Reference-Based Pricing Explained
Reference-Based Pricing is when a self-funded employer does not use a traditional health insurance network.
Instead, the employer pays hospital facility fees as a percentage of Medicare.
Typically employers that use Reference-Based Pricing will pay a hospital 120% to 200% of Medicare Reimbursement.
This reimbursement amount is still FAR LESS than the traditional commercial insurance discount amount, which is often 500% or more of Medicare reimbursement.
Doctor and other professional fees are typically still paid through a network... as these fees are far less than the hospital facility fees.
Reference-Based Pricing must use a Third Party Administrator (TPA) to process the claims and make the correct payments.
Employers that have enacted Reference-Based Pricing have seen their total employee health plan costs decrease by 30% or more.
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Instead, the employer pays hospital facility fees as a percentage of Medicare.
Typically employers that use Reference-Based Pricing will pay a hospital 120% to 200% of Medicare Reimbursement.
This reimbursement amount is still FAR LESS than the traditional commercial insurance discount amount, which is often 500% or more of Medicare reimbursement.
Doctor and other professional fees are typically still paid through a network... as these fees are far less than the hospital facility fees.
Reference-Based Pricing must use a Third Party Administrator (TPA) to process the claims and make the correct payments.
Employers that have enacted Reference-Based Pricing have seen their total employee health plan costs decrease by 30% or more.
BACK To Healthcare Finance Video Library
BACK to AHealthcareZ Home
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