Something Old, Something Novel [Updated]
[Scroll downward for Update]
So dorsum inwards April, nosotros blogged on a medical insurance reimbursement model called reference-based pricing:
"Briefly, this is where an employer enters direct into a contract amongst a infirmary (or other wellness assist provider, i supposes, including DPC) ... but tin give notice bear additional risks, every bit well, namely residuum billing"
In that post, I actually defined the concept agency likewise narrowly, because it doesn't accept to endure contractual amongst the provider. Indeed, every bit FoB Jeff yard alerts us, it tin give notice endure inwards human relationship amongst one's insurance company:
"MyChoice is a less expensive pick for families too modest businesses who may non endure able to afford other, higher-priced ACA plans ... This isn't a reduced-coverage plan, however. The cost savings are achieved through reference-based pricing. The conception reimburses customers direct for medical procedures at rates that are upward to xl per centum higher than what the physician or infirmary would have for providing the exact same services to a patient on Medicare."
Which seems fair, too also touches the sacred Price Transparency button. The challenge, of course, is two-fold (at least):
As noted inwards our Apr post, this opens upward the real existent possibility of balance-billing; that is, it's non a network issue, thus the provider is costless to accuse to a greater extent than than the reimbursement value. Which leads to the second, related issue: sure, this may endure groovy for non-emergency services, but who's shopping for the cheapest ER when having breast pains?
And the residuum billing effect on this could endure huge. recollect final month's post on the $100,000 take in attack? Influenza A virus subtype H5N1 fundamental passage notes:
"His insurance did what it was supposed to do, it made a fair too reasonable offering for the assist received."
Kinda similar 140% of Medicare pricing?
And how did that move out?
"St. David's stuck to their guns too refused to budge."
So, is this the future?
UPDATE: Co-blogger Patrick explains how this volition move inwards practice:
"Essentially the fellow member gets reimbursed for the cost of the service at 140% of the Medicare rate, thus if a physician charges $100 the fellow member pays $100. If Medicare contract says the provider gets $40 too thus BCBSNC volition reimburse the fellow member at $56 (140% of $40).
If that isn't plenty reimbursement for the physician too thus they tin give notice residuum nib the divergence [ed: every bit noted]. Think close how much of a nightmare this volition endure for members: Every code has a dissimilar accuse too reimbursement. If you lot accept x codes from your ER see too thus you lot could endure residuum billed for each delineate item. Aspirin at $8 Medicare pays $0.20. 140% of $0.20 is $0.28. Does the infirmary residuum nib the divergence of $7.72 or do they consume it? How ticked is the fellow member if they accept to pay $7.72 for an aspirin?"
Indeed. Thanks, Patrick!
So dorsum inwards April, nosotros blogged on a medical insurance reimbursement model called reference-based pricing:
"Briefly, this is where an employer enters direct into a contract amongst a infirmary (or other wellness assist provider, i supposes, including DPC) ... but tin give notice bear additional risks, every bit well, namely residuum billing"
In that post, I actually defined the concept agency likewise narrowly, because it doesn't accept to endure contractual amongst the provider. Indeed, every bit FoB Jeff yard alerts us, it tin give notice endure inwards human relationship amongst one's insurance company:
"MyChoice is a less expensive pick for families too modest businesses who may non endure able to afford other, higher-priced ACA plans ... This isn't a reduced-coverage plan, however. The cost savings are achieved through reference-based pricing. The conception reimburses customers direct for medical procedures at rates that are upward to xl per centum higher than what the physician or infirmary would have for providing the exact same services to a patient on Medicare."
Which seems fair, too also touches the sacred Price Transparency button. The challenge, of course, is two-fold (at least):
As noted inwards our Apr post, this opens upward the real existent possibility of balance-billing; that is, it's non a network issue, thus the provider is costless to accuse to a greater extent than than the reimbursement value. Which leads to the second, related issue: sure, this may endure groovy for non-emergency services, but who's shopping for the cheapest ER when having breast pains?
And the residuum billing effect on this could endure huge. recollect final month's post on the $100,000 take in attack? Influenza A virus subtype H5N1 fundamental passage notes:
"His insurance did what it was supposed to do, it made a fair too reasonable offering for the assist received."
Kinda similar 140% of Medicare pricing?
And how did that move out?
"St. David's stuck to their guns too refused to budge."
So, is this the future?
UPDATE: Co-blogger Patrick explains how this volition move inwards practice:
"Essentially the fellow member gets reimbursed for the cost of the service at 140% of the Medicare rate, thus if a physician charges $100 the fellow member pays $100. If Medicare contract says the provider gets $40 too thus BCBSNC volition reimburse the fellow member at $56 (140% of $40).
If that isn't plenty reimbursement for the physician too thus they tin give notice residuum nib the divergence [ed: every bit noted]. Think close how much of a nightmare this volition endure for members: Every code has a dissimilar accuse too reimbursement. If you lot accept x codes from your ER see too thus you lot could endure residuum billed for each delineate item. Aspirin at $8 Medicare pays $0.20. 140% of $0.20 is $0.28. Does the infirmary residuum nib the divergence of $7.72 or do they consume it? How ticked is the fellow member if they accept to pay $7.72 for an aspirin?"
Indeed. Thanks, Patrick!
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