Reduce Your Company’s Healthcare Costs by Adopting a Reference-based Pricing Model

Medicare repricing can help companies reduce their healthcare costs by utilizing a reference-based pricing model. In this model, the reference price is set by Medicare, and the provider is reimbursed at the lower of the billed amount or the reference price. This can help reduce the cost of care for companies, as Medicare reimbursement rates are typically lower than those of commercial payers. Additionally, by utilizing a reference-based pricing model, providers are more likely to be willing to accept lower rates for services, as they understand the importance of offering competitive rates in order to maintain their patient base.

In addition, reference-based pricing can lead to increased transparency in care costs, as the reference prices are available for all providers to view. This transparency can help companies better understand the true costs of care, and allow them to make more informed decisions when it comes to selecting providers.

Reference-based Pricing Model

With a reference-based pricing model (RBP), employers can predict healthcare expenses. As a result of its implementation, they will be able to determine reimbursements ahead of time and determine the price they are willing to pay for healthcare services. The RBP model protects employers from unexpected healthcare expenses for their employees.

In addition to reducing overall medical spending, RBP can reduce fraud, abuse, waste, and stop-loss premiums and claims by four times.

Exactly How Does Reference-Based Pricing Work?

Transparency is the key to reference-based pricing. The program reduces certain costs while promoting health market literacy at the same time. Third-party administrators create RBP plans in accordance with employers’ health insurance budgets.

In sophisticated top-tier enterprises focused on saving money, RBP can make a big difference. When reference-based pricing is used, employees choose procedures at the reference price and providers reduce their prices to the approved amount, leaving employees to cover the difference.

Reference-Based Pricing has The Following Advantages:

  • Comparable unit costs due to greater transparency
  • Based on the percentage of Medicare payments, expand or limit a company’s list of providers
  • Predicting health care expenditures more accurately
  • Increase healthcare prices in a normalized manner

Employer health plans have benefited from RBP by reducing insurance claim costs and allowing plan members to choose between providers and facilities instead of having a network impose restrictions.

The cost of RBP is much lower than that of traditional insurance network discounts. Because healthcare-allowed costs are predetermined, employers and employees alike prefer it over others because employers can anticipate the expenses, and employees know what amount they are allowed to pay and any extra they will have to pay out of pocket. When obtaining care from a provider at or below the reference price, only the normal cost-sharing, such as coinsurance, deductibles, etc., is required.

What is CMSPrider’s Role in Helping TPAs Customize RBPs?

A third-party administrator (TPA) typically administers RBP plans. With CMSPricer, a SaaS-based Medicare claims repricing system, TPAs can provide in-house rate-based pricing (RBP) based on CMS Medicare rates and configure any variances from those rates for their users.

By using CMSPricer, providers and facilities can calculate their percentage of Medicare allowable fees more efficiently. Based on accurate CMS Medicare allowable rates, this web-based reference-based pricing tool allows users to avoid over or underpayments.

By leveraging the RBP model and a self-service interface from CMSPricer, healthcare cost savings can be significantly realized for organizations.

Would you like to know how CMSPricer is designed to give the best user experience? Please click here.