Compliance
Compliance with the No Surprises Act: QPA Indexing for 2026 and What Employers Must Do
New guidance in Notice 2025-65 updates how the Qualifying Payment Amount (QPA) will be indexed in 2026—fallout for employers and health plans under the No Surprises Act.
By NomadicTax Research Team • 5-8 min read • November 18, 2025
## Background: The Qualifying Payment Amount (QPA)
The No Surprises Act mandates that certain health care cost sharing and balance-billing protections rely on the QPA—a benchmark median rate based on historical contracted rates. QPA determines out-of-network payment disputes and patient cost-sharing. ([irs.gov](https://www.irs.gov/irb/2025-47_IRB?utm_source=openai))
## What’s New: Notice 2025-65 (Employee Plans, Excise Tax Bulletin 2025-47)
On **November 17, 2025**, the IRS issued **Notice 2025-65**, which provides the indexing factors for calculating QPAs for items/services furnished between **January 1, 2026 and December 31, 2026**. It specifies the method for calculating percentage increases using CPI-U averages and provides cumulative adjustments from base years including 2019 onward. ([irs.gov](https://www.irs.gov/irb/2025-47_IRB?utm_source=openai))
## Key Compliance Obligations for Employers & Health Plans
- Use the updated percentage increase (approximately *2.65%*) from 2025 to 2026 when calculating QPAs. ([irs.gov](https://www.irs.gov/irb/2025-47_IRB?utm_source=openai))
- Ensure coverage contracts reflect QPA adjustments for balance billing and cost sharing under the No Surprises Act.
- Maintain records of contracted rates for service items used to determine medians.
- Be consistent: use either cumulative or year-to-year methods as allowed, but apply chosen method uniformly across all QPAs calculated. ([irs.gov](https://www.irs.gov/irb/2025-47_IRB?utm_source=openai))
## Strategic Moves for Employers
- Review provider contracts to assess how existing reimbursement relates to upcoming QPA thresholds. If your historic contracted rates are low relative to market, consider renegotiations before Jan. 1, 2026.
- Coordinate with billing teams to ensure documentation and coding of items/services align with definitions used in QPA calculations (e.g. facility type, specialty, geographic region).
- For self-insured plans, ensure transparency of behind-the-scenes provider network information—these may come under greater scrutiny in QPA disputes.
## Example Scenario
An ERISA‐governed self-insured employer plan had median contracted rate for certain specialist services set in 2019. For 2026, it should multiply that base rate by cumulative percentage increase from 2019 to 2026 (≈1.28× if using the methodology in Notice 2025-65). This rate becomes baseline for benefit design and cost-sharing in compliance with No Surprises Act. ([irs.gov](https://www.irs.gov/irb/2025-47_IRB?utm_source=openai))
## Key Dates & Effective Periods
- **Notice 2025-65** effective **January 1, 2026** through **December 31, 2026** for items/services provided in that period. ([irs.gov](https://www.irs.gov/irb/2025-47_IRB?utm_source=openai))
- Plans must begin using the indexed QPAs for cost sharing and billing disputes starting 2026.
Employers, insurers, and plan administrators should incorporate these changes into compliance checklists now—delays can lead to downstream disputes and financial risk.