Referenced based what?
May 2, 2018 6:48 AM Subscribe
My employer is switching our health insurance from Aetna to an open provider model utilizing referenced based pricing. Does anyone have experience with this type of insurance to share, either as a patient or provider?
My employer is switching our health insurance from Aetna to an open provider model utilizing referenced based pricing. Apparently what this means is that we have no network of providers, we can go to any provider we choose, and our insurance plan will reimburse the provider at a rate based on 120% of the Medicare rate. We have started contacting our current providers to see if they accept this form of insurance and so far two of them have essentially said "reference based-what?" and then said they wouldn't accept it. Google has been no help at all - it seems there is very little information out there except for the sales pitches of third-party administrators. Does anyone have experience with this type of insurance to share, either as a patient or provider? Pros and cons?
My employer is switching our health insurance from Aetna to an open provider model utilizing referenced based pricing. Apparently what this means is that we have no network of providers, we can go to any provider we choose, and our insurance plan will reimburse the provider at a rate based on 120% of the Medicare rate. We have started contacting our current providers to see if they accept this form of insurance and so far two of them have essentially said "reference based-what?" and then said they wouldn't accept it. Google has been no help at all - it seems there is very little information out there except for the sales pitches of third-party administrators. Does anyone have experience with this type of insurance to share, either as a patient or provider? Pros and cons?
Also what is the name of the new company? If you give us that we might be able to research from there.
posted by TestamentToGrace at 7:11 AM on May 2, 2018
posted by TestamentToGrace at 7:11 AM on May 2, 2018
This link seemed to be a bit more useful amongst the google results.
This reminds me of what a lot of pet health insurance plans do (mysteriously determine what every procedure "should" cost and then balance bill you for anything over that, which sucks if you live in a high cost of living area).
Is your employer moving to a self-funded model?
posted by soren_lorensen at 7:53 AM on May 2, 2018 [2 favorites]
This reminds me of what a lot of pet health insurance plans do (mysteriously determine what every procedure "should" cost and then balance bill you for anything over that, which sucks if you live in a high cost of living area).
Is your employer moving to a self-funded model?
posted by soren_lorensen at 7:53 AM on May 2, 2018 [2 favorites]
we have no network of providers, we can go to any provider we choose, and our insurance plan will reimburse the provider at a rate based on 120% of the Medicare rate.
This is a common reimbursement model for out-of-network coverage. The important things to look at will be: what is your deductible? what is your max out-of-pocket limit? what services are covered vs not? how do you submit claims for reimbursement? (if there's no network, you may be responsible for submitting your own claims and you may be asked by some providers to pay in full up front).
posted by melissasaurus at 7:59 AM on May 2, 2018
This is a common reimbursement model for out-of-network coverage. The important things to look at will be: what is your deductible? what is your max out-of-pocket limit? what services are covered vs not? how do you submit claims for reimbursement? (if there's no network, you may be responsible for submitting your own claims and you may be asked by some providers to pay in full up front).
posted by melissasaurus at 7:59 AM on May 2, 2018
You need to find out who will be responsible for submitting claims - you or the plan administrator. You may find that you have to pay providers directly and then submit claims to your program for reimbursement of whatever share of the cost they will cover.
posted by ThePinkSuperhero at 8:27 AM on May 2, 2018
posted by ThePinkSuperhero at 8:27 AM on May 2, 2018
The million dollar question I would want to know is who makes up the shortfall between 120% of Medicare rate and what the doctor actually charges? Normally with insurance companies who have networks the doctor has to take the loss between what the insurance company allows and what they charge. But you specifically said this is insurance without a network so it makes it sound like you are on the hook for the difference between what they reimburse and what the doctor charges?
This. "Balance billing" would be the key phrase to ask/search for regarding this aspect. I primarily work with Medicare and Medicaid on the payer side but have occasionally dabbled in commercial health coverage in the past, and 120% of Medicare feels like a very low reimbursement rate for a group plan. I'd be surprised if many providers were willing to settle for that.
posted by bassooner at 8:31 AM on May 2, 2018 [1 favorite]
This. "Balance billing" would be the key phrase to ask/search for regarding this aspect. I primarily work with Medicare and Medicaid on the payer side but have occasionally dabbled in commercial health coverage in the past, and 120% of Medicare feels like a very low reimbursement rate for a group plan. I'd be surprised if many providers were willing to settle for that.
posted by bassooner at 8:31 AM on May 2, 2018 [1 favorite]
And what about stuff that the vast majority of Medicare beneficiaries don't need since most are age 65 and older, and don't need pediatricians or obstetricians, for instance?
posted by mareli at 9:27 AM on May 2, 2018
posted by mareli at 9:27 AM on May 2, 2018
We have started contacting our current providers to see if they accept this form of insurance and so far two of them have essentially said "reference based-what?"
