Internal Revenue Bulletin No. 2025–47

Executive Summary: 2026 Health Plan Inflation Adjustments

This Internal Revenue Bulletin (IRB) 2025-47, dated November 17, 2025, primarily focuses on providing guidance related to health plan inflation adjustments mandated by the No Surprises Act (NSA). The core of this bulletin is Notice 2025-65, which delivers the indexing factors necessary for group health plans and health insurance issuers to compute the Qualifying Payment Amount (QPA) for items or services rendered on or after January 1, 2026, and before January 1, 2027. The QPA is crucial for determining individual cost-sharing under the balance-billing protections of the NSA. The remainder of the bulletin consists of administrative elements, specifically finding lists, which are standard inclusions in the IRB.

Deep Dive: Notice 2025-65 Sets 2026 QPA Inflation Factors

The Internal Revenue Service (IRS) has issued Notice 2025-65, providing essential guidance for calculating the Qualifying Payment Amount (QPA) for items and services furnished in 2026. This notice is crucial for group health plans and health insurance issuers subject to the No Surprises Act (NSA).

The Rule

Notice 2025-65 specifies the indexing factor needed to adjust the QPA for 2026. The percentage increase from 2025 to 2026 is set at 1.0265311701. This factor is used to update the QPA, which serves as the basis for determining patient cost-sharing and resolving payment disputes under the NSA.

The Context

The QPA plays a vital role in implementing the No Surprises Act, enacted as Title I of Division BB of the Consolidated Appropriations Act, 2021. The NSA added Section 9816 to the Internal Revenue Code (IRC), as well as parallel provisions in ERISA (§ 716) and the Public Health Service Act (§ 2799A-1). Section 9816 provides protections against surprise medical bills in certain circumstances. The QPA is generally defined as the median of the contracted rates recognized by a group health plan or health insurance issuer as of January 31, 2019, for the same or similar item or service provided by a provider in the same or similar specialty in the same geographic region, adjusted for inflation. This figure is significant because it serves as the foundation for calculating patient cost-sharing (e.g., coinsurance, deductibles) for out-of-network emergency services and certain non-emergency services rendered at in-network facilities. Furthermore, the QPA is a key consideration for certified independent dispute resolution (IDR) entities when determining the appropriate out-of-network rate in payment disputes. The IDR process, often described as "baseball-style" arbitration, requires the arbitrator to consider the QPA alongside other statutory factors when selecting between the provider’s and the insurer’s final payment offers.

The Calculation

Plans and issuers can calculate the adjusted QPA by multiplying the prior year’s adjusted QPA by the percentage increase for 2026 (1.0265311701). To simplify this calculation, the notice provides cumulative percentage increases, allowing plans to multiply the "base year" QPA (the QPA from the year it was first determined) by a single factor. For instance, the cumulative percentage increase for a QPA originating in 2019 is 1.2805070065. Plans and issuers may choose to use either the annual percentage increase or the cumulative percentage increase, but they must apply their chosen method consistently for all QPA calculations for items and services furnished during 2026.

Implication

Health plans and health insurance issuers must update their systems to incorporate the 2026 QPA indexing factor for services provided on or after January 1, 2026, and before January 1, 2027. Accurate QPA calculations are essential for compliance with the No Surprises Act and for ensuring fair cost-sharing for patients. Inaccuracies in QPA calculations can expose plans to potential audits by the IRS under IRC § 9816(a)(2) and potential excise taxes under IRC § 4980D.