Fifth Circuit Rejects "Ghost Rates" in Federal QPA Calculations Under the No Surprises Act
Rhea-AI Summary
Nutex Health (NASDAQ: NUTX)/b) commented on an Aug. 11, 2026 en banc ruling by the U.S. Court of Appeals for the Fifth Circuit that invalidated key federal rules for calculating the qualifying payment amount (QPA) under the No Surprises Act. The court rejected use of non‑negotiated “ghost rates” and held that excluding bonus and incentive payments from QPA calculations conflicted with the statute’s “total maximum payment” standard, while upholding exclusion of single‑case agreements. Nutex Health said prior QPA methods had depressed out‑of‑network payments, forcing frequent use of the Independent Dispute Resolution (IDR) process, where certified entities selected payment amounts above the insurer QPA in about 85% of decided cases. Patient balance‑billing protections remain unchanged. The company noted that new agency rules, their timing, and the ultimate financial impact are uncertain, and current enforcement relief allows prior QPA methodologies for services furnished before October 1, 2026.
Positive
- Fifth Circuit ruling limits ghost rates in QPA calculations, potentially reducing downward pressure from unnegotiated placeholder rates used by insurers.
- Court requires inclusion of bonuses and incentives in QPA, aligning calculations with the statute’s “total maximum payment” definition and potentially raising benchmark amounts in future disputes.
- IDR awards exceeded insurer QPA in ~85% of decided cases, highlighting that prior QPA methodologies often produced lower figures than amounts selected by arbitrators.
Negative
- Timing and content of new federal QPA rules are unknown, creating regulatory uncertainty for Nutex Health’s future out‑of‑network reimbursement environment.
- Prior QPA methodologies may continue through at least October 1, 2026, meaning current payment dynamics and related hardship for providers could persist in the near term.
News Explained
The August 11 ruling changes the future QPA framework, but prior methods remain available for services before October 1 pending new rules.
On
The disclosed consequence is conditional: after new rules are promulgated, insurers will have to recalculate QPAs to exclude nonzero unnegotiated placeholder rates and include bonus and incentive payments, potentially changing the benchmark used in out-of-network payment disputes involving providers such as Nutex.
The QPA is an insurer-calculated median payment figure that an independent arbitrator considers, alongside other factors, when resolving an out-of-network payment dispute.
The ruling does not change patients' protections for covered out-of-network emergency care or out-of-network care at an in-network facility, including limits on patient cost-sharing and balance billing.
The court also upheld excluding one-off single-case agreements from the QPA calculation, while rejecting the different treatment of zero-dollar and nonzero unnegotiated placeholder rates.
Current enforcement relief permits insurers to use prior QPA methods for services furnished before
The specified resolution points are the agencies' implementing rules, any further appeal, and whether the enforcement relief is extended beyond
Key Figures
Historical Context
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Aug 18 | Hospital opening | Positive | -0.7% | New Arkansas emergency hospital expanded the company's stated nationwide facility footprint. |
| Aug 06 | Q2 earnings report | Positive | +6.7% | Profitability improved sharply despite lower revenue, alongside higher EBITDA and operating cash flow. |
| Jul 21 | Earnings scheduling | Neutral | +4.2% | Company announced the second-quarter filing, release, and conference-call dates. |
| Apr 30 | Q1 earnings report | Positive | +17.1% | Revenue, net income, EBITDA, and operating cash flow all increased year over year. |
| Apr 22 | Earnings scheduling | Neutral | +0.8% | Company scheduled the first-quarter results release and conference call for late April and early May. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Positive earnings announcements aligned with positive reactions, while operational and scheduling news produced divergent reactions.
Key Terms
independent dispute resolution regulatory
en banc regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
"We applaud the court's decision on this important issue," said Tom Vo, M.D., MBA, Chairman and Chief Executive Officer of Nutex Health. "Since the NSA took effect in 2022, the agencies had directed the insurers to include non-negotiated ghost rates, artificially deflating the QPA calculations. The resulting depressed payments have created significant hardship for providers such as Nutex Health. As a result, providers have often had to pursue the Independent Dispute Resolution (IDR) process simply to obtain fair median in-network rates, an approach that is time-consuming and costly for both insurers and providers. We hope this landmark ruling will lead to fair and reasonable upfront payments, allowing us to continue delivering high-quality care to our patients."
