What is the Qualified Payment Amount (QPA) and why is there so much controversy surrounding the interim rules announced by the departments with regard to its application in the Independent Dispute Resolution (IDR) process under the No Surprises Act?
As previously written about, the No Surprises Act (NSA) goes into effect for virtually all health plans during 2022 and prohibits balance billing of patients by out-of-network providers for emergency services and, except where proper notice and consent is obtained from the patient, for post stabilization services and services provided by an out of network provider at an in-network facility. Unless the services are subject to a specified State law, the No Surprises Act applies with respect to determining the patient cost-sharing and initial payment made by the payor to an out-of-network provider. The starting point for calculating both the patient cost-sharing and initial reimbursement is based upon the Qualified Payment Amount.
How is the Qualifying Payment Amount Calculated?
The qualified payment amount is calculated based on the median of contracted rates recognized by plan or issuer on January 31, 2019, for the same or similar service that is provided by a provider in the same or similar specialty and provided in a geographic region in which the item or service is furnished, increased for inflation. The QPA is determined with respect to all group health plans of the plan sponsor, or all group or individual health insurance coverage offered by the health insurance issuer that are offered in the same insurance market.
The Median Contracted Rate is arrived at by identifying the relevant market and select the middle number (or average of middle 2) when ordering the list from least to greatest. All contracts are included even if the rate is the same.
The Contracted Rate includes the Total amount (includes cost-sharing) contractually agreed to pay, whether direct or indirect. The calculation is Applied individually to each item or service.
What Factors Affect the Qualifying Payment Amount?
A number of factors need to also be considered when reviewing the calculation of the QPA by a payor to ensure that the QPA is properly calculated. This analysis requires an understanding of the many factors to insure the QPA is not understated by a payor, including the following:
- What is the relevant Insurance Market?
- Is the QPA calculation using the Same or Similar Item or Service code as billed by the out-of-network provider relative to 2019?
- Is the QPA calculation for a Provider in the Same or Similar Specialty?
- Is the QPA calculation based on the same Geographic Region?
- Was the QPA calculation adjusted for inflation since 2019?
- If there were not sufficient contracted rates in the geographic region, what database was used for purposes of calculation the QPA?
- Is the code being billed a new service code or one that was substantially revised since 2019?
What Information Do Payors Need to Share for the QPA?
Payors are required to share information on QPA as part of the initial payment or notice of denial. This information includes:
- Disclosure must identify the QPA for each item/service
- Disclosure must state that QPA serves as recognized amount for cost-sharing and was determined in accordance with IFR. This notice is intended to serve as notice to negotiate under NSA and that the Federal IDR applies.
- Disclosure must state right to negotiate, who to contact and how (phone number and email) and if negotiation not successful, right to IDR.
Upon request, payors must provide other information- either electronically or in writing, to OON. The QPA calculation may be appealed to challenge the payor calculation.
Negotiating Payment Under the No Surprises Act
Under the No Surprises Act, the QPA is intended to serve as the starting point for opening negotiations between the payor and provider. This negotiation period occurs during the 30-business day period following the initiation of negotiation by the payor or provider and can continue during the entire period of any independent despite resolution process.
While the No Surprises Act did not specifically place any emphasis on the QPA as the guiding factor in the independent dispute resolution process, the interim rules adopted by the Biden administration state that the QPA is presumed to be the out-of-network rate unless credible evidence can be presented to overcome the QPA as the proper out of network rate.
This change has resulted in substantial public outcry that the interim rules fall outside the Congressional Intent set out in the No Surprises Act, including (i) over 150 members of the House of Representatives objecting to this part of the interim rules as outside congressional intent as set out in a letter to the Biden administration, (ii) the American Medical Association and over 100 other medical associations and societies objecting to the interim rules in correspondence sent to the Biden Administration and (iii) the filing of a lawsuit in Federal Court in Texas by the Texas Medical Association against the Biden Administration challenging the interim rules on the QPA which is now set for a reported accelerated resolution on or prior to when the first IDR disputes are anticipated to be filed under the No Surprises Act.
How Can Providers Prepare for the No Surprises Act
While the Biden administration has indicated it intends to move forward with the interim rules while also listening to the issues raised, providers need to begin preparing for the changes coming under the No Surprises Act. To that end, providers should be reviewing the following to be best positioned for success under the No Surprises Act:
- All EOBs must be reviewed upon receipt to know a claim pathway
- Understand how State law impacts the claim pathway
- Understand how one claim may have multiple pathways based on services provided
- Review payments made by payors for services rendered in 2019 and forward
- Update information regarding skill level and training relative to peers in the market
- Identify services where unique and special skills were required
- Identify services where patient acuity was severe requiring and services were complex
- Review geographic market and understand providers in market that are of the same skill level and training, including any that may be in-network
- Consider third party network agreements and carve out rates in the geographic market
Contact Cohen Howard For Help Navigating the Federal No Surprises Act
Cohen Howard understands the complexity of the rules under the NSA will required practices to find highly knowledgeable resources either internally or externally that can evaluate and apply the correct law to each claim. Our team has been finding ways to maximize payments rightfully owed to our clients for years using substantive legal and medical arguments and are prepared to help our clients navigate the everchanging regulatory landscape. Call us today to discuss how we can help.
