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What Is QPA?

The No Surprises Act introduces a new term called the Qualifying Payment Amount, or QPA, and defines it as the plan’s median contracted rate — the middle amount in an ascending or descending list adjusted for market consumer price index in urban areas (CPIU). 

How is the QPA used?

There are two uses for the QPA. First, it is a primary factor – perhaps the primary factor — that will be considered during the arbitration process if a provider does not agree with the payor’s initial payment, negotiations are unsuccessful and the Independent Dispute Resolution process is invoked.  Second, the Act also introduces a new value called the Recognized Amount (RA).  The RA is the basis for determining member cost share.  It is equal to the QPA or billed charges (if lesser than QPA) for self-insured plans, and for insured plans underwritten in states with no surprise billing protections (for insured plans underwritten in states with a payment standard, the state payment standard is the basis for determining member cost share). This means ERISA and select insured plans may no longer always determine the member cost share based on the allowed amount.

Considering QPA in your initial payment strategy

Because the QPA has such a significant influence on the arbitration process, it should be considered in the payor’s initial payment strategy.  It is important to note that the No Surprises Act does not require the plan to reimburse the provider using the QPA. In fact, the Act does not define how the payor determines the allowed amount, which means any out-of-network cost management and reference-based pricing programs already in place could remain in place. Using those or different services, payor’s reimbursement could be at, above or below the QPA. Either way, unless the payment is made using a complementary network contract or pre-payment negotiation, the outcome will have implications for post-payment negotiation and arbitration.