act section 2799A-1 or 2799A-2,
ERISA section 716 or 717, or Code sec-
tion 9816 or 9817 is eligible for external
review.
HHS considered certain other
approaches to furnishing good faith esti-
mates to uninsured (or self-pay) individ-
uals. HHS considered notification of the
availability of good faith estimates using
only broad outreach efforts and not, in
addition to, specifically requiring that
providers or facilities inform uninsured
(or self-pay) individuals of the avail-
ability of good faith estimates. However,
HHS is of the view that uninsured (or
self-pay) individuals are more acutely
aware of and concerned about health
care costs when engaging with providers
and facilities. Not requiring providers or
facilities to notify uninsured (or self-pay)
individuals of the availability of good
faith estimates would potentially deprive
uninsured (or self-pay) individuals of
the ability to avail themselves of these
important consumer protections under
the No Surprises Act.
HHS considered requiring good faith
estimates for each instance of a recurring
item or service with the same expected
charges. HHS is of the view that to do so
would unnecessarily increase the burden
on providers and facilities, particularly
for those items and services furnished
weekly or more than once per week,
without adding additional informational
value for the uninsured (or self-pay) indi-
vidual. HHS is of the view that, while
a single good faith estimate for certain
recurring items and services is sufficient,
establishing certain limitations is neces-
sary in order to confirm and periodically
evaluate the accuracy of the information
included in the good faith estimate. For
instance, HHS includes requirements that
limit the applicability of a good faith esti-
mate for recurring items and services to
no longer than 12 months. If additional
recurrences of furnishing such items or
services are expected beyond 12 months,
a convening provider or convening facil-

Bulletin No. 2021–42 565 October 18, 2021
ity must provide an uninsured (or self-
pay) individual with a new good faith
estimate.
HHS also considered requiring the
use of standardized notices for good faith
estimates issued to uninsured (or self-
pay) individuals. However, HHS is of the
view that requiring the use of such model
notices for good faith estimates would
not allow providers or facilities necessary
flexibilities to develop notices that would
be most effective for their patient popu-
lations.
HHS also considered basing the sub-
stantially in excess threshold as equal to
only a percentage of the expected charges
in the good faith estimate; however HHS
has concerns that such an approach
could make dispute resolution easier to
access for items or services where the
expected charges are small, which would
include circumstances where the differ-
ence between the billed charge and the
expected charges in the good faith esti-
mate is too small to justify the costs of
dispute resolution. Alternatively, when
the total expected charges in the good
faith estimate are very high, few items or
services could be subject to dispute res-
olution, despite significant unexpected
charges. HHS also considered other
approaches to defining the “substantially
in excess” standard, including setting it
as the lesser of a specific percentage of
the total expected charges in the good
faith estimate or a flat maximum dol-
lar amount, or based on a percentage of
the expected charges in the good faith
estimate that varies depending on the
expected costs of the items or service.
Although these approaches would mit-
igate some of the concerns discussed
previously and would make it easier for
higher cost items or services to meet the
substantially in excess threshold, these
approaches would increase concerns
that dispute resolution for lower cost
services could be overused, thus poten-
tially increasing costs for providers and
facilities and potentially increasing costs
for such items or services. As an alterna-
tive, HHS also considered an approach
for determining “substantially in excess”
based on an amount that is the greater of
either a percentage of the total amount of
expected charges in the good faith esti-
mate or a flat minimum dollar amount.
However, HHS remains concerned that
such an approach could effectively put
dispute resolution out of reach for unin-
sured (or self-pay) individuals in situa-
tions where the expected charges for the
item or service are high, particularly for
those who need to undergo more com-
plex procedures. Finally, HHS consid-
ered a tiered approach, either a flat dollar
amount that would increase as the total
expected charges in the good faith esti-
mate increases or a percentage that would
decrease as the total of expected charges
in the good faith estimate increases, but
HHS is of the view that such an approach
would add undue complexity and could
be confusing for uninsured (or self-pay)
individuals, providers, facilities, and
other stakeholders.
Lastly, HHS considered basing the
definition of “substantially in excess” on
billed charges that exceed a certain per-
centage for the same or similar services
using an independent database. However,
HHS is of the view that such a mechanism
is inconsistent with the statute which con-
templates items or services to be deter-
mined to be “substantially in excess”
based on the good faith estimate provided,
rather than being based on a specific
benchmark, such as that provided by an
independent database.
As HHS obtains additional experience
with the patient-provider dispute resolu-
tion process, HHS intends to review data
on the use of the dispute resolution pro-
cess and may propose adjustments to the
definition of “substantially in excess” in
the future.
HHS considered whether to base eligi-
bility for patient-provider dispute resolu-
tion on whether an individual item or ser-
vice listed on a good faith estimate is billed
an amount substantially in excess to the
expected charge in the good faith estimate.
However, HHS is concerned that such an
approach would add complexity as each
item or service on the good faith estimate
would need to be assessed separately for
eligibility. HHS also considered basing the
eligibility on the total of all billed charges
for all items or services and all providers
or facilities listed on the good faith esti-
mate, however such an approach would
be significantly more complex given that
the good faith estimate could consist of
estimates of multiple providers and facili-
ties who would bill the uninsured (or self-
pay) individual separately. This approach
could also potentially increase the burden
on the uninsured (or-self pay) individual
who would likely need to submit multiple
bills from multiple providers or facilities
for dispute resolution. Additionally, such
an approach could require a provider or
facility to respond to a notice requesting
additional documentation from an SDR
entity due to the billing of other providers,
even when the provider or facility did not
bill an uninsured (or self-pay) individual
an amount substantially in excess of the
good faith estimate. As a result, HHS is
of the view that it is appropriate to base
eligibility for dispute resolution on each
provider or facility listed on the good faith
estimate.
HHS considered not requiring co-pro-
viders or co-facilities that are not rep-
resented on a good faith estimate due to
replacing an original co-provider or co-fa-
cility that was represented in a good faith
estimate to be subject to the patient-pro-
vider dispute resolution process due to
not having provided estimates of expected
charges with which to base whether the
billed charges substantially exceed the
estimate. However, HHS is of the view
that such requirements should still apply
in these circumstances as they provide
important consumer protections that are
aimed to protect uninsured (or self-pay)
individuals from unexpected medical
bills, and allowing a replacement co-pro-
vider or co-facility to essentially circum-
vent these protections simply due to not
being directly represented on the good
faith estimate would weaken these con-
sumer protections.
HHS considered requiring the Fed-
eral IDR portal be used by an uninsured
(or self-pay) individual to initiate a
patient-provider dispute resolution pro-
cess rather than making the use of the Fed-
eral IDR portal optional. However, HHS
was concerned that such a requirement
could pose an unreasonable barrier for
uninsured (or self-pay) individuals, par-
ticularly those with limited or no access
to the internet.
HHS considered not providing a mech-
anism for the uninsured (or self-pay) indi-

October 18, 2021 566 Bulletin No. 2021–42
vidual to settle on a payment amount for
an item or service prior to an SDR entity
issuing a payment determination. How-
ever, HHS is of the view that providing
an opportunity for the uninsured (or self-
pay) individual and the provider or facil-
ity to come to terms on a payment amount
that is mutually agreeable for the parties
involved is appropriate as it can help
resolve payment disputes quickly without
the need for a determination by an SDR
entity. Such a process can also incentiv-
ize a provider or facility to accept a lower
payment amount or to provide financial
assistance to the uninsured (or self-pay)
individual.
HHS considered whether to allow the
SDR entity to have discretion to deter-
mine a payment amount lower than the
expected charges listed in the good faith
estimate. However, HHS is of the view
that such an approach would result in
less transparency and predictability for
the uninsured (or self-pay) individuals,
providers and facilities regarding the
outcomes of the patient-provider dispute
resolution process. Therefore, HHS is of
the view that the good faith estimate rep-
resents charges the uninsured (or self-pay)
individual would likely expect to pay for
the items or services, and as a result the
consumer protections established in the
patient-provider dispute resolution pro-
cess serve as an important backstop that
protects an uninsured (or self-pay) indi-
vidual from unexpected billed charges
that substantially exceed the good faith
estimate.
HHS considered allowing an SDR
entity to use a different standard for con-
ducting determinations, other than that
the information submitted by the pro-
vider must provide credible information
that the difference between the billed
charge and the expected charge for the
item or service in the good faith estimate
reflects the costs of a medically necessary
item or service and is based on unfore-
seen circumstances that could not have
reasonably been anticipated by the pro-
vider or facility when the good faith esti-
mate was provided. However, HHS is of
the view is that such an approach would
not align with the standard utilized in the
Federal IDR processes discussed in sec-
tion III of this preamble. This approach
would result in adding undue complexity
to the patient-provider dispute resolution
process and the use of a different stan-
dard from the Federal IDR process could
potentially lead to confusion for unin-
sured (or self-pay) individuals, providers
and facilities.
When an SDR entity determines that
the provider or facility has provided
credible information that the differ-
ence between the billed charge and the
expected charge for the item or service in
the good faith estimate reflects the costs
of a medically necessary item or service
and is based on unforeseen circumstances
that could not have reasonably been antic-
ipated by the provider or facility when the
good faith estimate was provided, HHS
considered requiring that the SDR deter-
mine that the payment amount be equal to
the billed charge, rather than the lesser of
the billed charge or the payment amount
for the same or similar services contained
on an independent database (or if appli-
cable, the good faith estimate). However,
HHS is concerned that such an approach
may increase the incentive for providers
and facilities to inflate their billed charges,
particularly in cases where the provider or
facility believes they can justify the billed
charges.
HHS considered not requiring an SDR
entity determination to be binding upon
the parties involved, in the absence of
a fraudulent claim or evidence of mis-
representation of facts presented to the
IDR entity involved. However, HHS was
concerned that not having the process be
binding could lead to a provider or facility
not abiding by the SDR entity determina-
tion and holding the uninsured (or self-
pay) individual liable for the entire billed
charge even if the SDR entity determined
that the uninsured (or self-pay) individual
pay a lower amount. HHS is of the view
that without making the determination
binding, the consumer protections estab-
lished in PHS Act section 2799B-7 would
be significantly diminished and that the
cost for administering the program may
outweigh the benefit.
HHS considered various approaches to
paying for the costs of the patient-provider
dispute resolution process. HHS consid-
ered requiring the uninsured (or self-pay)
individual to pay the patient-provider
dispute resolution costs (e.g. SDR entity
costs) in cases where the individual does
not prevail in dispute resolution. However,
such an approach could place a significant
burden on the uninsured (or self-pay) indi-
viduals, especially low-income individ-
uals. Such a requirement would also not
be in alignment with the requirements in
PHS Act section 2799B-7 that the admin-
istrative fee be set so as not to create a bur-
den to participation. HHS also considered
requiring the provider or facility to pay for
dispute resolution costs when the provider
or facility does not prevail. However, HHS
has concerns that such an approach would
impose a burden on the providers and
facilities and could potentially provide an
incentive for the providers and facilities to
increase the prices on uninsured (or self-
pay) individuals to account for potential
patient-provider dispute resolution costs
or avoid treating uninsured (or self-pay)
individuals altogether.
HHS considered using an open certifi-
cation process for SDR entities rather than
contracting with a limited number of SDR
entities that meet the certification require-
ments outlined in 45 CFR 149.620(d).
However, HHS is of the view that an open
certification process would increase the
administrative burden associated with cer-
tifying SDR entities and would not allow
for the same level of administrative over-
sight, monitoring, and audit potential as
opposed to contracting with the SDR enti-
ties directly.
HHS considered not providing a
mechanism to defer to a state that imple-
ments a parallel patient-provider dispute
resolution process that meets certain
minimum Federal requirements. How-
ever, such an approach would not allow
for states to establish processes which
meet Federal minimum standards that
are specifically tailored for the state’s
residents and providers and facilities in
the state. Allowing a state to establish a
process that meets or exceeds the Federal
minimum standards is also consistent
with other provisions of the No Surprises
Act such as allowing the application of a
state law to determine the total amount
payable to out-of-network providers and
facilities.
1.8. Uncertainty
It is unclear what percentage of partic-
ipants, beneficiaries, and enrollees expe-

Bulletin No. 2021–42 567 October 18, 2021
rience surprise billing. The frequency of
surprise billing may differ among small
and large health issuers.
Furthermore, among individuals who
experience surprise billing, the percentage
of claims that would be resolved by the
Federal IDR process is unclear. It is pos-
sible that some claims would be resolved
through early settlement before they pro-
ceed to the Federal IDR process. It is also
possible that some claims would be deter-
mined to be ineligible for the Federal IDR
process. While there is some data from
New York regarding these questions, it is
uncertain whether other states’ trends will
be similar to New York’s or whether New
York’s experience can be extrapolated to
other states.
Additionally, these interim final rules
permit multiple qualified IDR items and
services to be batched in a single pay-
ment determination to encourage effi-
ciency. In order for qualified IDR items
or services to be batched, they must
involve the same service code or com-
parable code under different procedural
systems. Batching by service code will
allow parties to group together qual-
ified IDR items and services that are
medically similar, promoting efficiency
by allowing the certified IDR entity to
consider similar qualified IDR items
and services, and more efficiently focus
on where the value of the qualified IDR
items or services is consistently materi-
ally different from the QPA. Addition-
ally, the Departments require batching
to be done by provider or group of pro-
viders, the same facility, or the same
provider of air ambulance services shar-
ing the same NPI or TIN. By allowing
groupings of providers with the same
TIN, this will allow group practices to
batch together qualified IDR items or
services. Due to the uncertainty sur-
rounding how often and how many
payment determinations will consider
batched items and services, the Depart-
ments acknowledge the high degree of
uncertainty around the estimates of how
many disputes will result in the Federal
IDR process each year.
Additionally, it is unclear how these
interim final rules will alter the experi-
ences of everyone involved in the health
care system, beyond the individuals and
entities that are involved in the Federal
IDR process. For example, research finds
that New York’s Out-of-Network law
228

reduced surprise billing by 34 percent
and lowered in-network emergency phy-
sician payments by 9 percent via shifting
the billing costs to emergency department
physicians who bill on an out-of-network
basis.
229
Research also finds that New
York’s Out-of-Network law increased the
incentive for physicians providing emer-
gency services to participate in health plan
networks.
230
It is unclear to what degree providers
and facilities may adjust their pricing
for items and services in order to pay
for the anticipated costs of providing
a good faith estimate. It also is unclear
if providers and facilities will provide
higher estimates than the amounts they
intend to charge in order to avoid the
patient-provider dispute resolution pro-
cess, and what impact this practice might
have on an individual’s decision to seek
necessary care. For example, some pro-
viders and facilities may overestimate
the costs for items or services, up-code
to a more expensive service, or add
additional unnecessary services, which
could circumvent the intended consumer
protections. These actions could impact
whether some patients defer or delay
needed care on the basis of perceived
costs or have a pathway to dispute bills
through the patient-provider dispute res-
olution process.
Among uninsured (or self-pay) indi-
viduals who receive billed charges that
are substantially in excess of the expected
charges in the good faith estimate, it is
unclear to what extent such bills will be
resolved using the patient-provider dis-
pute resolution process, or to what extent
such bills will be resolved in other ways
such as a settlement where the provider or
facility would offer a lower bill, discount,
or an offer of financial assistance.
Last, the Departments are uncertain
whether the policies adopted in these
interim final rules could ultimately lead
to inflation of health care costs or could
result in a reduction in uninsured (or self-
pay) individuals’ access to needed care.
One study, which examined the arbitra-
tion decisions in New Jersey, where billed
charges or usual and customary rates are
taken into consideration in the IDR pro-
cess, found that the median payments
awarded were 5.7 times higher than the
median in-network rates for the same ser-
vices. The study concluded that basing
arbitration decisions on provider-billed
charges would likely increase health care
costs.
231
In New York State, state guidance
directs arbiters to consider the 80
th
percen-
tile of billed charges and the New York
Department of Financial Services has
found that arbitration decisions resulted
in, on average, charges 8 percent higher
than the eightieth percentile of billed
charges.
232
By considering the offer closest
to the QPA and prohibiting certified IDR
entities from considering billed charges,
these interim final rules will likely limit
potential inflationary effects even if arbi-
tration leads to payment determinations
that are above the amounts plans and
issuers typically pay to in-network pro-
viders.
233
Thus, these interim final rules
may constrain inflationary effects, but the
degree to which they may do so is uncer-
tain.
228
NY Fin Serv L § 605 (2014).
229
Cooper, Z. et al., Surprise! Out-Of-Network Billing for Emergency Care in the United States, NBER Working Paper 23623, 2017, available at https://www.nber.org/papers/w23623.
230
New York State Department of Financial Services. “New York’s Surprise Out-Of-Network Protection Law Report on the Independent Dispute Resolution Process.” (September 2019).
https://www.pacep.net/assets/documents/NYReportontheIDRProcess.pdf.
231
Chartock, B. L., Adler, L., Ly, B., Duffy, E., & Trish, E. (2021). Arbitration over Out-Of-Network Medical Bills: Evidence from New Jersey Payment Disputes: Study Examines Arbitra-
tion Decisions to Resolve Payment Disputes Between Issuers and Out-Of-Network Providers in New Jersey. 40 Health Affairs 1, 130-137. https://www.healthaffairs.org/doi/abs/10.1377/
hlthaff.2020.00217.
232
Adler, Loren. “Experience with New York’s Arbitration Process for Surprise Out-of-Network Bills.” USC-Brookings Schaeffer on Health Policy. (October 2019). https://www.brookings.
edu/blog/usc-brookings-schaeffer-on-health-policy/2019/10/24/experience-with-new-yorks-arbitration-process-for-surprise-out-of-network-bills/.
233
Fielder, Matthew, Loren Adler, and Benedic Ippolito. “Recommendations for Implementing the No Surprises Act.” USC-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/.

October 18, 2021 568 Bulletin No. 2021–42
1.9. Conclusion and Summary of
Economic Impacts
The Departments are of the view that
these interim final rules will help ensure
that consumers are protected from unex-
pected out-of-network medical costs by
creating a process for plans, issuers, FEHB
carriers and nonparticipating providers,
facilities, and providers of air ambulance
services to resolve disputes regarding out-
of-network rates. These interim final rules
provide a market-based approach that will
allow these entities to agree upon reason-
able payment rates.
The Departments expect a significant
reduction in the incidence of surprise bill-
ing, potentially resulting in significant sav-
ings for consumers. There may be a poten-
tial transfer from providers, facilities, and
providers of air ambulance services to
the participant, beneficiary, or enrollee if
the out-of-network rate collected is lower
than what would have been collected had
the provider or facility balance billed the
participant, beneficiary, or enrollee. Over-
all, these interim final rules provide a
mechanism to effectively resolve disputes
between plans, issuers, and FEHB carriers
and providers and facilities, while protect-
ing patients.
HHS is of the view that the provisions
in these interim final rules will protect
uninsured (or self-pay) individuals from
surprise medical costs by allowing them
to obtain a good faith estimate of expected
charges from providers and facilities prior
to receiving scheduled items and services
and upon request. With this information,
uninsured (or self-pay) individuals may be
more likely to consider and compare costs
across providers or facilities prior to or
upon scheduling an item or service to help
inform decisions regarding costs for an
item or service. These benefits, however,
are predicated on the good faith estimate
being a reasonably predictive and accu-
rate document that can be understood by
patients and their representatives. Addi-
tionally, these interim final rules protect
these uninsured (or self-pay) individuals
by allowing an uninsured (or self-pay)
individual to seek a determination through
the patient-provider dispute resolution
process if actual billed charges for items
or services from a provider or facility are
substantially in excess of the expected
charges listed in the good faith estimate.
Moreover, HHS is of the view that unin-
sured (or self-pay consumers) will also
benefit from being able to take advantage
of the patient-provider dispute resolution
process as an intermediary step in resolv-
ing outstanding medical bills, which will
delay providers sending these outstanding
bills to collection agencies.
The patient-provider dispute resolu-
tion process further protects uninsured (or
self-pay) individuals as the process may
result in lower payments if an SDR entity
determines that information submitted
by a provider or facility does not provide
credible information that the billed charge
for an item or service reflects the costs
of a medically necessary item or service
and is based on unforeseen circumstances
that could not have reasonably been antic-
ipated by the provider or facility when
the good faith estimate was provided, in
which case the SDR entity must deter-
mine as the payment amount the expected
charge for the item or service (or in the
case of a new item or service, $0) to be
paid by the uninsured (or self-pay) indi-
vidual to the provider or facility.
The Departments estimate that these
interim final rules will impose incremental
costs of approximately $760.95 million in
the first year and $440.67 million in sub-
sequent years. Over 10 years, the asso-
ciated costs will be approximately $3.62
billion with an annualized cost of $517.12
million, using a 7 percent discount rate.
234

C. Paperwork Reduction Act
Contemporaneously with the publi-
cation of these interim final rules, the
Departments are each submitting a request
for a new ICR containing the information
collection requirements for the Federal
IDR process, and the patient-provider
dispute resolution process for HHS, cre-
ated by the No Surprises Act be processed
as an Emergency Clearance Request in
accordance with section 5 CFR 1320.13
of the Paperwork Reduction Act, Emer-
gency Processing. The Departments and
OPM have determined that it would be
impracticable and contrary to the public
interest to delay putting the provisions
in these interim final rules in place until
after a full public notice and comment
process has been completed. Although
this effective date may have allowed for
the regulations, if promulgated with the
full notice and comment rulemaking pro-
cess, to be applicable in time for the appli-
cability date of the provisions in the No
Surprises Act, this timeframe would not
provide sufficient time for the regulated
entities to implement the requirements.
To obtain a copy of the ICR go to https://
www.RegInfo.gov.
The Departments will be request-
ing approval of the emergency review
requests by the effective date of the
interim final rules. The Departments will
be seeking approval of the ICRs for 180
days, the maximum allowed for an ICR
approved using an emergency review. As
part of the emergency review request, the
Departments will be requesting that OMB
waive the notice requirement set forth in
5 CFR 1320.13(d). Once the emergency
submission is approved, the Departments
will initiate an ICR Revision, the process
required under the PRA to seek up to three
(3) years of approval for the information
collections. As part of the process, the
Departments and OPM will open a 60-day
and 30-day comment period for each ICR.
The Departments are particularly inter-
ested in comments that:
• Evaluate whether the collection of
information is necessary for the func-
tions of the Departments, including
whether the information will have
practical utility;
• Evaluate the accuracy of the Depart-
ments’ estimate of the burden of the
collection of information, including
the validity of the methodology and
assumptions used;
• Enhance the quality, utility, and clar-
ity of the information to be collected;
and
• Minimize the burden of the collection
of information on those who are to
respond, including use of appropriate
automated, electronic, mechanical, or
other technological collection tech-
234
The costs would be $4.19 billion over 10-year period with an annualized cost of $491.44 million, applying a 3 percent discount rate.

Bulletin No. 2021–42 569 October 18, 2021
niques or other forms of information
technology (for example permitting
electronically delivered responses).
Comments on these topics may also be
submitted to the Departments during the
open comment period for these interim
final rules. See the Addresses section in
this rule on where to send comments.
1. Labor Cost Estimates
TABLE 4: Wage Estimates
Occupation Title
Occupational
Code
Hourly Total
Compensation
($/hr)
Overhead Cost
($/hr.)
Total Hourly
Labor Costs
($/hour)
Secretaries and Administrative Assistants, Except
Legal, Medical, and Executive
43-6014$28.96$26.27$55.23
Lawyer
23-1011$105.28$35.68$140.96
Computer Programmers15-1251$67.62$46.15$113.77
Medical Secretaries and Administrative Assistants
43-6013$27.94$18.13$46.07
Human Resources Specialists13-1071$49.09 $42.74 $91.83
Business Operations Specialist
13-1198$59.60$41.72$101.32
General and Operations Manager
11-1021$88.25$34.30$122.55
Compensation and Benefits Manager11-3111$96.97 $24.81 $121.78
Computer and Information Systems Managers
11-3021$113.52$53.38$166.90
Medical and Health Services Manager
11-9110$83.39$21.62$105.01
Physician (all other)29-1228$154.74 $14.66 $169.40
All occupations00-0000$39.40 $ 24.92 $64.32
Group health plans, health insurance
issuers, and FEHB carries are responsi-
ble for ensuring compliance with these
interim final rules. Accordingly, in the
following ICR sections, the Departments
refer to costs on plans, issuers, and FEHB
carriers. However, it is expected that most
self-insured group health plans will work
with a TPA to meet the requirements of
these interim rules. The Departments rec-
ognize the potential that some of the larg-
est self-insured plans may seek to meet the
requirements of these interim final rules
in house and not use a TPA or other third
party, in such cases those plans will incur
the estimated burden and cost directly.
2. ICRs regarding IDR Process
for Nonparticipating Providers or
Nonparticipating Emergency Facilities
(26 CFR 54.9816-8T, 29 CFR 2590.716-
8, and 45 CFR 149.510)
As discussed in the Regulatory Impact
Analysis, the Departments estimate that
17,333 claims will be submitted as part of
the Federal IDR process each year.
The Departments estimate that 25 per-
cent of disputes will be resolved in open
negotiation before entering the Federal
IDR process. The Departments request
data or comments on this assumption.
Accordingly, the Departments estimate
that 23,111 claims will go through open
negotiation.
235
The Departments esti-
mate that it will take, on average, a med-
ical and health services manager 2 hours
to write each notice of open negotiation
and a clerical worker 15 minutes to pre-
pare and send the notice. The burden
for each plan, issuer, and FEHB carrier
would be 2.25 hours, with an equivalent
cost of approximately $224. As shown
in Table 5, for all 23,111 payment deter-
minations subject to these interim final
rules proceeding through the Federal
IDR process, the annual burden would
be 51,999 hours, with an associated
equivalent cost of $5.2 million.
236
The
open negotiation notice must be sent
within 30 business days beginning on
the day the provider or facility receives
an initial payment or a notice of denial
of payment from the plan or issuer
regarding such item or service. The
Departments assume that 5 percent of
these notices would be mailed and will
incur a printing cost of $0.05 per page
and $0.55 for postage. Thus, the mailing
cost is estimated to be $693.
237

235
This is calculated 17,333/ (1 - 0.25) = 23,111.
236
The burden is estimated as follows: 23,111 claims x 2 hours + 23,111 claims x 0.25 hour = 51,999 hours. A labor rate of $105.01 is used for a medical and health services manager and a
labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: 23,111 claims x 2 hours x $105.01 + 23,111 claims x 0.5 hour x $55.23 = $5,172,803.
Labor rates are EBSA estimates.
237
This is calculated 23,111 x 0.05 x ($0.05 + $0.55) = $693.

October 18, 2021 570 Bulletin No. 2021–42
TABLE 5: Annual Burden and Costs to Prepare and Send the Notice of Open Negotiation Process for Nonparticipating
Providers or Nonparticipating Emergency Facilities Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Mailing CostsTotal Estimated Cost
23,11151,999$5,172,803$693$5,173,496
The Departments estimate that it will
take 2 hours for a legal professional to
write the Notice of IDR Initiation and 15
minutes for a clerical worker to prepare
and send the initiating notice. The burden
for each plan, issuer, and FEHB carrier
would be 2.25 hours, with an equivalent
cost of approximately $224. As shown
in Table 6, for the 17,333 claims initiat-
ing the Federal IDR process, the annual
burden would be 38,999 hours, with an
annual equivalent cost estimate of $3.9
million.
238
The initiating party may fur-
nish the Notice of IDR Initiation to the
other party electronically if the initiating
party has a good faith belief that the elec-
tronic method is readily accessible by the
other party and the notice is provided in
paper form free of charge upon request;
the Departments assume that these notices
5 percent of notices would be mailed and
will incur a printing cost of $0.05 per page
and $0.55 for postage. Thus, the mailing
cost is estimated to be $520.
239

TABLE 6: Annual Burden and Cost to Prepare and Send the Notice of IDR Initiation for Nonparticipating Providers or
Nonparticipating Emergency Facilities Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Mailing and Printing
Costs
Total Estimated Cost
17,33338,999$3,879,602$520$3,880,122
If the parties to the Federal IDR pro-
cess agree on an out-of-network rate for a
qualified IDR item or service after provid-
ing notice to the Departments of initiation
of the Federal IDR process, but before the
certified IDR entity has made its payment
determination, the initiating party must
send a notification to the Departments and
to the certified IDR entity (if selected)
electronically through the Federal IDR
portal, in a form and manner specified by
the Departments, as soon as possible, but
no later than 3 business days after the date
of the agreement. This notification should
include the out-of-network rate for the
qualified IDR item or service and signa-
tures from authorized signatories for both
parties. The Departments assume that 1
percent of IDR payment determinations
will be resolved by an agreement on an
out-of-network rate after the Federal IDR
process has been initiated. The Depart-
ments request comment on this assump-
tion. The Departments estimate that it will
take, on average, a medical and health
services manager 30 minutes to write each
notice of open negotiation and a clerical
worker 15 minutes to submit the notice
to the Federal IDR portal. The burden for
each plan, issuer, and FEHB carrier would
be 45 minutes, with an equivalent cost of
approximately $66. As shown in Table
7, for the 173 payment determinations
resolved in this manner, the annual burden
would be 130 hours, with an associated
equivalent cost of $11,472.
240

TABLE 7: Annual Burden and Cost to Prepare and Send the Notice of Agreement on an Out-of-Network Rate Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Mailing and Printing
Costs
Total Estimated Cost
173130$11,472$0$11,472
If the plan, issuer, or FEHB carrier and
the nonparticipating provider or nonpar-
ticipating emergency facility select a cer-
tified IDR entity, or if they fail to select a
certified IDR entity, they must notify the
Departments of their selection no later
than 1 business day after such selection or
failure to select. To the extent the non-ini-
tiating party does not believe that the Fed-
eral IDR process applies, the non-initiat-
ing party must also provide information
that demonstrates the lack of applicability
238
The burden is estimated as follows: 17,333 claims x 2 hours + 17,333 claims x 0.25 hours = 38,999 hours. A labor rate of $105.01 is used for a medical and health services manager and
a labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: 17,333 claims x 0.25 hours x $105.01 + 17,333 claims x 2 hours x $55.23 =
$3,879,602. Labor rates are EBSA estimates.
239
This is calculated 17,333 x 0.05 x ($0.05 + $0.55) = $520.
240
The burden is estimated as follows: 17,300 claims x 1 percent x 0.5 hours + 17,300 claims x 1 percent x 0.25 hours = 130 hours. A labor rate of $105.01 is used for a medical and health
services manager and a labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: 17,300 claims x 1 percent x 0.5 hours x $105.01 + 17,300
claims x 1 percent x 0.25 hours x $55.23 = $11,472. Labor rates are EBSA estimates.

Bulletin No. 2021–42 571 October 18, 2021
by the same date that the notice of selec-
tion or failure to select must be submitted.
The Departments estimate that in 75
percent of IDR payment determinations,
a certified IDR entity will be selected by
the disputing parties. The Departments
request comments on this assumption.
Additionally, the Departments assume that
it will take 1 hour for a legal professional
to write the notice and 15 minutes for a
clerical worker to prepare and send the
notice. The burden for each plan, issuer,
and FEHB carrier would be 1.25 hours,
with an equivalent cost of approximately
$119. As shown in Table 8, for the 13,000
claims that will have a certified IDR
entity selected by the disputing parties,
the annual burden would be 16,250 hours,
with an annual equivalent cost estimate of
$1.5 million.
241
The Departments assume
that 5 percent of notices would be mailed
and will incur a printing cost of $0.05
per page and $0.55 for postage. Thus, the
mailing cost is estimated to be $390.
242

TABLE 8: Annual Burden and Cost to Select a Certified IDR Entity and Notify the Departments of Selection for
Nonparticipating Providers or Nonparticipating Emergency Facilities Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Mailing and Printing
Costs
Total Estimated Cost
13,00016,250$1,544,628$390$1,545,018
If the plan, issuer, or FEHB carrier
and the nonparticipating provider or non-
participating emergency facility fail to
select a certified IDR entity, the Depart-
ments will select a certified IDR entity
that charges a fee within the allowed
range of IDR entity costs (or has received
approval from the Departments to charge
a fee outside of the allowed range)
through a random selection method. The
Departments estimate that in 25 percent
of IDR payment determinations, a certi-
fied IDR entity will not be selected by the
parties.
Additionally, no later than 10 business
days after the date of selection of the cer-
tified IDR entity with respect to a payment
determination for a qualified IDR item or
service, the provider or facility and the
plan or issuer must submit to the certified
IDR entity an offer for a payment amount
for the qualified IDR item or service fur-
nished by such provider or facility though
the Federal IDR portal. The Departments
estimate for providers and issuers, it will
take an average of 2.5 hours for a medical
and health services manager to write the
offer and 30 minutes for a clerical worker
to prepare and send the offer. The burden
for each plan, issuer, and FEHB carrier
would be 3 hours, with an equivalent cost
of approximately $290. As shown in Table
9, for the 17,333 payment determinations
that will go through submission of offer,
the annual burden would be 103,998
hours, with an annual equivalent cost esti-
mate of $10.1 million.
243
The Departments
assume that 5 percent of notices would
be mailed and will incur a printing cost
of $0.05 per page and $0.55 for postage.
Thus, the mailing cost is estimated to be
$1,040.
244
TABLE 9: Annual Burden and Cost to Prepare and Submit Offer for Nonparticipating Providers or Nonparticipating
Emergency Facilities Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Mailing and Printing
Costs
Total Estimated Cost
17,333103,998$10,057,993$1,040$10,059,033
After the selected certified IDR entity
has reviewed the offer, the certified IDR
entity must notify the provider or facility
and the plan, issuer, or FEHB carrier of
the payment determination and the rea-
son for such determination, in a form and
manner specified by the Departments.
245

The cost of preparing and delivering this
notice is assumed to be included in the
certified IDR entity fee paid by the plan or
issuer, or provider or facility, to conduct
the review.
246
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 cred-
ible information that the certified IDR
entity determined demonstrated that the
241
The burden is estimated as follows: (13,000 claims x 75 percent x 1 hour) + (13,000 claims x 75 percent x 0.25 hours) = 16,250 hours. A labor rate of $105.01 is used for a medical and
health services manager and a labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: (13,000 claims x 75 percent x 0.25 hours x $105.01)
+13,000 claims x 75 percent x 1 hours x $55.23) = $1,544,628. Labor rates are EBSA estimates.
242
This is calculated 13,000 x 0.05 x ($0.05 + $0.55) = $390.
243
The burden is estimated as follows: (17,333 claims x 2.5 hours + 17,333 claims x 0.5 hours) + (17,333 claims x 2.5 hours + 17,333 claims x 0.5 hours) = 103,998 hours for providers and
issuers. A labor rate of $105.01 is used for a medical and health services manager and a labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calcula-
tion: (17,333 claims x 2.5 hours x $105.01 + 17,333 claims x 0.5 hours x $55.23) + (17,333 claims x 2.5 hours x $105.01 + 17,333 claims x 0.5 hours x $55.23) = $10,057,993. Labor rates
are EBSA estimates.
244
This is calculated (17,333 x 0.05 x ($0.05 + $0.55) + (17,333 x 0.05 x ($0.05 + $0.55) = $1,040.
245
IDR Payment Determination Notification (ERISA 716(c)(5)(A)).
246
Under Section 103 of the No Surprises Act, the party whose offer was not chosen by the certified IDR entity is responsible for paying the IDR entity’s fee.

October 18, 2021 572 Bulletin No. 2021–42
QPA was materially different from the
appropriate out-of-network rate, based
on the permitted considerations, with
respect to the qualified IDR item or ser-
vice. The cost of preparing and deliver-
ing this written decision is included in
the certified IDR entity fee paid by the
provider, facility, plan, issuer, or FEHB
carrier. When determining the out-of-net-
work rate, the certified IDR entity must
consider the QPA and must consider the
other statutory factors when a party pres-
ents credible information relating to those
factors clearly demonstrating the QPA is
materially different from the appropriate
out-of-network rate, or where the offers
are equally distant from the QPA but in
opposing directions.
Additionally, the selected certified
IDR entity must provide the payment
determination and the reasons for such to
the Departments. The Departments also
assume that the cost of preparing and
delivering this written decision is included
in the certified IDR entity fee paid by the
provider, facility, plan, issuer, or FEHB
carrier.
After a final determination, the cer-
tified IDR entity must maintain records
of all claims and notices associated with
the Federal IDR process for 6 years. The
certified IDR entity must store the docu-
ments in a manner necessary to meet the
requirements of these interim final rules.
The certified IDR entities must make such
records available for examination by the
plan, issuer, FEHB carrier, provider, facil-
ity, or state or Federal oversight agency
upon request, except where such disclo-
sure would violate state or Federal privacy
laws. The Departments assume it will take
30 minutes for a clerical worker to estab-
lish the records for each IDR payment
determinations. The burden for each certi-
fied IDR entity would be 30 minutes, with
an equivalent cost of approximately $28.
As shown in Table 10, for the maintenance
and recordkeeping of 17,333 claims, the
annual burden would be 8,667 hours, with
an annual equivalent cost burden estimate
of $0.5 million.
248
TABLE 10: Annual Burden and Cost for the Certified IDR Entity to Maintain Records for Nonparticipating Providers or
Nonparticipating Emergency Facilities Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Other CostsTotal Estimated Cost
17,3330$0$478,651$478,651
Summary
The total hour burden associated
with the Federal IDR process for hospi-
tal and emergency department claims is
211,376 hours with an equivalent cost of
$20,666,498. The total cost associated
with the Federal IDR process for hospi-
tal and emergency claims is $481,294.
Half of the burden associated with
the Federal IDR process for hospital
and emergency departments is esti-
mated to be allocated to health care
plans, issuers, and FEHB carriers, and
the other half is estimated be allocated
to health care providers and facilities.
As shown in Tables 11 through 13,
HHS, DOL, the Department of the Trea-
sury, and OPM share jurisdiction, HHS
will account for 45 percent of the bur-
den, or approximately, 95,119 hours at
an equivalent cost of $9,299,924 and a
cost burden of $216,582. DOL and the
Department of the Treasury will each
account for 25 percent of the burden,
or approximately 52,844 hours at an
equivalent cost of $5,166,624 and a cost
burden of $120,324. OPM will account
for 5 percent of the burden or approx-
imately 10,569 hours at an equivalent
cost of $1,033,325 and a cost burden of
$24,065.
TABLE 11: HHS Summary Annual Cost and Burden of IDR Process for Nonparticipating Providers or Nonparticipating
Emergency Facilities Starting in 2022
Estimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Mailing and
Printing Cost
Other Costs
Total Estimated
Cost
49,47795,119$9,299,924$1,189$215,393$9,516,506

TABLE 12: DOL and Department of the Treasury’s Summary Annual Cost and Burden of IDR Process for Nonparticipating
Providers or Nonparticipating Emergency Facilities Starting in 2022
Estimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Mailing and
Printing Cost
Other Costs
Total Estimated
Cost
27,48752,844$5,166,624$661$119,663$5,286,948
247
The burden is estimated as follows: (17,333 claims x 30 minutes) = 8,667 hours for providers and issuers. A labor rate of $55.23 is used for a clerical worker. The labor rates are applied in
the following calculation: (17,333 claims x 30 minutes x $55.23) = $478,651. Labor rates are EBSA estimates.

Bulletin No. 2021–42 573 October 18, 2021
TABLE 13: OPM’s Summary Annual Cost and Burden of IDR Process for Nonparticipating Providers or Nonparticipating
Emergency Facilities Starting in 2022
Estimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Mailing and
Printing Cost
Other Costs
Total Estimated
Cost
5,49710,569$1,033,325$132$23,933$1,057,390
3. ICRs Regarding Federal IDR Process
for Air Ambulance (26 CFR 54.9817-
2T, 29 CFR 2590.717-2, and 45 CFR
149.520)
According to the March 2019 Health
Insurance Coverage Bulletin, in 2018,
213.2 million individuals had private
health insurance.
248
In 2017, HCCI
estimated that, on average, there were
33.3 air ambulance uses per 100,000
people,
249
and the GAO estimated that
approximately 69 percent of air trans-
ports resulted in an out-of-network
bill.
250
The Departments do not have data
on what percent of out-of-network bills
will proceed to the Federal IDR process;
however, given the nature of air ambu-
lance services, the Departments assume
that the percentage will be substantially
higher than for hospital or emergency
department claims. The Departments
assume that 10 percent of out-of-network
claims for air transport will end up in the
Federal IDR process.
Accordingly, the government estimates
there will be 4,899 air ambulance service
claims submitted to the Federal IDR pro-
cess each year.
251
In these interim final rules, air ambu-
lance services are subject to the same
requirements for hospital and emergency
services in 26 CFR 54.9816-8T, 29 CFR
2590.716-8, and 45 CFR 149.510 (as
applicable), except that the items and ser-
vices for which the requirements of (b)(1)
of that section apply shall be understood
to be out-of-network air ambulance ser-
vices, and “qualified IDR items and ser-
vices” are understood to be air ambulance
services.
The Departments estimate that 4,899
air transport disputes will be handled by
the Federal IDR process each year, but
the Departments estimate that 25 per-
cent of disputes will be resolved in open
negotiation before entering the Federal
IDR process. Accordingly, the Depart-
ments estimate that 6,532 transport pay-
ment determinations will enter into open
negotiation.
252
The Departments estimate
that it will take an average of 2 hours for
a medical and health services manager to
write each notice of open negotiation and
15 minutes for a clerical worker to pre-
pare and send the notice. The burden for
each plan, issuer, and FEHB carrier would
be 2.25 hours, with an equivalent cost of
approximately $224. As shown in Table
14, for the 6,532 payment determinations
that will enter into open negotiation, the
annual burden would be 14,696 hours,
with an annual equivalent cost estimate
of $1.5 million.
253
The open negotiation
notice must be sent within 30 business
days beginning on the day the provider
of air ambulance services receives an
initial payment or a notice of denial of
payment from the plan, issuer, or FEHB
carrier regarding such item or service.
The Departments assume that 5 percent of
notices would be mailed and will incur a
printing cost of $0.05 per page and $0.55
for postage. Thus, the mailing cost is esti-
mated to be $196.
254
TABLE 14: Annual Burden and Costs to Prepare and Send the Notice of Open Negotiation Period for Providers of Air
Ambulance Services Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Mailing and Printing
Costs
Total Estimated Cost
6,53214,696$1,461,951$196$1,462,147
For the estimated 4,899 payment deter-
minations that are submitted to the Fed-
eral IDR process, the Departments esti-
mate that it will take 2 hours for a legal
professional to write the Notice of IDR
Initiation and 15 minutes for a clerical
worker to prepare and send the initiating
notice. The burden for each plan, issuer,
and FEHB carrier would be 2.25 hours,
with an equivalent cost of approximately
$224. As shown in Table 15, for the 4,899
payment determinations that will have
248
Employee Benefits Security Administration. “Health Insurance Coverage Bulletin.” (March 2019). https://www.dol.gov/sites/dolgov/files/EBSA/researchers/data/health-and-welfare/
health-insurance-coverage-bulletin-2019.pdf.
249
Hargraves, John and Aaron Bloschichak. “Air Ambulances-10-Year Trends in Costs and Use.” Health Care Cost Institute. (2019). https://healthcostinstitute.org/emergency-room/air-am-
bulances-10-year-trends-in-costs-and-use.
250
Government Accountability Office. “Air Ambulance: Available Data Show Privately-Insured Patients are at Financial Risk.” (2019). https://www.gao.gov/assets/gao-19-292.pdf.
251
The Departments estimate that of the 213.2 million individuals with employer-sponsored health insurance, 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 IDR. (213,200,000 x 0.000333 x 0.69 x 0.1= 4,899).
252
This is calculated as 4,899 / (1 - 0.25) = 6,532.
253
The burden is estimated as follows: 6,532 claims x 2 hours + 6,532 claims x 0.25 hours = 14,696 hours. A labor rate of $105.01 is used for a medical and health services manager and a
labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: 6,532 claims x 0.25 hours x $105.01 + 6,532 claims x 2 hours x $55.23 = $1,461,951.
Labor rates are EBSA estimates.
254
This is calculated 6,532 x 0.05 x ($0.05 + $0.55) = $196.

October 18, 2021 574 Bulletin No. 2021–42
selected a certified IDR entity, the annual
burden would be 11,022 hours, with an
annual equivalent cost estimate of $1.1
million.
255
The initiating party may fur-
nish the Notice of IDR Initiation to the
other party electronically if the initiating
party has a good faith belief that the elec-
tronic method is readily accessible by the
other party and the notice is provided in
paper form free of charge upon request.
The Departments assume that 5 percent of
notices would be mailed and will incur a
printing cost of $0.05 per page and $0.55
for postage. Thus, the mailing cost is esti-
mated to be $147.
256
TABLE 15: Annual Burden and Cost to Prepare and Send the Notice of IDR Initiation for Providers of Air Ambulance Services
Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Mailing and Printing
Costs
Total Estimated Cost
4,89911,022$1,096,463$147$1,096,610
If the parties to the Federal IDR pro-
cess agree on an out-of-network rate
for a qualified IDR item or service after
providing a Notice of IDR Initiation to
the Departments, but before the certified
IDR entity has made its payment deter-
mination, the initiating party must send
a notification to the Departments and to
the certified IDR entity (if selected) elec-
tronically through the Federal IDR por-
tal, in a form and manner specified by the
Departments, as soon as possible, but no
later than 3 business days after the date of
the agreement. This notification should
include the out-of-network rate for the
qualified IDR item or service and signa-
tures from authorized signatories for both
parties. The Departments assume that 1
percent of payment determinations will
be resolved by an agreement on an out-of-
network rate after the Federal IDR pro-
cess has been initiated. The Departments
request comment on this assumption. The
Departments estimate that it will take, on
average, a medical and health services
manager 30 minutes to write each notice
of open negotiation and a clerical worker
15 minutes to submit the notice to the
Federal IDR portal. The burden for each
plan, issuer, and FEHB carrier would be
45 minutes, with an equivalent cost of
approximately $66. As shown in Table
16, for the 49 payment determinations
resolved in this manner, the annual bur-
den would be 37 hours, with an associ-
ated equivalent cost of $3,249.
257

TABLE 16: Annual Burden and Cost to Prepare and Send the Notice of Agreement on an Out-of-Network Rate Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Mailing and Printing
Costs
Total Estimated Cost
4937$3,249$0$3,249
If the plan, issuer, or FEHB carrier
and the nonparticipating provider of
air ambulance services select or fail to
select a certified IDR entity, they must
notify the Departments of their selection
or failure to select a certified IDR entity
no later than 1 day after such selection
or failure. The Departments estimate
that in 75 percent of payment deter-
minations, a certified IDR entity will
be selected. The Departments request
comment on this assumption. Addition-
ally, the Departments assume that it will
take one hour for a legal professional
to write the notice and 15 minutes for a
clerical worker to prepare and send the
notice. The burden for each plan, issuer,
and FEHB carrier would be 1.25 hours,
with an equivalent cost of approximately
$119. Due to the tight turnaround, the
Departments assume this notice will be
sent electronically through the Federal
IDR portal. As shown in Table 17, for the
3,674 payment determinations that will
have a selected a certified IDR entity,
the annual burden would be 4,593 hours,
with an annual equivalent cost estimate
of $0.4 million.
258
The Departments
assume that 5 percent of notices would
be mailed and will incur a printing cost
of $0.05 per page and $0.55 for postage.
Thus, the mailing cost is estimated to be
$110.
259
255
The burden is estimated as follows: 4,899 claims x 2 hours + 4,899 claims x 0.25 hours = 11,022 hours. A labor rate of $105.01 is used for a medical and health services manager and a
labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: 4,899 claims x 0.25 hours x $105.01 + 4,899 claims x 2 hours x $55.23 = $1,096,463.
Labor rates are EBSA estimates.
256
This is calculated 4,899 x 0.05 x ($0.05 + $0.55) = $147.
257
The burden is estimated as follows: 4,899 claims x 1 percent x 0.5 hours + 4,899 claims x 1 percent x 0.25 hours = 37 hours. A labor rate of $105.01 is used for a medical and health services
manager and a labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: 4,899 claims x 1 percent x 0.5 hours x $105.01 + 4,899 claims x 1
percent x 0.25 hours x $55.23 = $3,249. Labor rates are EBSA estimates.
258
The burden is estimated as follows: (4,899 claims x 75 percent x 1 hour) + (4,899 claims x 75 percent x 0.25 hours) = 4,593 hours. A labor rate of $105.01 is used for a medical and health
services manager and a labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: (4,899 claims x 75 percent x 0.25 hours x $105.01) + (4,899
claims x 75 percent x 1 hours x $55.23) = $436,535. Labor rates are EBSA estimates.
259
This is calculated 3,674 x 0.05 x ($0.05 + $0.55) = $110.

Bulletin No. 2021–42 575 October 18, 2021
TABLE 17: Annual Burden and Cost to Select Certified IDR Entity and Notify the Departments of Selection for Providers of Air
Ambulance Services Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Mailing and Printing
Costs
Total Estimated Cost
3,6744,593$436,535$110$436,646
If the plan, issuer, or FEHB carrier and
the nonparticipating provider of air ambu-
lance services fail to select a certified IDR
entity, the Departments will select a certi-
fied IDR entity that charges a fee within
the allowed range of certified IDR entity
costs (or has received approval from the
Departments to charge a fee outside of the
allowed range if there are an insufficient
number of certified IDR entities) through
a random selection method. The range of
certified IDR entity fees and the admin-
istrative fee paid to the Departments by
the plan, issuer, or FEHB carrier and the
provider of air ambulance services will be
addressed in later guidance by the Depart-
ments. The Departments estimate that in
25 percent of IDR payment determina-
tions, a certified IDR entity will not be
selected by the parties.
Additionally, no later than 10 business
days after the date of selection of the cer-
tified IDR entity with respect to a determi-
nation for a qualified IDR item or service,
the provider of air ambulance services,
plan, issuer, or FEHB carrier must submit
to the certified IDR entity: (1) an offer for
a payment amount for the qualified IDR
item or service furnished by the provider
of air ambulance services, expressed both
as a dollar amount and as a percentage of
the QPA; and (2) information as requested
by the certified IDR entity relating to the
offer. With the information requested by
the certified IDR entity, the parties must
include: (A) the coverage area of the plan,
issuer, or FEHB carrier; the relevant geo-
graphic region for purposes of the QPA;
(B) whether the coverage is fully-insured
or fully or partially self-insured), if appli-
cable; and (C) the QPA. The parties may
also submit to the certified IDR entity any
information relating to the offer submitted
by either party, except that the information
may not include information on factors
described in paragraph 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 Depart-
ments estimate for providers of air ambu-
lance services, issuers, plans, and FEHB
carriers, it will take an average of 2 hours
for a medical and health services man-
ager to write the offer and 15 minutes for
a clerical worker to prepare and send the
offer. The burden for each plan, issuer, and
FEHB carrier would be 2.25 hours, with an
equivalent cost of approximately $224. As
shown in Table 18, for the 4,899 claims that
will go through submission of offers, the
annual burden would be 22,044 hours, with
an annual equivalent cost estimate of $2.2
million.
260
The Departments assume that 5
percent of notices would be mailed and will
incur a printing cost of $0.05 per page and
$0.55 for postage. Thus, the mailing cost is
estimated to be $294.
261
TABLE 18: Annual Burden and Cost to Prepare and Submit Offer for Providers of Air Ambulance Services Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Mailing and Printing
Costs
Total Estimated Cost
4,89922,044$2,192,926$294$2,193,220
After the certified IDR entity has
reviewed the offer, the certified IDR entity
must notify the provider of air ambulance
services and the plan, issuer, or FEHB
carrier of the payment determination.
262

The cost of preparing and delivering this
notice is included in the $25 administra-
tive fee paid by the provider of air ambu-
lance services, plan, issuer, or FEHB car-
rier to conduct the review.
Certified IDR entities also need to
notify the provider of air ambulance ser-
vices and the plan, issuer, or FEHB car-
rier of the payment determination and the
written decision explaining such deter-
mination. If the certified IDR entity does
not choose the offer closest to the QPA,
the certified IDR entity’s written deci-
sion must include an explanation of the
credible information that the certified
IDR entity determined demonstrated that
the QPA amount was materially different
from the appropriate out-of-network rate,
based on the required considerations, with
respect to the qualified IDR item or ser-
vice.
Additionally, the certified IDR entity
must provide the payment determination
and the reasons for such determination to
the Departments. The Departments also
assume that the cost of preparing and
delivering this written decision is included
in the certified IDR entity fee paid by the
provider of air ambulance services, plan,
issuer, or FEHB carrier.
After a final determination, the cer-
tified IDR entity must maintain records
of all claims and notices associated with
the Federal IDR process for 6 years. The
260
The burden is estimated as follows: (4,899 claims x 2 hours + 4,899 claims x 0.25 hours) + (4,899 claims x 2 hours + 4,899 claims x 0.25 hours) = 22,044 hours for providers and issuers. A
labor rate of $105.01 is used for a medical and health services manager and a labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: (4,899
claims x 2 hours x $105.01 + 4,899 claims x 0.25 hours x $55.23) + (4,899 claims x 2 hours x $105.01 + 4,899 claims x 0.25 hours x $105.01) = $2,192,926. Labor rates are EBSA estimates.
261
This is calculated (4,899 x 0.05 x ($0.05 + $0.55)) + (4,899 x 0.05 x ($0.05 + $0.55))= $294.
262
IDR Payment Determination Notification (ERISA 716(c)(5)(A)).

October 18, 2021 576 Bulletin No. 2021–42
certified IDR entity must make such
records available for examination by
the plan, issuer, FEHB carrier, provider
of air ambulance services, or state or
Federal oversight agency upon request,
except where such disclosure would
violate state or Federal privacy laws.
The Departments assume it will take 30
minutes for a clerical worker to establish
the records for each determination under
the Federal IDR process necessary to
meet the requirements. The cost burden
for each certified IDR entity would be
30 minutes, with an equivalent cost of
approximately $28. As shown in Table
19, for the maintenance and recordkeep-
ing of 4,899 claims, the annual burden
would be 2,449 hours, with an estimated
annual equivalent cost burden of $0.1
million.
263
TABLE 19: Annual Burden and Cost for the Certified IDR Entity to Maintain Records for Providers of Air Ambulance Services
Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Other CostsTotal Estimated Cost
4,8992,499$0$135,278$135,278
Summary
The total hour burden associated with
the Federal IDR process for air ambu-
lance services is 52,392 hours with an
equivalent cost of $5,191,124. The total
cost burden associated with the Federal
IDR process for air ambulance services
is $136,025. Half of the burden associ-
ated with the Federal IDR process for
air ambulance services is estimated to be
allocated to health plans, issuers, or TPAs,
and the other half is estimated be allo-
cated to health care providers. The burden
associated with the Federal IDR process
for air ambulance services is assumed to
be shared by the Departments and OPM.
HHS is assumed to cover 45 percent of
the burden, while DOL and the Depart-
ment of the Treasury will each cover
25 percent of the burden and OPM will
cover 5 percent of the burden. As shown
in Table 20, the hour burden associated
with HHS requirements is estimated to be
approximately 23,576 hours at an equiv-
alent cost of $2,336,006. The total cost
burden associated with HHS requirement
is estimated to be $61,211. As shown in
Table 21, the hour burden associated with
DOL and the Department of the Treasury
requirements is estimated to be approxi-
mately 13,089 hours at an equivalent cost
of $1,297,781 each. The total cost burden
associated with DOL and the Department
of the Treasury requirement is estimated
to be $34,006. As shown in Table 22,
the hour burden associated with OPM
requirements is estimated to be approxi-
mately 2,620 hours at an equivalent cost
of $259,556 each. The total cost burden
associated with OPM requirement is esti-
mated to be $6,801.
Table 20: HHS Summary Cost and Burden of Federal IDR Process for Providers of Air Ambulance Services Starting in 2022
Estimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Mailing and
Printing Costs
Other Costs
Total Estimated
Cost
16,18823,576$2,336,006$336$60,875$2,397,217
Table 21: DOL and Department of the Treasury’s Summary Cost and Burden of Federal IDR Process for Providers of Air
Ambulance Services Starting in 2022
Estimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Mailing and
Printing Costs
Other Costs
Total Estimated
Cost
8,99313,098$1,297,781
$187$33,819
$1,331,787
Table 22: OPM’s Summary Cost and Burden of Federal IDR Process for Providers of Air Ambulance Services Starting in 2022
Estimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Mailing and
Printing Costs
Other Costs
Total Estimated
Cost
4502,620$259,556
$37$6,734
$266,357
263
The burden is estimated as follows: (4,899 claims x 30 minutes) = 2,449 hours for providers and issuers. A labor rate of $55.23 is used for a clerical worker. The labor rates are applied in
the following calculation: (4,899 claims x 30 minutes x $55.23) = $135,278. Labor rates are EBSA estimates.

Bulletin No. 2021–42 577 October 18, 2021
3. ICRs Regarding the Request
of Extension of Time Periods for
Extenuating Circumstances (26 CFR
54.9816-8T, 29 CFR 2590.716-8, and 45
CFR 149.510)
The Departments do not have data on
how often entities will request an exten-
sion; however, the Departments are of
the view that extenuating circumstances
will be rare. The Departments assume
that 100 plans, issuers, FEHB carriers,
health care and air ambulance service
providers, or facilities will annually
request an extension starting in 2022
by completing the “Request for Exten-
sion due to Extenuating Circumstances”
form and attesting that prompt action
will be taken to ensure the payment
determination under this section is made
as soon as administratively practical.
The Departments request comment on
how many entities are likely to make
such a request. The Departments esti-
mate that it will take a clerical worker
15 minutes to prepare and send the
notice. As shown in Table 23, the annual
burden would be 25 hours, with an asso-
ciated equivalent cost of $1,381.
264
The
Departments expect these requests to be
submitted through the Federal IDR por-
tal, and therefore have not estimated an
associated mailing cost.
TABLE 23: Annual Burden and Costs to Request an Extension of Times Periods for Extenuating Circumstances Starting in
2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Mailing CostsTotal Estimated Cost
10025$1,381$0$1,381
Summary
The total hour burden associated with
requests for extension is 25 hours with an
equivalent cost of $1,381. Half of the bur-
den is estimated to be allocated to health
plans, issuers, or TPAs, and the other half
is estimated be allocated to health care
providers. The burden is assumed to be
shared by the Departments and OPM.
HHS is assumed to cover 45 percent of the
burden, while DOL and the Department of
the Treasury will each cover 25 percent of
the burden and OPM will cover 5 percent
of the burden. As shown in Table 24, the
hour burden associated with HHS require-
ments is estimated to be approximately
11 hours at an equivalent cost of $621.
As shown in Table 25, the hour burden
associated with DOL and the Department
of the Treasury requirements is estimated
to be approximately 6 hours at an equiva-
lent cost of $345 each. As shown in Table
26, the hour burden associated with OPM
requirements is estimated to be approxi-
mately 1 hour at an equivalent cost of $69.
TABLE 24: HHS’s Annual Burden and Costs Request an Extension of Times Periods for Extenuating Circumstances Starting
in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Mailing CostsTotal Estimated Cost
4511$621$0$621

TABLE 25: DOL and Department of the Treasury’s Annual Burden and Costs to Request an Extension of Times Periods for
Extenuating Circumstances Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Mailing CostsTotal Estimated Cost
256$345$0$345

TABLE 26: OPM’s Annual Burden and Costs to Request an Extension of Times Periods for Extenuating Circumstances
Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Mailing CostsTotal Estimated Cost
51.25$69$0$69
264
The burden is estimated as follows: 100 requests x 0.25 hour = 25 hours. A labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: 100
requests x 0.25 hours x $55.23 = $1,381. Labor rates are EBSA estimates.

