On October 6, 2023, regulators issued FAQs stating they would defer enforcement of the post-TMA III calculation rules until May 1, 2024 (see Reed Smith news flash on the same day). This effectively allowed payors to continue using pre-TMA III QPA calculations during the period of deferred enforcement. The October FAQs noted that enforcement could be further deferred to November 1, 2024, but any extension would be addressed in additional guidance. The FAQs issued yesterday, on the final day of the initial deferred enforcement period, mark the first time regulators have addressed the issue since the October 2023 FAQs.

The extended period for deferred enforcement will provide added reprieve for payors, particularly given the compliance challenges created by TMA III and the absence of any rulemaking or other regulatory guidance to inform payors on implementation of those standards. However, while the amended deadline will be beneficial to payors, it is important that payors take advantage of this additional time to ensure their QPA methodology complies with the regulations as revised by TMA III. Because QPA is calculated once, then adjusted in future years based on an inflation factor, non-compliant QPAs pose a continued and compounding risk for payors. It is therefore critical to ensure QPA calculations are accurate and compliant in the first instance.

Please contact us with any questions on this guidance or QPA compliance generally.

Newsflash 2024-097