Tell them the name of the insurer, don't just describe the business model. They may have heard of your new insurer, but may not recognize your description of it.
posted by JimN2TAW at 9:29 AM on May 2, 2018
Tell them the name of the insurer, don't just describe the business model. They may have heard of your new insurer, but may not recognize your description of it.
posted by JimN2TAW at 9:29 AM on May 2, 2018
I'd be surprised if many providers were willing to settle for that.
Strong agree. It depends to a certain extent on your local market, but in most places, the gross charges for providers are going to be a lot higher that 120% of Medicare. If you're liable for the difference, that can work out to a lot of money - whether through being balance-billed, or, even worse, if you're just supposed to pay your provider in full at the time of service and then submit a claim to your plan administrator yourself afterwards as ThePinkSuperhero suspects.
Another factor to understand: is there any kind of annual out-of-pocket maximum, and if there is, would it kick in before you went broke? If the answer to either of those questions is no, then anything where you get sick enough to be hospitalized is going to bankrupt you, given the difference between Medicare reimbursement for inpatient care and what hospitals charge.
If I were in your shoes, I'd really be looking into getting a marketplace exchange plan. Marketplace plans can be expensive, but if this employer coverage treats everybody as out-of-network, I think it's likely to be worthless to you for anything more serious than a doctor's office visit.
posted by strangely stunted trees at 9:40 AM on May 2, 2018
Strong agree. It depends to a certain extent on your local market, but in most places, the gross charges for providers are going to be a lot higher that 120% of Medicare. If you're liable for the difference, that can work out to a lot of money - whether through being balance-billed, or, even worse, if you're just supposed to pay your provider in full at the time of service and then submit a claim to your plan administrator yourself afterwards as ThePinkSuperhero suspects.
Another factor to understand: is there any kind of annual out-of-pocket maximum, and if there is, would it kick in before you went broke? If the answer to either of those questions is no, then anything where you get sick enough to be hospitalized is going to bankrupt you, given the difference between Medicare reimbursement for inpatient care and what hospitals charge.
If I were in your shoes, I'd really be looking into getting a marketplace exchange plan. Marketplace plans can be expensive, but if this employer coverage treats everybody as out-of-network, I think it's likely to be worthless to you for anything more serious than a doctor's office visit.
posted by strangely stunted trees at 9:40 AM on May 2, 2018
Are you employed by a small company? IS this plan ACA compliant or is it simply a discount card?
posted by WeekendJen at 10:24 AM on May 2, 2018
posted by WeekendJen at 10:24 AM on May 2, 2018
This sounds like something I read about some time back, it may have been another question posted to Meta Filter.
This may not even be considered insurance so there may be issues with ACA compliance. I also seem to recall reading that employers could limit what procedures are covered. The article I read was related to faith base companies.
Not sure I have answered any of your questions and likely raised more concerns.
posted by tman99 at 10:33 AM on May 2, 2018
This may not even be considered insurance so there may be issues with ACA compliance. I also seem to recall reading that employers could limit what procedures are covered. The article I read was related to faith base companies.
Not sure I have answered any of your questions and likely raised more concerns.
posted by tman99 at 10:33 AM on May 2, 2018
And what about stuff that the vast majority of Medicare beneficiaries don't need since most are age 65 and older, and don't need pediatricians or obstetricians, for instance?
Medicare has payment rates for just about everything that a provider / hospital could bill for, so I don't think I'd worry about not having coverage at all for certain types of services not used by older people. (About one in seven Medicare beneficiaries are actually younger than 65 but permanently disabled, so Medicare definitely pays for things like childbirth and pediatricians - just not as often.)
That said, I would be kicking up a major fuss at my employer if they were moving to this model. It's basically a PPO where *everybody* is out-of-network. The difference between what doctors/hospitals bill and the negotiated rate with your insurance company is a huge, huge part of the financial savings from having insurance, and if you're not getting any discounted rates (which is the case if you are responsible for the difference between the provider bills and 120% of the Medicare rate), then you are going to be paying significantly more for the same service than most people with health insurance.
Is there a maximum annual out-of-pocket limit (that is, a cap on what you'd be forced to pay for medical care)? I'd be suspicious that there isn't, and that is the sort of "insurance" that would leave you seriously at-risk of financial ruin if you were unlucky enough to have a serious illness or accident where bills can run into the hundreds of thousands of dollars.
posted by iminurmefi at 11:52 AM on May 2, 2018 [1 favorite]
Medicare has payment rates for just about everything that a provider / hospital could bill for, so I don't think I'd worry about not having coverage at all for certain types of services not used by older people. (About one in seven Medicare beneficiaries are actually younger than 65 but permanently disabled, so Medicare definitely pays for things like childbirth and pediatricians - just not as often.)