Patient Protections Are Unaffected
The disputes addressed by this ruling are between insurers and providers. Under the NSA, patients receiving out-of-network emergency care, or out-of-network care at an in-network facility, are responsible only for their normal in-network cost-sharing amount and cannot be balance-billed. Nothing in this decision changes those patient protections.
Background on the QPA and IDR Process
Under the NSA, when a provider and an insurer cannot agree on payment for out-of-network care, the dispute may be submitted to an independent arbitrator, who weighs several factors equally, including the provider's training and experience, case complexity, market share, and the QPA. The QPA is calculated by the insurer and is intended to reflect the median, across the insurer's contracts for the same service, specialty, and region, of each contract's "total maximum payment," the patient's cost-sharing amount plus the amount paid by the plan.
The Court's Holding
The Fifth Circuit upheld the district court's previous holding that a 2021 federal agency rule implementing the NSA was inconsistent with the statute in two respects. First, while the rule excluded contracted rates of
The court's opinion states that certified IDR entities selected a payment amount higher than the insurer-calculated QPA in approximately 85 percent of decided cases. (See also CMS' Independent Dispute Resolution Reports).
Potential Effects
We cannot predict when the relevant agencies will promulgate new rules and guidance in accordance with the court's ruling, or the content of such implementing rules. Following the ruling, once new regulations have been promulgated, insurers will have to recalculate QPAs to exclude ghost rates and include bonus and incentive payments. In the meantime, current enforcement relief permits insurers to continue using prior QPA methodologies for items and services furnished before October 1, 2026, subject to possible extension. The ultimate scope of the required changes will depend on the rules implemented by the relevant federal agencies, which have not been issued as of this release, and on the outcome of any further appeal.
The ruling invalidated the current agency rules and guidance but did not address several implementation questions that will ultimately have to be addressed in future agency rules and guidance, including: (1) whether a service must be provided more than once before its rate may be counted in the QPA; and (2) the mechanics of attributing bonus, incentive, and other non-fee-for-service payments to individual services.
Case: Texas Medical Association v.
About Nutex Health Inc.
Headquartered in Houston, Texas and founded in 2011, Nutex Health Inc. (NASDAQ: NUTX) is a healthcare management and operations company with three divisions: a Hospital Division, Population Health Management Division, and Real Estate Division. The Hospital Division owns, develops, and operates innovative health care models, including micro-hospitals, specialty hospitals, and hospital outpatient departments. This division owns and operates 28 facilities in 12 states. The Population Health Management division owns and operates provider networks such as Independent Physician Associations. Through our Management Services Organization, we provide management, administrative and other support services to our affiliated hospitals and physician groups. The real estate division comprises of real estate entities along with activity related to the development and construction of hospital facilities. The real estate entities own the land and hospital buildings which are leased to our hospital entities.
Forward-Looking Statements
Certain statements and information included in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words or phrases "will," "will likely result," "expected to," "will continue," "anticipated," "estimate," "projected," "intend," "goal," or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks, known and unknown, and uncertainties, many of which are beyond the control of the Company. Such uncertainties and risks include, but are not limited to, regulatory and litigation uncertainty under the No Surprises Act, lawsuits filed by health insurance providers against our third party provider in the arbitration process, sales of a substantial amount of our Common Stock by our stockholders, our obligation to issue additional shares of our common stock to former doctor owners of under construction hospitals, manipulative short seller reports, the impact of litigation and disputes, our ability to successfully execute our growth strategy, economic conditions, dependence on management, lack of capital, the effects of rapid growth upon the Company and the ability of management to effectively respond to the growth and demand for products and services of the Company, newly developing technologies, the Company's ability to compete, conflicts of interest in related party transactions, regulatory matters, protection of technology, lack of industry standards, the effects of competition and the ability of the Company to obtain future financing. An extensive list of factors that can affect future results are discussed in the Annual Report on Form 10-K for the year ended December 31, 2025 and subsequent Quarterly Reports on Form 10-Q for the three months ended March 31, 2026 and the six months ended June 30, 2026, under the heading "Risk Factors" in Part II, Item IA thereof, and the risk factors and other cautionary statements contained in our other documents filed from time to time with the Securities and Exchange Commission. Such factors could materially adversely affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed within this press release.
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SOURCE Nutex Health, Inc.