reference-based pricing

Top 7 Employee Engagement + RBP Questions & Answers

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Last month we hosted one of our favorite webinars yet, “Employee engagement + RBP: Employers’ secret to lowering healthcare costs.” The speakers shed light on how implementing a cost-containment solution like reference-based pricing (RBP) doesn’t mean an employer has to sacrifice the employee experience. During the webinar, our attendees came at us with some really great questions. Their questions were so good that we had to share with you, here on our mBLOG.

1) In my experience, employees don’t pay attention to education or information regarding healthcare until they actually need it. Any suggestions for combatting this?
It is true that employees often only show an interest in benefits that apply to their situations. One way to combat this is by approaching employee education with a marketer’s mindset, by focusing on awareness, interest, consideration and action.

First, identify the general actions you need employees to take. Then, develop a communication plan to relay the necessary information in an easily digestible manner. Finally, make it easy for employees to understand their options and use them in a way that makes sense for their situations.

2) If I will be undergoing surgery, whose responsibility is it to determine if the providers will accept a plan with RBP?
Unless there is actual acceptance of RBP in the form of a contract, there is no way to build absolute certainty about access to a specific provider for an upcoming surgery.  

However, some RBP partners will provide proactive patient advocacy to help schedule things like surgeries with receptive providers, either as a pre-arranged bundle or with up-front payment options. Also, some take it one step further by carving out networks for labs or imaging to help alleviate the access issue for scheduled, non-emergent care.

3) How does Maestro Health assist groups in implementing successful transition to RBP?
We begin by taking a look at the group, the demographics and the local healthcare markets to determine what is best for employees. From there, we start a discussion around cost-containment strategies for the plan. This may begin by transitioning from traditional self-funding to an independent third-party administrator (TPA) with a network to avoid access disruption and achieve a transparent environment to analyze claims and service patterns.

In addition, we arm employees with the education and resources they need to help them navigate the healthcare system using an RBP model. This ensures that they’re prepared to know what to do when they receive a balance bill, as well as understanding the advantages of visiting a provider that has a contract with the RBP plan.

It should be noted that our deep RBP knowledge is what allows us to implement solutions, create employee communication strategies and partner with the right vendors to create a transparent healthcare ecosystem that works for everyone involved.

4) Are there any shared characteristics of providers who are more willing to accept RBP plans?
Hospital systems in competitive markets may be more willing to tolerate predictable reference-pricing payments, especially if employers began to steer employees to that hospital system instead of the larger hospital systems in their area, creating a "safe harbor." Providers that are not connected to hospital systems may also be better candidates because they have more flexibility and are willing to make unique arrangements with employers.

5) Is there an element of quality that is considered when setting the payment level to the provider with an RBP solution?
Unlike many carrier networks, an RBP plan does not restrict the administrator's ability to direct care to high-quality, low-cost providers. While the benefit level may be a set multiple of Medicare, the flexibility in provider choice, possible incentive and transparent discussion about quality can result in employees seeking higher quality care for the same rates.

6) Do you foresee an RBP methodology being applied to pharmacy benefits?
RBP can be applied to Rx in limited situations outside of a pharmacy benefits manager (PBM). For instance, RBP can be applied in hospital services that focus on high cost drugs, or in instances where the plan design limits payment for a drug and facilitates better negotiation around that item.

7) What if providers don’t accept a plan with RBP and therefore employers would end up paying 100% of the billed charges?
In situations where healthcare providers refuse to accept RBP but access to that provider is a necessity, your RBP partner will typically assist the employee in negotiating payment. Payment is rarely 100% of billed charges. Further, in some markets, there are often alternative providers or means of access, like bundled services for some surgeries.

Of course, the best practice to ensuring providers are willing to accept a plan with RBP is by working with a partner that involves providers in their discussions when designing an RBP model.  We’ll be diving into how this works on May 14th during our webinar, “Build the dream: Constructing a cost-containment ecosystem for your organization.” Don’t miss it.

Keeping doctors out of the chair and part of the conversation

By Garrett Weldon, PT, DPT, Vice President of Provider Partnerships and Clinical Strategy, healtH2Business

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In 1891, an artist named Lukes Fildes completed a painting entitled, "The Doctor." It portrays a concerned physician watching over a gravely ill child. It is remarkably lifelike, perhaps because it is based on the artist’s own experience of losing a son before adolescence. Overlooking the sick child, the doctor is seated in a chair and appears deep in thought. Behind the little girl, with faces of fear and sadness, are the girl’s mother and father. Today, the painting begs the question: who is helping this little girl more? The doctor? The parents? Sure, both are present, but both are also an arm’s length away, immobile and frozen in their inability to intervene. There are no IV poles, cardiac monitors or tests to be run There is simply no active intervention being or to be done.

