The U.S. Department of Health and Human Services (“HHS”), along with several other agencies (the Departments of Labor and Treasury, as well as the Office of Personnel Management), issued an updated “Frequently Asked Question” document on July 30, 2025 (FAQ Set 71) regarding the calculation of Qualifying Payment Amounts (“QPAs”) under the No Surprises Act. These updates are in response to the decision by the U.S. Court of Appeals for the Fifth Circuit’s to grant rehearing en banc and vacate the panel opinion in Texas Medical Association, et al. v. United States Department of Health and Human Services.

FAQ Set 71 emphasizes the need for good faith interpretation of the QPA calculation methodology and explains that HHS would continue to exercise enforcement discretion for issuers and plans that use an earlier QPA calculation method.

Background

The agencies have released several different FAQs regarding the calculation of QPAs in response to the various decisions issued by the U.S. District Court for the Eastern District of Texas and the Fifth Circuit in the Texas Medical Association case.

The Texas Medical Association case involves a challenge to final rules and guidance documents from 2021 and 2022 implementing the No Surprises Act.

In August 2023,  the district court vacated several provisions of the law related to the methodology for calculating QPAs, which led the agencies to issue FAQ Set 62 on October 6, 2023. That document stated the agencies would exercise enforcement discretion with respect to plans or issuers who use the original (now vacated) methodology for items or services furnished prior to May 1, 2024. This discretion was also extended to providers that hold patients liable for the cost-sharing amount based on QPAs calculated using the vacated methodology for items or services furnished prior to May 1, 2024. 

On May 1, 2024, the agencies issued FAQ Set 67, which extended the enforcement discretion further to include items and services furnished before November 1, 2024.

Meanwhile, in October 2024, a three judge panel of the Fifth Circuit partially reversed the district court’s decision with respect to some aspects of the methodology used to calculate QPAs. Thus, in new FAQs issued on January 14, 2025 (FAQ Set 69), HHS and the other agencies stated that they would continue to exercise enforcement discretion with respect to the QPA calculations that use the district-court-vacated methodology (the “2021 methodology”) or the newer methodology that resulted from the district court’s August 2023 opinion (the “2023 methodology”) for items or services furnished before August 1, 2025.

Additionally, FAQ Set 69 explained that the agencies would extend this same enforcement discretion to those plans that attempted in good faith to use the calculation methodology that was left in place after both the district court’s August 2023 decision and the Fifth Circuit’s October 2024 decision (the “2024 methodology”).

Finally, on May 30, 2025, the full bench of the Fifth Circuit granted a rehearing en banc and vacated the Fifth Circuit’s panel decision, which now makes the original district court opinion binding until the Fifth Circuit concludes its en banc review of the case. It is this most recent ruling from the appeals court that FAQ Set 71 was drafted to address.

HHS Continues to Exercise Enforcement Discretion

FAQ Set 71 explains that issuers and plans must use a good faith interpretation of the 2023 methodology to calculate QPAs unless and until the Fifth Circuit says otherwise in its en banc decision.

Acknowledging “that it might take a significant amount of time and resources to review existing QPAs and recalculate the QPAs in accordance with the 2023 methodology, to the extent a plan or issuer is currently calculating QPAs under the 2021 methodology, and to then recalculate QPAs again if required by the Fifth Circuit’s en banc decision,” FAQ Set 71 extends the exercise of enforcement discretion to plans or issuers that continue to use the 2021 methodology for items and services furnished before February 1, 2026.

Similarly, the FAQ document notes the intent of the agencies to extend this same enforcement discretion to providers who hold patients liable for cost-sharing amounts based on QPAs calculated using the 2021 methodology for items and services furnished before February 1, 2026.  FAQ Set 71 also notifies of the intent to extend similar enforcement discretion for the 2021 and 2023 methodologies with respect to certain certification requirements regarding QPA calculations.

In the document, HHS also encourages states to “adopt a similar approach to enforcement” with respect to their enforcement duties under the No Surprises Act. FAQ Set 71 notes that Federal agencies do not anticipate extending enforcement discretion beyond August 1, 2026, but will reassess if needed.

What does this mean?

Pending resolution of the Fifth Circuit’s en banc review of the case, issuers and plans that are making a good faith effort to calculate their QPAs using the 2021 and 2023 methodologies should be safe from enforcement actions by the Federal agencies. However, once the Fifth Circuit issues its ruling, the QPA calculation methodology could drastically change and the plans and issuers should be ready for that eventuality.

Additionally, although FAQ Set 71 urges states to follow suit in providing enforcement discretion, there is no guarantee that all states will do so. So, any entities calculating QPAs through these methodologies should check their state surprise billing laws and the state agency that enforces them.

Reed Smith will continue to follow developments with regard to the No Surprises Act and the Texas Medical Association case. If you have any questions about this, please do not hesitate to contact the author or your health care lawyers at Reed Smith.