You know that Reference Based Pricing is a great cost containment tool- if done right, we’ve seen huge savings. But there’s a lot of misconceptions out there about RBP, and that can make trying to have a real conversation very frustrating.
To help you stay on course, here are five common myths about RBP, and the facts and figures you need to disarm them.
Fact: Fully insured plans get just as much balance billing as Referenced Based Pricing. 16% of in-patient visits in 2018 got a balance bill, and 18% for ER. If Balance Billing is the problem, the major carrier networks don't offer as much coverage as people think.
Fact: Maybe in the early days of RBP. But today, co-fiduciary partners typically indemnify patients from any harm, and provide services such as litigation support along with traditional bill auditing and pre-certification. Building the right “health stack” of re-pricer, medical manager, and member concierge gives all parties peace-of-mind. This is important because 8/10 medical bills contain at least one error, even with PPO plans where you can't audit them.
Fact: "High performance networks” are growing in popularity year-over-year. Key to any successful RBP launch is getting the C-suite, HR, and their advisor on the same page and committed to the change. Up front and continuous member education makes all the difference.
Fact: Hospital prices are made up, and so are BUCAH discounts. Don’t be fooled: 50% off of a 1,000% markup is still 450% overpriced. RBP prices are at least related to the cost of a procedure, rather than arbitrary numbers that hospitals and big insurers agree on.
Fact: Hospital quality and hospital billing practices aren’t related. According to data shared by 6Degrees Health, hospital quality shows little relationship to the billed price of various surgical procedures.
Thank you to the team at 6Degrees Health for helping us write this article. 6 Degrees Health is built to bring equity and fairness back into the healthcare reimbursement equation. Their solutions include everything from provider market analyses, reasonable value claim reports, claim negotiations, and referenced based repricing.
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Traditional networks may be the most well-known payment model for health coverage, but they're not the only option. Read this post for an overview of other options such as Direct Contracting and Reference-Based Pricing.