It wasn't until 1941 that penicillin was first prescribed and arguably changed the way we live and die. Now we have things like cortisone treatments, open heart surgeries, kidney transplants and rapid stroke interventions happening daily. If Sir Fildes were to paint this picture in 2019, I am confident the symbolic physician would no longer be simply sitting in a chair. He would be up on his feet, intervening.

However, having the doctor out of the chair comes with its own set of problems. Misdiagnosis, inappropriate interventions, over-treatment, under-treatment, human errors and debates about how, when, where and on whom to intervene. While these problems can be significant, I for one am still glad the doctor is out of the chair.  

It seems to be too often in the space of employee benefits that conversations turn to putting doctors back into their metaphoric chairs. From my perspective, many of the discussions happening are without consulting a large enough sample size of doctors or hospital systems to speak on their behalf. Often, anecdotal experiences are being used to frame the full provider experience. That is, simply, an error. Of course, doctors make mistakes, some of which even cause premature death, disability or financial hardship. But what if, instead of putting them back into the chair, we sought to give them a voice? What if we brought them to the table of creation? What if we gave them responsibility for a population? What if we worked with them to create and design plans in such a way the emphasis included responsibility and opportunity as opposed to just cost-containment. What if one of our top goals was to allow employers the flexibility they need to sit down with doctors and have meaningful conversations about their employee populations? What if our actions strongly suggested we view providers as a part of our community and in turn an integral part of the solution?

In the upcoming webinar, “Build the dream: Constructing a cost-containment ecosystem for your organization,” I’ll be exploring more of this topic. I will also be sharing my experience as a clinician and how the PPOs and ASO arrangements of today are not conducive to the vision of the healthcare delivery model I had and practiced, which ultimately led me to be a believer in reference-based pricing plans.

2018. What a Year.

It’s that time of year again. Festivus parties have ended. Holiday cards have been sent. A new year has begun. And we’re taking a step back to look at everything 2018 brought for Maestronites.

We started the year off with a bang with our acquisition by AXA. Joining forces with a worldwide insurance leader added even more fuel to our mission to make employee health and benefits people-friendly again.

Shortly after the acquisition, we launched our health plan management approach to self-funded benefits. By incorporating a people-friendly reference-based pricing model, we were able to partner with 170 new employer clients, like Leith Automotive, Secure Health and Phoebe Putney who were looking to change the healthcare game by lowering costs and improving health outcomes for their employees. 

Passionate about the value HR leaders offer to organizations, we equipped them with resources to help them not only land a seat in the C-Suite, but better position them to successfully collaborate with their C-Suite team. After all, HR is uniquely positioned to help drive down one of their organization’s largest expenses – healthcare.

In 2018, we continued to expand our partnership with Aflac® to offer their brokers and employers a robust benefits administration solution called voluntaryEDGE™. This partnership with Aflac has made it possible to simplify and streamline the complete benefits experience for employers looking to provide comprehensive voluntary benefits packages, including accident, hospital, critical illness, vision, dental, disability and cancer insurance, to employees.

We on-boarded 65 new Maestronites, including more customer advocates, a new Chief Financial Officer and data analysts, to help us meet our employers’ needs. (Spoiler Alert: We’re still hiring.) To house these new hires, we moved our Detroit Maestronites to a bigger and better office and we began breaking down walls to expand our corporate headquarters in Chicago.

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4 Points to hit when talking benefits with your CFO

By Sheryl Simmons, Chief Human Resources Officer

As an HR leader, it’s essential to collaborate with all members of your C-Suite. Doing so is not only important to your organization’s success, but it also helps you share your unique insight and be seen as a key member of the C-Suite table. What better opportunity to display your value than by tackling the healthcare dilemma? After all, it’s imperative that your business crafts a strategy to tackle the skyrocketing costs and poor employee experiences with healthcare. Your CFO is already keenly aware of this. Partnering with them to strategize your organization’s approach can likely be a win-win for all, but it’s essential that you begin by learning to speak your CFO’s language for a successful partnership.

1 Treat benefits like an investment opportunity.
When speaking with your CFO, focus on demonstrating the investment opportunity a modern benefits approach can offer your organization. Let them know that your company is in the healthcare business. In fact, every U.S. company is in the healthcare business. Healthcare is the second or third largest expense for most employers. General Motors spends more on healthcare than steel. Starbucks spends more on healthcare than coffee beans. Once your CFO is on-board for a partnership, lay out the strategic, business-focused reasons for implementing a modern benefits approach.

2 Give them the 411 on cost-saving solutions.
Provide a high-level view of the variety of new, cost-saving healthcare solutions available in the market. Be prepared to answer why you selected the options for your company, as well as why you don’t see the others as a good fit.

