Reference Based Pricing

What is Reference-Based Pricing?

Reference-based pricing (RBP) is a cost-containment strategy that uses an established benchmark, like Medicare, to determine what is paid for healthcare services. Self-insured businesses can add a reference-based pricing solution to their health plan and reduce annual costs by up to 30%. Gulf South Risk Services reviews and audits medical bills, reprices them based on Medicare or some other benchmark like the actual cost reported by a hospital, and pays a fair and reasonable amount on those charges.

Reference-based pricing utilizes a reference metric—often the actual cost or Medicare—then adds a fair profit margin to determine provider payment.

How does Gulf South Risk Services’ Reference-Based Pricing work?

With reference-based pricing, health plans set limits through plan design on paying healthcare providers for procedures and related healthcare costs. With our solution, the payments are based on actual costs from the providers (self-reported annually by law) and Medicare reimbursement rates as determined by the government.

Upon receipt of the claim our examiners:

• Audit the healthcare claim for errors and unexplained and excessive charges
• Identify the actual costs of services and materials
• Reprice based on Medicare and actual costs
• Determine a fair and reasonable payment for the provider

Is a Reference-Based Pricing model right for your benefits plan?

Careful consideration and analysis need to be completed prior to implementing RBP cost containment in your plan. Employer and employee education are essential to a successful RBP cost savings approach.

Why Gulf South Risk Services’ Reference-Based Pricing?

Gulf South Risk Services is one of the few Third Party Administrators that perform all services of RBP in-house (we do not outsource services to a vendor).  We are experienced in managing all aspects of services with one call to our office and have managed current RBP clients for multiple years for successful outcomes.  We can reprice to a multiple of Medicare reimbursement for our clients as well as offer patient’s advocacy and legal service if needed all inclusive at a PEPM price.