October 18, 2021 578 Bulletin No. 2021–42
5. ICRs Regarding IDR Entity
Certification and IDR Entity Monthly
Reporting (26 CFR 54.9816-8T, 29 CFR
2590.716-8, and 45 CFR 149.510)
An IDR entity must be certified under
standards and procedures set forth in guid-
ance promulgated by the Departments.
The Departments estimate that there will
be 50 entities that seek IDR certification.
To be certified as a certified IDR entity,
the entity will need to submit an application
through the Federal IDR portal, demonstrat-
ing that it meets the requirements described
in these interim final rules. An IDR entity
must provide written documentation to the
Departments regarding general company
information (such as contact information,
TIN, and website), as well as the applicable
service area in which the IDR entity intends
to conduct payment determinations under
the Federal IDR process. The IDR entity
must have (directly or through contracts or
other arrangements) sufficient arbitration
and claims administration, managed care,
billing and coding, medical, legal, and other
expertise, and sufficient staffing. The IDR
entity must also establish processes to ensure
against conflicts of interest, including to
attesting that such conflicts do not exist, as
defined under these interim final rules. The
IDR entity will also need to demonstrate
its financial stability and integrity. The cor-
responding paperwork (including 3 years
of financial statements) will be submitted
through the Federal IDR portal. Finally, each
IDR entity that the Departments certify must
enter into an agreement with the Depart-
ments. That agreement will include specified
provisions encompassed by these interim
final rules, including, but not limited to, the
requirements applicable to certified IDR
entities when making payment determina-
tions as well as the requirements for certifi-
cation and revocation (such as specifications
for wind down activities and reallocation of
certified IDR entity fees, where warranted).
The Departments estimate that on aver-
age it will take a medical and health ser-
vices manager 5.10 hours and a clerical
worker 15 minutes to satisfy the require-
ment. The burden for each IDR entity
would be 5.35 hours, with an equivalent
cost of approximately $548. As shown in
Table 27, for the 50 IDR entities that will
go through certification, this results in a
cost burden of $27,468 in the first year.
265
TABLE 27: One Time and Annual Burden and Costs to Certify and Recertify
Year
Estimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Other Costs
Total Estimated
Cost
2022500$0$27,468$27,468
2033100$0$2,343$2,343
2024100$0$2,343$2,343
3 Year Average23.330$0$10,718$10,718
TABLE 28: Annual Burden and Costs to Submit Administrative Fee Starting in 2022
Estimated Number
of IDR entities
participating
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Other CostTotal Estimated Cost
500$0$49,707$49,707
Upon selection of a certified IDR
entity, the certified IDR entity must submit
the administrative fee to the Departments
on behalf of patient and the provider or
facility. The Departments estimate that the
time required to complete the information
collection is estimated to average a cler-
ical worker 18 hours annually, including
the time to review instructions, search
existing data resources, gather required
data, and complete and review informa-
tion collection. As shown in Table 28, this
results in a cost burden of $49,707.
266
Certified IDR entities are required to be
recertified every 5 years. The Departments
estimate that on average one-fifth of certi-
fied IDR entities will need to be recertified
each year. Similar to the initial certification
process, the IDR entities must ensure the
processes are established and complete the
corresponding paperwork, including the
certification agreement, through the Fed-
eral IDR portal. The Departments estimate
that, on average, it will take a medical and
health services manager 2.10 hours and a
clerical worker 15 minutes to satisfy the
requirement. The burden for each certified
IDR entity would be 2.35 hours, with an
equivalent cost of approximately $224. As
shown in Table 30, for the 10 certified IDR
entities that will go through recertification,
this results in a cost burden of $2,238 in
subsequent years.
267
Table 29 summarizes
these costs over time.
265
The burden is estimated as follows: (50 IDR entities x 5.10 hours) + (50 IDR entities x 0.25 hours) = 268 hours. A labor rate of $105.01 is used for a medical and health services manager
and a labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: (50 IDR entities x 5.10 hours x $105.01) + (50 IDR entities x 0.25 hours x
$55.23) = $27,468.
266
The burden is estimated as follows: (18 hours x $55.23) = $994.14 each IDR entity. A labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calcu-
lation: (50 x 18 hours x $55.23) = $49,707. Labor rates are EBSA estimates.
267
The burden is estimated as follows: (50 IDR entities x 1/5 x 2.1 hours) + (50 IDR entities x 1/5 x 0.25 hours) = 24 hours. A labor rate of $105.01 is used for a medical and health services
manager and a labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: (50 IDR entities x 1/5 x 2.1 hours x $105.01) + (50 IDR entities x
1/5 x 0.25 hours x $55.23) = $2,343.

Bulletin No. 2021–42 579 October 18, 2021
TABLE 29: One Time and Annual Burden and Costs to Certify and Recertify
Year
Estimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Other Costs
Total Estimated
Cost
2022500$0$27,468$27,468
2033100$0$3,343$2,343
2024100$0$2,343$2,343
3 Year Average23.330$0$10,718$10,718
These interim final rules permit an
individual, provider, facility, provider of
air ambulance services, or group health
plan, health insurance issuer offering
group or individual health insurance
coverage, or FEHB carrier to petition
for a denial of a certification or a revoca-
tion of a certification with respect to an
IDR entity seeking certification or cer-
tified IDR entity for failure to meet cer-
tain requirements set forth in the interim
final rules. The Departments do not
have data on how often such a petition
might occur; however, the Departments
assume that such a petition will be a rare
occurrence. The Departments assume
that there will be 3 petitions each year,
and it will take on average a medical and
health services manager 2 hours and a
clerical worker 15 minutes to prepare
the petition. The burden for each IDR
entity seeking certification or certified
IDR entity would be 2.25 hours, with an
equivalent cost of approximately $224.
As shown in Table 30, for the three peti-
tions, this results in a cost burden of
$560.
268
TABLE 30: Annual Burden and Costs Associated with the Petition for Denial or Withdrawal of IDR Entity Certification
Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Other CostsTotal Estimated Cost
30$0$560$560
For each month, certified IDR entities
will be required to report information on
their activities to the Departments. The
required information will include the
number of Notices of IDR Initiation sub-
mitted to the certified IDR entity under the
Federal IDR process during the immedi-
ately preceding month; the number of such
Notices of IDR Initiation with respect to
which a final determination was made;
the size of the provider practices and the
size of the facilities submitting Notices of
IDR Initiation; the number of times the
payment amount determined or agreed to
exceeded the QPA, specified by items and
services; and the total amount of certified
IDR entity fees paid to the certified IDR
entity.
Additionally, for each Notice of IDR
Initiation, the certified IDR entity must
provide a description of the qualified IDR
items and services included with respect
to the Notice of IDR Initiation, including
the relevant billing and service codes; the
relevant geographic region for purposes
of the QPA; the amount of the offer sub-
mitted by the plan or issuer (as applicable)
and by the provider or facility (as appli-
cable) expressed as a dollar amount and
as a percentage of the QPA; whether the
offer selected by the certified IDR entity
was the offer submitted by the plan or
issuer (as applicable) or by the provider
or facility (as applicable); the amount
of the selected offer expressed as a dol-
lar amount and a percentage of the QPA;
the rationale for the certified IDR entity’s
decision; the practice specialty or type of
each provider or facility (as applicable)
involved in furnishing each qualified IDR
item or service; the identity for each plan
or issuer, and provider or facility, with
respect to the determination; and for each
determination, the number of business
days elapsed between selection of the cer-
tified IDR entity and the determination of
the out-of-network rate by the certified
IDR entity.
For each month, certified IDR entities
will be required to report information on
their activities to the Departments relating
to air ambulance services. The certified
IDR entities will be required to provide the
number of Notices of IDR Initiation sub-
mitted under the Federal IDR process that
pertain to air ambulance services during
the month submitted to the certified IDR
entity; the number of such Notices of IDR
Initiation with respect to which a final
determination was made; the number of
times the payment amount exceeded the
QPA; and the total amount of certified IDR
entity fees paid to the certified IDR entity
during the month that data was collected
with regard to air ambulance services.
With respect to each Notice of IDR Ini-
tiation involving air ambulance claims, the
certified IDR entity must also provide a
description of each air ambulance service,
the point of pick-up (as defined in 42 CFR
414.605) for which the services were pro-
vided, the amount of the offer submitted
268
The burden is estimated as follows: (3 IDR entities x 2 hours) + (3 IDR entities x 0.25 hours) = 6 hours. A labor rate of $105.01 is used for a medical and health services manager and a
labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: (3 IDR entities x 2 hours x $105.01) + (3 IDR entities x 0.25 hours x $55.23) = $560.

October 18, 2021 580 Bulletin No. 2021–42
by the group health plan, health insurance
issuer, or FEHB carrier and by the non-
participating provider of air ambulance
services expressed as a dollar amount and
a percentage of the QPA; whether the offer
selected by the certified IDR entity was
the offer submitted by such plan, issuer, or
FEHB carrier or by the provider or facil-
ity; the amount of the offer so selected
expressed as a dollar amount and a per-
centage of the QPA, including the ratio-
nale for the certified IDR entity’s deci-
sion; the air ambulance vehicle type; the
identity of the plan, issuer, FEHB carrier,
or provider of air ambulance services with
respect to such determination; and the
number of business days elapsed between
selection of the certified IDR entity and
the determination of the payment amount
by the certified IDR entity.
For each month, certified IDR entities
will be required to report the information
on their activity to the Departments. The
report will be submitted through the Fed-
eral IDR portal. The Departments estimate
it will take a medical and health services
manager 1 hour, on average, to prepare
the reports and a clerical worker 15 min-
utes to prepare and send the report to the
Departments each month. The burden for
each certified IDR entity would be 1.25
hours, with an equivalent cost of approxi-
mately $118. For the 600 IDR entities, the
annual burden would be 750 hours, with
an equivalent cost burden of $71,291 each
year.
269

TABLE 31: Annual Burden and Cost for the IDR Monthly Report Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Other CostsTotal Estimated Cost
60000$71,291$71,291
The certified IDR entities are
required, following the discovery of a
breach of unsecured IIHI, to notify of the
breach the provider, facility, or provider
of air ambulance services; the plan or
issuer; the Departments; and each indi-
vidual whose unsecured IIHI has been,
or is reasonably believed to have been,
subject to the breach, to the extent possi-
ble. The Departments estimate that three
certified IDR entities will have a breach
each year. In addition, the Departments
estimate that it will take a medical and
health services manager 1 hour, on
average, to handle the initial breach
and follow the required protocols, and
that it will take a general and opera-
tions manager 45 minutes, on average,
to ensure the protocol is executed and
adapt policies accordingly. The burden
for each certified IDR entity would be
1.75 hours, with an equivalent cost of
approximately $197. For the three cer-
tified IDR entities, this results in a cost
burden of $591 each year.
270
The Depart-
ments assume that 5 percent of notices
would be mailed and will incur a print-
ing cost of $0.05 per page and $0.55 for
postage. Thus, the mailing cost is esti-
mated to be $0.09.
271
The Departments
seek comment addressing the costs that
will be associated with these interim
final rules.
TABLE 32: Annual Burden and Cost for Breach Notification Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Mailing Costs Other CostsTotal Estimated Cost
30$0.09$591$591.09
Summary
In the first year, the total cost burden
associated with the IDR entity certifica-
tion process is $149,616. In subsequent
years, the total cost burden associated
with the IDR entity certification process
is $124,491. The three-year average cost
burden associated with the IDR entity cer-
tification is $132,866. The burden asso-
ciated with the IDR entity certification
is shared by HHS, DOL, the Department
of the Treasury, and OPM. As shown in
Tables 33 through 35, it is estimated that
45 percent of the burden will be accounted
for by HHS, 25 percent of the burden will
be accounted for by DOL and the Depart-
ment of the Treasury each, and 5 percent
will be accounted for by OPM. There-
fore, the cost burden associated with HHS
requirements is $67,327 in the first year
and $56,021 in subsequent years. The
three-year average cost burden associ-
ated with HHS requirements is $59,790.
The cost burden associated with each of
the DOL and the Department of the Trea-
sury requirements is $37,404 in the first
year and $31,123 in subsequent years. The
three-year average cost burden associated
with DOL and the Department of the
269
The burden is estimated as follows: (50 IDR entities x 1 hour x 12 reports annually) + (50 IDR entities x 0.25 hours x 12 reports annually) = 750 hours. A labor rate of $105.01 is used for
a medical and health services manager and a labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: (200 IDR entities x 1 hour x 12 reports
x $105.01) + (200 IDR entities x 0.25 hours x 12 reports x $55.23) = $71,291.
270
The burden is estimated as follows: (3 certified IDR entities x 1 hour) + (3 certified IDR entities x 0.75 hour) = 5 hours. A labor rate of $105.01 is used for a medical and health services
manager and a labor rate of $55.23 is used for a clerical worker. The labor rates are applied in the following calculation: (3 certified IDR entities x 1 hour x $105.01) + (3 certified IDR entities
x 0.75 hour x $122.55) = $591.
271
This is calculated 3 x 0.05 x ($0.05 + $0.55) = $0.09

Bulletin No. 2021–42 581 October 18, 2021
Treasury is $33,217 each. The cost bur-
den associated with OPM requirements
is $7,481 in the first year and $6,225 in
subsequent years. The three-year average
cost burden associated with OPM require-
ments is $6,643. The Departments seek
comment on the assumptions and calcula-
tions made in this ICR.
TABLE 33: HHS Summary Cost and Burden of IDR Entity Certification Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Other Costs Total Estimated Cost
305$0$0$59,790 $59,790

TABLE 34: DOL and the Department of the Treasury’s Summary Cost and Burden of IDR Entity Certification Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Other Costs Total Estimated Cost
1700$0
$33,217
$33,217

TABLE 35: OPM’s Summary Cost and Burden of IDR Entity Certification Starting in 2022
Estimated Number of
Responses
Total Annual Burden
(Hours)
Total Estimated Labor
Cost
Other Costs Total Estimated Cost
340$0$6,643 $6,643
ICRs Regarding Notice of the Right to
Good Faith Estimates for Uninsured (or
Self-Pay) Individuals (45 CFR 149.610)
Convening providers and facilities
are required under 45 CFR 149.610(b) to
inform uninsured (or self-pay) individuals
of the availability of good faith estimates
of expected charges. The notice regarding
the availability of good faith estimates for
uninsured (or self-pay) individuals must
be written in a clear and understandable
manner and made available in accessible
formats and in the language(s) spoken by
individual(s) seeking items and services
with such convening provider or conven-
ing facility. Additionally, the notice must
be prominently displayed (and easily
searchable from a public search engine),
on the convening provider’s or conven-
ing facility’s website, in the convening
provider’s or convening facility’s office,
and on-site where scheduling or questions
about the cost of items and services occur.
These ICRs estimate the information col-
lection burdens for three groups of pro-
vider types: (1) providers associated with
health care facilities, (2) individual physi-
cian practitioners, and (3) wholly physi-
cian-owned private practices. For all three
groups of providers, the ICRs apply the
same methodology to estimate the burden,
consisting of the following steps:
• Drafting notices informing uninsured
(or self-pay) individuals of their right
to receive a good faith estimate of
expected charges.
• Displaying the notices on the provid-
er’s website, in the provider’s office,
and on-site where scheduling or ques-
tions about the cost of items or ser-
vices occur.
• Posting a single page notice in at least
two prominent locations.
• Printing and materials costs for post-
ing notices.
Details about the requirements of the
steps that apply to all 3 provider groups
are described once for providers associ-
ated with health care facilities and apply
equally to the other two provider groups.
Any specific differences in estimating the
burden to comply with these requirements
are detailed for the specific provider
group below. HHS invites comment on
the assumptions and calculations made in
these ICRs.
Providers Associated with Health Care
Facilities
Unique to providers associated with
health care facilities, HHS assumes that
such providers will enter into agreements
with their associated health care facility
to provide notice of the availability of
good faith estimates of expected charges
to uninsured (or self-pay) individuals on
their behalf. HHS estimates that for each
health care facility it will take an aver-
age of 2 hours for a lawyer to draft an
agreement and a medical secretary and
administrative assistant 2 hours to pro-
vide electronic copies to all associated
convening providers to sign. As shown in
Table 36, this results in an equivalent cost
estimate of approximately $91,770,384 to
be incurred as one-time cost in 2021.
272

272
The burden is estimated as follows: 245,336 health care facilities x 2 hours = 490,672 hours. A labor rate of $140.96 is used for a lawyer. The labor rate is applied in the following calcu-
lation: 245,336 health care facilities x 2 hours x $140.96 = $69,165,125. 245,336 health care facilities x 2 hours = 490,672 hours. A labor rate of $46.07 is used for a medical secretary and
administrative assistant. The labor rate is applied in the following calculation: 245,336 health care facilities x 2 hours x $46.07 = $22,605,259. Therefore, 490,672 hours + 490,672 hours =
981,344 total burden hours and $69,165,125 + $22,605,259 = $91,770,381 total annual respondent time cost.

October 18, 2021 582 Bulletin No. 2021–42
HHS cannot estimate how many providers
will incur burden to sign the agreement,
but assumes the burden to providers will
be minimal; the use of electronic signa-
ture portals may reduce the burden to the
convening provider. In future years, this
agreement can be included in the contract
between the facilities and providers at no
additional cost.
TABLE 36: Estimated One-Time and Hour Burden for Providers Associated with Facilities to Enter into Agreements to Provide
Notice of Right to a Good Faith Estimate.
Year
Estimated Number
of Respondents
Estimated Number
of Responses
Burden Per
Response (Hours)
Total Burden
(Hours)
Total Estimated
Cost
2021245,336 245,336 4981,344$91,770,384
HHS assumes that the associated
facility will draft the notices informing
uninsured (or self-pay) individuals of
their right to receive a good faith esti-
mate of expected charges. Information
regarding the availability of good faith
estimates for uninsured (or self-pay)
individuals must be written in a clear and
understandable manner and made avail-
able in accessible formats and in the lan-
guage(s) spoken by individual(s) seek-
ing items and services with such conven-
ing provider. Additionally, the notices
must be prominently displayed on the
convening provider’s website, and in the
convening provider’s office, and on-site
where scheduling or questions about the
cost of items or services occur. Providers
may satisfy this requirement by utilizing
the language in the standard notice antic-
ipated to be issued by HHS. HHS esti-
mates that for each health care facility,
it will take an average of two hours for a
lawyer to read and understand the antic-
ipated notice and draft any additions in
clear and understandable language, a
medical secretary and administrative
assistant 30 minutes to prepare the docu-
ment for posting within the facility, and
a computer programmer 1 hour to post
the information on each providers’ web-
site on behalf of the facility. As shown
in Table 37, this results in an equivalent
cost of approximately $102,754,069 to
be incurred as a one-time cost in 2021.
273

TABLE 37: Estimated One-Time Cost and Hour Burden for Health Care Facilities (Including on Behalf of Health Care
Providers Associated with Health Care Facilities) to Draft and Post Notice of Good Faith Estimate
Year
Estimated
Number of
Respondents
Estimated
Number of
Responses
Burden Per
Response
(Hours)
Total
Burden (Hours)
Printing and
Materials Costs
Total Estimated
Cost
2021245,336245,3362.5858,676$25,752$102,754,069
273
The burden is estimated as follows: 245,336 health care facilities x 2 hours = 490,672 hours. A labor rate of $140.96 is used for a lawyer. The labor rate is applied in the following cal-
culation: 245,336 health care facilities x 2 hours x $140.96 = $69,165,125. 245,336 health care facilities x 0.5 hours = 122,668 hours. A labor rate of $46.07 is used for a medical secretary
and administrative assistant. The labor rate is applied in the following calculation: 245,336 health care facilities x 0.5 hours x $46.07 = $5,651,315. 245,336 health care facilities x 1 hours
= 245,336 hours. A labor rate of $113.77 is used for a computer programmer. The labor rate is applied to the following calculation: 245,336 health care facilities x 1 hour x $113.77=
$27,911,877. Therefore, 490,672 hours + 122,668 hours + 245,336 hours = 858,676 total burden hours. Additionally, one-time printing and material costs are estimated using the following
calculation: .05 X 2 pages X 245,336 impacted health care facilities = 25, 752 total one-time cost for printing and materials. The total respondent time costs are $69,165,125 + $5,651,315 +
$27,911,877 + $25,752 = $102,754,069.
HHS assumes that each health care
facility will post a single page document
in at least 2 prominent locations so unin-
sured (or self-pay) individuals are pro-
vided reasonable notice of their right to a
good faith estimate of expected charges.
A prominent location in the health care
facility may include patient appointment
check-in kiosks, reception front-desks,
patient appointment scheduling locations,
and where patients pay bills. The notices
should be drafted in clear and under-
standable language, shorter in length, and
printed in legible font size. HHS assumes
that each facility will incur a printing cost
of $0.05 per page and materials for a total
equivalent cost of $0.10. Hospitals may
have a greater number of posting locations
because of building size, therefore, HHS
anticipates that hospitals will post four
additional notices on average and incur an
additional cost of $0.20 each. This results
in a one-time equivalent cost of approxi-
mately $24,534 to all non-hospital health
care facilities and an overall one-time cost
of approximately $25,752 when including
hospitals.
HHS estimates that the one-time bur-
den for providers and facilities to enter into
agreements and for facilities to develop,
prepare, print, and post the notices and
update their respective websites will be
approximately 1,840,020 total burden
hours with an associated equivalent cost
of approximately $194,524,453, as shown
in Table 38.

Bulletin No. 2021–42 583 October 18, 2021
TABLE 38: Total Estimated One-Time Cost and Hour Burden for Health Care Facilities (Including on Behalf of Health Care
Providers Associated with Health Care Facilities) to Provide Notice of Right to a Good Faith Estimate
274
Year
Estimated
Number of
Respondents
Estimated
Number of
Responses
Burden Per
Response
(Hours)
Total Annual
Burden (Hours)
Printing and
Materials Costs
Total Estimated
Cost
2021 245,336245,3367.51,840,020$25,752$194,524,453
Individual Physician Practitioners
HHS estimates that 145,887 individ-
ual physician practitioners will incur
burden and cost to comply with this pro-
vision.
275
HHS estimates an average of 2
hours and 30 minutes for the individual
physician practitioner to read and under-
stand the provided notice and draft any
additions in clear and understandable
language and (for 80% of individual phy-
sician practitioners) a computer program-
mer one hour to post the information in
the provider’s website. HHS estimates
that the one-time burden for individual
physician practitioners to develop, pre-
pare, print, post the notices, and make
website updates will be approximately
481,426 total burden hours. This results
in an equivalent cost of approximately
$75,075,712.
276

HHS assumes that each individual
physician practitioner will incur a printing
cost of $0.05 per page and materials for a
total equivalent cost of $0.10. This results
in an annual one-time equivalent cost of
approximately $14,589 to all individual
physician practitioners.
HHS estimates that the annual one-
time burden for individual physician prac-
titioners to develop, prepare, print, post
the notices, and make website updates will
be approximately 481,426 total burden
hours with an associated equivalent cost
of approximately $75,075,712, as shown
in Table 39.
TABLE 39: Estimated One-Time Cost and Hour Burden for Individual Physician Practitioners to Draft and Post Notice of
Good Faith Estimate Notice
277
Year
Estimated Number of
Respondents
Estimated
Number of
Responses
Burden Per
Response
(Hours)
Total Annual
Burden
(Hours)
Printing and
Material Costs
Total Estimated
Cost
2021
145,887 (All
Physicians)
145,8872.5364,717$61,797,674
2021
116,709* (Additional
burden for Subset
of Physicians with
Websites)
116,709* 1116,709
-
$13,278,038
-Total3.5481,426-75,075,712**
* This is calculated as the sum of $61,797,674 (cost for all individual physician practitioners to draft notice of right to GFE) + $13,278,038 (cost for computer pro-
grammers to post notice of right to GFE on 80% of practitioners’ websites).
Total estimated cost of $75,075,712 includes burden for all individual physician prac-
titioners to draft the notice of right to GFE plus the additional burden for computer programmers to add the notice to the website for the subset (80 percent) of total
physicians that have websites, (80 percent of 145,887 = 116,709).
274
Estimated cost includes the sum of Table 28 and 29. It also includes computer programming cost to update health care facility websites with uninsured (or self-pay) individuals’ right to
the good faith estimate. Total printing and material costs for all health care facilities of $24,534 to all non-hospital health care facilities and an overall one-time cost of approximately $25,752
for hospitals.
275
In generating these estimates, HHS reviewed data from the American Medical Association (AMA) and Kaiser Family Foundation. See Kane C. Policy Research Perspectives Recent
Changes in Physician Practice Arrangements: Private Practice Dropped to Less than 50 Percent of Physicians in 2020. Accessed July 15, 2021. https://www.ama-assn.org/system/
files/2021-05/2020-prp-physician-practice-arrangements.pdf; Professionally Active Physicians. KFF. Published May 20, 2020. https://www.kff.org/other/state-indicator/total-active-physi-
cians/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22.
276
The burden is estimated as follows: 145,887 individual physician practitioners x 2.5 hours = 364,717 hours. A labor rate of $169.40 is used for a physician. The labor rate is applied to
the following calculation: 145,887 individual physician practitioners x 2.5 hours x $169.40 = $61,783,085..HHS assumes that 80 percent of individual physician practitioners have a website
resulting in 116,709 websites needed to be updated with good faith estimate notices. HHS assumes that the physician will pay a computer programmer to make the website update. The burden
is estimated as follows: 116,709 websites needing updates x 1 hour = 116,709 hours. A labor rate of $113.77 is used for a computer programmer. The labor rate is applied to the following
calculation: 116,709 websites needing updates x 1 hour x $113.77 = $13,278,038. Therefore, 364,717 hours + 116,709 hours = 481,426 total burden hours. The total annual respondent time
cost is $61,783,085 + $13,276,038 = $75,061,124Total printing and material costs are of $14,589. Therefore, $75,061,124 + $14,589 =$75,075,712.
277
HHS estimates that 80 percent (116,709) of individual physician practitioners have a website. Therefore, estimated cost includes computer programming cost to update individual physician
practitioners’ websites with uninsured (or self-pay) individuals’ right to good faith estimate. HHS assumes that each individual physician practitioner will incur a printing cost of $0.05 per
page and materials for a total equivalent cost of $0.10. Total printing and material costs of $14,589 are included.

October 18, 2021 584 Bulletin No. 2021–42
Wholly-Physician-Owned Private
Practices
HHS estimates that 120,525 wholly
physician-owned private practices will
incur burden and cost to comply with
this provision.
278
For each practice, HHS
estimates an average of 2 hours and 30
minutes for a general and operations man-
ager to read and understand the provided
notice and draft any additions in clear and
understandable language and a computer
programmer one hour to post the informa-
tion in the provider’s website. This results
in an equivalent cost of approximately
$50,650,005 to be incurred as a one-time
cost in 2021.
279
HHS assumes that each the wholly
physician-owned private practice will
incur a printing cost of $0.05 per page
and materials for a total equivalent cost of
$0.10. This results in a one-time equiva-
lent cost of approximately $12,052 to all
wholly physician-owned private practices.
HHS estimates that the annual one-
time burden for wholly physician-owned
private practices to develop, prepare,
print, and post the notices, and make
website updates will be approximately
421,837 total burden hours with an asso-
ciated equivalent cost of approximately
$50,650,005, as shown in Table 40.
TABLE 40: Estimated One-Time Cost and Hour Burden for Wholly Physician-owned Private Practices to Draft and Post Notice
of Good Faith Estimate Notice*
Year
Estimated
Number of
Respondents
Estimated
Number of
Responses
Burden Per
Response
(Hours)
Total Annual
Burden (Hours)
Material and
Printing Costs
Total Estimated
Cost
2021120,525120,5253.5421,837$12,052$50,650,005
280
* Estimated cost includes computer programming cost to update wholly physician-owned private practice website with uninsured (or self-pay) individuals’ right to a
good faith estimate. HHS assumes that each the wholly physician-owned private practice will incur a printing cost of $0.05 per page and materials for a total equiva-
lent cost of $0.10. Total printing and material costs of $12,052 are included.
Summary
HHS estimates that the one-time bur-
den for health care providers (including
providers associated with health care
facilities, individual physician practi-
tioners, and wholly physician-owned pri-
vate practices) and health care facilities to
provide notice of the right to a good faith
estimate of expected charges to uninsured
(self-pay) individuals will be approxi-
mately 2,743,283 total burden hours with
an associated equivalent cost of approxi-
mately $320,250,169
TABLE 41: Estimated Total One-Time Cost Related to Notice of Right to Good Faith Estimate*
Year
Estimated
Number of
Respondents
Estimated
Number of
Responses
Burden Per
Response
(Hours)
281
Total Annual
Labor Burden
(Hours)
Total Printing
and Material
Costs
Total Estimated
Cost
2021511,748511,74815.52,743,283$52,393$320,250,169
*Tables 38 through 40 are combined to estimate total amounts. This table presents a cumulative 15.5 hours of burden per response for summary purposes.
7. ICRs Regarding Requirements for
Provision of Good Faith Estimate of
Expected Charges upon Request of
Uninsured (or Self-pay) Individuals
and for Scheduled Items and Services
(45 CFR 149.610)
These interim final rules require a con-
vening provider or facility to provide a
good faith estimate of expected charges
to uninsured (or self-pay) individuals for
scheduled items and services and upon
request (45 CFR 149.610) including those
items or services furnished by a co-pro-
vider or co-facility in conjunction with the
primary items or services. HHS estimates
that approximately 3,498,942 uninsured
(or self-pay) individuals will be impacted
278
In generating these estimates, HHS reviewed data from the American Medical Association (AMA) and Kaiser Family Foundation. See Kane C. Policy Research Perspectives Recent
Changes in Physician Practice Arrangements: Private Practice Dropped to Less than 50 Percent of Physicians in 2020. Accessed July 15, 2021. https://www.ama-assn.org/system/
files/2021-05/2020-prp-physician-practice-arrangements.pdf; Professionally Active Physicians. KFF. Published May 20, 2020. https://www.kff.org/other/state-indicator/total-active-physi-
cians/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22
279
The burden is estimated as follows: 125,525 wholly physician-owned private practices x 2.5 hours = 301,312 hours. A labor rate of $122,55 is used for a general and operations manager.
The labor rate is applied to the following calculation: 120,525 wholly physician-owned private practices x 2.5 hours x $122.55 = $36,925,829. 120,525 wholly physician-owned private
practices x 1 hour = 120,525 hours. A labor rate of $113.77 is used for a computer programmer. The labor rate is applied to the following calculation: 120,525 wholly physician-owned private
practices x 1 hour x $113.77 = $13,712,123. Therefore, the total burden hours are 301,312 + 120,525 = 421,837 and the total equivalent costs are $36,925,829 + $13,712,123 = $50,637,952..
The printing and material costs are $12,052. Therefore, $50,637,952+ $12,052 = $50,650,005
280
301,312 + 120,525 = 421,837 and the total equivalent costs are $36,925,829 + $13,712,123 = $50,637,952. The printing and material costs are $12,052. Therefore, $50,637,952+ $12,052
= $50,650,005.
281
This includes the time for providers associated with health care facilities to enter into agreements with health care facilities to provide good faith estimates on their behalf.

Bulletin No. 2021–42 585 October 18, 2021
by this rule requirement.
282
A total of
511,748 providers associated with health
care facilities, individual physician prac-
titioners, and wholly physician-owned
private practices will incur the burden and
costs associated with generating a good
faith estimate.
283
HHS welcomes com-
ments on this estimate.
HHS estimates that it will take an
average of 30 minutes for a business
operations specialist to determine a
patient’s insurance status, orally inform
the patient of their right to receive a good
faith estimate of expected charges, and
provide an oral good faith estimate, if no
additional items and services are needed.
HHS assumes 1,749,471 (50 percent) of
uninsured (or self-pay) individuals fall
in this category. Therefore, the annual
equivalent cost estimate for provision
of good faith estimates where no addi-
tional items and services are needed is of
$88,628,201.
284
HHS estimates that it will take an
average of 30 minutes for a business
operations specialist to generate a good
faith estimate of expected charges fur-
nished by a co-provider and co-facility
for items and services to the convening
provider. Given that 1,749,471 (50 per-
cent) of uninsured (or self-pay) individu-
als require additional items and services,
same number (1,749,471) of claims will
be generated by co-providers or co-fa-
cilities. Therefore, the annual equivalent
cost estimate for good faith estimates
sent to convening providers by co-pro-
viders or co-facilities is $88,628,201.
285

HHS assumes that all communication
between convening provider and conven-
ing facility, and co-provider or co-facil-
ity will be done electronically. Thus, the
cost to generate a good faith estimate for
both cases where additional items and
services are needed and where no addi-
tional items and services are needed is
$354,512,803.
286
HHS estimates that it will take an aver-
age of 1 hour for a business operations
specialist to determine a patient’s insur-
ance status, inform uninsured (or self-
pay) individuals of their right to receive
a good faith estimate of expected charges,
and provide a good faith estimate, if addi-
tional items and services are needed. HHS
assumes 1,749,471 (50 percent) of unin-
sured (or self-pay) individuals fall in this
category. Therefore, the annual equivalent
cost estimate is $177,256,402.
287
Thus,
a total of $265,884,603 is estimated for
business operations specialists, when add-
ing the cost if no additional items and ser-
vices are needed ($88,628,201) to the cost
if additional items and services are needed
($177,256,402).
HHS estimates that approximately 90
percent of uninsured (or self-pay) indi-
viduals will receive a good faith estimate
of expected charges through the mail
that is 2 pages in length.
288
The remain-
ing 10 percent of uninsured (or self-pay)
individuals will receive the good faith
estimate via electronic correspondence;
costs are therefore accounted for in the
2 preceding paragraphs. HHS assumes
that each convening provider or facility
will incur a printing cost of $0.05 per
page and materials for a total equivalent
cost of $0.10 per good faith estimate.
Therefore, the annual equivalent cost
estimate for printing good faith estimates
is $314,905 for all health care providers
and health care facilities.
289

HHS assumes that 5% of uninsured
(or self-pay) individuals (i.e., 157,452
uninsured (or self-pay) individuals) will
request a mailed copy of their written
good faith estimate of expected charges
to a preferred location.
290
HHS assumes
that it will take an average of 15 minutes
for a medical secretary and administra-
tive assistant to print and mail the good
faith estimate to the uninsured (or self-
pay) individual. HHS estimates a post-
age cost of $0.55 per mailing. Therefore,
the annual equivalent cost estimate is
$1,900,057 to mail the good faith esti-
mate for all health care providers and
health care facilities.
291

282
The number is estimated as follows: 51,744,200 nonemergency elective procedures (surgical and non-surgical) performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes that
some uninsured populations will forego elective procedures because of costs. Therefore, a 30% decrease adjustment was included resulting in 3,332,326. HHS also assumes a 5% adjustment
for good faith estimate inquires only resulting in a final value of 3,498,942. See Squitieri, Lee et al. “Resuming Elective Surgery during Covid-19: Can Inpatient Hospitals Collaborate with
Ambulatory Surgery Centers?.” Plastic and reconstructive surgery. Global open vol. 9,2 e3442. 18 Feb. 2021, doi:10.1097/GOX.0000000000003442 (The study estimates 4,297,850 none-
mergency elective procedures (surgical and non-surgical) are performed each month. This value was multiplied by 12 months = 51,574,200. HHS adjusted by approximately one-third of one
percent to account annual increase in volume since study publication resulting in 51,744,200). See also KFF Health Insurance Coverage of the Total Population.
283
These estimates include the total number of health care facilities and health care providers from the preceding ICR Regarding Notice of Right to Good Faith Estimate.
284
The burden is estimated as follows: 1,749,471 uninsured (or self-pay) individuals in need of good faith estimates without items and services x 0.50 hours = 874,736 hours. A labor rate of
$101.32 is used for a business operations specialist. The labor rate is applied in the following calculation: 1,749,471 claims x 0.50 hours x $101.32 = $88,628,201.
285
The burden is estimated as follows: 1,749,471 uninsured individuals in need of good faith estimates with additional items and services x 0.50 hours = 874,736 hours. A labor rate of $101.32
is used for a business operations specialist. The labor rate is applied in the following calculation: 1,749,471 claims x 0.50 hours x $101.32 = $88,628,201.
286
The burden is estimated as follows: $88,628,201 + $177,256,402 + $88,628,201 = $354,512,803.
287
The burden is estimated as follows: 1,749,471 claims x 1 hour = 1,749,471 hours. A labor rate of $101.32 is used for a business operations specialist. The labor rate is applied in the fol-
lowing calculation: 1,749,471 claims x 1 hour x $101.32 = $177,256,402.
288
HHS assumes that the good faith estimate will be printed in 8.5” x 11” letter sized paper.
289
The estimate is calculated as follows: $0.05 cost per page x 2 pages x 3,149,048 uninsured (or self-pay) individuals who receive a written good faith estimate = $314,905.
290
An estimated 3, 149,048uninsured (or self-pay) individuals who receive a written good faith estimate x 5% =157,452 uninsured (or self-pay) individuals who request a mailed good faith
estimate of expected charges.
291
The burden is estimated as follows: 157,452 good faith estimates x 0.25 hours = 39,363 hours. A labor rate of $46.07 is used for a medical secretary and administrative assistant. The labor
rate is applied in the following calculation: 157,452 good faith estimates x 0.25 hours x $46.07 =$1,813,458. Therefore, 157,452 mailed good faith estimates x $0.55 postage cost = $86,599in
mailing costs + $1,813,458in annual respondent time cost = $1,900,057.

October 18, 2021 586 Bulletin No. 2021–42
TABLE 42: Estimated Annual Cost and Hour Burden per Response per Health Care Provider and Health Care Facility to
Accept and Fulfill Requests for Mailed Good Faith Estimates of Expected Charges (Mailing Costs Only)
Occupation Burden Hours per ResponseLabor Cost per HourTotal Mailing Cost per
Response
Medical Secretary and
Administrative Assistant
0.25$46.07$3.71
292
Total per Response0.25-$3.71

TABLE 43: Estimated Annual Cost and Hour Burden for All Health Care Provider and Health Care Facility to Accept and
Fulfill Requests for Mailed Good Faith Estimates of Expected Charges
Number of
Respondents
Number of
Responses
Burden Hours
per Respondent
Total Burden
Hours
Total Labor
Costs of
Reporting
Mailing CostTotal Annual
Cost
511,748157,4520.2539,363$1,813,458$86,599$1,900,057
293
Summary
HHS estimates the annual cost to a
convening provider or facility to pro-
vide a good faith estimate of expected
charges to uninsured (or self-pay) indi-
viduals for scheduled items and services
and upon requests between 2022-2024 to
be $356,727,765 (inclusive of printing,
materials, mailing costs) and total burden
hours of 3,538,305, as shown in Table 44.
HHS estimates the annual cost for
printing and materials to provide written
good faith estimates to uninsured (or self-
pay) individuals to be $314,905. The mail-
ing costs of good faith estimates to unin-
sured (or self-pay) individuals is $86,599
with an annual total burden hour esti-
mate of 39,363 hours and a total annual
respondent time cost of $1,813,458. This
estimate is included in the total cost of
$356,727,765. HHS invites comment on
the assumptions and calculations made in
this ICR.
TABLE 44: Annual Burden and Total Cost Related to Provision of Good Faith Estimates for Uninsured (or-Self-Pay)
Individuals (Labor, Printing, and Mailing)
Estimated
Number of
Respondents
Estimated
Number of
Responses
Burden Per
Response
(Hours)
Total Annual
Burden (Hours)
Total Annual
Respondent
Time Cost
Printing and
Mailing Costs
(Labor Cost
Included)*
Total Estimated
Cost
3,498,9423,498,9422.03,538,305$354,512,803$2,214,961$356,727,765**
* This is calculated as following: $314,905 in printing costs + $86,599 in mailing costs + $1,813,458 in estimated annual respondent time cost to mail good faith
estimate = $2,214,961. The Department assumes that it will take an average of fifteen minutes for a medical secretary and administrative assistant to print and mail
the good faith estimate to the uninsured (or self-pay) individual. The annual burden hours associated with printing and mailing a good faith estimate of expected
charges is 39,363 hours.
** The total estimated cost burden is the sum $88,628,201 (the GFE costs without co-providers or co-facilities) + $177,256,402 (the GFE costs with co-providers or
co-facilities) + 88, 628, 201 (the GFE costs to convening providers) + $2,214,961 (printing and mailing costs, including labor).
8. ICRs Regarding Patient-Provider
Dispute Resolution Process (45 CFR
149.620)
These interim final rules enable unin-
sured (or self-pay) individuals to initi-
ate a patient-provider dispute resolution
process if their final billed charges are in
excess of the expected charges by at least
$400 more than the amount listed in the
good faith estimate supplied by the pro-
vider or facility. HHS does not have data
on how many claims will be likely to result
in patient-provider dispute resolution. For
the estimates in this section, HHS relied
on the experience of New York State. In
2015-2018 New York State had 1,486 dis-
putes involving surprise bills submitted to
IDR, 31% of these disputes (457 in all)
were found ineligible for IDR for various
reasons including 8% (approximately 36
292
The cost per respondent is calculated as: $1,900,057 in medical secretary and administrative assistant annual respondent time cost to mail good faith estimate and mailing costs (printing
costs are already accounted for in preceding section) divided by 511,748 health care providers and health care facilities = $3.71 cost per respondent.
293
Therefore, 157,452 mailed good faith estimates x $0.55 postage cost = $86,599 in mailing costs + $1,813,458 in annual respondent time cost = $1,900,057.

Bulletin No. 2021–42 587 October 18, 2021
cases) due to enrollment in self-insured
plans.
294
For purposes of this analysis,
HHS assumes that going forward, New
York State will continue to see 40 IDR
cases each year involving surprise bills
for individuals enrolled with self-insured
plans. Accordingly, the Departments esti-
mate that there will be 26,659 claims that
result in patient-provider dispute resolu-
tion each year.
295

HHS estimates that it will take an
average of 2 hours for an uninsured (or
self-pay) individual or, if they use an
authorized representative, 1 hour for
their authorized representative to write,
prepare, and send the notice to initiate
the patient-provider dispute resolution to
the Secretary of HHS. HHS assumes that
uninsured (or self-pay) individuals will
self-represent in 90% of the cases, while
the remaining 10% will be represented by
the uninsured (or self-pay) individual’s
authorized representative, as allowed by
these interim final rules.
HHS assumes the authorized repre-
sentative will be a lawyer. Additionally,
HHS assumes that a small percentage of
uninsured (or self-pay) individuals or their
authorized representatives will be asked
to resubmit or send additional materials
to complete the initiation process. This
results in an annual equivalent cost esti-
mate of $3,789,694.
296
The patient-pro-
vider dispute resolution initiation notice
must be submitted to the Secretary of
HHS within 120 calendar days of receiv-
ing billed charges substantially in excess
of the good faith estimate. HHS assumes
for uninsured (or self-pay) individuals that
8,973 (34%) of initiation notices, includ-
ing those that need to be resubmitted with
additional materials, will be sent electron-
ically and 17,419 (66%) of the initiation
notices, including those that need to be
resubmitted with additional materials
will be mailed with an associated print-
ing and materials and postage costs of
$12,193.
297,298
To facilitate communication
between parties and compliance with this
notice requirement, HHS is concurrently
issuing a model notice that the parties may
use to satisfy the patient-provider dispute
resolution initiation notice requirement.
HHS will consider timely use of the model
notice in accordance with the accompa-
nying instructions to satisfy the notice
requirement.
These interim final rules require the
SDR entity to attest to the Secretary of
HHS whether a conflict of interest exists
with the uninsured (or self-pay) individ-
ual, provider, or facility. HHS assumes
that it will take an average of one hour for
a general and operations manager and one
hour for a lawyer to determine whether a
conflict of interest exists. HHS assumes
all communication will be done electron-
ically. This results in annual equivalent
cost estimate of $7,024,811, as shown in
Table 45.
299
TABLE 45: Estimated Annual Cost and Hour Burden Related to Attestation of Conflict of Interest with a Patient-Provider
Dispute Resolution Initiation Notice
Estimated Number of
Respondents
Estimated Number of
Responses
Burden Per Response
(Hours)
Total Annual Burden
(Hours)
Total Estimated Cost
26,65926,659253,317$7,024,811
These interim final rules also require
the selected SDR entity to review eligi-
bility and completeness of the initiation
notice and notify uninsured (or self-pay)
individuals, providers or facilities of the
SDR entity’s selection to conduct dispute
resolution. Providers and facilities are
thereafter required to furnish additional
information to the SDR entity within 10
business days after receiving notification
of SDR entity selection. This informa-
tion must include: (1) a copy of the good
faith estimate provided to the uninsured
(or self-pay) individual for the items or
services under dispute; (2) a copy of the
294
See https://www.dfs.ny.gov/system/files/documents/2019/09/dfs_oon_idr.pdf
295
The number is estimated as follows: 51,744,200 nonemergency elective procedures (surgical and non-surgical) performed annually x 9.2% uninsured rate = 4,760,466. HHS assumes that
some uninsured (or self-pay) individuals will forego elective procedures because of costs. Therefore, a 30% decrease adjustment was included resulting in 3,332,326. HHS assumes that 10%
of uninsured (or self-pay) individuals who undergo a nonemergency elective procedure will receive a billed charge that is $400 or greater more than the total expected charges listed in the
good faith estimate, therefore 3,332,326 x 10% = 333,233. HHS assumes that 8% will engage the provider-patient dispute resolution process, therefore 333,233 x 8% = 26,659.
296
The burden is estimated as follows: 26,659 x 90% = 23,993 uninsured (or self-pay) individuals will self-represent. 23,993 x 2 hours = 47,986 hours. A labor rate of $64.32 is used for
uninsured (or self-pay) individuals (all occupations). The labor rate is applied in the following calculation: 23,993 claims x 2 hours x $64.32 = $3,086,427. HHS assumes that uninsured (or
self-pay) individual will appoint an authorized representative in 10% of cases. .26,659 x 10% = 2,666 claims represented by an authorized representative. HHS assumes approximately 15%
of uninsured (or self-pay) individuals will need to resubmit or submit additional materials to initiate IDR, either themselves or through their authorized representative. Therefore, the burden
estimate is calculated as follows: 23,993 claims x 10% = 2,399 resubmitted claims by individual x 2 hours x $64.32 (labor rate) = $129,899. 2,666 claims x 5% = 133 resubmitted claims by
authorized representative x 1 hour x $140.96 (labor rate) = $18,789. The total annual respondent time cost estimates are added as follows: $3,086,472 + $375,785 + $308,647 + $18,789 =
$3,789,694. The total burden hours are 55,584.
297
HHS assumes that the average initiation notice sent via mail by uninsured (or self-pay) individuals will be three pages in length and printed on 8.5” x 11” sized paper. HHS assumes a
$0.05 cost in printing and materials cost per page and $0.55 in postage cost. Therefore, $0.05 cost per page x 3 pages x 17,419 mailed initiation notices (inclusive of notices that needed to be
resubmitted) = $2,613 in printing and material costs. The postage costs are calculated as $0.55 cost per postage x 17,419 mailed initiation notices = $9,580 in postage cost. The total printing
and materials and postage costs are therefore $2,613 + $9,580 = $12,193
298
According to data from the National Telecommunications and Information Agency, 34% of households in the United States accessed health records or health insurance online. https://www.
ntia.doc.gov/blog/2020/more-half-american-households-used-internet-health-related-activities-2019-ntia-data-show
299
The burden is estimated as follows: 26,659 claims x 1 hour = 26,659 hours. A labor rate of $122.55 is used for a general and operations manager. The labor rate is applied in the following
calculation: 26,659 claims x 1 hour x $122.55 = $3,267,013. The burden for legal review is estimated as follows: 26,659 claims x 1 hour = 26,659 hours. A labor rate of $140.96 is used for a
lawyer. The labor rates are applied in the following calculation: 26,659 claims x 1 hour x $140.96 = $3,757,798. The total annual response time cost estimates are added as follows: $3,267,013
+ $3,757,798 = $7,024,811The total burden hours are 53,317.

October 18, 2021 588 Bulletin No. 2021–42
bill provided to the uninsured (or self-
pay) individual for items or services under
dispute; and (3) documentation providing
evidence to demonstrate the difference
between the billed charge and the expected
charges in the good faith estimate reflects
a medically necessary item or service and
is based on unforeseen circumstances that
could not have reasonably been antici-
pated by the provider or facility when the
good faith estimate was provided. HHS
estimates that it will take an average of 1
hour for a general and operations manager
to address these requirements and send to
the SDR entity. This results in an annual
equivalent cost estimate of $3,267,013.
300

These interim final rules require the
SDR entity to assess the information pro-
vided by the provider or facility accord-
ing to the standards described in 45
CFR 149.620(f) and discussed in section
VI.B.7 of the preamble. The SDR entity
must respond within 30 days after receipt
information from the provider or facility
to make determinations on charges to the
paid by the uninsured (or self-pay) indi-
vidual. HHS estimates that it will take an
average of 2 hours for a general and oper-
ations manager and 2 hours for a lawyer
to assess the merits of the submitted infor-
mation and determine a prevailing party.
This results in an annual equivalent cost
estimate of $14,049,622.
301
TABLE 46: Estimated Annual Burden to Assess the Submitted Information and Determine a Prevailing Party
Estimated Number of
Respondents
Estimated Number of
Responses
Burden Per Response
(Hours)
Total Annual Burden
(Hours)
Total Estimated Cost
26,65926,6594106,634$14,049,622
HHS estimates that it will take an aver-
age of 30 minutes for an SDR entity’s gen-
eral and operations manager to notify par-
ties of the IDR determination. This results
in an annual equivalent cost estimate of
$1,633,506.
302

The SDR entity must also submit the
administrative fee to the Secretary of
HHS on behalf of uninsured (or self-pay)
individuals. This burden includes time to
review instructions, search existing data
resources, gather data needed, and com-
plete and review information collection.
HHS estimates that the time required to
complete and submit this information col-
lection is estimated to average a clerical
worker 1.5 hours per month (or 18 hours
annually), with a total annual cost of
$2,982.42, as shown in Table 47.
303
HHS
estimates the total annual ongoing costs
associated with the implementation and
administration of the patient-provider dis-
pute resolution program, including system
maintenance, and program support, is esti-
mated to be 12.6 million this cost will be
offset by the collection of the $25 admin-
istrative fee, resulting in a total anticipated
collection of $655,475 and a total annual
cost to the Federal Government of $12
million.
TABLE 47: Estimated Annual Burden and Cost Related to SDR Submission of the Administrative fee to HHS.
Estimated Number of
Responses
Total Annual Burden
(1.5 hours x 12 months)
Annual Cost
Per IDR entity
Annual Cost for all Responses
318994.14$2,982.42
Summary
The total annual burden associated
with the patient-provider dispute resolu-
tion process for uninsured (or self-pay)
individuals and providers and facilities
is 255,524 hours with an equivalent cost
of $29,764,646, as shown in Table 48.
304

HHS invites comment on the assumptions
and calculations made in this ICR.
300
The burden is estimated as follows: 26,659 claims x 1 hour = 26,659 hours. A labor rate of $101.32 is used for a general and operations manager. The labor rate is applied in the following
calculation: 26,659 claims x 1 hour x $122.55 = $3,267,013. Total burden hours are 26,659 hours.
301
The burden is estimated as follows: 26,659 claims x 2 hours = 53,317 hours. A labor rate of $122.55 is used for a general and operations manager. The labor rate is applied in the following
calculation: 26,659 claims x 2 hours x $122.55 = $6,534,026. The burden for legal review is estimated as follows: 26,659 claims x 2 hours = 53,317 hours. A labor rate of $140.96 is used for a
lawyer. The labor rates are applied in the following calculation: 53,317 x 2 hours x $140.96 = $7,515,596. The total annual respond time cost estimates are calculated as follows: $6,534,026+
$7,515,596 = $14,049,622. The total annual burden hours are 106,634 hours.
302
The burden is estimated as follows: 26,659 claims x 0.50 hours = 13,329 hours. A labor rate of $122.55 is used for a general and operations manager. The labor rate is applied in the fol-
lowing calculation: 26,659 claims x 0.50 hours x $122.55 = $1, 633,506.
303
The burden is estimated as follows: A labor rate of $55.23 is used for a clerical worker. The labor rate is applied in the following calculation: 3 annual responses x 18hours x $55.23 =
$2,982.42.
304
The total estimated cost burden is the sum of $3,789,694 (the cost for uninsured or self-pay individuals and authorized representatives to write, prepare and send the initiation notice for
the patient-provider dispute resolution to the Secretary of HHS, including resubmission costs) + $7,024,811 (the cost for SDR entities to attest whether a Conflict of Interest exists with the
uninsured or self-pay individual, provider or facility) + $3,267,013 (the cost for uninsured or self-pay individuals and providers or facilities to furnish additional information to selected SDR
entities) + $14,049,622 (the cost for the SDR entity to carry out the dispute outcome analysis for uninsured or self-pay individuals and providers and facilities) + 1,633,506 (the cost for the
SDR entity to notify the parties of the SDR entity’s determination) = $29,764,646. These costs represent 13.5 burden hours.

Bulletin No. 2021–42 589 October 18, 2021
TABLE 48: Annual Burden and Cost Related to Patient-Provider Dispute Resolution Process for Uninsured (Self-Pay)
Individuals and Providers and Facilities
Estimated Number of
Respondents
Estimated Number of
Responses
Burden Per Response
(Hours)
Total Annual Burden
(Hours)
Total Estimated Cost
26,65926,65913.50255,524$29,764,646
9. ICRs Regarding Patient-Provider
Dispute Resolution Entity Certification
(45 CR 149.620))
An SDR entity contracted by HHS
must be certified under standards and pro-
cedures set forth in 45 CFR 149.620(d).
HHS estimates that there will be between
1 and 3 entities that HHS contracts with to
be an SDR entity.
To be an SDR entity, the entity will
need to establish the processes and com-
plete the corresponding paperwork. HHS
estimates that on average it will take a
general and operations manager 5 hours
and medical secretary and administrative
assistant 15 minutes to satisfy the require-
ment. As shown in Table 49, this result in
an equivalent cost burden of $1,554 in the
first year.
305
TABLE 49: Estimated First Year One-Time Cost Annual Burden and Cost Related to Patient-Provider SDR Entity Certification
Process Cost Related to Patient-Provider Dispute Resolution Process
Estimated Number of
Respondents
Estimated Number of
Responses
Burden Per Response
(Hours)
Total Annual Burden
(Hours)
Total Estimated Cost
335.2515.75$1,873
HHS estimates that on average one-
third of SDR entities (i.e., one of the
three contracted organizations) will need
to be recertified or reapproved, through
the contracting process, each year and
that on average it will take a general and
operations manager 2 hours and medical
secretary and administrative assistant 15
minutes to satisfy the requirement. This
results in an equivalent cost burden of
$257.
306

The total annual burden associated
with the SDR entity certification is 16
hours with an equivalent cost of $1,873.
In subsequent years, the total hour burden
associated with the SDR entity certifica-
tion or recertification is 2.25 hours with an
equivalent cost of $257. HHS will assess
whether the SDR entity’s meets the cer-
tification standards as discussed in sec-
tion VI.B.5. of this preamble as part of
contracting per the contract period. HHS
invites comment on the assumptions and
calculations made in this ICR.
TABLE 50: Annual Burden and Cost Related to SDR Entity Re-Certification Process
Year
Estimated Number
of Respondents
Estimated Number
of Responses
Burden Per
Response (Hours)
Total Annual
Burden (Hours)
Total Estimated
Cost
2023112.252.25$257
10. Summary
The total hour burden in the first six
months associated with the Federal IDR
process is 3,400,460 hours with an equiv-
alent cost burden of $366,082,073. The
total annual hour burden associated with
the Federal IDR process is 4,972,056
hours with an equivalent cost burden of
$518,688,160.
The Departments assume that half of
the burden associated with the required
notices will be allocated to plans, issuers,
and FEHB carriers and the other half of
the burden will be allocated to providers,
facilities, and providers of air ambulance
services. The burden of the plans, issu-
ers, and FEHB carriers will be allocated
toward the hour burden of DOL, the
Department of the Treasury, and OPM,
and the burden of the providers will be
allocated toward the hour burden of HHS.
The burden of IDR entities will be fully
allocated toward the cost burden.
305
The burden is estimated as follows: (3 SDR entities x 5 hours) + (3 SDR entities x 0.25 hours) = 15.75 hours. A labor rate of $101.32 is used for a general and operations manager and a
labor rate of $46.07 is used for a medical secretary and administrative assistant. The labor rates are applied in the following calculation: (3 SDR entities x 5 hours x $101.32) + (3 SDR entities
x 0.25 hours x $46.07) = $1,554.
306
The burden is estimated as follows: (1 SDR entities x 2 hours) + (1 SDR entities x 0.25 hours) = 2.25 hours. A labor rate of $122.55 is used for a general and operations manager and a
labor rate of $46.07 is used for medical secretary and administrative assistant. The labor rates are applied in the following calculation: (1 SDR entities x 2 hours x $122.55) + (1 SDR entities
x 0.25 hours x $46.07) = $257.

