Fifth Circuit Backs Providers in No Surprises Act Case
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- The U.S. Court of Appeals for the Fifth Circuit ruled on Tuesday that the government erred in its instructions for calculating qualifying payment amounts (QPAs) used in No Surprises Act arbitration.
- The decision stems from a 2022 Texas Medical Association lawsuit challenging the government's QPA methodology, which the doctors' trade group argued produced numbers that were unfairly low.
- The court sided with providers on two of three points: QPAs should exclude "ghost rates" (placeholder rates providers don't actually negotiate) and should include bonus and incentive payments.
- Air ambulance providers lost on the third point, with the court ruling that a one-off price for transporting a single patient should not factor into QPAs.
- QPAs represent health insurers' contracted rates for services in arbitration, meaning the partial win could push those benchmark figures higher in future disputes.
Why it matters: This decision gives providers a stronger hand in surprise-billing arbitration, as the court found two key elements of the QPA formula must change — excluding ghost rates and including incentive payments. Air ambulance companies, however, failed to persuade the court to fold one-off transport prices into the benchmark calculation.
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