The Qualifying Payment Amount (QPA) plays a significant role in the No Surprises Act (NSA). When managing compliance with the NSA, it is essential to understand what the QPA is and how it impacts payors, providers, and members. Several common challenges in calculating Qualifying Payment Amount accurately include:

  • The complexity of federal regulations, requirements, and interpretation of compliance
  • Infrastructure and technology limitations due to the size of the files
  • Access to dedicated and qualified industry personnel across various areas of expertise   

This blog post offers a QPA 101 primer, answering several frequently asked questions.

How is QPA defined under the NSA?

The Qualifying Payment Amount or QPA is a plan’s median contracted rate for the same or similar services when provided by same or similar providers in the same geographic market, adjusted for inflation.  

Generally, the NSA mandates that QPA be used to calculate member cost sharing, and as one of the items Independent Dispute Resolution Entities are asked to consider when making payment determinations in the arbitration process.

How is the QPA calculated?

 The No Surprises Act requires that CMS audit payors to ensure that QPA is calculated and determined appropriately. As a result, deriving accurate QPA schedules is critical to NSA compliance.  

The July 2021 original Interim Final Rule as well as subsequent guidance released by the U.S. Department of Labor, the Department of Health and Human Services, the Department of the Treasury, and CMS, include the methodology for calculating QPA that Health Plans are required to follow. This includes three main steps: 

1. Determine if the plan has sufficient information to perform the calculation

Plans must use contract rates in effect as of January 31, 2019, to calculate QPA. To have a sufficient amount, a plan or issuer must have at least 3 contract rates for the service (provided by a similar provider in the correct geographic market).

If the plan does not have sufficient information, the plan must calculate the QPA using the median contract rate for the first sufficient information year thereafter.  

In cases where a plan does not have sufficient information to calculate a median contracted rate, the plan must determine the QPA using an eligible database. 

2. Determine the median contracted rates

The following factors must be considered: 

Contracted Rates

The contracted rates for all plans of the plan sponsor (or administering entity, if applicable) for the insurance market. 

Single case agreements are not considered contract rates for the purpose of calculating QPA.

Insurance Market

 Insurance markets include: 

  • Individual market (excludes short-term, limited-duration insurance) 
  • Small group market 
  • Large group market 
  • Self-funded plans 

Any plan or coverage that is not a “group health plan” or “group or individual health insurance coverage” offered by a “health insurance issuer” is not to be included for the purposes of determining the QPA.

Same or Similar Items or Services

The health care items or services billed under the same or similar service code or comparable code under different procedural code system. 

Provider in the Same or Similar Specialty 

The practice specialty of a provider as identified by the plan consistent with the plan’s usual business practice.

Geographic Region 

Geographic requirements are broken down into a primary definition and two alternate definitions.  

For non-air ambulance items and services, these are defined as follows: 

  • Primary definition. This is one region for each MSA in the state and one region consisting of all other portions of the state. 
  • First alternative. This is one region consisting of all MSAs in the state and one region consisting of all other portions of the state. 
  • Second alternative. This is one region consisting of all MSAs in the Census division and one region consisting of all other portions of the Census division.

3. Determine the median rate for each combination (service + provider type + geographic area) to identify the applicable QPA for each

This is a topic that has been in flux over the past two years, due to litigation brought by the Texas Medical Association (TMA).  All four TMA lawsuits have been resolved, requiring plans to revise some aspects of how they calculate the QPA by, for example, excluding bonuses, incentives, or other potential increases when determining the contract rate for calculating QPA.

How does the QPA factor into Member Cost Sharing? 

For surprise bill claims subject to the NSA, the member’s cost share is determined before the claim is paid, and it can’t be changed even if the plan ends up paying a higher amount to the provider for those covered services. Under the NSA, the member’s cost share is determined using the lesser of billed charges or the QPA.  

For fully insured plans subject to state surprise bill laws, or ERISA plans that have opted in to such laws, the recognized amount may be determined by the state-mandated process. Additionally, in these circumstances provider-plan disputes over reimbursement will be managed under state surprise bill laws.

How else is QPA used in the Process?  

In addition to being used in the member cost share determination process, plans must disclose QPA to the provider at the time initial payment is made on a surprise bill.  

Additionally, Independent Dispute Resolution Entities (IDREs) are required to consider the QPA (in addition to other factors) when arbitrating surprise bill reimbursement disputes between providers and payors.  

While not mandated by NSA for any other uses, many payors are using the QPA to make initial payments to providers for surprise bill services rendered.

Next Steps 

NSA compliance can be complex, but you don’t have to navigate the complexities alone. We are here to support you. Contact us

Disclaimers: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes. If you have questions about how the No Surprises Act applies to your organization, please consult your legal counsel.