October 18, 2021 590 Bulletin No. 2021–42
The total annual hour burden in the
first six months associated with the Fed-
eral IDR process associated with HHS
requirements is estimated to be 3,327,917
hours with an equivalent cost burden of
$358,970,847. The total annual hour bur-
den is 4,826,970 hours with an equivalent
cost burden of $504,465,709.
The total annual hour burden in the first
six months associated with the Federal
IDR process associated with DOL require-
ments is estimated to be estimated to be
32,974 hours with an equivalent cost of
$3,232,375. The total annual hour burden
is 65,948 hours with an equivalent cost
burden of $6,464,751.
The total annual hour burden in the
first six months associated with the Fed-
eral IDR process for the Department of the
Treasury is estimated to be 32,974 hours
with an equivalent cost of $3,232,375.
The total annual hour burden is estimated
to be 65,948 hours with an equivalent cost
burden of $6,464,751.
The total annual hour burden in the
first six months associated with the Fed-
eral IDR process for OPM is estimated to
be 6,595 hours with an equivalent cost of
$646,475. The total annual hour burden
is estimated to be 13,190 hours with an
equivalent cost burden of $1,292,950.
In terms of the cost burden, the total
cost burden in the first six months asso-
ciated with the Federal IDR process is
$610,675. The first year associated with
the Federal IDR process is $1,206,242.
In subsequent years, the total cost burden
associated with the Federal IDR process is
$1,143,314. Thus, the 3-year average cost
burden is $1,164,290.
The Departments classify the burden
born by IDR entities and certified IDR
entities as a cost burden. For certification,
re-certification, and monthly reporting
requirements, 45 percent of the burden
will be allocated toward the cost burden
of HHS, while DOL and the Department
of the Treasury will each be allocated
25 percent of the burden, and OPM will
be allocated 5 percent of the burden. As
shown in Table 51, for HHS requirements,
the total cost burden associated with the
Federal IDR process in the first six months
is $392,214. The total cost burden in the
first year is estimated to be $784,429 and
in subsequent years, the total cost burden
associated with the Federal IDR process is
estimated to be $735,318. Thus, the 3-year
average cost burden associated with HHS
requirements is $751,688.
As shown in Table 52, for DOL
requirements, the total cost burden asso-
ciated with the Federal IDR process in
the first six months is $99,300. The total
cost burden in the first year is estimated
to be $191,734 and in subsequent years,
the total cost burden associated with the
Federal IDR process is estimated to be
$185,452. Thus, the 3-year average cost
burden associated with DOL requirements
is $187,546.
As shown in Table 52, for the Depart-
ment of the Treasury requirements, the
total cost burden associated with the Fed-
eral IDR process in the first six months
is $99,300. The total cost burden in the
first year is estimated to be $191,734 and
in subsequent years, the total cost burden
associated with the Federal IDR process is
estimated to be $185,452. Thus, the 3-year
average cost burden associated with the
Department of the Treasury requirements
is $187,546.
As shown in Table 53, for OPM
requirements, the total cost burden asso-
ciated with the Federal IDR process in
the first six months is $19,860. The total
cost burden in the first year is estimated to
$38,347 and in subsequent years, the total
cost burden associated with the Federal
IDR process is estimated to be $37,090.
Thus, the 3-year average cost burden asso-
ciated with OPM requirements is $37,509.
TABLE 51: HHS Summary Table
Year
Estimated
Number of
Respondents
Estimated
Number of
Responses
Burden Per
Response
(Hours)
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Total Estimated
Cost
20224,059,6104,103,3681.17634344,826,970$504,465,709$784,429
20234,059,6104,103,3681.17634344,826,970$504,465,709$735,318
20244,059,6104,103,3681.17634344,826,970$504,465,709$735,318
3 Year Average4,059,6104,103,3681.17634344,826,970$504,465,709$751,688

TABLE 52: DOL’s and Department of the Treasury’s Summary Table
Year
Estimated
Number of
Respondents
Estimated
Number of
Responses
Burden Per
Response
(Hours)
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Total Estimated
Cost
202222,25736,6751.798169765,948$6,464,751$191,734
202322,25736,6751.798169765,948$6,464,751$185,452
202422,25736,6751.798169765,948$6,464,751$185,452
3 Year Average22,25736,6751.798169765,948$6,464,751$187,546

Bulletin No. 2021–42 591 October 18, 2021
TABLE 53: OPM’s Summary Table
Year
Estimated
Number of
Respondents
Estimated
Number of
Responses
Burden Per
Response
(Hours)
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Total Estimated
Cost
202222,2575,9862.203453513,190$1,292,950$38,347
202322,2575,9862.203453513,190$1,292,950$37,090
202422,2575,9862.203453513,190$1,292,950$37,090
3 Year Average22,2575,9862.203453513,190$1,292,950$37,509
These paperwork burden estimates are
summarized as follows:
Agency: Centers for Medicare & Medic-
aid Services, Department of Health and
Human Services.
Type of Review: New collection.
Title: Surprise Medical Billing: Indepen-
dent Dispute Resolution
OMB Control Number: 0938-NEW
Affected Public: Businesses or other
for-profits; not-for-profit institutions.
Estimated Number of Respondents:
4,059,610
Estimated Number of Annual Responses:
4,103,368
Frequency of Response: Occasionally
Estimated Total Annual Burden Hours:
4,826,970 (3,327,917 during the first six
months)
Estimated Total Annual Burden Cost:
$751,688 ($392,214 during the first six
months)
Agency: Employee Benefits Security
Administration, Department of Labor.
Type of Review: New collection.
Title: Surprise Medical Billing: Indepen-
dent Dispute Resolution
OMB Control Number: 1210–New.
Affected Public: Businesses or other
for-profits; not-for-profit institutions.
Estimated Number of Respondents: 22,257
Estimated Number of Annual Responses:
36,675
Frequency of Response: Occasionally
Estimated Total Annual Burden Hours:
65,948 (32,974 during the first six months)
Estimated Total Annual Burden Cost:
$187,546 ($99,300 during the first six
months)
Agency: Internal Revenue Service,
Department of the Treasury.
Type of Review: New collection.
Title: Surprise Medical Billing: Indepen-
dent Dispute Resolution
OMB Control Number: 1545–New
Affected Public: Businesses or other
for-profits; not-for-profit institutions.
Estimated Number of Respondents: 22,257
Estimated Number of Annual Responses:
36,675
Frequency of Response: Occasionally
Estimated Total Annual Burden Hours:
65,948 (32,974 during the first six months)
Estimated Total Annual Burden Cost:
$187,546 ($99,300 during the first six
months)
Agency: Office of Personnel Management.
Type of Review: New collection.
Title: Surprise Medical Billing: Indepen-
dent Dispute Resolution
OMB Control Number: NEW
Affected Public: Businesses or other
for-profits; not-for-profit institutions.
Estimated Number of Respondents: 22,257
Estimated Number of Annual Responses:
5,986
Frequency of Response: Occasionally
Estimated Total Annual Burden Hours:
13,190 (6,595 during the first six months)
Estimated Total Annual Burden Cost:
$37,509 ($19,860 during the first six
months)
11. ICRs Regarding Internal Claims and
Appeals and External Review Require-
ments for Non- Grandfathered Plans and
Grandfathered Plans – Applicability (26
CFR 54.9815-2719, 29 CFR 2590.715-
2719, and 45 CFR 147.136)
The No Surprises Act extends the pro-
tections related to external reviews to
grandfathered plans. Grandfathered plans
must comply either with a state external
review process or a Federal review pro-
cess. The disclosure requirements of the
Federal external review process require:
(1) a preliminary review by plans of
requests for external review; (2) IROs to
notify claimants of eligibility and accep-
tance for external review; (3) the plan or
issuer to provide IROs with documenta-
tion and other information considered in
making adverse benefit determination; (4)
the IRO to forward to the plan or issuer
any information submitted by the claim-
ant; (5) plans to notify the claimant and
IRO if it reverses its decision; (6) the
IRO to provide notice of the final external
review decision to the claimant and plan;
and (7) the IRO to maintain records for six
years.
The Departments already have an
existing information collection on the
claim, appeals, and external review
requirements for non-grandfathered
plans (1210-0144). Due to these interim
final rules, the Departments have added
the burden associated with the external
review requirements for grandfathered
plans and non-grandfathered plans in
the information collection. The burden
associated with the additional standards
that non-grandfathered and grandfa-
thered ERISA-covered plans must meet
is shared equally between the Depart-
ment of Labor and the Department of
the Treasury. The burden associated with
the additional standards that non-grand-
fathered and grandfathered non-Federal
governmental plans and individual mar-
ket policies must meet is assigned to the
Department of Health and Human Ser-
vices.
The Departments estimate that there are
approximately 84.4 million participants in
self-insured ERISA-covered plans. Prior
to the interim final rules, the Departments
estimate that there are approximately 8.1
million participants in ERISA-covered
plans in the states which have no external
review laws or whose laws do not meet

October 18, 2021 592 Bulletin No. 2021–42
the Federal minimum requirements.
307

These estimates lead to a total of 92.5 mil-
lion participants. Among the 92.5 million
participants, 80.5 million participants in
non-grandfathered plans and 12 million
participants in grandfathered plans will
be required to be covered by the external
review requirement.
The Departments estimate that there
are approximately 1.3 external reviews for
every 10,000 participants
308
and that there
will be approximately 12,275 external
reviews annually. Experience from North
Carolina indicates that about 75 percent of
requests for external reviews are actually
eligible to proceed to an external review,
309

therefore it is expected that there will be
about 16,261 (12,275/0.7549) requests
for external review. In addition, a 2 per-
cent increase in the number of out-of-
networks claims was incorporated in the
estimate to capture the increase in burden
on non-grandfathered plans resulting from
the surprise billing and cost sharing pro-
tections of the external review.
As shown in Table 54, the hour bur-
den related to the preliminary review by
grandfathered and non-grandfathered
plans subject to ERISA of the request for
external review is estimated to be 4,0655
hours (16,261 * 0.25 hours) with an
equivalent cost of $373,303 (4,065 hours
* $91.83). The Departments assume that
plans have a human resources specialist
with a labor rate of $91.83. The human
resource specialist will spend an average
of 15 minutes for each of the requests, for
a plan to make an eligibility determina-
tion. Plans will already have conducted
internal reviews for eligible claimants;
therefore, the required information for
plans to make this determination should
be readily available. Additionally, plans
will incur material costs of $0.05 for
paper and printing and $0.55 for post-
age for each request for external review,
resulting in a cost of $9,756 (16,261 *
$0.60).
TABLE 54: Annual Burden and Cost for Plans to Conduct a Preliminary Review of the Request for the External Review
Starting in 2022
YearEstimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Other Costs
Total Estimated
Cost
202216,2614,065$373,303$9,756$383,060
Once an eligibility determination is
made, plans must provide the IRO with
all documentation and other informa-
tion considered in making an adverse
benefit determination. The Departments
assume that plans have clerical staff with
a labor rate of $55.23. The clerical staff
will spend an average of 5 minutes for
each of the requests for a plan to send
documentation to the IRO. As shown in
Table 55, for the 12,275 verified requests
for external review the hour burden for
grandfathered and non-grandfathered
plans is estimated as 1,023 hours (12,275
* 5 minutes), with an equivalent cost of
$56,494 (1,023 * $55.23). Additionally,
plans will incur material costs of $0.05
for each sheet of paper. The Departments
assume that each set of documentation
will be 20 pages. Plans will also incur a
cost of $0.55 for postage for each set of
documentation, resulting in a cost bur-
den of $19,026 (12,275 x $0.05 x 20 +
12,275 * $0.55). The Departments esti-
mate that this will cost, on average, $1.55
per claimant.
TABLE 55: Annual Burden and Cost for Plans to Provide the IRO with Documentation Starting in 2022
YearEstimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Other Costs
Total Estimated
Cost
202212,2751,023$56,494$19,026$75,519
IROs must also send each eligible
claimant a notice of eligibility and accep-
tance. The Departments assume that the
IRO has clerical staff with a labor rate
of $55.23 that will spend, on average
5 minutes per claimant preparing the
notice, and that IROs incur an average
cost of $0.60 to print and mail the notice.
As shown in Table 56, for the 12,275
verified requests for external review, the
cost burden for the clerical worker to
send the notice of eligibility and accep-
tance is estimated to be $56,493 (12,275
x 5 minutes x $55.23). Additionally,
IROs will incur material costs of $0.05
for each sheet of paper. The Departments
assume that each notice of eligibility and
acceptance will be 1 page. Plans will
also incur a cost of $0.55 for postage for
each set of documentation, resulting in a
cost of $7,365 (12,275 x $0.05 + 12,275
* $0.55). Thus, the total cost burden
relating to the notice of eligibility and
acceptance is $63,858.
307
These states are Alabama, Florida, Georgia, Pennsylvania, Texas, and Wisconsin. See Affordable Care Act: Working with States to Protect Consumers, available at https://www.cms.gov/
CCIIO/Resources/Files/external_appeals.html. https://www.cms.gov/CCIIO/Resources/Files/external_appeals.html
308
AHIP Center for Policy and Research, “An Update on State External Review Programs, 2006,” July 2008.
309
North Carolina Department of Insurance. “Health Insurance Smart NC: Annual Report on External Review Activity 2013.” https://digital.ncdcr.gov/digital/collection/p249901coll22/
id/730531.

Bulletin No. 2021–42 593 October 18, 2021
TABLE 56: Annual Burden and Cost for IROs to Send Notices of Eligibility and Acceptance Starting in 2022
YearEstimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Other Costs
Total Estimated
Cost
202212,2750$0$63,858$63,858
IROs are required to send to plans all
documents that claimants submit. The
Departments do not know what fraction
of claimants will submit additional doc-
umentation, but for purposes of this bur-
den analysis assume that half of claimants
(6,137) do. The Departments assume that
the IRO has clerical staff with a labor rate
of $55.23 that will spend, on average 5
minutes per claimant preparing and for-
warding the required documents, and that
IROs incur an average cost of $1.05 to
print and mail the documents. As shown
in Table 57, for the 6,137 verified requests
for external review, the cost burden for
the clerical worker to send the claimants’
documentation to the plans is estimated to
be $28,247 (6,137 x 5 minutes x $55.23).
Additionally, IROs will incur material
costs of $0.05 for each sheet of paper. The
Departments assume that such documen-
tation will be 10 pages. Plans will also
incur a cost of $0.55 for postage for each
set of documentation, resulting in a cost
of $6,444 (6,137 x $0.05 x 10 + 12,275 *
$0.55). Thus, the total cost burden relating
to preparing and forwarding the required
documents is $34,691.
TABLE 57: Annual Burden and Cost for IROs to Send Plans all Documents that Claimants Submit Starting in 2022
YearEstimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Other Costs
Total Estimated
Cost
20226,1370$0$34,691$34,691
IROs are required to provide the notice
of the final external review decision to
the claimant and plan. The Departments
estimate that preparing and sending the
notices for each of the 12,275 external
reviews will take IRO clerical staff, with
a labor rate of $55.23, on average 5 min-
utes per claimant, and that IROs will
incur an average cost of $1.05 to mail
the documents. As shown in Table 58, for
the 12,275 verified requests for external
review, the cost burden for the clerical
worker to send the notice is estimated to
be $56,494 (12,275 x 5 minutes x $55.23).
Additionally, IROs will incur material
costs of $0.05 for each sheet of paper. The
Departments assume that such documen-
tation will be 10 pages. Plans will also
incur a cost of $0.55 for postage for each
set of documentation, resulting in a cost of
$12,888 (12,275 x $0.05 x 10 + 12,275 *
$0.55). Thus, the total cost burden relating
to notifying the claimant and plan of the
final external review decision is $69,382.
TABLE 58: Annual Burden and Cost for IROs to Notify the Claimant and Plan of the Result of the Final External Review
Decision Starting in 2022
YearEstimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Other Costs
Total Estimated
Cost
202212,2750$0$69,382$69,382
IROs also are required to maintain
records of all claims and notices associ-
ated with the external review process for
six years. The Departments are of the view
that these documents would be retained as
a customary part of business, but estimate
that clerical staff will spend on average an
additional 5 minutes per claimant ensur-
ing all files are complete. As shown in
Table 59, for the 12,275 verified requests
for external review, the cost burden for the
clerical worker to maintain records is esti-
mated to be $56,494 (12,275 x 5 minutes
x $55.23).
TABLE 59: Annual Burden and Cost for IROs to Maintain Record of All Claims and Notices Starting in 2022
YearEstimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Other Costs
Total Estimated
Cost
202212,2750$0$56,494$56,494

October 18, 2021 594 Bulletin No. 2021–42
The Departments estimate that the
Federal external review process will result
in an hour burden of 5,088 hours with
an equivalent cost of $429,797 related
to external reviews. The cost burden of
approximately $253,207 annually. The
cost burden results from the cost associ-
ated with preparing and mailing required
notices and documents.
The Departments are not able to esti-
mate the number of reversals and the asso-
ciated notices to claimants and IROs that
plans would send due to reversing prior
decisions, but the Departments are of the
view that the number would be small.
The existing information collection had
an estimated hour burden of 1,394 hours
with an equivalent cost of $97,616 and an
estimated cost burden by $3,002,150.
In summary, the total burden asso-
ciated the information collection for
DOL and the Department of the Trea-
sury, including the existing collection, is
approximately 6,482 hours at an equiva-
lent cost of $527,413 annually. The cost
burden is approximately $3,255,357 annu-
ally. Because the burden is shared equally
between the DOL and the Department of
the Treasury, the DOL’s share is 3,241
hours at an equivalent cost of $263,706
annually. The DOL’s share of the cost bur-
den is $1,627,679 annually. The summary
of burden for DOL and the Department of
the Treasury’s information collection has
also been provided below.
TABLE 60: DOL and Department of the Treasury’s Summary Table
YearEstimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Other Costs
Total Estimated
Cost
2022381,8263,241$263,706$1,627,679 $1,891,385
2023381,8263,241$263,706$1,627,679 $1,891,385
2024381,826 3,241$263,706$1,627,679 $1,891,385
3 Year Average381,8263,241$263,706$1,627,679 $1,891,385
HHS estimates that there are approx-
imately 13.5 million individual market
enrollees and 19.3 million non-Federal
governmental plans enrollees.
310
These
estimates lead to a total of 32.8 million
total enrollees in individual market and
non-Federal Government plans. Among
the 32.8 million participants, 2.6 million
are in grandfathered plans and 30.1 mil-
lion are in non-grandfathered plans. HHS
also added a two percent increase in the
number of out-of-networks claims to cap-
ture the increase in burden on non-grand-
fathered plans resulting from the surprise
billing and cost sharing protections of the
external review resulting in an adjusted
total of 30.7 million for non-grandfathered
plans and an adjusted total of 33.3 million
for all individual market and non-Federal
Government plans.
HHS also estimates there are an esti-
mated 1.3 external reviews for every
10,000 participants and that there will
be approximately 4,337 total external
reviews annually for individual mar-
ket and non-Federal Government plans.
This amount includes 3,994 reviews for
non-grandfathered plans and 343 for
grandfathered plans. Experience from
North Carolina indicates that about 75 per-
cent of requests for external reviews are
actually eligible to proceed to an external
review, therefore it is expected that there
will be about 5,783 requests for exter-
nal review. This amount includes 5,326
requests for non-grandfathered plans and
457 requests for grandfathered plans.
HHS estimated the burden for the dis-
closure requirements of the Federal exter-
nal review process to align with the meth-
odologies used to calculate the amounts in
Tables 54 through 59. As shown in Table
61, HHS estimates that the disclosure
requirements will require 3,066 burden
hours that result in $222,224 in estimated
labor costs and $19,625 in other costs for
printing and mailing. The total estimated
updated burden for Federal external
review to individual market and non-Fed-
eral Government plans is $241,850. This
amount includes $222,729 in costs for
non-grandfathered plans and $19,121 for
grandfathered plans. The existing collec-
tion for HHS for Federal external review
is $128,876.
TABLE 61: HHS’ Summary Table New Collection Burden for Federal External Review
YearEstimated Number
of Responses
Total Annual
Burden (Hours)
Total Estimated
Labor Cost
Other Costs
Total Estimated
Cost
20225,7833,066$222,224$19,625$241,850
20235,7833,066$222,224$19,625$241,850
20245,7833,066$222,224$19,625$241,850
3 Year Average5,7833,066$222,224$19,625$241,850
310
Individual market data is based on data from MLR annual report for the 2019 MLR reporting year, available at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr. Non-federal
government plans data from Agency for Healthcare Research and Quality, Center for Financing, Access and Cost Trends. 2019 Medical Expenditure Panel Survey-Insurance Component.

Bulletin No. 2021–42 595 October 18, 2021
Summary of Burden
Type of Review: Revised Collection.
Agency: DOL–EBSA
Title: Affordable Care Act Internal Claims
and Appeals and External Review Proce-
dures for Plans
OMB Numbers: 1210-0144
Affected Public: Businesses or other
for-profits, Not-for-profit institutions.
Estimated Number of Respondents:
2,524,241
Estimated Number of Annual Responses:
381,826
Frequency of Response: Occasionally.
Estimated Total Annual Burden Hours:
3,241
Estimated Total Annual Burden Cost:
$1,627,679
Type of Review: Revised Collection.
Agency: Treasury – IRS
Title: Affordable Care Act Internal Claims
and Appeals and External Review Proce-
dures for Plans
OMB Numbers: 1545-2182
Affected Public: Businesses or other
for-profits, Not-for-profit institutions.
Estimated Number of Respondents:
2,524,241
Estimated Number of Annual Responses:
381,826
Frequency of Response: Occasionally.
Estimated Total Annual Burden Hours:
3,241
Estimated Total Annual Burden Cost:
$1,627,679
Type of Review: Revised Collection.
Agency: Centers for Medicare & Medic-
aid Services, Department of Health and
Human Services.
Title: Affordable Care Act Internal Claims
and Appeals and External Review Proce-
dures for Plans
OMB Numbers: 0938-1099
Affected Public: Businesses or other
for-profits, Not-for-profit institutions.
Estimated Number of Respondents: 5,783
Estimated Number of Annual Responses:
5,783
Frequency of Response: Occasionally.
Estimated Total Annual Burden Hours:
3,066
Estimated Total Annual Burden Cost:
$241,850
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) (RFA) imposes cer-
tain requirements with respect to Federal
rules that are (1) required to be published
as a notice of proposed rulemaking sub-
ject to the notice and comment require-
ments of the Administrative Procedure
Act (5 U.S.C. 553(b)) and (2) likely to
have a significant economic impact on a
substantial number of small entities. The
RFA generally defines a “small entity”
as (1) a proprietary firm meeting the size
standards of the Small Business Admin-
istration (SBA), (2) a not-for-profit orga-
nization that is not dominant in its field,
or (3) a small government jurisdiction
with a population of less than 50,000.
States and individuals are not included
in the definition of “small entity.” The
Departments use a change in revenues of
more than 3 to 5 percent as its measure
of significant economic impact on a sub-
stantial number of small entities.
These interim final rules are exempt
from the RFA because the Departments
were not required to publish a notice of
proposed rulemaking. Therefore, the RFA
does not apply and the Departments are not
required to either certify that the interim
final rules will not have a significant eco-
nomic impact on a substantial number of
small entities or conduct a regulatory flex-
ibility analysis. Nevertheless, the Depart-
ments carefully considered the likely
impact of the interim final rules on small
entities in connection with its assessment
of the interim final rules’ cost and benefits
under Executive Order 12866.
Table 58 summarizes the estimated
costs on small issuers, physicians, and
providers of air ambulance services. The
original analysis was based on a cost per
IDR payment determination basis. To
break down the cost to a per-entity basis,
the Departments assume that the distribu-
tion of per-entity costs is proportional to
annual receipts. The affected entities are
estimated based on the SBA’s size stan-
dards. The size standards applied for issu-
ers is North American Industry Classifica-
tion System (NAICS) 524114, for which
a business with less than $41.5 million in
receipts is considered to be small. The size
standard applied for physicians is NAICS
62111, for which a business with less than
$12.0 million in receipts is considered to
be small.
311
TABLE 62: Summary of Estimates Costs on Small Entities
Affected EntityAffected Small Entities
312
Aggregate Annual Cost for
Small Entities
313
Annual Cost per Entity
314
Issuer 132$714,065$5,410
Physicians
315
61,890$136,976,819$2,213
311
U.S. Small Business Administration. “Table of Size Standards.” (August 2019). https://www.sba.gov/document/support--table-size-standards.
312
For issuers, it is assumed that the size distribution across establishments is the same for issuers as their respective industry. For physicians, it is assumed that the size distribution across
employment is the same for physicians as the respective industry. For more information, refer to the
Affected Entities section in the Regulatory Impact Analysis.
313
To estimate the proportion of the total costs that would fall onto small entities, the Departments assume that the proportion of costs is proportional to the industry receipts. The Departments
are of the view that this assumption is reasonable, as the number of IDR payment determinations an entity is involved in 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, that physicians in small offices will incur 36.8 percent of total costs incurred by all physicians, and small providers of air ambulance services will incur 31.0 percent of total costs
incurred by all providers of air ambulance services. (See 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/susb/2017-susb-annual.html.)
314
The Annual Cost per Entity is calculated by dividing the estimated Aggregate Annual Cost for Small Entities by the Estimated Affected Small Entities.
315
The costs for physicians refers to the cost associated with each physician. The Departments estimate that 140,270 physicians, on average, bill on an out-of-network basis and will be
affected by these interim final rules, but the Departments do not have data on how many of the affected physicians are employed in small offices. This analysis is based on the number phy-
sicians affected, not the number of physician offices.

October 18, 2021 596 Bulletin No. 2021–42
The Departments do not have the same
level of data used in the table above the
air ambulance sub-sector and are of the
view that this sub-sector is likely to dif-
fer from the ambulance services industry
as a whole. In 2020, the total revenue of
providers of air ambulance services is
estimated to be $4.2 billion with 1,073
businesses in the industry.
316
This results
in an industry average of $3.9 million per
business. Accordingly, the Departments
are of the view that most providers of air
ambulance services are likely to be small
entities.
Additionally, this analysis also
excludes certified IDR entities and their
respective costs, as the Departments do
not have information on how many cer-
tified IDR entities are likely to be small
entities.
Consistent with the policy of the RFA,
the Departments seek comment regarding
the impact of these interim final rules on
small entities.
E. 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.
317

However, Section 202 of UMRA does not
apply to interim final rules or non-notice
rules issued under the ‘good cause’ exemp-
tion in 5 U.S.C. 553(b)(B).
318
For purposes
of the UMRA, this rule does not include
any Federal mandate that the Departments
expect to result in such expenditures by
state, local, or tribal governments.
F. Federalism Statement
Executive Order 13132 outlines fun-
damental principles of Federalism and
requires Federal agencies to adhere to
specific criteria when formulating and
implementing policies that have “substan-
tial direct effects” on the states, the rela-
tionship 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 the final rule.
In the Departments’ view, these interim
final rules have Federalism implica-
tions because they have direct effects on
the states, the relationship between the
national government and the states, or
the distribution of power and responsi-
bilities among various levels of govern-
ment. State and local government health
plans may be subject to the Federal IDR
process, where a specified state law does
not apply. Additionally, the No Surprises
Act authorizes states to enforce the new
requirements, including those related to
balance billing, with respect to issuers,
providers, facilities, and providers of air
ambulance services, with HHS enforcing
only in cases where the state has noti-
fied HHS that the state does not have the
authority to enforce or is otherwise not
enforcing, or HHS has made a determi-
nation that a state has failed to substan-
tially enforce the requirements. However,
in the Departments’ view, the Federalism
implications of these interim final rules
are substantially mitigated because the
Departments expect that some states will
have their own process for determining
the total amount payable under such a plan
or coverage for emergency services and to
out-of-network providers at in-network
facilities. Where a state has such a spec-
ified state law, the state law, rather than
the Federal IDR process, will apply. The
Departments anticipate that some states
with their own IDR process may want to
change their laws or adopt new laws in
response to these interim final rules. The
Departments anticipate that these states
will incur a small incremental cost when
making changes to their laws.
In general, ERISA section 514 super-
sedes state laws to the extent that they
relate to any covered employee bene-
fit plan, including covered group health
plans, and preserves state laws that reg-
ulate insurance, banking, or securities.
While ERISA prohibits states from reg-
ulating a plan as an insurance or invest-
ment company or bank, the preemption
provisions of ERISA section 731 and
PHS Act section 2724 (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 Affordable Care
Act) are not to be “construed to supersede
any provision of state law which estab-
lishes, implements, or continues in effect
any standard or requirement solely relat-
ing to health insurance issuers in connec-
tion with group health insurance coverage
except to the extent that such standard
or requirement prevents the application
of a requirement” of a Federal standard.
The conference report accompanying
HIPAA indicates that this is intended to
be the “narrowest” preemption of state
laws.
319
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 out-of-network providers at
in-network facilities, such state law will
apply, rather than the Federal IDR process
specified in these regulations.
In compliance with the requirement
of Executive Order 13132 that agencies
examine closely any policies that may
have Federalism implications or limit the
policy making discretion of the states, the
Departments have engaged in efforts to
consult with and work cooperatively with
affected states, including participating in
conference calls with and attending con-
ferences of the NAIC, and consulting with
state insurance officials on a state-by-state
basis. In addition, the Departments con-
sulted with the NAIC, as required by the
316
IBIS World. “Air Ambulance Service Industry in the US – Market Research Report.” (December 2020). https://www.ibisworld.com/united-states/market-research-reports/air-ambu-
lance-services-industry/.
317
2 U.S.C. 1501 et seq. (1995).
318
See OMB, Memorandum for the Heads of Executive Departments and Agencies, M-95-09, “Guidance for Implementing Title II of S.1,” 1995, available at https://www.whitehouse.gov/
sites/ whitehouse.gov/ files/ omb/ memoranda/ 1995-1998/ m95-09.pdf.
319
See House Conf. Rep. No. 104-736, at 205, reprinted in 1996 U.S. Code Cong. & Admin. News 2018.

Bulletin No. 2021–42 597 October 18, 2021
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 rule.
While developing these interim
final rules, the Departments and OPM
attempted to balance the states’ interests
in regulating health insurance issuers,
providers, and facilities with the need to
ensure at least the minimum Federal con-
sumer protections in every state. By doing
so, the Departments and OPM complied
with the requirements of Executive Order
13132. The Departments welcome input
from affected states regarding this assess-
ment.
G. Congressional Review Act
These interim final rules are deter-
mined to be major and are subject to the
Congressional Review Act provisions of
the Small Business Regulatory Enforce-
ment Fairness Act of 1996 (5 U.S.C. 801
et seq.) and will be transmitted to the
Congress and to the Comptroller General
for review in accordance with such pro-
visions.
_____________________________
Laurie Bodenheimer,
Associate Director Healthcare
and Insurance Office of Personnel
Management
_____________________________
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.
OFFICE OF PERSONNEL
MANAGEMENT
5 CFR Chapter I
For the reasons stated in the pream-
ble, the Office of Personnel Management
amends 5 CFR part 890 as follows:
PART 890—FEDERAL EMPLOYEES
HEALTH BENEFITS PROGRAM
1. The authority citation for part 890
continues to read as follows:
Authority: 5 U.S.C. 8913; Sec. 890.102
also issued under sections 11202(f),
11232(e), and 11246 (b) of Pub. L. 105-
33, 111 Stat. 251; Sec. 890.111 also
issued under section 1622(b) of Pub. L.
104-106, 110 Stat. 521 (36 U.S.C. 5522);
Sec. 890.112 also issued under section
1 of Pub. L. 110-279, 122 Stat. 2604 (2
U.S.C. 2051); Sec. 890.113 also issued
under section 1110 of Pub. L. 116-92,
133 Stat. 1198 (5 U.S.C. 8702 note); Sec.
890.301 also issued under section 311 of
Pub. L. 111-3, 123 Stat. 64 (26 U.S.C.
9801); Sec. 890.302(b) also issued under
section 1001 of Pub. L. 111-148, 124
Stat. 119, as amended by Pub. L. 111-
152, 124 Stat. 1029 (42 U.S.C. 300gg-
14); Sec. 890.803 also issued under 50
U.S.C. 3516 (formerly 50 U.S.C. 403p)
and 22 U.S.C. 4069c and 4069c-1; sub-
part L also issued under section 599C
of Pub. L. 101-513, 104 Stat. 2064 (5
U.S.C. 5561 note), as amended; and sub-
part M also issued under section 721 of
Pub. L. 105-261 (10 U.S.C. 1108), 112
Stat. 2061.
Subpart A - Administration and
General Provisions
2. Amend § 890.114 by revising para-
graph (a) and adding paragraph (d) to read
as follows:
§ 890.114 Surprise billing.
(a) A carrier must comply with require-
ments described in 26 CFR 54.9816-3T
through
54.9816-8T, 54.9817-1T, 54.9817-
2T and 54.9822-1T; 29 CFR 2590.716-3
through 2590.716-8, 2590.717-1,
2590.717-2 and 2590.722; and 45 CFR
149.30, 149.110 through 149.140,
149.310, 149.510, and 149.520, in the
same manner as such provisions apply to
a group health plan or health insurance
issuer offering group or individual health
insurance coverage, subject to 5 U.S.C.
8902(m)(1), and the provisions of the car-
rier’s contract. For purposes of application
of such sections, all carriers are deemed
to offer health benefits in the large group
market.
* * * * *
(d)(1) In addition to notification to the
Department per 26 CFR 54.9816-8T(b)
(2)(iii), 29 CFR 2590.716-8(b)(2)(iii),
and 45 CFR 149.510(b)(2)(iii), a carrier
must notify the Director of its intent to
initiate the Federal IDR process, or its
receipt of written notice that a provider,
facility, or provider of air ambulance
services has initiated the Federal IDR
process, upon sending or receiving such
notice.
(2) The Director will coordinate with
the Departments in resolving matters
under 26 CFR 54.9816-8T(c)(4)(vi)(A)
(1), 29 CFR 2590.716-8(c)(4)(vi)(A)(1),
or 45 CFR 149.510(c)(4)(vi)(A)(1) where
fraud or misrepresentation are presented,
and matters involving 26 CFR 54.9816-
8T(c)(4)(vii)(A)(2), 29 CFR 2590.716-
8(c)(4)(vii)(A)(2), and 45 CFR 149.510(c)
(4)(vii)(A)(2) . The Director will coordi-
nate with the Departments in oversight of
reports submitted by certified IDR entities
with respect to carriers pursuant to 26
CFR 54.9816-8T(f), 29 CFR 2590.716-
8(f), or 45 CFR 149.510(f).
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Chapter I
Accordingly, 26 CFR part 54 is
amended as follows:
PART 54—PENSION EXCISE TAXES
3. The authority citation for part 54
continues to read, in part, as follows:
Authority: 26 U.S.C. 7805, unless
otherwise noted.
* * * * *
4. Section 54.9815-2719T is added to
read as follows:

October 18, 2021 598 Bulletin No. 2021–42
§ 54.9815-2719T Internal claims and
appeals and external review processes
(temporary).
(a) Scope and definitions—(1) Scope—
(i) In general. This section sets forth
requirements with respect to internal
claims and appeals and external review
processes for group health plans and
health insurance issuers. Paragraph (b)
of this section provides requirements for
internal claims and appeals processes.
Paragraph (c) of this section sets forth
rules governing the applicability of State
external review processes. Paragraph (d)
of this section sets forth a Federal exter-
nal review process for plans and issuers
not subject to an applicable State external
review process. Paragraph (e) of this sec-
tion prescribes requirements for ensuring
that notices required to be provided under
this section are provided in a culturally
and linguistically appropriate manner.
Paragraph (f) of this section describes the
authority of the Secretary to deem certain
external review processes in existence on
March 23, 2010, as in compliance with
paragraph (c) or (d) of this section.
(ii) Application to grandfathered
health plans and health insurance cover-
age. The provisions of this section gener-
ally do not apply to coverage offered by
health insurance issuers and group health
plans that are grandfathered health plans,
as defined under § 54.9815-1251. How-
ever, the external review process require-
ments under paragraphs (c) and (d) of this
section, and related notice requirements
under paragraph (e) of this section, apply
to grandfathered health plans or coverage
with respect to adverse benefit determina-
tions involving items and services within
the scope of the requirements for out-of-
network emergency services, nonemer-
gency services performed by nonpartici-
pating providers at participating facilities,
and air ambulance services furnished by
nonparticipating providers of air ambu-
lance services under sections 9816 and
9817 and §§ 54.9816-4T through 54.9816-
5T and 54.9817-1T.
(2) Definitions. For purposes of this
section, the following definitions apply—
(i) Adverse benefit determination. An
adverse benefit determination means an
adverse benefit determination as defined
in 29 CFR 2560.503–1, as well as any
rescission of coverage, as described in
§ 54.9815–2712(a)(2) (whether or not, in
connection with the rescission, there is an
adverse effect on any particular benefit at
that time).
(ii) Appeal (or internal appeal). An
appeal or internal appeal means review
by a plan or issuer of an adverse benefit
determination, as required in paragraph
(b) of this section.
(iii) Claimant. Claimant means an
individual who makes a claim under this
section. For purposes of this section, ref-
erences to claimant include a claimant’s
authorized representative.
(iv) External review. External review
means a review of an adverse benefit
determination (including a final internal
adverse benefit determination) conducted
pursuant to an applicable State external
review process described in paragraph
(c) of this section or the Federal external
review process of paragraph (d) of this
section.
(v) Final internal adverse benefit
determination. A final internal adverse
benefit determination means an adverse
benefit determination that has been upheld
by a plan or issuer at the completion of
the internal appeals process applicable
under paragraph (b) of this section (or an
adverse benefit determination with respect
to which the internal appeals process has
been exhausted under the deemed exhaus-
tion rules of paragraph (b)(2)(ii)(F) of this
section).
(vi) Final external review decision.
A final external review decision means a
determination by an independent review
organization at the conclusion of an exter-
nal review.
(vii) Independent review organization
(or IRO). An independent review orga-
nization (or IRO) means an entity that
conducts independent external reviews of
adverse benefit determinations and final
internal adverse benefit determinations
pursuant to paragraph (c) or (d) of this
section.
(viii) NAIC Uniform Model Act. The
NAIC Uniform Model Act means the
Uniform Health Carrier External Review
Model Act promulgated by the National
Association of Insurance Commissioners
in place on July 23, 2010.
(b) Internal claims and appeals pro-
cess—(1) In general. A group health plan
and a health insurance issuer offering
group health insurance coverage must
implement an effective internal claims
and appeals process, as described in this
paragraph (b).
(2) Requirements for group health
plans and group health insurance issuers.
A group health plan and a health insur-
ance issuer offering group health insur-
ance coverage must comply with all the
requirements of this paragraph (b)(2).
In the case of health insurance coverage
offered in connection with a group health
plan, if either the plan or the issuer com-
plies with the internal claims and appeals
process of this paragraph (b)(2), then the
obligation to comply with this paragraph
(b)(2) is satisfied for both the plan and the
issuer with respect to the health insurance
coverage.
(i) Minimum internal claims and
appeals standards. A group health plan
and a health insurance issuer offering
group health insurance coverage must
comply with all the requirements appli-
cable to group health plans under 29 CFR
2560.503-1, except to the extent those
requirements are modified by paragraph
(b)(2)(ii) of this section. Accordingly,
under this paragraph (b), with respect
to health insurance coverage offered in
connection with a group health plan, the
group health insurance issuer is subject to
the requirements in 29 CFR 2560.503-1
to the same extent as the group health
plan.
(ii) Additional standards. In addition
to the requirements in paragraph (b)(2)
(i) of this section, the internal claims and
appeals processes of a group health plan
and a health insurance issuer offering
group health insurance coverage must
meet the requirements of this paragraph
(b)(2)(ii).
(A) Clarification of meaning of adverse
benefit determination. For purposes of
this paragraph (b)(2), an “adverse benefit
determination” includes an adverse bene-
fit determination as defined in paragraph
(a)(2)(i) of this section. Accordingly, in
complying with 29 CFR 2560.503-1, as
well as the other provisions of this para-
graph (b)(2), a plan or issuer must treat a
rescission of coverage (whether or not the
rescission has an adverse effect on any par-
ticular benefit at that time) as an adverse
benefit determination. (Rescissions of

Bulletin No. 2021–42 599 October 18, 2021
coverage are subject to the requirements
of §54.9815-2712.)
(B) Expedited notification of benefit
determinations involving urgent care. The
requirements of 29 CFR 2560.503-1(f)
(2)(i) (which generally provide, among
other things, in the case of urgent care
claims for notification of the plan’s benefit
determination (whether adverse or not) as
soon as possible, taking into account the
medical exigencies, but not later than 72
hours after the receipt of the claim) con-
tinue to apply to the plan and issuer. For
purposes of this paragraph (b)(2)(ii)(B), a
claim involving urgent care has the mean-
ing given in 29 CFR 2560.503-1(m)(1), as
determined by the attending provider, and
the plan or issuer shall defer to such deter-
mination of the attending provider.
(C) Full and fair review. A plan and
issuer must allow a claimant to review the
claim file and to present evidence and tes-
timony as part of the internal claims and
appeals process. Specifically, in addition
to complying with the requirements of 29
CFR 2560.503-1(h)(2)—
(1) The plan or issuer must provide the
claimant, free of charge, with any new
or additional evidence considered, relied
upon, or generated by the plan or issuer
(or at the direction of the plan or issuer) in
connection with the claim; such evidence
must be provided as soon as possible and
sufficiently in advance of the date on
which the notice of final internal adverse
benefit determination is required to be
provided under 29 CFR 2560.503-1(i) to
give the claimant a reasonable opportunity
to respond prior to that date; and
(2) Before the plan or issuer can issue
a final internal adverse benefit determina-
tion based on a new or additional ratio-
nale, the claimant must be provided, free
of charge, with the rationale; the rationale
must be provided as soon as possible and
sufficiently in advance of the date on
which the notice of final internal adverse
benefit determination is required to be
provided under 29 CFR 2560.503-1(i) to
give the claimant a reasonable opportu-
nity to respond prior to that date. Notwith-
standing the rules of 29 CFR 2560.503-
1(i), if the new or additional evidence is
received so late that it would be impossi-
ble to provide it to the claimant in time for
the claimant to have a reasonable oppor-
tunity to respond, the period for providing
a notice of final internal adverse benefit
determination is tolled until such time as
the claimant has a reasonable opportunity
to respond. After the claimant responds,
or has a reasonable opportunity to respond
but fails to do so, the plan administrator
shall notify the claimant of the plan’s ben-
efit determination as soon as a plan acting
in a reasonable and prompt fashion can
provide the notice, taking into account the
medical exigencies.
(D) Avoiding conflicts of interest. In
addition to the requirements of 29 CFR
2560.503-1(b) and (h) regarding full
and fair review, the plan and issuer must
ensure that all claims and appeals are adju-
dicated in a manner designed to ensure
the independence and impartiality of the
persons involved in making the decision.
Accordingly, decisions regarding hiring,
compensation, termination, promotion, or
other similar matters with respect to any
individual (such as a claims adjudicator or
medical expert) must not be made based
upon the likelihood that the individual
will support the denial of benefits.
(E) Notice. A plan and issuer must pro-
vide notice to individuals, in a culturally
and linguistically appropriate manner (as
described in paragraph (e) of this section)
that complies with the requirements of 29
CFR 2560.503-1(g) and (j). The plan and
issuer must also comply with the addi-
tional requirements of this paragraph (b)
(2)(ii)(E).
(1) The plan and issuer must ensure that
any notice of adverse benefit determina-
tion or final internal adverse benefit deter-
mination includes information sufficient
to identify the claim involved (including
the date of service, the health care pro-
vider, the claim amount (if applicable),
and a statement describing the availability,
upon request, of the diagnosis code and its
corresponding meaning, and the treatment
code and its corresponding meaning).
(2) The plan and issuer must provide
to participants and beneficiaries, as soon
as practicable, upon request, the diagnosis
code and its corresponding meaning, and
the treatment code and its corresponding
meaning, associated with any adverse
benefit determination or final internal
adverse benefit determination. The plan or
issuer must not consider a request for such
diagnosis and treatment information, in
itself, to be a request for an internal appeal
under this paragraph (b) or an external
review under paragraphs (c) and (d) of
this section.
(3) The plan and issuer must ensure that
the reason or reasons for the adverse ben-
efit determination or final internal adverse
benefit determination includes the denial
code and its corresponding meaning,
as well as a description of the plan’s or
issuer’s standard, if any, that was used in
denying the claim. In the case of a notice
of final internal adverse benefit determi-
nation, this description must include a dis-
cussion of the decision.
(4) The plan and issuer must provide a
description of available internal appeals
and external review processes, including
information regarding how to initiate an
appeal.
(5) The plan and issuer must disclose
the availability of, and contact information
for, any applicable office of health insur-
ance consumer assistance or ombudsman
established under PHS Act section 2793 to
assist individuals with the internal claims
and appeals and external review processes.
(F) Deemed exhaustion of internal
claims and appeals processes. (1) In the
case of a plan or issuer that fails to strictly
adhere to all the requirements of this para-
graph (b)(2) with respect to a claim, the
claimant is deemed to have exhausted the
internal claims and appeals process of
this paragraph (b), except as provided in
paragraph (b)(2)(ii)(F)(2) of this section.
Accordingly the claimant may initiate an
external review under paragraph (c) or (d)
of this section, as applicable. The claim-
ant is also entitled to pursue any available
remedies under section 502(a) of ERISA
or under State law, as applicable, on the
basis that the plan or issuer has failed to
provide a reasonable internal claims and
appeals process that would yield a deci-
sion on the merits of the claim. If a claim-
ant chooses to pursue remedies under
section 502(a) of ERISA under such cir-
cumstances, the claim or appeal is deemed
denied on review without the exercise of
discretion by an appropriate fiduciary.
(2) Notwithstanding paragraph (b)
(2)(ii)(F)(1) of this section, the internal
claims and appeals process of this para-
graph (b) will not be deemed exhausted
based on de minimis violations that do not
cause, and are not likely to cause, preju-
dice or harm to the claimant so long as the

October 18, 2021 600 Bulletin No. 2021–42
plan or issuer demonstrates that the viola-
tion was for good cause or due to matters
beyond the control of the plan or issuer
and that the violation occurred in the con-
text of an ongoing, good faith exchange
of information between the plan and the
claimant. This exception is not available
if the violation is part of a pattern or prac-
tice of violations by the plan or issuer.
The claimant may request a written expla-
nation of the violation from the plan or
issuer, and the plan or issuer must provide
such explanation within 10 days, includ-
ing a specific description of its bases, if
any, for asserting that the violation should
not cause the internal claims and appeals
process of this paragraph (b) to be deemed
exhausted. If an external reviewer or a
court rejects the claimant’s request for
immediate review under paragraph (b)(2)
(ii)(F)(1) of this section on the basis that
the plan met the standards for the excep-
tion under this paragraph (b)(2)(ii)(F)(2),
the claimant has the right to resubmit and
pursue the internal appeal of the claim.
In such a case, within a reasonable time
after the external reviewer or court rejects
the claim for immediate review (not to
exceed 10 days), the plan shall provide the
claimant with notice of the opportunity to
resubmit and pursue the internal appeal of
the claim. Time periods for re-filing the
claim shall begin to run upon claimant’s
receipt of such notice.
(iii) Requirement to provide contin-
ued coverage pending the outcome of an
appeal. A plan and issuer subject to the
requirements of this paragraph (b)(2) are
required to provide continued coverage
pending the outcome of an appeal. For
this purpose, the plan and issuer must
comply with the requirements of 29 CFR
2560.503-1(f)(2)(ii), which generally pro-
vides that benefits for an ongoing course
of treatment cannot be reduced or termi-
nated without providing advance notice
and an opportunity for advance review.
(c) State standards for external
review—(1) In general. (i) If a State
external review process that applies to
and is binding on a health insurance issuer
offering group health insurance coverage
includes at a minimum the consumer pro-
tections in the NAIC Uniform Model Act,
then the issuer must comply with the appli-
cable State external review process and is
not required to comply with the Federal
external review process of paragraph (d)
of this section. In such a case, to the extent
that benefits under a group health plan are
provided through health insurance cover-
age, the group health plan is not required
to comply with either this paragraph (c)
or the Federal external review process of
paragraph (d) of this section.
(ii) To the extent that a group health
plan provides benefits other than through
health insurance coverage (that is, the
plan is self-insured) and is subject to a
State external review process that applies
to and is binding on the plan (for exam-
ple, is not preempted by ERISA) and the
State external review process includes
at a minimum the consumer protections
in the NAIC Uniform Model Act, then
the plan must comply with the applica-
ble State external review process and is
not required to comply with the Federal
external review process of paragraph
(d) of this section. Where a self-insured
plan is not subject to an applicable State
external review process, but the State has
chosen to expand access to its process for
plans that are not subject to the applica-
ble State laws, the plan may choose to
comply with either the applicable State
external review process or the Federal
external review process of paragraph (d)
of this section.
(iii) If a plan or issuer is not required
under paragraph (c)(1)(i) or (ii) of this
section to comply with the requirements
of this paragraph (c), then the plan or
issuer must comply with the Federal
external review process of paragraph (d)
of this section, except to the extent, in
the case of a plan, the plan is not required
under paragraph (c)(1)(i) of this section to
comply with paragraph (d) of this section.
(2) Minimum standards for State
external review processes. An applicable
State external review process must meet
all the minimum consumer protections in
this paragraph (c)(2). The Department of
Health and Human Services will deter-
mine whether State external review pro-
cesses meet these requirements.
(i) The State process must provide for
the external review of adverse benefit
determinations (including final internal
adverse benefit determinations) by issu-
ers (or, if applicable, plans) that are based
on the issuer’s (or plan’s) requirements
for medical necessity, appropriateness,
health care setting, level of care, or effec-
tiveness of a covered benefit, as well as a
consideration of whether a plan or issuer
is complying with the surprise billing
and cost-sharing protections under sec-
tions 9816 and 9817 and §§ 54.9816-1T
through 54.9816-6T and 54.9817-1T.
(ii) The State process must require
issuers (or, if applicable, plans) to provide
effective written notice to claimants of
their rights in connection with an external
review for an adverse benefit determina-
tion.
(iii) To the extent the State process
requires exhaustion of an internal claims
and appeals process, exhaustion must be
unnecessary where the issuer (or, if appli-
cable, the plan) has waived the require-
ment; the issuer (or the plan) is consid-
ered to have exhausted the internal claims
and appeals process under applicable law
(including by failing to comply with any
of the requirements for the internal appeal
process, as outlined in paragraph (b)(2) of
this section), or the claimant has applied
for expedited external review at the same
time as applying for an expedited internal
appeal.
(iv) The State process provides that the
issuer (or, if applicable, the plan) against
which a request for external review is filed
must pay the cost of the IRO for conduct-
ing the external review. Notwithstanding
this requirement, a State external review
process that expressly authorizes, as of
November 18, 2015, a nominal filing fee
may continue to permit such fees. For this
purpose, to be considered nominal, a fil-
ing fee must not exceed $25; it must be
refunded to the claimant if the adverse
benefit determination (or final internal
adverse benefit determination) is reversed
through external review; it must be waived
if payment of the fee would impose an
undue financial hardship; and the annual
limit on filing fees for any claimant within
a single plan year must not exceed $75.
(v) The State process may not impose a
restriction on the minimum dollar amount
of a claim for it to be eligible for external
review. Thus, the process may not impose,
for example, a $500 minimum claims
threshold.
(vi) The State process must allow at
least four months after the receipt of a
notice of an adverse benefit determination
or final internal adverse benefit determi-

Bulletin No. 2021–42 601 October 18, 2021
nation for a request for an external review
to be filed.
(vii) The State process must provide
that IROs will be assigned on a random
basis or another method of assignment
that assures the independence and impar-
tiality of the assignment process (such as
rotational assignment) by a State or inde-
pendent entity, and in no event selected by
the issuer, plan, or the individual.
(viii) The State process must provide
for maintenance of a list of approved IROs
qualified to conduct the external review
based on the nature of the health care ser-
vice that is the subject of the review. The
State process must provide for approval
only of IROs that are accredited by a
nationally recognized private accrediting
organization.
(ix) The State process must provide
that any approved IRO has no conflicts
of interest that will influence its indepen-
dence. Thus, the IRO may not own or con-
trol, or be owned or controlled by a health
insurance issuer, a group health plan, the
sponsor of a group health plan, a trade
association of plans or issuers, or a trade
association of health care providers. The
State process must further provide that the
IRO and the clinical reviewer assigned to
conduct an external review may not have
a material professional, familial, or finan-
cial conflict of interest with the issuer or
plan that is the subject of the external
review; the claimant (and any related par-
ties to the claimant) whose treatment is the
subject of the external review; any officer,
director, or management employee of the
issuer; the plan administrator, plan fidu-
ciaries, or plan employees; the health care
provider, the health care provider’s group,
or practice association recommending
the treatment that is subject to the exter-
nal review; the facility at which the rec-
ommended treatment would be provided;
or the developer or manufacturer of the
principal drug, device, procedure, or other
therapy being recommended.
(x) The State process allows the claim-
ant at least five business days to submit to
the IRO in writing additional information
that the IRO must consider when conduct-
ing the external review, and it requires that
the claimant is notified of the right to do
so. The process must also require that any
additional information submitted by the
claimant to the IRO must be forwarded
to the issuer (or, if applicable, the plan)
within one business day of receipt by the
IRO.
(xi) The State process must provide
that the decision is binding on the plan
or issuer, as well as the claimant except
to the extent the other remedies are
available under State or Federal law,
and except that the requirement that the
decision be binding shall not preclude
the plan or issuer from making payment
on the claim or otherwise providing ben-
efits at any time, including after a final
external review decision that denies the
claim or otherwise fails to require such
payment or benefits. For this purpose,
the plan or issuer must provide bene-
fits (including by making payment on
the claim) pursuant to the final external
review decision without delay, regard-
less of whether the plan or issuer intends
to seek judicial review of the external
review decision and unless or until there
is a judicial decision otherwise.
(xii) The State process must require,
for standard external review, that the IRO
provide written notice to the issuer (or, if
applicable, the plan) and the claimant of its
decision to uphold or reverse the adverse
benefit determination (or final internal
adverse benefit determination) within no
more than 45 days after the receipt of the
request for external review by the IRO.
(xiii) The State process must provide
for an expedited external review if the
adverse benefit determination (or final
internal adverse benefit determination)
concerns an admission, availability of
care, continued stay, or health care service
for which the claimant received emergency
services, but has not been discharged from
a facility; or involves a medical condition
for which the standard external review
time frame would seriously jeopardize the
life or health of the claimant or jeopardize
the claimant’s ability to regain maximum
function. As expeditiously as possible
but within no more than 72 hours after
the receipt of the request for expedited
external review by the IRO, the IRO must
make its decision to uphold or reverse the
adverse benefit determination (or final
internal adverse benefit determination)
and notify the claimant and the issuer (or,
if applicable, the plan) of the determina-
tion. If the notice is not in writing, the IRO
must provide written confirmation of the
decision within 48 hours after the date of
the notice of the decision.
(xiv) The State process must require
that issuers (or, if applicable, plans)
include a description of the external
review process in or attached to the sum-
mary plan description, policy, certificate,
membership booklet, outline of coverage,
or other evidence of coverage it provides
to participants, beneficiaries, or enrollees,
substantially similar to what is set forth in
section 17 of the NAIC Uniform Model
Act.
(xv) The State process must require
that IROs maintain written records and
make them available upon request to the
State, substantially similar to what is set
forth in section 15 of the NAIC Uniform
Model Act.
(xvi) The State process follows pro-
cedures for external review of adverse
benefit determinations (or final internal
adverse benefit determinations) involving
experimental or investigational treatment,
substantially similar to what is set forth in
section 10 of the NAIC Uniform Model
Act.
(3) Transition period for external
review processes. (i) Through Decem-
ber 31, 2017, an applicable State exter-
nal review process applicable to a health
insurance issuer or group health plan is
considered to meet the requirements of
PHS Act section 2719(b). Accordingly,
through December 31, 2017, an applica-
ble State external review process will be
considered binding on the issuer or plan
(in lieu of the requirements of the Fed-
eral external review process). If there is
no applicable State external review pro-
cess, the issuer or plan is required to com-
ply with the requirements of the Federal
external review process in paragraph (d)
of this section.
(ii) An applicable State external
review process must apply for final
internal adverse benefit determinations
(or, in the case of simultaneous internal
appeal and external review, adverse ben-
efit determinations) provided on or after
January 1, 2018. The Federal external
review process will apply to such internal
adverse benefit determinations unless the
Department of Health and Human Ser-
vices determines that a State law meets
all the minimum standards of paragraph
(c)(2) of this section. Through December

October 18, 2021 602 Bulletin No. 2021–42
31, 2017, a State external review process
applicable to a health insurance issuer
or group health plan may be considered
to meet the minimum standards of para-
graph (c)(2), if it meets the temporary
standards established by the Secretary
in guidance for a process similar to the
NAIC Uniform Model Act.
(d) Federal external review process.
A plan or issuer not subject to an appli-
cable State external review process under
paragraph (c) of this section must provide
an effective Federal external review pro-
cess in accordance with this paragraph
(d) (except to the extent, in the case of a
plan, the plan is described in paragraph
(c)(1)(i) of this section as not having to
comply with this paragraph (d)). In the
case of health insurance coverage offered
in connection with a group health plan,
if either the plan or the issuer complies
with the Federal external review process
of this paragraph (d), then the obligation
to comply with this paragraph (d) is satis-
fied for both the plan and the issuer with
respect to the health insurance coverage.
A Multi State Plan or MSP, as defined by
45 CFR 800.20, must provide an effective
Federal external review process in accor-
dance with this paragraph (d). In such cir-
cumstances, the requirement to provide
external review under this paragraph (d) is
satisfied when a Multi State Plan or MSP
complies with standards established by
the Office of Personnel Management.
(1) Scope.—(i) In general. The Federal
external review process established pur-
suant to this paragraph (d) applies to the
following:
(A) An adverse benefit determination
(including a final internal adverse bene-
fit determination) by a plan or issuer that
involves medical judgment (including, but
not limited to, those based on the plan’s or
issuer’s requirements for medical neces-
sity, appropriateness, health care setting,
level of care, or effectiveness of a cov-
ered benefit; its determination that a treat-
ment is experimental or investigational;
its determination whether a participant
or beneficiary is entitled to a reasonable
alternative standard for a reward under
a wellness program; its determination
whether a plan or issuer is complying
with the nonquantitative treatment lim-
itation provisions of Code section 9812
and § 54.9812-1, which generally require,
among other things, parity in the applica-
tion of medical management techniques),
as determined by the external reviewer. (A
denial, reduction, termination, or a failure
to provide payment for a benefit based
on a determination that a participant or
beneficiary fails to meet the requirements
for eligibility under the terms of a group
health plan or health insurance coverage
is not eligible for the Federal external
review process under this paragraph (d));
(B) An adverse benefit determination
that involves consideration of whether a
plan or issuer is complying with the sur-
prise billing and cost-sharing protections
set forth in sections 9816 and 9817 and
§§ 54.9816-4T through 54.9816-5T and
54.9817-1T; and
(C) A rescission of coverage (whether
or not the rescission has any effect on any
particular benefit at that time).
(ii) Examples. The rules of paragraph
(d)(1)(i) of this section are illustrated by
the following examples:
(A) Example 1—(1) Facts. A group health plan
provides coverage for 30 physical therapy visits
generally. After the 30th visit, coverage is provided
only if the service is preauthorized pursuant to an
approved treatment plan that takes into account
medical necessity using the plan’s definition of the
term. Individual A seeks coverage for a 31st physi-
cal therapy visit. A’s health care provider submits a
treatment plan for approval, but it is not approved by
the plan, so coverage for the 31st visit is not preau-
thorized. With respect to the 31st visit, A receives a
notice of final internal adverse benefit determination
stating that the maximum visit limit is exceeded.
(2) Conclusion. In this Example 1, the plan’s
denial of benefits is based on medical necessity and
involves medical judgment. Accordingly, the claim is
eligible for external review under paragraph (d)(1)(i)
of this section. Moreover, the plan’s notification of
final internal adverse benefit determination is inade-
quate under paragraphs (b)(2)(i) and (b)(2)(ii)(E)(3)
of this section because it fails to make clear that the
plan will pay for more than 30 visits if the service
is preauthorized pursuant to an approved treatment
plan that takes into account medical necessity using
the plan’s definition of the term. Accordingly, the
notice of final internal adverse benefit determination
should refer to the plan provision governing the 31st
visit and should describe the plan’s standard for med-
ical necessity, as well as how the treatment fails to
meet the plan’s standard.
(B) Example 2—(1) Facts. A group health plan
does not provide coverage for services provided out
of network, unless the service cannot effectively be
provided in network. Individual B seeks coverage for
a specialized medical procedure from an out-of-net-
work provider because B believes that the procedure
cannot be effectively provided in network. B receives
a notice of final internal adverse benefit determina-
tion stating that the claim is denied because the pro-
vider is out-of-network.
(2) Conclusion. In this Example 2, the plan’s
denial of benefits is based on whether a service can
effectively be provided in network and, therefore,
involves medical judgment. Accordingly, the claim
is eligible for external review under paragraph (d)
(1)(i) of this section. Moreover, the plan’s notice of
final internal adverse benefit determination is inade-
quate under paragraphs (b)(2)(i) and (b)(2)(ii)(E)(3)
of this section because the plan does provide ben-
efits for services on an out-of-network basis if the
services cannot effectively be provided in network.
Accordingly, the notice of final internal adverse ben-
efit determination is required to refer to the exception
to the out-of-network exclusion and should describe
the plan’s standards for determining effectiveness
of services, as well as how services available to the
claimant within the plan’s network meet the plan’s
standard for effectiveness of services.
(C) Example 3—(1) Facts. A group health plan
generally provides benefits for services in an emer-
gency department of a hospital or independent
freestanding emergency department. Individual C
receives pre-stabilization emergency treatment in an
out-of-network emergency department of a hospital.
The group health plan determines that protections for
emergency services under § 54.9816-4T do not apply
because the treatment did not involve “emergency
services” within the meaning of § 54.9816-4T(c)(2)
(i). C receives an adverse benefit determination, and
the plan imposes cost-sharing requirements that are
greater than the requirements that would apply if the
same services were provided in an in-network emer-
gency department.
(2) Conclusion. In this Example 3, the plan’s
determination that treatment received by C did not
include emergency services involves medical judg-
ment and consideration of whether the plan complied
with § 54.9816-4T. Accordingly, the claim is eligible
for external review under paragraph (d)(1)(i) of this
section.
(D) Example 4—(1) Facts. A group health plan
generally provides benefits for anesthesiology ser-
vices. Individual D undergoes a surgery at an in-net-
work health care facility and during the course of
the surgery, receives anesthesiology services from
an out-of-network provider. The plan decides the
claim for these services without regard to the protec-
tions related to items and services furnished by out-
of-network providers at in-network facilities under
§ 54.9816-5T. As a result, D receives an adverse
benefit determination for the services and is subject
to cost-sharing liability that is greater than it would
be if cost sharing had been calculated in a manner
consistent with the requirements of § 54.9816-5T.
(2) Conclusion. In this Example 4, whether the
plan was required to decide the claim in a manner
consistent with the requirements of § 54.9816-5T
involves considering whether the plan complied with
§ 54.9816-5T, as well as medical judgment, because
it requires consideration of the health care setting
and level of care. Accordingly, the claim is eligible
for external review under paragraph (d)(1)(i) of this
section.
(E) Example 5—(1) Facts. A group health plan
generally provides benefits for services in an emer-
gency department of a hospital or independent
freestanding emergency department. Individual E
receives emergency services in an out-of-network

