Benchmark prices under NSA far below actual median rates: Study

The benchmark prices payers use in disputes through the No Surprises Act, or NSA, fall far below actual median in-network payment rates, undermining the law and clinician work, according to a new analysis.

On average, these qualifying payment amounts (QPAs), as they are called under the No Surprises Act, were just a third of the payers' own contracted in-network rates, reported the Americans for Fair Health Care (AFHC), a coalition representing over 70,000 frontline clinicians and healthcare organizations. The analysis performed by NDP Analytics also found that QPAs were frequently inaccurate.

"Our clinicians are fiercely supportive of the patient protections afforded under the NSA, but we continue to see insurers undermine the law," said Eric Berger, AFHC's executive director, in a media statement. "Using inaccurate QPAs drives use of the NSA's arbitration process and adds cost to the health care system."

Congress passed the NSA at the close of 2020 to protect consumers from unexpected and often high medical bills arising from out-of-network care. Payers and providers can use the Independent Dispute Resolution process designed by the law to determine payment for eligible out-of-network care.

A significant factor that independent arbiters in the process use to decide on a payment amount is the QPA.

The use and weight of the QPA have been contested since the implementation of the Independent Dispute Resolution process. The amount is meant to represent the median in-network rate of a service in a particular region. However, providers have argued the validity of the methodology for calculating QPAs, as evidenced by ongoing litigation brought on by the Texas Medical Association.

AFHC's analysis of QPAs used as part of disputes during the fourth quarter of 2024 were lower than the median in-network contracted rates about 61% of the time. The QPAs were compared to actual in-network rates published by payers under the Transparency in Coverage rule.

In these disputes with lower QPAs, the median in-network contracted rate was significantly higher. On average, the rate was nearly 291% higher than the QPA, according to the analysis.

The QPA was frequently lower than the median in-network contracted rate across payers, services and geographies, signaling a widespread issue with the Independent Dispute Resolution Process, researchers explained.

They stated that the QPA methodology could be flawed and not accurately capture the median in-network contracted rates for the present day. However, evidence shows more downward pressure on rates since the passage of the NSA. Alternatively, the ghost rates at the center of the Texas Medical Association's litigation may be artificially deflating QPAs, they explained.

"In this analysis, we removed ghost rates for our median [in-network] contracted rate data by limiting our analysis only to those contracted rates for providers of our relevant taxonomies. This could help explain some of the difference in our findings and would reinforce the importance of the court's findings," researchers wrote.

Payers may also simply be reporting inaccurate or incomplete data, which is then used to determine QPAs, researchers added. They described NSA data as a "black box," particularly since HHS is using enforcement discretion due to pending litigation.

The QPA is not the only factor independent arbiters consider during disputes. However, inaccurate QPAs would drive up the cost of arbitration and incent profit-driving behaviors from payers, the analysis suggested.

The federal government continues to refine the Independent Dispute Resolution process as the number of disputes continues to grow, leading to a major backlog of claims.

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.