A reference-based pricing FAQ only makes sense for a medical cost-saving model expanding across the nation. Here are some questions and answers about RBP.
How Does RBP Save Money?
RBP bases insurance payout to hospitals on a multiple of Medicare costs for the same service. That means that insuring networks set a payment ceiling on the amount that healthcare facilities can receive for a procedure.
It also causes clinics with exorbitant prices to figure out for themselves how to deal with the balance billed toward its patients. Often they will narrow that margin by implementing cost-saving mechanisms.
Finally, RBP increases transparency. It forces billers to itemize expenses. So insurers can deem unnecessary or overpriced goods and services as such. It takes the mystery out of negotiating prices.
Can RBP Save Money for Big Businesses?
Networks in states that have already adopted RBP have found significant savings in healthcare. Of course, insurers benefit from more predictable and stable pricing.
The RBP system offers greater transparency than existing hospital reimbursement models. That means fewer complications that can tie up HR and employees. And, businesses that sign onto these networks also find these programs more manageable.
Do Employees Like RBP Insurance Networks?
Just like employers, employees like transparency. They want to know what to expect, in terms of healthcare pricing and balance billing.
They also appreciate having a better understanding of what insurance will cover. RBP also helps avoid the unpleasant surprises of balance billing by making payouts more transparent.
What Are the Disadvantages of RBP?
While RBP offers significant advantages, in terms of cost savings, it does have some disadvantages. These disadvantages, for the most part, also plague the existing hospital reimbursement system.
First, policyholders still bear the weight of balance bills. While RBP does make them more predictable and manageable, it does not eliminate them. And they can still reach disastrous amounts.
Second, patients under the RBP system may be denied treatment. Although these situations often have remedies within the system. When this happens, policy administrators can often remedy the issue. Even so, this can delay or defer the treatment in some cases.
Thirdly, conflicts can still occur. RBP does not reduce partner liability, nor does it fix all administrative problems. In fact, being a new system, it, like any system, requires that HR staff learn to navigate it.
Will RBP, developed for the State of Montana, adapt well to states like New York on the east coast?
RBP bases its payout price on Medicare. And, all states have adapted to Medicare nationwide. In addition, Medicare sets its cost ceilings based on regional data.
As a result, the RBP system has already spread to other regions of the country. For example, Dee Jones, the Executive Director of the State Health Plan for the State of North Carolina has already revealed plans for that state. California, too, has adopted RBP.
Is RBP Available to My Company?
Reference-based pricing has only begun to spread from state to state. It's only available in some states, including Maine, California, Montana, and North Carolina. Other states, including New York, have already begun looking at it.
In addition, not all networks have adopted RBP. However, it's becoming available in more places as users discover the value of its savings. Your local insurance broker can tell you more about RBP availability in your area.
Reference-Based Pricing FAQ: Where Can I Get More Information?
While RBP may not be available everywhere, you can get more information by talking with an experienced insurance broker. Contact us to find out more about reference-based pricing insurance for employers.