Compliance
No Surprises Act Indexing: What the QPA Update for 2026 Means for Cost Sharing
The IRS has released new indexing factors for qualifying payment amounts (QPAs) effective January 1, 2026, which could meaningfully impact cost sharing under surprise billing protections.
By NomadicTax Research Team • 5-6 min read • November 16, 2025
## What’s the QPA Update Under the No Surprises Act?
Notice 2025-65, published in Internal Revenue Bulletin 2025-47, sets out the updated **Qualifying Payment Amount (QPA)** indexing factor to use for medical items or services furnished between **January 1, 2026 and December 31, 2026**. This amount is the benchmark for determining patient cost sharing in certain balance-billing situations under the No Surprises Act. ([irs.gov](https://www.irs.gov/irb/2025-47_IRB?utm_source=openai))
### Key details
- The QPA uses median rates for certain items/services in prior years, adjusted for consumer price index (CPI) changes. ([irs.gov](https://www.irs.gov/irb/2025-47_IRB?utm_source=openai))
- Notice 2025-65 replaces earlier notices (2022-11; 2023-4; 2024-1; 2025-12) with this new inflation-adjusted factor. ([irs.gov](https://www.irs.gov/irb/2025-47_IRB?utm_source=openai))
- Effective date is **January 1, 2026**. ([irs.gov](https://www.irs.gov/irb/2025-47_IRB?utm_source=openai))
## Why This Matters for Patients & Health Plans
- Determines what providers and insurers believe is a “qualifying payment,” which then affects what cost sharing (deductibles, co-pays) you’ll be responsible for when surprise bills apply. Balanced billing protections rely on QPA for fairness.
- If your insurer or plan uses broad networks or out-of-network providers, you may see changes in what you pay when a surprise bill triggers cost-sharing based on the QPA.
## What Employers and Plan Administrators Should Do
- **Review 2026 plan designs**: Ensure patient cost sharing tables align with new QPA factors. Adjust benefit summaries if necessary.
- **Communicate with employees**: For plan years starting in 2026, explain how surprise billing protections work and how cost sharing may change if services are billed using the QPA calculation.
- **Check provider contracts**: Especially if out-of-network providers are involved; contract reimbursement expectations might need renegotiation.
## Example Illustration
Jane has a major surgery unexpectedly while traveling. She thought she was covered, but the provider was out-of-network. Under the No Surprises Act, Jane’s cost sharing (what she pays out of pocket) is calculated using the QPA for that service. With the updated 2026 QPA, Jane’s portion could be higher or lower depending on inflation in medical service rates. Plan administrators need to update cost sharing tables to avoid under- or over-charging employees.
## Best Practices for 2026
| Action | Who’s Responsible | By When |
|---|---|---|
| Assess existing plan documents & disclosures | HR / Compliance teams | Q4 2025 |
| Update summary of benefits & coverage | HR / Legal | Before open enrollment for 2026 |
| Ensure billing/claims systems use updated QPA values | Healthcare payers & providers | Early 2026 |
| Inform members of any changes to cost sharing expectations | Plan sponsors / Providers | With pre-billing notices or plan materials |
## Bottom Line
Notice 2025-65 subtly but meaningfully updates one of the benchmarks in the surprise billing protection ecosystem. Whether you’re a patient, plan member, employer or healthcare provider, taking action now ensures you're not blindsided by surprise billing cost shares in 2026.