How can you Approach for Reference-Based Pricing?

1. How can you Approach for Reference- Based Pricing? There are numerous strategies now available for the employers to execute the cost-containment concepts in their self-funded plans. Here we have listed down some approaches we have seen the reference based vendors use. Reference-based pricing is on the rise. This strategy has traditionally been out of reach for the small employers. But the carriers and third-party administrators are increasingly working with groups as small as 25. However, these reference-based pricing vendors and the third-party partners do not always take the same approach to reference-based pricing. In fact, there are other various strategies for the employers to execute the cost-containment concepts in their self-funded plans. Let us take a turn towards few of the approaches we have seen self-funding vendors use: Balance Billing Support Under true reference-based pricing, there is no legal contract between the hospital and the third-party administrator. A legit concern for the employers is that the hospital will balance bill the employee for the difference between the billed charge master rate and the reference-based price. Some consulting services even provide patient advocacy services and legal support to the employees who are balanced bill. As reference-based pricing plans are becoming more common, we might begin to see some legal precedents flourish around how such cases are handled when there are no contracts.

2. Direct Contracting There are some self-insured employers who still prefer to have contracts in place with a hospital. Some employers have even found that they can obtain better value by pursuing these contracts directly, rather than through a traditional fully- insured plan. Rather than pursuing a discount off of the charge master rate, employers are grounding their negotiations around an excess of Medicare reimbursement. Eventually, this often produces considerable cost savings. Orthodox insurers have alternatives, too Reference-based pricing is rapidly becoming a healthcare buzz, similar to the price transparency or consumer-based health plans. Insurers are picking up on the fact that employers are becoming more careful about the rates at which the hospitals are paid. As a result, some of these insurers are making themselves cost transparent. So if you are considering reference-based pricing, it is for sure that you bring in a benefit consultant to do a feasible study on the alternate funding arrangements, Depending upon your goals, risk tolerance, size and the budget constraints, the reference-based pricing vendors will be able to help you decide what kind of funding arrangement is right for you.