As the world deals with the impact of COVID-19, one of the most common issues we hear about healthcare today is the cost. The various healthcare studies indicate that the cost of providing medical and pharmacy benefits will rise 5 percent more for three consecutive years.
As a result, the companies that use the best-in-class healthcare self-funded strategy to take on the risk for coverage of medical and pharmacy costs for their employees are finding no other option than to pass along premium increases to their members in an effort to preserve the bottom line. The approach to self-funded benefits is built around people so that both the members and the employers’ bottom line is met.
In order to do it, employers are leveraging reference-based pricing (RBP) and setting their own prices for healthcare services. RBP is in contract with doctors and hospitals, which pays doctors, labs, clinics, and hospitals a percentage of an established benchmark. Typically, the reimbursement rate ranges between 120 percent and 300 percent of Medicare pricing for a given service. It is calculated on the basis of what is reasonable in terms of the local health care market.
The most important advantage of reference-based pricing is, unlike traditional preferred provider organization (PPO) coverage, the RBP approach typically has no in- and out-of-network payment tiers. Members can go anywhere for service and the plan will pay the provider the right amount based on Medicare plus percentage, which includes the costs of physician, hospital, or other facilities.
Advantages of Self-funded Employers from RBP:
As said that the traditional PPO contracts erect some barriers to controlling healthcare costs, lack pricing transparency, and pricing accountability by disallowing the right to audit or question billed charges.
The RBP strategy for self-funded employers establishes full transparency through price-to-value medical services. That also gives them a 360-degree view of all claims which are then benchmarked through the Medicare repricing tool solution.
Why does This Matter?
Employers are adapting reference-based pricing, in which an insurer or other payer selects a price it is willing to pay for a healthcare service or procedure. But claim expenses are claim expenses and that need to be paid off. What they can do is reduce the costs in other areas.
Employers can give them more control over benefits and employee incentives by encouraging them to not procrastinate on care by waiving monthly premiums during the holidays, for example.
How does a Medicare Repricing Tool Help?
Medicare claims repricing tools are used by healthcare plan providers to calculate and create plans. Providers align employers’ requirements with the CMS policies and rates. But the CMS policies and rates are updated frequently, staying compliant with them is next to impossible many often, which is why providers use Medicare claims repricing tools to reprice all PPS types of institutional and professional claims, including claim editing for Reference Based Pricing.
CMS Pricer, a SaaS-based Medicare claims repricing tool, is one of the most robust tools in the industry, featuring:
Are you a self-funded employer, TPA, or a healthcare auditing firm? Do you need a robust, SaaS-based Medicare claims repricing tool?
Send your inquiry to firstname.lastname@example.org