Risk & Business Magazine JGS Insurance Summer 2021 - Page 5

HEALTH CARE INSURANCE
• RBP can be a cost-effective option for employers . Rather than using the contracted rate that is negotiated by an insurance carrier , they use Medicare as their benchmark by typically paying hospitals a 120 %– 200 % markup to the Medicare reimbursement rate . While still high , this is far less than the 250 % of Medicare reimbursement many hospitals bill employer plans based on the discount an insurer has negotiated .
IMPLEMENTING REFERENCE-BASED PRICING
Many employers that implement RBP plans have achieved substantial savings , reducing health care costs by 5 %– 20 %. Employees , of course , benefit from these lower costs too . When properly structured and supported , the transition to RBP plans will go a lot smoother . Some administrators of RBP plans will contact the providers utilized by your employees in advance of the effective date and / or

Many employers that implement RBP plans have achieved substantial savings , reducing health care costs by 5 %– 20 %.

in advance of the scheduled procedure . This way , the provider will be informed about the employee ’ s RBP plan and can try to negotiate the cost in advance , and the employee will not have the burden of introducing and educating the provider during their first visit .
In instances where the payment terms are not negotiated in advance and a member does incur a balance bill , many RBP administrators have a dedicated staff who work with providers to negotiate a settlement based on local benchmark data and applicable state balance billing regulations . Often , the provider will accept payment in full ( writing off the balance ) or another agreement can be reached . There have been lawsuits filed by providers over balance billing issues , but most have been settled out of court . Fortunately , in most cases , the provider ends up accepting the RBP amount as payment in full before things reach that stage .
Considering the magnitude of this change in health care delivery , it is critical that employees are offered the right tools and information to make informed choices and have a thorough understanding of what to expect at the point of service . First , identify an experienced partner who specializes in these plans . You will want an expert to choose the type of RBP plan that meets your needs and negotiates / communicates with providers . Second , make sure there is a robust education plan in place to reduce the anxiety and address questions in advance of the effective date . Employers must help educate employees about the health care system , beyond just explaining RBP . Third , arrange for a lot of support . Employees will need assistance with enrolling , understanding the nuances of the RBP plan , finding providers , and resolving billing issues . Partnering with a benefits advocacy service can provide this level of support both at the time of enrollment and throughout the year .
RBP is an innovative strategy for lowering health care costs . As the market continues to evolve , employers are tasked with developing creative strategies for saving money . The RBP model is unique in its ability to reduce costs while simultaneously promoting employee health literacy . To learn more about RBP , and to see if it is right for your organization , contact JGS Insurance . +
BY : BARRY E . FIELDS VICE PRESIDENT OF EMPLOYEE BENEFITS JGS INSURANCE
Barry Fields has over 30 years of employee benefits experience advising clients in a wide range of industries , professional and industrial , public and private , throughout the United States and worldwide .
Barry specializes in providing full-service benefits consulting to clients including program design , compliance , plan funding , underwriting , wellness programs , employee communications , benefits administration , employee advocacy and the use of effective strategies in benefits management .
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