FAQ Addresses Enforcement Discretion for Plan Compliance Under Certain No Surprises Act Provisions

Why It Matters

The clarification shields health‑plan sponsors and providers from immediate penalties, preserving operational stability while litigation resolves, but it also signals that future compliance requirements could shift dramatically.

Key Takeaways

• CMS maintains discretion for 2021 QPA calculations.
• Litigation in Texas Medical Association v. HHS ongoing.
• Plans can avoid penalties using 2021 methodology.
• Providers, including air‑ambulance, also covered by discretion.
• Enforcement stance may shift after court resolution.

Pulse Analysis

The No Surprises Act, enacted 2020, aims to protect patients from unexpected medical bills. Central to the law is the qualifying payment amount (QPA), which determines cost‑sharing limits for out‑of‑network services. CMS originally adopted a 2021 methodology for calculating QPAs, but a federal court in Texas Medical Association v. HHS challenged that approach, arguing it exceeds statutory authority. In response, CMS, together with Labor, Treasury, and OPM, issued a joint FAQ on April 1 clarifying that it will continue to exercise enforcement discretion while the litigation proceeds. The FAQ emphasizes that agencies will not penalize plans or providers that rely on the contested formula, providing short‑term regulatory certainty for the industry.

For health‑plan sponsors, the FAQ means they can keep using the 2021 QPA formula without fearing automatic penalties, preserving administrative stability and avoiding costly system overhauls. This temporary reprieve reduces legal exposure and budgeting uncertainty, but participants must still monitor the evolving case law to ensure compliance once the courts issue a final ruling. Many insurers are already updating internal compliance dashboards to flag any QPA‑related billing that could trigger future audits, ensuring they remain agile if the methodology changes.

The discretionary posture is unlikely to be permanent. Should the court invalidate the 2021 methodology, CMS will be forced to adopt an alternative calculation, potentially reshaping network contracts and reimbursement rates across the industry. Stakeholders should therefore develop contingency plans, such as updating claims‑processing engines and renegotiating provider agreements, to accommodate a new QPA framework. Keeping abreast of CMS guidance and court developments will be essential for mitigating financial risk and maintaining patient‑centered billing practices. A shift in QPA calculations could also ripple into premium pricing, as carriers adjust cost projections to reflect new out‑of‑network payment expectations.