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Understanding Indexing Factors for Surprise Billing: What Group Health Plans Must Know
With updated QPA indexing factors under the No Surprises Act for 2026, group health plans need precise action plans to avoid surprise billing snafus.
By NomadicTax Research Team • 5-8 min read • November 18, 2025
## What Are Qualifying Payment Amounts (QPA)?
The **No Surprises Act** protects patients in certain out-of-network emergency or surprise medical scenarios by limiting what health plans and insurers can charge. One critical concept is the “Qualifying Payment Amount” (QPA): the median in-network rate paid by an insurer for a given item or service. Cost-sharing and balance-billing protections hinge on accurate QPAs. ([irs.gov](https://www.irs.gov/irb/2025-47_IRB?utm_source=openai))
## Notice 2025-65: Key Changes for 2026 • Employee Plans • Health Insurance Issuers
Notice 2025-65 (IRB 2025-47, Nov 17, 2025) sets forth the **indexing factors** health plans and insurers must use to calculate QPAs for services provided on or after **January 1, 2026**, up to December 31, 2026. These factors correspond with those required by the law’s implementing regulations (Treas. Reg. § 54.9816-6T and others). ([irs.gov](https://www.irs.gov/irb/2025-47_IRB?utm_source=openai))
## Implications for Health Plans, Insurers & Employers
- **Network reimbursement analyses**: Plans must update internal benchmarks to apply the indexed multiplier or percentage.
- **Contract adjustments**: Agreements with providers often include rate schedules tied to median in-network rates; these clauses need review to ensure they align with indexed expectations.
- **Member cost-sharing and estimates**: Member communications around estimates or explanations of coverage should reflect QPAs correctly so surprise billing transparency is maintained.
## Example: Applying the Indexed QPA Increase
Suppose for a cardiac procedure, last year’s median in-network payment was $2,000. If the indexing factor for 2026 is 5% (hypothetical), then the QPA for that procedure in 2026 would be **$2,100**. All cost sharing, co-insurance, and balance billing limits in “surprise” cases would center around that $2,100 figure. Providers cannot charge patients more than allowed if they don’t give advance notice, etc.
## Action Plan for Entities That Must Comply
1. **Identify the applicable regulated survival rules** under NSA for your plan type (ERISA, the PHS Act, etc.).
2. Pull together data on your current median in-network rates by service type.
3. Apply the IRS-provided indexing increases for 2026 as per Notice 2025-65.
4. Update provider contracts, member materials, and provider directories before January 1.
5. Monitor IRS bulletins for any corrections or amendments.
## Why This Matters to Beneficiaries & Digital Nomads
For patients traveling across state lines or premiums covering long-distance coverage, surprise bills are growing concerns. The indexed QPA ensures that cost protections keep pace with inflation—especially for nomadic or remote workers who may receive services in less familiar health networks.