Large health plan develops QPA methodology to comply with the No Surprises Act

Client background 

A large national payer organization with multiple health plans that covers more than 16 million lives in commercial products throughout several U.S. states. 

The business challenge 

The client needed assistance with becoming compliant with the No Surprises Act (NSA), a federal law that aims to protect consumers from surprise medical bills when they receive care from out-of-network providers in circumstances outside of their control. One of the key provisions in the NSA is qualifying payment amounts (QPAs), which determine the maximum patient cost-share amount payer organizations can set for specific out-of-network healthcare services. The NSA contains many ambiguities (e.g., lack of clarifying guidance on case rate, percent of billed charge reimbursements, etc.) that make it difficult to design a QPA methodology that accurately represents the median commercial in-network rate for thousands of medical services across multiple categories. 

In addition to complying with the final rule, the payer organization wanted to keep a uniform QPA calculation methodology across all member plans as much as possible – this was complicated by the unique reimbursement structures per plan. Further complications arose from the plans having several disparate pricing systems, resulting in technical challenges when pulling rates, as well as various stakeholders throughout the organization, including legal, network operations and reimbursement teams, from whom knowledge needed to be gathered from. 

Baker Tilly’s solution-driven approach 

Baker Tilly’s healthcare subject matter specialists, comprising both health plan and provider specialists experienced in reimbursement and network contracting, developed the following solutions:  

 Compliant QPA methodology designs 

Efforts across multiple stakeholders were coordinated to draft a QPA calculation and maintenance approach that met the needs of each health plan. This involved helping the client make key methodology decisions in accordance with the more than 400 pages of CMS guidance. 

 QPA calculations 

A repeatable, data-driven QPA calculation approach was built for each health plan. The various calculation approaches leveraged advanced data tools and technologies to create the technical capabilities for extracting the required rates and claims data. The resulting output was that each plan received a comprehensive set of QPAs. 

 QPA analysis 

One crucial and overlooked aspect of QPAs is assessing their validity. To address this, Baker Tilly developed an iterative approach to analyze QPAs against historical in-network claims payments and CMS reimbursement benchmarks. This enabled the client to not only determine whether adjustments to the QPA calculation methodology were required, but also ensure interpretation of the NSA guidance did not result in outlier values detrimental to its plan members. 

 Documentation and audit preparation 

Extensive documentation of each medical service category was created to capture all QPA calculation and maintenance processes in a succinct manner. This documentation equipped the client with reference material for future audits and direction on how to repeat and maintain QPA calculations moving forward. 

The accomplished results 

The health plans were able to achieve compliance with the NSA through QPA calculation methodologies tailored to each plan’s specific structure. In addition to achieving compliance, the payer organization now has a method for determining QPAs, a set of processes for maintaining their calculation process and sufficient documentation for future CMS audits. 

For more information on this topic, or to learn how Baker Tilly’s team of health plan industry specialists can help, contact us now.