Bulletin No. 2021–42 603 October 18, 2021
emergency department of a hospital, including cer-
tain post-stabilization services. The plan processes
the claim for the post-stabilization services as not
being for emergency services under § 54.9816-4T(c)
(2)(ii) based on representations made by the treat-
ing provider that E was in a condition to receive
notice from the provider about cost-sharing and
surprise billing protections for these services, and
subsequently gave informed consent to waive those
protections. E receives an adverse benefit determina-
tion and is subject to cost-sharing requirements that
are greater than the cost-sharing requirements that
would apply if the services were processed in a man-
ner consistent with §54.9816-4T.
(2) Conclusion. In this Example 5, whether E was
in a condition to receive notice about the availabil-
ity of cost-sharing and surprise billing protections
and give informed consent to waive those protec-
tions involves medical judgment and consideration
of whether the plan complied with the requirements
under § 54.9816-4T(c)(2)(ii). Accordingly, the claim
is eligible for external review under paragraph (d)(1)
(i) of this section.
(F) Example 6—(1) Facts. Individual F gives
birth to a baby at an in-network hospital. The baby
is born prematurely and receives certain neona-
tology services from a nonparticipating provider
during the same visit as the birth. F was given
notice about cost-sharing and surprise billing pro-
tections for these services, and subsequently gave
informed consent to waive those protections. The
claim for the neonatology services is coded as a
claim for routine post-natal services and the plan
decides the claim without regard to the require-
ments under § 54.9816-5T(a) and the fact that those
protections may not be waived for neonatology ser-
vices under § 54.9816-5T(b).
(2) Conclusion. In this Example 6, medical judg-
ment is necessary to determine whether the correct
code was used and compliance with § 54.9816-5T(a)
and (b) must also be considered. Accordingly, the
claim is eligible for external review under paragraph
(d)(1)(i) of this section. The Departments also note
that, to the extent the nonparticipating provider bal-
ance bills Individual F for the outstanding amounts
not paid by the plan for the neonatology services,
such provider would be in violation of PHS Act sec-
tion 2799B-2 and its implementing regulations at 45
CFR 149.420(a).
(G) Example 7—(1) Facts. A group health plan
generally provides benefits to cover knee replace-
ment surgery. Individual G receives a knee replace-
ment surgery at an in-network facility and, after
receiving proper notice about the availability of
cost-sharing and surprise billing protections, pro-
vides informed consent to waive those protections.
However, during the surgery, certain anesthesiology
services are provided by an out-of-network nurse
anesthetist. The claim for these anesthesiology ser-
vices is decided by the plan without regard to the
requirements under § 54.9816-5T(a) or to the fact
that those protections may not be waived for ancil-
lary services such as anesthesiology services pro-
vided by an out-of-network provider at an in-net-
work facility under § 54.9816-5T(b). G receives
an adverse benefit determination and is subject to
cost-sharing requirements that are greater than the
cost-sharing requirements that would apply if the
services were provided in a manner consistent with
§ 54.9816-5T(a) and (b).
(2) Conclusion. In this Example 7, consideration
of whether the plan complied with the requirements
in § 54.9816-5T(a) and (b) is necessary to determine
whether cost-sharing requirements were applied
appropriately. Accordingly, the claim is eligible for
external review under paragraph (d)(1)(i) of this sec-
tion.
(2) External review process standards.
The Federal external review process
established pursuant to this paragraph (d)
is considered similar to the process set
forth in the NAIC Uniform Model Act
and, therefore satisfies the requirements of
paragraph (d)(2) if such process provides
the following.
(i) Request for external review. A group
health plan or health insurance issuer must
allow a claimant to file a request for an
external review with the plan or issuer
if the request is filed within four months
after the date of receipt of a notice of an
adverse benefit determination or final
internal adverse benefit determination.
If there is no corresponding date four
months after the date of receipt of such a
notice, then the request must be filed by
the first day of the fifth month following
the receipt of the notice. For example, if
the date of receipt of the notice is October
30, because there is no February 30, the
request must be filed by March 1. If the
last filing date would fall on a Saturday,
Sunday, or Federal holiday, the last filing
date is extended to the next day that is not
a Saturday, Sunday, or Federal holiday.
(ii) Preliminary review—(A) In gen-
eral. Within five business days following
the date of receipt of the external review
request, the group health plan or health
insurance issuer must complete a prelim-
inary review of the request to determine
whether:
(1) The claimant is or was covered
under the plan or coverage at the time the
health care item or service was requested
or, in the case of a retrospective review,
was covered under the plan or coverage
at the time the health care item or service
was provided;
(2) The adverse benefit determination
or the final adverse benefit determination
does not relate to the claimant’s failure
to meet the requirements for eligibility
under the terms of the group health plan
or health insurance coverage (e.g., worker
classification or similar determination);
(3) The claimant has exhausted the
plan’s or issuer’s internal appeal process
unless the claimant is not required to
exhaust the internal appeals process under
paragraph (b)(1) of this section; and
(4) The claimant has provided all the
information and forms required to process
an external review.
(B) Within one business day after
completion of the preliminary review, the
plan or issuer must issue a notification
in writing to the claimant. If the request
is complete but not eligible for external
review, such notification must include the
reasons for its ineligibility and current
contact information, including the phone
number, for the Employee Benefits Secu-
rity Administration. If the request is not
complete, such notification must describe
the information or materials needed to
make the request complete, and the plan
or issuer must allow a claimant to perfect
the request for external review within the
four-month filing period or within the 48
hour period following the receipt of the
notification, whichever is later.
(iii) Referral to Independent Review
Organization—(A) In general. The group
health plan or health insurance issuer must
assign an IRO that is accredited by URAC
or by similar nationally-recognized
accrediting organization to conduct the
external review. The IRO referral process
must provide for the following:
(1) The plan or issuer must ensure that
the IRO process is not biased and ensures
independence;
(2) The plan or issuer must contract
with at least three (3) IROs for assign-
ments under the plan or coverage and
rotate claims assignments among them (or
incorporate other independent, unbiased
methods for selection of IROs, such as
random selection); and
(3) The IRO may not be eligible for
any financial incentives based on the like-
lihood that the IRO will support the denial
of benefits.
(4) The IRO process may not impose
any costs, including filing fees, on the
claimant requesting the external review.
(B) IRO contracts. A group health plan
or health insurance issuer must include
the following standards in the contract
between the plan or issuer and the IRO:
(1) The assigned IRO will utilize legal
experts where appropriate to make cover-

October 18, 2021 604 Bulletin No. 2021–42
age determinations under the plan or cov-
erage.
(2) The assigned IRO will timely notify
a claimant in writing whether the request
is eligible for external review. This notice
will include a statement that the claim-
ant may submit in writing to the assigned
IRO, within ten business days following
the date of receipt of the notice, additional
information. This additional information
must be considered by the IRO when
conducting the external review. The IRO
is not required to, but may, accept and
consider additional information submitted
after ten business days.
(3) Within five business days after the
date of assignment of the IRO, the plan
or issuer must provide to the assigned
IRO the documents and any information
considered in making the adverse bene-
fit determination or final internal adverse
benefit determination. Failure by the plan
or issuer to timely provide the documents
and information must not delay the con-
duct of the external review. If the plan or
issuer fails to timely provide the docu-
ments and information, the assigned IRO
may terminate the external review and
make a decision to reverse the adverse
benefit determination or final internal
adverse benefit determination. Within one
business day after making the decision,
the IRO must notify the claimant and the
plan.
(4) Upon receipt of any information
submitted by the claimant, the assigned
IRO must within one business day forward
the information to the plan or issuer. Upon
receipt of any such information, the plan
or issuer may reconsider its adverse ben-
efit determination or final internal adverse
benefit determination that is the subject
of the external review. Reconsideration
by the plan or issuer must not delay the
external review. The external review may
be terminated as a result of the reconsider-
ation only if the plan decides, upon com-
pletion of its reconsideration, to reverse
its adverse benefit determination or final
internal adverse benefit determination and
provide coverage or payment. Within one
business day after making such a decision,
the plan must provide written notice of its
decision to the claimant and the assigned
IRO. The assigned IRO must terminate
the external review upon receipt of the
notice from the plan or issuer.
(5) The IRO will review all of the infor-
mation and documents timely received.
In reaching a decision, the assigned IRO
will review the claim de novo and not be
bound by any decisions or conclusions
reached during the plan’s or issuer’s inter-
nal claims and appeals process applicable
under paragraph (b) of this section. In
addition to the documents and informa-
tion provided, the assigned IRO, to the
extent the information or documents are
available and the IRO considers them
appropriate, will consider the following in
reaching a decision:
(i) The claimant’s medical records;
(ii) The attending health care profes-
sional’s recommendation;
(iii) Reports from appropriate health
care professionals and other documents
submitted by the plan or issuer, claimant,
or the claimant’s treating provider;
(iv) The terms of the claimant’s plan or
coverage to ensure that the IRO’s decision
is not contrary to the terms of the plan or
coverage, unless the terms are inconsistent
with applicable law;
(v) Appropriate practice guidelines,
which must include applicable evi-
dence-based standards and may include
any other practice guidelines developed
by the Federal Government, national or
professional medical societies, boards,
and associations;
(vi) Any applicable clinical review cri-
teria developed and used by the plan or
issuer, unless the criteria are inconsistent
with the terms of the plan or coverage or
with applicable law; and
(vii) To the extent the final IRO deci-
sion maker is different from the IRO’s
clinical reviewer, the opinion of such clin-
ical reviewer, after considering informa-
tion described in this notice, to the extent
the information or documents are avail-
able and the clinical reviewer or reviewers
consider such information or documents
appropriate.
(6) The assigned IRO must pro-
vide written notice of the final external
review decision within 45 days after the
IRO receives the request for the external
review. The IRO must deliver the notice
of the final external review decision to the
claimant and the plan or issuer.
(7) The assigned IRO’s written notice
of the final external review decision must
contain the following:
(i) A general description of the reason
for the request for external review, includ-
ing information sufficient to identify the
claim (including the date or dates of ser-
vice, the health care provider, the claim
amount (if applicable), and a statement
describing the availability, upon request,
of the diagnosis code and its correspond-
ing meaning, the treatment code and its
corresponding meaning, and the reason
for the plan’s or issuer’s denial);
(ii) The date the IRO received the
assignment to conduct the external review
and the date of the IRO decision;
(iii) References to the evidence or doc-
umentation, including the specific cover-
age provisions and evidence-based stan-
dards, considered in reaching its decision;
(iv) A discussion of the principal rea-
son or reasons for its decision, including
the rationale for its decision and any evi-
dence-based standards that were relied on
in making its decision;
(v) A statement that the IRO’s determi-
nation is binding except to the extent that
other remedies may be available under
State or Federal law to either the group
health plan or health insurance issuer or
to the claimant, or to the extent the health
plan or health insurance issuer voluntarily
makes payment on the claim or otherwise
provides benefits at any time, includ-
ing after a final external review decision
that denies the claim or otherwise fails to
require such payment or benefits;
(vi) A statement that judicial review
may be available to the claimant; and
(vii) Current contact information,
including phone number, for any appli-
cable office of health insurance consumer
assistance or ombudsman established
under PHS Act section 2793.
(viii) After a final external review deci-
sion, the IRO must maintain records of
all claims and notices associated with the
external review process for six years. An
IRO must make such records available for
examination by the claimant, plan, issuer,
or State or Federal oversight agency upon
request, except where such disclosure
would violate State or Federal privacy
laws.
(iv) Reversal of plan’s or issuer’s deci-
sion. Upon receipt of a notice of a final
external review decision reversing the
adverse benefit determination or final
adverse benefit determination, the plan or

Bulletin No. 2021–42 605 October 18, 2021
issuer immediately must provide coverage
or payment (including immediately autho-
rizing care or immediately paying bene-
fits) for the claim.
(3) Expedited external review. A group
health plan or health insurance issuer must
comply with the following standards with
respect to an expedited external review:
(i) Request for external review. A group
health plan or health insurance issuer must
allow a claimant to make a request for an
expedited external review with the plan or
issuer at the time the claimant receives:
(A) An adverse benefit determination if
the adverse benefit determination involves
a medical condition of the claimant for
which the timeframe for completion of an
expedited internal appeal under paragraph
(b) of this section would seriously jeop-
ardize the life or health of the claimant or
would jeopardize the claimant’s ability to
regain maximum function and the claim-
ant has filed a request for an expedited
internal appeal; or
(B) A final internal adverse benefit
determination, if the claimant has a med-
ical condition where the timeframe for
completion of a standard external review
would seriously jeopardize the life or
health of the claimant or would jeop-
ardize the claimant’s ability to regain
maximum function, or if the final inter-
nal adverse benefit determination con-
cerns an admission, availability of care,
continued stay, or health care item or
service for which the claimant received
emergency services, but has not been dis-
charged from the facility.
(ii) Preliminary review. Immediately
upon receipt of the request for expedited
external review, the plan or issuer must
determine whether the request meets the
reviewability requirements set forth in
paragraph (d)(2)(ii) of this section for
standard external review. The plan or
issuer must immediately send a notice that
meets the requirements set forth in para-
graph (d)(2)(ii)(B) for standard review to
the claimant of its eligibility determina-
tion.
(iii) Referral to independent review
organization. (A) Upon a determination
that a request is eligible for expedited
external review following the preliminary
review, the plan or issuer will assign an
IRO pursuant to the requirements set forth
in paragraph (d)(2)(iii) of this section for
standard review. The plan or issuer must
provide or transmit all necessary doc-
uments and information considered in
making the adverse benefit determination
or final internal adverse benefit determi-
nation to the assigned IRO electronically
or by telephone or facsimile or any other
available expeditious method.
(B) The assigned IRO, to the extent the
information or documents are available
and the IRO considers them appropriate,
must consider the information or docu-
ments described above under the proce-
dures for standard review. In reaching a
decision, the assigned IRO must review
the claim de novo and is not bound by any
decisions or conclusions reached during
the plan’s or issuer’s internal claims and
appeals process.
(iv) Notice of final external review
decision. The plan’s or issuer’s contract
with the assigned IRO must require the
IRO to provide notice of the final exter-
nal review decision, in accordance with
the requirements set forth in paragraph (d)
(2)(iii)(B) of this section, as expeditiously
as the claimant’s medical condition or cir-
cumstances require, but in no event more
than 72 hours after the IRO receives the
request for an expedited external review.
If the notice is not in writing, within 48
hours after the date of providing that
notice, the assigned IRO must provide
written confirmation of the decision to the
claimant and the plan or issuer.
(4) Alternative, federally-administered
external review process. Insured coverage
not subject to an applicable State external
review process under paragraph (c) of this
section may elect to use either the Federal
external review process, as set forth under
paragraph (d) of this section or the feder-
ally-administered external review process,
as set forth by HHS in guidance. In such
circumstances, the requirement to provide
external review under this paragraph (d)
is satisfied.
(e) Form and manner of notice—(1)
In general. For purposes of this section,
a group health plan and a health insurance
issuer offering group health insurance
coverage are considered to provide rel-
evant notices in a culturally and linguis-
tically appropriate manner if the plan or
issuer meets all the requirements of para-
graph (e)(2) of this section with respect
to the applicable non-English languages
described in paragraph (e)(3) of this sec-
tion.
(2) Requirements. (i) The plan or issuer
must provide oral language services (such
as a telephone customer assistance hotline)
that includes answering questions in any
applicable non-English language and pro-
viding assistance with filing claims and
appeals (including external review) in any
applicable non-English language;
(ii) The plan or issuer must provide,
upon request, a notice in any applicable
non-English language; and
(iii) The plan or issuer must include in
the English versions of all notices, a state-
ment prominently displayed in any appli-
cable non-English language clearly indi-
cating how to access the language services
provided by the plan or issuer.
(3) Applicable non-English language.
With respect to an address in any United
States county to which a notice is sent,
a non-English language is an applica-
ble non-English language if ten percent
or more of the population residing in the
county is literate only in the same non-En-
glish language, as determined in guidance
published by the Secretary.
(f) Secretarial authority. The Secretary
may determine that the external review
process of a group health plan or health
insurance issuer, in operation as of March
23, 2010, is considered in compliance
with the applicable process established
under paragraph (c) or (d) of this section
if it substantially meets the requirements
of paragraph (c) or (d) of this section, as
applicable.
(g) Applicability date. The provisions
of this section generally are applicable to
group health plans and health insurance
issuers for plan years beginning on or
after January 1, 2017. The external review
scope provision at paragraph (d)(1)(i)(B)
of this section is applicable for plan years
beginning on or after January 1, 2022. The
external review provisions described in
paragraphs (c) and (d) of this section are
applicable to grandfathered health plans,
with respect to the types of claims speci-
fied under paragraph (a)(1)(ii) of this sec-
tion, for plan years beginning on or after
January 1, 2022.
5. Section 54.9816-1T is revised to
read as follows:

October 18, 2021 606 Bulletin No. 2021–42
§ 54.9816-1T Basis and scope
(temporary).
(a) Basis. This section and §§ 54.9816-
2T through 54.9816-8T, 54.9817-1T,
54.9817-2T, and 54.9822-1T implement
subchapter B of chapter 100 of the Inter-
nal Revenue Code of 1986.
(b) Scope. This part establishes stan-
dards for group health plans with respect
to surprise medical bills, transparency
in health care coverage, and additional
patient protections. This part also estab-
lishes an independent dispute resolution
process and standards for certifying inde-
pendent dispute resolution entities.
6. Section 54.9816-2T is amended by
revising paragraph (a) and paragraph (b)
introductory text to read as follows:
§ 54.9816-2T Applicability (temporary).
(a) In general. (1) The requirements
in §§ 54.9816-4T through 54.9816-7T,
54.9817-1T, and 54.9822-1T apply to
group health plans (including grandfa-
thered health plans as defined in § 54.9815-
1251), except as specified in paragraph (b)
of this section.
(2) The requirements in §§ 54.9816-
8T and 54.9817-2T apply to certified IDR
entities and group health plans (including
grandfathered health plans as defined in
§ 54.9815-1251) except as specified in
paragraph (b) of this section.
(b) Exceptions. The requirements
in §§ 54.9816-4T through 54.9816-8T,
54.9817-1T, 54.9817-2T, and 54.9822-1T
do not apply to the following:
* * * * *
7. Section 54.9816-8T is added to read
as follows:
§ 54.9816-8T Independent dispute
resolution process (temporary).
(a) Scope and definitions – (1) Scope.
This section sets forth requirements with
respect to the independent dispute reso-
lution (IDR) process (referred to in this
section as the Federal IDR process) under
which a nonparticipating provider, non-
participating emergency facility, or non-
participating provider of air ambulance
services (as applicable); and a group
health plan complete a requisite open
negotiation period, and at least one party
submits a notification under paragraph (b)
of this section to initiate the Federal IDR
process under paragraph (c) of this sec-
tion, and under which an IDR entity (as
certified under paragraph (e) of this sec-
tion) determines the amount of payment
under the plan for an item or service fur-
nished by the provider or facility.
(2) Definitions. Unless otherwise
stated, the definitions in § 54.9816-3T
apply to this section. Additionally, for pur-
poses of this section, the following defini-
tions apply:
(i) Batched items and services means
multiple qualified IDR items or services
that are considered jointly as part of one
payment determination by a certified IDR
entity for purposes of the Federal IDR
process. In order for a qualified IDR item
or service to be included in a batched item
or service, the qualified IDR item or ser-
vice must meet the criteria set forth in
paragraph (c)(3) of this section.
(ii) Breach means the acquisition,
access, use, or disclosure of individually
identifiable health information (IIHI) in a
manner not permitted under paragraph (e)
(2)(v) of this section that compromises the
security or privacy of the IIHI.
(A) Breach excludes:
(1) Any unintentional acquisition,
access, or use of IIHI by personnel, a con-
tractor, or a subcontractor of a certified
IDR entity that is acting under the author-
ity of that certified IDR entity, if the acqui-
sition, access, or use was made in good
faith and within the scope of that author-
ity and that does not result in further use
or disclosure in a manner not permitted
under paragraph (e)(2)(v) of this section.
(2) Any inadvertent disclosure by a
person who is authorized to access IIHI
at a certified IDR entity to another per-
son authorized to access IIHI at the same
certified IDR entity, and the information
received as a result of the disclosure is
not further used or disclosed in a manner
not permitted under paragraph (e)(2)(v) of
this section.
(3) A disclosure of IIHI in which a cer-
tified IDR entity has a good faith belief
that an unauthorized person to whom the
disclosure was made would not reason-
ably have been able to retain such infor-
mation.
(B) Except as provided in paragraph
(a)(2)(ii)(A) of this section, access, use,
or disclosure of IIHI in a manner not per-
mitted under paragraph (e)(2)(v) of this
section is presumed to be a breach unless
the certified IDR entity demonstrates
that there is a low probability that the
security or privacy of the IIHI has been
compromised based on a risk assessment
encompassing at least the following fac-
tors:
(1) The nature and extent of the IIHI
involved, including the types of identifiers
and the likelihood of re-identification;
(2) The unauthorized person who used
the IIHI or to whom the disclosure was
made;
(3) Whether the IIHI was actually
acquired or viewed; and
(4) The extent to which the risk to the
IIHI has been mitigated.
(iii) Certified IDR entity means an
entity responsible for conducting determi-
nations under paragraph (c) of this section
that meets the certification criteria spec-
ified in paragraph (e) of this section and
that has been certified by the Secretary,
jointly with the Secretaries of Health and
Human Services and Labor.
(iv) Conflict of interest means, with
respect to a party to a payment determi-
nation or certified IDR entity, a material
relationship, status, or condition of the
party or certified IDR entity that impacts
the ability of the certified IDR entity to
make an unbiased and impartial payment
determination. For purposes of this sec-
tion, a conflict of interest exists when a
certified IDR entity is:
(A) A group health plan; a health
insurance issuer offering group health
insurance coverage, individual health
insurance coverage, or short-term, limit-
ed-duration insurance; a carrier offering a
health benefits plan under 5 U.S.C. 8902;
or a provider, a facility or a provider of air
ambulance services;
(B) An affiliate or a subsidiary of a
group health plan; a health insurance
issuer offering group health insurance
coverage, individual health insurance
coverage, or short-term, limited-duration
insurance; a carrier offering a health ben-
efits plan under 5 U.S.C. 8902; or a pro-
vider, a facility, or a provider of air ambu-
lance services;
(C) An affiliate or subsidiary of a pro-
fessional or trade association representing
group health plans; health insurance issu-

Bulletin No. 2021–42 607 October 18, 2021
ers offering group health insurance cover-
age, individual health insurance coverage,
or short-term, limited-duration insurance;
carriers offering a health benefits plan
under 5 U.S.C. 8902; or providers, facil-
ities, or providers of air ambulance ser-
vices.
(D) A certified IDR entity that has, or
that has any personnel, contractors, or
subcontractors assigned to a determina-
tion who have, a material familial, finan-
cial, or professional relationship with a
party to the payment determination being
disputed, or with any officer, director, or
management employee of the plan, issuer,
or carrier offering a health benefits plan
under 5 U.S.C. 8902; the plan adminis-
trator, plan fiduciaries, or plan, issuer, or
carrier employees; the health care pro-
vider, the health care provider’s group
or practice association; the provider of
air ambulance services, the provider of
air ambulance services’ group or practice
association, or the facility that is a party to
the dispute.
(v) Credible information means infor-
mation that upon critical analysis is wor-
thy of belief and is trustworthy.
(vi) IDR entity means an entity that
may apply or has applied for certification
to conduct determinations under para-
graph (c) of this section, and that currently
is not certified by the Secretary, jointly
with the Secretaries of Health and Human
Services and Labor, pursuant to paragraph
(e) of this section.
(vii) Individually identifiable health
information (IIHI) means any informa-
tion, including demographic data, that
relates to the past, present, or future phys-
ical or mental health or condition of an
individual; the provision of health care
to an individual; or the past, present, or
future payment for the provision of health
care to an individual; and
(A) That identifies the individual; or
(B) With respect to which there is a rea-
sonable basis to believe the information
can be used to identify the individual.
(viii) Material difference means a sub-
stantial likelihood that a reasonable per-
son with the training and qualifications of
a certified IDR entity making a payment
determination would consider the submit-
ted information significant in determining
the out of network rate and would view
the information as showing that the quali-
fying payment amount is not the appropri-
ate out-of-network rate.
(ix) Material familial relationship
means any relationship as a spouse, domes-
tic partner, child, parent, sibling, spouse’s
or domestic partner’s parent, spouse’s or
domestic partner’s sibling, spouse’s or
domestic partner’s child, child’s parent,
child’s spouse or domestic partner, or sib-
ling’s spouse or domestic partner.
(x) Material financial relationship
means any financial interest of more
than five percent of total annual revenue
or total annual income of a certified IDR
entity, or an officer, director, or manager
thereof, or of a reviewer or reviewing phy-
sician employed or engaged by a certified
IDR entity to conduct or participate in any
review in the Federal IDR process. The
terms annual revenue and annual income
do not include mediation fees received by
mediators who are also arbitrators, pro-
vided that the mediator acts in the capac-
ity of a mediator and does not represent a
party in the mediation.
(xi) Material professional relationship
means any physician-patient relationship,
any partnership or employment relation-
ship, any shareholder or similar owner-
ship interest in a professional corporation,
partnership, or other similar entity; or any
independent contractor arrangement that
constitutes a material financial relation-
ship with any expert used by the certified
IDR entity or any officer or director of the
certified IDR entity.
(xii) Qualified IDR item or service
means an item or service:
(A) That is an emergency service fur-
nished by a nonparticipating provider or
nonparticipating facility subject to the
protections of § 54.9816-4T, 29 CFR
2590.716-4, or 45 CFR 149.110, as appli-
cable, for which the conditions of 45
CFR 149.410(b) are not met, or an item
or service furnished by a nonparticipat-
ing provider at a participating health care
facility, subject to the requirements of
§ 54.9816-5T, 29 CFR 2590.716-5, or 45
CFR 149.120, as applicable, for which
the conditions of 45 CFR 149.420(c)
through (i) are not met, or air ambulance
services furnished by a nonparticipating
provider of air ambulance services sub-
ject to the protections of § 54.9817-1T, 29
CFR 2590.717-1, or 45 CFR 149.130, as
applicable, and for which the out-of-net-
work rate is not determined by reference
to an All-Payer Model Agreement under
section 1115A of the Social Security Act
or a specified State law as defined in
§ 54.9816-3T;
(B) With respect to which a provider
or facility (as applicable) or group health
plan submits a notification under para-
graph (b)(2) of this section;
(C) That is not an item or service that
is the subject of an open negotiation under
paragraph (b)(1) of this section; and
(D) That is not an item or service for
which a notification under paragraph (b)
(2) of this section is submitted during the
90-calendar-day period under paragraph
(c)(4)(vi)(B) of this section, but that may
include such an item or service if the noti-
fication is submitted during the subse-
quent 30-business-day period under para-
graph (c)(4)(vi)(C) of this section.
(xiii) Unsecured IIHI means IIHI that
is not rendered unusable, unreadable, or
indecipherable to unauthorized persons
through the use of a technology or meth-
odology specified by the Secretary, jointly
with the Secretary of Health and Human
Services and the Secretary of Labor.
(b) Determination of payment amount
through open negotiation and initiation
of the Federal IDR process—(1) Deter-
mination of payment amount through
open negotiation—(i) In general. With
respect to an item or service that meets the
requirements of paragraph (a)(2)(xii)(A)
of this section, the provider, facility, or
provider of air ambulance services or the
group health plan may, during the 30-busi-
ness-day period beginning on the day the
provider, facility, or provider of air ambu-
lance services receives an initial payment
or notice of denial of payment regarding
the item or service, initiate an open nego-
tiation period for purposes of determining
the out-of-network rate for such item or
service. To initiate the open negotiation
period, a party must send a notice to the
other party (open negotiation notice) in
accordance with paragraph (b)(1)(ii) of
this section.
(ii) Open negotiation notice—(A) Con-
tent. The open negotiation notice must
include information sufficient to identify
the item(s) and service(s) (including the
date(s) the item(s) or service(s) were fur-
nished, the service code, and initial pay-
ment amount, if applicable), an offer of an

October 18, 2021 608 Bulletin No. 2021–42
out-of-network rate, and contact informa-
tion for the party sending the open nego-
tiation notice.
(B) Manner. The open negotiation
notice must be provided, using the stan-
dard form developed by the Secretary, in
writing within 30 business days beginning
on the day the provider, facility, or pro-
vider of air ambulance services receives
an initial payment or a notice of denial of
payment from the plan regarding the item
or service. The day on which the open
negotiation notice is first sent by a party
is the date the 30-business-day open nego-
tiation period begins. This notice may be
provided to the other party electronically
(such as by email) if the following two
conditions are satisfied:
(1) The party sending the open negotia-
tion notice has a good faith belief that the
electronic method is readily accessible by
the other party; and
(2) The notice is provided in paper
form free of charge upon request.
(2) Initiating the Federal IDR pro-
cess—(i) In general. With respect to an
item or service for which the parties do
not agree upon an out-of-network rate
by the last day of the open negotiation
period under paragraph (b)(1) of this sec-
tion, either party may initiate the Federal
IDR process. To initiate the Federal IDR
process, a party must submit a written
notice of IDR initiation to the other party
and to the Secretary, using the standard
form developed by the Secretary, during
the 4-business-day period beginning on
the 31st business day after the start of the
open negotiation period.
(ii) Exception for items and services
provided by certain nonparticipating pro-
viders and facilities. A party may not ini-
tiate the Federal IDR process with respect
to an item or service if, with respect to
that item or service, the party knows
(or reasonably should have known) that
the provider or facility provided notice
and received consent under 45 CFR
149.410(b) or 149.420(c) through (i).
(iii) Notice of IDR initiation—(A)
Content. The notice of IDR initiation must
include:
(1) Information sufficient to iden-
tify the qualified IDR items or services
under dispute (and whether the qualified
IDR items or services are designated as
batched items and services as described in
paragraph (c)(3) of this section), includ-
ing the date(s) and location the item or
service was furnished, the type of item or
service (such as whether the qualified IDR
item or service is an emergency service as
defined in § 54.9816-4T(c)(2)(i), 29 CFR
2590.716-4(c)(2)(i), or 45 CFR 149.110(c)
(2)(i), as applicable, an emergency ser-
vice as defined in § 54.9816-4T(c)(2)
(ii), 29 CFR 2590.716-4(c)(2)(ii), or 45
CFR 149.110(c)(2)(ii), as applicable, or a
nonemergency service; and whether any
service is a professional service or facil-
ity-based service), corresponding service
codes, place of service code, the amount
of cost sharing allowed, and the amount of
the initial payment made for the qualified
IDR item or service, if applicable;
(2) Names of the parties involved and
contact information, including name,
email address, phone number, and mailing
address;
(3) State where the qualified IDR item
or service was furnished;
(4) Commencement date of the open
negotiation period under paragraph (b)(1)
of this section;
(5) Preferred certified IDR entity;
(6) An attestation that the items and
services under dispute are qualified IDR
items or services;
(7) Qualifying payment amount;
(8) Information about the qualify-
ing payment amount as described in
§ 54.9816-6T(d); and
(9) General information describing the
Federal IDR process as specified by the
Secretary.
(B) Manner. The initiating party must
provide written notice of IDR initiation to
the other party. The initiating party may
satisfy this requirement by furnishing the
notice of IDR initiation to the other party
electronically (such as by email) if the fol-
lowing two conditions are satisfied –
(1) The initiating party has a good faith
belief that the electronic method is readily
accessible by the other party; and
(2) The notice is provided in paper
form free of charge upon request.
(C) Notice to the Secretary. The initi-
ating party must also furnish the notice of
IDR initiation to the Secretary by submit-
ting the notice through the Federal IDR
portal. The initiation date of the Federal
IDR process will be the date of receipt by
the Secretary.
(c) Federal IDR process following
initiation—(1) Selection of certified
IDR entity—(i) In general. The plan or
the provider, facility, or provider of air
ambulance services receiving the notice
of IDR initiation under paragraph (b)(2)
of this section may agree or object to the
preferred certified IDR entity identified in
the notice of IDR initiation. If the party
in receipt of the notice of IDR initiation
fails to object within 3 business days,
the preferred certified IDR entity iden-
tified in the notice of IDR initiation will
be selected and will be treated as jointly
agreed to by the parties, provided that the
certified IDR entity does not have a con-
flict of interest. If the party in receipt of
the notice of IDR initiation objects, that
party must notify the initiating party of
the objection and propose an alternative
certified IDR entity. The initiating party
must then agree or object to the alterna-
tive certified IDR entity; if the initiating
party fails to agree or object to the alter-
native certified IDR entity, the alternative
certified IDR entity will be selected and
will be treated as jointly agreed to by the
parties. In order to select a preferred certi-
fied IDR entity, the plan and the provider,
facility, or provider of air ambulance ser-
vices, must jointly agree on a certified
IDR entity not later than 3 business days
after the initiation date of the Federal IDR
process. If the plan and the provider, facil-
ity, or provider of air ambulance services
fail to agree upon a certified IDR entity
within that time, the Secretary shall select
a certified IDR entity in accordance with
paragraph (c)(1)(iv) of this section.
(ii) Requirements for selected certi-
fied IDR entity. The certified IDR entity
selected must be an IDR entity certified
under paragraph (e) of this section, that:
(A) Does not have a conflict of inter-
est as defined in paragraph (a)(2) of this
section;
(B) Ensures that assignment of per-
sonnel to a payment determination and
decisions regarding hiring, compensation,
termination, promotion, or other similar
matters related to personnel assigned to
the dispute are not made based upon the
likelihood that the assigned personnel will
support a particular party to the determi-
nation being disputed other than as out-
lined under paragraph (c)(4)(iii) of this
section; and

Bulletin No. 2021–42 609 October 18, 2021
(C) Ensures that any personnel assigned
to a payment determination do not have
any conflicts of interests as defined in
paragraph (a)(2) of this section regarding
any party to the dispute within the 1 year
immediately preceding an assignment
of dispute determination, similar to the
requirements laid out in 18 U.S.C. 207(b).
(iii) Notice of certified IDR entity selec-
tion. Upon the selection of a certified IDR
entity, in accordance with paragraph (c)
(1)(i) of this section, the plan or the pro-
vider or emergency facility that submitted
the notice of IDR initiation under para-
graph (b)(2) of this section must notify
the Secretary of the selection as soon as
reasonably practicable, but no later than 1
business day after such selection, through
the Federal IDR portal. In addition, if the
non-initiating party believes that the Fed-
eral IDR process is not applicable, the
non-initiating party must also provide
information regarding the Federal IDR
process’s inapplicability through the Fed-
eral IDR portal by the same date that the
notice of certified IDR entity selection
must be submitted.
(A) Content. If the parties have agreed
on the selection of a certified IDR entity
or the party in receipt of the notice of IDR
initiation has not objected to the other par-
ty’s selection, the notice of the certified
IDR entity selection must include the fol-
lowing information:
(1) Name of the certified IDR entity;
(2) The certified IDR entity number;
and
(3) Attestation by both parties, or by
the initiating party if the non-initiating
party fails to object to the selection of the
certified IDR entity, that the selected certi-
fied IDR entity meets the requirements of
paragraph (c)(1)(ii) of this section.
(B) [Reserved]
(iv) Failure to select a certified IDR
entity. If the plan and the provider, facility,
or provider of air ambulance services fail to
select a certified IDR entity in accordance
with paragraph (c)(1)(i) of this section, the
initiating party must notify the Secretary
of the failure no later than 1 business day
after the date of such failure (or in other
words, 4 business days after initiation of
the Federal IDR process) by electroni-
cally submitting the notice as described
in paragraph (c)(1)(iii) of this section but
indicating that the parties have failed to
select a certified IDR entity. In addition,
if the non-initiating party believes that
the Federal IDR process is not applicable,
the non-initiating party must also provide
information regarding the Federal IDR
process’s inapplicability through the Fed-
eral IDR portal by the same date that the
notice of failure to select must be submit-
ted. Upon notification of the failure of the
parties to select a certified IDR entity, the
Secretary will select a certified IDR entity
that charges a fee within the allowed
range of certified IDR entity fees through
a random selection method not later than
6 business days after the date of initiation
of the Federal IDR process and will notify
the plan and the provider or facility of the
selection. If there are insufficient certi-
fied IDR entities that charge a fee within
the allowed range of certified IDR entity
fees available to arbitrate the dispute, the
Secretary, jointly with the Secretary of
Health and Human Services and Secretary
of Labor, will select a certified IDR entity
that has received approval, as described in
paragraph (e)(2)(vi)(B) of this section, to
charge a fee outside of the allowed range
of certified IDR entity fees.
(v) Review by certified IDR entity.
After selection by the parties (including
when the initiating party selects a certified
IDR entity and the other party does not
object), or by the Secretary under para-
graph (c)(1)(iv) of this section, the certi-
fied IDR entity must review the selection
and attest that it meets the requirements of
paragraph (c)(1)(ii) of this section. If the
certified IDR entity is unable to attest that
it meets the requirements of paragraph (c)
(1)(ii) within 3 business days of selection,
the parties, upon notification, must select
another certified IDR entity under para-
graph (c)(1) of this section, , treating the
date of notification of the failure to attest
to the requirements of (c)(1)(ii) of this
section as the date of initiation of the Fed-
eral IDR process for purposes of the time
periods in paragraphs (c)(1)(i) and (iv)
of this section. Additionally, the certified
IDR entity selected must review the infor-
mation submitted in the notice of IDR ini-
tiation to determine whether the Federal
IDR process applies. If the Federal IDR
process does not apply, the certified IDR
entity must notify the Secretary and the
parties within 3 business days of making
that determination.
(2) Authority to continue negotia-
tions—(i) In general. If the parties to
the Federal IDR process agree on an out-
of-network rate for a qualified IDR item
or service after providing the notice of
IDR initiation to the Secretary consistent
with paragraph (b)(2) of this section, but
before the certified IDR entity has made
its payment determination, the amount
agreed to by the parties for the qualified
IDR item or service will be treated as the
out-of-network rate for the qualified IDR
item or service. To the extent the amount
exceeds the initial payment amount (or
initial denial of payment) and any cost
sharing paid or required to be paid by
the participant or beneficiary, payment
must be made directly by the plan to the
nonparticipating provider, facility, or
nonparticipating provider of air ambu-
lance services not later than 30 business
days after the agreement is reached. In
no instance may either party seek addi-
tional payment from the participant or
beneficiary, including in instances in
which the out-of-network rate exceeds
the qualifying payment amount. The
initiating party must send a notification
to the Secretary and to the certified IDR
entity (if selected) electronically through
the Federal IDR portal, as soon as pos-
sible, but no later than 3 business days
after the date of the agreement. The noti-
fication must include the out-of-network
rate for the qualified IDR item or service
and signatures from authorized signato-
ries for both parties.
(ii) Method of allocation of the certified
IDR entity fee. In the case of an agreement
described in paragraph (c)(2)(i) of this
section, the certified IDR entity is required
to return half of each parties’ certified IDR
entity fee, unless directed otherwise by
both parties. The administrative fee under
paragraph (d)(2) of this section will not be
returned to the parties.
(3) Treatment of batched items and ser-
vices—(i) In general. Batched items and
services may be submitted and considered
jointly as part of one payment determi-
nation by a certified IDR entity only if
the batched items and services meet the
requirements of this paragraph (c)(3).
Batched items and services submitted and
considered jointly as part of one payment
determination under this paragraph (c)(3)
(i) are treated as a batched determination

October 18, 2021 610 Bulletin No. 2021–42
and subject to the fee for batched determi-
nations under this section.
(A) The qualified IDR items and ser-
vices are billed by the same provider or
group of providers, the same facility, or
the same provider of air ambulance ser-
vices. Items and services are billed by the
same provider or group of providers, the
same facility, or the same provider of air
ambulance services if the items or services
are billed with the same National Provider
Identifier or Tax Identification Number;
(B) Payment for the qualified IDR
items and services would be made by the
same plan;
(C) The qualified IDR items and ser-
vices are the same or similar items and
services. The qualified IDR items and
services are considered to be the same or
similar items or services if each is billed
under the same service code, or a com-
parable code under a different procedural
code system, such as Current Procedural
Terminology (CPT) codes with modifiers,
if applicable, Healthcare Common Proce-
dure Coding System (HCPCS) with mod-
ifiers, if applicable, or Diagnosis-Related
Group (DRG) codes with modifiers, if
applicable; and
(D) All the qualified IDR items and
services were furnished within the same
30-business-day period, or the same
90-calendar-day period under paragraph
(c)(4)(vi)(B) of this section, as applicable.
(ii) Treatment of bundled payment
arrangements. In the case of qualified
IDR items and services billed by a pro-
vider, facility, or provider of air ambu-
lance services as part of a bundled pay-
ment arrangement, or where a plan makes
or denies an initial payment as a bundled
payment, the qualified IDR items and
services may be submitted as part of one
payment determination. Bundled payment
arrangements submitted under this para-
graph (c)(3)(ii) are subject to the rules
for batched determinations set forth in
paragraph (c)(3)(i) of this section and the
certified IDR entity fee for single determi-
nations as set forth in paragraph (e)(2)(vii)
of this section.
(4) Payment determination for a qual-
ified IDR item or service—(i) Submission
of offers. Not later than 10 business days
after the selection of the certified IDR
entity, the plan and the provider, facility,
or provider of air ambulance services:
(A) Must each submit to the certified
IDR entity:
(1) An offer of an out-of-network rate
expressed as both a dollar amount and the
corresponding percentage of the qualify-
ing payment amount represented by that
dollar amount;
(2) Information requested by the certi-
fied IDR entity relating to the offer.
(3) The following additional informa-
tion, as applicable—
(i) For providers and facilities, infor-
mation on the size of the provider’s prac-
tice or of the facility (if applicable). Spe-
cifically, a group of providers must specify
whether the providers’ practice has fewer
than 20 employees, 20 to 50 employees,
51 to 100 employees, 101 to 500 employ-
ees, or more than 500 employees. For
facilities, the facility must specify whether
the facility has 50 or fewer employees, 51
to 100 employees, 101 to 500 employees,
or more than 500 employees;
(ii) For providers and facilities, infor-
mation on the practice specialty or type,
respectively (if applicable);
(iii) For plans, information on the cov-
erage area of the plan, the relevant geo-
graphic region for purposes of the quali-
fying payment amount, whether the cov-
erage is fully-insured or partially or fully
self-insured; and
(iv) The qualifying payment amount for
the applicable year for the same or similar
item or service as the qualified IDR item
or service.
(B) May each submit to the certified
IDR entity any information relating to
the offer that was submitted by either
party, except that the information may not
include information on factors described
in paragraph (c)(4)(v) of this section.
(ii) Payment determination and noti-
fication. Not later than 30 business days
after the selection of the certified IDR
entity, the certified IDR entity must:
(A) Select as the out-of-network rate
for the qualified IDR item or service
one of the offers submitted under para-
graph (c)(4)(i) of this section, taking into
account the considerations specified in
paragraph (c)(4)(iii) of this section (as
applied to the information provided by
the parties pursuant to paragraph (c)(4)
(i) of this section). The certified IDR
entity must select the offer closest to
the qualifying payment amount unless
the certified IDR entity determines that
credible information submitted by either
party under paragraph (c)(4)(i) clearly
demonstrates that the qualifying pay-
ment amount is materially different from
the appropriate out-of-network rate, or
if the offers are equally distant from the
qualifying payment amount but in oppos-
ing directions. In these cases, the certi-
fied IDR entity must select the offer as
the out-of-network rate that the certified
IDR entity determines best represents the
value of the qualified IDR item or ser-
vices, which could be either offer.
(B) Notify the plan and the provider
or facility, as applicable, of the selection
of the offer under paragraph (c)(4)(ii)(A)
of this section, and provide the written
decision required under (c)(4)(vi) of this
section.
(iii) Considerations in determination.
In determining which offer to select, the
certified IDR entity must consider:
(A) The qualifying payment amount(s)
for the applicable year for the same or
similar item or service.
(B) Information requested by the certi-
fied IDR entity under paragraph (c)(4)(i)
(A)(2) of this section relating to the offer,
to the extent a party provides credible
information.
(C) Additional information submitted
by a party, provided the information is
credible and relates to the circumstances
described in paragraphs (c)(4)(iii)(C)(1)
through (5) of this section, with respect to
a qualified IDR item or service of a non-
participating provider, facility, or group
health plan that is the subject of a payment
determination. This information must also
clearly demonstrate that the qualifying
payment amount is materially different
from the appropriate out-of-network rate.
(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 in the
geographic region in which the qualified
IDR item or service was provided.
(3) The acuity of the participant, or
beneficiary, receiving the qualified IDR
item or service, or the complexity of fur-

Bulletin No. 2021–42 611 October 18, 2021
nishing 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 to enter into network
agreements with each other, and, if appli-
cable, contracted rates between the pro-
vider or facility, as applicable, and the
plan during the previous 4 plan years.
(D) Additional information submitted
by a party, provided the information is
credible and relates to the offer submitted
by either party and does not include infor-
mation on factors described in paragraph
(c)(4)(v) of this section.
(iv) Examples. The rules of paragraph
(c)(4)(iii) of this section are illustrated by
the following examples:
(A) Example 1 – (1) Facts. A nonparticipating
provider and a group health plan are parties to a
payment determination in the Federal IDR process.
The nonparticipating provider submits an offer and
additional written information asserting that the pro-
vider has made good faith efforts to enter into net-
work agreements with the plan. The nonparticipating
provider fails to provide any documentation of these
efforts, such as correspondence or records of conver-
sations with representatives of the plan.
(2) Conclusion. In this Example 1, the nonpar-
ticipating provider has submitted additional infor-
mation. However, this information is not credible,
as the nonparticipating provider has failed to pro-
vide any documentation in support of the provider’s
assertions of good faith efforts to enter into network
agreements with the plan. Therefore, the certified
IDR entity cannot consider the information.
(B) Example 2 – (1) Facts. A nonparticipating
provider and a group health plan are parties to a
payment determination in the Federal IDR pro-
cess. The nonparticipating provider submits cred-
ible information relating to the provider’s level
of training, experience, and quality and outcome
measurements from 2019. The provider also sub-
mits credible information that clearly demonstrates
that the provider’s level of training and expertise
was necessary for providing the service that is the
subject of the payment determination to the par-
ticular patient. Further, the provider submits cred-
ible information that clearly demonstrates that the
qualifying payment amount generally presumes the
service would be delivered by a provider with a
lower level of training, experience, and quality and
outcome measurements. This information, taken
together, demonstrates that the qualifying payment
amount is not an appropriate payment amount, and
the provider submits an offer that is higher than
the qualifying payment amount and commensu-
rate with the provider’s level of training, experi-
ence, and quality and outcome measurements with
respect to the service provided. The plan submits
the qualifying payment amount as its offer with no
additional information.
(2) Conclusion. In this Example 2, the nonpar-
ticipating provider has submitted information that is
credible. Moreover, the credible information clearly
demonstrates that the qualifying payment amount
does not adequately take into account the provider’s
level of training, experience, and quality and out-
come measurements with respect to the service pro-
vided, and that the appropriate out-of-network rate
should therefore be higher than the qualifying pay-
ment amount. Accordingly, the certified IDR entity
must select the provider’s offer, as that offer best
represents the value of the service that is the subject
of the payment determination.
(C) Example 3 – (1) Facts. A nonparticipating
provider and a group health plan are parties to a pay-
ment determination in the Federal IDR process. The
nonparticipating provider submits credible informa-
tion to the certified IDR entity relating to the acu-
ity of the patient that received the service, and the
complexity of furnishing the service to the patient,
by providing details of the service at issue and the
training required to furnish the complex service. The
provider contends that this information demonstrates
that the qualifying payment amount is not an appro-
priate payment amount, and the provider submits
an offer that is higher than the qualifying payment
amount and equal to what the provider believes is
commensurate with the acuity of the patient and the
complexity of the service that is the subject of the
payment determination. However, the evidence sub-
mitted by the provider does not clearly demonstrate
that the qualifying payment amount fails to encom-
pass the acuity and complexity of the service. The
plan submits the qualifying payment amount as its
offer, along with credible information that demon-
strates how the qualifying payment amount was cal-
culated for this particular service, taking into consid-
eration the acuity of the patient and the complexity
of the service.
(2) Conclusion. The information submitted by
the provider to the certified IDR entity is credible
with respect to the acuity of the patient and complex-
ity of the service. However, in this example, the pro-
vider has not clearly demonstrated that the qualify-
ing payment amount is materially different from the
appropriate out-of-network rate, based on the acuity
of the patient and the complexity of the service that
is the subject of the payment determination. Accord-
ingly, the certified IDR entity must select the offer
closest to the qualifying payment amount, which is
the plan’s offer.
(D) Example 4 - (1) Facts. A nonparticipating
provider and a group health plan are parties to a
payment determination in the Federal IDR process.
The plan submits credible information demonstrat-
ing that the patent for the item that is the subject of
the payment determination has expired, including
written documentation that demonstrates how much
the cost of the item was at the time the provider
rendered service and how the qualifying payment
amount exceeds that cost. The plan submits an offer
that is lower than the qualifying payment amount and
commensurate with the cost of the item at the time
service was rendered. The nonparticipating provider
submits the qualifying payment amount as its offer
and also submits credible information demonstrating
the provider’s level of training, experience, and qual-
ity and outcome measurements from 2019, but the
provider does not explain how this additional infor-
mation is relevant to the cost of the item.
(2) Conclusion. In this Example 4, both the
nonparticipating provider and plan submitted infor-
mation that is credible and that may be considered
by the certified IDR entity. However, only the plan
provided credible information that was relevant to
the service that is the subject of the payment deter-
mination. Moreover, the plan has clearly demon-
strated that the qualifying payment amount does not
adequately take into account the complexity of the
item furnished – in this case that the item is no longer
patent protected. While the provider submitted cred-
ible information, the provider failed to show how
the information was relevant to the item that is the
subject of the payment determination. Accordingly,
the certified IDR entity must select the offer that best
represents the value of the item, which is the plan’s
offer in this example.
(v) Prohibition on consideration of cer-
tain factors. In determining which offer to
select, the certified IDR entity must not
consider:
(A) Usual and customary charges
(including payment or reimbursement
rates expressed as a proportion of usual
and customary charges);
(B) The amount that would have been
billed by the provider or facility with
respect to the qualified IDR item or service
had the provisions of 45 CFR 149.410 and
149.420 (as applicable) not applied; or
(C) The payment or reimbursement
rate for items and services furnished by
the provider or facility payable by a pub-
lic payor, including 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; or demon-
stration projects under section 1115 of the
Social Security Act.
(vi) Written decision. (A) The certified
IDR entity must explain its determination
in a written decision submitted to the par-
ties and the Secretary, in a form and man-
ner specified by the Secretary;
(B) If the certified IDR entity does
not choose the offer closest to the quali-
fying payment amount, the certified IDR
entity’s written decision must include an
explanation of the credible information
that the certified IDR entity determined
demonstrated that the qualifying payment

October 18, 2021 612 Bulletin No. 2021–42
amount was materially different from the
appropriate out-of-network rate, based on
the considerations allowed under para-
graphs (c)(4)(iii)(B) through (D) of this
section, with respect to the qualified IDR
item or service.
(vii) Effects of determination—(A)
Binding. A determination made by a certi-
fied IDR entity under paragraph (c)(4)(ii)
of this section:
(1) Is binding upon the parties, in the
absence of fraud or evidence of intentional
misrepresentation of material facts pre-
sented to the certified IDR entity regard-
ing the claim; and
(2) Is not subject to judicial review,
except in a case described in any of para-
graphs (1) through (4) of section 10(a) of
title 9, United States Code.
(B) Suspension of certain subsequent
IDR requests. In the case of a determina-
tion made by a certified IDR entity under
paragraph (c)(4)(ii) of this section, the
party that submitted the initial notifica-
tion under paragraph (b)(2) of this section
may not submit a subsequent notifica-
tion involving the same other party with
respect to a claim for the same or similar
item or service that was the subject of the
initial notification during the 90-calen-
dar-day period following the determina-
tion.
(C) Subsequent submission of requests
permitted. If the end of the open negoti-
ation period specified in paragraph (b)(1)
of this section occurs during the 90-cal-
endar-day suspension period regarding
claims for the same or similar item or
service that were the subject of the initial
notice of IDR determination as described
in paragraph (c)(4)(vi) of this section,
either party may initiate the Federal IDR
process for those claims by submitting a
notification as specified in paragraph (b)
(2) of this section during the 30-busi-
ness-day period beginning on the day
after the last day of the 90-calendar-day
suspension period.
(viii) Recordkeeping requirements. The
certified IDR entity must maintain records
of all claims and notices associated with
the Federal IDR process with respect to
any determination for 6 years. The certi-
fied IDR entity must make these records
available for examination by the plan, pro-
vider, facility, provider of air ambulance
services, or a State or Federal oversight
agency upon request, except to the extent
the disclosure would violate either State
or Federal privacy law.
(ix) Payment. If applicable, the amount
of the offer selected by the certified IDR
entity (less the sum of the initial payment
and any cost sharing paid or owed by the
participant or beneficiary) must be paid
directly to the provider, facility, or pro-
vider of air ambulance services not later
than 30 calendar days after the determi-
nation by the certified IDR entity. If the
offer selected by the certified IDR entity
is less than the sum of the initial payment
and any cost sharing paid by the partici-
pant or beneficiary, the provider, facility,
or provider of air ambulance services will
be liable to the plan for the difference. The
provider, facility, or provider of air ambu-
lance services must pay the difference
directly to the plan not later than 30 cal-
endar days after the determination by the
certified IDR entity.
(d) Costs of IDR process—(1) Certi-
fied IDR entity fee. (i) With respect to the
Federal IDR process described in para-
graph (c) of this section, the party whose
offer submitted to the certified IDR entity
under paragraph (c)(4)(ii)(A) of this sec-
tion is not selected is responsible for the
payment to the certified IDR entity of the
predetermined fee charged by the certified
IDR entity.
(ii) Each party to a determination for
which a certified IDR entity is selected
under paragraph (c)(1) of this section must
pay the predetermined certified IDR entity
fee charged by the certified IDR entity to
the certified IDR entity at the time the par-
ties submit their offers under (c)(4)(i) of
this section. The certified IDR entity fee
paid by the prevailing party whose offer is
selected by the certified IDR entity will be
returned to that party within 30 business
days following the date of the certified
IDR entity’s determination.
(2) Administrative fee. (i) Each party to
a determination for which a certified IDR
entity is selected under paragraph (c)(1) of
this section must, at the time the certified
IDR entity is selected under paragraph
(c)(1), pay to the certified IDR entity a
non-refundable administrative fee due to
the Secretary for participating in the Fed-
eral IDR process described in this section.
(ii) The administrative fee amount
will be established in guidance published
annually by the Secretary in a manner such
that the total fees paid for a year are esti-
mated to be equal to the projected amount
of expenditures by the Departments of the
Treasury, Labor, and Health and Human
Services for the year in carrying out the
Federal IDR process.
(e) Certification of IDR entity—(1)
In general. In order to be selected under
paragraph (c)(1) of this section—
(i) An IDR entity must meet the stan-
dards described in this paragraph (e) and
be certified by the Secretary, jointly with
the Secretaries of Health and Human
Services and Labor, as set forth in this
paragraph (e) and guidance promulgated
by the Secretary. Once certified, the IDR
entity will be provided with a certified
IDR entity number.
(ii) An IDR entity must provide written
documentation to the Secretary regarding
general company information (such as
contact information, Taxpayer Identifica-
tion Number, and website), as well as the
applicable service area in which the IDR
entity intends to conduct payment deter-
minations under the Federal IDR process.
IDR entities may choose to submit their
application for all States or self-limit to a
particular subset of States.
(iii) An IDR entity that the Secretary,
jointly with the Secretary of Labor and the
Secretary of Health and Human Services,
certifies must enter into an agreement as
a condition of certification. The agree-
ment shall include specified provisions
encompassed by this section, including,
but not limited to, the requirements appli-
cable to certified IDR entities when mak-
ing payment determinations, as well as
the requirements regarding certification
and revocation (such as specifications
for wind-down activities and reallocation
of certified IDR entity fees, where war-
ranted).
(2) Requirements. An IDR entity must
provide written documentation to the Sec-
retary through the Federal IDR portal that
demonstrates that the IDR entity satisfies
the following standards to be a certified
IDR entity under this paragraph (e):
(i) Possess (directly or through con-
tracts or other arrangements) sufficient
arbitration and claims administration of
health care services, managed care, bill-
ing and coding, medical and legal exper-
tise to make the payment determinations

Bulletin No. 2021–42 613 October 18, 2021
described in paragraph (c) of this section
within the time prescribed in paragraph
(c)(4)(ii) of this section.
(ii) Employ (directly or through con-
tracts or other arrangements) a sufficient
number of personnel to make the deter-
minations described in paragraph (c) of
this section within the time prescribed by
(c)(4)(ii) of this section. To satisfy this
standard, the written documentation must
include a description of the IDR entity’s
organizational structure and capabilities,
including an organizational chart and the
credentials, responsibilities, and number
of personnel employed to make determi-
nations described in paragraph (c) of this
section.
(iii) Maintain a current accreditation
from a nationally recognized and rele-
vant accrediting organization, such as
URAC, or ensure that it otherwise pos-
sesses the requisite training to conduct
payment determinations (for example,
providing documentation that personnel
employed by the IDR entity have com-
pleted arbitration training by the Amer-
ican Arbitration Association, the Ameri-
can Health Law Association, or a similar
organization);
(iv) Have a process to ensure that no
conflict of interest, as defined in paragraph
(a)(2) of this section, exists between the
parties and the personnel the certified IDR
entity assigns to a payment determination
to avoid violating paragraph (c)(1)(ii) of
this section, including policies and proce-
dures for conducting ongoing audits for
conflicts of interest, to ensure that should
any conflicts of interest arise, the certi-
fied IDR entity has procedures in place to
inform the Secretary, jointly with the Sec-
retary of Health and Human Services and
the Secretary of Labor, of the conflict of
interest and to mitigate the risk by reas-
signing the dispute to other personnel in
the event that any personnel previously
assigned have a conflict of interest.
(v) Have a process to maintain the con-
fidentiality of IIHI obtained in the course
of conducting determinations. A certified
IDR entity’s responsibility to comply with
these confidentiality requirements shall
survive revocation of the IDR entity’s cer-
tification for any reason, and IDR entities
must comply with the record retention and
disposal requirements described in this
section. Under this process, once certified,
the certified IDR entity must comply with
the following requirements:
(A) Privacy. The certified IDR entity
may create, collect, handle, disclose,
transmit, access, maintain, store, and/or
use IIHI, only to perform:
(1) The certified IDR entity’s required
duties described in this section; and
(2) Functions related to carrying out
additional obligations as may be required
under applicable Federal or State laws or
regulations.
(B) Security. (1) The certified IDR
entity must ensure the confidentiality
of all IIHI it creates, obtains, maintains,
stores, and transmits;
(2) The certified IDR entity must pro-
tect against any reasonably anticipated
threats or hazards to the security of this
information;
(3) The certified IDR entity must
ensure that IIHI is securely destroyed or
disposed of in an appropriate and reason-
able manner 6 years from either the date
of its creation or the first date on which
the certified IDR entity had access to it,
whichever is earlier;
(4) The certified IDR entity must
implement policies and procedures to pre-
vent, detect, contain, and correct security
violations in the event of a breach of IIHI;
(C) Breach notification. The certified
IDR entity must, following the discovery
of a breach of unsecured IIHI, notify of
the breach the provider, facility, or pro-
vider of air ambulance services; the plan;
the Secretary, jointly with the Secretary
of Health and Human Services and the
Secretary of Labor; and each individual
whose unsecured IIHI has been, or is rea-
sonably believed to have been, subject to
the breach, to the extent possible.
(1) Breaches treated as discovered. For
purposes of this paragraph (e)(2)(v)(C), a
breach shall be treated as discovered by a
certified IDR entity as of the first day on
which the breach is known to the certified
IDR entity or, by exercising reasonable
diligence, would have been known to the
certified IDR entity. A certified IDR entity
shall be deemed to have knowledge of a
breach if the breach is known, or by exer-
cising reasonable diligence would have
been known, to any person, other than the
person committing the breach, who is an
employee, officer, or other agent of the
certified IDR entity;
(2) Timing of notification. A certified
IDR entity must provide the notification
required by this paragraph (e)(2)(v)(C)
without unreasonable delay and in no case
later than 60 calendar days after discovery
of a breach.
(3) Content of notification. The notifi-
cation required by this paragraph (e)(2)(v)
(C) must include, to the extent possible:
(i) The identification of each individ-
ual whose unsecured IIHI has been, or is
reasonably believed by the certified IDR
entity to have been, subject to the breach;
(ii) A brief description of what hap-
pened, including the date of the breach and
the date of the discovery of the breach, to
the extent known;
(iii) A description of the types of
unsecured IIHI that were involved in the
breach (for example whether full name,
social security number, date of birth,
home address, account number, diagnosis,
disability code, or other types of informa-
tion were involved);
(iv) A brief description of what the
certified IDR entity involved is doing to
investigate the breach, to mitigate harm to
the affected parties, and to protect against
any further breaches; and
(v) Contact procedures for individuals
to ask questions or learn additional infor-
mation, which must include a toll-free
telephone number, email address, website,
or postal address.
(4) Method for providing notification.
A certified IDR entity must submit the
notification required by this paragraph
(e)(2)(v)(C) in written form (in clear and
understandable language) either on paper
or electronically through the Federal IDR
portal or electronic mail.
(D) Application to contractor and sub-
contractors. The certified IDR entity must
ensure compliance with this paragraph (e)
(2)(v) of this section by any contractor
or subcontractor with access to IIHI per-
forming any duties related to the Federal
IDR process.
(vi) Meet appropriate indicators of
fiscal integrity and stability by demon-
strating that the certified IDR entity has a
system of safeguards and controls in place
to prevent and detect improper financial
activities by its employees and agents to
assure fiscal integrity and accountability
for all certified IDR entity fees and admin-
istrative fees received, held, and disbursed

