Top Secrets to Making Reference Based Pricing Work in the Covid-19 World
The US spends $ 3.6tn a year on health. Post Covid-19 times, this spending is breaking all previous records and people are really concerned about high out-of-pocket costs.
In times of the Covid-19 pandemic, healthcare experts anticipate healthcare costs will continue to rise. In April 2020, a health report estimated that $163.4 billion in direct medical costs could result from the pandemic in the second quarter.
As a result of the rising healthcare costs, companies may have less wherewithal to endure the increased financial burden. That means those employers are in even more dire need of some kind of innovative, cost-saving solutions. Health insurance experts suggest employers should consider reference based pricing (RBP) plans to cope with the challenges ahead, post the strain brought on them by the pandemic.
How Reference Based Pricing Works?
Reference based pricing has been an effective strategy to help employer group to gain control over employee healthcare spending since long ago the outbreak of coronavirus. Under the RBP plan, employers work with the Medicare and Medicaid plan administrators to set fair and reasonable prices for their employee health services. The RBP prices are typically set as a percentage of Medicare or the true cost of delivering that service.
With the leverage of an RBP model, employers are reported to have been achieving 25% to 30% savings over typical PPO plans. All the more, RBP model stamps out the need for a provider network, which means members are having the freedom to seek care from a provider of their choosing and provided the access to resources to help them select based on their preferences.
Another benefit of the RBP model is cost transparency. It includes point-by-point auditing of claims that helps employers to avoid being overcharged for health services or products, such as being billed $500 for a PPE kit.
We’re now seeing an uptick in RBP interest, particularly as employers attempt to navigate the challenges of Covid-19. But, they can work with their providers to ensure they understand the risks and to achieve their desired goals.
How Do Employers Implement an RBP plan?
Employers will need the help of the providers and the TPA together to implement an RBP plan. The provider will put across the reference price, negotiate with the employers and the TPA will handle broader member services aspects of the plan, administers the fee schedule and administers provider payments.
What Employers Need to Know Now?
With the pandemic knowing no bounds to stop, it is important that employers are provided the key metrics related to Covid-19 infections within their RBP plan’s population. If they can get the Covid-19 data in dashboards, graphs, and heat maps, it will be helpful for them. With the data available to them, employers might consider whether it would be right for them to reopen or return to a work-from-home arrangement to minimize exposure and keep employees safe.
Covid-19 data can also help employers understand healthcare spending related to the virus. Suppose an employer offering both a PPO and RBP plan, they could compare the savings under both plans. Usually, a 40% to 50% discount is attainable via PPO, compared to as much as a 70% savings via RBP.
RBP Plan Flattens the Curve
Healthcare expenses are on the rise and, simply speaking, threatening to climb at an even steeper rate. Employers need solutions to help get through this virus outbreak situation and the resulting economic downturn.
Reference based pricing plans provide an innovative approach that can help employers and providers flatten the curve not only during this pandemic situation but also all through the times.
How Does A TPA Administer Provider Payments?
First of all, TPAs need to stay compliant with the latest CMS policies and rates. Doing that they can ensure accurate claims pricing. It is a huge task if they attempt to do it manually. Which is why they accomplish the task using Medicare Repricing Solution CMSPricer that can price all PPS types of Institutional and Professional claims including claim editing for Referenced Based pricing.
For additional details, please visit www.cmspricer.com