Reference-Based Pricing 101: Transparency in Service Prices

As employers look for greater transparency, flexibility, and cost control in their health plans, they are increasingly turning to alternatives to traditional models.

One of the self-funded employer solutions gaining momentum is reference-based pricing (RBP). RBP has been around for years, but many employers and brokers are still unfamiliar with how it works and how it can be a powerful tool for managing healthcare costs.

What is reference-based pricing?

Reference-based pricing is a pricing model that bases provider payments on transparent, benchmarked rates rather than through traditional network pricing.

Instead of relying on the negotiated discounts of a PPO network, RBP plans typically reimburse hospitals and providers for services at a set percentage above Medicare rates. This creates a consistent and transparent methodology for determining fair payment for care.

Why explore reference-based pricing?

Many self-funded employers explore alternative benefits cost reduction strategies to combat premium increases, pharmacy costs, and other plan design changes.

Traditional network discounts may appear substantial on paper, but they often apply to highly inflated provider charges. Employers still end up paying significantly more than necessary for the same care.

RBP addresses this challenge by incorporating greater transparency and consistency into healthcare reimbursement. Employers that implement RBP often see:

• Lower healthcare costs: Service reimbursements are based on established benchmarks, not billed charges

• Greater transparency: Employers know exactly how provider payments are calculated and where their healthcare dollars are spent

• More control over plan performance: Employers take a more active role in managing healthcare costs while maintaining a flexible plan design

• Long-term sustainability: Reduced costs empower organizations to offer competitive benefits for a longer period of time

Navigating reference-based pricing

A common misconception about RBP is that members have difficulty accessing care. In reality, with strong member advocacy and support, RBP programs can produce meaningful savings for employers without compromising care for their members.

That’s why OneVeracity offers a RBP Navigator service as part of Care Solutions, offering hands-on support to help self-funded employers and their members use their benefits confidently and effectively.

The team helps remove barriers to care while supporting a health plan’s long-term stability by providing:

• Expert guidance: Helps members understand RBP, guide them to choose plan-friendly providers, and provide clinical and navigation support.

• Proactive coordination with providers: Our team works directly with providers before care even begins to address insurance acceptance concerns, coordinate RBP-friendly pricing, and more.

• Advocacy and end-to-end support: We support members to ensure maximum employee benefits optimization, maintaining continuity of care, coordinating direct pay, and resolving insurance acceptance issues quickly.

Is reference-based pricing right for uou?

RBP is not a one-size-fits all solution, but it can be highly effective for self-funded employers seeking a benefits plan design strategy with more transparency and greater control over their healthcare costs.

Organizations exploring alternatives to traditional PPO networks often find that RBP delivers meaningful savings while maintaining access to quality care, especially when paired with strong navigation and advocacy services.

The bottom line

RBP offers a transparent, proven approach to reducing healthcare costs. With careful management and navigation assistance, self-funded employers can reimburse providers with transparent, benchmark-based costs and maintain a high level of care quality.

At OneVeracity, our holistic approach combines RBP, care navigation, pharmacy management, and transparent data analytics to help employers reduce costs, improve outcomes, and simplify the healthcare experience.

Learn more about how OneVeracity can help your organization take control of your healthcare spend while supporting your members every step of the way.

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