That said, I would be kicking up a major fuss at my employer if they were moving to this model. It's basically a PPO where *everybody* is out-of-network. The difference between what doctors/hospitals bill and the negotiated rate with your insurance company is a huge, huge part of the financial savings from having insurance, and if you're not getting any discounted rates (which is the case if you are responsible for the difference between the provider bills and 120% of the Medicare rate), then you are going to be paying significantly more for the same service than most people with health insurance.
Is there a maximum annual out-of-pocket limit (that is, a cap on what you'd be forced to pay for medical care)? I'd be suspicious that there isn't, and that is the sort of "insurance" that would leave you seriously at-risk of financial ruin if you were unlucky enough to have a serious illness or accident where bills can run into the hundreds of thousands of dollars.
posted by iminurmefi at 11:52 AM on May 2, 2018 [1 favorite]
Is there a maximum annual out-of-pocket limit (that is, a cap on what you'd be forced to pay for medical care)? I'd be suspicious that there isn't, and that is the sort of "insurance" that would leave you seriously at-risk of financial ruin if you were unlucky enough to have a serious illness or accident where bills can run into the hundreds of thousands of dollars.
PPACA requires most plans to have an out-of-pocket max (OOP max) on "essential health benefits." While those maximums aren't trivial ($7,350 for self-only coverage and $14,700 for family coverage), costs to patients are limited by law for:
Ambulatory patient services (outpatient services)
Emergency services
Hospitalization
Maternity and newborn care
Mental health and substance use disorder services, including behavioral health treatment
Prescription drugs
Rehabilitative and habilitative services (those that help patients acquire, maintain, or improve skills necessary for daily functioning) and devices
Laboratory services
Preventive and wellness services and chronic disease management
Pediatric services, including oral and vision care
Also, as to reference-based pricing (I am deeply cynical about the actual cost-containment, much less the moral, aspects of all so-called "consumer-driven healthcare, including RBP**), there are certain protections for people in areas without adequate access to quality providers at the reference price and for emergency services, both under PPACA and some state laws. The areas that end up achieving the best savings for health plans (not patients, necessarily, but sometimes) are for things that can be done at a non-hospital, like surgi-center knee and hip replacements, stand-alone MRI places, etc.
** Added cost of employer and employee education (to avoid participants unknowingly choosing high-cost providers and incurring thousands of dollars in medical bills as a result), limited experience of vendors sorting out the pricing and billing, lack of established markets, disruption from non-participating providers, lack of leverage for small employers; access to plan and or provider specific pricing data is limited for most employers...)
posted by Pax at 12:19 PM on May 2, 2018
PPACA requires most plans to have an out-of-pocket max (OOP max) on "essential health benefits." While those maximums aren't trivial ($7,350 for self-only coverage and $14,700 for family coverage), costs to patients are limited by law for:
Ambulatory patient services (outpatient services)
Emergency services
Hospitalization
Maternity and newborn care
Mental health and substance use disorder services, including behavioral health treatment
Prescription drugs
Rehabilitative and habilitative services (those that help patients acquire, maintain, or improve skills necessary for daily functioning) and devices
Laboratory services
Preventive and wellness services and chronic disease management
Pediatric services, including oral and vision care
Also, as to reference-based pricing (I am deeply cynical about the actual cost-containment, much less the moral, aspects of all so-called "consumer-driven healthcare, including RBP**), there are certain protections for people in areas without adequate access to quality providers at the reference price and for emergency services, both under PPACA and some state laws. The areas that end up achieving the best savings for health plans (not patients, necessarily, but sometimes) are for things that can be done at a non-hospital, like surgi-center knee and hip replacements, stand-alone MRI places, etc.
** Added cost of employer and employee education (to avoid participants unknowingly choosing high-cost providers and incurring thousands of dollars in medical bills as a result), limited experience of vendors sorting out the pricing and billing, lack of established markets, disruption from non-participating providers, lack of leverage for small employers; access to plan and or provider specific pricing data is limited for most employers...)
posted by Pax at 12:19 PM on May 2, 2018
I'd be looking for a new job so effing fast if my employer did this. iminurmefi explained it better than I could. I don't know who this is benefiting, but it isn't you.
posted by radioamy at 5:36 PM on May 2, 2018 [2 favorites]
posted by radioamy at 5:36 PM on May 2, 2018 [2 favorites]
This thread is closed to new comments.
posted by TestamentToGrace at 7:10 AM on May 2, 2018 [3 favorites]