The implementation of the No Surprises Act (NSA), effective from January 1, 2022, has prompted many healthcare providers to reevaluate their billing practices and payer relationships. A key aspect of the law is understanding the concept of the qualifying payment amount (QPA) and how it influences billing and payment processes. This guide explores the essential questions surrounding the QPA and offers insights for physicians and healthcare organizations navigating the new regulations.
Many providers are considering whether to participate in payer networks or operate out-of-network. Contracting directly with payers (going in-network) often simplifies compliance with the NSA’s notification requirements. Conversely, staying out-of-network means providers risk not notifying patients about their out-of-network status, which could result in losing the ability to balance bill. Instead, providers must accept the QPA as the basis for payment, as outlined in Part 1 of the NSA. Understanding how the QPA functions is crucial for making informed operational decisions.
What Is the QPA?
Q: What exactly is the QPA?
A: Broadly, the QPA represents the median contracted rate that a payer offers for a specific health service or item. It serves as a benchmark to determine the maximum amount that insurers will consider for provider reimbursement when applying balance-billing protections under the NSA. Essentially, the QPA reflects what payers generally consider a fair market value for a service, factoring in the typical contracted rates.
Interestingly, the QPA can sometimes be higher than what the provider has negotiated directly with the payer. In some instances, providers who have not successfully negotiated higher rates may remain out-of-network, yet the NSA’s QPA considers the higher contracted rates obtained by larger, more influential practices. As a result, smaller practices might find that the QPA exceeds their actual negotiated rates, impacting their reimbursement expectations.
How Is the QPA Calculated?
Q: How is the QPA determined?
A: The calculation involves identifying the median of all contracted rates for the same or similar services across different health plans within a specific geographic area. It considers the rates for providers with comparable specialties performing similar procedures in the same region. This median rate provides a standardized basis for payment calculations, ensuring consistency across different payers and services.
What Happens If the Physician’s Bill Is Less Than the QPA?
Q: What if the amount I bill is less than the QPA?
A: In such cases, the patient’s cost-sharing is generally based on the lower of the billed amount or the QPA. This means that if a provider’s charge is below the median contracted rate, the patient’s out-of-pocket costs are calculated from the lower figure, potentially reducing the provider’s reimbursement and patient expenses.
How Is the QPA Applied to Non-Fee-For-Service Payments?
Q: What about payments under bundled or capitated arrangements?
A: For arrangements where payments are bundled or involve full or partial capitation, the QPA methodology offers an approach to estimating a median contracted rate. This ensures that even in non-traditional payment models, providers receive a fair and consistent compensation amount. For more detailed guidance, refer to the CMS presentation (slide 16) on this topic.
How Are Unit-Based Services Handled?
Q: How does the QPA apply to unit-based services like anesthesia or air ambulance?
A: Specific rules have been established for these types of services to account for their unique billing and delivery models. These rules aim to fairly determine the QPA for services that are billed per unit, which can differ significantly from standard fee-for-service calculations. Details can be found in the CMS presentation (slides 17-20), providing clarity for providers managing these complex services.
How Is the QPA Determined for New Service Codes?
Q: What about new or substantially revised service codes introduced after 2019?
A: For newly created or significantly revised service codes, the QPA is determined based on related existing codes’ rates. CMS provides specific guidance (slides 30 and 31) on how to use data from similar or related codes to establish a fair QPA for these innovative or revised services.
Two critical questions for providers include:
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What are the QPAs for my most frequently billed items if I don’t notify patients of my out-of-network status? The July 2021 interim final rule requires insurers to disclose the QPA for each initial payment or denial notice, helping providers understand the expected reimbursement levels.
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How does the QPA compare to rates I could negotiate directly with payers? Determining whether participating in a network makes financial sense involves analyzing whether the QPA-based payments or negotiated rates are more advantageous.
If you seek guidance on how these regulations impact your practice or healthcare organization, consulting with legal and billing experts, such as those at Rivet Health Law, can be invaluable. To delve deeper into how social structures influence healthcare policies, you might explore the core functions of social institutions in society, which can provide context for regulatory developments.
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