Employers are getting creative in an effort to reduce their healthcare costs, including looking for alternatives to the typical preferred provider organization (PPO) plan. Many are choosing self-insurance coupled with reference-based pricing (RBP), which is the assessment and payment of medical claims based on Medicare reimbursement data or the provider’s self-reported cost to deliver the service.

RBP has some naysayers in the insurance industry due to outdated notions about this innovative and cost-effective health plan model. In fact, businesses typically save up to 30% off their total healthcare spending and find it to be a long-term sustainable solution.

A Closer Look at Three Myths

Here are three common misconceptions about RBP that every informed insurance or benefits professional should know. 

  • Myth 1: Providers turn away patients.  The vast majority of hospitals and facilities accept RBP payments throughout the U.S. every day. In the rare instance where pushback is encountered, skilled RBP solution providers can quickly resolve the situation on a case-by-case basis with the facility.
  • Myth 2: Balance bills only happen with RBP. The truth is that balance billing and surprise bills are common across healthcare and most notably occur with out-of-network claims in traditional PPO health plans. Again, an experienced RBP solutions provider minimizes the chance of balance bills for plan members and assists them with dedicated support services to help them resolve the issue.
  • Myth 3: Legal action is common with RBP. In the rare instance that a facility does not accept payment, there are many steps before the threat of litigation. Both the health system and the employer have much to gain by resolving the claim. Again, an RBP solutions provider who has strong patient advocacy and legal expertise can effectively address the situation and protect the employer and member.

Just The Facts

It is vital to have the facts about RBP. Employers should not overlook its many benefits, and industry professionals should know when to recommend this powerful solution.

Businesses that implement RBP can use their savings toward growing their business or putting dollars back into the benefits package of their employees. Brokers that offer RBP can remain in the center of the healthcare benefits discussion and showcase their knowledge to clients.

Get the facts and choose an experienced RBP solution partner to ensure the greatest cost savings and the smoothest experience for employer, members and providers once the plan is implemented.

For more information, contact American Health & Wellness today.