When you switch to an Open Access healthcare plan that uses Reference Based Pricing (RBP), it’s not uncommon to run into a bit of confusion about how these plans work. Some of this is a natural part of the process of adopting to a new kind of plan. Unfortunately, some of the confusion can also be the result of stakeholders who know they can no longer unfairly overcharge people under an RBP system, and therefore want to discredit these plans in favor of the status quo.

In order to clear up some of the confusion, we’ve put together this list of common misconceptions about reference-based pricing.

One third of fully insured patients have received a balance bill in the past two years, according to one study. The majority of them ended up paying it in full, meaning they bear the cost of insurance carriers' and providers' inability to figure out what a “fair rate” means.

This huge financial burden on American families has reached crisis mode, and legislators have proposed two main solutions for protecting patients from balance bills. On the surface, these solutions may look like they protect patients, but both ultimately fail to address the core issue.

Open Enrollment is the 1-2 week period prior to the start of the plan where you’re able to choose between different coverage options your employer is providing, add dependents to your plan, and learn about what’s changing with your health insurance.

One of your first interactions with your new health plan will be an “open enrollment meeting”, where someone who’s an expert in your health coverage comes to explain the plan(s) and answer questions. DON’T SKIP THESE! This is your chance to learn how to save money on next year’s plan and what support resources are available to you. To help you make the most of these meetings, these are the five questions everyone should ask at open enrollment.

Flume Health’s Chief Operating Officer, Kevin Schlotman, has decades of experience in the insurance industry and was an early adopter of reference-based pricing. In this interview, we talked to him about where RBP came from, and how to make the most of it.

A personal essay and case study (~5 minutes read time)

As patients, we all want to believe that the healthcare facilities we turn to for treatment are there to take care of us. And it's true that the doctors we're seeing usually are. But a hospital is more than just doctors and nurses, and the sad truth is that many hospitals are more interested in extracting money from vulnerable patients than providing quality care at a fair price. They usually get away with it, too, because the leverage they hold - a person's access to care - makes it seem like they can demand as much money as they want, while making the payer feel like there isn't another option.

The good news: it doesn't have to be this way. There are good men and women across our industry who have both the will and the audacity to fight back, and they’re showing us that with vigilance and a little know-how, even one person really can make a difference. Because a good plan administrator knows the truth: greedy healthcare participants like hospitals don’t have quite as much leverage as they’d like us to think.

Healthcare is full of jargon. Here are some of the words you need to know (in plain English):

You know that Reference Based Pricing is a great cost containment tool- if done right, we’ve seen huge savings. But there’s a lot of misconceptions out there about RBP, and that can make trying to have a real conversation about as frustrating as fighting the Black Knight. 

In 2016, Montana became the first state to implement reference-based pricing for all 30,000 of its employees' health benefits. In 2018 North Carolina tried to be the second, but its efforts appear to be coming up short. 

In this post, we’ll take a look at:

1. Tactics used by each state to get RBP off the ground
2. What worked and what didn't for their leadership
3. Key take-aways for employers considering reference-based pricing

Montana is done letting insurers and hospitals run the show

As some readers may know from experience, launching an RBP plan isn't easy. Montana was no exception. The state’s Health Care and Benefits Division Administrator, Marilyn Bartlett, spearheaded the transition, and faced resistance from hospitals, the incumbent insurance carrier, and even members of her own office. Some employees quit over how many changes she was demanding. One tactic that Cigna employed to stop her efforts was a classic one: they refused to provide transparency into pricing agreements made with hospitals under the incumbent plan. Rather than capitulate, Bartlett ended the relationship. ProPublica reports “that Christmas, the Cigna representative sent each employee in Bartlett’s office a small gift, a snow globe. Bartlett didn’t get one.”

This article was contributed by Q4i and was originally posted on their blog.

I doubt anyone disagrees that having good communication with employees is a core business necessity. But I don’t believe everyone really understands and/or appreciates the critical role it plays in employee engagement, and particularly as it relates to the benefits package. As health plans become more complex within an organization, the communication must also increase along with it. And as generations in the workplace become further separated with vastly different life experiences and expectations, communication must take on a different face and role with the employee population.

Brokers and advisors have been communicating employee benefits packages for decades and relatively little has changed over time. Employee enrollment meetings, printed enrollment guides, benefits websites: pretty standard stuff that resembles broadcast communication, and a look-it-up-yourself approach.

When we put the importance of benefits into context of the balance sheet for the company, and the relative importance to the employees, it begs the question: Should we be doing more to help our employees understand and value of the benefits package so we can better attract and retain team members?

When Flume Health stepped in to replace Blue Cross Blue Shield for one client’s health benefits, we found a problem even worse than their out-of-control premiums: member health was being neglected. 

The patient in question had been suffering from lung problems for six years, but the incumbent's TPA was not actively managing his care. Now he had ended up in the ER, and the doctor was recommending a full lung transplant!

Left on his own, the patient likely would have gone straight to the nearest hospital to get on the waitlist, without even realizing that he had other options. The employer would have paid the bill regardless of whether it was overpriced, and the status quo would have rolled on...

Instead, Flume Health delivered a win-win-win for the patient, CEO, and provider by providing an opportunity to:

• get the patient better care with no out-of-pocket cost
• save the employer a ton of money
• give the provider a clear and easy path to billing

Here's how we did it: