A TPA specializing in self-funding for small group plans of 100 employee lives or less offers a unique Reference Based Pricing model that includes the promise of no balance billing.
Their RBP model represents approximately 60% of new business submissions. The model includes:
– Promise of no balance bills
– Professional reimbursement at 125% of Medicare
– Facility reimbursement at 150% of Medicare
Their “No Balance Billing” guarantee is unique to the market. They have simply isolated balance billing liability as an actuarial calculation. The liability is loaded in the funding structure.
Here are some interesting numbers obtained from the TPA:
Paid Claims November 2016 through June 2017 (8 months)
# Claims = 17,786
# Claims disputed = 280
% of Claims disputed = 1.57%
Total Claims Paid = $20,918,000
Balance Bill Adjustments = $228,758
% of Balance Bill Adjustments= 1.09%
The difference between plan allowed and balance billing payment is 14.7% (In other words, balance billing settlements were averaging almost 15% above plan allowed amount).
Funding levels through a BUCA PPO network vs this RBP model in Texas averages 21.5% to 31.6% depending on location. For example funding levels in the Houston market for RBP is 21.5% less than for the BUCA network. Midland on the other hand has a 31.6% funding differential.
It is our understanding the TPA does not perform Medical Bill Review nor do they provide legal defense (not needed). They do provide patient balance billing support.
This is further evidence of the value of Reference Based Pricing strategies. PPO networks drive costs up, not down. Few plan sponsors are aware and those that are find it hard to buck 40 years of managed care.
It is our job to continue to educate consumers.
RiskMangers.us 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.
For More Information Write RiskManager@RiskManagers.us