Reference based pricing strategy in healthcare is revolutionary. It helps both employers and employees save money by paying reduced aggregate amounts based on a percentage of what Medicare reimburses these providers. It’s truly helpful for them to bend healthcare costs downward.
Let’s Explain the Benefits of Reference Based Pricing Strategy.
With the reference based pricing system, an insurer is privileged to select a price it is willing to pay for a healthcare service. Insured people who obtain health care from a provider with a price at or below the reference price need to pay only the normally essential cost sharing, such as deductibles, coinsurance, etc. When they obtain health care from a higher-priced provider, they need to pay not only the normally required cost sharing but also an extra cost, which is typically the difference between the reference price and the allowed charge. Reference based pricing strategy can ensure that the consumers can get the incentive while seeking care at lower-cost providers and can also put pressure on providers to reduce their prices.
This reference based pricing strategy eliminates traditional networks, driving savings for employers as they agree to pay a certain percentage above Medicare price for healthcare services.
Quickview of Reference Based Pricing Program Benefits:
Insured persons or employees can go anywhere they choose for service, and the plan will pay the provider a fair and reasonable amount based on Medicare plus a percentage. This is a profitable arrangement for a physician, hospital or other facility as well.
While there are lots of benefits that both employers and employees can enjoy by using a reference based pricing system, the RBP system does also come with a few pitfalls.
Does It Mean the Reference Based Pricing System is Unable to Cut Healthcare Plan Expenses?
Not at all! With a successful implementation of the reference based pricing system (which requires careful planning), all these pitfalls can be averted. So, when it comes to choosing a RBP plan, make sure you choose a vendor who has long-standing experience, clear and transparent processes and safeguards in place to protect insured people. Employers need to conduct proper planning upfront, such as holding conversations with high utilized providers to minimize the potential disruptions.
Reference based pricing strategy works well for employers, but they have to remember also that adoption of reference pricing is always significant. They can make significant savings through a reference based pricing program only when potential is realized. However, higher-priced providers would need to lower their prices and insured persons or employees would need to switch to lower-priced providers.
Solution for Simplifying Reference Pricing Planning
A turnkey solution like CMSPricer can be an effective solution for self-funded employers. It can eliminate their biggest concerns about RBP, and is broadly useful if there is broader uptake of RBP benefit design than what it offers currently.
What does CMSPricer do for Reference Pricing?
A SaaS based Medicare repricing system that requires no installation or setup in a computer system, CMRPricer can price all PPS types of institutional and professional claims including claim editing for Referenced Based pricing. Also useful for payers, PPOs, TPA’s, BPO’s, and auditing firms, CMSPricer can accurately meet all stringent CMS Medicare rules and regulations by their latest updates, with ease and precision.
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