October 18, 2021 614 Bulletin No. 2021–42
and by submitting 3 years of financial
statements or, if not available, other infor-
mation to demonstrate fiscal stability of
the IDR entity;
(vii) Provide a fixed fee for single
determinations and a separate fixed fee for
batched determinations within the upper
and lower limits for each, as set forth in
guidance issued by the Secretary. The cer-
tified IDR entity may not charge a fee that
is not within the approved limits as set
forth in guidance unless the certified IDR
entity or IDR entity seeking certification
receives written approval from the Secre-
tary to charge a flat rate beyond the upper
or lower limits approved by the Secretary
for fees. The certified IDR entity or IDR
entity seeking certification may update its
fees and seek approval from the Secretary
to charge a flat fee beyond the upper or
lower limits for fees annually as provided
in guidance. In order for the certified IDR
entity to receive the Secretary’s written
approval to charge a flat fee beyond the
upper or lower limits for fees as set forth
in guidance, it must satisfy both condi-
tions in paragraphs (e)(2)(vii)(A) and (B)
of this section as follows:
(A) Submit, in writing, a proposal to
the Secretary that includes:
(1) The alternative flat fee the certified
IDR entity or IDR entity seeking certifi-
cation believes is appropriate for the cer-
tified IDR entity or IDR entity seeking
certification to charge;
(2) A description of the circumstances
that require the alternative fee; and
(3) A description of how the alternative
flat rate will be used to mitigate the effects
of these circumstances; and
(B) Receive from the Secretary, jointly
with the Secretary of Health and Human
Services and the Secretary of Labor, writ-
ten approval to charge the fee documented
in the certified IDR entity’s or the IDR
entity seeking certification’s written pro-
posal.
(viii) Have a procedure in place
to retain the certified IDR entity fees
described in paragraph (d)(1) of this
section paid by both parties in a trust or
escrow account and to return the certified
IDR entity fee paid by the prevailing party
of an IDR payment determination, or half
of each party’s certified IDR entity fee
in the case of an agreement described in
paragraph (c)(2)(i) of this section, within
30 business days following the date of the
determination;
(ix) Have a procedure in place to retain
the administrative fees described in para-
graph (d)(2) of this section and to remit
the administrative fees to the Secretary in
accordance with the timeframe and proce-
dures set forth in guidance published by
the Secretary;
(x) Discharge its responsibilities in
accordance with paragraph (c) of this
section, including not making any deter-
mination with respect to which the certi-
fied IDR entity would not be eligible for
selection pursuant to paragraph (c)(1) of
this section; and
(xi) Collect the information required to
be reported to the Secretary under para-
graph (f) of this section and report the
information on a timely basis in the form
and manner provided in guidance pub-
lished by the Secretary.
(3) Conflict-of-interest standards. In
addition to the general standards set forth
in paragraph (e)(2)(iv) of this section,
an IDR entity must provide written doc-
umentation that the IDR entity satisfies
the standards to be a certified IDR entity
under this paragraph (e)(3).
(i) The IDR entity must provide an
attestation indicating that it does not have
a conflict of interest as defined in para-
graph (a)(2) of this section;
(ii) The IDR entity must have proce-
dures in place to ensure that personnel
assigned to a determination do not have
any conflicts of interest regarding any
party to the dispute within the 1 year
immediately preceding an assignment
of dispute determination, similar to the
requirements laid out in 18 U.S.C. 207(b).
In order to satisfy this requirement, if
certified, the IDR entity must ensure that
any personnel assigned to a determination
do not have any conflicts of interest as
defined in paragraph (a)(2) of this section.
(iii) Following certification under this
paragraph (e), if a certified IDR entity
acquires control of, becomes controlled
by, or comes under common control with
any entity described in paragraph (e)(3)
(i) of this section, the certified IDR entity
must notify the Secretary in writing no
later than 3 business days after the acqui-
sition or exercise of control and shall be
subject to revocation of certification under
paragraph (e)(6)(ii) of this section.
(4) Period of certification. Subject to
paragraphs (e)(5) and (6) of this section,
each certification (including a recertifica-
tion) of a certified IDR entity under the
process described in paragraph (e)(1) of
this section will be effective for a 5-year
period.
(5) Petition for denial or revocation—
(i) In general. An individual, provider,
facility, provider of air ambulance ser-
vices, plan, or issuer may petition for a
denial of a certification for an IDR entity
or a revocation of a certification for a
certified IDR entity for failure to meet a
requirement of this section using the stan-
dard form and manner set forth in guid-
ance issued by the Secretary. The petition
for denial of a certification must be sub-
mitted within the timeframe set forth in
guidance issued by the Secretary.
(ii) Content of petition. The individual,
provider, facility, provider of air ambu-
lance services, plan, or issuer seeking
denial or revocation of certification must
submit a written petition using the stan-
dard form issued by the Secretary includ-
ing the following information:
(A) The identity of the IDR entity seeking
certification or certified IDR entity
that is the subject of the petition;
(B) The reason(s) for the petition;
(C) Whether the petition seeks denial or
revocation of a certification;
(D) Documentation to support the reasons
outlined in the petition; and
(E) Other information as may be required
by the Secretary.
(iii) Process. (A) The Secretary, jointly
with the Secretary of Health and Human
Services and the Secretary of Labor, will
acknowledge receipt of the petition within
10 business days of receipt of the petition.
(B) If the Secretary finds that the peti-
tion adequately shows a failure of the IDR
entity seeking certification or the certified
IDR entity to follow the requirements of
this paragraph (e), the Secretary, jointly
with the Secretary of Health and Human
Services and the Secretary of Labor, will
notify the IDR entity seeking certification
or the certified IDR entity by providing a
de-identified copy of the petition. Follow-
ing the notification, the IDR entity seek-
ing certification or certified IDR entity
will have 10 business days to provide a
response. After the time period for pro-
viding the response has passed, the Sec-

Bulletin No. 2021–42 615 October 18, 2021
retary, jointly with the Secretary of Health
and Human Services and the Secretary of
Labor, will review the response (if any),
determine whether a denial or revocation
of a certification is warranted, and issue a
notice of the decision to the IDR entity or
certified IDR entity and to the petitioner.
This decision will be subject to the appeal
requirements of paragraph (e)(6)(v) of this
section.
(C) Effect on certification under peti-
tion. Regarding a petition for revocation
of a certified IDR entity’s certification, if
the Secretary, jointly with the Secretary
of Health and Human Services and the
Secretary of Labor, finds that the petition
adequately shows a failure to comply with
the requirements of this paragraph (e), fol-
lowing the Secretary’s notification of the
failure to the certified IDR entity under
paragraph (e)(5)(iii)(B) of this section, the
certified IDR entity may continue to work
on previously assigned determinations but
may not accept new determinations until
the Secretary issues a notice of the decision
to the certified IDR entity finding that a
revocation of certification is not warranted.
(6) Denial of IDR entity certification
or revocation of certified IDR entity cer-
tification—(i) Denial of IDR entity cer-
tification. The Secretary, jointly with the
Secretary of Health and Human Services
and the Secretary of Labor, may deny the
certification of an IDR entity under para-
graph (e)(1) of this section if, during the
process of certification, including as a
result of a petition described in paragraph
(e)(5) of this section, the Secretary deter-
mines the following:
(A) The IDR entity fails to meet the
applicable standards set forth under this
paragraph (e);
(B) The IDR entity has committed
or participated in fraudulent or abusive
activities, including, during the certifica-
tion process, submitting fraudulent data,
or submitting information or data the IDR
entity knows to be false to the Secretary,
the Secretary of Health and Human Ser-
vices, or the Secretary of Labor;
(C) The IDR entity has failed to com-
ply with requests for information from
the Secretary, the Secretary of Health
and Human Services, or the Secretary of
Labor as part of the certification process;
(D) In conducting payment determina-
tions, including those outside the Federal
IDR process, the IDR entity has failed to
meet the standards that applied to those
determinations or reviews, including
standards of independence and impartial-
ity; or
(E) The IDR entity is otherwise not fit
or qualified to make determinations under
the Federal IDR process.
(ii) Revocation of certification of a cer-
tified IDR entity. The Secretary, jointly
with the Secretary of Health and Human
Services and the Secretary of Labor, may
revoke the certification of a certified IDR
entity under paragraph (e)(1) of this sec-
tion if, as a result of an audit, a petition
described in paragraph (e)(5) of this sec-
tion, or otherwise, the Secretary deter-
mines the following:
(A) The certified IDR entity has a pat-
tern or practice of noncompliance with
any requirements of this paragraph (e);
(B) The certified IDR entity is operat-
ing in a manner that hinders the efficient
and effective administration of the Federal
IDR process;
(C) The certified IDR entity no longer
meets the applicable standards for certifi-
cation set forth under this paragraph (e);
(D) The certified IDR entity has com-
mitted or participated in fraudulent or
abusive activities, including submission
of false or fraudulent data to the Secretary,
the Secretary of Health and Human Ser-
vices, or the Secretary of Labor;
(E) The certified IDR entity lacks the
financial viability to provide arbitration
under the Federal IDR process;
(F) The certified IDR entity has failed
to comply with requests from the Secre-
tary, the Secretary of Health and Human
Services, or the Secretary of Labor made
as part of an audit, including failing to
submit all records of the certified IDR
entity that pertain to its activities within
the Federal IDR process; or
(G) The certified IDR entity is other-
wise no longer fit or qualified to make
determinations.
(iii) Notice of denial or revocation. The
Secretary, jointly with the Secretary of
Health and Human Services and the Sec-
retary of Labor, will issue a written notice
of denial to the IDR entity or revocation to
the certified IDR entity within 10 business
days of the Secretary’s decision, including
the effective date of denial or revocation,
the reason(s) for denial or revocation, and
the opportunity to request appeal of the
denial or revocation.
(iv) Request for appeal of denial or
revocation. To request an appeal, the IDR
entity or certified IDR entity must sub-
mit a request for appeal to the Secretary
within 30 business days of the date of the
notice under paragraph (e)(6)(iii) of this
section of denial or revocation and in the
manner prescribed by the instructions to
the notice. During this time period, the
Secretary, jointly with the Secretary of
Health and Human Services and the Sec-
retary of Labor, will not issue a notice of
final denial or revocation and a certified
IDR entity may continue to work on pre-
viously assigned determinations but may
not accept new determinations. If the
IDR entity or certified IDR entity does
not timely submit a request for appeal of
the denial or revocation, the Secretary,
jointly with the Secretary of Health and
Human Services and the Secretary of
Labor, will issue a notice of final denial
or revocation to the IDR entity or cer-
tified IDR entity (if applicable) and the
petitioner.
(v) Denial or final revocation. Upon
notice of denial or final revocation, the
IDR entity shall not be considered a certi-
fied IDR entity and therefore shall not be
eligible to accept payment determinations
under the Federal IDR process. Moreover,
after a notice of final revocation, the IDR
entity may not re-apply to be a certified
IDR entity until on or after the 181st day
after the date of the notice of denial or
final revocation.
(f) Reporting of information relating to
the Federal IDR process—(1) Reporting
of information. Within 30 business days of
the close of each month, for qualified IDR
items and services furnished on or after
January 1, 2022, each certified IDR entity
must, in a form and manner specified by
the Secretary, report:
(i) The number of notices of IDR ini-
tiation submitted under paragraph (b)(2)
of this section to the certified IDR entity
during the immediately preceding month;
(ii) The size of the provider practices
and the size of the facilities submitting
notices of IDR initiation under paragraph
(b)(2) of this section during the immedi-
ately preceding month, as required to be
provided to the certified IDR entity under
paragraph (c)(4)(i)(A)(2) of this section;

October 18, 2021 616 Bulletin No. 2021–42
(iii) The number of such notices of IDR
initiation with respect to which a determi-
nation was made under paragraph (c)(4)
(ii) of this section;
(iv) The number of times during the
month that the out-of-network rate deter-
mined (or agreed to) under this section has
exceeded the qualifying payment amount,
specified by qualified IDR items and ser-
vices;
(v) With respect to each notice of IDR
initiation under paragraph (b)(2) of this
section for which such a determination
was made, the following information:
(A) A description of the qualified IDR
items and services included with respect
to the notification, including the relevant
billing and service codes;
(B) The relevant geographic region
for purposes of the qualifying payment
amount for the qualified IDR items and
services with respect to which the notifi-
cation was provided;
(C) The amount of the offer submitted
under paragraph (c)(4)(i) of this section by
the plan and by the provider or facility (as
applicable) expressed as a dollar amount
and as a percentage of the qualifying pay-
ment amount;
(D) Whether the offer selected by the
certified IDR entity under paragraph (c)
(4) of this section was the offer submitted
by the plan or by the provider or facility
(as applicable);
(E) The amount of the selected offer
expressed as a dollar amount and as a per-
centage of the qualifying payment amount;
(F) The rationale for the certified IDR
entity’s decision, including the extent to
which the decision relied on the criteria in
paragraph (c)(4)(iv) of this section;
(G) The practice specialty or type of
each provider or facility, respectively,
involved in furnishing each qualified IDR
item or service;
(H) The identity for each plan, and pro-
vider or facility, with respect to the noti-
fication. Specifically, each certified IDR
entity must provide each party’s name and
address, as applicable; and
(I) For each determination, the number
of business days elapsed between selec-
tion of the certified IDR entity and the
determination of the out-of-network rate
by the certified IDR entity.
(vi) The total amount of certified IDR
entity fees paid to the certified IDR entity
under paragraph (d)(1) of this section
during the month.
(g) Extension of time periods for exten-
uating circumstances—(1) General. The
time periods specified in this section
(other than the time for payment, if appli-
cable, under paragraph (c)(4)(ix) of this
section) may be extended in extenuating
circumstances at the Secretary’s discretion
if:
(i) An extension is necessary to address
delays due to matters beyond the control
of the parties or for good cause; and
(ii) The parties attest that prompt action
will be taken to ensure that the determi-
nation under this section is made as soon
as administratively practicable under the
circumstances.
(2) Process to request an extension.
The parties may request an extension by
submitting a request for extension due to
extenuating circumstances through the
Federal IDR portal if the extension is nec-
essary to address delays due to matters
beyond the control of the parties or for
good cause.
(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 [INSERT DATE OF PUB-
LICATION IN THE FEDERAL REGIS-
TER].
8. Section 54.9817-2T is added to read
as follows:
§ 54.9817-2T Independent dispute
resolution process for air ambulance
services (temporary).
(a) Definitions. Unless otherwise
stated, the definitions in § 54.9816-3T
apply.
(b) Determination of out-of-network
rates to be paid by group health plans;
independent dispute resolution process—
(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 for out-
of-network air ambulance services, plans
must comply with the requirements of
§ 54.9816-8T, except that references in
§ 54.9816-8T to the additional circum-
stances in § 54.9816-8T(c)(4)(iii)(C) shall
be understood to refer to § 54.9817-2T(b)
(2).
(2) Additional information. Additional
information submitted by a party, pro-
vided the information is credible, relates
to the circumstances described in para-
graphs (b)(2)(i) through (vi) of this sec-
tion, with respect to a qualified IDR ser-
vice of a nonparticipating provider of air
ambulance services or group health plan
that is the subject of a payment determi-
nation. This information must also clearly
demonstrate that the qualifying payment
amount is materially different from the
appropriate out-of-network rate.
(i) The quality and outcomes measure-
ments of the provider that furnished the
services.
(ii) The acuity of the condition of the
participant or beneficiary receiving the
service, or the complexity of furnishing
the service to the participant or benefi-
ciary.
(iii) The training, experience, and qual-
ity of the medical personnel that furnished
the air ambulance services.
(iv) Ambulance vehicle type, including
the clinical capability level of the vehicle.
(v) 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).
(vi) Demonstrations of good faith
efforts (or lack thereof) made by the non-
participating provider of air ambulance
services or the plan 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 during the previous 4 plan years.
(3) Reporting of information relating to
the IDR process. In applying the require-
ments of § 54.9816-8T(f), within 30 busi-
ness days of the close of each month, for
services furnished on or after January 1,
2022, the information the certified IDR
entity must report, in a form and manner
specified by the Secretary, with respect
to the Federal IDR process involving air
ambulance services is:
(i) The number of notices of IDR ini-
tiation submitted under the Federal IDR
process to the certified IDR entity that
pertain to air ambulance services during
the immediately preceding month;
(ii) The number of such notices of IDR
initiation with respect to which a final

Bulletin No. 2021–42 617 October 18, 2021
determination was made under § 54.9816-
8T(c)(4)(ii) (as applied by paragraph (b)
(1) of this section);
(iii) The number of times the payment
amount determined (or agreed to) under
this subsection has exceeded the quali-
fying payment amount, specified by ser-
vices;
(iv) With respect to each notice of IDR
initiation under § 54.9816-8T(b)(2) (as
applied by paragraph (b)(1) of this sec-
tion) for which a determination was made,
the following information:
(A) A description of each air ambu-
lance service included in such notifica-
tion, including the relevant billing and
service codes;
(B) The point of pick-up (as defined in
42 CFR 414.605) for the services included
in such notification;
(C) The amount of the offers submitted
under § 54.9816-8T(c)(4)(i) (as applied
by paragraph (b)(1) of this section) by
the group health plan and by the nonpar-
ticipating provider of air ambulance ser-
vices, expressed as a dollar amount and
as a percentage of the qualifying payment
amount;
(D) Whether the offer selected by the
certified IDR entity under § 54.9816-
8T(c)(4)(ii) (as applied by paragraph (b)
(1) of this section) to be the payment
amount applied was the offer submitted
by the plan or by the provider of air ambu-
lance services;
(E) The amount of the selected offer
expressed as a dollar amount and as a per-
centage of the qualifying payment amount;
(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;
(G) Air ambulance vehicle type, includ-
ing the clinical capability level of such
vehicle (to the extent this information has
been provided to the certified IDR entity);
(H) The identity for each plan and
provider of air ambulance services, with
respect to the notification. Specifically,
each certified IDR entity must provide
each party’s name and address, as appli-
cable; and
(I) For each determination, the number
of business days elapsed between selec-
tion of the certified IDR entity and the
selection of the payment amount by the
certified IDR entity.
(v) The total amount of certified IDR
entity fees paid to the certified IDR entity
under paragraph § 54.9816-8T(d)(1) (as
applied by paragraph (b)(1) of this sec-
tion) during the month for determinations
involving air ambulance services.
(c) Applicability date. The provisions
of this section are applicable with respect
to plan years beginning on or after January
1, 2022.
Employee Benefits Security
Administration
29 CFR Chapter XXV
For the reasons set forth in the pream-
ble, the Department of Labor amends 29
CFR part 2590 as set forth below:
PART 2590—RULES AND
REGULATIONS FOR GROUP
HEALTH PLANS.
9. The authority citation for part 2590
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; Secretary of Labor’s
Order 1-2011, 77 FR 1088 (Jan. 9, 2012).
Subpart C—Other Requirements
10. Section 2590.715-2719 is amended
by:
a. Revising paragraphs (a)(1), (c)(2)(i),
and (d)(1)(i)(A) and (B);
b. Adding paragraph (d)(1)(i)(C);
c. Adding Examples 3 through 7 to
paragraph (d)(1)(ii); and
d. Revising paragraph (g).
The revisions and additions read as fol-
lows:
§ 2590.715-2719 Internal claims and
appeals and external review processes.
(a) Scope and definitions—(1) Scope—
(i) In general. This section sets forth
requirements with respect to internal
claims and appeals and external review
processes for group health plans and
health insurance issuers. Paragraph (b)
of this section provides requirements for
internal claims and appeals processes.
Paragraph (c) of this section sets forth
rules governing the applicability of State
external review processes. Paragraph (d)
of this section sets forth a Federal exter-
nal review process for plans and issuers
not subject to an applicable State external
review process. Paragraph (e) of this sec-
tion prescribes requirements for ensuring
that notices required to be provided under
this section are provided in a culturally
and linguistically appropriate manner.
Paragraph (f) of this section describes the
authority of the Secretary to deem certain
external review processes in existence on
March 23, 2010 as in compliance with
paragraph (c) or (d) of this section.
(ii) Application to grandfathered
health plans and health insurance cover-
age. The provisions of this section gener-
ally do not apply to coverage offered by
health insurance issuers and group health
plans that are grandfathered health plans,
as defined under § 2590.715-1251. How-
ever, the external review process require-
ments under paragraphs (c) and (d) of this
section, and related notice requirements
under paragraph (e) of this section, apply
to grandfathered health plans or coverage
with respect to adverse benefit determina-
tions involving items and services within
the scope of the requirements for out-of-
network emergency services, nonemer-
gency services performed by nonpartici-
pating providers at participating facilities,
and air ambulance services furnished by
nonparticipating providers of air ambu-
lance services under ERISA sections
716 and 717 and §§ 2590.716-4 through
2590.716-5 and 2590.717-1.
* * * * *
(c) * * *
(2) * * *
(i) The State process must provide for
the external review of adverse benefit
determinations (including final internal
adverse benefit determinations) by issu-
ers (or, if applicable, plans) that are based
on the issuer’s (or plan’s) requirements
for medical necessity, appropriateness,
health care setting, level of care, or effec-
tiveness of a covered benefit, as well as a

October 18, 2021 618 Bulletin No. 2021–42
consideration of whether a plan or issuer
is complying with the surprise billing and
cost-sharing protections under ERISA
sections 716 and 717 and §§ 2590.716-4
through 2590.716-5 and 2590.717-1.
* * * * *
(d) * * *
(1) * * *
(i) * * *
(A) An adverse benefit determination
(including a final internal adverse bene-
fit determination) by a plan or issuer that
involves medical judgment (including, but
not limited to, those based on the plan’s or
issuer’s requirements for medical neces-
sity, appropriateness, health care setting,
level of care, or effectiveness of a cov-
ered benefit; its determination that a treat-
ment is experimental or investigational;
its determination whether a participant
or beneficiary is entitled to a reasonable
alternative standard for a reward under
a wellness program; its determination
whether a plan or issuer is complying
with the nonquantitative treatment lim-
itation provisions of ERISA section 712
and § 2590.712, which generally require,
among other things, parity in the applica-
tion of medical management techniques),
as determined by the external reviewer. (A
denial, reduction, termination, or a failure
to provide payment for a benefit based
on a determination that a participant or
beneficiary fails to meet the requirements
for eligibility under the terms of a group
health plan or health insurance coverage
is not eligible for the Federal external
review process under this paragraph (d));
(B) An adverse benefit determination
that involves consideration of whether a
plan or issuer is complying with the sur-
prise billing and cost-sharing protections
set forth in ERISA sections 716 and 717
and §§ 2590.716-4 through 2590.716-5
and 2590.717-1; and
(C) A rescission of coverage (whether
or not the rescission has any effect on any
particular benefit at that time).
(ii) * * *
Example 3. (i) Facts. A group health plan gener-
ally provides benefits for services in an emergency
department of a hospital or independent freestand-
ing emergency department. Individual C receives
pre-stabilization emergency treatment in an out-of-
network emergency department of a hospital. The
group health plan determines that protections for
emergency services under § 2590.716-4 do not apply
because the treatment did not involve “emergency
services” within the meaning of § 2590.716-4(c)(2)
(i). C receives an adverse benefit determination and
the plan imposes cost-sharing requirements that are
greater than the requirements that would apply if the
same services were provided in an in-network emer-
gency department.
(ii) Conclusion. In this Example 3, the plan’s
determination that treatment received by C did not
include emergency services involves medical judg-
ment and consideration of whether the plan complied
with § 2590.716-4. Accordingly, the claim is eligible
for external review under paragraph (d)(1)(i) of this
section.
* * * * *
Example 4. (i) Facts. A group health plan gen-
erally provides benefits for anesthesiology services.
Individual D undergoes a surgery at an in-network
health care facility and during the course of the
surgery, receives anesthesiology services from an
out-of-network provider. The plan decides the claim
for these services without regard to the protections
related to items and services furnished by out-of-
network providers at in-network facilities under
§ 2590.716-5. As a result, D receives an adverse ben-
efit determination for the services and is subject to
cost-sharing liability that is greater than it would be
if cost sharing had been calculated in a manner con-
sistent with the requirements of § 2590.716-5.
(ii) Conclusion. In this Example 4, whether the
plan was required to decide the claim in a manner
consistent with the requirements of § 2590.716-5
involves considering whether the plan complied with
§ 2590.716-5, as well as medical judgment, because
it requires consideration of the health care setting
and level of care. Accordingly, the claim is eligible
for external review under paragraph (d)(1)(i) of this
section.
Example 5. (i) Facts. A group health plan gener-
ally provides benefits for services in an emergency
department of a hospital or independent freestand-
ing emergency department. Individual E receives
emergency services in an out-of-network emergency
department of a hospital, including certain post-sta-
bilization services. The plan processes the claim
for the post-stabilization services as not being for
emergency services under § 2590.716-4(c)(2)(ii)
based on representations made by the treating pro-
vider that E was in a condition to receive notice from
the provider about cost-sharing and surprise bill-
ing protections for these services and subsequently
gave informed consent to waive those protections.
E receives an adverse benefit determination and is
subject to cost-sharing requirements that are greater
than the cost-sharing requirements that would apply
if the services were processed in a manner consistent
with § 2590.716-4.
(ii) Conclusion. In this Example 5, whether E was
in a condition to receive notice about the availability
of cost-sharing and surprise billing protections and
give informed consent to waive those protections
involves medical judgment and consideration of
whether the plan complied with the requirements
under § 2590.716-4(c)(2)(ii). Accordingly, the claim
is eligible for external review under paragraph (d)(1)
(i) of this section.
Example 6. (i) Facts. Individual F gives birth to
a baby at an in-network hospital. The baby is born
prematurely and receives certain neonatology ser-
vices from a nonparticipating provider during the
same visit as the birth. F was given notice about
cost-sharing and surprise billing protections for these
services, and subsequently gave informed consent to
waive those protections. The claim for the neonatol-
ogy services is coded as a claim for routine post-na-
tal services and the plan decides the claim without
regard to the requirements under § 2590.716-5(a)
and the fact that those protections may not be waived
for neonatology services under § 2590.716-5(b).
(ii) Conclusion. In this Example 6, medical judg-
ment is necessary to determine whether the correct
code was used and compliance with § 2590.716-5(a)
and (b) must also be considered. Accordingly, the
claim is eligible for external review under paragraph
(d)(1)(i) of this section. The Departments also note
that, to the extent the nonparticipating provider bal-
ance bills Individual F for the outstanding amounts
not paid by the plan for the neonatology services,
such provider would be in violation of PHS Act sec-
tion 2799B-2 and its implementing regulations at 45
CFR 149.420(a).
Example 7. (i) Facts. A group health plan gen-
erally provides benefits to cover knee replacement
surgery. Individual G receives a knee replacement
surgery at an in-network facility and, after receiv-
ing proper notice about the availability of cost-shar-
ing and surprise billing protections, provides
informed consent to waive those protections. How-
ever, during the surgery, certain anesthesiology
services are provided by an out-of-network nurse
anesthetist. The claim for these anesthesiology ser-
vices is decided by the plan without regard to the
requirements under § 2590.716-5(a) or to the fact
that those protections may not be waived for ancil-
lary services such as anesthesiology services pro-
vided by an out-of-network provider at an in-net-
work facility under § 2590.716-5(b). G receives
an adverse benefit determination and is subject to
cost-sharing requirements that are greater than the
cost-sharing requirements that would apply if the
services were provided in a manner consistent with
§ 2590.716-5(a) and (b).
(ii) Conclusion. In this Example 7, consideration
of whether the plan complied with the requirements
in § 2590.716-5(a) and (b) is necessary to determine
whether cost-sharing requirements were applied
appropriately. Accordingly, the claim is eligible for
external review under paragraph (d)(1)(i) of this sec-
tion.
* * * * *
(g) Applicability date. The provisions
of this section generally are applicable to
group health plans and health insurance
issuers for plan years beginning on or
after January 1, 2017. The external review
scope provision at paragraph (d)(1)(i)(B)
of this section is applicable for plan years
beginning on or after January 1, 2022. The
external review provisions described in
paragraphs (c) and (d) of this section are
applicable to grandfathered health plans,
with respect to the types of claims speci-
fied under paragraph (a)(1)(ii) of this sec-
tion, for plan years beginning on or after
January 1, 2022.

Bulletin No. 2021–42 619 October 18, 2021
11. Section 2590.716-1 is amended by
revising paragraph (b) to read as follows:
§ 716-1 Basis and scope.
* * * * *
(b) Scope. This part establishes stan-
dards for group health plans, and health
insurance issuers offering group or indi-
vidual health insurance coverage with
respect to surprise medical bills, transpar-
ency in health care coverage, and addi-
tional patient protections. This part also
establishes an independent dispute resolu-
tion process, and standards for certifying
independent dispute resolution entities.
12. Section 2590.716-2 is amended by
revising paragraph (a) and paragraph (b)
introductory text to read as follows:
§ 2590.716-2 Applicability
(a) In general. (1) The requirements
in §§ 2590.716-4 through 2590.716-7,
2590.717-1, and 2590.722 apply to group
health plans and health insurance issuers
offering group health insurance coverage
(including grandfathered health plans as
defined in § 2590.715-1251), except as
specified in paragraph (b) of this section.
(2) The requirements in §§ 54.9816-
8T and 54.9817-2T apply to certified
IDR entities and group health plans and
health insurance issuers offering group
health insurance coverage (including
grandfathered health plans as defined in
§ 2590.715-1251) except as specified in
paragraph (b) of this section.
(b) Exceptions. The requirements
in §§ 2590.716-4 through 2590.716-8,
2590.717-1, 2590.717-2 and 2590.722 do
not apply to the following:
* * * * *
13. Section 2590.716-8 is added to read
as follows:
§ 2590.716-8 Independent dispute
resolution process.
(a) Scope and definitions–(1) Scope.
This section sets forth requirements with
respect to the independent dispute reso-
lution (IDR) process (referred to in this
section as the Federal IDR process) under
which a nonparticipating provider, non-
participating emergency facility, or non-
participating provider of air ambulance
services (as applicable), and a group health
plan or health insurance issuer offering
group health insurance coverage com-
pletes a requisite open negotiation period
and at least one party submits a notifica-
tion under paragraph (b) of this section
to initiate the Federal IDR process under
paragraph (c) of this section, and under
which an IDR entity (as certified under
paragraph (e) of this section) determines
the amount of payment under the plan or
coverage for an item or service furnished
by the provider or facility.
(2) Definitions. Unless otherwise
stated, the definitions in § 2590.716-3 of
this part apply to this section. Addition-
ally, for purposes of this section, the fol-
lowing definitions apply:
(i) Batched items and services means
multiple qualified IDR items or services
that are considered jointly as part of one
payment determination by a certified IDR
entity for purposes of the Federal IDR
process. In order for a qualified IDR item
or service to be included in a batched item
or service, the qualified IDR item or ser-
vice must meet the criteria set forth in
paragraph (c)(3) of this section.
(ii) Breach means the acquisition,
access, use, or disclosure of individually
identifiable health information (IIHI) in a
manner not permitted under paragraph (e)
(2)(v) of this section that compromises the
security or privacy of the IIHI.
(A) Breach excludes:
(1) Any unintentional acquisition,
access, or use of IIHI by personnel, a con-
tractor, or a subcontractor of a certified
IDR entity that is acting under the author-
ity of that certified IDR entity, if the acqui-
sition, access, or use was made in good
faith and within the scope of that author-
ity and that does not result in further use
or disclosure in a manner not permitted
under paragraph (e)(2)(v) of this section.
(2) Any inadvertent disclosure by a
person who is authorized to access IIHI
at a certified IDR entity to another per-
son authorized to access IIHI at the same
certified IDR entity, and the information
received as a result of the disclosure is
not further used or disclosed in a manner
not permitted under paragraph (e)(2)(v) of
this section.
(3) A disclosure of IIHI in which a cer-
tified IDR entity has a good faith belief
that an unauthorized person to whom the
disclosure was made would not reason-
ably have been able to retain such infor-
mation.
(B) Except as provided in paragraph
(a)(2)(ii)(A) of this section, access, use,
or disclosure of IIHI in a manner not per-
mitted under paragraph (e)(2)(v) of this
section is presumed to be a breach unless
the certified IDR entity demonstrates
that there is a low probability that the
security or privacy of the IIHI has been
compromised based on a risk assessment
encompassing at least the following fac-
tors:
(1) The nature and extent of the IIHI
involved, including the types of identifiers
and the likelihood of re-identification;
(2) The unauthorized person who used
the IIHI or to whom the disclosure was
made;
(3) Whether the IIHI was actually
acquired or viewed; and
(4) The extent to which the risk to the
IIHI has been mitigated.
(iii) Certified IDR entity means an
entity responsible for conducting determi-
nations under paragraph (c) of this section
that meets the certification criteria spec-
ified in paragraph (e) of this section and
that has been certified by the Secretary,
jointly with the Secretaries of Health and
Human Services and the Treasury.
(iv) Conflict of interest means, with
respect to a party to a payment determi-
nation, or certified IDR entity, a material
relationship, status, or condition of the
party, or certified IDR entity that impacts
the ability of the certified IDR entity to
make an unbiased and impartial payment
determination. For purposes of this sec-
tion, a conflict of interest exists when a
certified IDR entity is:
(A) A group health plan; a health
insurance issuer offering group health
insurance coverage, individual health
insurance coverage, or short-term, limit-
ed-duration insurance; a carrier offering a
health benefits plan under 5 U.S.C. 8902;
or a provider, a facility, or a provider of air
ambulance services;
(B) An affiliate or a subsidiary of a
group health plan; a health insurance
issuer offering group health insurance
coverage, individual health insurance
coverage, or short-term limited-duration
insurance; a carrier offering a health ben-
efits plan under 5 U.S.C. 8902; or a pro-

October 18, 2021 620 Bulletin No. 2021–42
vider, a facility, or a provider of air ambu-
lance services;
(C) An affiliate or subsidiary of a pro-
fessional or trade association representing
group health plans; health insurance issu-
ers offering group health insurance cover-
age, individual health insurance coverage,
or short-term limited duration insurance;
carriers offering a health benefits plan
under 5 U.S.C. 8902; or providers, facil-
ities, or providers of air ambulance ser-
vices.
(D) A certified IDR entity, that has,
or that has any personnel, contractors, or
subcontractors assigned to a determina-
tion who have, a material familial, finan-
cial, or professional relationship with a
party to the payment determination being
disputed, or with any officer, director, or
management employee of the plan, issuer,
or carrier offering a health benefits plan
under 5 U.S.C. 8902; the plan adminis-
trator, plan fiduciaries, or plan, issuer, or
carrier employees; the health care pro-
vider, the health care provider’s group
or practice association; the provider of
air ambulance services, the provider of
air ambulance services’ group or practice
association, or the facility that is a party to
the dispute.
(v) Credible information means infor-
mation that upon critical analysis is wor-
thy of belief and is trustworthy.
(vi) IDR entity means an entity that may
apply or has applied for certification to
conduct determinations under paragraph
(c) of this section, and that currently is not
certified by the Secretary, jointly with the
Secretaries of Health and Human Services
and the Treasury, pursuant to paragraph
(e) of this section.
(vii) Individually identifiable health
information (IIHI) means any informa-
tion, including demographic data, that
relates to the past, present, or future phys-
ical or mental health or condition of an
individual; the provision of health care
to an individual; or the past, present, or
future payment for the provision of health
care to an individual; and
(A) That identifies the individual; or
(B) With respect to which there is a rea-
sonable basis to believe the information
can be used to identify the individual.
(viii) Material difference means a sub-
stantial likelihood that a reasonable per-
son with the training and qualifications of
a certified IDR entity making a payment
determination would consider the submit-
ted information significant in determining
the out of network rate and would view
the information as showing that the quali-
fying payment amount is not the appropri-
ate out-of-network rate.
(ix) Material familial relationship
means any relationship as a spouse, domes-
tic partner, child, parent, sibling, spouse’s
or domestic partner’s parent, spouse’s or
domestic partner’s sibling, spouse’s or
domestic partner’s child, child’s parent,
child’s spouse or domestic partner, or sib-
ling’s spouse or domestic partner.
(x) Material financial relationship
means any financial interest of more
than five percent of total annual revenue
or total annual income of a certified IDR
entity, or an officer, director, or manager
thereof, or of a reviewer or reviewing phy-
sician employed or engaged by a certified
IDR entity to conduct or participate in any
review in the Federal IDR process. The
terms annual revenue and annual income
do not include mediation fees received by
mediators who are also arbitrators, pro-
vided that the mediator acts in the capac-
ity of a mediator and does not represent a
party in the mediation.
(xi) Material professional relationship
means any physician-patient relationship,
any partnership or employment relation-
ship, any shareholder or similar owner-
ship interest in a professional corporation,
partnership, or other similar entity; or any
independent contractor arrangement that
constitutes a material financial relation-
ship with any expert used by the certified
IDR entity or any officer or director of the
certified IDR entity.
(xii) Qualified IDR item or service
means an item or service:
(A) That is an emergency service fur-
nished by a nonparticipating provider
or nonparticipating facility subject to
the protections of 26 CFR 54.9816-4T,
§ 2590.716-4, or 45 CFR 149.110, as
applicable, for which the conditions of 45
CFR 149.410(b) are not met, or an item
or service furnished by a nonparticipat-
ing provider at a participating health care
facility, subject to the requirements of 26
CFR 54.9816-T, § 2590.716-5, or 45 CFR
149.120, as applicable, for which the con-
ditions of 45 CFR 149.420(c) through (i)
are not met, or air ambulance services fur-
nished by a nonparticipating provider of air
ambulance services subject to the protec-
tions of 26 CFR 54.9817-1T, § 2590.717-
1, or 45 CFR 149.130, as applicable, and
for which the out-of-network rate is not
determined by reference to an All-Payer
Model Agreement under section 1115A of
the Social Security Act or a specified State
law as defined in § 2590.716-3;
(B) With respect to which a provider
or facility (as applicable) or group health
plan or health insurance issuer offering
group health insurance coverage submits
a notification under paragraph (b)(2) of
this section;
(C) That is not an item or service that
is the subject of an open negotiation under
paragraph (b)(1) of this section; and
(D) That is not an item or service for
which a notification under paragraph (b)
(2) of this section is submitted during the
90-calendar-day period under paragraph
(c)(4)(vi)(B) of this section, but that may
include such an item or service if the noti-
fication is submitted during the subse-
quent 30-business-day period under para-
graph (c)(4)(vi)(C) of this section.
(xiii) Unsecured IIHI means IIHI that
is not rendered unusable, unreadable,
or indecipherable to unauthorized per-
sons through the use of a technology or
methodology specified by the Secretary,
jointly with the Secretary of the Treasury
and the Secretary of Health and Human
Services.
(b) Determination of payment amount
through open negotiation and initiation
of the Federal IDR process—(1) Deter-
mination of payment amount through
open negotiation—(i) In general. With
respect to an item or service that meets
the requirements of paragraph (a)(2)(xii)
(A) of this section, the provider, facility,
or provider of air ambulance services
or the group health plan or health insur-
ance issuer offering group or individual
health insurance coverage may, during the
30-business-day period beginning on the
day the provider, facility, or provider of
air ambulance services receives an initial
payment or notice of denial of payment
regarding the item or service, initiate an
open negotiation period for purposes of
determining the out-of-network rate for
such item or service. To initiate the open
negotiation period, a party must send a
notice to the other party (open negotiation

Bulletin No. 2021–42 621 October 18, 2021
notice) in accordance with paragraph (b)
(1)(ii) of this section.
(ii) Open negotiation notice—(A) Con-
tent. The open negotiation notice must
include information sufficient to identify
the item(s) and service(s) (including the
date(s) the item(s) or service(s) were fur-
nished, the service code, and initial pay-
ment amount, if applicable), an offer of an
out-of-network rate, and contact informa-
tion for the party sending the open nego-
tiation notice.
(B) Manner. The open negotiation
notice must be provided, using the stan-
dard form developed by the Secretary, in
writing within 30 business days begin-
ning on the day the provider, facility,
or provider of air ambulance services
receives an initial payment or a notice of
denial of payment from the plan or issuer
regarding the item or service. The day on
which the open negotiation notice is first
sent by a party is the date the 30-busi-
ness-day open negotiation period begins.
This notice may be provided to the other
party electronically (such as by email)
if the following two conditions are sat-
isfied –
(1) The party sending the open negotia-
tion notice has a good faith belief that the
electronic method is readily accessible by
the other party; and
(2) The notice is provided in paper
form free of charge upon request.
(2) Initiating the Federal IDR pro-
cess—(i) In general. With respect to an
item or service for which the parties do
not agree upon an out-of-network rate
by the last day of the open negotiation
period under paragraph (b)(1) of this sec-
tion, either party may initiate the Federal
IDR process. To initiate the Federal IDR
process, a party must submit a written
notice of IDR initiation to the other party
and to the Secretary, using the standard
form developed by the Secretary, during
the 4-business-day period beginning on
the 31st business day after the start of the
open negotiation period.
(ii) Exception for items and services
provided by certain nonparticipating pro-
viders and facilities. A party may not ini-
tiate the Federal IDR process with respect
to an item or service if, with respect to
that item or service, the party knows
(or reasonably should have known) that
the provider or facility provided notice
and received consent under 45 CFR
149.410(b) or 149.420(c) through (i).
(iii) Notice of IDR initiation—(A)
Content. The notice of IDR initiation must
include:
(1) Information sufficient to iden-
tify the qualified IDR items or services
under dispute (and whether the qualified
IDR items or services are designated as
batched items and services as described
in paragraph (c)(3) of this section),
including the date(s) and location the
item or service was furnished, the type of
item or service (such as whether the qual-
ified IDR item or service is an emergency
service as defined in 26 CFR 54.9816-
4T(c)(2)(i), § 2590.716-4(c)(2)(i), or 45
CFR 149.110(c)(2)(i), as applicable, an
emergency service as defined in 26 CFR
54.9816-4T(c)(2)(ii), § 2590.716-4(c)
(2)(ii), or 45 CFR 149.110(c)(2)(ii), as
applicable, or a nonemergency service;
and whether any service is a professional
service or facility-based service), corre-
sponding service codes, place of service
code, the amount of cost sharing allowed,
and the amount of the initial payment
made for the qualified IDR item or ser-
vice, if applicable;
(2) Names of the parties involved and
contact information, including name,
email address, phone number, and mailing
address;
(3) State where the qualified IDR item
or service was furnished;
(4) Commencement date of the open
negotiation period under paragraph (b)(1)
of this section;
(5) Preferred certified IDR entity;
(6) An attestation that the items and
services under dispute are qualified IDR
items or services;
(7) Qualifying payment amount;
(8) Information about the qualify-
ing payment amount as described in
§ 2590.716-6(d); and
(9) General information describing the
Federal IDR process as specified by the
Secretary.
(B) Manner. The initiating party must
provide written notice of IDR initiation
to the other party. The initiating party
may satisfy this requirement by furnish-
ing the notice of IDR initiation to the
other party electronically (such as by
email) if the following two conditions
are satisfied –
(1) The initiating party has a good faith
belief that the electronic method is readily
accessible by the other party; and
(2) The notice is provided in paper
form free of charge upon request.
(C) Notice to the Secretary. The initi-
ating party must also furnish the notice of
IDR initiation to the Secretary by submit-
ting the notice through the Federal IDR
portal. The initiation date of the Federal
IDR process will be the date of receipt by
the Secretary.
(c) Federal IDR process following ini-
tiation—(1) Selection of certified IDR
entity—(i) In general. The plan or issuer
or the provider, facility, or provider of air
ambulance services receiving the notice of
IDR initiation under paragraph (b)(2) of this
section may agree or object to the preferred
certified IDR entity identified in the notice
of IDR initiation. If the party in receipt of
the notice of IDR initiation fails to object
within 3 business days, the preferred cer-
tified IDR entity identified in the notice of
IDR initiation will be selected and will be
treated as jointly agreed to by the parties,
provided that the certified IDR entity does
not have a conflict of interest. If the party
in receipt of the notice of IDR initiation
objects, that party must notify the initiating
party of the objection and propose an alter-
native certified IDR entity. The initiating
party must then agree or object to the alter-
native certified IDR entity; if the initiating
party fails to agree or object to the alterna-
tive certified IDR entity, the alternative cer-
tified IDR entity will be selected and will be
treated as jointly agreed to by the parties.
In order to select a preferred certified IDR
entity, the plan or issuer and the provider,
facility, or provider of air ambulance ser-
vices must jointly agree on a certified IDR
entity not later than 3 business days after the
initiation date of the Federal IDR process. If
the plan or issuer and the provider, facility,
or provider of air ambulance services fail to
agree upon a certified IDR entity within that
time, the Secretary shall select a certified
IDR entity in accordance with paragraph
(c)(1)(iv) of this section.
(ii) Requirements for selected certi-
fied IDR entity. The certified IDR entity
selected must be an IDR entity certified
under paragraph (e) of this section, that:
(A) Does not have a conflict of inter-
est as defined in paragraph (a)(2) of this
section;

October 18, 2021 622 Bulletin No. 2021–42
(B) Ensures that assignment of per-
sonnel to a payment determination and
decisions regarding hiring, compensation,
termination, promotion, or other similar
matters related to personnel assigned to
the dispute are not made based upon the
likelihood that the assigned personnel will
support a particular party to the determi-
nation being disputed other than as out-
lined under paragraph (c)(4)(iii) of this
section; and
(C) Ensures that any personnel assigned
to a payment determination do not have
any conflicts of interests as defined in
paragraph (a)(2) of this section regarding
any party to the dispute within the 1 year
immediately preceding an assignment
of dispute determination, similar to the
requirements laid out in 18 U.S.C. 207(b).
(iii) Notice of certified IDR entity selec-
tion. Upon the selection of a certified IDR
entity, in accordance with paragraph (c)(1)
(i) of this section, the plan or issuer or the
provider or emergency facility that sub-
mitted the notice of IDR initiation under
paragraph (b)(2) of this section must
notify the Secretary of the selection as
soon as reasonably practicable, but no later
than 1 business day after such selection,
through the Federal IDR portal. In addi-
tion, if the non-initiating party believes
that the Federal IDR process is not appli-
cable, the non-initiating party must also
provide information regarding the Federal
IDR process’s inapplicability through the
Federal IDR portal by the same date that
the notice of certified IDR entity selection
must be submitted.
(A) Content. If the parties have agreed
on the selection of a certified IDR entity
or the party in receipt of the notice of IDR
initiation has not objected to the other par-
ty’s selection, the notice of the certified
IDR entity selection must include the fol-
lowing information:
(1) Name of the certified IDR entity;
(2) The certified IDR entity number;
and
(3) Attestation by both parties, or by
the initiating party if the non-initiating
party fails to object to the selection of the
certified IDR entity, that the selected certi-
fied IDR entity meets the requirements of
paragraph (c)(1)(ii) of this section.
(B) [Reserved]
(iv) Failure to select a certified IDR
entity. If the plan or issuer and the pro-
vider, facility, or provider of air ambu-
lance services fail to select a certified IDR
entity in accordance with paragraph (c)
(1)(i) of this section, the initiating party
must notify the Secretary of the failure
no later than 1 business day after the date
of such failure (or in other words, 4 busi-
ness days after initiation of the Federal
IDR process) by electronically submitting
the notice as described in paragraph (c)
(1)(iii) of this section but indicating that
the parties have failed to select a certified
IDR entity. In addition, if the non-initi-
ating party believes that the Federal IDR
process is not applicable, the non-initiat-
ing party must also provide information
regarding the Federal IDR process’s inap-
plicability through the Federal IDR portal
by the same date that the notice of failure
to select must be submitted. Upon notifi-
cation of the failure of the parties to select
a certified IDR entity, the Secretary will
select a certified IDR entity that charges
a fee within the allowed range of certified
IDR entity fees through a random selec-
tion method not later than 6 business days
after the date of initiation of the Federal
IDR process and will notify the plan or
issuer and the provider or facility of the
selection. If there are insufficient certified
IDR entities that charge a fee within the
allowed range of certified IDR entity fees
available to arbitrate the dispute, the Sec-
retary, jointly with the Secretary of Health
and Human Services and Secretary of the
Treasury, will select a certified IDR entity
that has received approval, as described in
paragraph (e)(2)(vi)(B) of this section, to
charge a fee outside of the allowed range
of certified IDR entity fees.
(v) Review by certified IDR entity.
After selection by the parties (including
when the initiating party selects a certified
IDR entity and the other party does not
object), or by the Secretary under para-
graph (c)(1)(iv) of this section, the certi-
fied IDR entity must review the selection
and attest that it meets the requirements of
paragraph (c)(1)(ii) of this section. If the
certified IDR entity is unable to attest that
it meets the requirements of paragraph (c)
(1)(ii) within 3 business days of selection,
the parties, upon notification, must select
another certified IDR entity under para-
graph (c)(1) of this section, , treating the
date of notification of the failure to attest
to the requirements of (c)(1)(ii) as the date
of initiation of the Federal IDR process for
purposes of the time periods in paragraphs
(c)(1)(i) and (iv) of this section. Addi-
tionally, the certified IDR entity selected
must review the information submitted in
the notice of IDR initiation to determine
whether the Federal IDR process applies.
If the Federal IDR process does not apply,
the certified IDR entity must notify the
Secretary and the parties within 3 business
days of making that determination.
(2) Authority to continue negotia-
tions—(i) In general. If the parties to
the Federal IDR process agree on an out-
of-network rate for a qualified IDR item
or service after providing the notice of
IDR initiation to the Secretary consistent
with paragraph (b)(2) of this section, but
before the certified IDR entity has made
its payment determination, the amount
agreed to by the parties for the qualified
IDR item or service will be treated as the
out-of-network rate for the qualified IDR
item or service. To the extent the amount
exceeds the initial payment amount (or
initial denial of payment) and any cost
sharing paid or required to be paid by the
participant or beneficiary, payment must
be made directly by the plan or issuer to
the nonparticipating provider, facility, or
nonparticipating provider of air ambu-
lance services, not later than 30 business
days after the agreement is reached. In
no instance may either party seek addi-
tional payment from the participant or
beneficiary, including in instances in
which the out-of-network rate exceeds
the qualifying payment amount. The
initiating party must send a notifica-
tion to the Secretary and to the certified
IDR entity (if selected) electronically,
through the Federal IDR portal, as soon
as possible, but no later than 3 business
days after the date of the agreement. The
notification must include the out-of-net-
work rate for the qualified IDR item or
service and signatures from authorized
signatories for both parties.
(ii) Method of allocation of the certified
IDR entity fee. In the case of an agreement
described in paragraph (c)(2)(i) of this
section, the certified IDR entity is required
to return half of each parties’ certified IDR
entity fee, unless directed otherwise by
both parties. The administrative fee under
paragraph (d)(2) of this section will not be
returned to the parties.

Bulletin No. 2021–42 623 October 18, 2021
(3) Treatment of batched items and
services—(i) In general. Batched items
and services may be submitted and con-
sidered jointly as part of one payment
determination by a certified IDR entity
only if the batched items and services
meet the requirements of this paragraph
(c)(3)(i). Batched items and services
submitted and considered jointly as part
of one payment determination under
this paragraph (c)(3)(i) are treated as a
batched determination and subject to the
fee for batched determinations under this
section.
(A) The qualified IDR items and ser-
vices are billed by the same provider or
group of providers, the same facility, or
the same provider of air ambulance ser-
vices. Items and services are billed by the
same provider or group of providers, the
same facility, or the same provider of air
ambulance services if the items or services
are billed with the same National Provider
Identifier or Tax Identification Number;
(B) Payment for the qualified IDR
items and services would be made by the
same plan or issuer;
(C) The qualified IDR items and ser-
vices are the same or similar items and
services. The qualified IDR items and
services are considered to be the same or
similar items or services if each is billed
under the same service code, or a com-
parable code under a different procedural
code system, such as Current Procedural
Terminology (CPT) codes with modifiers,
if applicable, Healthcare Common Proce-
dure Coding System (HCPCS) with mod-
ifiers, if applicable, or Diagnosis-Related
Group (DRG) codes with modifiers, if
applicable; and
(D) All the qualified IDR items and
services were furnished within the same
30-business-day period, or the same
90-calendar-day period under paragraph
(c)(4)(vi)(B) of this section, as applicable.
(ii) Treatment of bundled payment
arrangements. In the case of qualified
IDR items and services billed by a pro-
vider, facility, or provider of air ambu-
lance services as part of a bundled pay-
ment arrangement, or where a plan or
issuer makes or denies an initial payment
as a bundled payment, the qualified IDR
items and services may be submitted as
part of one payment determination. Bun-
dled payment arrangements submitted
under this paragraph (c)(3)(ii) are subject
to the rules for batched determinations
and the certified IDR entity fee for single
determinations.
(4) Payment determination for a qual-
ified IDR item or service—(i) Submission
of offers. Not later than 10 business days
after the selection of the certified IDR
entity, the plan or issuer and the provider,
facility, or provider of air ambulance ser-
vices:
(A) Must each submit to the certified
IDR entity:
(1) An offer of an out-of-network rate
expressed as both a dollar amount and the
corresponding percentage of the qualify-
ing payment amount represented by that
dollar amount;
(2) Information requested by the certi-
fied IDR entity relating to the offer.
(3) The following additional informa-
tion, as applicable—
(i) For providers and facilities, infor-
mation on the size of the provider’s prac-
tice or of the facility (if applicable). Spe-
cifically, a group of providers must specify
whether the providers’ practice has fewer
than 20 employees, 20 to 50 employees,
51 to 100 employees, 101 to 500 employ-
ees, or more than 500 employees. For
facilities, the facility must specify whether
the facility has 50 or fewer employees, 51
to 100 employees, 101 to 500 employees,
or more than 500 employees;
(ii) For providers and facilities, infor-
mation on the practice specialty or type,
respectively (if applicable);
(iii) For plans and issuers, information
on the coverage area of the plan or issuer,
the relevant geographic region for pur-
poses of the qualifying payment amount,
whether the coverage is fully-insured or
partially or fully self-insured; and
(iv) The qualifying payment amount for
the applicable year for the same or similar
item or service as the qualified IDR item
or service.
(B) May each submit to the certified
IDR entity any information relating to
the offer that was submitted by either
party, except that the information may not
include information on factors described
in paragraph (c)(4)(v) of this section.
(ii) Payment determination and noti-
fication. Not later than 30 business days
after the selection of the certified IDR
entity, the certified IDR entity must:
(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, taking into account
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 closest to the qualifying payment
amount unless the certified IDR entity
determines that credible information sub-
mitted by either party under paragraph
(c)(4)(i) clearly demonstrates that the
qualifying payment amount is materially
different from the appropriate out-of-net-
work rate, or if the offers are equally dis-
tant from the qualifying payment amount
but in opposing directions. In these cases,
the certified IDR entity must select the
offer as the out-of-network rate that the
certified IDR entity determines best rep-
resents the value of the qualified IDR item
or services, which could be either offer.
(B) Notify the plan or issuer and the
provider or facility, as applicable, of the
selection of the offer under paragraph (c)
(4)(ii)(A) of this section, and provide the
written decision required under (c)(4)(vi)
of this section.
(iii) Considerations in determination.
In determining which offer to select, the
certified IDR entity must consider:
(A) The qualifying payment amount(s)
for the applicable year for the same or
similar item or service.
(B) Information requested by the certi-
fied IDR entity under paragraph (c)(4)(i)
(A)(2) of this section relating to the offer,
to the extent a party provides credible
information.
(C) Additional information submitted
by a party, provided the information is
credible and relates to the circumstances
described in paragraphs (c)(4)(iii)(C)(1)
through (5) of this section, with respect
to a qualified IDR item or service of a
nonparticipating provider, facility, group
health plan, or health insurance issuer
of group or individual health insurance
coverage that is the subject of a payment
determination. This information must also
clearly demonstrate that the qualifying
payment amount is materially different
from the appropriate out-of-network rate.
(1) The level of training, experience,
and quality and outcomes measurements

October 18, 2021 624 Bulletin No. 2021–42
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 qualified IDR item or service was pro-
vided.
(3) The acuity of the participant, or
beneficiary, receiving the qualified IDR
item or service, or the complexity of fur-
nishing 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
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.
(D) Additional information submitted
by a party, provided the information is
credible and relates to the offer submitted
by either party and does not include infor-
mation on factors described in paragraph
(c)(4)(v) of this section.
(iv) Examples. The rules of paragraph
(c)(4)(iii) of this section are illustrated by
the following examples:
(A) Example 1 – (1) Facts. A nonparticipating
provider and an issuer are parties to a payment deter-
mination in the Federal IDR process. The nonpartici-
pating provider submits an offer and additional writ-
ten information asserting that the provider has made
good faith efforts to enter into network agreements
with the issuer. The nonparticipating provider fails
to provide any documentation of these efforts, such
as correspondence or records of conversations with
representatives of the issuer.
(2) Conclusion. In this Example 1, the nonpar-
ticipating provider has submitted additional infor-
mation. However, this information is not credible,
as the nonparticipating provider has failed to pro-
vide any documentation in support of the provider’s
assertions of good faith efforts to enter into network
agreements with the issuer. Therefore, the certified
IDR entity cannot consider the information.
(B) Example 2 – (1) Facts. A nonparticipating
provider and an issuer are parties to a payment deter-
mination in the Federal IDR process. The nonpartic-
ipating provider submits credible information relat-
ing to the provider’s level of training, experience,
and quality and outcome measurements from 2019.
The provider also submits credible information that
clearly demonstrates that the provider’s level of
training and expertise was necessary for providing
the service that is the subject of the payment determi-
nation to the particular patient. Further, the provider
submits credible information that clearly demon-
strates that the qualifying payment amount gener-
ally presumes the service would be delivered by a
provider with a lower level of training, experience,
and quality and outcome measurements. This infor-
mation, taken together, demonstrates that the qual-
ifying payment amount is not an appropriate pay-
ment amount and the provider submits an offer that
is higher than the qualifying payment amount and
commensurate with the provider’s level of training,
experience, and quality and outcome measurements
with respect to the service provided. The issuer sub-
mits the qualifying payment amount as its offer with
no additional information.
(2) Conclusion. In this Example 2, the nonpar-
ticipating provider has submitted information that is
credible. Moreover, the credible information clearly
demonstrates that the qualifying payment amount
does not adequately take into account the provider’s
level of training, experience, and quality and out-
come measurements with respect to the service pro-
vided, and that the appropriate out-of-network rate
should therefore be higher than the qualifying pay-
ment amount. Accordingly, the certified IDR entity
must select the provider’s offer, as that offer best
represents the value of the service that is the subject
of the payment determination.
(C) Example 3 – (1) Facts. A nonparticipating
provider and an issuer are parties to a payment deter-
mination in the Federal IDR process. The nonpar-
ticipating provider submits credible information to
the certified IDR entity relating to the acuity of the
patient that received the service, and the complexity
of furnishing the service to the patient, by provid-
ing details of the service at issue and the training
required to furnish the complex service. The pro-
vider contends that this information demonstrates
that the qualifying payment amount is not an appro-
priate payment amount, and the provider submits
an offer that is higher than the qualifying payment
amount and equal to what the provider believes is
commensurate with the acuity of the patient and the
complexity of the service that is the subject of the
payment determination. However, the evidence sub-
mitted by the provider does not clearly demonstrate
that the qualifying payment amount fails to encom-
pass the acuity and complexity of the service. The
issuer submits the qualifying payment amount as its
offer, along with credible information that demon-
strates how the qualifying payment amount was cal-
culated for this particular service, taking into consid-
eration the acuity of the patient and the complexity
of the service.
(2) Conclusion. The information submitted by the
provider to the certified IDR entity is credible with
respect to the acuity of the patient and complexity of
the service. However, in this example, the provider has
not clearly demonstrated that the qualifying payment
amount is materially different from the appropriate
out-of-network rate, based on the acuity of the patient
and the complexity of the service that is the subject of
the payment determination. Accordingly, the certified
IDR entity must select the offer closest to the qualify-
ing payment amount, which is the issuer’s offer.
(D) Example 4 - (1) Facts. A nonparticipat-
ing provider and an issuer are parties to a payment
determination in the Federal IDR process. The issuer
submits credible information demonstrating that the
patent for the item that is the subject of the payment
determination has expired, including written docu-
mentation that demonstrates how much the cost of
the item was at the time the provider rendered service
and how the qualifying payment amount exceeds
that cost. The issuer submits an offer that is lower
than the qualifying payment amount and commen-
surate with the cost of the item at the time service
was rendered. The nonparticipating provider submits
the qualifying payment amount as its offer and also
submits credible information demonstrating the pro-
vider’s level of training, experience, and quality and
outcome measurements from 2019, but the provider
does not explain how this additional information is
relevant to the cost of the item.
(2) Conclusion. In this Example 4, both the non-
participating provider and issuer submitted informa-
tion that is credible and that may be considered by
the certified IDR entity. However, only the issuer
provided credible information that was relevant to
the service that is the subject of the payment deter-
mination. Moreover, the issuer has clearly demon-
strated that the qualifying payment amount does not
adequately take into account the complexity of the
item furnished – in this case that the item is no longer
patent protected. While the provider submitted cred-
ible information, the provider failed to show how
the information was relevant to the item that is the
subject of the payment determination. Accordingly,
the certified IDR entity must select the offer that best
represents the value of the item, which is the issuer’s
offer in this example.
(v) Prohibition on consideration of cer-
tain factors. In determining which offer to
select, the certified IDR entity must not
consider:
(A) Usual and customary charges
(including payment or reimbursement
rates expressed as a proportion of usual
and customary charges);
(B) The amount that would have been
billed by the provider or facility with
respect to the qualified IDR item or service
had the provisions of 45 CFR 149.410 and
149.420 (as applicable) not applied; or
(C) The payment or reimbursement
rate for items and services furnished by
the provider or facility payable by a pub-
lic payor, including 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; or demon-
stration projects under section 1115 of the
Social Security Act.

