Relentless Health Value

Reference-based pricing, the way that most employee benefit consultants use the term anyway, refers to a methodology used by employers to pay providers for services. Usually we’re talking within a fee-for-service (FFS) environment here. The way it typically works ... there are different flavors, but how it typically works is this: Reference-based pricing (RBP) means that an employer starts with some reference-based price. Many times, it’s the Medicare rate. Medicare will pay X dollars for something. The employer—and when I say employer, I mean the vendor/company the employer is using to run this whole thing mainly—but the employer will decide that they’re willing to pay some percent over the Medicare rate to providers who render that service to the employee. Maybe it’s 10% over the Medicare rate or 20% to 50% as David Contorno talks about in this healthcare podcast. One of the biggest pushbacks against RBP schemes has been that it results in balance bills for employees, meaning that an employee goes to the ho