Ghost Rate Gambit: How Insurers Skew Rad Payments

Summary: Just last week, a federal court ruled that the government’s methodology for crunching QPA is, at least partly, unlawful. However, a majority of the 5th Circuit’s 17 active judges agreed that agencies can allow insurers to use existing QPAs until new ones can be calculated, meaning that NSA’s dispute resolution process can continue unabated.

Reimbursement Check, Mate? A loophole in the implementation of the No Surprises Act (NSA) allows health insurers to use inactive, unnegotiated “ghost rates” to artificially depress reimbursement benchmarks for out-of-network care.

In the second episode of the AJR Podcast Series Difficult Conversations, Richard E. Heller III, MD, MBA, explained to co-hosts Sherry S. Wang, MBBS, and Surbhi Raichandani, MD, how this loophole unfurls:

• Boilerplate: Insurers issue massive, standardized contracts containing thousands of billing codes to every practice they contract with.
• Ignorance: Rads ignore psychiatric codes, while psych or family medicine practices ignore complex MRI and CT scans because they will never perform or bill for those services.
• Paper Tigers: Insurers slip rock-bottom default rates (such as paying 60% of Medicare) into these ignored codes. Because they are signed into contracts but never actually billed, they exist purely on paper.

Median Distortion: The NSA relies on the Qualifying Payment Amount (QPA)—the median commercial rate for a service—to guide out-of-network payment arbitration.

• Artificial Depression: Insurers have been allowed to calculate the QPA using any contracted rate on their books, regardless of how often it is actually billed. Including zero-utilization ghost rates skews the median rubric downward, making that benchmark highly unrealistic.

Black Box Computation: When physicians ask insurers to show the math or the range of contracts used to calculate these low QPAs, amazingly, insurers refuse. Providers are forced to simply take the insurers’ word that the calculations are correct.

• What Oversight? To date, one, singular federal audit of QPA calculations has been publicly known. Not unsurprisingly, it uncovered irregularities.