By: Nic Hayes
Reference-based pricing (RBP) plans can deliver significant savings to both employers and the plan. However, not all RBP plans deliver the same level of savings. As many brokers and groups turn to reference-based pricing plans, they’re looking to drive savings, and bigger groups have the potential for larger savings; however, there are other considerations. Let's look at the differences that could limit employer savings with an RBP solution as well as the importance of the member experience.
Optimizing Reference-Based Pricing Savings
When evaluating your RBP plan, one of the most important things to consider is the plan’s approach to provider access. As there is an inverse relationship between broad network contacts and savings, striking the right balance is critical. Plans that prioritize gathering network contracts in every market often mean decreased savings. By negotiating contracts with hospitals or systems around the country, their approach becomes closer to traditional PPO plans and the savings opportunities are often eroded by agreeing to higher reimbursement levels than could’ve been negotiated on a case-by-case basis. More often than not, the more contracts, the higher the reimbursement.
However, as Andy McMillan, Executive VP of Sales and Marketing for Homestead Smart Health Plans, explains, “The key is having those contracts that are significantly less than one of the traditional national carriers from a reimbursement standpoint. At Homestead, we provide each group and broker that requests a quote with a savings analysis based on the GeoAccess Report, which details where their employees are. We'll look at historical data, and we will also utilize the information that we have on what percentage on average we're reimbursing those hospital systems in various parts of the country based on the data that we have from the census and where people are utilizing care.”
Compared to other reference-based pricing vendors, Homestead’s approach of having less contracts maximizes the savings for employees and employers. Additionally, when compared to other RBP, Homestead is able to alleviate access concerns with their Clear the Path™ Program, by reaching out to providers and hospitals during implementation to prevent any disruption from a transition of care perspective. “We proactively reach out to area providers letting them know that they have membership coming onto the health plan, answering any questions, and establishing those relationships before the plan effective date,” Andy explained.
These differentiators are a result of Homestead’s approach of focusing on the most important stakeholder in the health plan.
Focusing on the Member
“Absolutely, the member experience is number one for us,” said Andy McMillan.
By focusing on the member, Homestead is able to reduce friction and relieve tension for both the plan sponsor and broker. As Andy remarked, “Whenever there's issues at the member level, that will always boil up to the plan sponsor group level and guess who hears about it? The broker.”
For the member, most friction occurs when they’re going to see their doctor. Homestead addresses this through their Clear the Path ProgramTM when they reach out to hospitals and providers. Additionally, Homestead is able to eliminate most balance bills. While industry averages are between 2 and 5%, Homestead’s book of business runs at 1.2% meaning that 98.8% of their claims never get a balance bill. Even, in the case of the 1 .2 % of claims where hospitals don’t accept the initial reimbursement level suggested by Homestead and the member receives a bill, Homestead will protect the member for the life of that claim ensuring they never pay more than their patient responsibility. As Andy McMillan put simply, “As long as that claim is open, we will protect that member.”
Lastly, whenever members need Homestead, Homestead is there to help. Their call center average speed to answer is 10 seconds, and 95% of every call they take in is resolved on the first call without asking the member to make another call.
Through Homestead’s RBP plan, their commitment to the member experience is clear and equal to their promise of delivering significant employer savings.
We are proud to feature Homestead on the Granite List.