By Robert M.
March 24, 2026
Reference-based pricing has a reputation for being disruptive. Providers push back. Employees get nervous. HR professionals hear the term and brace for a fight.
Forty years ago, the same concept existed under a different name. UCR. Usual, customary and reasonable. It was the standard basis for benefit payments in self-funded plans, and nobody treated it like a radical idea.
Here is how it worked. If you were self-funded, your plan paid claims at a percentage of UCR. Eighty percent was the common benchmark. If you wanted more protection, you could bump it to 85 or 90. The employer had control. There was a foundation, a reference point, a defined basis for what the plan would pay.
The primary resource for establishing the UCR benchmark is Medicare.
That is the same reference point reference based pricing uses today.
Same concept. Same math. Same underlying logic. The name changed, the controversy around it grew, and somewhere along the way, we started treating it like something that had never been done before.
To be fair, early RBP had real problems. The first wave of adopters took a hard line: we will pay X, and you can take us to court if you disagree. That created friction, confusion, and a lot of justified pushback from providers and employees alike. The approach has matured significantly since then. When RBP is structured well and communicated clearly to employees, it works. Employers save money. Employees get access to quality care. The math holds up.
But the resistance to it often comes from unfamiliarity, not evidence. HR professionals hear “reference-based pricing” and assume it is complicated, risky, or untested. It is none of those things. It is a pricing methodology with a fifty-year track record, operating under a name most people no longer recognize.
Understanding that context matters. It does not mean RBP is the right fit for every employer. It does mean the conversation deserves to start from an accurate baseline, not from fear of something that feels foreign.
That is the kind of conversation the Employers Healthcare Alliance is built for. A place where HR professionals can ask honest questions about strategies like RBP, understand how they actually work, and decide with confidence whether they make sense for their organization.
Membership in 2026 is free. Learn more at http://employershealthcarealliance.com