Bulletin No. 2021–42 625 October 18, 2021
(vi) Written decision. (A) The certified
IDR entity must explain its determination
in a written decision submitted to the par-
ties and the Secretary, in a form and man-
ner specified by the Secretary;
(B) If the certified IDR entity does
not choose the offer closest to the quali-
fying payment amount, the certified IDR
entity’s written decision must include an
explanation of the credible information
that the certified IDR entity determined
demonstrated that the qualifying payment
amount was materially different from the
appropriate out-of-network rate, based on
the considerations allowed under para-
graphs (c)(4)(iii)(B) through (D) of this
section, with respect to the qualified IDR
item or service.
(vii) Effects of determination—(A)
Binding. A determination made by a certi-
fied IDR entity under paragraph (c)(4)(ii)
of this section:
(1) Is binding upon the parties, in the
absence of fraud or evidence of intentional
misrepresentation of material facts pre-
sented to the certified IDR entity regard-
ing the claim; and
(2) Is not subject to judicial review,
except in a case described in any of para-
graphs (1) through (4) of section 10(a) of
title 9, United States Code.
(B) Suspension of certain subsequent
IDR requests. In the case of a determina-
tion made by a certified IDR entity under
paragraph (c)(4)(ii) of this section, the
party that submitted the initial notifica-
tion under paragraph (b)(2) of this section
may not submit a subsequent notifica-
tion involving the same other party with
respect to a claim for the same or similar
item or service that was the subject of the
initial notification during the 90-calen-
dar-day period following the determina-
tion.
(C) Subsequent submission of requests
permitted. If the end of the open negoti-
ation period specified in paragraph (b)(1)
of this section occurs during the 90-cal-
endar-day suspension period regarding
claims for the same or similar item or
service that were the subject of the initial
notice of IDR determination as described
in paragraph (c)(4)(vi) of this section,
either party may initiate the Federal IDR
process for those claims by submitting a
notification as specified in paragraph (b)
(2) of this section during the 30-busi-
ness-day period beginning on the day
after the last day of the 90-calendar-day
suspension period.
(viii) Recordkeeping requirements. The
certified IDR entity must maintain records
of all claims and notices associated with
the Federal IDR process with respect to
any determination for 6 years. The certi-
fied IDR entity must make these records
available for examination by the plan,
issuer, provider, facility, or provider of air
ambulance services, or a State or Federal
oversight agency upon request, except to
the extent the disclosure would violate
either State or Federal privacy law.
(ix) Payment. If applicable, the amount
of the offer selected by the certified IDR
entity (less the sum of the initial payment
and any cost sharing paid or owed by the
participant or beneficiary) must be paid
directly to the provider, facility, or pro-
vider of air ambulance services not later
than 30 calendar days after the determi-
nation by the certified IDR entity. If the
offer selected by the certified IDR entity
is less than the sum of the initial payment
and any cost sharing paid by the partic-
ipant or beneficiary, the provider, facil-
ity, or provider of air ambulance services
will be liable to the plan or issuer for
the difference. The provider, facility, or
provider of air ambulance services must
pay the difference directly to the plan
or issuer not later than 30 calendar days
after the determination by the certified
IDR entity.
(d) Costs of IDR process—(1) Certi-
fied IDR entity fee. (i) With respect to the
Federal IDR process described in para-
graph (c) of this section, the party whose
offer submitted to the certified IDR entity
under paragraph (c)(4)(ii)(A) of this sec-
tion is not selected is responsible for the
payment to the certified IDR entity of the
predetermined fee charged by the certified
IDR entity.
(ii) Each party to a determination for
which a certified IDR entity is selected
under paragraph (c)(1) of this section must
pay the predetermined certified IDR entity
fee charged by the certified IDR entity to
the certified IDR entity at the time the par-
ties submit their offers under (c)(4)(i) of
this section. The certified IDR entity fee
paid by the prevailing party whose offer is
selected by the certified IDR entity will be
returned to that party within 30 business
days following the date of the certified
IDR entity’s determination.
(2) Administrative fee. (i) Each party
to a determination for which a certified
IDR entity is selected under paragraph
(c)(1) of this section must, at the time
the certified IDR entity is selected under
paragraph (c)(1), pay to the certified IDR
entity a non-refundable administrative
fee due to the Secretary for participating
in the Federal IDR process described in
this section.
(ii) The administrative fee amount
will be established in guidance published
annually by the Secretary in a manner such
that the total fees paid for a year are esti-
mated to be equal to the projected amount
of expenditures by the Departments of the
Treasury, Labor, and Health and Human
Services for the year in carrying out the
Federal IDR process.
(e) Certification of IDR entity—(1)
In general. In order to be selected under
paragraph (c)(1) of this section—
(i) An IDR entity must meet the stan-
dards described in this paragraph (e) and
be certified by the Secretary, jointly with
the Secretaries of Health and Human Ser-
vices and the Treasury, as set forth in this
paragraph (e) of this section and guidance
promulgated by the Secretary. Once certi-
fied, the IDR entity will be provided with
a certified IDR entity number.
(ii) An IDR entity must provide written
documentation to the Secretary regarding
general company information (such as
contact information, Taxpayer Identifica-
tion Number, and website), as well as the
applicable service area in which the IDR
entity intends to conduct payment deter-
minations under the Federal IDR process.
IDR entities may choose to submit their
application for all States, or self-limit to a
particular subset of States.
(iii) An IDR entity that the Secretary,
jointly with the Secretary of the Treasury
and the Secretary of Health and Human
Services, certifies must enter into an
agreement as a condition of certification.
The agreement shall include specified
provisions encompassed by this section,
including, but not limited to, the require-
ments applicable to certified IDR entities
when making payment determinations as
well as the requirements regarding certi-
fication and revocation (such as specifica-
tions for wind down activities and reallo-

October 18, 2021 626 Bulletin No. 2021–42
cation of certified IDR entity fees, where
warranted).
(2) Requirements. An IDR entity must
provide written documentation to the Sec-
retary through the Federal IDR portal that
demonstrates that the IDR entity satisfies
the following standards to be a certified
IDR entity under this paragraph (e):
(i) Possess (directly or through con-
tracts or other arrangements) sufficient
arbitration and claims administration of
health care services, managed care, bill-
ing and coding, medical and legal exper-
tise to make the payment determinations
described in paragraph (c) of this section
within the time prescribed in paragraph
(c)(4)(ii) of this section.
(ii) Employ (directly or through con-
tracts or other arrangements) a sufficient
number of personnel to make the deter-
minations described in paragraph (c) of
this section within the time prescribed by
(c)(4)(ii) of this section. To satisfy this
standard, the written documentation must
include a description of the IDR entity’s
organizational structure and capabilities,
including an organizational chart and the
credentials, responsibilities, and number
of personnel employed to make determi-
nations described in paragraph (c) of this
section.
(iii) Maintain a current accreditation
from a nationally recognized and rele-
vant accrediting organization, such as
URAC, or ensure that it otherwise pos-
sesses the requisite training to conduct
payment determinations (for example,
providing documentation that personnel
employed by the IDR entity have com-
pleted arbitration training by the Amer-
ican Arbitration Association, the Ameri-
can Health Law Association, or a similar
organization);
(iv) Have a process to ensure that no
conflict of interest, as defined in paragraph
(a)(2) of this section, exists between the
parties and the personnel the certified IDR
entity assigns to a payment determination
to avoid violating paragraph (c)(1)(ii)of
this section, including policies and pro-
cedures for conducting ongoing audits for
conflicts of interest, to ensure that should
any arise, the certified IDR entity has pro-
cedures in place to inform the Secretary,
jointly with the Secretary of the Treasury
and the Secretary of Health and Human
Services of the conflict of interest and to
mitigate the risk by reassigning the dis-
pute to other personnel in the event that
any personnel previously assigned have a
conflict of interest.
(v) Have a process to maintain the con-
fidentiality of IIHI obtained in the course
of conducting determinations. A certified
IDR entity’s responsibility to comply with
these confidentiality requirements shall
survive revocation of the IDR entity’s cer-
tification for any reason, and IDR entities
must comply with the record retention and
disposal requirements described in this
section. Under this process, once certified,
the certified IDR entity must comply with
the following requirements:
(A) Privacy. The certified IDR entity
may create, collect, handle, disclose,
transmit, access, maintain, store, and/or
use IIHI, only to perform:
(1) The certified IDR entity’s required
duties described in this section; and
(2) Functions related to carrying out
additional obligations as may be required
under applicable Federal or State laws or
regulations.
(B) Security. (1) The certified IDR
entity must ensure the confidentiality
of all IIHI it creates, obtains, maintains,
stores, and transmits;
(2) The certified IDR entity must pro-
tect against any reasonably anticipated
threats or hazards to the security of this
information;
(3) The certified IDR entity must
ensure that IIHI is securely destroyed or
disposed of in an appropriate and reason-
able manner 6 years from either the date
of its creation or the first date on which
the certified IDR entity had access to it,
whichever is earlier;
(4) The certified IDR entity must
implement policies and procedures to pre-
vent, detect, contain, and correct security
violations in the event of a breach of IIHI;
(C) Breach notification. The certified
IDR entity must, following the discovery
of a breach of unsecured IIHI, notify of
the breach the provider, facility, or pro-
vider of air ambulance services; the plan
and issuer; the Secretary, jointly with the
Secretary of the Treasury and the Secre-
tary of Health and Human Services; and
each individual whose unsecured IIHI has
been, or is reasonably believed to have
been, subject to the breach, to the extent
possible.
(1) Breaches treated as discovered. For
purposes of this paragraph (e)(2)(v)(C), a
breach shall be treated as discovered by a
certified IDR entity as of the first day on
which the breach is known to the certified
IDR entity or, by exercising reasonable
diligence, would have been known to the
certified IDR entity. A certified IDR entity
shall be deemed to have knowledge of a
breach if the breach is known, or by exer-
cising reasonable diligence would have
been known, to any person, other than the
person committing the breach, who is an
employee, officer, or other agent of the
certified IDR entity;
(2) Timing of notification. A certified
IDR entity must provide the notification
required by this paragraph (e)(2)(v)(C)
without unreasonable delay and in no case
later than 60 calendar days after discovery
of a breach.
(3) Content of notification. The notifi-
cation required by this paragraph (e)(2)(v)
(C) must include, to the extent possible:
(i) The identification of each individ-
ual whose unsecured IIHI has been, or
is reasonably believed by the certified
IDR entity to have been, subject to the
breach;
(ii) A brief description of what hap-
pened, including the date of the breach and
the date of the discovery of the breach, to
the extent known;
(iii) A description of the types of
unsecured IIHI that were involved in the
breach (for example whether full name,
social security number, date of birth,
home address, account number, diagnosis,
disability code, or other types of informa-
tion were involved);
(iv) A brief description of what the
certified IDR entity involved is doing to
investigate the breach, to mitigate harm to
the affected parties, and to protect against
any further breaches; and
(v) Contact procedures for individuals
to ask questions or learn additional infor-
mation, which must include a toll-free
telephone number, email address, website,
or postal address.
(4) Method for providing notification.
A certified IDR entity must submit the
notification required by this paragraph
(e)(2)(v)(C) in written form (in clear and
understandable language) either on paper
or electronically through the Federal IDR
portal or electronic mail.

Bulletin No. 2021–42 627 October 18, 2021
(D) Application to contractor and sub-
contractors. The certified IDR entity must
ensure compliance with this paragraph (e)
(2)(v) of this section by any contractor
or subcontractor with access to IIHI per-
forming any duties related to the Federal
IDR process.
(vi) Meet appropriate indicators of
fiscal integrity and stability by demon-
strating that the certified IDR entity has a
system of safeguards and controls in place
to prevent and detect improper financial
activities by its employees and agents to
assure fiscal integrity and accountability
for all certified IDR entity fees and admin-
istrative fees received, held, and disbursed
and by submitting 3 years of financial
statements or, if not available, other infor-
mation to demonstrate fiscal stability of
the IDR entity;
(vii) Provide a fixed fee for single
determinations and a separate fixed fee
for batched determinations within the
upper and lower limits for each, as set
forth in guidance issued by the Secretary.
The certified IDR entity may not charge a
fee that is not within the approved limits
as set forth in guidance unless the certi-
fied IDR entity or IDR entity seeking cer-
tification receives written approval from
the Secretary to charge a flat rate beyond
the upper or lower limits approved by
the Secretary for fees. The certified IDR
entity or IDR entity seeking certification
may update its fees and seek approval
from the Secretary to charge a flat fee
beyond the upper or lower limits for
fees, annually as provided in guidance.
In order for the certified IDR entity to
receive the Secretary’s written approval
to charge a flat fee beyond the upper or
lower limits for fees as set forth in guid-
ance, it must satisfy both conditions in
paragraphs (e)(2)(vii)(A) and (B) of this
section as follows:
(A) Submit, in writing, a proposal to
the Secretary that includes:
(1) The alternative flat fee the certified
IDR entity or IDR entity seeking certifi-
cation believes is appropriate for the cer-
tified IDR entity or IDR entity seeking
certification to charge;
(2) A description of the circumstances
that require the alternative fee; and
(3) A description of how the alternative
flat rate will be used to mitigate the effects
of these circumstances; and
(B) Receive from the Secretary, jointly
with the Secretary of the Treasury and the
Secretary of Health and Human Services,
written approval to charge the fee docu-
mented in the certified IDR entity’s or the
IDR entity seeking certification’s written
proposal.
(viii) Have a procedure in place
to retain the certified IDR entity fees
described in paragraph (d)(1) of this
section paid by both parties in a trust or
escrow account and to return the certified
IDR entity fee paid by the prevailing party
of an IDR payment determination, or half
of each party’s certified IDR entity fee
in the case of an agreement described in
paragraph (c)(2)(i) of this section, within
30 business days following the date of the
determination;
(ix) Have a procedure in place to retain
the administrative fees described in para-
graph (d)(2) of this section and to remit
the administrative fees to the Secretary in
accordance with the timeframe and proce-
dures set forth in guidance published by
the Secretary;
(x) Discharge its responsibilities in
accordance with paragraph (c) of this
section, including not making any deter-
mination with respect to which the certi-
fied IDR entity would not be eligible for
selection pursuant to paragraph (c)(1) of
this section; and
(xi) Collect the information required to
be reported to the Secretary under para-
graph (f) of this section and report the
information on a timely basis in the form
and manner provided in guidance pub-
lished by the Secretary.
(3) Conflict-of-interest standards. In
addition to the general standards set forth
in paragraph (e)(2)(iv) of this section,
an IDR entity must provide written doc-
umentation that the IDR entity satisfies
the standards to be a certified IDR entity
under this paragraph (e)(3).
(i) The IDR entity must provide an
attestation indicating that it does not have
a conflict of interest as defined in para-
graph (a)(2) of this section;
(ii) The IDR entity must have proce-
dures in place to ensure that personnel
assigned to a determination do not have
any conflicts of interest regarding any
party to the dispute within the 1 year
immediately preceding an assignment
of dispute determination, similar to the
requirements laid out in 18 U.S.C. 207(b).
In order to satisfy this requirement, if
certified, the IDR entity must ensure that
any personnel assigned to a determination
do not have any conflicts of interest as
defined in paragraph (a)(2) of this section.
(iii) Following certification under this
paragraph (e), if a certified IDR entity
acquires control of, becomes controlled
by, or comes under common control with
any entity described in paragraph (e)(3)
(i) of this section, the certified IDR entity
must notify the Secretary in writing no
later than 3 business days after the acqui-
sition or exercise of control and shall be
subject to the revocation of certification
under paragraph (e)(6)(ii) of this section.
(4) Period of certification. Subject to
paragraphs (e)(5) and (6) of this section,
each certification (including a recertifica-
tion) of a certified IDR entity under the
process described in paragraph (e)(1) of
this section will be effective for a 5-year
period.
(5) Petition for denial or revocation—
(i) In general. An individual, provider,
facility, provider of air ambulance ser-
vices, plan, or issuer may petition for a
denial of a certification for an IDR entity
or a revocation of a certification for a
certified IDR entity for failure to meet a
requirement of this section using the stan-
dard form and manner set forth in guid-
ance to be issued by the Secretary. The
petition for denial of a certification must
be submitted within the timeframe set
forth in guidance issued by the Secretary.
(ii) Content of petition. The individual,
provider, facility, provider of air ambu-
lance services, plan, or issuer seeking
denial or revocation of certification must
submit a written petition using the stan-
dard form issued by the Secretary includ-
ing the following information:
(A) The identity of the IDR entity seek-
ing certification or certified IDR entity
that is the subject of the petition;
(B) The reason(s) for the petition;
(C) Whether the petition seeks denial
or revocation of a certification;
(D) Documentation to support the rea-
sons outlined in the petition; and
(E) Other information as may be
required by the Secretary.
(iii) Process. (A) The Secretary, jointly
with the Secretary of the Treasury and the
Secretary of Health and Human Services,

October 18, 2021 628 Bulletin No. 2021–42
will acknowledge receipt of the petition
within 10 business days of receipt of the
petition.
(B) If the Secretary finds that the peti-
tion adequately shows a failure of the
IDR entity seeking certification or the
certified IDR entity to follow the require-
ments of this paragraph (e), the Secretary,
jointly with the Secretary of the Treasury
and the Secretary of Health and Human
Services, will notify the IDR entity seek-
ing certification or the certified IDR
entity by providing a de-identified copy
of the petition. Following the notifica-
tion, the IDR entity seeking certification
or certified IDR entity will have 10 busi-
ness days to provide a response. After the
time period for providing the response
has passed, the Secretary, jointly with the
Secretary of the Treasury and the Secre-
tary of Health and Human Services, will
review the response (if any), determine
whether a denial or revocation of a cer-
tification is warranted, and issue a notice
of the decision to the IDR entity or certi-
fied IDR entity and to the petitioner. This
decision will be subject to the appeal
requirements of paragraph (e)(6)(v) of
this section.
(C) Effect on certification under peti-
tion. Regarding a petition for revocation
of a certified IDR entity’s certification, if
the Secretary, jointly with the Secretary of
the Treasury and the Secretary of Health
and Human Services, finds that the peti-
tion adequately shows a failure to comply
with the requirements of this paragraph
(e), following the Secretary’s notification
of the failure to the certified IDR entity
under paragraph (e)(5)(iii)(B) of this sec-
tion, the certified IDR entity may continue
to work on previously assigned determi-
nations but may not accept new determi-
nations until the Secretary issues a notice
of the decision to the certified IDR entity
finding that a revocation of certification is
not warranted.
(6) Denial of IDR entity certification or
revocation of certified IDR entity certifi-
cation—(i) Denial of IDR entity certifica-
tion. The Secretary, jointly with the Sec-
retary of the Treasury and the Secretary
of Health and Human Services, may deny
the certification of an IDR entity under
paragraph (e)(1) of this section if, during
the process of certification, including as a
result of a petition described in paragraph
(e)(5) of this section, the Secretary deter-
mines the following:
(A) The IDR entity fails to meet the
applicable standards set forth under this
paragraph (e);
(B) The IDR entity has committed
or participated in fraudulent or abusive
activities, including, during the certifica-
tion process, submitting fraudulent data,
or submitting information or data the IDR
entity knows to be false to the Secretary,
the Secretary of the Treasury or the Secre-
tary of Health and Human Services;
(C) The IDR entity has failed to com-
ply with requests for information from the
Secretary, the Secretary of the Treasury, or
the Secretary of Health and Human Ser-
vices as part of the certification process;
(D) In conducting payment determina-
tions, including those outside the Federal
IDR process, the IDR entity has failed to
meet the standards that applied to those
determinations or reviews, including
standards of independence and impartial-
ity; or
(E) The IDR entity is otherwise not fit
or qualified to make determinations under
the Federal IDR process.
(ii) Revocation of certification of a cer-
tified IDR entity. The Secretary, jointly
with the Secretary of the Treasury and the
Secretary of Health and Human Services,
may revoke the certification of a certified
IDR entity under paragraph (e)(1) of this
section if, as a result of an audit, a peti-
tion described in paragraph (e)(5) of this
section, or otherwise, the Secretary deter-
mines the following:
(A) The certified IDR entity has a pat-
tern or practice of noncompliance with
any requirements of this paragraph (e);
(B) The certified IDR entity is operat-
ing in a manner that hinders the efficient
and effective administration of the Federal
IDR process;
(C) The certified IDR entity no longer
meets the applicable standards for certifi-
cation set forth under this paragraph (e);
(D) The certified IDR entity has com-
mitted or participated in fraudulent or
abusive activities, including submission
of false or fraudulent data to the Secretary,
the Secretary of the Treasury, or the Secre-
tary of Health and Human Services;
(E) The certified IDR entity lacks the
financial viability to provide arbitration
under the Federal IDR process;
(F) The certified IDR entity has failed
to comply with requests from the Secre-
tary, the Secretary of the Treasury, or the
Secretary of Health and Human Services
made as part of an audit, including failing
to submit all records of the certified IDR
entity that pertain to its activities within
the Federal IDR process; or
(G) The certified IDR entity is other-
wise no longer fit or qualified to make
determinations.
(iii) Notice of denial or revocation. The
Secretary, jointly with the Secretary of
the Treasury and the Secretary of Health
and Human Services, will issue a written
notice of denial to the IDR entity or revo-
cation to the certified IDR entity within
10 business days of the Secretary’s deci-
sion, including the effective date of denial
or revocation, the reason(s) for denial or
revocation, and the opportunity to request
appeal of the denial or revocation.
(iv) Request for appeal of denial or
revocation. To request an appeal, the IDR
entity or certified IDR entity must sub-
mit a request for appeal to the Secretary
within 30 business days of the date of the
notice under paragraph (e)(6)(iii) of this
section of denial or revocation and in the
manner prescribed by the instructions to
the notice. During this time period, the
Secretary, jointly with the Secretary of the
Treasury and the Secretary of Health and
Human Services, will not issue a notice
of final denial or revocation and a certi-
fied IDR entity may continue to work on
previously assigned determinations but
may not accept new determinations. If the
IDR entity or certified IDR entity does not
timely submit a request for appeal of the
denial or revocation, the Secretary, jointly
with the Secretary of the Treasury and the
Secretary of Health and Human Services,
will issue a notice of final denial or revo-
cation to the IDR entity or certified IDR
entity (if applicable) and the petitioner.
(v) Denial or final revocation. Upon
notice of denial or final revocation, the
IDR entity shall not be considered a certi-
fied IDR entity and therefore shall not be
eligible to accept payment determinations
under the Federal IDR process. Moreover,
after a notice of final revocation, the IDR
entity may not re-apply to be a certified
IDR entity until on or after the 181st day
after the date of the notice of denial or
final revocation.

Bulletin No. 2021–42 629 October 18, 2021
(f) Reporting of information relating to
the Federal IDR process—(1) Reporting
of information. Within 30 business days of
the close of each month, for qualified IDR
items and services furnished on or after
January 1, 2022, each certified IDR entity
must, in a form and manner specified by
the Secretary, report:
(i) The number of notices of IDR ini-
tiation submitted under paragraph (b)
(2) of this section to the certified IDR
entity during the immediately preceding
month;
(ii) The size of the provider prac-
tices and the size of the facilities sub-
mitting notices of IDR initiation under
paragraph (b)(2) of this section during
the immediately preceding month, as
required to be provided to the certified
IDR entity under paragraph (c)(4)(i)(A)
(2) of this section;
(iii) The number of such notices of IDR
initiation with respect to which a determi-
nation was made under paragraph (c)(4)
(ii) of this section;
(iv) The number of times during the
month that the out-of-network rate deter-
mined (or agreed to) under this section has
exceeded the qualifying payment amount,
specified by qualified IDR items and ser-
vices;
(v) With respect to each notice of IDR
initiation under paragraph (b)(2) of this
section for which such a determination
was made, the following information:
(A) A description of the qualified IDR
items and services included with respect
to the notification, including the relevant
billing and service codes;
(B) The relevant geographic region
for purposes of the qualifying payment
amount for the qualified IDR items and
services with respect to which the notifi-
cation was provided;
(C) The amount of the offer submitted
under paragraph (c)(4)(i) of this section
by the plan or issuer (as applicable) and
by the provider or facility (as applica-
ble) expressed as a dollar amount and as
a percentage of the qualifying payment
amount;
(D) Whether the offer selected by the
certified IDR entity under paragraph (c)
(4) of this section was the offer submit-
ted by the plan or issuer (as applicable)
or by the provider or facility (as appli-
cable);
(E) The amount of the selected offer
expressed as a dollar amount and as a
percentage of the qualifying payment
amount;
(F) The rationale for the certified IDR
entity’s decision, including the extent to
which the decision relied on the criteria in
paragraph (c)(4)(iv) of this section;
(G) The practice specialty or type of
each provider or facility, respectively,
involved in furnishing each qualified IDR
item or service;
(H) The identity for each plan or issuer,
and provider or facility, with respect to
the notification. Specifically, each certi-
fied IDR entity must provide each party’s
name and address, as applicable; and
(I) For each determination, the number
of business days elapsed between selec-
tion of the certified IDR entity and the
determination of the out-of-network rate
by the certified IDR entity.
(vi) The total amount of certified IDR
entity fees paid to the certified IDR entity
under paragraph (d)(1) of this section
during the month.
(2) [Reserved]
(g) Extension of time periods for exten-
uating circumstances—(1) General. The
time periods specified in this section
(other than the time for payment, if appli-
cable, under paragraph (c)(4)(ix) of this
section) may be extended in extenuating
circumstances at the Secretary’s discretion
if:
(i) An extension is necessary to address
delays due to matters beyond the control
of the parties or for good cause; and
(ii) The parties attest that prompt action
will be taken to ensure that the determi-
nation under this section is made as soon
as administratively practicable under the
circumstances.
(2) Process to request an extension.
The parties may request an extension by
submitting a request for extension due to
extenuating circumstances through the
Federal IDR portal if the extension is nec-
essary to address delays due to matters
beyond the control of the parties or for
good cause.
(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 [INSERT THE DATE OF
PUBLICATION IN THE FEDERAL
REGISTER].
14. Section 2590.717-2 is added to read
as follows:
§ 2590.717-2 Independent dispute
resolution process for air ambulance
services
(a) Definitions. Unless otherwise stated,
the definitions in § 2590.716-3 apply.
(b) Determination of out-of-network
rates to be paid by health plans and
health insurance issuers; independent
dispute resolution process—(1) In gen-
eral. Except as provided in paragraphs
(b)(2) and (3) of this section, in deter-
mining 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 cir-
cumstances in § 2590.716-8(c)(4)(iii)(C)
shall be understood to refer to paragraph
(b)(2) of this section.
(2) Additional information. Addi-
tional information submitted by a party,
provided the information is credible,
relates to the circumstances described in
paragraphs (b)(2)(i) through (vi) of this
section, with respect to a qualified IDR
service of a nonparticipating provider of
air ambulance services or health insur-
ance issuer of group or individual health
insurance coverage that is the subject of
a payment determination. This informa-
tion must also clearly demonstrate that the
qualifying payment amount is materially
different from the appropriate out-of-net-
work rate.
(i) The quality and outcomes measure-
ments of the provider that furnished the
services.
(ii) The acuity of the condition of the
participant or beneficiary receiving the
service, or the complexity of furnishing
the service to the participant or benefi-
ciary.
(iii) The training, experience, and qual-
ity of the medical personnel that furnished
the air ambulance services.
(iv) Ambulance vehicle type, including
the clinical capability level of the vehicle.

October 18, 2021 630 Bulletin No. 2021–42
(v) 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).
(vi) Demonstrations of good faith
efforts (or lack thereof) made by the non-
participating provider of air ambulance
services or the plan or issuer to enter into
network agreements with each other and,
if applicable, contracted rates between the
provider of air ambulance services and the
plan or issuer, as applicable, during the
previous 4 plan years.
(3) Reporting of information relating to
the IDR process. In applying the require-
ments of § 2590.716-8(f), within 30 busi-
ness days of the close of each month, for
services furnished on or after January 1,
2022, the information the certified IDR
entity must report, in a form and manner
specified by the Secretary, with respect
to the Federal IDR process involving air
ambulance services is:
(i) The number of notices of IDR ini-
tiation submitted under the Federal IDR
process to the certified IDR entity that
pertain to air ambulance services during
the immediately preceding month;
(ii) The number of such notices of
IDR initiation with respect to which
a final determination was made under
§ 2590.716-8(c)(4)(ii) of this part (as
applied by paragraph (b)(1) of this sec-
tion);
(iii) The number of times the payment
amount determined (or agreed to) under
this subsection has exceeded the quali-
fying payment amount, specified by ser-
vices;
(iv) With respect to each notice of IDR
initiation under § 2590.716-8(b)(2) of this
part (as applied by paragraph (b)(1) of this
section) for which a determination was
made, the following information:
(A) A description of each air ambu-
lance service included in such notifica-
tion, including the relevant billing and
service codes;
(B) The point of pick-up (as defined in
42 CFR 414.605) for the services included
in such notification;
(C) The amount of the offers submitted
under § 2590.716-8(c)(4)(i) (as applied
by paragraph (b)(1) of this section) by
the group health plan or health insurance
issuer (as applicable) and by the nonpar-
ticipating provider of air ambulance ser-
vices, expressed as a dollar amount and
as a percentage of the qualifying payment
amount;
(D) Whether the offer selected by the
certified IDR entity under § 2590.716-
8(c)(4)(ii) of this part (as applied by
paragraph (b)(1) of this section) to be the
payment amount applied was the offer
submitted by the plan or issuer (as appli-
cable) or by the provider of air ambu-
lance services;
(E) The amount of the selected offer
expressed as a dollar amount and as a
percentage of the qualifying payment
amount;
(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;
(G) Air ambulance vehicle type,
including the clinical capability level of
such vehicle (to the extent this informa-
tion has been provided to the certified
IDR entity);
(H) The identity for each plan or issuer
and provider of air ambulance services,
with respect to the notification. Specifi-
cally, each certified IDR entity must pro-
vide each party’s name and address, as
applicable; and
(I) For each determination, the number
of business days elapsed between selec-
tion of the certified IDR entity and the
selection of the payment amount by the
certified IDR entity.
(v) The total amount of certified IDR
entity fees paid to the certified IDR entity
under paragraph § 2590.716-8(d)(1) of
this part (as applied by paragraph (b)
(1) of this section) during the month for
determinations involving air ambulance
services.
(c) Applicability date. The provisions
of this section are applicable with respect
to plan years beginning on or after January
1, 2022.
Department of Health and Human
Services
45 CFR Subtitle A, Subchapter B
For the reasons set forth in the pream-
ble, the Department of Health and Human
Services amends 45 CFR parts 147 and
149 as set forth below:
PART 147—HEALTH INSURANCE
REFORM REQUIREMENTS FOR
THE GROUP AND INDIVIDUAL
HEALTH INSURANCE MARKETS
15. The authority citation for part 147
continues to read as follows:
Authority: 42 U.S.C. 300gg through
300gg-63, 300gg-91, 300gg-92, and
300gg-111 through 300gg-139, as
amended, and section 3203, Pub. L. 116-
136, 134 Stat. 281.
16. Section 147.136 is amended by:
a. Revising paragraphs (a)(1), (c)(2)(i),
and (d)(1)(i)(A) and (B);
b. Adding paragraph (d)(1)(i)(C);
c. Adding Examples 3 through 7 to
paragraph (d)(1)(ii); and
d. Revising paragraph (g).
The revisions and additions read as fol-
lows:
§ 147.136 Internal claims and appeals
and external review processes.
(a) Scope and definitions—(1)
Scope—(i) In general. This section
sets forth requirements with respect to
internal claims and appeals and external
review processes for group health plans
and health insurance issuers. Paragraph
(b) of this section provides requirements
for internal claims and appeals processes.
Paragraph (c) of this section sets forth
rules governing the applicability of State
external review processes. Paragraph
(d) of this section sets forth a Federal
external review process for plans and
issuers not subject to an applicable State
external review process. Paragraph (e) of
this section prescribes requirements for
ensuring that notices required to be pro-
vided under this section are provided in
a culturally and linguistically appropri-
ate manner. Paragraph (f) of this section
describes the authority of the Secretary
to deem certain external review pro-
cesses in existence on March 23, 2010 as
in compliance with paragraph (c) or (d)
of this section.
(ii) Application to grandfathered health
plans and health insurance coverage. The
provisions of this section generally do not
apply to coverage offered by health insur-
ance issuers and group health plans that
are grandfathered health plans, as defined
under § 147.140. However, the external

Bulletin No. 2021–42 631 October 18, 2021
review process requirements under para-
graphs (c) and (d) of this section, and
related notice requirements under para-
graph (e) of this section, apply to grand-
fathered health plans or coverage with
respect to adverse benefit determinations
involving items and services within the
scope of the requirements for out-of-net-
work emergency services, nonemergency
services performed by nonparticipating
providers at participating facilities, and
air ambulance services furnished by non-
participating providers of air ambulance
services under PHS Act sections 2799A-1
and 2799A-2 and §§ 149.110 through
149.130.
* * * * *
(c) * * *
(2) * * * .
(i) The State process must provide for
the external review of adverse benefit
determinations (including final internal
adverse benefit determinations) by issu-
ers (or, if applicable, plans) that are based
on the issuer’s (or plan’s) requirements
for medical necessity, appropriateness,
health care setting, level of care, or effec-
tiveness of a covered benefit, as well as a
consideration of whether a plan or issuer
is complying with the surprise billing
and cost-sharing protections under PHS
Act sections 2799A-1 and 2799A-2 and
§§ 149.110 through 149.130.
* * * * *
(d) * * *
(1) * * *
(i) * * *
(A) An adverse benefit determination
(including a final internal adverse bene-
fit determination) by a plan or issuer that
involves medical judgment (including, but
not limited to, those based on the plan’s or
issuer’s requirements for medical neces-
sity, appropriateness, health care setting,
level of care, or effectiveness of a cov-
ered benefit; its determination that a treat-
ment is experimental or investigational;
its determination whether a participant,
beneficiary, or enrollee is entitled to a rea-
sonable alternative standard for a reward
under a wellness program; its determina-
tion whether a plan or issuer is complying
with the nonquantitative treatment limita-
tion provisions of PHS Act section 2726
and §§ 146.136 and 147.160, which gen-
erally require, among other things, parity
in the application of medical management
techniques), as determined by the external
reviewer. (A denial, reduction, termina-
tion, or a failure to provide payment for
a benefit based on a determination that a
participant, beneficiary, or enrollee fails to
meet the requirements for eligibility under
the terms of a group health plan or health
insurance coverage is not eligible for the
Federal external review process under this
paragraph (d));
(B) An adverse benefit determination
that involves consideration of whether a
plan or issuer is complying with the sur-
prise billing and cost-sharing protections
set forth in PHS Act sections 2799A-1
and 2799A-2 and §§ 149.110 through
149.130; and
(C) A rescission of coverage (whether
or not the rescission has any effect on any
particular benefit at that time).
(ii) * * *
Example 3. (i) Facts. A group health plan gener-
ally provides benefits for services in an emergency
department of a hospital or independent freestand-
ing emergency department. Individual C receives
pre-stabilization emergency treatment in an out-of-
network emergency department of a hospital. The
group health plan determines that protections for
emergency services under § 149.110 do not apply
because the treatment did not involve “emergency
services” within the meaning of § 149.110(c)(2)
(i). C receives an adverse benefit determination and
the plan imposes cost-sharing requirements that are
greater than the requirements that would apply if the
same services were provided in an in-network emer-
gency department.
(ii) Conclusion. In this Example 3, the plan’s
determination that treatment received by C did not
include emergency services involves medical judg-
ment and consideration of whether the plan complied
with § 149.110. Accordingly, the claim is eligible for
external review under paragraph (d)(1)(i) of this sec-
tion.
Example 4. (i) Facts. A group health plan gen-
erally provides benefits for anesthesiology services.
Individual D undergoes a surgery at an in-network
health care facility and during the course of the
surgery, receives anesthesiology services from an
out-of-network provider. The plan decides the claim
for these services without regard to the protections
related to items and services furnished by out-of-
network providers at in-network facilities under
§ 149.120. As a result, D receives an adverse ben-
efit determination for the services and is subject to
cost-sharing liability that is greater than it would be
if cost sharing had been calculated in a manner con-
sistent with the requirements of § 149.120.
(ii) Conclusion. In this Example 4, whether the
plan was required to decide the claim in a man-
ner consistent with the requirements of § 149.120
involves considering whether the plan complied with
§ 149.120, as well as medical judgment, because it
requires consideration of the health care setting and
level of care. Accordingly, the claim is eligible for
external review under paragraph (d)(1)(i) of this sec-
tion.
Example 5. (i) Facts. A group health plan gener-
ally provides benefits for services in an emergency
department of a hospital or independent freestand-
ing emergency department. Individual E receives
emergency services in an out-of-network emergency
department of a hospital, including certain post-sta-
bilization services. The plan processes the claim
for the post-stabilization services as not being for
emergency services under § 149.110(c)(2)(ii) based
on representations made by the treating provider
that E was in a condition to receive notice from
the provider about cost-sharing and surprise billing
protections for these services, and subsequently
gave informed consent to waive those protections.
E receives an adverse benefit determination and is
subject to cost-sharing requirements that are greater
than the cost-sharing requirements that would apply
if the services were processed in a manner consistent
with § 149.110.
(ii) Conclusion. In this Example 5, whether E was
in a condition to receive notice about the availability
of cost-sharing and surprise billing protections and
give informed consent to waive those protections
involves medical judgment and consideration of
whether the plan complied with the requirements
under § 149.110(c)(2)(ii). Accordingly, the claim is
eligible for external review under paragraph (d)(1)
(i) of this section.
Example 6. (i) Facts. Individual F gives birth to
a baby at an in-network hospital. The baby is born
prematurely and receives certain neonatology ser-
vices from a nonparticipating provider during the
same visit as the birth. F was given notice about
cost-sharing and surprise billing protections for these
services, and subsequently gave informed consent to
waive those protections. The claim for the neonatol-
ogy services is coded as a claim for routine post-na-
tal services and the plan decides the claim without
regard to the requirements under § 149.120(a) and
the fact that those protections may not be waived for
neonatology services under § 149.120(b).
(ii) Conclusion. In this Example 6, medical judg-
ment is necessary to determine whether the correct
code was used and compliance with § 149.120(a)
and (b) must also be considered. Accordingly, the
claim is eligible for external review under paragraph
(d)(1)(i) of this section. The Departments also note
that, to the extent the nonparticipating provider bal-
ance bills Individual F for the outstanding amounts
not paid by the plan for the neonatology services,
such provider would be in violation of PHS Act sec-
tion 2799B-2 and its implementing regulations at 45
CFR 149.420(a).
Example 7. (i) Facts. A group health plan gen-
erally provides benefits to cover knee replacement
surgery. Individual G receives a knee replacement
surgery at an in-network facility and, after receiving
proper notice about the availability of cost-sharing
and surprise billing protections, provides informed
consent to waive those protections. However, during
the surgery, certain anesthesiology services are pro-
vided by an out-of-network nurse anesthetist. The
claim for these anesthesiology services is decided
by the plan without regard to the requirements under
§ 149.120(a) or to the fact that those protections may
not be waived for ancillary services such as anesthe-

October 18, 2021 632 Bulletin No. 2021–42
siology services provided by an out-of-network pro-
vider at an in-network facility under § 149.120(b).
G receives an adverse benefit determination and is
subject to cost-sharing requirements that are greater
than the cost-sharing requirements that would apply
if the services were provided in a manner consistent
with § 149.120(a) and (b).
(ii) Conclusion. In this Example 7, consideration
of whether the plan complied with the requirements
in § 149.120(a) and (b) is necessary to determine
whether cost-sharing requirements were applied
appropriately. Accordingly, the claim is eligible for
external review under paragraph (d)(1)(i) of this sec-
tion.
* * * * *
(g) Applicability date. The provisions
of this section generally are applicable to
group health plans and health insurance
issuers for plan years (in the individual
market, policy years) beginning on or
after January 1, 2017. The external review
scope provision at paragraph (d)(1)(i)(B)
of this section is applicable for plan years
(in the individual market, policy years)
beginning on or after January 1, 2022. The
external review provisions described in
paragraphs (c) and (d) of this section are
applicable to grandfathered health plans
and grandfathered individual market pol-
icies, with respect to the types of claims
specified under paragraph (a)(1)(ii) of this
section, for plan years (in the individual
market, policy years) beginning on or
after January 1, 2022.
PART 149—SURPRISE BILLING
AND TRANSPARENCY
REQUIREMENTS
17. The authority citation for part 149
is amended to read as follows:
Authority: 42 U.S.C. 300gg-92
and 300gg-111 through 300gg-139, as
amended.
18. Section 149.10 is amended by
revising paragraph (b) to read as follows:
§ 149.10 Basis and scope.
* * * * *
(b) Scope. This part establishes stan-
dards for group health plans, health insur-
ance issuers offering group or individual
health insurance coverage, health care
providers and facilities, and providers of
air ambulance services with respect to sur-
prise medical bills, transparency in health
care coverage, and additional patient
protections. This part also establishes an
independent dispute resolution process,
and standards for certifying independent
dispute resolution entities. This part also
establishes a Patient-Provider Dispute
Resolution Process and standards for cer-
tifying Selected Dispute Resolution enti-
ties.
17. Section 149.20 is amended by add-
ing paragraphs (a)(3) and (4) and revising
paragraph (b) introductory text to read as
follows:
§ 149.20 Applicability.
(a) * * *
(3) The requirements in subpart F of
this part apply to certified IDR entities,
health care providers, health care facili-
ties, and providers of air ambulance ser-
vices and group health plans and health
insurance issuers offering group or indi-
vidual health insurance coverage (includ-
ing grandfathered health plans as defined
in § 147.140 of this subchapter) except as
specified in paragraph (b) of this section.
(4) The requirements in subpart G of
this part apply to Selected Dispute Reso-
lution Entities, health care providers, pro-
viders of air ambulance services, health
care facilities and uninsured (or self-pay)
individuals, as defined in subpart G.
(b) Exceptions. The requirements in
subparts B, D, E, and F of this part do not
apply to the following:
* * * * *
18. Section 149.450 is amended by
revising paragraphs (a)(1) and (a)(2)(i) to
read as follows:
§ 149.450 Complaint process for
balance billing and good faith
estimates regarding providers and
facilities.
(a) Scope and definitions—(1) Scope.
This section establishes a process for HHS
to receive and resolve complaints regard-
ing information that a health care pro-
vider, provider of air ambulance services,
or health care facility may be failing to
meet the requirements under subpart E or
subpart G of this part, which may warrant
an investigation.
(2) * * *
(i) Complaint means a communication,
written, or oral, that indicates there has
been a potential violation of the require-
ments under this subpart or subpart G of
this part, whether or not a violation actu-
ally occurred.
* * * * *
20. Subpart F, consisting of §§ 149.510
and 149.20. is added to read as follows:
Subpart F—Independent Dispute
Resolution Process
§ 149.510 Independent dispute
resolution process.
(a) Scope and definitions – (1) Scope.
This section sets forth requirements with
respect to the independent dispute reso-
lution (IDR) process (referred to in this
section as the Federal IDR process) under
which a nonparticipating provider, non-
participating emergency facility, or non-
participating provider of air ambulance
services (as applicable), and a group
health plan or health insurance issuer
offering group or individual health insur-
ance coverage completes a requisite open
negotiation period and at least one party
submits a notification under paragraph (b)
of this section to initiate the Federal IDR
process under paragraph (c) of this sec-
tion, and under which an IDR entity (as
certified under paragraph (e) of this sec-
tion) determines the amount of payment
under the plan or coverage for an item or
service furnished by the provider or facil-
ity.
(2) Definitions. Unless otherwise
stated, the definitions in § 149.30 of this
part apply to this section. Additionally,
for purposes of this section, the following
definitions apply:
(i) Batched items and services means
multiple qualified IDR items or services
that are considered jointly as part of one
payment determination by a certified IDR
entity for purposes of the Federal IDR
process. In order for a qualified IDR item
or service to be included in a batched item
or service, the qualified IDR item or ser-
vice must meet the criteria set forth in
paragraph (c)(3) of this section.
(ii) Breach means the acquisition,
access, use, or disclosure of individually
identifiable health information (IIHI) in a
manner not permitted under paragraph (e)
(2)(v) of this section that compromises the
security or privacy of the IIHI.
(A) Breach excludes:

Bulletin No. 2021–42 633 October 18, 2021
(1) Any unintentional acquisition,
access, or use of IIHI by personnel, a con-
tractor, or a subcontractor of a certified
IDR entity that is acting under the author-
ity of that certified IDR entity, if the acqui-
sition, access, or use was made in good
faith and within the scope of that author-
ity and that does not result in further use
or disclosure in a manner not permitted
under paragraph (e)(2)(v) of this section.
(2) Any inadvertent disclosure by a
person who is authorized to access IIHI
at a certified IDR entity to another per-
son authorized to access IIHI at the same
certified IDR entity, and the information
received as a result of the disclosure is
not further used or disclosed in a manner
not permitted under paragraph (e)(2)(v) of
this section.
(3) A disclosure of IIHI in which a cer-
tified IDR entity has a good faith belief
that an unauthorized person to whom the
disclosure was made would not reason-
ably have been able to retain such infor-
mation.
(B) Except as provided in paragraph
(a)(2)(ii)(A) of this definition, access, use,
or disclosure of IIHI in a manner not per-
mitted under paragraph (e)(2)(v) of this
section is presumed to be a breach unless
the certified IDR entity demonstrates that
there is a low probability that the security
or privacy of the IIHI has been compro-
mised based on a risk assessment encom-
passing at least the following factors:
(1) The nature and extent of the IIHI
involved, including the types of identifiers
and the likelihood of re-identification;
(2) The unauthorized person who used
the IIHI or to whom the disclosure was
made;
(3) Whether the IIHI was actually
acquired or viewed; and
(4) The extent to which the risk to the
IIHI has been mitigated.
(iii) Certified IDR entity means an
entity responsible for conducting determi-
nations under paragraph (c) of this section
that meets the certification criteria spec-
ified in paragraph (e) of this section and
that has been certified by the Secretary,
jointly with the Secretaries of Labor and
the Treasury.
(iv) Conflict of interest means, with
respect to a party to a payment determi-
nation, or certified IDR entity, a material
relationship, status, or condition of the
party, or certified IDR entity that impacts
the ability of the certified IDR entity to
make an unbiased and impartial payment
determination. For purposes of this sec-
tion, a conflict of interest exists when a
certified IDR entity is:
(A) A group health plan; a health
insurance issuer offering group health
insurance coverage, individual health
insurance coverage, or short-term, limit-
ed-duration insurance; a carrier offering a
health benefits plan under 5 U.S.C. 8902;
or a provider, a facility, or a provider of air
ambulance services;
(B) An affiliate or a subsidiary of a
group health plan; a health insurance
issuer offering group health insurance
coverage, individual health insurance
coverage, or short-term limited-duration
insurance; a carrier offering a health ben-
efits plan under 5 U.S.C. 8902; or a pro-
vider, a facility, or a provider of air ambu-
lance services;
(C) An affiliate or subsidiary of a pro-
fessional or trade association representing
group health plans; health insurance issu-
ers offering group health insurance cover-
age, individual health insurance coverage,
or short-term limited duration insurance;
carriers offering a health benefits plan
under 5 U.S.C. 8902; or providers, facil-
ities, or providers of air ambulance ser-
vices.
(D) A certified IDR entity, that has,
or that has any personnel, contractors, or
subcontractors assigned to a determina-
tion who have, a material familial, finan-
cial, or professional relationship with a
party to the payment determination being
disputed, or with any officer, director, or
management employee of the plan, issuer,
or carrier offering a health benefits plan
under 5 U.S.C. 8902; the plan or coverage
administrator, plan or coverage fiducia-
ries, or plan, issuer or carrier employees;
the health care provider, the health care
provider’s group or practice association;
the provider of air ambulance services, the
provider of air ambulance services’ group
or practice association, or the facility that
is a party to the dispute.
(v) Credible information means infor-
mation that upon critical analysis is wor-
thy of belief and is trustworthy.
(vi) IDR entity means an entity that may
apply or has applied for certification to
conduct determinations under paragraph
(c) of this section, and that currently is
not certified by the Secretary, jointly with
the Secretaries of Labor and the Treasury,
pursuant to paragraph (e) of this section.
(vii) Individually identifiable health
information (IIHI) means any informa-
tion, including demographic data, that
relates to the past, present, or future phys-
ical or mental health or condition of an
individual; the provision of health care
to an individual; or the past, present, or
future payment for the provision of health
care to an individual; and
(A) That identifies the individual; or
(B) With respect to which there is a rea-
sonable basis to believe the information
can be used to identify the individual.
(viii) Material difference means a sub-
stantial likelihood that a reasonable per-
son with the training and qualifications of
a certified IDR entity making a payment
determination would consider the submit-
ted information significant in determining
the out-of-network rate and would view
the information as showing that the quali-
fying payment amount is not the appropri-
ate out-of-network rate.
(ix) Material familial relationship
means any relationship as a spouse, domes-
tic partner, child, parent, sibling, spouse’s
or domestic partner’s parent, spouse’s or
domestic partner’s sibling, spouse’s or
domestic partner’s child, child’s parent,
child’s spouse or domestic partner, or sib-
ling’s spouse or domestic partner.
(x) Material financial relationship
means any financial interest of more
than five percent of total annual revenue
or total annual income of a certified IDR
entity or an officer, director, or manager
thereof, or of a reviewer or reviewing phy-
sician employed or engaged by a certified
IDR entity to conduct or participate in any
review in the Federal IDR process. The
terms annual revenue and annual income
do not include mediation fees received by
mediators who are also arbitrators, pro-
vided that the mediator acts in the capac-
ity of a mediator and does not represent a
party in the mediation.
(xi) Material professional relationship
means any physician-patient relationship,
any partnership or employment relation-
ship, any shareholder or similar owner-
ship interest in a professional corporation,
partnership, or other similar entity; or any
independent contractor arrangement that

October 18, 2021 634 Bulletin No. 2021–42
constitutes a material financial relation-
ship with any expert used by the certified
IDR entity or any officer or director of the
certified IDR entity.
(xii) Qualified IDR item or service
means an item or service:
(A) That is an emergency service fur-
nished by a nonparticipating provider
or nonparticipating facility subject to
the protections of 26 CFR 54.9816-4T,
29 CFR 2590.716-4, or § 149.110, as
applicable, for which the conditions of
§ 149.410(b) are not met, or an item or
service furnished by a nonparticipating
provider at a participating health care
facility, subject to the requirements of 26
CFR 54.9816-5T, 29 CFR 2590.717-5, or
§ 149.120, as applicable, for which the
conditions of § 149.420(c)-(i) are not met,
or air ambulance services furnished by
a nonparticipating provider of air ambu-
lance services subject to the protections of
26 CFR 54.9817-1T, 29 CFR 2590.717-1,
or § 149.130, as applicable, and for which
the out-of-network rate is not determined
by reference to an All-Payer Model Agree-
ment under section 1115A of the Social
Security Act or a specified State law as
defined in § 149.30;
(B) With respect to which a provider
or facility (as applicable) or group health
plan or health insurance issuer offering
group or individual health insurance cov-
erage submits a notification under para-
graph (b)(2) of this section;
(C) That is not an item or service that
is the subject of an open negotiation under
paragraph (b)(1) of this section; and
(D) That is not an item or service for
which a notification under paragraph (b)
(2) of this section is submitted during the
90-calendar-day period under paragraph
(c)(4)(vi)(B) of this section, but that may
include such an item or service if the noti-
fication is submitted during the subse-
quent 30-business-day period under para-
graph (c)(4)(vi)(C) of this section.
(xiii) Unsecured IIHI means IIHI that
is not rendered unusable, unreadable, or
indecipherable to unauthorized persons
through the use of a technology or meth-
odology specified by the Secretary, jointly
with the Secretary of the Treasury and the
Secretary of Labor.
(b) Determination of payment amount
through open negotiation and initiation
of the Federal IDR process—(1) Deter-
mination of payment amount through
open negotiation—(i) In general. With
respect to an item or service that meets
the requirements of paragraph (a)(2)(xii)
(A) of this section, the provider, facility,
or provider of air ambulance services
or the group health plan or health insur-
ance issuer offering group or individual
health insurance coverage may, during the
30-business-day period beginning on the
day the provider, facility, or provider of
air ambulance services receives an initial
payment or notice of denial of payment
regarding the item or service, initiate an
open negotiation period for purposes of
determining the out-of-network rate for
such item or service. To initiate the open
negotiation period, a party must send a
notice to the other party (open negotiation
notice) in accordance with paragraph (b)
(1)(ii) of this section.
(ii) Open negotiation notice—(A) Con-
tent. The open negotiation notice must
include information sufficient to identify
the item(s) and service(s) (including the
date(s) the item(s) or service(s) were fur-
nished, the service code, and initial pay-
ment amount, if applicable), an offer of an
out-of-network rate, and contact informa-
tion for the party sending the open nego-
tiation notice.
(B) Manner. The open negotiation
notice must be provided, using the stan-
dard form developed by the Secretary, in
writing within 30 business days beginning
on the day the provider, facility, or pro-
vider of air ambulance services receives
an initial payment or a notice of denial of
payment from the plan or issuer regarding
the item or service. The day on which the
open negotiation notice is first sent by a
party is the date the 30-business-day open
negotiation period begins. This notice
may be provided to the other party elec-
tronically (such as by email) if the follow-
ing two conditions are satisfied –
(1) The party sending the open negotia-
tion notice has a good faith belief that the
electronic method is readily accessible by
the other party; and
(2) The notice is provided in paper
form free of charge upon request.
(2) Initiating the Federal IDR pro-
cess—(i) In general. With respect to an
item or service for which the parties do
not agree upon an out-of-network rate
by the last day of the open negotiation
period under paragraph (b)(1) of this sec-
tion, either party may initiate the Federal
IDR process. To initiate the Federal IDR
process, a party must submit a written
notice of IDR initiation to the other party
and to the Secretary, using the standard
form developed by the Secretary, during
the 4-business-day period beginning on
the 31st business day after the start of the
open negotiation period.
(ii) Exception for items and services
provided by certain nonparticipating pro-
viders and facilities. A party may not ini-
tiate the Federal IDR process with respect
to an item or service if, with respect to
that item or service, the party knows
(or reasonably should have known) that
the provider or facility provided notice
and received consent under 45 CFR
149.410(b) or 149.420(c) through (i).
(iii) Notice of IDR initiation—(A)
Content. The notice of IDR initiation must
include:
(1) Information sufficient to iden-
tify the qualified IDR items or services
under dispute (and whether the qualified
IDR items or services are designated as
batched items and services as described
in paragraph (c)(3) of this section),
including the date(s) and location the
item or service was furnished, the type of
item or service (such as whether the qual-
ified IDR item or service is an emergency
service as defined in 26 CFR 54.9816-
4T(c)(2)(i), 29 CFR 2590.716-4(c)(2)(i),
or § 149.110(c)(2)(i), as applicable, an
emergency service as defined in 26 CFR
54.9816-4T(c)(2)(ii), 29 CFR 2590.716-
4(c)(2)(ii), or § 149.110(c)(2)(ii), as
applicable, or a nonemergency service;
and whether any service is a professional
service or facility-based service), corre-
sponding service codes, place of service
code, the amount of cost sharing allowed,
and the amount of the initial payment
made for the qualified IDR item or ser-
vice, if applicable;
(2) Names of the parties involved and
contact information, including name,
email address, phone number, and mailing
address;
(3) State where the qualified IDR item
or service was furnished;
(4) Commencement date of the open
negotiation period under paragraph (b)(1)
of this section;
(5) Preferred certified IDR entity;

Bulletin No. 2021–42 635 October 18, 2021
(6) An attestation that the items and
services under dispute are qualified IDR
items or services;
(7) Qualifying payment amount;
(8) Information about the qualify-
ing payment amount as described in
§ 149.140(d); and
(9) General information describing the
Federal IDR process as specified by the
Secretary.
(B) Manner. The initiating party must
provide written notice of IDR initiation to
the other party. The initiating party may
satisfy this requirement by furnishing the
notice of IDR initiation to the other party
electronically (such as by email) if the fol-
lowing two conditions are satisfied –
(1) The initiating party has a good faith
belief that the electronic method is readily
accessible by the other party; and
(2) The notice is provided in paper
form free of charge upon request.
(C) Notice to the Secretary. The initi-
ating party must also furnish the notice of
IDR initiation to the Secretary by submit-
ting the notice through the Federal IDR
portal. The initiation date of the Federal
IDR process will be the date of receipt by
the Secretary.
(c) Federal IDR process following
initiation—(1) Selection of certified IDR
entity—(i) In general. The plan or issuer
or the provider, facility, or provider of air
ambulance services receiving the notice
of IDR initiation under paragraph (b)(2)
of this section may agree or object to the
preferred certified IDR entity identified
in the notice of IDR initiation. If the party
in receipt of the notice of IDR initiation
fails to object within 3 business days,
the preferred certified IDR entity identi-
fied in the notice of IDR initiation will
be selected and will be treated as jointly
agreed to by the parties, provided that the
certified IDR entity does not have a con-
flict of interest. If the party in receipt of
the notice of IDR initiation objects, that
party must notify the initiating party of
the objection and propose an alternative
certified IDR entity. The initiating party
must then agree or object to the alterna-
tive certified IDR entity; if the initiating
party fails to agree or object to the alter-
native certified IDR entity, the alternative
certified IDR entity will be selected and
will be treated as jointly agreed to by the
parties. In order to select a preferred cer-
tified IDR entity, the plan or issuer and
the provider, facility, or provider of air
ambulance services must jointly agree
on a certified IDR entity not later than 3
business days after the initiation date of
the Federal IDR process. If the plan or
issuer and the provider, facility, or pro-
vider of air ambulance services fail to
agree upon a certified IDR entity within
that time, the Secretary shall select a cer-
tified IDR entity in accordance with para-
graph (c)(1)(iv) of this section.
(ii) Requirements for selected certi-
fied IDR entity. The certified IDR entity
selected must be an IDR entity certified
under paragraph (e) of this section, that:
(A) Does not have a conflict of inter-
est as defined in paragraph (a)(2) of this
section;
(B) Ensures that assignment of per-
sonnel to a payment determination and
decisions regarding hiring, compensation,
termination, promotion, or other similar
matters related to personnel assigned to
the dispute are not made based upon the
likelihood that the assigned personnel will
support a particular party to the determi-
nation being disputed other than as out-
lined under paragraph (c)(4)(iii) of this
section; and
(C) Ensures that any personnel assigned
to a payment determination do not have
any conflicts of interests as defined in
paragraph (a)(2) of this section regarding
any party to the dispute within the 1 year
immediately preceding an assignment
of dispute determination, similar to the
requirements laid out in 18 U.S.C. 207(b).
(iii) Notice of certified IDR entity selec-
tion. Upon the selection of a certified IDR
entity, in accordance with paragraph (c)(1)
(i) of this section, the plan or issuer or the
provider or emergency facility that sub-
mitted the notice of IDR initiation under
paragraph (b)(2) of this section must
notify the Secretary of the selection as
soon as reasonably practicable, but no later
than 1 business day after such selection,
through the Federal IDR portal. In addi-
tion, if the non-initiating party believes
that the Federal IDR process is not appli-
cable, the non-initiating party must also
provide information regarding the Federal
IDR process’s inapplicability through the
Federal IDR portal by the same date that
the notice of certified IDR entity selection
must be submitted.
(A) Content. If the parties have agreed
on the selection of a certified IDR entity
or the party in receipt of the notice of IDR
initiation has not objected to the other par-
ty’s selection, the notice of the certified
IDR entity selection must include the fol-
lowing information:
(1) Name of the certified IDR entity;
(2) The certified IDR entity number;
and
(3) Attestation by both parties, or by
the initiating party if the non-initiating
party fails to object to the selection of the
certified IDR entity, that the selected certi-
fied IDR entity meets the requirements of
paragraph (c)(1)(ii) of this section.
(B) [Reserved]
(iv) Failure to select a certified IDR
entity. If the plan or issuer and the pro-
vider, facility, or provider of air ambu-
lance services fail to select a certified IDR
entity in accordance with paragraph (c)
(1)(i) of this section, the initiating party
must notify the Secretary of the failure
no later than 1 business day after the date
of such failure (or in other words, 4 busi-
ness days after initiation of the Federal
IDR process) by electronically submitting
the notice as described in paragraph (c)
(1)(iii) of this section but indicating that
the parties have failed to select a certified
IDR entity. In addition, if the non-initi-
ating party believes that the Federal IDR
process is not applicable, the non-initiat-
ing party must also provide information
regarding Federal IDR process’s inappli-
cability through the Federal IDR portal by
the same date that the notice of failure to
select must be submitted. Upon notifica-
tion of the failure of the parties to select
a certified IDR entity, the Secretary will
select a certified IDR entity that charges
a fee within the allowed range of certified
IDR entity fees through a random selec-
tion method not later than 6 business days
after the date of initiation of the Federal
IDR process and will notify the plan or
issuer and the provider or facility of the
selection. If there are insufficient certi-
fied IDR entities that charge a fee within
the allowed range of certified IDR entity
fees available to arbitrate the dispute,
the Secretary, jointly with the Secretary
of the Treasury and Secretary of Labor,
will select a certified IDR entity that has
received approval, as described in para-
graph (e)(2)(vi)(B) of this section, to

