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Court rules surprise-billing QPA rules unlawful for insurers
The Fifth Circuit said insurers cannot include so-called ghost rates in the qualifying payment amount and must count bonus and incentive payments under the No Surprises Act.
A federal appeals court has ruled that two key surprise-billing rate rules are unlawful, forcing health insurers to rework the way they calculate the qualifying payment amount used in No Surprises Act disputes, according to Insurance Business.
The August 11, 2026 decision by the Fifth Circuit Court of Appeals, sitting as a full en banc panel, centered on the QPA, the benchmark that anchors negotiations when an insurer and an out-of-network provider dispute who pays the balance of a patient bill.
One part of the challenged approach involved “ghost rates,” where insurers provide a form contract with default fees for services the provider may not perform, sometimes as low as $0 or $1, and then those rates were directed into the QPA by a July 2021 rule. The court said that broke the law’s requirement that the QPA tie to services “provided by a provider,” and it said the change contributed to far higher dispute volume and different outcomes in arbitration.
The second challenged rule required excluding bonus and incentive payments from the QPA, and the court disagreed, saying the statute’s “total maximum payment” language covers the full payment including bonuses. The court did allow insurers to exclude one-off “single-case agreements,” and it affirmed in part, reversed in part, and sent the case back to the district court, with Insurance Business noting the rejected provisions were the ones that had held reimbursement figures down for claims teams.