Reference Based Pricing Quandary – Medicare Cuts & New Government Mandates

The new Surprise Billing and Transparency rules to take effect in 2022 will be a game changer for Reference Based Pricing plans. Add to that the upcoming 10% Medicare cut to physicians.

Some say these Reference Based Pricing plans will disappear, replaced by traditional managed care plans administered by a BUCA who they believe will be the only ones able to properly operate under the new rules. Reference Based Pricing plan administrators will be reduced to the same level of skill sets as a paraplegic lap dancer. Others say hog wash, there’s options.

Another issue is Medicare payment cuts. How much should Reference Based Pricing plans pay providers? We addressed this several years ago: Was J Patrick Rooney Right?

A knee jerk reaction some Reference Based Pricing plans may have in order to avoid these new punishing government mandates include the following:

– Eliminate all direct provider agreements. Frustration of Purpose applies here. (no network – solves all the new network requirements because there won’t be one)

– Pay all providers 175% of Medicare. (a winning number under arbitration rules)

– Eliminate all benefit cost sharing with plan members (easy cost sharing data to plan members – “your estimated cost for your procedure is $0). Gobsmacking plan members to bliss and happiness is HR’s dream come true.

– Cash Pay Option (CPO) – single case cash pay agreements on pre-planned medical events (solves transparency and notice mandates)

The healthcare benefits market is dynamic and undergoing rapid changes. It’s never been as challenging than it is today.

Most plan sponsors dislike “change” as disruptive. That’s about to change.

Physician Compensation, Staffing to Take Big Hit from 10% Medicare Cut is a specialty company in the benefits market that, while not an insurance company, works directly with health entities, medical providers, and businesses to identify and develop cost effective benefits packages, emphasizing transparency and fairness in direct reimbursement compensation methods.