October 18, 2021 636 Bulletin No. 2021–42
charge a fee outside of the allowed range
of certified IDR entity fees.
(v) Review by certified IDR entity. After
selection by the parties (including when
the initiating party selects a certified IDR
entity and the other party does not object),
or by the Secretary under paragraph (c)(1)
(iv) of this section, the certified IDR entity
must review the selection and attest that
it meets the requirements of paragraph
(c)(1)(ii) of this section. If the certified
IDR entity is unable to attest that it meets
the requirements of paragraph (c)(1)(ii)
of this section within 3 business days of
selection, the parties, upon notification,
must select another certified IDR entity
under paragraph (c)(1) of this section,,
treating the date of notification of the fail-
ure to attest to the requirements of (c)(1)
(ii) as the date of initiation of the Federal
IDR process for purposes of the time peri-
ods in paragraphs (c)(1)(i) and (iv) of this
section. Additionally, the certified IDR
entity selected must review the informa-
tion submitted in the notice of IDR initi-
ation to determine whether the Federal
IDR process applies. If the Federal IDR
process does not apply, the certified IDR
entity must notify the Secretary and the
parties within 3 business days of making
that determination.
(2) Authority to continue negotia-
tions—(i) In general. If the parties to
the Federal IDR process agree on an out-
of-network rate for a qualified IDR item
or service after providing the notice of
IDR initiation to the Secretary consistent
with paragraph (b)(2) of this section, but
before the certified IDR entity has made
its payment determination, the amount
agreed to by the parties for the qualified
IDR item or service will be treated as the
out-of-network rate for the qualified IDR
item or service. To the extent the amount
exceeds the initial payment amount (or
initial denial of payment) and any cost
sharing paid or required to be paid by the
participant or beneficiary, payment must
be made directly by the plan or issuer to
the nonparticipating provider, facility, or
nonparticipating provider of air ambu-
lance services not later than 30 business
days after the agreement is reached. In
no instance may either party seek addi-
tional payment from the participant or
beneficiary, including in instances in
which the out-of-network rate exceeds
the qualifying payment amount. The
initiating party must send a notifica-
tion to the Secretary and to the certified
IDR entity (if selected) electronically,
through the Federal IDR portal, as soon
as possible, but no later than 3 business
days after the date of the agreement. The
notification must include the out-of-net-
work rate for the qualified IDR item or
service and signatures from authorized
signatories for both parties.
(ii) Method of allocation of the certified
IDR entity fee. In the case of an agreement
described in paragraph (c)(2)(i) of this
section, the certified IDR entity is required
to return half of each parties’ certified IDR
entity fee, unless directed otherwise by
both parties. The administrative fee under
paragraph (d)(2) of this section will not be
returned to the parties.
(3) Treatment of batched items and ser-
vices—(i) In general. Batched items and
services may be submitted and considered
jointly as part of one payment determi-
nation by a certified IDR entity only if
the batched items and services meet the
requirements of this paragraph (c)(3)(i).
Batched items and services submitted and
considered jointly as part of one payment
determination under this paragraph (c)(3)
(i) are treated as a batched determination
and subject to the fee for batched determi-
nations under this section.
(A) The qualified IDR items and ser-
vices are billed by the same provider or
group of providers, the same facility, or
the same provider of air ambulance ser-
vices. Items and services are billed by the
same provider or group of providers, the
same facility, or the same provider of air
ambulance services if the items or ser-
vices are billed with the same National
Provider Identifier or Tax Identification
Number;
(B) Payment for the qualified IDR
items and services would be made by the
same plan or issuer;
(C) The qualified IDR items and ser-
vices are the same or similar items and
services. The qualified IDR items and
services are considered to be the same or
similar items or services if each is billed
under the same service code, or a com-
parable code under a different procedural
code system, such as Current Procedural
Terminology (CPT) codes with modifiers,
if applicable, Healthcare Common Proce-
dure Coding System (HCPCS) with mod-
ifiers, if applicable, or Diagnosis-Related
Group (DRG) codes with modifiers, if
applicable; and
(D) All the qualified IDR items and
services were furnished within the same
30-business-day period, or the same
90-calendar-day period under paragraph
(c)(4)(vi)(B) of this section, as applicable.
(ii) Treatment of bundled payment
arrangements. In the case of qualified
IDR items and services billed by a pro-
vider, facility, or provider of air ambu-
lance services as part of a bundled pay-
ment arrangement, or where a plan or
issuer makes or denies an initial payment
as a bundled payment, the qualified IDR
items and services may be submitted as
part of one payment determination. Bun-
dled payment arrangements submitted
under this paragraph (c)(3)(ii) are subject
to the rules for batched determinations
and the certified IDR entity fee for single
determinations.
(4) Payment determination for a qual-
ified IDR item or service—(i) Submission
of offers. Not later than 10 business days
after the selection of the certified IDR
entity, the plan or issuer and the provider,
facility, or provider of air ambulance ser-
vices:
(A) Must each submit to the certified
IDR entity:
(1) An offer of an out-of-network rate
expressed as both a dollar amount and the
corresponding percentage of the qualify-
ing payment amount represented by that
dollar amount;
(2) Information requested by the certi-
fied IDR entity relating to the offer.
(3) The following additional informa-
tion, as applicable—
(i) For providers and facilities, infor-
mation on the size of the provider’s prac-
tice or of the facility (if applicable). Spe-
cifically, a group of providers must specify
whether the providers’ practice has fewer
than 20 employees, 20 to 50 employees,
51 to 100 employees, 101 to 500 employ-
ees, or more than 500 employees. For
facilities, the facility must specify whether
the facility has 50 or fewer employees, 51
to 100 employees, 101 to 500 employees,
or more than 500 employees;
(ii) For providers and facilities, infor-
mation on the practice specialty or type,
respectively (if applicable);

Bulletin No. 2021–42 637 October 18, 2021
(iii) For plans and issuers, information
on the coverage area of the plan or issuer,
the relevant geographic region for pur-
poses of the qualifying payment amount,
whether the coverage is fully-insured or
partially or fully self-insured (or a FEHB
carrier if the item or service relates to
FEHB plans); and
(iv) The qualifying payment amount for
the applicable year for the same or similar
item or service as the qualified IDR item
or service.
(B) May each submit to the certified
IDR entity any information relating to
the offer that was submitted by either
party, except that the information may not
include information on factors described
in paragraph (c)(4)(v) of this section.
(ii) Payment determination and noti-
fication. Not later than 30 business days
after the selection of the certified IDR
entity, the certified IDR entity must:
(A) Select as the out-of-network rate
for the qualified IDR item or service
one of the offers submitted under para-
graph (c)(4)(i) of this section, taking into
account the considerations specified in
paragraph (c)(4)(iii) of this section (as
applied to the information provided by
the parties pursuant to paragraph (c)(4)
(i) of this section). The certified IDR
entity must select the offer closest to
the qualifying payment amount unless
the certified IDR entity determines that
credible information submitted by either
party under paragraph (c)(4)(i) clearly
demonstrates that the qualifying pay-
ment amount is materially different from
the appropriate out-of-network rate, or
if the offers are equally distant from the
qualifying payment amount but in oppos-
ing directions. In these cases, the certi-
fied IDR entity must select the offer as
the out-of-network rate that the certified
IDR entity determines best represents the
value of the qualified IDR item or ser-
vices, which could be either offer.
(B) Notify the plan or issuer and the
provider or facility, as applicable, of the
selection of the offer under paragraph (c)
(4)(ii)(A) of this section, and provide the
written decision required under (c)(4)(vi)
of this section.
(iii) Considerations in determination.
In determining which offer to select, the
certified IDR entity must consider:
(A) The qualifying payment amount(s)
for the applicable year for the same or
similar item or service.
(B) Information requested by the certi-
fied IDR entity under paragraph (c)(4)(i)
(A)(2) of this section relating to the offer,
to the extent a party provides credible
information.
(C) Additional information submitted
by a party, provided the information is
credible and relates to the circumstances
described in paragraphs (c)(4)(iii)(C)(1)
through (5) of this section, with respect
to a qualified IDR item or service of a
nonparticipating provider, facility, group
health plan, or health insurance issuer
of group or individual health insurance
coverage that is the subject of a payment
determination. This information must also
clearly demonstrate that the qualifying
payment amount is materially different
from the appropriate out-of-network rate.
(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 qualified IDR item or service was pro-
vided.
(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.
(D) Additional information submitted
by a party, provided the information is
credible and relates to the offer submitted
by either party and does not include infor-
mation on factors described in paragraph
(c)(4)(v) of this section.
(iv) Examples. The rules of paragraph
(c)(4)(iii) of this section are illustrated by
the following examples:
(A) Example 1 – (1) Facts. A nonparticipating
provider and an issuer are parties to a payment deter-
mination in the Federal IDR process. The nonpartici-
pating provider submits an offer and additional writ-
ten information asserting that the provider has made
good faith efforts to enter into network agreements
with the issuer. The nonparticipating provider fails
to provide any documentation of these efforts, such
as correspondence or records of conversations with
representatives of the issuer.
(2) Conclusion. In this Example 1, the nonpar-
ticipating provider has submitted additional infor-
mation. However, this information is not credible,
as the nonparticipating provider has failed to pro-
vide any documentation in support of the provider’s
assertions of good faith efforts to enter into network
agreements with the issuer. Therefore, the certified
IDR entity cannot consider the information.
(B) Example 2 – (1) Facts. A nonparticipating
provider and an issuer are parties to a payment deter-
mination in the Federal IDR process. The nonpartic-
ipating provider submits credible information relat-
ing to the provider’s level of training, experience,
and quality and outcome measurements from 2019.
The provider also submits credible information that
clearly demonstrates that the provider’s level of
training and expertise was necessary for providing
the service that is the subject of the payment determi-
nation to the particular patient. Further, the provider
submits credible information that clearly demon-
strates that the qualifying payment amount gener-
ally presumes the service would be delivered by a
provider with a lower level of training, experience,
and quality and outcome measurements. This infor-
mation, taken together, demonstrates that the qual-
ifying payment amount is not an appropriate pay-
ment amount and the provider submits an offer that
is higher than the qualifying payment amount and
commensurate with the provider’s level of training,
experience, and quality and outcome measurements
with respect to the service provided. The issuer sub-
mits the qualifying payment amount as its offer with
no additional information.
(2) Conclusion. In this Example 2, the nonpar-
ticipating provider has submitted information that is
credible. Moreover, the credible information clearly
demonstrates that the qualifying payment amount
does not adequately take into account the provider’s
level of training, experience, and quality and out-
come measurements with respect to the service pro-
vided, and that the appropriate out-of-network rate
should therefore be higher than the qualifying pay-
ment amount. Accordingly, the certified IDR entity
must select the provider’s offer, as that offer best
represents the value of the service that is the subject
of the payment determination.
(C) Example 3 – (1) Facts. A nonparticipating
provider and an issuer are parties to a payment deter-
mination in the Federal IDR process. The nonpar-
ticipating provider submits credible information to
the certified IDR entity relating to the acuity of the

October 18, 2021 638 Bulletin No. 2021–42
patient that received the service, and the complexity
of furnishing the service to the patient, by provid-
ing details of the service at issue and the training
required to furnish the complex service. The pro-
vider contends that this information demonstrates
that the qualifying payment amount is not an appro-
priate payment amount, and the provider submits
an offer that is higher than the qualifying payment
amount and equal to what the provider believes is
commensurate with the acuity of the patient and the
complexity of the service that is the subject of the
payment determination. However, the evidence sub-
mitted by the provider does not clearly demonstrate
that the qualifying payment amount fails to encom-
pass the acuity and complexity of the service. The
issuer submits the qualifying payment amount as its
offer, along with credible information that demon-
strates how the qualifying payment amount was cal-
culated for this particular service, taking into consid-
eration the acuity of the patient and the complexity
of the service.
(2) Conclusion. The information submitted by
the provider to the certified IDR entity is credible
with respect to the acuity of the patient and complex-
ity of the service. However, in this example, the pro-
vider has not clearly demonstrated that the qualify-
ing payment amount is materially different from the
appropriate out-of-network rate, based on the acuity
of the patient and the complexity of the service that
is the subject of the payment determination. Accord-
ingly, the certified IDR entity must select the offer
closest to the qualifying payment amount, which is
the issuer’s offer.
(D) Example 4 - (1) Facts. A nonparticipat-
ing provider and an issuer are parties to a payment
determination in the Federal IDR process. The issuer
submits credible information demonstrating that the
patent for the item that is the subject of the payment
determination has expired, including written docu-
mentation that demonstrates how much the cost of
the item was at the time the provider rendered service
and how the qualifying payment amount exceeds
that cost. The issuer submits an offer that is lower
than the qualifying payment amount and commen-
surate with the cost of the item at the time service
was rendered. The nonparticipating provider submits
the qualifying payment amount as its offer and also
submits credible information demonstrating the pro-
vider’s level of training, experience, and quality and
outcome measurements from 2019, but the provider
does not explain how this additional information is
relevant to the cost of the item.
(2) Conclusion. In this Example 4, both the non-
participating provider and issuer submitted informa-
tion that is credible and that may be considered by
the certified IDR entity. However, only the issuer
provided credible information that was relevant to
the service that is the subject of the payment deter-
mination. Moreover, the issuer has clearly demon-
strated that the qualifying payment amount does not
adequately take into account the complexity of the
item furnished – in this case that the item is no longer
patent protected. While the provider submitted cred-
ible information, the provider failed to show how
the information was relevant to the item that is the
subject of the payment determination. Accordingly,
the certified IDR entity must select the offer that best
represents the value of the item, which is the issuer’s
offer in this example.
(v) Prohibition on consideration of cer-
tain factors. In determining which offer to
select, the certified IDR entity must not
consider:
(A) Usual and customary charges
(including payment or reimbursement
rates expressed as a proportion of usual
and customary charges);
(B) The amount that would have been
billed by the provider or facility with
respect to the qualified IDR item or service
had the provisions of 45 CFR 149.410 and
149.420 (as applicable) not applied; or
(C) The payment or reimbursement
rate for items and services furnished by
the provider or facility payable by a pub-
lic payor, including 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; or demon-
stration projects under section 1115 of the
Social Security Act.
(vi) Written decision. (A) The certified
IDR entity must explain its determination
in a written decision submitted to the par-
ties and the Secretary, in a form and man-
ner specified by the Secretary;
(B) If the certified IDR entity does
not choose the offer closest to the quali-
fying payment amount, the certified IDR
entity’s written decision must include an
explanation of the credible information
that the certified IDR entity determined
demonstrated that the qualifying payment
amount was materially different from the
appropriate out-of-network rate, based on
the considerations allowed under para-
graph (c)(4)(iii)(B) through (D) of this
section, with respect to the qualified IDR
item or service.
(vii) Effects of determination—(A)
Binding. A determination made by a certi-
fied IDR entity under paragraph (c)(4)(ii)
of this section:
(1) Is binding upon the parties, in the
absence of fraud or evidence of intentional
misrepresentation of material facts pre-
sented to the certified IDR entity regard-
ing the claim; and
(2) Is not subject to judicial review,
except in a case described in any of para-
graphs (1) through (4) of section 10(a) of
title 9, United States Code.
(B) Suspension of certain subsequent
IDR requests. In the case of a determina-
tion made by a certified IDR entity under
paragraph (c)(4)(ii) of this section, the
party that submitted the initial notifica-
tion under paragraph (b)(2) of this section
may not submit a subsequent notifica-
tion involving the same other party with
respect to a claim for the same or similar
item or service that was the subject of the
initial notification during the 90-calen-
dar-day period following the determina-
tion.
(C) Subsequent submission of requests
permitted. If the end of the open negoti-
ation period specified in paragraph (b)(1)
of this section occurs during the 90-cal-
endar-day suspension period regarding
claims for the same or similar item or
service that were the subject of the initial
notice of IDR determination as described
in paragraph (c)(4)(vi) of this section,
either party may initiate the Federal IDR
process for those claims by submitting a
notification as specified in paragraph (b)
(2) of this section during the 30-busi-
ness-day period beginning on the day
after the last day of the 90-calendar-day
suspension period.
(viii) Recordkeeping requirements. The
certified IDR entity must maintain records
of all claims and notices associated with
the Federal IDR process with respect to
any determination for 6 years. The certi-
fied IDR entity must make these records
available for examination by the plan,
issuer, FEHB carrier, provider, facility,
or provider of air ambulance services, or
a State or Federal oversight agency upon
request, except to the extent the disclosure
would violate either State or Federal pri-
vacy law.
(ix) Payment. If applicable, the amount
of the offer selected by the certified IDR
entity (less the sum of the initial payment
and any cost sharing paid or owed by the
participant or beneficiary) must be paid
directly to the provider, facility, or pro-
vider of air ambulance services not later
than 30 calendar days after the determi-
nation by the certified IDR entity. If the
offer selected by the certified IDR entity

Bulletin No. 2021–42 639 October 18, 2021
is less than the sum of the initial payment
and any cost sharing paid by the partici-
pant or beneficiary, the provider, facility,
or provider of air ambulance services will
be liable to the plan or issuer for the dif-
ference. The provider, facility, or provider
of air ambulance services must pay the
difference directly to the plan or issuer not
later than 30 calendar days after the deter-
mination by the certified IDR entity.
(d) Costs of IDR process—(1) Certi-
fied IDR entity fee. (i) With respect to the
Federal IDR process described in para-
graph (c) of this section, the party whose
offer submitted to the certified IDR entity
under paragraph (c)(4)(ii)(A) of this sec-
tion is not selected is responsible for the
payment to the certified IDR entity of the
predetermined fee charged by the certified
IDR entity.
(ii) Each party to a determination for
which a certified IDR entity is selected
under paragraph (c)(1) of this section must
pay the predetermined certified IDR entity
fee charged by the certified IDR entity to
the certified IDR entity at the time the par-
ties submit their offers under (c)(4)(i) of
this section. The certified IDR entity fee
paid by the prevailing party whose offer is
selected by the certified IDR entity will be
returned to that party within 30 business
days following the date of the certified
IDR entity’s determination.
(2) Administrative fee. (i) Each party to
a determination for which a certified IDR
entity is selected under paragraph (c)(1) of
this section must, at the time the certified
IDR entity is selected under paragraph (c)
(1) of this section, pay to the certified IDR
entity a non-refundable administrative fee
due to the Secretary for participating in
the Federal IDR process described in this
section.
(ii) The administrative fee amount
will be established in guidance published
annually by the Secretary in a manner such
that the total fees paid for a year are esti-
mated to be equal to the projected amount
of expenditures by the Departments of the
Treasury, Labor, and Health and Human
Services for the year in carrying out the
Federal IDR process.
(e) Certification of IDR entity—(1) In
general. In order to be selected under para-
graph (c)(1) of this section— (i) An IDR
entity must meet the standards described
in this paragraph (e) and be certified by
the Secretary, jointly with the Secretaries
of Labor and the Treasury, as set forth in
this paragraph (e) of this section and guid-
ance promulgated by the Secretary. Once
certified, the IDR entity will be provided
with a certified IDR entity number.
(ii) An IDR entity must provide written
documentation to the Secretary regarding
general company information (such as
contact information, Taxpayer Identifica-
tion Number, and website), as well as the
applicable service area in which the IDR
entity intends to conduct payment deter-
minations under the Federal IDR process.
IDR entities may choose to submit their
application for all States or self-limit to a
particular subset of States.
(iii) An IDR entity that the Secretary,
jointly with the Secretary of Labor and the
Secretary of the Treasury, certifies must
enter into an agreement as a condition of
certification. The agreement shall include
specified provisions encompassed by this
section, including, but not limited to, the
requirements applicable to certified IDR
entities when making payment determina-
tions as well as the requirements regard-
ing certification and revocation (such as
specifications for wind down activities
and reallocation of certified IDR entity
fees, where warranted).
(2) Requirements. An IDR entity must
provide written documentation to the Sec-
retary through the Federal IDR portal that
demonstrates that the IDR entity satisfies
the following standards to be a certified
IDR entity under this paragraph (e):
(i) Possess (directly or through con-
tracts or other arrangements) sufficient
arbitration and claims administration of
health care services, managed care, bill-
ing and coding, medical and legal exper-
tise to make the payment determinations
described in paragraph (c) of this section
within the time prescribed in paragraph
(c)(4)(ii) of this section.
(ii) Employ (directly or through con-
tracts or other arrangements) a sufficient
number of personnel to make the deter-
minations described in paragraph (c) of
this section within the time prescribed by
(c)(4)(ii) of this section. To satisfy this
standard, the written documentation must
include a description of the IDR entity’s
organizational structure and capabilities,
including an organizational chart and the
credentials, responsibilities, and number
of personnel employed to make determi-
nations described in paragraph (c) of this
section.
(iii) Maintain a current accreditation
from a nationally recognized and relevant
accrediting organization, such as URAC,
or ensure that it otherwise possesses the
requisite training to conduct payment
determinations (for example, providing
documentation that personnel employed
by the IDR entity have completed arbitra-
tion training by the American Arbitration
Association, the American Health Law
Association, or a similar organization);
(iv) Have a process to ensure that no
conflict of interest, as defined in paragraph
(a)(2) of this section, exists between the
parties and the personnel the certified IDR
entity assigns to a payment determination
to avoid violating paragraph (c)(1)(ii) of
this section, including policies and proce-
dures for conducting ongoing audits for
conflicts of interest, to ensure that should
any arise, the certified IDR entity has pro-
cedures in place to inform the Secretary,
jointly with the Secretary of the Treasury
and the Secretary of Labor, of the conflict
of interest and to mitigate the risk by reas-
signing the dispute to other personnel in
the event that any personnel previously
assigned have a conflict of interest.
(v) Have a process to maintain the con-
fidentiality of IIHI obtained in the course
of conducting determinations. A certified
IDR entity’s responsibility to comply with
these confidentiality requirements shall
survive revocation of the IDR entity’s cer-
tification for any reason, and IDR entities
must comply with the record retention and
disposal requirements described in this
section. Under this process, once certified,
the certified IDR entity must comply with
the following requirements:
(A) Privacy. The certified IDR entity
may create, collect, handle, disclose,
transmit, access, maintain, store, and/or
use IIHI, only to perform:
(1) The certified IDR entity’s required
duties described in this section; and
(2) Functions related to carrying out
additional obligations as may be required
under applicable Federal or State laws or
regulations.
(B) Security. (1) The certified IDR
entity must ensure the confidentiality
of all IIHI it creates, obtains, maintains,
stores, and transmits;

October 18, 2021 640 Bulletin No. 2021–42
(2) The certified IDR entity must pro-
tect against any reasonably anticipated
threats or hazards to the security of this
information;
(3) The certified IDR entity must
ensure that IIHI is securely destroyed or
disposed of in an appropriate and reason-
able manner 6 years from either the date
of its creation or the first date on which
the certified IDR entity had access to it,
whichever is earlier.
(4) The certified IDR entity must
implement policies and procedures to pre-
vent, detect, contain, and correct security
violations in the event of a breach of IIHI;
(C) Breach notification. The certified
IDR entity must, following the discov-
ery of a breach of unsecured IIHI, notify
of the breach the provider, facility, or
provider of air ambulance services; the
plan and issuer; the Secretary, jointly
with the Secretary of the Treasury and
the Secretary of Labor; and each indi-
vidual whose unsecured IIHI has been,
or is reasonably believed to have been,
subject to the breach, to the extent pos-
sible.
(1) Breaches treated as discovered. For
purposes of this paragraph (e)(2)(v)(C), a
breach shall be treated as discovered by a
certified IDR entity as of the first day on
which the breach is known to the certified
IDR entity or, by exercising reasonable
diligence, would have been known to the
certified IDR entity. A certified IDR entity
shall be deemed to have knowledge of a
breach if the breach is known, or by exer-
cising reasonable diligence would have
been known, to any person, other than the
person committing the breach, who is an
employee, officer, or other agent of the
certified IDR entity;
(2) Timing of notification. A certified
IDR entity must provide the notification
required by this paragraph (e)(2)(v)(C)
without unreasonable delay and in no case
later than 60 calendar days after discovery
of a breach.
(3) Content of notification. The notifi-
cation required by this paragraph (e)(2)(v)
(C) must include, to the extent possible:
(i) The identification of each individ-
ual whose unsecured IIHI has been, or is
reasonably believed by the certified IDR
entity to have been, subject to the breach;
(ii) A brief description of what hap-
pened, including the date of the breach and
the date of the discovery of the breach, to
the extent known;
(iii) A description of the types of
unsecured IIHI that were involved in the
breach (for example whether full name,
social security number, date of birth,
home address, account number, diagnosis,
disability code, or other types of informa-
tion were involved);
(iv) A brief description of what the
certified IDR entity involved is doing to
investigate the breach, to mitigate harm to
the affected parties, and to protect against
any further breaches; and
(v) Contact procedures for individuals
to ask questions or learn additional infor-
mation, which must include a toll-free
telephone number, email address, website,
or postal address.
(4) Method for providing notification.
A certified IDR entity must submit the
notification required by this paragraph
(e)(2)(v)(C) in written form (in clear and
understandable language) either on paper
or electronically through the Federal IDR
portal or electronic mail.
(D) Application to contractor and sub-
contractors. The certified IDR entity must
ensure compliance with this paragraph (e)
(2)(v) of this section by any contractor
or subcontractor with access to IIHI per-
forming any duties related to the Federal
IDR process.
(vi) Meet appropriate indicators of
fiscal integrity and stability by demon-
strating that the certified IDR entity has a
system of safeguards and controls in place
to prevent and detect improper financial
activities by its employees and agents to
assure fiscal integrity and accountability
for all certified IDR entity fees and admin-
istrative fees received, held, and disbursed
and by submitting 3 years of financial
statements or, if not available, other infor-
mation to demonstrate fiscal stability of
the IDR entity;
(vii) Provide a fixed fee for single
determinations and a separate fixed fee for
batched determinations within the upper
and lower limits for each, as set forth in
guidance issued by the Secretary. The cer-
tified IDR entity may not charge a fee that
is not within the approved limits as set
forth in guidance unless the certified IDR
entity or IDR entity seeking certification
receives written approval from the Secre-
tary to charge a flat rate beyond the upper
or lower limits approved by the Secretary
for fees. The certified IDR entity or IDR
entity seeking certification may update its
fees and seek approval from the Secretary
to charge a flat fee beyond the upper or
lower limits for fees, annually as provided
in guidance. In order for the certified IDR
entity to receive the Secretary’s written
approval to charge a flat fee beyond the
upper or lower limits for fees as set forth
in guidance, it must satisfy both condi-
tions in paragraphs (e)(2)(v)(A) and (B)
of this section, as follows:
(A) Submit, in writing, a proposal to
the Secretary that includes:
(1) The alternative flat fee the certified
IDR entity or IDR entity seeking certifi-
cation believes is appropriate for the cer-
tified IDR entity or IDR entity seeking
certification to charge;
(2) A description of the circumstances
that require the alternative fee; and
(3) A description of how the alternative
flat rate will be used to mitigate the effects
of these circumstances; and
(B) Receive from the Secretary, jointly
with the Secretary of the Treasury and the
Secretary of Labor written approval to
charge the fee documented in the certified
IDR entity’s or the IDR entity seeking cer-
tification’s written proposal.
(viii) Have a procedure in place
to retain the certified IDR entity fees
described in paragraph (d)(1) of this
section paid by both parties in a trust or
escrow account and to return the certified
IDR entity fee paid by the prevailing party
of an IDR payment determination, or half
of each party’s certified IDR entity fee
in the case of an agreement described in
paragraph (c)(2)(i) of this section, within
30 business days following the date of the
determination;
(ix) Have a procedure in place to retain
the administrative fees described in para-
graph (d)(2) of this section and to remit
the administrative fees to the Secretary in
accordance with the timeframe and proce-
dures set forth in guidance published by
the Secretary;
(x) Discharge its responsibilities in
accordance with paragraph (c) of this
section, including not making any deter-
mination with respect to which the certi-
fied IDR entity would not be eligible for
selection pursuant to paragraph (c)(1) of
this section; and

Bulletin No. 2021–42 641 October 18, 2021
(xi) Collect the information required to
be reported to the Secretary under para-
graph (f) of this section and report the
information on a timely basis in the form
and manner provided in guidance pub-
lished by the Secretary.
(3) Conflict-of-interest standards. In
addition to the general standards set forth
in paragraph (e)(2)(iv) of this section,
an IDR entity must provide written doc-
umentation that the IDR entity satisfies
the standards to be a certified IDR entity
under this paragraph (e)(3).
(i) The IDR entity must provide an
attestation indicating that it does not have
a conflict of interest as defined in para-
graph (a)(2) of this section;
(ii) The IDR entity must have proce-
dures in place to ensure that personnel
assigned to a determination do not have
any conflicts of interest regarding any
party to the dispute within the 1 year
immediately preceding an assignment
of dispute determination, similar to the
requirements laid out in 18 U.S.C. 207(b).
In order to satisfy this requirement, if
certified, the IDR entity must ensure that
any personnel assigned to a determination
do not have any conflicts of interest as
defined in paragraph (a)(2) of this section.
(iii) Following certification under this
paragraph (e), if a certified IDR entity
acquires control of, becomes controlled
by, or comes under common control with
any entity described in paragraph (e)(3)
(i) of this section, the certified IDR entity
must notify the Secretary in writing no
later than 3 business days after the acqui-
sition or exercise of control and shall be
subject to the revocation of certification
under paragraph (e)(6)(ii) of this section.
(4) Period of certification. Subject to
paragraphs (e)(5) and (6) of this section,
each certification (including a recertifica-
tion) of a certified IDR entity under the
process described in paragraph (e)(1) of
this section will be effective for a 5-year
period.
(5) Petition for denial or revocation—
(i) In general. An individual, provider,
facility, provider of air ambulance ser-
vices, plan, or issuer may petition for a
denial of a certification for an IDR entity
or a revocation of a certification for a
certified IDR entity for failure to meet a
requirement of this section using the stan-
dard form and manner set forth in guid-
ance to be issued by the Secretary. The
petition for denial of a certification must
be submitted within the timeframe set
forth in guidance issued by the Secretary.
(ii) Content of petition. The individual,
provider, facility, provider of air ambu-
lance services, plan, or issuer seeking
denial or revocation of certification must
submit a written petition using the stan-
dard form issued by the Secretary includ-
ing the following information:
(A) The identity of the IDR entity seek-
ing certification or certified IDR entity
that is the subject of the petition;
(B) The reason(s) for the petition;
(C) Whether the petition seeks denial
or revocation of a certification;
(D) Documentation to support the rea-
sons outlined in the petition; and
(E) Other information as may be
required by the Secretary.
(iii) Process. (A) The Secretary, jointly
with the Secretary of the Treasury and
the Secretary of Labor will acknowledge
receipt of the petition within 10 business
days of receipt of the petition.
(B) If the Secretary finds that the peti-
tion adequately shows a failure of the IDR
entity seeking certification or the certified
IDR entity to follow the requirements of
this paragraph (e), the Secretary, jointly
with the Secretary of the Treasury and the
Secretary of Labor, will notify the IDR
entity seeking certification or the certified
IDR entity by providing a de-identified
copy of the petition. Following the notifi-
cation, the IDR entity seeking certification
or certified IDR entity will have 10 busi-
ness days to provide a response. After the
time period for providing the response has
passed, the Secretary, jointly with the Sec-
retary of the Treasury and the Secretary of
Labor, will review the response (if any),
determine whether a denial or revocation
of a certification is warranted, and issue a
notice of the decision to the IDR entity or
certified IDR entity and to the petitioner.
This decision will be subject to the appeal
requirements of paragraph (e)(6)(v) of this
section.
(C) Effect on certification under peti-
tion. Regarding a petition for revocation
of a certified IDR entity’s certification,
if the Secretary, jointly with the Secre-
tary of the Treasury and the Secretary of
Labor, finds that the petition adequately
shows a failure to comply with the
requirements of this paragraph (e), fol-
lowing the Secretary’s notification of the
failure to the certified IDR entity under
paragraph (e)(5)(iii)(B) of this section,
the certified IDR entity may continue to
work on previously assigned determina-
tions but may not accept new determina-
tions until the Secretary issues a notice
of the decision to the certified IDR entity
finding that a revocation of certification
is not warranted.
(6) Denial of IDR entity certification
or revocation of certified IDR entity cer-
tification—(i) Denial of IDR entity cer-
tification. The Secretary, jointly with the
Secretary of the Treasury and the Secre-
tary of Labor, may deny the certification
of an IDR entity under paragraph (e)(1) of
this section if, during the process of cer-
tification, including as a result of a peti-
tion described in paragraph (e)(5) of this
section, the Secretary determines the fol-
lowing:
(A) The IDR entity fails to meet the
applicable standards set forth under this
paragraph (e);
(B) The IDR entity has committed
or participated in fraudulent or abusive
activities, including, during the certifica-
tion process, submitting fraudulent data,
or submitting information or data the IDR
entity knows to be false to the Secretary,
the Secretary of the Treasury or the Secre-
tary of Labor;
(C) The IDR entity has failed to com-
ply with requests for information from the
Secretary, the Secretary of the Treasury, or
the Secretary of Labor as part of the certi-
fication process;
(D) In conducting payment determina-
tions, including those outside the Federal
IDR process, the IDR entity has failed to
meet the standards that applied to those
determinations or reviews, including stan-
dards of independence and impartiality; or
(E) The IDR entity is otherwise not fit
or qualified to make determinations under
the Federal IDR process.
(ii) Revocation of certification of a cer-
tified IDR entity. The Secretary, jointly
with the Secretary of the Treasury and the
Secretary of Labor, may revoke the certifi-
cation of a certified IDR entity under para-
graph (e)(1) of this section if, as a result of
an audit, a petition described in paragraph
(e)(5) of this section, or otherwise, the
Secretary determines the following:

October 18, 2021 642 Bulletin No. 2021–42
(A) The certified IDR entity has a pat-
tern or practice of noncompliance with
any requirements of this paragraph (e);
(B) The certified IDR entity is operat-
ing in a manner that hinders the efficient
and effective administration of the Federal
IDR process;
(C) The certified IDR entity no longer
meets the applicable standards for certifi-
cation set forth under this paragraph (e);
(D) The certified IDR entity has com-
mitted or participated in fraudulent or
abusive activities, including submission
of false or fraudulent data to the Secretary,
the Secretary of the Treasury, or the Sec-
retary of Labor;
(E) The certified IDR entity lacks the
financial viability to provide arbitration
under the Federal IDR process;
(F) The certified IDR entity has failed
to comply with requests from the Sec-
retary, the Secretary of the Treasury, or
the Secretary of Labor made as part of
an audit, including failing to submit all
records of the certified IDR entity that
pertain to its activities within the Federal
IDR process; or
(G) The certified IDR entity is other-
wise no longer fit or qualified to make
determinations.
(iii) Notice of denial or revocation. The
Secretary, jointly with the Secretary of the
Treasury and the Secretary of Labor, will
issue a written notice of denial to the IDR
entity or revocation to the certified IDR
entity within 10 business days of the Sec-
retary’s decision, including the effective
date of denial or revocation, the reason(s)
for denial or revocation, and the oppor-
tunity to request appeal of the denial or
revocation.
(iv) Request for appeal of denial or
revocation. To request an appeal, the IDR
entity or certified IDR entity must submit
a request for appeal to the Secretary within
30 business days of the date of the notice
under paragraph (e)(6)(iii) of this section
of denial or revocation and in the manner
prescribed by the instructions to the notice.
During this time period, the Secretary,
jointly with the Secretary of the Treasury
and the Secretary of Labor, will not issue
a notice of final denial or revocation and a
certified IDR entity may continue to work
on previously assigned determinations but
may not accept new determinations. If the
IDR entity or certified IDR entity does not
timely submit a request for appeal of the
denial or revocation, the Secretary, jointly
with the Secretary of the Treasury and the
Secretary of Labor, will issue a notice of
final denial or revocation to the IDR entity
or certified IDR entity (if applicable) and
the petitioner.
(v) Denial or final revocation. Upon
notice of denial or final revocation, the
IDR entity shall not be considered a certi-
fied IDR entity and therefore shall not be
eligible to accept payment determinations
under the Federal IDR process. Moreover,
after a notice of final revocation, the IDR
entity may not re-apply to be a certified
IDR entity until on or after the 181st day
after the date of the notice of denial or
final revocation.
(f) Reporting of information relating to
the Federal IDR process—(1) Reporting
of information. Within 30 business days of
the close of each month, for qualified IDR
items and services furnished on or after
January 1, 2022, each certified IDR entity
must, in a form and manner specified by
the Secretary, report:
(i) The number of notices of IDR ini-
tiation submitted under paragraph (b)(2)
of this section to the certified IDR entity
during the immediately preceding month;
(ii) The size of the provider practices
and the size of the facilities submitting
notices of IDR initiation under paragraph
(b)(2) of this section during the immedi-
ately preceding month, as required to be
provided to the certified IDR entity under
paragraph (c)(4)(i)(A)(2) of this section;
(iii) The number of such notices of IDR
initiation with respect to which a determi-
nation was made under paragraph (c)(4)
(ii) of this section;
(iv) The number of times during the
month that the out-of-network rate deter-
mined (or agreed to) under this section has
exceeded the qualifying payment amount,
specified by qualified IDR items and ser-
vices;
(v) With respect to each notice of IDR
initiation under paragraph (b)(2) of this
section for which such a determination
was made, the following information:
(A) A description of the qualified IDR
items and services included with respect
to the notification, including the relevant
billing and service codes;
(B) The relevant geographic region
for purposes of the qualifying payment
amount for the qualified IDR items and
services with respect to which the notifi-
cation was provided;
(C) The amount of the offer submitted
under paragraph (c)(4)(i) of this section
by the plan or issuer (as applicable) and
by the provider or facility (as applica-
ble) expressed as a dollar amount and as
a percentage of the qualifying payment
amount;
(D) Whether the offer selected by the
certified IDR entity under paragraph (c)
(4) of this section was the offer submitted
by the plan or issuer (as applicable) or by
the provider or facility (as applicable);
(E) The amount of the selected offer
expressed as a dollar amount and as a per-
centage of the qualifying payment amount;
(F) The rationale for the certified IDR
entity’s decision, including the extent to
which the decision relied on the criteria in
paragraph (c)(4)(iv) of this section;
(G) The practice specialty or type of
each provider or facility, respectively,
involved in furnishing each qualified IDR
item or service;
(H) The identity for each plan or issuer,
and provider or facility, with respect to
the notification. Specifically, each certi-
fied IDR entity must provide each party’s
name and address, as applicable; and
(I) For each determination, the number
of business days elapsed between selec-
tion of the certified IDR entity and the
determination of the out-of-network rate
by the certified IDR entity.
(vi) The total amount of certified IDR
entity fees paid to the certified IDR entity
under paragraph (d)(1) of this section
during the month.
(2) [Reserved]
(g) Extension of time periods for exten-
uating circumstances—(1) General. The
time periods specified in this section
(other than the time for payment, if appli-
cable, under paragraph (c)(4)(ix) of this
section) may be extended in extenuating
circumstances at the Secretary’s discretion
if:
(i) An extension is necessary to address
delays due to matters beyond the control
of the parties or for good cause; and
(ii) The parties attest that prompt action
will be taken to ensure that the determi-
nation under this section is made as soon
as administratively practicable under the
circumstances.

Bulletin No. 2021–42 643 October 18, 2021
(2) Process to request an extension.
The parties may request an extension by
submitting a request for extension due to
extenuating circumstances through the
Federal IDR portal if the extension is nec-
essary to address delays due to matters
beyond the control of the parties or for
good cause.
(h) Applicability date. The provisions
of this section are applicable with respect
to plan years (in the individual market,
policy years) beginning on or after Jan-
uary 1, 2022, except that the provisions
regarding IDR entity certification at
paragraphs (a) and (e) of this section are
applicable beginning on [INSERT DATE
OF PUBLICATION IN THE FEDERAL
REGISTER].
§ 149.520 Independent dispute res-
olution process for air ambulance ser-
vices
(a) Definitions. Unless otherwise
stated, the definitions in § 149.30 apply.
(b) Determination of out-of-network
rates to be paid by health plans and health
insurance issuers; independent dispute
resolution process—(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 individual health insurance cov-
erage for out-of-network air ambulance
services, plans and issuers must com-
ply with the requirements of § 149.510,
except that references in § 149.510 to the
additional circumstances in § 149.510(c)
(4)(iii)(C) shall be understood to refer to
paragraph (b)(2) of this section.
(2) Additional information. Addi-
tional information submitted by a party,
provided the information is credible,
relates to the circumstances described in
paragraphs (b)(2)(i) through (vi) of this
section, with respect to a qualified IDR
service of a nonparticipating provider of
air ambulance services or health insur-
ance issuer of group or individual health
insurance coverage that is the subject of
a payment determination. This informa-
tion must also clearly demonstrate that the
qualifying payment amount is materially
different from the appropriate out-of-net-
work rate.
(i) The quality and outcomes measure-
ments of the provider that furnished the
services.
(ii) 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.
(iii) The training, experience, and qual-
ity of the medical personnel that furnished
the air ambulance services.
(iv) Ambulance vehicle type, including
the clinical capability level of the vehicle.
(v) 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).
(vi) Demonstrations of good faith
efforts (or lack thereof) made by the non-
participating provider of air ambulance
services or the plan or issuer to enter into
network agreements with each other and,
if applicable, contracted rates between the
provider of air ambulance services and the
plan or issuer, as applicable, during the
previous 4 plan years.
(3) Reporting of information relat-
ing to the IDR process. In applying the
requirements of § 149.510(f), within 30
business days of the close of each month,
for services furnished on or after January
1, 2022, the information the certified IDR
entity must report, in a form and manner
specified by the Secretary, with respect
to the Federal IDR process involving air
ambulance services is:
(i) The number of notices of IDR ini-
tiation submitted under the Federal IDR
process to the certified IDR entity that
pertain to air ambulance services during
the immediately preceding month;
(ii) The number of such notices of
IDR initiation with respect to which
a final determination was made under
§ 149.510(c)(4)(ii) (as applied by para-
graph (b)(1) of this section);
(iii) The number of times the payment
amount determined (or agreed to) under
this subsection has exceeded the quali-
fying payment amount, specified by ser-
vices;
(iv) With respect to each notice of IDR
initiation under § 149.510(b)(2) of this
part (as applied by paragraph (b)(1) of this
section) for which a determination was
made, the following information:
(A) A description of each air ambu-
lance service included in such notifica-
tion, including the relevant billing and
service codes;
(B) The point of pick-up (as defined in
42 CFR 414.605) for the services included
in such notification;
(C) The amount of the offers submit-
ted under § 149.510(c)(4)(i) (as applied
by paragraph (b)(1) of this section) by
the group health plan or health insurance
issuer (as applicable) and by the nonpar-
ticipating provider of air ambulance ser-
vices, expressed as a dollar amount and
as a percentage of the qualifying payment
amount;
(D) Whether the offer selected by the
certified IDR entity under § 149.510(c)(4)
(ii) (as applied by paragraph (b)(1) of this
section) to be the payment amount applied
was the offer submitted by the plan or
issuer (as applicable) or by the provider of
air ambulance services;
(E) The amount of the selected offer
expressed as a dollar amount and as a
percentage of the qualifying payment
amount;
(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;
(G) Air ambulance vehicle type,
including the clinical capability level of
such vehicle (to the extent this informa-
tion has been provided to the certified
IDR entity);
(H) The identity for each plan or issuer
and provider of air ambulance services,
with respect to the notification. Specifi-
cally, each certified IDR entity must pro-
vide each party’s name and address, as
applicable; and
(I) For each determination, the number
of business days elapsed between selec-
tion of the certified IDR entity and the
selection of the payment amount by the
certified IDR entity.
(v) The total amount of certified IDR
entity fees paid to the certified IDR entity
under paragraph § 149.510(d)(1) (as
applied by paragraph (b)(1) of this sec-
tion) during the month for determinations
involving air ambulance services.
(c) Applicability date. The provisions
of this section are applicable with respect
to plan years (in the individual market,
policy years) beginning on or after Janu-
ary 1, 2022.
21. Subpart G, consisting of §§ 149.610
and 149.620, is added to read as follows:

October 18, 2021 644 Bulletin No. 2021–42
Subpart G—Protection of Uninsured
or Self-pay Individuals
§ 149.610 Requirements for provision
of good faith estimates of expected
charges for uninsured (or self-pay)
individuals.
(a) Scope and definitions— (1) Scope.
This section sets forth requirements for
health care providers and health care
facilities related to the issuance of good
faith estimates of expected charges for
uninsured (or self-pay) individuals (or
their authorized representatives), upon
request or upon scheduling an item or
service.
(2) Definitions. For purposes of this
section, the following definitions apply:
(i) Authorized representative means an
individual authorized under State law to
provide consent on behalf of the uninsured
(or self-pay) individual, provided that the
individual is not a provider affiliated with
a facility or an employee of a provider or
facility represented in the good faith esti-
mate, unless such provider or employee is
a family member of the uninsured (or self-
pay) individual.
(ii) Convening health care provider or
convening health care facility (convening
provider or convening facility) means the
provider or facility who receives the ini-
tial request for a good faith estimate from
an uninsured (or self-pay) individual and
who is or, in the case of a request, would
be responsible for scheduling the primary
item or service.
(iii) Co-health care provider or
co-health care facility (co-provider or
co-facility) means a provider or facil-
ity other than a convening provider or a
convening facility that furnishes items or
services that are customarily provided in
conjunction with a primary item or ser-
vice.
(iv) Diagnosis code means the code
that describes an individual’s disease, dis-
order, injury, or other related health condi-
tions using the International Classification
of Diseases (ICD) code set.
(v) Expected charge means, for an item
or service, the cash pay rate or rate estab-
lished by a provider or facility for an unin-
sured (or self-pay) individual, reflecting
any discounts for such individuals, where
the good faith estimate is being provided
to an uninsured (or self-pay) individual; or
the amount the provider or facility would
expect to charge if the provider or facility
intended to bill a plan or issuer directly for
such item or service when the good faith
estimate is being furnished to a plan or
issuer.
(vi) Good faith estimate means a noti-
fication of expected charges for a sched-
uled or requested item or service, includ-
ing items or services that are reasonably
expected to be provided in conjunction
with such scheduled or requested item
or service, provided by a convening pro-
vider, convening facility, co-provider, or
co-facility.
(vii) Health care facility (facility)
means an institution (such as a hospital
or hospital outpatient department, critical
access hospital, ambulatory surgical cen-
ter, rural health center, federally qualified
health center, laboratory, or imaging cen-
ter) in any State in which State or appli-
cable local law provides for the licensing
of such an institution, that is licensed as
such an institution pursuant to such law or
is approved by the agency of such State
or locality responsible for licensing such
institution as meeting the standards estab-
lished for such licensing.
(viii) Health care provider (provider)
means a physician or other health care
provider who is acting within the scope
of practice of that provider’s license or
certification under applicable State law,
including a provider of air ambulance ser-
vices.
(ix) Items or services has the meaning
given in 45 CFR 147.210(a)(2).
(x) Period of care means the day or
multiple days during which the good faith
estimate for a scheduled or requested
item or service (or set of scheduled or
requested items or services) are furnished
or are anticipated to be furnished, regard-
less of whether the convening provider,
convening facility, co-providers, or co-fa-
cilities are furnishing such items or ser-
vices, including the period of time during
which any facility equipment and devices,
telemedicine services, imaging services,
laboratory services, and preoperative and
postoperative services that would not be
scheduled separately by the individual, are
furnished.
(xi) Primary item or service means the
item or service to be furnished by the con-
vening provider or convening facility that
is the initial reason for the visit.
(xii) Service code means the code that
identifies and describes an item or service
using the Current Procedural Terminology
(CPT), Healthcare Common Procedure
Coding System (HCPCS), Diagnosis-Re-
lated Group (DRG) or National Drug
Codes (NDC) code sets.
(xiii) Uninsured (or self-pay) individ-
ual means:
(A) An individual who does not have
benefits for an item or service under a
group health plan, group or individual
health insurance coverage offered by a
health insurance issuer, Federal health care
program (as defined in section 1128B(f) of
the Social Security Act), or a health bene-
fits plan under chapter 89 of title 5, United
States Code; or
(B) An individual who has benefits for
such item or service under a group health
plan, or individual or group health insur-
ance coverage offered by a health insur-
ance issuer, or a health benefits plan under
chapter 89 of title 5, United States Code
but who does not seek to have a claim for
such item or service submitted to such
plan or coverage.
(b) Requirements of providers and
facilities—(1) Requirements for conven-
ing providers and convening facilities. A
convening provider or convening facility
must determine if an individual is an unin-
sured (or self-pay) individual by:
(i) Inquiring if an individual is enrolled
in a group health plan, group or individ-
ual health insurance coverage offered by a
health insurance issuer, Federal health care
program (as defined in section 1128B(f) of
the Social Security Act), or a health bene-
fits plan under chapter 89 of title 5, United
States Code;
(ii) Inquiring whether an individual
who is enrolled in a group health plan, or
group or individual health insurance cov-
erage offered by a health insurance issuer
or a health benefits plan under chapter 89
of title 5, United States Code is seeking
to have a claim submitted for the primary
item or service with such plan or cover-
age; and
(iii) Informing all uninsured (or self-
pay) individuals of the availability of a
good faith estimate of expected charges
upon scheduling an item or service or
upon request; information regarding the

Bulletin No. 2021–42 645 October 18, 2021
availability of good faith estimates for
uninsured (or self-pay) individuals must
be:
(A) Written in a clear and understand-
able manner, prominently displayed (and
easily searchable from a public search
engine) on the convening provider’s
or convening facility’s website, in the
office, and on-site where scheduling or
questions about the cost of items or ser-
vices occur;
(B) Orally provided when scheduling
an item or service or when questions about
the cost of items or services occur; and
(C) Made available in accessible for-
mats, and in the language(s) spoken by
individual(s) considering or scheduling
items or services with such convening
provider or convening facility.
(iv) Convening providers and conven-
ing facilities shall consider any discussion
or inquiry regarding the potential costs of
items or services under consideration as a
request for a good faith estimate;
(v) Upon the request for a good faith
estimate from an uninsured (or self-pay)
individual or upon scheduling a primary
item or service to be furnished for such an
individual, the convening provider or con-
vening facility must contact, no later than
1 business day of such scheduling or such
request, all co-providers and co-facilities
who are reasonably expected to provide
items or services in conjunction with and
in support of the primary item or service
and request that the co-providers or co-fa-
cilities submit good faith estimate infor-
mation (as specified in paragraphs (b)(2)
and (c)(2) of this section) to the convening
provider or facility; the request must also
include the date that good faith estimate
information must be received by the con-
vening provider or facility;
(vi) Provide a good faith estimate (as
specified in paragraph (c)(1) of this sec-
tion) to uninsured (or self-pay) individuals
within the following timeframes:
(A) When a primary item or service is
scheduled at least 3 business days before
the date the item or service is scheduled to
be furnished: not later than 1 business day
after the date of scheduling;
(B) When a primary item or service is
scheduled at least 10 business days before
such item or service is scheduled to be fur-
nished: not later than 3 business days after
the date of scheduling; or
(C) When a good faith estimate is
requested by an uninsured (or self-pay)
individual: not later than 3 business days
after the date of the request.
(vii) A convening provider or convening
facility must provide an uninsured (or self-
pay) individual who has scheduled an item
or service with a new good faith estimate
if a convening provider, convening facility,
co-provider, or co-facility anticipates or
is notified of any changes to the scope of
a good faith estimate (such as anticipated
changes to the expected charges, items,
services, frequency, recurrences, dura-
tion, providers, or facilities) previously
furnished at the time of scheduling; a new
good faith estimate must be issued to the
uninsured (or self-pay) individual no later
than 1 business day before the items or ser-
vices are scheduled to be furnished.
(viii) If any changes in expected pro-
viders or facilities represented in a good
faith estimate occur less than 1 business
day before the item or service is scheduled
to be furnished, the replacement provider
or facility must accept as its good faith
estimate of expected charges the good
faith estimate for the relevant items or ser-
vices included in the good faith estimate
for the items or services being furnished
that was provided by the replaced pro-
vider or facility.
(ix) For good faith estimates provided
upon request of an uninsured (or self-
pay) individual, upon scheduling of the
requested item or service, the convening
provider or convening facility must pro-
vide the uninsured (or self-pay) individ-
ual with a new good faith estimate for the
scheduled item or service within the time-
frames specified in paragraphs (b)(1)(vi)
(A) and (B) of this section; and
(x) A convening provider or conven-
ing facility may issue a single good faith
estimate for recurring primary items or
services if the following requirements are
met, in addition to the requirements under
this section:
(A) The good faith estimate for recur-
ring items or services must include, in
a clear and understandable manner, the
expected scope of the recurring primary
items or services (such as timeframes,
frequency, and total number of recurring
items or services); and
(B) The scope of a good faith estimate
for recurring primary items or services
must not exceed 12 months. If additional
recurrences of furnishing such items or
services are expected beyond 12 months
(or as specified under paragraph (b)(vii) of
this section), a convening provider or con-
vening facility must provide an uninsured
(or self-pay) individual with a new good
faith estimate, and communicate such
changes (such as timeframes, frequency,
and total number of recurring items or ser-
vices) upon delivery of the new good faith
estimate to help patients understand what
has changed between the initial good faith
estimate and the new good faith estimate.
(2) Requirements for co-providers and
co-facilities. (i) Co-providers and co-fa-
cilities must submit good faith estimate
information (as specified in paragraph (c)
(2) of this section) upon the request of the
convening provider or convening facil-
ity. The co-provider or co-facility must
provide, and the convening provider or
convening facility must receive, the good
faith estimate information no later than
1 business day after the co-provider or
co-facility receives the request from the
convening provider or convening facility.
(ii) Co-providers and co-facilities must
notify and provide new good faith esti-
mate information to a convening provider
or convening facility if the co-provider or
co-facility anticipates any changes to the
scope of good faith estimate information
previously submitted to a convening pro-
vider or convening facility (such as antic-
ipated changes to the expected charges,
items, services, frequency, recurrences,
duration, providers, or facilities).
(iii) If any changes in the expected
co-providers or co-facilities represented
in a good faith estimate occur less than
1 business day before that the item or
service is scheduled to be furnished, the
replacement co-provider or co-facility
must accept as its good faith estimate of
expected charges the good faith estimate
for the relevant items or services included
in the good faith estimate for the item or
service being furnished that was provided
by the replaced provider or facility.
(iv) In the event that an uninsured (or
self-pay) individual separately schedules
or requests a good faith estimate from a
provider or facility that would otherwise
be a co-provider or co-facility, that pro-
vider or facility is considered a convening
provider or convening facility for such

October 18, 2021 646 Bulletin No. 2021–42
item or service and must meet all require-
ments in paragraphs (b)(1) and (c)(1) of
this section for issuing a good faith esti-
mate to an uninsured (or self-pay) individ-
ual.
(c) Content requirements of a good
faith estimate issued to an uninsured (or
self-pay) individual. (1) A good faith esti-
mate issued to an uninsured (or self-pay)
individual must include:
(i) Patient name and date of birth;
(ii) Description of the primary item or
service in clear and understandable lan-
guage (and if applicable, the date the pri-
mary item or service is scheduled);
(iii) Itemized list of items or services,
grouped by each provider or facility, rea-
sonably expected to be furnished for the
primary item or service, and items or ser-
vices reasonably expected to be furnished
in conjunction with the primary item or
service, for that period of care including:
(A) Items or services reasonably
expected to be furnished by the conven-
ing provider or convening facility for the
period of care; and
(B) Items or services reasonably
expected to be furnished by co-providers
or co-facilities (as specified in paragraphs
(b)(2) and (c)(2) of this section);
(iv) Applicable diagnosis codes,
expected service codes, and expected
charges associated with each listed item
or service;
(v) Name, National Provider Identifier,
and Tax Identification Number of each
provider or facility represented in the good
faith estimate, and the State(s) and office
or facility location(s) where the items or
services are expected to be furnished by
such provider or facility;
(vi) List of items or services that the
convening provider or convening facility
anticipates will require separate schedul-
ing and that are expected to occur before
or following the expected period of care
for the primary item or service. The good
faith estimate must include a disclaimer
directly above this list that includes the
following information: separate good
faith estimates will be issued to an unin-
sured (or self-pay) individual upon sched-
uling or upon request of the listed items
or services; notification that for items or
services included in this list, information
such as diagnosis codes, service codes,
expected charges and provider or facility
identifiers do not need to be included as
that information will be provided in sepa-
rate good faith estimates upon scheduling
or upon request of such items or services;
and include instructions for how an unin-
sured (or self-pay) individual can obtain
good faith estimates for such items or ser-
vices;
(viii) A disclaimer that informs the
uninsured (or self-pay) individual that
there may be additional items or ser-
vices the convening provider or conven-
ing facility recommends as part of the
course of care that must be scheduled or
requested separately and are not reflected
in the good faith estimate;
(ix) A disclaimer that informs the unin-
sured (or self-pay) individual that the
information provided in the good faith
estimate is only an estimate regarding
items or services reasonably expected to
be furnished at the time the good faith
estimate is issued to the uninsured (or
self-pay) individual and that actual items,
services, or charges may differ from the
good faith estimate; and
(x) A disclaimer that informs the
uninsured (or self-pay) individual of the
uninsured (or self-pay) individual’s right
to initiate the patient-provider dispute
resolution process if the actual billed
charges are substantially in excess of the
expected charges included in the good
faith estimate, as specified in § 149.620;
this disclaimer must include instructions
for where an uninsured (or self-pay) indi-
vidual can find information about how to
initiate the patient-provider dispute reso-
lution process and state that the initiation
of the patient-provider dispute resolution
process will not adversely affect the qual-
ity of health care services furnished to an
uninsured (or self-pay) individual by a
provider or facility; and
(xi) A disclaimer that the good faith
estimate is not a contract and does not
require the uninsured (or self-pay) indi-
vidual to obtain the items or services from
any of the providers or facilities identified
in the good faith estimate.
(2) [Reserved]
(d) Content Requirements for Good
Faith Estimate Information Submitted by
Co-Providers or Co-Facilities to Conven-
ing Providers or Convening Facilities. (1)
Good faith estimate information submit-
ted to convening providers or convening
facilities by co-providers or co-facilities
for inclusion in the good faith estimate
(described in paragraph (c)(1) of this sec-
tion) must include:
(i) Patient name and date of birth;
(ii) Itemized list of items or services
expected to be provided by the co-pro-
vider or co-facility that are reasonably
expected to be furnished in conjunction
with the primary item or service as part of
the period of care;
(iii) Applicable diagnosis codes,
expected service codes, and expected
charges associated with each listed item
or service;
(iv) Name, National Provider Identifi-
ers, and Tax Identification Numbers of the
co-provider or co-facility, and the State(s)
and office or facility location(s) where the
items or services are expected to be fur-
nished by the co-provider or co-facility;
and
(v) A disclaimer that the good faith esti-
mate is not a contract and does not require
the uninsured (or self-pay) individual to
obtain the items or services from any of
the co-providers or co-facilities identified
in the good faith estimate.
(2) [Reserved]
(e) Required Methods for Providing
Good Faith Estimates for Uninsured (or
Self-Pay) Individuals. (1) A good faith
estimate must be provided in written form
either on paper or electronically, pursuant
to the uninsured (or self-pay) individual’s
requested method of delivery, and within
the timeframes described in paragraph (b)
of this section. Good faith estimates pro-
vided electronically must be provided in
a manner that the uninsured (or self-pay)
individual can both save and print. A good
faith estimate must be provided and writ-
ten using clear and understandable lan-
guage and in a manner calculated to be
understood by the average uninsured (or
self-pay) individual.
(2) To the extent that an uninsured (or
self-pay) individual requests a good faith
estimate in a method other than paper or
electronically (for example, by phone
or orally in person), the convening pro-
vider may orally inform the uninsured
(or self-pay) individual of information
contained in the good faith estimate using
the method requested by the uninsured (or
self-pay) individual; however, in order for
a convening provider or convening facil-

