Reference-Based Pricing

Reference-based pricing caps what a plan pays for a service at a set multiple of a benchmark such as Medicare, instead of using a negotiated network. It can cut cost sharply but raises balance-billing risk that must be managed.

What is reference-based pricing (RBP)?

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Reference-based pricing is a self-funded cost-containment strategy that pays providers a set multiple of Medicare rates (often around 120 to 180%) instead of a negotiated network discount. It can sharply reduce claims costs but exposes members to potential balance billing, so it requires strong member advocacy.