(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 information (IIHI), and unsecured IIHI also apply to this section. Additionally, for purposes of this section, the following definitions apply:

1. (i) Billed charge(s) means the amount billed by a provider or facility for an item or service.
2. (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.
3. (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) individual, regardless of whether such items or services were included in the good faith estimate.
4. (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, 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 § 149.610.
5. (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 replacement 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 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 provided by the replacement co-provider or co-facility.
6. (c) Initiation of the Patient Provider dispute resolution process—(1) In general. With respect to an item or service that meets the requirements in paragraph (b) of this section, an uninsured (or self-pay) individual (or their authorized representative, excluding any providers directly represented in the good faith estimate, providers associated with these providers, non-clinical staff associated 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 containing charges for the item or service that is substantially in excess of the expected charges in the good faith estimate. In addition, the uninsured (or self-pay) individual 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.

7. (2) Initiation notice—(i) Content. The notice to initiate the patient-provider dispute resolution process must include:

   1. (A) Information sufficient to identify the item or service under dispute, including the date the item or service was provided, and a description of the item or service;
   2. (B) A copy of the provider or facility bill for the item and service under dispute (the copy can be a photocopy or an electronic image so long as the document is readable);
   3. (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 readable);
   4. (D) If not included on the good faith estimate, contact information of the provider or facility involved, including, if available, name, email address, phone number, and mailing address;
   5. (E) The State where the items or services in dispute were furnished; and
   6. (F) The uninsured (or self-pay) individual's communication preference, through the Federal IDR portal, or electronic or paper mail.
   7. (ii) Manner. The uninsured (or self-pay) individual or their authorized representative 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 specified 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 addition, the uninsured (or self-pay) individual 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.

8. (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 selection, 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:

   1. (i) Sufficient information to identify the item or service under dispute;
   2. (ii) The date the initiation notice was received;
   3. (iii) Notice of the additional requirements for providers or facilities specified in paragraphs (c)(5) and (6) of this section while the patient-provider dispute resolution process is pending; and
   4. (iv) Information to the uninsured (or self-pay) individual about the availability of consumer assistance resources that can assist the individual with the dispute.

9. (4) Validation of initiation notice. After the selection of the SDR entity, as described in paragraph (c)(2) of this section, the SDR entity shall review the initiation notice to ensure the items or services in dispute meet the eligibility criteria described in paragraph (b) of this section and the initiation notice contains the required information described in paragraph (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.

   1. (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 determined 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.
   2. (ii) If the SDR entity determines that the item or service does not meet the eligibility criteria or that the initiation notice does not contain the required information, the SDR entity will provide an insufficiency 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) individual that the individual may submit supplemental information, postmarked within 21 calendar days, to resolve any deficiencies 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 proficiency within 14 calendar days of such a request from the individual, a 14-calendar-day extension will be granted so that the individual will have a total of 35 calendar days to submit supplemental information.
10. (5) Prohibitions on collections. While the patient-provider dispute resolution process is pending, the 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. 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.
11. (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) individual for utilizing the patient-provider dispute resolution process to seek resolution for a disputed item or service.
12. (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 necessary 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 process, HHS will assess the dispute resolution entity for compliance with all applicable SDR entity certification requirements.

13. (2) Exception for SDR entity certification. 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 submissions:

    1. (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;
    2. (ii) Fee schedule for batched and non-batched claims;
    3. (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 procedures to hold administrative fees, as described in paragraph (g) of this section, and remit them to HHS in a manner specified by HHS.
14. (3) Conflict of interest mitigation policies. A potential SDR entity must also provide additional information on the SDR entity's conflict-of-interest policies and procedures, including outlining a mitigation plan in the event of an entity-level conflict of interest, under which no dispute resolution personnel affiliated with the SDR entity can fairly and impartially adjudicate a case, in compliance with the standards in Federal Acquisition Regulation-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.

15. (e) Selection of an SDR entity.

