Are reference-based pricing and behavioral health related?

Reference-based pricing (RBP), or Medicare-based pricing (MBP, as we like to use at ClearHealth) are heating up throughout the industry. There is more and more being discussed in the way of RBP and MBP, and the industry has taken a serious look at the ways to roll out a successful program.

This being the case, there are a number of pitfalls that can exist when working with a vendor partner on a RBP/MPB strategy. As the largest vendor in out-of-network RBP/MBP programs, we see a lot of opportunity for failure that would cause us to seriously look at the program installed. I was asked last week by somebody to list some of the critical questions to ask a RBP/MBP vendor; here is a sampling:

  • Do you require the use of a physician-only network? (this is asked because physician-only networks can be ineffective in addressing real cost as there are often significant network gaps; plus, unnecessary as providers accept MBP)
  • If I do use a physician-only network, what do you do when a provider is out-of-network? What pricing method is used, and how is it calculated?
  • Can I take a large claims sample and run it through your analytic process to understand the actual (not approximate) savings I would have realized?
  • Are you using cost-plus pricing or Medicare-based pricing? (there is a significant difference and more risk with cost-plus)
  • If you are using cost-plus pricing (and not Medicare pricing), what do you do for ambulatory surgery centers, inpatient rehab, air ambulance, and other expenses billed on a facility/UB claim form that don’t have cost-plus pricing?
  • Similarly, what do you do for behavioral health and other services for which cost-plus and Medicare do not have rates?
  • If you use Medicare as a proxy or benchmark for payment, what do you do when Medicare itself doesn’t cover (and therefore price) a service, yet it is covered by a commercial plan?
  • Do you offer necessary fair adjustments to pricing for uncompensated care and other provisions of pricing methods that require additional adjustment?
  • Are coding rules such as the Medicare Correct Coding Initiative (CCI), Medically Unlikely Edits (MUE), Multiple Procedure Reductions (MPR) and others, incorporated into your pricing process and updated regularly?

With a rise in the abuse of behavioral health causing some insurers to question their market position in certain States, I chose that pricing method to center my focus on for this article. You may have groups or blocks of business where behavioral health has been abused, and you may be looking at drug diagnostic screenings (coming through as lab codes) that are billed at egregious levels and not have an appropriate pricing solution. It is an often mis-construed point that just because the ACA said that behavioral health must be “covered”, it does not need to be “paid for” at 100%, especially when the charges are excessively billed.

Have you or your clients run into any of these interestingly named behavioral health facilities? Are they experiencing record-breaking expense in the mental health arena? Are there other categories of claims spend that are not being addressed through a traditional network or RBP program?

Reference-based pricing is not easy, and it shouldn’t be taken lightly. Trusting your claim pricing to an organization that has all of the bases covered is a logical first step. Appropriately paying for the program without over-exposing your business or customers is a great step two.

The bottom line is this: we have run into a few companies that ‘quote end-quote’ “do reference pricing”. For an organization that needs significant expertise, market-leading technology, comprehensive pricing, ultra competitive fees, and a fully turnkey program that can simply be implemented, ClearHealth is your partner. We’ve got the most experience and a program that doesn’t have another replacement in the industry. Ask me to prove it and let’s have a conversation about the right way to install RBP/MBP!