Payer organizations face challenges with calculating QPAs related to the No Surprises Act

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Enacted in January 2022, the No Surprises Act (NSA) establishes patient protections from surprise bills related to unexpected medical costs for emergency services received from out-of-network (OON) providers. As a part of the NSA, health plans are required to establish a process, in accordance with the CMS Interim Final Rule (IFR) requirements, to determine the maximum patient cost-share amount that payer organizations can set for qualified items and services rendered by certain providers and facilities. To determine these cost-share amounts, payers have the responsibility to develop qualifying payment amounts (QPAs), which reflect the median in-network (INN) rate for these services. 

NSA’s penalty for payer non-compliance is $100 per affected member per day of non-compliance. Additionally, issues with QPAs can be detrimental for the payer in the Independent Dispute Resolution (IDR) process, in which an arbiter considers the QPA when validating provider payments. Compliance, however, requires careful application of complex IFR requirements to real-world network contracting and reimbursement practices. 

QPA calculation / maintenance challenges for payers 

Calculating QPAs is a complex, multi-layered process, which often requires interpretation of compliance that considers plan-specific contracting terms. A health plan must select and/or derive comparable rates from which to calculate a median contracted rate. 

Rates utilized to calculate QPAs must have the same set of defining components, which include the procedure code, the specialty of the provider rendering the service, the geographic location of the provider, the service category (outpatient setting, physician office setting, etc.), and insurance market (for example, employer group or individual plans). 

Complexities of the QPA calculation process include: 

• Treatment of percent-of-charge rates (where a per code rate depends on claim-specific charges) 
• Applying claim-level case rates to service line-level codes (e.g., CPT codes) appropriately 
• Definition and construction of unique contracted entity rates and terms 
• Ensuring QPA completeness across service codes for all MSAs, market segments, specialties, etc., while complying with rate sufficiency rules