Article
What the court decided
On Aug. 11, the U.S. Court of Appeals for the Fifth Circuit, sitting en banc, ruled in Texas Medical Association v. HHS, the third TMA challenge to the surprise billing rules. The court affirmed parts of a lower-court judgment that vacated rules on how health plans calculate the qualifying payment amount, or QPA. The QPA is a plan’s median contracted rate for a service in a given region and market, and it is one of the factors arbiters weigh in independent dispute resolution.
Two findings matter most for hospitals and physician groups:
- Ghost rates are out. Plans may no longer include contracted rates for services a provider never actually delivers. Those rates can pull the median down without reflecting what the market pays.
- Incentives count. Bonuses and incentive payments must be included in the rates used to calculate the QPA.
The court did not vacate every challenged provision. It upheld the rule that keeps one-off single-case agreements out of the contracted rates used in the calculation. The opinion also noted that the agencies can use enforcement discretion while new QPAs are calculated.
What happens next
In a statement on Aug. 13, CMS said the departments and the Office of Personnel Management are reviewing the decision and expect to issue guidance soon. CMS also said the federal dispute resolution process remains open. Until guidance arrives, it is unclear how quickly plans must recalculate QPAs or whether the change applies to disputes already in progress.
Why it matters to hospital finance
For many out-of-network emergency and ancillary services, the QPA anchors the initial payment and the arguments in arbitration. If ghost rates have been depressing those figures, recalculated QPAs could raise initial payments and strengthen provider positions in disputes. The size of the effect will vary by plan and specialty.
The ruling is also a reminder that the rules behind surprise billing payments are still in flux, so revenue cycle teams should expect further changes to processes and deadlines.
Steps to take now
- Inventory open disputes. List pending payment determinations and note which rely on QPAs you consider suspect.
- Request disclosures. Use your right to ask plans how they calculated the QPA, and keep the responses on file.
- Track your own data. Compare plan QPAs against your contracted rates by payer and service to spot outliers.
- Coordinate with employed and contracted groups. Emergency, anesthesia, radiology and pathology partners may benefit most and should align on strategy.
Archive entry for Aug 14, 2026, added Nov. 11, 2026.