Treas. Reg. § 54.9816-6 — Methodology for calculating qualifying payment amount.

(a) Definitions. For further guidance, see 29 CFR 2590.716-6(a) introductory text through (a)(17).

(1) -(17) [Reserved]

(18) Downcode means the alteration by a plan or issuer of a service code to another service code, or the alteration, addition, or removal by a plan or issuer of a modifier, if the changed code or modifier is associated with a lower qualifying payment amount than the service code or modifier billed by the provider, facility, or provider of air ambulance services.

(b) Methodology for calculation of median contracted rate. For further guidance, see 29 CFR 2590.716-6(b).

(c) Methodology for calculation of the qualifying payment amount. For further guidance, see 29 CFR 2590.716-6(c).

(d) Information to be shared about the qualifying payment amount. In cases in which the recognized amount, for an item or service furnished by a nonparticipating provider or nonparticipating emergency facility, is the qualifying payment amount or the amount billed by the provider or facility, or if the amount on which cost sharing is based for air ambulance services furnished by a nonparticipating provider of air ambulance services is the qualifying payment amount or the amount billed by the provider of air ambulance services, the plan or issuer must provide to the provider, facility, or provider of air ambulance services, as applicable, in writing, in paper or electronic form—

(1) With an initial payment or notice of denial of payment under § 54.9816-4, § 9816-5, or § 54.9817:

(i) For further guidance, see 29 CFR 2590.716-6(d)(1)(i);

(ii) If the qualifying payment amount is based on a downcoded service code or modifier—

(A) A statement that the service code or modifier billed by the provider, facility, or provider of air ambulance services was downcoded;

(B) An explanation of why the claim was downcoded, which must include a description of which service codes were altered, if any, and a description of which modifiers were altered, added, or removed, if any; and

(C) The amount that would have been the qualifying payment amount had the service code or modifier not been downcoded;

(iii) For further guidance, see 29 CFR 2590.716-6(d)(1)(iii);

(iv) A statement that—

(A) If the provider, facility, or provider of air ambulance services, as applicable, wishes to initiate a 30-business-day open negotiation period for purposes of determining the out-of-network rate, the provider, facility, or provider of air ambulance services must:

(1) Contact the appropriate person or office to initiate open negotiation generally within 30 business days of receiving the initial payment or notice of denial of payment, and

(2) For disclosures required to be provided on or after the later of August 3, 2026 and the date that the open negotiation notice can be submitted through the Federal independent dispute resolution (IDR) portal, notify the Secretary of the Treasury (Secretary) as described under § 54.9816-8(b)(1)(i); and

(B) If the 30-business-day open negotiation period does not result in an agreement on the amount of payment, the provider, facility, or provider of air ambulance services may generally initiate the Federal IDR process within 4 business days after the end of the 30-business-day open negotiation period;

(v) For disclosures required to be provided on or after August 3, 2026, the legal business name (if any) of the self-insured group health plan, FEHB Program carrier, or issuer and, if applicable, the legal business name of the self-insured group health plan sponsor, and the registration number assigned to the plan or issuer, as required under § 54.9816-9.

(vi) For further guidance, see 29 CFR 2590.716-6(d)(1)(vi).

(2) In a timely manner upon the request of the provider, facility, or provider of air ambulance services:

(i) For further guidance, see 29 CFR 2590.716-6(d)(2)(i).

(ii) For further guidance, see 29 CFR 2590.716-6(d)(2)(ii).

(iii) For further guidance, see 29 CFR 2590.716-6(d)(2)(iii).

(iv) For further guidance, see 29 CFR 2590.716-6(d)(2)(iv).

(e) For further guidance, see 29 CFR 2590.716-6(e).

(f) For further guidance, see 29 CFR 2590.716-6(f).

(g) Applicability date. The provisions of this section are applicable for plan years beginning on or after January 1, 2022, except that paragraph (a)(18) of this section regarding the definition of the term “downcode” and paragraph (d)(1)(ii) of this section regarding additional information that must be provided if the qualifying payment amount is based on a downcoded service code or modifier are applicable with respect to items or services provided or furnished on or after October 25, 2022, for plan years beginning on or after January 1, 2022.

(h) Severability.

(1) Any provision of this section held to be invalid or unenforceable by its terms, or as applied to any person or circumstance, will be construed so as to continue to give maximum effect to the provision permitted by law, unless such holding is one of utter invalidity or unenforceability, in which event the provision will be severable from this section and will not affect the remainder thereof or the application of the provision to persons not similarly situated or to dissimilar circumstances.

(2) The provisions in this section are intended to be severable from the provisions in §§ 54.9816-6A, 54.9816-8, and 54.9816-9, from any grant of forbearance from removal resulting from this subpart, and from any provision referenced in §§ 54.9816-6A, 54.9816-8, and 54.9816-9.