In December 2020, Congress passed the No Surprises Act with the intent of protecting patients from surprise medical bills and lowering health care costs. Delivering on the law’s cost-savings goal centers on a wonky, but critically important, payment methodology known as the QPA, or qualifying payment amount.
The QPA, is the median of a health plan’s in-network, contracted rates for a specific service in a geographic region within the same insurance market. Congress spent a lot of time and legislative text reinforcing the importance of the QPA as the primary and overriding criteria in determining final payments as part of an arbitration process. Policymakers did that for one very important reason: patients’ cost-sharing – specifically out-of-pocket costs – is ultimately tied to the QPA amount. You can read more about the QPA and patient cost-sharing here.
Unfortunately, out-of-network providers and private equity firms are pushing for a more expansive and wide-reaching arbitration process where the final payment decisions would be based on a broader set of considerations. This is effectively gaming the arbitration system in a way to increase out-of-network providers’ bottom lines.
As the Biden Administration moves forward with developing new rules for implementing the No Surprises Act, it’s mission-critical that regulations prioritize the QPA as the main consideration in the IDR process. Leading policy experts, patient and consumer advocates, union leaders, employers and health insurance providers have all voiced strong support for that very position:
- “If anything, the text of the law offers clues that lawmakers assumed that the qualifying payment amount would play a central role in shaping arbitration outcomes. Notably, the law devotes hundreds of words to specifying precisely how to calculate the qualifying payment amount but says nothing about how to measure the other factors that must be considered in arbitration.” (Matthew Fiedler, Benedic Ippolito, and Loren Adler, USC-Brookings Schaeffer on Health Policy)
- “Seeking to anchor the arbitration process to the qualifying payment amount is also consistent with Congress’ overall approach in drafting the No Surprises Act … Additionally, where patients are responsible for coinsurance, the law directs that it be calculated based on the qualifying payment amount. Finally, the law further emphasizes this metric by requiring arbitration decisions to be publicly reported in relation to the relevant qualifying payment amount.” (Matthew Fiedler, Benedic Ippolito, and Loren Adler, USC-Brookings Schaeffer on Health Policy)
- “When payment amounts selected by arbitrators are higher than in-network rates, it can raise spending in two ways: it can raise the cost of the out-of-network service if the payer previously limited its payment to the in-network rate, or it can lead to higher in-network rates in future contract negotiations if providers see that they can receive more out of network. Arbitrator decisions that are reasonably close to median in-network rates should avoid these scenarios, making an inflationary impact less likely.” (Kevin Lucia and Jack Hoadley, Georgetown University)
- “While the No Surprises Act removes patients from the middle of payment disputes, there are several provisions of the law that could lead to undue costs and financial harm for consumers and families if implemented in a way that incentivizes out-of-network providers to pursue excessive inflationary charges…Congressional intent can only be honored by drafting regulations that make the qualifying payment amount (QPA), on which patient cost-sharing is based, the primary factor in resolving payment disputes.” (U.S. PIRG, AFL-CIO, Families USA, and more than 40 other leading employer organizations)
To learn more about the importance of limiting arbitration, click here.