Reference Based Pricing Impact on Provider Payments
REVELOHEALTH
REVELOHEALTH? is comprised of deep Payer and Provider operational experience committed to reduce the cost of collection.
Wednesday October 25, 2023. REVELOHEALTH President and Chief Executive Officer, John R. Thomas, shares Reference Based Pricing Impact on Provider Payments:
Reference Based Pricing (“RBP”) is a little-known claim pricing technique by payers where the ultimate price for a medical claim is not contracted, consistent, and dependent upon an estimate of local “market cost”. The industry leader in discounted reimbursement. This little-known pricing technique has been used to negotiate prices out of network or non-covered medical claims versus pay full charges. ?Additionally, RBP may be used to determine the price of complex disease states over a long period of treatment.?Historically, RBP was used to support a legal case to determine reasonable and customary price for a particular medical claim.?Recently, RBP is being used more often to price in network claims to attempt to reach “market-based price” for a medical claim.
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At best, RBP attempts to determine a current and reasonable price for non-covered services within the provider contract.?At its worst, providers are forced to accept a price for a medical claim where they have not agreed to the price via a contract.?Imagine having to accept or litigate and unknown price for services one provides.?
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Can you imagine buying a car in this manner?? Only in healthcare would we create or allow such a pricing structure.
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Imagine if a provider accepts an RBP price below the in-network price for the same payer?
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Imagine the impact of RBP on the cost of collection not only for providers but also for payers?
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What is the solution??
?A solution should be based upon the following principles.?Providers should have the right and responsibility to contract with various payers and plans on mutually agreeable terms. These terms should include the price for each procedure. Should the payer or plan fail to contract a mutually agreeable rate for the provider’s services, then the provider should have the right to set, communicate and collect their prices accordingly. Providers need the clarity in their managed care contracts and need better tools to contract effectively.?RBP has a small role in the cost of collection.?Its increase in utilization to reallocate revenues (increased plan cost) to disinterested parties (disinterested parties is defined as anyone not a provider or payer/plan) is not good for the healthcare industry.?BP increases the cost of collection for all parties.?
Stay tuned as we will soon release a discussion around our solution for RBP for medical providers...
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