By Evan Boswell
A growing interest in reducing and stabilizing large healthcare bills and high-cost claims has inspired a number of new creative approaches. One such model is called Reference Based Pricing (RBP), in which programs contain costs by paying providers according to an established benchmark, usually around 120 to 300% of Medicare pricing. This strategy is great for clients, but it often comes packaged with a great deal of bills and other kinds of hassle. In order to provide an alternative, lower stress approach, some companies offer another approach called Fair Market Pricing (FMP). FMP uses a wider range of data points, such as the client's geographic area and the other competing plans in the area, the provider's previous prices, and all sorts of other metrics to find a truly "fair" price.
One of the first companies to make use of this system is Reliant Health Partners, LLC. “We frequently try to solve the problem of reducing our client’s healthcare spend, with minimal noise and disruption to the member and/or plan. Our goal is to see that the member is only ever responsible for their co-pay, co-insurance or deductible, and nothing more,” shares Reliant COO Bailey Smith.
FMP has a few advantages over RBP. For one, since it uses a more client-specific approach, it can sometimes save you more than RBP would, considering factors that RBP does not. Additionally, FMP is simply less stressful. There are fewer balance bills for patients and generally less noise. On top of that, FMP frees Plan Members from being tethered to a network, with all of its associated restricted provider access. This grants users more choice in facilities and specialists.
Reliant Principle Arthur Chapman explains, “Payers are looking for alternatives to narrow networks, networks with tepid pricing and the disruption that comes with Reference Based Pricing. Reliant offers a very effective solution with its Fair Market Pricing protocol, as members get broad access to providers, coverage for all claim types, pricing comparable to the best network pricing and provider appeals averaging 1%, an overall positive experience.”
An important factor to bear in mind when comparing RBP and FMP is consistency. RBP virtually guarantees lowered healthcare costs, with no room for appeals. FMP on the other hand is more varied. It may be lower than what RBP can offer, or it can be higher. What's more, under FMP, appeals can be made, leading to the whole process getting even more entangled. However, Reliant has managed to master this process, maintaining an appeal rate of roughly 1%. Additionally, 2/3 of those appeals are settled for the original repriced amount, while the remainder are resolved quickly by an additional payment and the claim is settled by agreement. Otherwise, FMP is significantly less stress and less work for the client.
“Plan Members are no longer tethered to a network with its restricted provider access, enabling the exercise of choice of preferred facilities and specialists,” according to Chapman. FMP manages to save an average of 63% on costs across the country, which is only slightly less than RPB, and for some, that small difference can be worth the ease of use.
The goal of FMP is, ultimately, to minimize the stress, headache, and frustrations in healthcare spending, while also lowering costs as much as possible. FMP seeks to reduce the concerns of the client to their co-pay, co-insurance, or deductible. Convenience and ease of use is always a bonus, and Fair Market Pricing is designed to achieve just that, all the while providing savings on your healthcare costs.
