What is Reference Based Pricing (RBP)?

What is Reference Based Pricing (RBP)?

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How Reference Based Pricing Works

In certain parts of the country, Reference Based Pricing (RBP) is a relatively new concept in insurance – but its popularity has been surging as RBP is driving down employer costs significantly. Now that RBP is proven successful and has become more commonplace, it should not be ignored as a viable alternative to more traditional insurance. Now is the time to explore RBP as an option for 2022.

RBP – most simply put – is a cost-containment strategy where the insurer pays doctors, hospitals, labs, etc., a percentage of an established benchmark most commonly based on the established Medicare reimbursement rate. So, let’s say that Medicare will reimburse a certain doctor’s visit $100, the RBP might reimburse that same visit at $100 plus an additional 30%.

Benefits of Reference Based Pricing

Besides the transparency in pricing – unheard of with other types of plans – one of the biggest advantages to RBP is that there are NO provider networks to contend with. Plan participants simply go to the provider they choose. The RBP insurer then reimburses the provider a fair and reasonable amount based on that Medicare benchmark plus an additional percentage. RBPs are a win-win for everyone!

  • Employers are happy because premiums are lower and they can often pass that on to employees by increasing other benefits or reducing employee contributions.
  • Employees are happy because their costs may be reduced and they have no annoying networks to deal with.
  • Providers are happy because they are seeing increases in revenue based on the additional percentage provided and they don’t need to go through the hassle of joining another network.

At benefEx, we are industry leaders with decades of experience in the insurance field and we’re ready to talk with you about RBP now. Keep reading to learn how this type of financing strategy can benefit your company!

Learn More About Reference Based Pricing Today

Employees may experience greater satisfaction when they feel their employer cares about them and as such has selected truly great benefits options. Ready to learn more about reference based pricing as an option for your company? Contact benefEx today to get your 2022 coverage questions answered from industry-leading experts.