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Court strikes down surprise-billing QPA rate rules for insurers
The Fifth Circuit said “ghost rates” and bonus-based calculations were improperly used in the QPA framework, while allowing insurers to keep excluding single-case agreements.
A federal appeals court has ruled that two key surprise-billing rate rules are unlawful, prompting a rework of the way health insurers calculate the qualifying payment amount, or QPA, used in No Surprises Act disputes, according to Insurance Business.
The Aug. 11, 2026 ruling by the Fifth Circuit Court of Appeals, sitting en banc, was made in a case brought by the Texas Medical Association, air ambulance operators, and three federal agencies including the Departments of Health and Human Services, Labor, and Treasury.
At the center of the decision were “ghost rates,” default service fees insurers included even when the out-of-network provider did not perform those services, sometimes at $0 or $1. A July 2021 rule required those rates to be fed into the QPA, but the court said that approach violated the No Surprises Act because the QPA must be tied to services “provided by a provider.”
The court also rejected a method that excluded bonus and incentive payments from the QPA, ruling instead that the statute’s “total maximum payment” language encompasses the whole payment, including bonuses. It allowed insurers to continue excluding one-off “single-case agreements,” and noted provider avoidance of insurance network participation alongside aggressive collection practices has been described as a business strategy in some air ambulance services.