IRS Adjusts 2024 Qualifying Payment Amount Calculation Under No Surprises Act

The Internal Revenue Service (IRS) released Notice 2024-01 providing the percentage increase for calculating the qualifying payment amounts (QPAs) for items and services furnished in 2024 under sections 9816 and 9817 of the Internal Revenue Code. These provisions, added by the No Surprises Act, provide protections against surprise medical bills in certain circumstances. The QPA calculation is required in the case of a plan or issuer that does not have sufficient information to calculate the median of the contracted rates for the same or similar item or service provided in a geographic region.

For such an item or service furnished in a subsequent year (before the first sufficient information year for the item or service with respect to such plan or coverage or before the first year for which an eligible database has sufficient information to calculate a rate under 29 CFR 2590.716-6(c)(3)(i), and 45 CFR 149.140(c)(3)(i) in the immediately preceding year), the plan or issuer must calculate the QPA by increasing the QPA amount determined for the item or service for the year immediately preceding the subsequent year, by the percentage increase in the U.S. city average consumer price index (CPI-U) over the preceding year.

The percentage increase in the CPI-U for items and services provided in 2024 over the preceding year is the average CPI-U for 2023 over the average CPI-U for 2022. Pursuant to this calculation, the percentage increase from 2023 to 2024 is 1.0543149339. Plans and issuers may round any resulting QPAs to the nearest dollar.

The guidance provides example calculations for the following:

• Adjusting QPAs based on January 31, 2019 rates.
• Adjusting QPAs based on 2021 rates.
• Adjusting QPAs based on 2022 rates.
• Calculating QPAs when 2024 is the first coverage year.

IRS Notice 2024-01 is effective January 1, 2024.