Part I of the Requirements Related to Surprise Billing require cost-sharing amounts for emergency services provided at nonparticipating emergency facilities or by nonparticipating providers or non-emergency services provided by nonparticipating providers at participating facilities to be based on the lesser of the billed charge or the Qualifying Payment Amount (QPA) where an All-Payer Model Agreement under section 1115A of the Social Security Act or a specified state law does not apply. Cost-sharing amounts for non-participating air ambulance providers are also based on the lesser of the billed charge or the QPA.
What is the QPA?
The QPA is typically the median contracted rate as of January 31, 2019 for the same or similar item or service that is provided by a provider in the same or similar speciality in the same geographic region. “The median contracted rate 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.”[1] “In general, the median contracted rate for an item or service is calculated by arranging in order from least to greatest the contracted rates of all plans of the plan sponsor (or of the administering entity, if applicable) or all coverage offered by the issuer in the same insurance market” for the same or similar services in the same geographic region “and selecting the middle number.”[2]
A “contracted rate” is defined as “the total amount (including cost-sharing) that a group health plan or health insurance issuer has contractually agreed to pay a participating provider, facility, or provider of air ambulance services for covered items and services, whether directly or indirectly, including through a third-party administrator or pharmacy benefit manager.”[3] Single case agreements and other ad hoc arrangements are expressly excluded from the definition of “contracted rate.”
How is the QPA calculated for self-insured plans that contract with third-party administrators?
According to Part I, plan sponsors are permitted “to allow their third-party administrators to determine the QPA for the sponsor by calculating the median contracted rate using the contracted rates recognized by all self-insured group health plans administered by the third-party administrator (not only those of the particular plan sponsor).”[4]
How is the geographic region defined?
“[F]or items and services other than air ambulance services, a geographic region is generally defined as one region for each metropolitan statistical area (MSA) in a state and one region consisting of all other portions of the state. The delineations for MSAs are described by the U.S. Office of Management and Budget (OMB) and published by the U.S. Census Bureau.”[5] The delineations can be found here.
For air ambulance services, “a geographic region means one region consisting of all MSAs in the state, and one region consisting of all other portions of the state.”[6]
How are same or similar service and specialty defined?
Part I defines “same or similar item or service” as “a health care item or service billed under the same service code, or a comparable code under a different procedural code system” such as CPT, HCPCS and DRG codes and any modifiers.[7]
Part I defines “provider in the same or similar specialty” “as the practice specialty of a provider, as identified by the plan or issuer consistent with the plan’s or issuer’s usual business practice.”[8]
Why is the QPA important?
Part II of the Requirements Related to Surprise Billing establishes a rebuttable presumption that the offer submitted to the Independent Dispute Resolution entity that is the closes to the QPA is the appropriate payment amount.
Also, as set forth above, the QPA may be the basis for determining the cost-sharing amount. Plans and issuers are required to calculate the cost-sharing amount using the “recognized amount, rather than the amount the plan or issuer ultimately pays” the nonparticipating provider or facility.[9] “The ‘recognized amount’ is: (1) An amount determined by an applicable All-Payer Model Agreement under section 1115A of the Social Security Act; (2) if there is no applicable All-Payer Model Agreement, an amount determined by a specified state law; or (3) if there is no applicable All-Payer Model Agreement or specified state law, the lesser of the amount billed by the provider or facility or the QPA.”[10]
The “recognized amount” is not used for determining the cost-sharing amounts for air ambulance services. Instead, the cost-sharing amounts are based solely on the lesser of the amount billed by the air ambulance provider or the QPA.[11]
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[1] Federal Register, Vol. 86, No. 131, 36888.
[2] Id. at 36889.
[3] Id.
[4] Id. at 36890.
[5] Id. at 36892.
[6] Id. at 36893.
[7] Id. at 36891.
[8] Id.
[9] Id. at 36884.
[10] Id. (emphasis added).
[11] Id.