Unlike traditional PPO plans, reference-based pricing doesn’t require the use of a network. The plan reimburses the same amount—no matter which health care provider members choose. So there’s no need to worry about out-of-network charges.
The Benefits of Reference-Based Pricing
Reference-based pricing is designed to deal with cost variations for the same service or procedure across providers. By setting objective payments for services and procedures:
- Employers have more control over health care costs
- Employers may pay less for members’ claims, which saves money for both the employer and group member.
- Employers and employees can budget for benefits and health care with certainty.
Traditional PPO health plans negotiate prices individually with each health care provider in their network. Prices can vary widely in the same community for the same care. However, health plans that use the reference-based pricing model pay based on widely-accepted Medicare reimbursement rates.
RBP plans use a fair, collaborative approach to health coverage that:
- Reduces health care costs by up to 20%.
- Eliminates wide variations in the cost of care, compensating providers equally for the same care.
- Increases transparency of cost and empowers plan members to make better decisions.
The U.S. Centers for Medicare and Medicaid Services (CMS) establish Medicare reimbursement rates based on the actual cost of providing care. Allstate Benefits’ RBP plans pay 100% to 150%2of the Medicare reimbursement rates or other derived equivalents for services.
Everyone wins: providers are compensated in an equitable way while members and employers save money.
Cosmo Insurance Agency is a full-service independent insurance agency based in Hackensack (Bergen County) and Lakewood (Ocean County), New Jersey that offers an all-encompassing range of insurance options for both individuals and businesses. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating our knowledge of the insurance guidelines for healthcare, employee benefits, life insurance, self-insurance, dental, disability, and long term care insurance, we keep our clients up-to-date with affordable plans that cover all their specific insurance needs.