Eliott Dear: The Hidden Cost of QPA — How Carrier-Internal Data Became Federal Law

The No Surprises Act’s Qualifying Payment Amount was designed to be a transparent market benchmark. The implementation produced something different: a federal rate-setting mechanism in which the rate is computed from the rate-payer’s own data and audited by the rate-payer’s own auditors.

Eliott Dear watches the consequences play out daily on Claims Assassins filings. The structural problem is worth naming clearly.

What the Statute Said

The No Surprises Act defined the QPA as the median of in-network rates a carrier had in force for the same service in the same geographic area as of January 31, 2019, indexed forward for medical inflation. The intent, on the face of the text, was to anchor OON dispute awards in transparent market data: what carriers actually pay in-network is what they should pay out-of-network for the same procedure in the same place.

The intent was reasonable. The implementation broke it.

The Carrier-Computes-Carrier-Audits Loop

The Departments of HHS, Treasury, and Labor did not build a centralized QPA database. They delegated the computation to each carrier. Each carrier computes its own QPA per CPT per geographic locality, internally, using its own data, its own methodology choices, and its own audit. The Departments do not see the data. CMS does not see the data. Providers do not see the data. The QPA arrives on the EOB and the ONN as a single number with no audit trail.

That is the conflict of interest. The carrier writes the number that determines what the carrier owes. The carrier audits the carrier. When a provider challenges the QPA in federal IDR, the carrier still controls the underlying data the challenge attempts to attack.

The TMA III Confirmation

In August 2023, the Texas Medical Association filed its third lawsuit against the Departments. The court reviewed the actual QPA computation methodology the carriers were using. The methodology was striking down: carriers had been excluding risk-sharing payments, performance bonuses, and certain capitation-equivalent payments from the median in-network rate calculation — categories of compensation that should have been included by statute.

When the Departments revised the methodology to comply, recomputed QPAs dropped 15-25% across major markets. The downward correction was the size of the original error. The original error favored the carrier. That was not a coincidence; it was the predictable consequence of the carrier-computes-carrier-audits loop.

Why It Persists

The carrier-internal QPA architecture persists for two reasons. First, the Departments lack the data-collection infrastructure to centralize the computation. Building a national in-network rate database would require statutory authority and budget Congress has not appropriated. Second, the political economics favor the carriers: insurer lobbying against centralization has exceeded $130 million across the relevant cycle.

So the loop continues. Each TMA-style lawsuit fixes one exclusion bug. The carriers comply technically. The structural conflict remains.

The State-Regulator Alternative

State IDR systems do not rely on QPA. They anchor awards in FAIR Health UCR data — data compiled by an independent nonprofit from billions of claims across multiple carriers. FAIR Health has its own methodology debates, but it does not have the conflict-of-interest problem of carrier-internal computation. That is why state IDR awards consistently land above federal IDR awards on the same fact pattern.

Eliott Dear and Claims Assassins file state IDR for exactly this reason: the benchmark is not the carrier’s own number.