The financial pressures surrounding COVID-19 have led employers to look for new ways to contain health care costs. Payors are using reference-based pricing (RBP), saying goodbye to traditional participating provider (PPO) networks.

Reference-based pricing is a health care cost containment model that limits what a payor will pay a provider for health care goods and services. Most insurers these days use RBP for certain out-of-network benefits. However, this becomes problematic when a plan foregoes a PPO network for hospital services altogether and pays all services, including emergency services, using an unsupportable benchmark rate, typically based on a percentage of Medicare fee-for-service or the provider’s cost plus a minimal mark-up. The plans usually keep a PPO network for physician or other professional services to ensure their members can continue to see their preferred physicians. This occurs most frequently with mid-sized self-insured employer plans.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]