On November 4, 2016, the IRS announced the increased dollar amount for use in calculating patient-centered outcomes research (PCOR) fees under the Affordable Care Act (ACA) (IRS Notice 2016-64).

The ACA established the PCOR Institute, a private, nonprofit corporation to research the clinical effectiveness of medical treatments, procedures, and drugs. To finance this research, PCOR fees are imposed on:

PCOR fees are assessed for the range of plan and policy years ending on or after October 1, 2012, and before October 1, 2019.

For insured arrangements, PCOR fees are calculated by multiplying the average number of individuals covered under the policy for the year by the applicable dollar amount for that year. For self-insured plans, PCOR fees paid by plan sponsors are calculated by multiplying:

The applicable dollar amount is adjusted each year based on changes in the projected per capita amount of National Health Expenditures published by the Department of Health and Human Services (HHS).

For a discussion of calculating PCOR fees, see Practice Note, Patient-Centered Outcomes Research (PCOR) Fees Under the ACA: Calculating PCOR Fees for Insured Arrangements and Calculating PCOR Fees for Self-Insured Health Plans. For additional ACA resources, see the Practice Note, Affordable Care Act (ACA) Overview and Affordable Care Act (ACA) Toolkit.

Under Notice 2016-64, the applicable dollar amount for plan and policy years ending on or after October 1, 2016 and before October 1, 2017, will increase from $2.17 to $2.26. (The applicable dollar amount of $2.17 applied for plan and policy years ending on or after October 1, 2015 and before October 1, 2016.) This is the second consecutive year that the dollar amount has increased by nine cents.

Notice 2016-64 is effective for plan and policy years ending on or after October 1, 2016.