    1. (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 determination for an item or service as described in paragraph (c)(3) of this section, the SDR entity shall ensure that no conflict of interest 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. (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 automatically select a new SDR entity to conduct the patient-provider dispute resolution 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 mitigation 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 dispute resolution services due to conflicts of interest that cannot be sufficiently mitigated 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. (3) 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 determination. For purposes of this section, a conflict of interest exists when an SDR entity is:

       1. (i) A provider or a facility;
       2. (ii) An affiliate or a subsidiary of a provider or facility;
       3. (iii) An affiliate or subsidiary of a professional or trade association representing a provider or facility; or
       4. (iv) An SDR entity, or any personnel assigned to a determination has a material 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. (4) Either party to the dispute resolution 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.
16. (f) Payment determination for Patient-Provider dispute resolution—(1) Determination of payment amount through settlement—(i) In general. If the parties 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 section, the provider or facility will 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 of such settlement, and documentation demonstrating that the provider or facility and uninsured (or self-pay) individual have agreed to the settlement. 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 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 settlement 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.
17. (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 uninsured (or self-pay) individual) prior to a determination under paragraph (f)(3) of this section does not demonstrate agreement by the uninsured (or self-pay) individual to settle at that amount or any other amount.

18. (2) Determination of payment amount through the patient-provider dispute resolution 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 submit to the SDR entity:

    1. (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);
    2. (B) A copy of the billed charges 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); and
    3. (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 anticipated by the provider or facility when the good faith estimate was provided.
    4. (ii) Timeframe for SDR entity determination. 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 paragraph (f)(3) of this section.
19. (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 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.
20. (ii) Definition of credible information. Credible information means information that upon critical analysis is worthy of belief and is trustworthy.

21. (iii) Payment determination process.

    1. (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 submitted by the provider or facility does not 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 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 for the item or service to be equal to the expected charge for the item or service 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 information submitted by the provider or facility provides 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 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.

    2. (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 provider 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 anticipated 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 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 methodology 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.

    3. (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 determined by the amount paid by the individual 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 determination 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 determination, 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. (4) Effects of determination. A determination made by an SDR entity under this paragraph (f) will be binding upon the parties involved, in the absence of a fraud or evidence of misrepresentation of facts presented to the selected SDR entity regarding 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 determination, 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.

    5. (g) Costs of patient-provider dispute resolution process—(1) Administrative fee to participate in the patient-provider dispute resolution process.

       1. (i) The uninsured (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-provider 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.
       2. (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 section, 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.
       3. (iii) If the SDR entity issues a determination 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 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.
       4. (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.
       5. (v) Allocation of administrative fee in the case of settlement. In case of a settlement described in paragraph (f)(1) of this section, the provider or facility must pay an amount equal to half of the administrative 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.
       6. (2) Establishment of the administrative fee. The amount of the administrative fee described in paragraph (g)(1) of this section will be specified by the Secretary through guidance.
    6. (h) Deferral to State patient-provider dispute resolution processes—(1) In general. 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 facility, 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-provider dispute resolution requests received from uninsured (or self-pay) individuals in such state to the State process to adjudicate the dispute resolution initiation request.

    7. (2) Minimum Federal requirements. A State process described in paragraph (h)(1) of this section shall at a minimum:

       1. (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;
       2. (ii) Take into consideration a good faith estimate, that meets the minimum standards established in § 149.160, provided by the provider or facility to the uninsured (or self-pay) individual;
       3. (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
       4. (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.
    8. (3) HHS determination of State process. 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.
    9. (4) HHS review of State process. 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 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.

    10. (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 resolution process that meets the minimum Federal requirements.

        1. (i) Extension of time periods for extenuating 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 extenuating circumstances at the Secretary's discretion if:
        2. (i) An extension is necessary to address delays due to matters beyond the control of the parties or for good cause; and
        3. (ii) The parties attest that prompt action will be taken to ensure that the determination under this section is made as soon as administratively practicable under the circumstances.
        4. (2) Process to request an extension. The time periods specified in this section may be extended in the case of extenuating 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.
        5. (j) Applicability date. The provisions of this section are applicable to uninsured (or self-pay) individuals; providers (including 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 October 7, 2021.