Reference Based Pricing – Misconception #1

Every day you remain in an RBP plan, your risk of massive liability increases

This is a first of a series of postings that will expose common misconceptions about Reference Based Pricing strategies.

Misconception # 1

Employer assumes liability for balance billing – This is false. Yet the bitter push-back against Reference Based Pricing strategies continues at a fever pitch by those welded to the status quo. “Every day you [employer] remain in an RBP plan, your risk of massive liability increases”, opined one industry “expert” recently.

A plan pays what it says it will pay, nothing more and nothing less. It’s no different when one buys any other kind of health plan. Employers adopting Reference Based Pricing strategies assume no more liability than what is memorialized within their Plan Document.

FEAR MONGERING OPPORTUNIST – “What about stop loss insurance reimbursement? If the claim is contested beyond the term of the stop loss contract, and settlement is made subsequently, there is no stop loss reimbursement! That’s the liability I’m talking about!” 

PROFESSOR OF REASON AND LOGIC – “No, that scenario doesn’t apply.  Stop loss reimbursement mirrors the underlying plan, i.e same reimbursement methodologies. A claim received is adjudicated and paid first, then a claim for stop loss reimbursement is filed during the contract period. There is no need to wait for resolution of a disputed claim because the plan and the stop loss carrier are not responsible for balance billing.”

FEAR MONGERING OPPORTUNIST – “No, No, No! I’m talking about the member……..their liability!”

PROFESSOR OF REASON AND LOGIC – “That’s not what you said. A member’s liability is not the employer’s liability. I’m ecstatic you brought that up though and will address that in Misconception #2.”

 

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