By Doug Aldeen – ERISA Healthcare Attorney and Fractional General Counsel•
Memorial Hermann (“MH”) in Houston recently implemented a “Reference Based Pricing and Limited Benefit Plan Discount Policy” that entitles these types of plans to discounts between 35% and 45% contingent upon the location of the facility.
This policy forces local employers into more expensive traditional insurance products whose level of reimbursement is significantly higher than any RBP/Limited Benefit Plan.
Consider:
1) The RBP discounted policy rate at MH (35%) is < than the average discounted BUCAH rate (75%);
2) The BUCAH national average contractual level of reimbursement for their plans is roughly 250% ( or more) and > than any national RBP level of reimbursement which is usually around 150% of Medicare;
3) The MH Reference Based Pricing and Limited Benefit Policy has the downstream effect of discouraging the local employer market from implementing nontraditional insurance products and steering employers to insurance coverage with a substantially greater level of reimbursement for the facility.
Sunday Morning Bathroom Read Takeaway:
Hospital Counsel Research:
Does a not-for-profit hospital (technically owned by the local community via its tax exemptions) have the authority to discriminate based upon the type of insurance the members of the community can afford? It is double taxation: higher cost health insurance plus a subsidy in the form of tax exemptions. MH is creating a significant market barrier to access lower cost health care to those very employer groups and community members who support their charitable endeavor.
Potential Plan Sponsor Strategy/Recommendation for MH access:
Implement an indemnity plan and show up at the facility as a cash paying customer. You will get better pricing and better access to charity care in the event that there is an outstanding balance with zero chance of any “Extraordinary Collection Actions” such as credit impairment and balance billing. Cash pricing+ AGB rates of 9% (OP) 19% (IP) (FY 23) with no ECA’s. See attached highlighted MH Billing and Collection policy in comments.
Could be a winner.
