Fifth Circuit Invalidates Key Aspects of No Surprises Act QPA Rule
A federal appeals court has struck down parts of the methodology for calculating out-of-network payment rates, adding new complexity for payors and providers navigating the federal dispute resolution process.
The US Court of Appeals for the Fifth Circuit has invalidated key federal regulations governing how insurers calculate the Qualifying Payment Amount (QPA), a crucial benchmark in out-of-network billing disputes under the No Surprises Act (NSA). Affirming a lower court, the panel ruled insurers may not include non-negotiated "ghost rates" and must include bonus and incentive payments in their QPA calculations, a decision expected to shift leverage in payment negotiations and the Independent Dispute Resolution (IDR) process.
This ruling arrives amid intense scrutiny of the NSA's IDR system, with federal reports revealing over 1.3 million disputes initiated in a recent six-month period and lawmakers investigating potential arbitrator conflicts. The decision directly impacts all healthcare providers, group health plans, and insurers navigating the NSA framework. Sophisticated counsel should advise clients on updating QPA calculation methodologies to comply with the ruling and prepare for significant upcoming operational changes, including a new centralized IDR Gateway portal and the phased implementation of a new federal final rule altering dispute batching and timelines.