IRS Announces Indexing for Calculating No Surprises Act Qualifying Payment Amount in 2024

Plan sponsors should coordinate with vendors supporting independent dispute resolution and qualifying payment amount calculation to ensure compliance with 2024 calculation guidance.


January 16, 2024

The Internal Revenue Service (IRS) published Notice 2024-01 on December 19, 2023 establishing the indexing factor group health plans and health insurance issuers use to calculate the qualifying payment amount (QPA) under the No Surprises Act for items and services provided on or after January 1, 2024 and before January 1, 2025.

Enacted in December 2020 as part of the Consolidated Appropriations Act, 2021 (CAA ’21), The No Surprises Act prohibits surprise billing for out-of-network emergency care, air ambulance services, and facility-based nonemergency services, while also prohibiting balance billing in circumstances in which surprise bills frequently occur. The QPA is based on the plan’s median in-network contracted rate, adjusted according to rules outlined in regulations and FAQ guidance.

Key Actions

  • Review the IRS guidance for calculating qualifying payment amounts in 2024.
  • Coordinate with vendors supporting independent dispute resolution and qualifying payment amount calculation to ensure compliance with indexed 2024 calculation guidance.

Recently, the Departments of Labor (DOL), Health and Human Services (HHS), and Treasury/IRS (collectively, the Departments) issued FAQs About the Consolidated Appropriations Act, 2021 Implementation Part 62 (FAQs Part 62) in response to a federal district court ruling in one of the many ongoing legal challenges to the No Surprises Act – Texas Medical Association v. United States Department of Health and Human Services, also known as TMA III – in which the federal district court vacated portions of prior guidance for calculating the QPA. For additional insight and context about the TMA III ruling and FAQs Part 62, please listen to the replays of our September 2023 and October 2023 Regulatory & Compliance Update webinars and read our policy newsletter article.

Next Steps

The IRS guidance provided in Notice 2024-01 is effective January 1, 2024 and should be utilized for calculating the QPA under the No Surprises Act for calendar year 2024. Employer plan sponsors should work with the vendors supporting their IDR administration and calculating QPAs on their behalf to confirm appropriate calculations are in place for 2024.

Legal challenges to various aspects of No Surprises Act implementation, including with respect to the QPA calculation methodology, remain ongoing. The federal government filed notice of appeal to the district court’s ruling in TMA III. Business Group on Health continues to advocate with the Departments on behalf of employer plan sponsors with respect to implementation of the No Surprises Act, and the Business Group and other coalition partners are also engaging key Congressional committees as Congress holds hearings related to surprise billing protections. We will continue to keep members informed of regulatory developments as well as future litigation.


More Topics

Articles & Guides icon_right_chevron_dark Surprise Billing icon_right_chevron_dark
More in Policy & Advocacy