The Qualifying Payment Amount (QPA), Explained

What is the qualifying payment amount?

The QPA is the amount a health plan or insurer calculates, under 45 CFR 149.140, from its own contracted rates with in-network providers. Section 149.140(a)(16) defines it as the amount calculated using the methodology in paragraph (c) of that section.

In plain terms, the payer takes the middle value of what it has agreed to pay in-network providers for the same service, adjusts it for inflation, and that result is the QPA. It does not come from your charges, from Medicare rates or from what you were paid last year.

The QPA does two jobs. First, in a state with no specified state law, the recognized amount for items and services from nonparticipating providers and facilities is the lesser of the QPA or the billed amount (45 CFR 149.30). The patient's cost sharing is calculated from that recognized amount. Second, the QPA is a required reference point when an out-of-network payment goes to federal IDR.

How does a payer calculate the QPA?

A payer calculates the QPA by finding the median contracted rate for the item or service on January 31, 2019, then indexing it forward by CPI-U each year. Section 149.140(b) governs the median and section 149.140(c) governs the indexing.

Step 1: collect the contracted rates

Under 45 CFR 149.140(b)(1), the payer arranges the contracted rates from least to greatest and picks the middle number. If there is an even number of rates, it averages the middle two. The set of rates is limited to the same or similar item or service, a provider in the same or similar specialty (or a facility of the same or similar type), the geographic region where the service was furnished, and the same insurance market.

Step 2: apply the calculation rules

Section 149.140(b)(2) requires the payer to compute the median on the full contracted rate for the service code, with set exceptions. It must calculate separate medians for CPT modifier 26 (professional component) and modifier TC (technical component). Where rates change by modifier, it calculates one median per code and modifier combination.

For payments that are not fee-for-service, such as bundled or capitated payments, the payer uses underlying fee schedule rates, or a derived amount if it has none (149.140(b)(2)(iii)). Anesthesia uses a median conversion factor, which the payer multiplies by base, time and physical status units (149.140(c)(1)(iii) and (iv)).

Step 3: index to the service year

For services furnished in 2022, the payer increased the 2019 median by the combined CPI-U increase for 2019, 2020 and 2021. For 2023 and later years, it takes the prior year's QPA and raises it by the CPI-U percentage increase for the year (149.140(c)(1)(i) and (ii)).

What is the QPA when the payer has no 2019 rate?

When a payer lacks enough 2019 data, 45 CFR 149.140(c)(3) tells it to use the median of in-network allowed amounts from an eligible database, indexed by CPI-U. Sufficient information means at least three contracted rates on January 31, 2019 (149.140(a)(15)(i)).

An eligible database is a state all-payer claims database, or a third-party database that is not owned by an insurer or provider, has enough in-network data for the region and can separate commercial in-network payments from other claims (149.140(a)(3)). The payer pays for database access (149.140(e)). Once it picks a database for an item or service in a calendar year, it must use that database through the end of that year (149.140(c)(3)(i)). For a new service code, the payer finds a reasonably related older code and applies a ratio (149.140(c)(4)(i)).

If your claim is for a service with no clear in-network history, ask the payer which route it used. Section 149.140(d)(2) requires it to identify the database on request.

What must the payer disclose with the initial payment or denial?

Under 45 CFR 149.140(d)(1), the payer must send the QPA in writing with each initial payment or notice of denial of payment, whenever the recognized amount is the QPA or the billed amount. The statement can be on paper or electronic, and it covers each item or service involved.

The rule adds that, for disclosures required on or after the later of August 3, 2026 and the date the open negotiation notice can be submitted through the federal IDR portal, the statement must also tell you to notify the Secretary under 149.510(b)(1)(i). That is the payer telling you what to do. The steps themselves are on the open negotiation page.

How do I request the QPA calculation details from a payer?

Ask the payer in writing for the items 45 CFR 149.140(d)(2) lists. The payer must provide them in a timely manner on request, and the rule gives no fixed number of days.

• Whether the QPA used contracted rates that were not fee-for-service, and whether it used underlying fee schedule rates or a derived amount.
• Which eligible database was used, if the payer used one.
• The related service code, if the payer used one for a new service code.
• If applicable, a statement that its contracted rates include risk-sharing, bonus, penalty or other incentive-based or retrospective payments that were excluded from the QPA.

Keep the request and the reply in your claim file. Our post on how to request QPA calculation details covers the request in more detail.

What did the courts decide about the QPA method?

On August 11, 2026, the full Fifth Circuit held in Texas Medical Association v. HHS, No. 23-40605, that parts of the 2021 QPA rule were unlawful. The court said non-negotiated ghost rates and the blanket exclusion of bonus and incentive payments could not stand, and it upheld the exclusion of single case agreements.

A ghost rate here means a rate that appears in a payer's contract for a service the provider does not actually perform, or never negotiated. The court's own term is "non-negotiated ghost rates"; the regulation does not use the phrase.

What role does the QPA play in IDR now?

Under 45 CFR 149.510(c)(5)(iii)(A), the certified IDR entity must consider the QPA for the applicable year for the same or similar item or service. The current text then lists other circumstances it must also consider, and it does not tell the entity to start from the QPA or treat it as presumptively right.

This paragraph was numbered (c)(4)(iii) in earlier versions of the rule. The June 4, 2026 final rule redesignated it as (c)(5)(iii). The following is what the text in eCFR said on October 20, 2026, as amended through 91 FR 55468 (August 28, 2026).

The entity must select the offer it determines best represents the value of the qualified IDR item or service, weighing only the listed considerations (149.510(c)(5)(ii)(A)). Its written decision must explain what information showed that the chosen offer best represents value, including the weight it gave the QPA and any additional credible information (149.510(c)(5)(vi)(B)).

The June 2026 final rule says it removed redesignated paragraphs (c)(5)(iii)(E) and (c)(5)(iv) and trimmed the last sentence of (c)(5)(vi)(B) to comply with the opinion and order in TMA II. Paragraph (c)(5)(iv) now reads "[Reserved]".

Each party must also submit its offer as both a dollar amount and the corresponding percentage of the QPA, and must submit the QPA for the applicable year for the same or similar item or service (149.510(c)(5)(i)(A)(1) and (3)(iv)). For the filing steps and deadlines, see the federal IDR process.

How we handle QPA review for out-of-network claims

We treat the QPA as a document to check and file, not a number to accept. Our work on out-of-network reimbursement runs from eligibility assessment through open negotiation, dispute submissions, deadline management, documentation validation and outcome tracking, under federal IDR and applicable state pathways, including Texas TDI.

For each claim we record the QPA the payer sent, compare it with the billed service code and modifiers, and file the disclosure with the claim. We keep deadline tracking and required fees under the same controls as the rest of the dispute. We measure IDR performance by decision win rate, award-to-offer ratio, reimbursement recovered and collections, using verified case-level data.

Our out-of-network billing and IDR service covers the whole workflow. If you want us to review QPAs on your open claims, book a call.