Bulletin No. 2021–42 647 October 18, 2021
ity to meet the requirements of this sec-
tion, the convening provider or convening
facility must issue the good faith estimate
to the uninsured (or self-pay) individual in
written form as specified in paragraph (e)
(1) of this section.
(f) Additional compliance provisions.
(1) A good faith estimate issued to unin-
sured (or self-pay) individual under this
section is considered part of the patient’s
medical record and must be maintained
in the same manner as a patient’s med-
ical record. Convening providers and
convening facilities must provide a copy
of any previously issued good faith esti-
mate furnished within the last 6 years to
an uninsured (or self-pay) individual upon
the request of the uninsured (or self-pay)
individual.
(2) Providers or facilities that issue
good faith estimates issued under State
processes that do not meet the require-
ments set forth in this section fail to com-
ply with the requirements of this section.
(3) A provider or facility will not fail to
comply with this section solely because,
despite acting in good faith and with rea-
sonable due diligence, the provider or
facility makes an error or omission in a
good faith estimate required under this
section, provided that the provider or
facility corrects the information as soon
as practicable. If items or services are fur-
nished before an error in a good faith esti-
mate is addressed, the provider or facility
may be subject to patient-provider dispute
resolution if the actual billed charges are
substantially in excess of the good faith
estimate (as described in § 149.620).
(4) To the extent compliance with this
section requires a provider or facility to
obtain information from any other entity
or individual, the provider or facility will
not fail to comply with this section if it
relied in good faith on the information
from the other entity, unless the provider or
facility knows, or reasonably should have
known, that the information is incomplete
or inaccurate. If the provider or facility
learns that the information is incomplete
or inaccurate, the provider or facility must
provide corrected information to the unin-
sured (or self-pay) individual as soon as
practicable. If items or services are fur-
nished before an error in a good faith esti-
mate is addressed, the provider or facility
may be subject to patient-provider dispute
resolution if the actual billed charges are
substantially in excess of the good faith
estimate (as described in § 149.620).
(g) Applicability—(1) Applicability
date. The requirements of this section
are applicable for good faith estimates
requested on or after January 1, 2022 or
for good faith estimates required to be pro-
vided in connection with items or services
scheduled on or after January 1, 2022.
(2) Applicability with other laws.
Nothing in this section alters or otherwise
affects a provider’s or facility’s require-
ment to comply with other applicable
State or Federal laws, including those
governing the accessibility, privacy, or
security of information required to be
disclosed under this section, or those gov-
erning the ability of properly authorized
representatives to access uninsured (or
self-pay) individuals’ information held by
providers or facilities, except to the extent
a state law prevents the application of this
section.
§ 149.620 Requirements for the
patient-provider dispute resolution
process.
(a) Scope and definitions—(1) Scope.
This section sets forth requirements for
the patient-provider dispute resolution
process, under which an uninsured (or
self-pay) individual, with respect to eli-
gible items or services under paragraph
(b) of this section, may submit notifica-
tion under paragraph (c) of this section
to initiate the patient-provider dispute
resolution process. This section sets forth
in paragraph (d) of this section the certifi-
cation requirements for a dispute resolu-
tion entity to become a Selected Dispute
Resolution (SDR) entity contracted to
resolve the patient-provider dispute, and
the process for HHS to select SDR enti-
ties for patient-provider disputes under
paragraph (e) of this section. This section
sets forth in paragraph (f) the process and
requirements regarding how SDR entities
will determine the amount to be paid by
an uninsured (or self-pay) individual to a
provider or facility. This section also sets
forth requirements for an administrative
fee under paragraph (g) of this section
and minimum requirements under para-
graph (h) of this section for states that
wish to establish processes for perform-
ing patient-provider dispute resolution in
place of the Federal process.
(2) Definitions. Unless otherwise
stated, the definitions in § 149.610(a)(2)
apply to this section. Definitions related
to confidentiality set forth in § 149.510(a)
(2), including the definitions for breach,
individually identifiable health informa-
tion (IIHI), and unsecured IIHI also apply
to this section. Additionally, for purposes
of this section, the following definitions
apply:
(i) Billed charge(s) means the amount
billed by a provider or facility for an item
or service.
(ii) Substantially in excess means, with
respect to the total billed charges by a
provider or facility, an amount that is at
least $400 more than the total amount of
expected charges listed on the good faith
estimate for the provider or facility.
(iii) Total billed charge(s) means the
total of billed charges, by a provider or
facility, for all primary items or services
and all other items or services furnished
in conjunction with the primary items or
services to an uninsured (or self-pay) indi-
vidual, regardless of whether such items
or services were included in the good faith
estimate.
(b) Eligibility for patient-provider
dispute resolution—(1) In general. In
general, an item or service provided by
a convening provider, convening facility,
co-provider, or co-facility is eligible for
the patient-provider dispute resolution
process if the total billed charges (by the
particular convening provider, conven-
ing facility, or co-provider or co-facility
listed in the good faith estimate), are sub-
stantially in excess of the total expected
charges for that specific provider or facil-
ity listed on the good faith estimate, as
required under § 149.610.
(2) Special rule for co-provider or
co-facility substitution. If a co-provider
or co-facility that provided an estimate of
the expected charge for an item or service
in the good faith estimate is substituted
for a different co-provider or co-facility,
an item or service billed by the replace-
ment co-provider or co-facility is eligible
for dispute resolution if the billed charge
is substantially in excess of the total
expected charges included in the good
faith estimate for the original co-provider
or co-facility. If the replacement provider

October 18, 2021 648 Bulletin No. 2021–42
or facility provides the uninsured (or self-
pay) individual with a new good faith
estimate in accordance with § 149.610(b)
(2), then the determination of whether an
item or service billed by the replacement
co-provider or co-facility is eligible for
dispute resolution is based on whether
the total billed charge for the replacement
co-provider or co-facility is substantially
in excess of the total expected charges
included in the good faith estimate pro-
vided by the replacement co-provider or
co-facility.
(c) Initiation of the Patient Provider
dispute resolution process—(1) In gen-
eral. With respect to an item or service
that meets the requirements in para-
graph (b) of this section, an uninsured
(or self-pay) individual (or their autho-
rized representative, excluding any pro-
viders directly represented in the good
faith estimate, providers associated with
these providers, non-clinical staff associ-
ated with these providers, or individuals
employed or associated with a facility that
had included services in the good faith
estimate) may initiate the patient-provider
dispute resolution process by submitting
a notification (initiation notice) to HHS
as specified in paragraph (c)(2) of this
section postmarked within 120 calendar
days of receiving the initial bill contain-
ing charges for the item or service that
is substantially in excess of the expected
charges in the good faith estimate. In addi-
tion, the uninsured (or self-pay) individ-
ual must submit an administrative fee as
described in paragraph (g) of this section
to the SDR entity in an amount and in a
manner that will be clarified in guidance
by HHS.
(2) Initiation notice—(i) Content. The
notice to initiate the patient-provider dis-
pute resolution process must include:
(A) Information sufficient to identify
the item or service under dispute, includ-
ing the date the item or service was pro-
vided, and a description of the item or
service;
(B) A copy of the provider or facility
bill for the item and service under dispute
(the copy can be a photocopy or an elec-
tronic image so long as the document is
readable);
(C) A copy of the good faith estimate
for the item or service under dispute (the
copy can be a photocopy or an electronic
image so long as the document is read-
able);
(D) If not included on the good faith
estimate, contact information of the pro-
vider or facility involved, including, if
available, name, email address, phone
number, and mailing address;
(E) The State where the items or ser-
vices in dispute were furnished; and
(F) The uninsured (or self-pay) individ-
ual’s communication preference, through
the Federal IDR portal, or electronic or
paper mail.
(ii) Manner. The uninsured (or self-
pay) individual or their authorized repre-
sentative must submit the initiation notice,
to the Secretary by submitting the notice
via the Federal IDR portal, electronically,
or on paper, in the form and manner speci-
fied by the Secretary. The date of initiation
of the patient-provider dispute resolution
process will be the date the Secretary
receives such initiation notice. In addi-
tion, the uninsured (or self-pay) individ-
ual must submit an administrative fee as
described in paragraph (g) of this section
to the SDR entity in an amount and in a
manner that will be clarified in guidance
by HHS.
(3) Notification of SDR entity receipt.
Upon receipt of the initiation notice
described in paragraph (c)(1) of this
section, HHS will select an SDR entity
according to the process described in
paragraph (e) of this section. Upon selec-
tion, the SDR entity will, through the
Federal IDR portal, or electronic or paper
mail, notify the uninsured (or self-pay)
individual, and the provider or facility
that a patient-provider dispute resolution
request has been received and is under
review. Such notice shall also include:
(i) Sufficient information to identify
the item or service under dispute;
(ii) The date the initiation notice was
received;
(iii) Notice of the additional require-
ments for providers or facilities specified
in paragraphs (c)(5) and (6) of this section
while the patient-provider dispute resolu-
tion process is pending; and
(iv) Information to the uninsured (or
self-pay) individual about the availability
of consumer assistance resources that can
assist the individual with the dispute.
(4) Validation of initiation notice.
After the selection of the SDR entity, as
described in paragraph (c)(2) of this sec-
tion, the SDR entity shall review the initi-
ation notice to ensure the items or services
in dispute meet the eligibility criteria
described in paragraph (b) of this sec-
tion and the initiation notice contains the
required information described in para-
graph (c)(2). The SDR entity will notify
the uninsured (or self-pay) individual of
the outcome of the review, including, if
applicable, providing the individual with
21 calendar days to submit supplemental
information when the initiation notice is
determined to be incomplete or the items
or services are determined ineligible for
dispute resolution.
(i) If the SDR entity determines that
the item or service meets the eligibility
criteria, and the initiation notice contains
the required information, the SDR entity
will notify the uninsured (or self-pay)
individual and the provider or facility that
the that the item or service has been deter-
mined eligible for dispute resolution. The
SDR entity shall request the provider or
facility provide the information described
in paragraph (f)(2) of this section within
10 business days.
(ii) If the SDR entity determines that
the item or service does not meet the eli-
gibility criteria or that the initiation notice
does not contain the required information,
the SDR entity will provide an insuffi-
ciency notice to the uninsured (or self-
pay) individual of the determination and
the reasons for the determination and will
notify the uninsured (or self-pay) individ-
ual that the individual may submit supple-
mental information, postmarked within
21 calendar days, to resolve any deficien-
cies identified. If the insufficiency notice
is not made available to an individual in
a format that is accessible to individuals
with disabilities or with low-English pro-
ficiency within 14 calendar days of such
a request from the individual, a 14-calen-
dar-day extension will be granted so that
the individual will have a total of 35 cal-
endar days to submit supplemental infor-
mation.
(5) Prohibitions on collections. While
the patient-provider dispute resolution
process is pending, the provider or facil-
ity must not move the bill for the disputed
item or service into collection or threaten
to do so, or if the bill has already moved
into collection, the provider or facility

Bulletin No. 2021–42 649 October 18, 2021
should cease collection efforts. The pro-
vider or facility must also suspend the
accrual of any late fees on unpaid bill
amounts until after the dispute resolution
process has concluded.
(6) Prohibitions on retributive action.
The provider or facility must not take
or threaten to take any retributive action
against an uninsured (or self-pay) individ-
ual for utilizing the patient-provider dis-
pute resolution process to seek resolution
for a disputed item or service.
(d) Certification of SDR entities—(1)
In general. The Secretary shall contract
with and certify only that number of SDR
entities the Secretary believes will be nec-
essary to timely resolve the volume of
patient-provider disputes. As part of the
contract process with HHS, a potential
SDR entity must satisfy the Federal IDR
entity certification criteria specified in
§ 149.510(e), subject to the exceptions set
forth in paragraphs (d)(2) of this section.
In addition, the SDR entity must also meet
the conflict-of-interest mitigation policy
requirements specified in paragraph (d)(3)
of this section. Through this contract pro-
cess, HHS will assess the dispute resolu-
tion entity for compliance with all applica-
ble SDR entity certification requirements.
(2) Exception for SDR entity certifica-
tion. With respect to certified IDR entity
requirements that do not apply to an SDR
entity, potential SDR entities are not
required to make the following submis-
sions:
(i) Information regarding the service
area(s) for which the entity will arbitrate
cases, however, a potential SDR entity
will need to submit information on their
ability to operate nationwide through the
contract process;
(ii) Fee schedule for batched and non-
batched claims;
(iii) Policies and procedures to hold
dispute resolution entity fees in a trust
or escrow account, however, a potential
SDR entity must submit policies and pro-
cedures to hold administrative fees, as
described in paragraph (g) of this section,
and remit them to HHS in a manner spec-
ified by HHS.
(3) Conflict of interest mitigation pol-
icies. A potential SDR entity must also
provide additional information on the
SDR entity’s conflict-of-interest policies
and procedures, including outlining a mit-
igation plan in the event of an entity-level
conflict of interest, under which no dis-
pute resolution personnel affiliated with
the SDR entity can fairly and impartially
adjudicate a case, in compliance with the
standards in Federal Acquisition Regu-
lation subpart 9.5 (48 CFR subpart 9.5).
Such conflict of interest mitigation plan
could include utilizing a subcontractor
without a conflict of interest that meets
SDR entity requirements to conduct the
patient-provider dispute resolution for the
case.
(e) Selection of an SDR entity. (1) After
the Secretary has received the initiation
notice as described in paragraph (c) of this
section, the Secretary will assign an SDR
entity that is certified and contracted under
paragraph (d) of this section to conduct
the dispute resolution process for the item
or service. Upon receiving an assignment
from the Secretary to make a determina-
tion for an item or service as described in
paragraph (c)(3) of this section, the SDR
entity shall ensure that no conflict of inter-
est exists, and in such case, shall notify the
uninsured (or self-pay) individual and the
provider or facility of the selection of the
SDR entity.
(2) Should a conflict of interest exist,
the SDR entity must submit notice to the
Secretary of such conflict no later than 3
business days following selection by the
Secretary. The Secretary will then auto-
matically select a new SDR entity to con-
duct the patient-provider dispute resolu-
tion process for the item or service. In the
event that no SDR entities are available to
resolve the dispute, the initially-selected
SDR entity will be required to initiate
their entity-level conflict of interest miti-
gation plan as described in paragraph (d)
(3) of this section. If no other contracted
SDR entity, and no subcontracted entity,
is able to provide the patient-provider dis-
pute resolution services due to conflicts
of interest that cannot be sufficiently mit-
igated or any other reason, HHS may seek
to contract with an additional SDR entity
as needed. In the event that HHS needs to
contract with an additional SDR entity, the
time periods specified in this section may
be extended at HHS’ discretion to allow
for HHS to contract with that SDR entity.
(3) Conflict of interest means, with
respect to a party to a payment determi-
nation, or SDR entity, a material rela-
tionship, status, or condition of the party,
or SDR entity that impacts the ability of
the SDR entity to make an unbiased and
impartial payment determination. For pur-
poses of this section, a conflict of interest
exists when an SDR entity is:
(i) A provider or a facility;
(ii) An affiliate or a subsidiary of a pro-
vider or facility;
(iii) An affiliate or subsidiary of a pro-
fessional or trade association representing
a provider or facility; or
(iv) An SDR entity, or any personnel
assigned to a determination has a mate-
rial familial, financial, or professional
relationship with a party to the payment
determination being disputed, or with any
officer, director, or management employee
of the provider, the provider’s group or
practice association, or the facility that is
a party to the dispute.
(4) Either party to the dispute resolu-
tion process (the uninsured (or self-pay)
individual, or the provider or facility) may
attest that a conflict of interest exists in
relation to the SDR entity assigned to a
payment dispute, in which case the SDR
entity must notify the Secretary of HHS
no later than 3 business days receiving the
attestation.
(f) Payment determination for
Patient-Provider dispute resolution—(1)
Determination of payment amount through
settlement—(i) In general. If the par-
ties to a dispute resolution process agree
on a payment amount (through either an
offer of financial assistance or an offer of
a lower amount, or an agreement by the
uninsured (or self-pay) individual to pay
the billed charges in full) after the dispute
resolution process has been initiated but
before the date on which a determination
is made under paragraph (f)(3) of this sec-
tion, the provider or facility will notify the
SDR entity through the Federal IDR Por-
tal, electronically, or in paper form as soon
as possible, but no later than 3 business
days after the date of the agreement. The
settlement notification must contain at a
minimum, the settlement amount, the date
of such settlement, and documentation
demonstrating that the provider or facil-
ity and uninsured (or self-pay) individual
have agreed to the settlement. The settle-
ment notice must also document that the
provider or facility has applied a reduction
to the uninsured (or self-pay) individual’s

October 18, 2021 650 Bulletin No. 2021–42
settlement amount equal to at least half the
amount of the administrative fee paid as
set forth in paragraph (g) of this section.
Once the SDR entity receives the settle-
ment notice, the SDR entity shall close the
dispute resolution case as settled and the
agreed upon payment amount will apply
for the items or services.
(ii) Treatment of payments made prior
to determination. Payment of the billed
charges (or a portion of the billed charges)
by the uninsured (or self-pay) individual
(or by another party on behalf of the unin-
sured (or self-pay) individual) prior to a
determination under paragraph (f)(3) of
this section does not demonstrate agree-
ment by the uninsured (or self-pay) indi-
vidual to settle at that amount or any other
amount.
(2) Determination of payment amount
through the patient-provider dispute res-
olution process—(i) In general. With
respect to an item or service to which an
agreement described in paragraph (f)(1)
of this section does not apply, not later
than 10 business days after the receipt of
the selection notice from the SDR entity
described in paragraph (c)(4)(i) of this
section, the provider or facility must sub-
mit to the SDR entity:
(A) A copy of the good faith estimate
provided to the uninsured (or self-pay)
individual for the item or service under
dispute (the copy can be a photocopy or an
electronic image so long as the document
is readable);
(B) A copy of the billed charges pro-
vided to the uninsured (or self-pay) indi-
vidual for the item or service under dis-
pute (the copy can be a photocopy or an
electronic image so long as the document
is readable); and
(C) If available, documentation
demonstrating that the difference between
the billed charge and the expected charges
in the good faith estimate reflects the cost
of a medically necessary item or service
and is based on unforeseen circumstances
that could not have reasonably been antic-
ipated by the provider or facility when the
good faith estimate was provided.
(ii) Timeframe for SDR entity deter-
mination. Not later than 30 business days
after receipt of the information described
in paragraph (f)(2)(i) of this section, the
SDR entity must make a determination
regarding the amount to be paid by such
uninsured (or self-pay) individual, taking
into account the requirements in para-
graph (f)(3) of this section.
(3) Payment determination by an SDR
entity—(i) In general. The SDR entity
must review any documentation submitted
by the uninsured (or self-pay) individual,
and the provider or the facility, and make
a separate determination for each unique
item or service charged as to whether the
provider or facility has provided credible
information to demonstrate that the dif-
ference between the billed charge and the
expected charge for the item or service in
the good faith estimate reflects the costs
of a medically necessary item or service
and is based on unforeseen circumstances
that could not have reasonably been antic-
ipated by the provider or facility when the
good faith estimate was provided.
(ii) Definition of credible information.
Credible information means information
that upon critical analysis is worthy of
belief and is trustworthy.
(iii) Payment determination process.
(A) For an item or service that appears on
the good faith estimate:
(1) If the billed charge is equal to or
less than the expected charge for the item
or service in the good faith estimate, the
SDR entity must determine the amount to
be paid for the item or service as the billed
charge.
(2) If the billed charge for the item or
service is greater than the expected charge
in the good faith estimate, and the SDR
entity determines that information sub-
mitted by the provider or facility does not
provide credible information that the dif-
ference between the billed charge and the
expected charge for the item or service in
the good faith estimate reflects the costs
of a medically necessary item or service
and is based on unforeseen circumstances
that could not have reasonably been antic-
ipated by the provider or facility when
the good faith estimate was provided, the
SDR entity must determine the amount to
be paid for the item or service to be equal
to the expected charge for the item or ser-
vice in the good faith estimate.
(3) If the billed charge for the item
or service is greater than the expected
charge in the good faith estimate, and
the SDR entity determines that informa-
tion submitted by the provider or facility
provides credible information that the dif-
ference between the billed charge and the
expected charge for the item or service in
the good faith estimate reflects the costs
of a medically necessary item or service
and is based on unforeseen circumstances
that could not have reasonably been antic-
ipated by the provider or facility when the
good faith estimate was provided, the SDR
entity must determine as the amount to be
paid for the item or service, the lesser of:
(i) The billed charge; or
(ii) The median payment amount paid
by a plan or issuer for the same or similar
service, by a same or similar provider in the
geographic area as defined in § 149.140(a)
(7) where the services were provided, that
is reflected in an independent database
as defined in § 149.140(a)(3) using the
methodology described in § 149.140(c)
(3), except that in cases where the amount
determined by an independent database is
determined to be less than the expected
charge for the item or service listed on
the good faith estimate, the amount to
be paid will equal to the expected charge
for the item or service listed on the good
faith estimate. When comparing the billed
charge with the amount contained in an
independent database, the SDR entity
should account for any discounts offered
by the provider or facility.
(B) For an item or service that does not
appear on the good faith estimate (new
item or service):
(1) If the SDR entity determines that
the information submitted by the pro-
vider or facility does not provide credible
information that the billed charge for the
new item or service reflects the costs of
a medically necessary item or service and
is based on unforeseen circumstances that
could not have reasonably been antici-
pated by the provider or facility when the
good faith estimate was provided, then the
SDR entity must determine that amount to
be paid for the new item or service to be
equal to $0.
(2) If the SDR entity determines that
the information submitted by the provider
or facility provides credible information
that the billed charge for the new item or
service reflects the costs of a medically
necessary item or service and is based on
unforeseen circumstances that could not
have reasonably been anticipated by the
provider or facility when the good faith
estimate was provided, the SDR entity

Bulletin No. 2021–42 651 October 18, 2021
must select as the amount to be paid for
the new item or service, the lesser of:
(i) The billed charge; or
(ii) The median payment amount paid
by a plan or issuer for the same or similar
service, by a same or similar provider in the
geographic area as defined in § 149.140(a)
(7) where the services were provided, that
is reflected in an independent database as
defined in § 149.140(a)(3) using the meth-
odology described in § 149.140(c)(3).
When comparing the billed charge with
the amounts contained in an independent
database, the SDR entity should account
for any discounts offered by the provider
or facility.
(C) To calculate the final payment
determination amount, the SDR entity
must add together the amounts to be paid
for all items or services subject to the
determination. In cases where the final
amount determined by the SDR entity is
lower than the billed charges, the SDR
entity must reduce the total amount deter-
mined by the amount paid by the individ-
ual for the administrative fee described in
paragraph (g) of this section to calculate
the final payment determination amount
to be paid by the individual for the items
or services. Once the final payment deter-
mination amount has been calculated, the
SDR entity will inform the uninsured (or
self-pay) individual and the provider or
facility, through the Federal IDR portal, or
by electronic or paper mail, of such deter-
mination, the determination amount and
the SDR entity’s justification for making
the determination. After such notification
is made, the SDR entity will close the
case.
(4) Effects of determination. A determi-
nation made by an SDR entity under this
paragraph (f) will be binding upon the par-
ties involved, in the absence of a fraud or
evidence of misrepresentation of facts pre-
sented to the selected SDR entity regard-
ing the claim, except that the provider or
facility may provide financial assistance
or agree to an offer for a lower payment
amount than the SDR entity’s determina-
tion, the uninsured (or self-pay) individual
may agree to pay the billed charges in full,
or the uninsured (or self-pay) individual
and the provider or facility may agree to a
different payment amount
(g) Costs of patient-provider dispute
resolution process—(1) Administrative
fee to participate in the patient-provider
dispute resolution process. (i) The unin-
sured (or self-pay) individual shall pay
to the SDR entity the administrative fee
amount described in section (g)(2) of this
section at the initiation of the patient-pro-
vider dispute resolution process described
in paragraph (c) of this section. The SDR
entity shall remit all administrative fees
collected to the Secretary upon receiving
an invoice from HHS.
(ii) In cases where the SDR entity
issues a determination and the provider
or facility is the non-prevailing party as
described in section (g)(1)(iv) of this sec-
tion, the provider or facility must pay an
amount equal to the administrative fee to
the uninsured (or self-pay) individual in
the form of a reduction in the payment
amount that is applied by the SDR entity
to the final payment determination amount
as described in paragraph (f)(3) of this
section.
(iii) If the SDR entity issues a determi-
nation and the provider or facility is the
prevailing party as described in paragraph
(g)(1)(iv) of this section, the provider or
facility is not required to pay an amount
equal to the administrative fee to the unin-
sured (or self-pay) individual in the form
of a reduction in the payment amount
that is applied by the SDR entity to the
final payment determination amount as
described in paragraph (f)(3) of this sec-
tion.
(iv) For purposes of paragraphs (g)(1)
(ii) and (iii) of this section, the prevailing
party is the provider or facility in cases
where the SDR entity determines the
amount to be paid as equal to the billed
charges; and the prevailing party is the
uninsured (or self-pay) individual in cases
where the SDR entity determines the
amount to be paid as less than the billed
charges.
(v) Allocation of administrative fee in
the case of settlement. In case of a settle-
ment described in paragraph (f)(1) of this
section, the provider or facility must pay
an amount equal to half of the adminis-
trative fee to the uninsured (or self-pay)
individual in the form of a reduction in
the payment amount that is applied to the
final settlement amount. The provider or
facility will document in the settlement
notice described in paragraph (f)(1) that
it has applied a payment reduction of at
least half of the administrative fee amount
to the uninsured (or self-pay) individual’s
settlement amount.
(2) Establishment of the administra-
tive fee. The amount of the administrative
fee described in paragraph (g)(1) of this
section will be specified by the Secretary
through guidance.
(h) Deferral to State patient-provider
dispute resolution processes—(1) In gen-
eral. If the Secretary determines that a
state law provides a process to determine
the amount to be paid by an uninsured (or
self-pay) individual to a provider or facil-
ity, and that such process meets or exceeds
the requirements in paragraph (h)(2) of
this section, the Secretary shall defer to the
State process and direct any patient-pro-
vider dispute resolution requests received
from uninsured (or self-pay) individuals
in such state to the State process to adju-
dicate the dispute resolution initiation
request.
(2) Minimum Federal requirements. A
State process described in paragraph (h)
(1) of this section shall at a minimum:
(i) Be binding, unless the provider or
facility offer for the uninsured (or self-
pay) individual to pay a lower payment
amount than the determination amount;
(ii) Take into consideration a good faith
estimate, that meets the minimum stan-
dards established in § 149.160, provided
by the provider or facility to the uninsured
(or self-pay) individual;
(iii) If the State has a fee charged to
uninsured (or self-pay) individuals to
participate in the patient-provider dispute
resolution process, the fee must be equal
to or less than the Federal administrative
fee established in paragraph (g) of this
section; and
(iv) Have in place conflict-of-interest
standards that at a minimum meets the
requirements set forth in paragraphs (d)
and (e) of this section.
(3) HHS determination of State pro-
cess. HHS will review the State process to
determine whether it meets or exceeds the
minimum Federal requirements set forth in
paragraph (h)(2) of this section HHS will
communicate with the state and determine
whether such process meets or exceeds
such requirements. HHS will notify the
state in writing of such determination.
(4) HHS review of State process. HHS
will review changes to the State process

October 18, 2021 652 Bulletin No. 2021–42
on an annual basis (or at other times if
HHS receives information from the state
that would indicate the state process
no longer meets the minimum Federal
requirements) to ensure the state process
continues to meet or exceed the minimum
Federal standards set forth in this section.
(5) State process termination. In the
event that the State process is terminated,
or HHS determines that the State process
no longer meets the minimum Federal
requirements described in paragraph (h)
(2) of this section, HHS will make the
Federal process available to uninsured
(or self-pay) individuals in that State
to ensure that the state’s residents have
access to a patient-provider dispute res-
olution process that meets the minimum
Federal requirements.
(i) Extension of time periods for exten-
uating circumstances—(1) In general.
The time periods specified in this section
(other than the time for payment of the
administrative fees under paragraph (d)(2)
of this section) may be extended in exten-
uating circumstances at the Secretary’s
discretion if:
(i) An extension is necessary to address
delays due to matters beyond the control
of the parties or for good cause; and
(ii) The parties attest that prompt action
will be taken to ensure that the determi-
nation under this section is made as soon
as administratively practicable under the
circumstances.
(2) Process to request an extension.
The time periods specified in this section
may be extended in the case of extenu-
ating circumstances at HHS’ discretion.
The parties may request an extension by
submitting a request for extension due
to extenuating circumstances through
the Federal IDR portal, or electronic or
paper mail if the extension is necessary to
address delays due to matters beyond the
control of the parties or for good cause.
(j) Applicability date. The provisions of
this section are applicable to uninsured (or
self-pay) individuals; providers (includ-
ing providers of air ambulance services)
and facilities; and SDR entities, generally
beginning on or after January 1, 2022.
The provisions regarding SDR entity
certification in paragraphs (a) and (d) of
this section, are applicable beginning on
[INSERT DATE OF PUBLICATION IN
THE FEDERAL REGISTER].
(Filed by the Office of the Federal Register on Sep-
tember 30, 2021, 4:15 p.m., and published in the
issue of the Federal Register for October 7, 2021, 86
FR 55980)

Bulletin No. 2021–42 653 October 18, 2021
Part IV
Notice of Proposed
Rulemaking and Notice of
Public Hearing.
User Fees Relating
to the Enrolled Agent
Special Enrollment
Examination and the
Enrolled Retirement Plan
Agent Special Enrollment
Examination
REG-100718-21
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
SUMMARY: This document contains
proposed amendments to the regulations
relating to the user fees for the special
enrollment examinations for enrolled
agents and enrolled retirement plan
agents. This document also contains a
notice of public hearing on the proposed
regulations. The proposed regulations
increase the amount of the user fee for
each part of the special enrollment exam-
ination for enrolled agents (EA SEE). The
proposed regulations also remove the user
fee for the special enrollment examination
for enrolled retirement plan agents (ERPA
SEE) because the IRS no longer offers
the ERPA SEE or new enrollment as an
enrolled retirement plan agent. The pro-
posed regulations affect individuals tak-
ing the EA SEE. The Independent Offices
Appropriation Act of 1952 authorizes
charging user fees.
DATES: Electronic or written comments
must be received by November 15, 2021.
The public hearing is being held by tele-
conference on November 23, 2021 at 10
a.m. EST. Requests to speak and outlines
of topics to be discussed at the public
hearing must be received by November
15, 2021. If no outlines are received by
November 15, 2021, the public hearing
will be cancelled. Requests to attend the
public hearing must be received by 5:00
p.m. EST on November 19, 2021. The
telephonic hearing will be made accessible
to people with disabilities. Requests for
special assistance during the telephonic
hearing must be received by November
18, 2021.
ADDRESSES: Commenters are strongly
encouraged to submit public comments
electronically. Submit electronic submis-
sions via the Federal eRulemaking Portal
at www.regulations.gov (indicate IRS and
REG-100718-21) by following the online
instructions for submitting comments.
Once submitted to the Federal eRulemak-
ing Portal, comments cannot be edited or
withdrawn. The IRS expects to have lim-
ited personnel available to process public
comments that are submitted on paper
through the mail. Any comments sub-
mitted on paper will be considered to the
extent practicable. The IRS will publish
any comments submitted electronically,
and to the extent practicable comments
submitted on paper, to the public docket.
Send paper submissions to: CC:PA:LP-
D:PR (REG-100718-21), Room 5203,
Internal Revenue Service, P.O. Box 7604,
Ben Franklin Station, Washington, D.C.
20044.
For those requesting to speak during
the hearing, send an outline of topic sub-
missions electronically via the Federal
eRulemaking Portal at www.regulations.
gov (indicate IRS and REG-100718-21).
Individuals who want to testify (by
telephone) at the public hearing must
send an email to publichearings@irs.
gov to receive the telephone number and
access code for the hearing. The subject
line of the email must contain the regu-
lation number REG-100718-21 and the
word TESTIFY. For example, the subject
line may say: Request to TESTIFY at
Hearing for REG-100718-21. The email
should include a copy of the speaker’s
public comments and outline of top-
ics. Individuals who want to attend (by
telephone) the public hearing must also
send an email to publichearings@irs.
gov to receive the telephone number and
access code for the hearing. The subject
line of the email must contain the regu-
lation number REG-100718-21 and the
word ATTEND. For example, the sub-
ject line may say: Request to ATTEND
Hearing for REG-100718-21. To request
special assistance during the telephonic
hearing, contact the Publications and
Regulations Branch of the Office of
Associate Chief Counsel (Procedure and
Administration) by sending an email to
publichearings@irs.gov (preferred) or
by telephone at (202) 317-5177 (not a
toll-free number).
FOR FURTHER INFORMATION CON-
TACT: Concerning the proposed regula-
tions, Karen Wozniak at (202) 317-5129;
concerning cost methodology, Michael
A. Weber at (202) 803-9738; concerning
submission of comments, the hearing, and
the access code to attend the hearing by
telephone, Regina Johnson at (202) 317-
5177 (not toll-free numbers) or publi-
chearings@irs.gov.
SUPPLEMENTARY INFORMATION:
Background and Explanation of
Provisions
This document contains proposed
amendments to 26 CFR part 300 regard-
ing user fees.
A. Enrolled Agents, Enrolled Retirement
Plan Agents, and the Special Enrollment
Examinations
Section 330 of Title 31 of the United
States Code authorizes the Secretary of
the Treasury to regulate the practice of
representatives before the Department
of the Treasury (Treasury Department)
and require that an individual seeking to
practice demonstrate the necessary qual-
ifications, competency, and good charac-
ter, and reputation. The rules governing
practice before the IRS are published in
31 CFR, Subtitle A, part 10, and reprinted
as Treasury Department Circular No. 230
(Circular 230).
Section 10.4(a) of Circular 230 autho-
rizes the IRS to grant status as enrolled

October 18, 2021 654 Bulletin No. 2021–42
agents to individuals who demonstrate
special competence in tax matters by pass-
ing a written examination, the EA SEE,
and who have not engaged in any conduct
that would justify suspension or disbar-
ment under Circular 230.
The EA SEE is comprised of three
parts and an applicant generally must
pass all three parts within two years to
be granted enrolled agent status through
written examination. The EA SEE test-
ing period generally begins on May 1
each year and ends the last day of the
following February. The EA SEE is not
offered during March and April when it
is updated to reflect recent changes in
the relevant law. More information on
the EA SEE, including content, scoring,
and how to register, can be found on the
IRS website at www.irs.gov/tax-profes-
sionals/enrolled-agents. Since 2006, the
IRS has engaged the services of a third-
party contractor to develop and adminis-
ter the EA SEE. The IRS Return Preparer
Office (RPO) oversees the development
and administration of the EA SEE. As
of August 30, 2021, there were 62,686
enrolled agents.
Section 10.4(b) of Circular 230 autho-
rizes the IRS to grant status as enrolled
retirement plan agents to individuals who
demonstrate special competence in qual-
ified retirement plan matters by passing a
written examination, the ERPA SEE, and
who have not engaged in any conduct that
would justify suspension or disbarment
under Circular 230. The IRS stopped
offering the ERPA SEE as of February
12, 2016, and no longer accepts applica-
tions for new enrollment as an enrolled
retirement plan agent. Accordingly, the
proposed regulations remove the user fee
for the ERPA SEE. Individuals currently
enrolled as retirement plan agents can
maintain their status as enrolled retire-
ment plan agents. As of August 30, 2021,
there were 743 enrolled retirement plan
agents.
B. User Fee Authority
The Independent Offices Appropri-
ation Act of 1952 (IOAA) (31 U.S.C.
9701) authorizes each agency to promul-
gate regulations establishing the charge
for services provided by the agency. The
IOAA states that the services provided by
an agency should be self-sustaining to the
extent possible. 31 U.S.C. 9701(a). The
IOAA provides that user fees are subject
to policies prescribed by the President,
which are currently set forth in the Office
of Management and Budget (OMB) Cir-
cular A-25 (OMB Circular A-25), 58 FR
38142 (July 15, 1993).
Section 6a(1) of OMB Circular A-25
states that when a service offered by an
agency provides special benefits to iden-
tifiable recipients beyond those accruing
to the general public, the agency is to
charge a user fee to recover the full cost
of providing the service. Section 8e of
OMB Circular A-25 requires agencies to
review user fees biennially and update the
fees as necessary to reflect changes in the
cost of providing the underlying services.
During the biennial review, an agency
must calculate the full cost of providing
each service, taking into account all direct
and indirect costs to any part of the U.S.
government. Under section 6d(1) of OMB
Circular A-25, the full cost of providing
a service includes, but is not limited to,
an appropriate share of salaries, medical
insurance and retirement benefits, man-
agement costs, and physical overhead and
other indirect costs, including rents, utili-
ties, and travel, associated with providing
the service.
An agency should set the user fee at
an amount that recovers the full cost of
providing the service unless the agency
requests, and the OMB grants, an excep-
tion to the full-cost requirement. Under
section 6c(2) of OMB Circular A-25, the
OMB may grant exceptions when the
cost of collecting the fees would repre-
sent an unduly large part of the fee for
the activity or when any other condition
exists that, in the opinion of the agency
head, justifies an exception. When the
OMB grants an exception, the agency
does not collect the full cost of providing
the service and must fund the remaining
cost of providing the service from other
available funding sources. Consequently,
the agency subsidizes the cost of the ser-
vice to the recipients of reduced-fee ser-
vices even though the service confers a
special benefit on those recipients who
would otherwise be required to pay the
full cost of receiving the benefit as pro-
vided for by the IOAA and OMB Circu-
lar A-25.
C. The EA SEE User Fee
Section 10.4(a) of Circular 230 pro-
vides that the IRS will grant enrolled
agent status to an applicant who, among
other things, demonstrates special compe-
tence in tax matters by written examina-
tion. The EA SEE is the written examina-
tion by which applicants can demonstrate
special competence in tax matters, and
an applicant must pass all three parts of
the EA SEE to be granted enrolled agent
status through written examination. The
IRS confers a benefit on individuals who
take the EA SEE beyond those that accrue
to the general public by providing them
with an opportunity to demonstrate spe-
cial competence in tax matters by passing
a written examination and thereby satisfy
one of the requirements for becoming an
enrolled agent under section 10.4(a) of
Circular 230. Because the EA SEE is a
service that provides a special benefit to
test takers, the IRS charges a user fee to
take the examination.
Final regulations (TD 9820) published
in the Federal Register (82 FR 33009-01)
on July 19, 2017, established the current
$81 user fee per part of the EA SEE. At
that time the Treasury Department and
the IRS determined that a $81 user fee per
part would recover the full direct and indi-
rect costs the government would incur to
oversee the EA SEE. The contractor who
administers the EA SEE also charges indi-
viduals taking the EA SEE an additional
fee for its services. For the May 2021 to
February 2022 testing period, the contrac-
tor’s fee is $104 for each part of the EA
SEE.
As required by OMB Circular A-25, in
2021 the IRS conducted a biennial review
of the EA SEE user fee and calculated
its costs for overseeing the examination.
As a result of the review, the IRS deter-
mined that its full cost for overseeing the
EA SEE is $99 per part, plus an amount
payable directly to a third-party contractor
for its services. The proposed regulations
increase the amount of the user fee for tak-
ing the EA SEE from $81 per part to $99
per part. This amount is in addition to an
amount payable directly to the third-party
contractor for each part. The IRS does
not intend to subsidize any of the cost of
making the EA SEE available to examin-
ees and is not applying for an exception to

Bulletin No. 2021–42 655 October 18, 2021
the full-cost requirement in OMB Circular
A-25.
The increase in the user fee is primar-
ily attributable to increases in salary and
benefits for employees conducting activ-
ities related to the EA SEE program. The
proposed user fee accounts for the time
and personnel necessary to oversee the
development and administration of the
EA SEE and to ensure the contractor
complies with the terms of its contract.
The IRS’s oversight costs include costs
associated with: (1) review and approval
of materials used by the contractor in
developing the EA SEE; (2) review of
surveys of existing enrolled agents,
which help to determine the topics to be
covered in the EA SEE; (3) composition
of potential EA SEE questions in coor-
dination with the contractor’s external
tax law experts; and (4) analysis of the
answers and raw scores of a testing pop-
ulation to determine a passing score.
In addition, IRS personnel ensure the
contractor’s compliance with its contract
by reviewing the work of the contractor
using an annual Work Breakdown Struc-
ture—a project management tool—and
reviewing and verifying that the contractor
is in compliance with a Quality Assurance
Plan measuring customer satisfaction and
accuracy. The IRS incurs additional costs
associated with enforcing compliance with
the Treasury contractor personnel security
and training policies, Federal Information
Security Modernization Act (FISMA),
Section 508 of the Rehabilitation Act of
1973 and other laws, regulations and pol-
icies in the scope of the EA SEE contract;
monitoring the contractor’s help desk; and
the resolution of test-related issues such as
cheating incidents, appeals regarding test
scores, refund requests, and customer ser-
vice complaints that are not resolved by
the contractor.
D. Calculation of User Fees Generally
The IRS follows generally accepted
accounting principles (GAAP) in cal-
culating the full cost of overseeing the
EA SEE. The Federal Accounting Stan-
dards Advisory Board (FASAB) is the
body that establishes GAAP that apply
for Federal reporting entities, such as
the IRS. FASAB publishes the FASAB
Handbook of Accounting Standards and
Other Pronouncements, as Amended
(Current Handbook), which is available
at https://files.fasab.gov/pdffiles/2020_
fasab_handbook.pdf. The Current Hand-
book includes the Statement of Federal
Financial Accounting Standards (SFFAS)
No. 4: Managerial Cost Accounting Stan-
dards and Concepts. SFFAS No. 4 estab-
lishes internal costing standards under
GAAP to accurately measure and man-
age the full cost of Federal programs, and
the methodology below is in accordance
with SFFAS No. 4.
1. Cost Center Allocation
The IRS determines the cost of its ser-
vices and the activities involved in pro-
ducing them through a cost accounting
system that tracks costs to organizational
units. The lowest organizational unit in
the IRS’s cost accounting system is called
a cost center. Cost centers are usually
separate offices that are distinguished by
subject matter area of responsibility or
geographic region. All costs of operating
a cost center are recorded in the IRS’s cost
accounting system. The costs charged to a
cost center are the direct costs for the cost
center’s activities in addition to allocated
overhead. Some cost centers work on dif-
ferent services across the IRS and are not
fully devoted to the services for which the
IRS charges user fees.
2. Cost Estimation of Direct Costs
The IRS uses various cost measure-
ment techniques to estimate the costs
attributable to oversight of the EA SEE.
These techniques include using various
timekeeping systems to measure the
time required to accomplish activities,
or using information provided by subject
matter experts on the time devoted to a
service or activity. To determine the labor
and benefits costs incurred to provide the
service of providing the EA SEE, the
IRS estimated the number of full-time
employees required to conduct activities
related to the costs of overseeing the EA
SEE. The number of full-time employ-
ees is based on both current employment
numbers and future hiring estimates.
Other direct costs associated with over-
seeing the EA SEE include travel, train-
ing, and supplies.
3. Overhead
When the indirect cost of a service or
activity is not specifically identified from
the cost accounting system, an overhead
rate is added to the identifiable direct cost
to arrive at full cost. Overhead is an indi-
rect cost of operating an organization that
is not specifically identified with an activ-
ity. Overhead includes costs of resources
that are jointly or commonly consumed by
one or more organizational unit’s activi-
ties but are not specifically identifiable to
a single activity.
These costs can include:
• General management and administra-
tive services of sustaining and sup-
porting organizations.
• Facilities management and ground
maintenance services (security, rent,
utilities, and building maintenance).
• Procurement and contracting ser-
vices.
• Financial management and account-
ing services.
• Information technology services.
• Services to acquire and operate prop-
erty, plants, and equipment.
• Publication, reproduction, and graph-
ics and video services.
• Research, analytical, and statistical
services.
• Human resources/personnel services.
• Library and legal services.
To calculate the overhead allocable
to a service, the IRS multiplies an over-
head rate by the estimated direct costs.
The IRS calculates the overhead rate
annually based on the Statement of Net
Cost included in the IRS annual finan-
cial statements. The financial statements
are audited by the Government Account-
ability Office. The overhead rate is the
ratio of the IRS’s indirect costs divided
by the direct costs of its organizational
units. Indirect costs are labor, benefits,
and non-labor costs (excluding IT related
to taxpayer services, enforcement, and
business system modernization) from the
supporting and sustaining organizational
units. Direct costs are the labor, benefits,
and non-labor costs for the IRS’s organi-
zational units that interact directly with
taxpayers.
For the EA SEE user fee review, the
Fiscal Year (FY) 2021 overhead rate of
58.83 percent was used. The rate was cal-

October 18, 2021 656 Bulletin No. 2021–42
culated based on the FY 2020 Statement
of Net Cost as follows:
Total Indirect Costs $4,274,512,375
Total Direct Costs ÷ $7,265,460,800
Overhead Rate 58.83%
E. Calculation of the EA SEE User Fee
1. Cost Estimate
The IRS projected the estimated costs
of direct labor and benefits based on the
actual salary and benefits of employees
who devote time to oversee the adminis-
tration of the EA SEE program, reduced
to reflect the percentage of time each
individual spends overseeing the EA SEE
program. RPO’s managers estimated the
percentage of time these employees devote
to overseeing the EA SEE based on their
knowledge of actual program assignments.
Six employees devote seventy-five percent
of their time to EA SEE-related activities.
Two employees who are contracting offi-
cer representatives devote 90 percent and
80 percent of their time, respectively, to EA
SEE-related activities. Additional staffing
costs include oversight and support associ-
ated with these functions.
The baseline for the labor and benefits
estimate was the actual salary and benefits
for FY 2021. From this baseline, the IRS
estimated the direct labor and benefits costs
over the next three years using an inflation
factor for FYs 2022, 2023, and 2024. The
IRS used a three-year projection because
the increase in future labor and benefits
costs are reliably predictable representa-
tions of the actual costs that will be incurred
by the RPO. These estimated direct labor
and benefits costs were then reduced to
reflect the percentage of time each individ-
ual devoted to the EA SEE program and are
set out in the following table:
YearEstimated direct labor and benefit costs
2022$1,346,086.00
2023$1,376,656.00
2024$1,407,937.00
Total$4,130,679.00
The IRS estimated $12,000 in addi-
tional direct costs for each year for travel,
training, and supplies.
The total estimated direct costs for the
three years is $4,166,679. After estimat-
ing the total direct costs, the IRS applied
the FY 2021 overhead rate of 58.83 per-
cent to the estimated direct costs to cal-
culate indirect costs of $2,451,257, for
a total cost for the three-year period of
$6,617,936.
The calculation of the total cost of the
EA SEE program for 2022 through 2024
is below:
Direct Costs $4,166,679
Overhead at 58.83% + $2,451,257
Total EA SEE Cost $6,617,936
2. Volume of Examinations
The number of examination parts pro-
vided during FYs 2018, 2019, and 2020
were 23,286; 23,945; and 19,913, respec-
tively. The total number of examination
parts provided during the three years was
67,144. The IRS used this historical three-
year volume to estimate the number of
examination parts it expects to provide in
FYs 2022, 2023, and 2024.
3. Unit Cost Per Exam
To arrive at the total cost per exam-
ination part, the IRS divided the esti-
mated three-year total of EA SEE costs
by the total volume of examination parts
expected over the same three-year period
to determine a unit cost per examination
part of $99, as shown below
Total EA SEE Cost $6,617,936
Volume ÷ 67,144
Unit Cost per exam part $99
As noted in section C, the contractor
who administers the EA SEE also charges
individuals taking the EA SEE an addi-
tional fee for its services. For the May
2022 to February 2023 and May 2023 to
February 2024 testing periods, the con-
tractor’s fee is $104 and $107, respec-
tively, for each part of the EA SEE. The
fee charged by the contractor is fixed by
the current contract terms and therefore
cannot be reduced or renegotiated at this
time. The contract was subject to public
procurement procedures, and there were
no tenders that were more competitive.
The contract will expire on February 28,
2024. The fee charged by the contractor
may change when the contract expires.
Any future contract will be subject to the
public procurement procedures.
Special Analyses
This regulation is not significant and is
not subject to review under section 6(b)
of Executive Order 12866 pursuant to the
Memorandum of Agreement (April 11,
2018) between the Treasury Department
and the Office of Management and Bud-
get regarding review of tax regulations.
Pursuant to the Regulatory Flexibility Act
(5 U.S.C. chapter 6), it is hereby certified
that these proposed regulations will not
have a significant economic impact on a
substantial number of small entities. The
proposed regulations remove the ERPA
SEE user fee as the IRS no longer offers
the examination or new enrollment as an
enrolled retirement plan agent. The EA
SEE user fee primarily affects individuals
who take the EA SEE. Only individuals,
not businesses, can be enrolled agents.
Thus, the economic impact of these reg-
ulations on any small entity would be
a result of an individual enrolled agent
owning a small entity or a small entity
employing an enrolled agent and reim-

Bulletin No. 2021–42 657 October 18, 2021
bursing the individual for the fee. The
Treasury Department and the IRS esti-
mate that an average of 22,381 EA SEE
examination parts will be taken by indi-
viduals annually. Therefore, a substantial
number of small entities is not likely to be
affected. Further, the economic impact on
any small entities affected would be lim-
ited to paying the $18 difference in cost
between the $99 user fee and the previous
$81 user fee per part (for each enrolled
agent that a small entity employs and
pays for), which is unlikely to present a
significant economic impact. The total
economic impact of this regulation is thus
approximately $402,858 annually, which
is the product of the approximately 22,381
examination parts and the $18 increase
in the fee per part. Accordingly, the rule
is not expected to have a significant eco-
nomic impact on a substantial number of
small entities, and a regulatory flexibility
analysis is not required.
Pursuant to section 7805(f) of the Inter-
nal Revenue Code, this notice of proposed
rulemaking has been submitted to the
Chief Counsel of the Office of Advocacy
of the Small Business Administration for
comment on its impact on small business.
Comments and Public Hearing
Before these proposed amendments to
the regulations are adopted as final reg-
ulations, consideration will be given to
comments that are submitted timely to the
IRS as prescribed in the preamble under
the ADDRESSES section. The Treasury
Department and the IRS request comments
on all aspects of the proposed regulations.
Any electronic comments submitted, and
to the extent practicable any paper com-
ments submitted, will be made available
at www.regulations.gov or upon request.
A public hearing is being held by tele-
conference on November 23, 2021 begin-
ning at 10:00 a.m. EST unless no outlines
are received by November 15, 2021. The
rules of 26 CFR 601.601(a)(3) apply to
the hearing. Persons who wish to pres-
ent oral comments by telephone at the
hearing must submit written or electronic
comments and an outline of the topics to
be addressed and the time to be devoted
to each topic by November 15, 2021 as
prescribed in the preamble under the
ADDRESSES section.
A period of 10 minutes will be allo-
cated to each person for making com-
ments. After the deadline for receiving
outlines has passed, the IRS will prepare
an agenda containing the schedule of
speakers. Copies of the agenda will be
made available at www.regulations.gov,
search IRS and REG-100718-21. Copies
of the agenda will also be available by
emailing a request to publichearings@irs.
gov. Please put “REG-100718-21 Agenda
Request” in the subject line of the email.
Drafting Information
The principal author of these regu-
lations is Karen Wozniak, Office of the
Associate Chief Counsel (Procedure and
Administration). Other personnel from the
Treasury Department and the IRS partic-
ipated in the development of the regula-
tions.
List of Subjects in 26 CFR Part 300
Reporting and recordkeeping require-
ments, User fees.
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 300 is pro-
posed to be amended as follows:
PART 300 – USER FEES
Paragraph 1. The authority citation for
part 300 continues to read as follows:
Authority: 31 U.S.C. 9701.
§300.0 [Amended]
Par. 2. Section 300.0 is amended by
removing paragraph (b)(9) and redesig-
nating paragraphs (b)(10) through (12) as
paragraphs (b)(9) through (11).
Par. 3. Section 300.4 is amended by
revising paragraphs (b) and (d) to read as
follows:
§300.4 Enrolled agent special enroll-
ment examination fee.
* * * * *
(b) Fee. The fee for taking the enrolled
agent special enrollment examination is
$99 per part, which is the cost to the gov-
ernment for overseeing the development
and administration of the examination and
is in addition to the fees charged by the
administrator of the examination.
* * * * *
(d) Applicability date. This section
applies to registrations for the enrolled
agent special enrollment examination
that occur on or after [DATE 30 DAYS
AFTER PUBLICATION OF THE FINAL
RULE IN THE Federal Register].
§300.9 [Removed]
Par. 4. Section 300.9 is removed.
§§300.10 through 300.12 [Redesignated
as §§300.09 through 300.11]
Par. 5. Redesignate §§300.10 through
300.12 as §§300.09 through 300.11.
Douglas W. O’Donnell,
Deputy Commissioner for Services
and Enforcement.
(Filed by the Office of the Federal Register on Sep-
tember 27, 2021, 4:15 a.m., and published in the
issue of the Federal Register for September 29, 2021,
86 FR 53893)

Notice of Proposed
Rulemaking and Notice of
Public Hearing...
Requirements Related to
Surprise Billing; Part II
REG-107707-21
AGENCY: Internal Revenue Service,
Department of the Treasury.
ACTION: Notice of proposed rulemaking.
SUMMARY: The Department of the
Treasury (Treasury Department) and
Internal Revenue Service (IRS) are pro-
posing regulations that provide for a
federal independent dispute resolution
(IDR) process to permit group health
plans and nonparticipating providers,
facilities, and providers of air ambu-
lance services to determine the out-of-
network rate for items and services that
are emergency services, nonemergency
services furnished by nonparticipating

October 18, 2021 658 Bulletin No. 2021–42
providers at participating facilities, and
air ambulance services furnished by non-
participating providers of air ambulance
services, under certain circumstances.
Elsewhere in this issue of the Federal
Register, the IRS is issuing the tempo-
rary regulations that correspond to this
proposal at the same time that the Office
of Personnel Management (OPM), the
Employee Benefits Security Administra-
tion of the Department of Labor (DOL),
and the Center for Medicare & Medicaid
Services of the Department of Health and
Human Services (HHS) are issuing sub-
stantially similar interim final rules with
request for comments. The text of those
temporary regulations also serves as the
text of these proposed regulations.
DATES: Comment date: To be assured
consideration, comments must be received
at one of the addresses provided below, no
later than 5 p.m. on December 6, 2021.
Applicability date: It is proposed that
these regulations apply for plan years
beginning on or after January 1, 2022.
ADDRESSES: In commenting, please
refer to file code REG-107707-21. Com-
ments, including mass comment submis-
sions, must be submitted in one of the fol-
lowing two ways (please choose only one
of the ways listed):
1. Electronically. You may submit
electronic comments on this regulation to
http://www.regulations.gov. Follow the
“Submit a comment” instructions.
2. By mail. You may mail written com-
ments to the following address ONLY:
Office of Health Plan Standards and
Compliance Assistance, Employee
Benefits Security Administration, U.S.
Department of Labor, 200 Constitution
Avenue NW, Room N-5653,
Washington, DC 20210
Attention: RIN 1210-AB00.
Please allow sufficient time for mailed
comments to be received before the close
of the comment period.
FOR FURTHER INFORMATION
CONTACT: Kari DiCecco, (202) 317-
5500, Internal Revenue Service, Depart-
ment of the Treasury.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All
comments received before the close of
the comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included
in a comment. We post all comments
received before the close of the comment
period on the following website as soon
as possible after they have been received:
http://regulations.gov. Follow the search
instructions on that website to view pub-
lic comments.
Background and Regulatory Impact
Analysis
The Treasury Department and the IRS
propose to amend paragraphs (a), (c), (d),
and (g) of § 54.9815-2719 of the Miscel-
laneous Excise Tax Regulations to expand
the scope of claims eligible for external
review to include adverse benefit determi-
nations related to compliance with the sur-
prise billing and cost-sharing protections
under the No Surprises Act.
The Treasury Department and the IRS
also propose to add §§ 54.9816-8 and
54.9817-2 to establish a federal IDR pro-
cess that nonparticipating providers or
facilities, nonparticipating providers of
air ambulance services, and group health
plans may use following the end of an
unsuccessful open negotiation period to
determine the out-of-network rate for cer-
tain services.
The temporary regulations published
elsewhere in this issue of the Federal Reg-
ister add §§ 54.9815-2719T, 54.9816-8T,
and 54.9817-2T. The proposed and tem-
porary regulations are being published as
part of a joint rulemaking with the OPM,
DOL, and HHS. The text of temporary
sections added elsewhere also serves as
the text of the corresponding sections
proposed in this document. The preamble
to the temporary regulations contains the
agency’s rationale and provides a regula-
tory impact analysis.
Drafting Information
The principal author of this notice
of proposed rulemaking is Kari DiCe-
cco, Office of Associate Chief Counsel
(Employee Benefits, Exempt Organiza-
tions and Employment Taxes). The pro-
posed regulations, as well as the tempo-
rary regulations, have been developed
in coordination with personnel from the
OPM, DOL, and HHS.
List of Subjects in 26 CFR Part 54
Excise taxes, Pensions, Reporting and
recordkeeping requirements.
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 54 is pro-
posed to be amended as follows:
PART 54—PENSION EXCISE TAXES
Paragraph. 1. The general authority
citation for part 54 continues to read as
follows:
Authority: 26 U.S.C. 7805, unless oth-
erwise noted.
* * * * *
Par. 2. Section 54.9815-2719 is
amended by revising paragraphs (a), (c),
(d), and (g) to read as follows:
§54.9815-2719 Internal claims and
appeals and external review processes.
[The text of proposed § 54.9815-
2719(a), (c), (d), and (g) is the same as the
text of § 54.9815-2719T(a), (c), (d), and
(g) published elsewhere in this issue of the
Federal Register].
Par. 3. Section 54.9816-1 is added to
read as follows:
[The text of proposed § 54.9816-1 is
the same as the text of § 54.9816-1T pub-
lished elsewhere in this issue of the Fed-
eral Register].
Par. 4. Section 54.9816-2(a) and (b) is
added to read as follows:
[The text of proposed § 54.9816-2(a)
and (b) is the same as the text of § 54.9816-
2T(a) and (b) published elsewhere in this
issue of the Federal Register].
Par. 5. Sections 54.9816-8 and
54.9817-2 are added to read as follows:

Bulletin No. 2021–42 659 October 18, 2021
§ 54.9816-8 Independent dispute
resolution process.
[The text of proposed § 54.9816-8 is
the same as the text of § 54.9816-8T pub-
lished elsewhere in this issue of the Fed-
eral Register].
§ 54.9817-2 Independent dispute
resolution process for air ambulance
services.
[The text of proposed § 54.9817-2 is
the same as the text of § 54.9817-2T pub-
lished elsewhere in this issue of the Fed-
eral Register].
Douglas W. O’Donnell,
Deputy Commissioner for Services
and Enforcement.
(Filed by the Office of the Federal Register on Sep-
tember 30, 2021, 4:15 p.m., and published in the
issue of the Federal Register for October 7, 2021, 86
FR 55756)

Bulletin No. 2021–42 i October 18, 2021
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.

October 18, 2021 ii Bulletin No. 2021–42
Numerical Finding List
1
Bulletin 2021–42
Announcements:
2021-12, 2021-31 I.R.B. 267
2021-13, 2021-33 I.R.B. 314
2021-14, 2021-33 I.R.B. 315
Notices:
2021-39, 2021-27 I.R.B. 3
2021-40, 2021-28 I.R.B. 15
2021-41, 2021-29 I.R.B. 17
2021-42, 2021-29 I.R.B. 19
2021-38, 2021-30 I.R.B. 155
2021-44, 2021-31 I.R.B. 166
2021-45, 2021-31 I.R.B. 170
2021-47, 2021-32 I.R.B. 269
2021-46, 2021-33 I.R.B. 303
2021-48, 2021-33 I.R.B. 305
2021-49, 2021-34 I.R.B. 316
2021-43, 2021-35 I.R.B. 332
2021-50, 2021-35 I.R.B. 333
2021-51, 2021-36 I.R.B. 361
2021-52, 2021-38 I.R.B. 381
2021-53, 2021-39 I.R.B. 438
2021-54, 2021-41 I.R.B. 457
2021-55, 2021-41 I.R.B. 461
Proposed Regulations:
REG-107705-21, 2021-30 I.R.B. 162
REG-102951-16, 2021-32 I.R.B. 272
REG-109077-21, 2021-39 I.R.B. 445
REG-100718-21, 2021-42 I.R.B. 653
REG-107707-21, 2021-42 I.R.B. 657
Revenue Procedures:
2021-28, 2021-27 I.R.B. 5
2021-29, 2021-27 I.R.B. 12
2021-24, 2021-29 I.R.B. 19
2021-14, 2021-30 I.R.B. 158
2021-30, 2021-31 I.R.B. 172
2021-31, 2021-33 I.R.B. 324
2021-33, 2021-34 I.R.B. 327
2021-34, 2021-35 I.R.B. 337
2021-35, 2021-35 I.R.B. 355
2021-36, 2021-35 I.R.B. 357
2021-37, 2021-38 I.R.B. 385
2021-38, 2021-38 I.R.B. 425
2021-39, 2021-38 I.R.B. 426
2021-40, 2021-38 I.R.B. 426
2021-41, 2021-39 I.R.B. 443
2021-32, 2021-42 I.R.B. 465
2021-44, 2021-42 I.R.B. 469
Revenue Rulings:
2021-12, 2021-27 I.R.B. 1
2021-13, 2021-30 I.R.B. 152
2021-14, 2021-31 I.R.B. 164
2021-19, 2021-42 I.R.B. 470
2021-15, 2021-35 I.R.B. 331
2021-16, 2021-36 I.R.B. 359
2021-17, 2021-37 I.R.B. 362
2021-18, 2021-40 I.R.B. 447
Treasury Decisions:
9951, 2021-30 I.R.B. 25
9952, 2021-39 I.R.B. 428
9953, 2021-39 I.R.B. 430
9956, 2021-41 I.R.B. 449
9957, 2021-41 I.R.B. 452
9955, 2021-42 I.R.B. 471
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. 2021–42 iii October 18, 2021
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2021–42
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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