What is Reference-Based Pricing (RBP)?

With health care costs continuing to rise year after year, reference-based pricing provides a great alternative to traditional Large Group Health Insurance and can help you keep costs below trend year after year.

  • RBP is an alternative health care pricing methodology
  • RBP is a way to price health care to a fair and reasonable level, but using a bottom-up approach
  • RBP takes a known starting price (usually Medicare allowable), and then the plan marks up a percentage to a level set by each plan
  • RBP enabled you to set maximum coverage limits on medical services

How does Reference-Based Pricing Work?

  • RBP works in conjunction with self-insured health plans
    • Allows employers to have more control and cost transparency of covered care and their own insurance cards
  • RBP plans allow employers and employees to get an itemized bill so they can pay for only what services were used
    • Lessens the likelihood of paying for incorrect expenses
  • The employer covers the specified maximum coverage amount, and the plan should provide resources in the rare instance of a balance bill occurring

What’s Next?

Reference-Based pricing is a great way to boost employee health care engagement, while simultaneously cutting costs, but it will take some work before you get there. As your insurance broker, we are here as your consultants to guide you through the process and educate your employees properly at open enrollment. If you’re tired of overpaying for services and need to increase employee buy-in, it’s time to talk about RBP!