The qualifying payment amount (QPA) is the number most out-of-network payment disputes revolve around. Payers often pay at or near it. Providers often dispute it. Understanding how it’s built, and what it doesn’t account for, is essential to both open negotiation and federal IDR.
What the QPA is
In general terms, the QPA is the plan’s median contracted rate for the same or a similar item or service, provided by a provider in the same or a similar specialty in the same geographic region. It is calculated from the plan’s 2019 contracted rates and adjusted for inflation each year.
Put simply, the QPA reflects what this plan pays its in-network providers, as a median, for this kind of service in this area.
What the QPA is used for
- Patient cost-sharing. Where no state law or All-Payer Model applies, the patient’s cost-sharing for a protected service is generally based on the recognized amount, which is usually the lesser of the QPA and billed charges.
- The plan’s initial payment. Many plans set their initial out-of-network payment at or near the QPA.
- Federal IDR. The IDR entity must consider the QPA when choosing between the two offers.
What plans must disclose
With the initial payment or notice of denial, the plan must give the QPA for each item or service involved. It must also state that each QPA was calculated in line with the rules. On request, the plan must provide additional information about how the QPA was determined.
If a remit arrives without a QPA, or the QPA looks inconsistent with the service billed, raise it in writing during open negotiation.
Why the QPA isn’t the final word
The statute tells IDR entities to consider the QPA and additional information submitted by the parties, including:
- the provider’s level of training, experience and quality and outcomes measurements,
- the market share held by the provider or the plan in the geographic region,
- the acuity of the patient or the complexity of the service,
- the teaching status, case mix and scope of services of the facility, and
- good-faith efforts (or the lack of them) by either party to enter a network agreement, and any contracted rates between the parties over the previous four plan years.
Early federal rules instructed IDR entities to begin from a presumption that the QPA was the right amount. Courts vacated those provisions in litigation brought by the Texas Medical Association. Today, IDR entities must weigh the QPA alongside the additional factors rather than defer to it. Parts of the QPA calculation methodology have also been challenged in court.
What the IDR entity may not consider
The statute bars IDR entities from considering:
- usual and customary charges,
- the provider’s billed charges, and
- public payer rates, such as Medicare, Medicaid, CHIP and TRICARE.
An offer that rests on billed charges or Medicare multiples isn’t building on anything the arbitrator can use.
Practical takeaways
- Record the QPA from every remit. It’s the baseline you’re arguing against.
- Build the offer on the permitted factors. Complexity, acuity, credentials and negotiation history are what move an arbitrator.
- Document good-faith contracting efforts. If you’ve tried to go in-network with this payer and been refused, that’s relevant evidence.
- Ask for the calculation if it doesn’t add up. A QPA that seems low for the specialty or region is worth questioning.
This guide is general information, not legal advice. Confirm current requirements at cms.gov/nosurprises.