Keep in mind, your CFO is not entirely fluent in HR speak and that’s okay. Share your knowledge. Get comfortable speaking from a financial viewpoint about the modern solutions organizations are using to combat rising costs like:

  • People-friendly reference-based pricing models that increase access to quality care AND lower healthcare costs
  • Pharmacy benefit management vendors that provide transparent contracting
  • Medical management that is integrating throughout the employee experience

3 Find the numbers. Know the data.
If you have access, dig into your claims data to show the breakdown of your current healthcare costs. It is highly probable that a small population of your employees are driving the majority of your healthcare costs. These are the numbers you need to bring to your CFO. If you don’t have this data available to you, hit your CFO with the fact that just 5 percent of Americans are driving over half of the cost of U.S. healthcare.

Use this information to forecast how new approaches to benefits can lower your healthcare costs. For example, implementing a self-funded solution that offers holistic care management can help improve the health conditions of employees who need it the most, while also offering wellness initiatives to maintain the health of your healthier employees.

4 Show them the money.
It’s fair to say that your company’s bottom line is top of mind for your CFO. In fact, 65 percent of CFOs claim “cost management” as their top priority. With that being said, you must be able to show them true numbers on how a new self-funded solution can provide real cost-savings for your company’s bottom line.

This can be done by showing a comparison of the cost trend of traditional benefit strategies. Fully-insured employers can expect to continue to see a 20 percent increase in their benefits, while self-insured employers that offer traditional PPO networks, can expect a 5.5 percent cost increase for the future. However, employers that are implementing creative healthcare solutions like a health plan management approach to self-funded benefits are experiencing an average decrease in healthcare costs of 20 percent in their first year.

If you’re already in the process of researching vendors that offer these modern approaches, be sure that you’re also making it a requirement for them to provide you with an ROI analysis. If they can’t provide this for you, do you truly trust them to partner with you?

You can find more tips and resources to help you grab a chair and collaborate with the entire C-Suite at YourHRSeat.com.

Traditional vs. People-friendly reference-based pricing

By Ray West, Chief Growth Officer

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If you’re familiar with reference-based pricing (RBP), then you’re also likely aware that many early adopters did not have the best experience. They were promised RBP was a surefire strategy to prevent overpaying for medical claims. However, employers experienced an alarming amount of noise from their employees, who were struggling to cope with balance billing and fear of medical debt. Since then, some vendors have evolved the RBP game to include a people-friendly approach.

The traditional reference-based pricing model.
When RBP emerged approximately ten years ago, the model leveraged median prices in geographical locations as a reference-point for how much an employer would pay for provider services. RBP vendors then began holding strict reference points to Medicare for all service types. This created a “take it or leave it” message for providers, leaving them understandably frustrated.

This traditional model also left employees in the dark. As if the healthcare experience isn’t complex enough, employees were receiving bills from their providers for the balance their health plan was refusing to pay (aka, a balance bill). These bills came as a surprise to employees and vendors were providing little to no education or support to help guide employees on how to resolve these balance bills.

Eventually RBP vendors began to grow more flexible with their payment models by incorporating additional data to determine what was an appropriate amount to pay. Up-front and real-time member education became a part of their offering. Some even began offering employee assistance with balance bills.

The people-friendly reference-based pricing model.
Today, employers are able to implement a modern reference-based pricing model that eliminates over-paying for claims, but also offers complete transparency and the support employees need – the people-friendly reference-based pricing model. This new model improves the experience for everyone involved:

  • Providers receive fair-market reimbursement
  • Employers get connected with providers and see significant healthcare savings and transparent claims data
  • Employees get the support they need to navigate the complex healthcare system

People-friendly reference-based pricing still has Medicare at its core. However, it’s no longer a rigid, one-size-fits-all approach. Instead, these vendors directly reach out to providers and negotiate a fair-market reimbursement using Medicare as a reference-point. This ensures providers are being paid fairly for services and reduces the risk of employees receiving a balance bill.

It’s important to note that people-friendly reference-based pricing is not solely based around Medicare. These vendors offer employers a proactive provider disruption analysis, which helps identify the doctors an organization’s employees are used to seeing. This will often lead to provider outreach and contracting with providers to guarantee the provider will accept the negotiated pricing, essentially replacing traditional PPO networks with RBP networks.

The education and support offered by people-friendly reference-based pricing sets it far apart from the traditional reference-based pricing model. Vendors will navigate employees to high quality and low-cost providers in their area. One way they do this is by implementing copay incentives – offering lower copays for medical services if they visit pre-negotiated providers. In addition, employees are given education on how to react if they receive a balance bill. They’re also given the support and guidance necessary for handling a balance bill to eliminate the worry of medical debt.

Here’s a look at what the people-friendly RBP process can look like for an employee:

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If you’re working with an RBP vendor or thinking of implementing one, don’t settle for just any vendor. To determine if they’re truly people-friendly, ask them these simple questions:

  • How do they handle balance billing?
  • Will they be a co-fiduciary for the plan and provide legal services if needed during balance billing?
  • How do they support employees in learning how to navigate the healthcare system?
  • Are they flexible to your needs?

Learn more about how employers are changing the healthcare game by implementing innovative solutions to drive down their healthcare costs by visiting GameChangerHR.com.