Reference Based Pricing
As cited in Benefits Pro Magazine, "The maze of the U.S. health insurance system is riddled with fraud, a lurking demon that clandestinely drains a staggering proportion of health care expenditure. One-third of every dollar circulating in the health care system — totaling over $1 trillion — is squandered on dubious services, lost to fraud, or otherwise misused."
Hence, the rise of Reference Based Pricing. Reference-based pricing (RBP) is a pricing model in which an insurer or employer sets a maximum limit on what they will pay for a specific medical procedure or service based on the average price in a particular geographic region.
Millions in Savings
A trucking company based in Southern California received yet
another double-digit increase to their fully-insured health plan.
With just over 800 employees on the plan, they were looking
at a $4.5 million expense. The next year, they received another
15% renewal increase. Seeing a non-sustainable trend, the
executive team start ed looking for alternatives other than of
cost-shifting to employees.
The following year, their carrier offered their best renewal:
a 25% increase. Over $6.2 million. More than double the
expense since their start , despite having the same number of
employees. It was time for a change. Enter our Reference Based Pricing Team, ClaimDOC.
ClaimDOC’s reference-based pricing program was
implemented and within year one the client increased
headcount and expense was held to $5.4 million — $860,000
below the fully-insured quote. By year two, their headcount
jumped to an average of 934 and expenses held at $6.4 million.
Year three, they added another 130 employees and cut costs
to just over $5 million. Year four saw another 100 jobs added
with a spend of $6.1 million. Year fi ve produced another year of
tremendous savings with the program.
Smarter Plan Spend
RBP negotiates medical rates up front, with your providers, BEFORE you need the services. Our clients typically save 25 to 35 percent within the first year of switching to RBP from a traditional carrier/network program. Our RBP team performs a line-by-line audit for medical necessity and billing accuracy. This is very different than generic repricing typically offered under RBP. Providers may not like it; however, they respect our process and the accuracy we provide.