Before his presentation at the World Health Care Congress (WHCC), Marty Joseph sat down with Mabel Jong, WHCC chief correspondent, to discuss a relatively new approach – reference-based pricing (RBP).
- RBP has been around for a few years but is gaining more traction.
As a relatively new plan option, many employers are turning to reference-based pricing strategies as healthcare costs continue to rise. This approach is proven to successfully control healthcare costs.
- The RBP strategy is a modified approach to how facilities, hospitals, and physicians are paid.
Administered by a third-party administrator (TPA), this strategy determines the reimbursement amount an employer is responsible for when it comes to medical services and procedures. This amount is usually a percentage of the allowable amount used by Medicare and will be negotiated with the provider before service. In the event of an unplanned visit, the TPA will negotiate with the provider after the fact but will still use the Medicare allowable amount as a baseline.
- RBP plans offer a level of transparency not found in traditional PPO plans.
Reference-based pricing strategies are designed to offer transparency in healthcare pricing by providing plan contributions upfront. Since patients will know what portion of the payment they are responsible for beforehand, they will be able to make informed decisions about their healthcare, and providers are encouraged to offer competitive pricing.
Consider something different to save your clients money on their healthcare spend with a reference-based pricing strategy and watch the full interview below.