Out-of-network pay benchmark takes effect 2028

Summary#

The Lower Premiums, Faster Payments Act would amend the Public Health Service Act, the Internal Revenue Code, and the Employee Retirement Income Security Act. It would change how private health plans set out-of-network payments for certain surprise medical bills starting in 2028. Its stated aim is to adjust surprise-billing rules; the title’s promise of lower premiums and faster payments is not a guaranteed result.

  • For services furnished before January 1, 2028, the bill keeps the existing independent dispute resolution process available under the time limits in the amended laws.
  • For services furnished on or after that date, the bill makes the qualifying payment amount (QPA, a plan’s benchmark payment amount) the out-of-network rate, replacing that dispute process.
  • For 2028, the QPA would generally be based on 2019 contracted rates, adjusted for inflation through 2027. For 2029 and later, it would generally rise with inflation from the prior year.
  • New plans or coverage without 2019 rates would use a rate-setting method established by federal rules, then adjust the amount for inflation in later years.
  • Federal agencies must update the rules within 180 days after enactment and conduct annual audits using claims data from at least 25 plans or insurers. Audit findings must be made public beginning in 2028.
  • The bill bars court review of the rules’ methodology for determining the QPA. For certain bills where the QPA is the out-of-network rate, payment must be made within 30 days after the bill is sent.

What it means for you#

  • Patients: The bill changes payment rules between health plans and providers. It does not directly change patient cost-sharing rules or create a new patient benefit in the text provided.
  • Providers and facilities, including air ambulance providers: For covered services furnished from 2028 onward, the bill removes the independent dispute process and sets the QPA as the out-of-network rate. For certain bills where that rate applies, payment is due within 30 days after the bill is sent.
  • Health plans, insurers, and plan sponsors: They would have to calculate QPAs under updated federal rules. The bill also covers plans and coverage that did not exist in 2019.
  • Federal agencies: They must update the rules and conduct annual audits. The bill does not set out a case-by-case review or appeal process for providers.
  • Taxpayers: The text requires federal rulemaking and audits but does not give a cost estimate.

Money#

No cost information is in the available material.

  • The bill requires updated federal rules and annual audits, but provides no cost estimate or funding amount.
  • Plans and insurers would have to calculate QPAs under the new method. The bill gives no estimate of those costs.
  • The bill does not set premiums, taxes, or fees, and does not estimate how the changes would affect premiums or payments.

What is unclear#

  • The current versions of the three amended laws were not supplied, so the full current rules and the exact baseline for these changes could not be verified.
  • The bill does not show how much the new QPA method would change payment rates, premiums, or providers’ revenue.
  • Federal rules must set the rate method for plans or coverage without 2019 rates. The details are not in the bill.
  • The bill does not explain how providers can challenge an individual QPA after the dispute process ends, or how the audit sample would be selected.
  • Passage is uncertain: the bill was introduced and referred to House committees, and is not law.

Case for#

  • A possible argument for the bill is that replacing disputes over individual payments with a set benchmark could make payment amounts more predictable.
  • Requiring payment within 30 days in certain cases could speed payment to providers.
  • The bill requires audits and public reporting of findings, which could help show whether plans are following the rules.
  • Using inflation adjustments gives the benchmark a defined update method after 2028.

Case against#

  • Providers would lose the independent dispute process for services from 2028 onward, even if they disagree with the QPA.
  • One concern is that a benchmark based on 2019 contracted rates plus inflation may not match later local rates or the costs of a particular service.
  • The bill bars court review of the QPA methodology, limiting one route to challenge how the federal rules set that benchmark.
  • It is unclear whether audits of claims data from at least 25 plans or insurers would identify problems across the wider market.