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Reference-based pricing is a great option for employers anxious to save on healthcare costs without reducing benefits or limiting provider choice. Reference-based pricing is a healthcare cost containment model that limits what the group health plan will pay for certain high-cost services including hospital and outpatient facility charges. It stabilizes and/or reduces the cost of claims.

How are Costs Determined?

Hospitals often charge more than 20 times the actual cost for certain procedures in an effort to maximize their revenue. Insurance carriers negotiate a reduced rate off these inflated prices. These reduced in-network rates are still higher than what Medicare pays for the same services.


Reference-based pricing pays claims based on an established benchmark, rather than a carrier-determined fee. That “established benchmark” price, in this case, is the average cost paid by Medicare. Most referenced based pricing plans pays providers between 130% and 150% of Medicare reimbursement levels, but our rates are lower. This means your healthcare costs are lower.


  1. NO balanced billing

  2. You are fully protected against risk

  3. Covered employees can select any provider that best meets their needs

  4. Premiums reflect expected claims of your company, not a larger pool

  5. The employer is not subject to state health mandates, only federal mandates

  6. When health care costs are lower than expected, you get a refund


Are you ready to try something different?

If your company has a self-funded medical plan or you are considering self-funding your medical plan, it may be helpful to have a conversation about referenced-based pricing as a way to save money and help control escalating medical plan costs.