Tasting the secret sauce
As the name suggests, RBP uses a reference point for pricing high-cost medical procedures that vary widely from one facility or market to another. Plans that employ this strategy often will use a modest multiplier of Medicare in the 120% to 150% range. RBP has become a fast-growing, transparent solution for avoiding unreasonable or excessive provider charges that drive up the cost of employer-sponsored health benefits. It has the potential to transform employee use of health care services by making procedures more accessible and affordable. Attorneys serving this space and involved in litigations view RBP as a transparent and affordable solution that helps employers and providers negotiate reasonable prices and utilize state and federal laws to their benefit.

Not all RBPs, however, are created equal. Just like the wide range of prices they seek to contain, there are variations in plan design and services to consider. This is especially important to consider given that the NSA could significantly increase costs for health plans that use narrow networks, negotiate contracts with providers or employ RBP as the mechanism to price out-of-network claims.

Now here’s why: open negotiation and independent dispute resolution (IDR) procedures may trigger a new risk for health plans that apply RBP to non-network providers or plans that directly contract with providers and facilities. The irony is that any added cost associated with making health insurance coverage more transparent easily could be passed onto participants.

To avoid harmful exposure to the medical overbilling epidemic, the most effective approach is to adopt a “pure” RBP plan that does not contract with providers and, therefore, avoids the IDR process based on the guidance received to date. In the absence of any out-of-network claims, direct-contracting fees or need to determine a median in-network rate, these plans will not be adversely affected by the NSA. Further, because in-network charges also tend to vary substantially, pure RBP ensures the suggested reference price applies in every situation.

While all employers face the same pain points associated with legislative loopholes and litigation, there’s a way for larger or jumbo groups to avoid the IDR process. If those companies reduced the breadth of their networks and applied RBP, then there is no network qualified payment amount.

Adopting this structure, coupled with tech-driven data support that includes an advanced payment-integrity solution, could potentially lower both the cost of coverage and employee cost sharing. Given the wide variation of provider charges for the same services, without any difference in quality, a pure RBP design offers plans the best opportunity to avoid excessive and unreasonable provider charges.

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