Embracing Transparency and Fiscal Responsibility: The Quest for Medicare-inspired Pricing Strategy

By pwsadmin | July 24, 2024

Major business organizations tend to use a self-funded, Medicare-based insurance plan. If you ask them what factors propelled them to transition out of their insurance plan, you’ll get to know they turned to what is known as “reference-based pricing” after seeing double-digit rate increases with each renewal of their carrier’s plan.

This scenario is frustrating for the likes of all others who become affected by the rise in the amount and cannot provide excellent benefits to their employees because they become compelled to deal with factors outside of their control.

By implementing reference-based pricing, employers use Medicare reimbursement rates as a benchmark to set prices in their self-funded insurance plans. Under this arrangement, employers commit to paying providers a certain percentage above the standard Medicare rate, usually ranging between 125% to 300%. Consequently, many employers part ways with their previous insurance carriers and networks.

For those unfamiliar with the concept, reference-based pricing empowers employers to set a cap on provider payments, rather than being bound by in-network and out-of-network rates. This approach can save them a significant 15-20% on their annual healthcare expenditures, making it a wise financial choice. It tends to help navigate the wild fluctuations and predatory pricing. Working with an insurance TPA, payer, etc., is instrumental in laying the groundwork for a company to move out of the existing network-carrier arrangement.

A typical healthcare provider is familiar with the age-old question, “Can I accept this type of insurance?” However, for our non-networked plan, we needed to have a serious discussion with our employees. We needed them to understand that our employer-sponsored plan would pay them directly, eliminating the need for a provider network.

While predicting annual cost savings can be challenging, one thing is certain: transitioning to reference-based pricing results in lower co-pays and premiums for employees, as well as reduced claims expenses for the company. It’s time for more employers to adopt and support this Medicare-based, self-funded model.As healthcare costs continue to rise faster than employee wages, the sustainability of our workforce is in jeopardy. Recent data from the Bureau of Labor Statistics reveals that many individuals are grappling with the harsh reality of medical bankruptcy.

Employers are under pressure to reduce costs, often resorting to shifting the burden onto their employees through higher deductibles and premiums. This creates a vicious cycle that leaves employees feeling stressed and defeated.

However, there is room for negotiation. Private health plans are paying hospitals significantly more than government-sponsored plans like Medicare. It’s time for employers to take the lead and advocate for a more affordable insurance system by directly negotiating with healthcare providers.

How can this be accomplished? By implementing reference-based pricing. Yet, this cannot be achieved alone. It is crucial to have a knowledgeable benefits partner who can help navigate the process and ensure that your plan is positioned for success.

Introducing CMSPricer, the leading SaaS-based Medicare claims repricing system. With their advanced technology and expert team, they can tailor plans and facilitate negotiations, making reference-based pricing a feasible option for employers.

So why delay? Bid farewell to complicated contracts and frustrating negotiations. With CMSPricer, no setup is required, there is no need for PHI or data records, and it is 100% USA owned and operated. Moreover, their precise claims processing and seamless integration make it an obvious choice.

Are you ready to move towards affordable healthcare? Get in touch with CMSPricer today and allow them to assist you in unlocking the key to a brighter future for your business and employees.