Montana Sets BCBS Up To Look Good – Health Care Costs To Lower 20%

……………………………It’s Blue Cross of Montana!

When the dust settles 18 months from now Blue Cross of Montana is gonna look like Superman to Montana legislators by saving millions of dollars on the state’s Reference Based Pricing employee health plan.

Effective January 1, 2023 Blue Cross of Montana will be taking over administration of the state employee Reference Based Pricing health plan. State officials say the move will save taxpayers millions of dollars by reducing health care costs.

An obvious way to reduce health care costs is to pay less. That’s exactly what the state intends to do.

The contract with Blue Cross stipulates targeted health care reimbursement rates of 180% of Medicare allowable rates. Failure to achieve that benchmark puts Blue Cross fees at risk contractually.

How does this compare to Montana’s current average reimbursement rates? Optumas, an independent consulting firm did a study using publicly available data to analyze the financial impact of the plan’s transition to reference-based pricing when the state moved to Reference Based Pricing several years ago.

“Before the reference-based pricing agreements, Montana paid a range of 191 to 322 percent of Medicare rates for inpatient services and 239 to 611 percent of Medicare rates for hospital outpatient services. The reference-based pricing agreements lowered the range in prices paid by the health plan to 220 to 225 percent for inpatient services and 230 to 250 percent for outpatient services.”

SEE FULL REPORT HERE: MT-Eval-Analysis-Final-4-2-2021.pdf (

The differential between 225% MC and 180% MC is 20%.

Recent articles on Montana’s move to BCBS Reference Based Pricing plan administration questions whether this is a move backwards. From our perspective they have missed the point here.

Eighteen months from now we fully expect to see articles and commentary on how Superman saved Montana millions above and beyond savings generated by the states previous third party administrator. You will hear thunderous backslapping echoing across the fruited plains.

Will the Montana Association of Counties and other Reference Based Pricing plans follow the state’s lead?