SOURCE: State Successes Passing Laws to Lower Costs through Reference-Based Pricing (FINAL, March 2026)
As of March 2026, 13 states have implemented reference-based pricing……..and underscores the increasing interest by states to lower health care costs
One way states can take a more active role in lowering the high cost of care is by establishing direct limits on the prices hospitals can charge through reference-based pricing. This policy ties the price of services charged by hospitals to a “reference price,” often a percentage of Medicare’s payment rates, that’s more in line with the actual cost of care. Doing so can yield significant savings for patients and states with manageable impact on hospital finances. This policy can apply to all providers in a state or more narrowly to specific markets or programs states oversee, such as their state employee health plans, allowing states significant flexibility to tailor this policy to meet their individual needs and achieve specific cost-saving goals.
In addition to lowering costs for consumers, states can also adapt reference-based pricing policies to achieve other policy outcomes. For example, as states continue to grapple with tight finances and federal funding challenges, reference-based pricing in state employee health plans can lead to meaningful savings for state budgets. States can also pair payment caps established through reference-based pricing with payment floors for certain providers or services, such as primary care or behavioral
health services, to increase investment in certain forms of care.
State Laws to Implement Reference-Based Pricing
As of March 2026, 13 states have implemented reference-based pricing in a segment of their health insurance markets through the legislative or regulatory process. The chart on the next few pages provides an overview of states’ reference-based pricing policies and underscores the increasing interest by states to lower health care costs to help state budgets, employers, and patients. The chart does not include states that have considered or studied reference-based pricing solutions but haven’t implemented them, such as North Carolina. Additionally, this chart only includes states with broad-based policies; reference-based pricing for individual services or billing types, including ground ambulances or surprising billing, are not reflected in this chart.
What this article is really saying, and what political subdivisions are slowly realizing, is PPO managed care networks suck. There’s going to be a day not too far in the future when Little Johnny asks “Grandpa, what’s a PPO?”
