American Hospital Association Issues Fact Sheet on Reference Based Pricing

Some employers are moving away from offering traditional coverage with a provider network and instead are using reference-based pricing for some or all of services they cover.

Under reference-based pricing, the employer (supported by a third party administrator [TPA] or other vendor) pays a set a price for each health care service instead of negotiating prices with providers. When a provider bills for the service, the payer remits the set amount. If the provider is dissatisfied with the payment, they can bill the patient for the unpaid portion of the claim.

Fact Sheet: Reference-based Pricing | AHA