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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Rules and Regulations
a comparable code under a different procedural code system.
14 Service code means the code that describes an item or service using the Current Procedural Terminology CPT
code, Healthcare Common Procedure Coding System HCPCS, or DiagnosisRelated Group DRG codes.
15 Sufficient information means, for purposes of determining whether a group health plan or health insurance issuer offering group or individual health insurance coverage has sufficient information to calculate the median of the contracted rates described in paragraph b of this section i The plan or issuer has at least three contracted rates on January 31, 2019, to calculate the median of the contracted rates in accordance with paragraph b of this section; or ii For an item or service furnished during a year after 2022 that is used to determine the first sufficient information year A The plan or issuer has at least three contracted rates on January 31 of the year immediately preceding that year to calculate the median of the contracted rates in accordance with paragraph b of this section; and B The contracted rates under paragraph a15iiA of this section account or are reasonably expected to account for at least 25 percent of the total number of claims paid for that item or service for that year with respect to all plans of the sponsor or the administering entity as provided in paragraph a8iv of this section, if applicable or all coverage offered by the issuer that are offered in the same insurance market.
16 Qualifying payment amount means, with respect to a sponsor of a group health plan or health insurance issuer offering group or individual health insurance coverage, the amount calculated using the methodology described in paragraph c of this section.
17 Underlying fee schedule rate means the rate for a covered item or service from a particular participating provider, providers, or facility that a group health plan or health insurance issuer uses to determine a participants, beneficiarys, or enrollees cost-sharing liability for the item or service, when that rate is different from the contracted rate.
b Methodology for calculation of median contracted rate1 In general.
The median contracted rate for an item or service is calculated by arranging in order from least to greatest the contracted rates of all group health plans of the plan sponsor or the administering entity as provided in
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paragraph a8iv of this section, if applicable or all group or individual health insurance coverage offered by the issuer in the same insurance market for the same or similar item or service that is provided by a provider in the same or similar specialty or facility of the same or similar facility type and provided in the geographic region in which the item or service is furnished and selecting the middle number. If there are an even number of contracted rates, the median contracted rate is the average of the middle two contracted rates. In determining the median contracted rate, the amount negotiated under each contract is treated as a separate amount. If a plan or issuer has a contract with a provider group or facility, the rate negotiated with that provider group or facility under the contract is treated as a single contracted rate if the same amount applies with respect to all providers of such provider group or facility under the single contract. However, if a plan or issuer has a contract with multiple providers, with separate negotiated rates with each particular provider, each unique contracted rate with an individual provider constitutes a single contracted rate. Further, if a plan or issuer has separate contracts with individual providers, the contracted rate under each such contract constitutes a single contracted rate even if the same amount is paid to multiple providers under separate contracts.
2 Calculation rules. In calculating the median contracted rate, a plan or issuer must:
i Calculate the median contracted rate with respect to all plans of such sponsor or the administering entity as provided in paragraph a8iv of this section, if applicable or all coverage offered by such issuer that are offered in the same insurance market;
ii Calculate the median contracted rate using the full contracted rate applicable to the service code, except that the plan or issuer must A Calculate separate median contracted rates for CPT code modifiers 26 professional component and TC technical component;
B For anesthesia services, calculate a median contracted rate for the anesthesia conversion factor for each service code;
C For air ambulance services, calculate a median contracted rate for the air mileage service codes A0435
and A0436; and D Where contracted rates otherwise vary based on applying a modifier code, calculate a separate median contracted rate for each such service code-modifier combination;

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iii In the case of payments made by a plan or issuer that are not on a fee-forservice basis such as bundled or capitation payments, calculate a median contracted rate for each item or service using the underlying fee schedule rates for the relevant items or services. If the plan or issuer does not have an underlying fee schedule rate for the item or service, it must use the derived amount to calculate the median contracted rate; and iv Exclude risk sharing, bonus, penalty, or other incentive-based or retrospective payments or payment adjustments.
3 Provider specialties; facility types.
i If a plan or issuer has contracted rates that vary based on provider specialty for a service code, the median contracted rate is calculated separately for each provider specialty, as applicable.
ii If a plan or issuer has contracted rates for emergency services that vary based on facility type for a service code, the median contracted rate is calculated separately for each facility of the same or similar facility type.
c Methodology for calculation of the qualifying payment amount1 In general. i For an item or service other than items or services described in paragraphs c1iii through vii of this section furnished during 2022, the plan or issuer must calculate the qualifying payment amount by increasing the median contracted rate as determined in accordance with paragraph b of this section for the same or similar item or service under such plans or coverage, respectively, on January 31, 2019, by the combined percentage increase as published by the Department of the Treasury and the Internal Revenue Service to reflect the percentage increase in the CPIU over 2019, such percentage increase over 2020, and such percentage increase over 2021.
A The combined percentage increase for 2019, 2020, and 2021 will be published in guidance by the Internal Revenue Service. The Department of the Treasury and the Internal Revenue Service will calculate the percentage increase using the CPIU published by the Bureau of Labor Statistics of the Department of Labor.
B For purposes of this paragraph c1i, the CPIU for each calendar year is the average of the CPIU as of the close of the 12-month period ending on August 31 of the calendar year, rounded to 10 decimal places.
C The combined percentage increase for 2019, 2020, and 2021 will be calculated as:
CPIU 2019/CPIU 2018 CPIU
2020/CPIU 2019 CPIU 2021/
CPIU 2020

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