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.

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

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.”