Brokers—and Clients—Benefit from the Reference-Based Pricing Model

Brokers—and Clients—Benefit from the Reference-Based Pricing Model

Reference-based pricing (RBP) is a relatively new innovation in health insurance. Trustmark’s recent webinar gave brokers across the country a solid understanding of the concept, how it has evolved, and finally its emergence as an increasingly mainstream strategy for both improving access to care and controlling health insurance costs.

The “From Resistance to Results: The New Era of Reference-Based Pricing (RBP)” webinar explored how brokers can take advantage of RBP to help strengthen long-term relationships, win business and expand their blocks, and to help differentiate themselves by bringing genuine value to clients.

Missed the live discussion? Watch the replay here.

Taking a fresh look at RBP

The webinar took brokers beyond the buzzwords and misconceptions to look at the real opportunity that RBP can bring to the market today. Thomas Coffey, Trustmark’s RBP expert, took brokers through topics such as: 

• How health insurance evolved from HMOs to PPOs and now to RBP
• A clear explanation of reference-based pricing and how it works
• Dealing with misconceptions and common objections
• Real-world examples that demonstrate employer savings and member satisfaction
• Strategies brokers can use to help clients structure a program that works
• Ways that RBP can help brokers succeed in today’s challenging marketplace

Key takeaways and real results

When first developed some fourteen years ago, RBP experienced some growing pains. That is why brokers still sometimes bring up some common objections:

1. “It doesn’t work.”
2. “Doctors won’t accept it.”
3. “Balance billing happens.”
4. “Employers don’t understand it.”

We took a poll during this webinar, asking brokers if they saw employer acceptance of RBP improve over the last three years. 56% said yes.

Thomas covered how each of these issues have been resolved and how Trustmark® particularly has transformed reference-based pricing to benefit all the participants:

• Fair and reasonable prices. Healthcare providers get paid 150% of Medicare rates for hospitals and 130% of Medicare rates for doctors.
• Educating healthcare providers. Trustmark invested in helping providers understand how RBP works and how it benefits them. Today, most groups see fewer than 2% of claims result in balance billing.*
• Members are protected from balance billing. Members never have to pay a balance bill. In the rare cases where a member gets billed, they simply submit it to our Trusted Member Care Team. Members don’t have to do anything more and they never have to pay a dime.
• We resolve most issues quickly. When balance billing happens, the Trusted Member Care Team puts decades-deep experience to work. 90% of these issues are resolved within two business days. When a full resolution cannot be reached, the employer’s claims fund kicks in to settle the account.
• Exceptional member experience. Trustmark has worked hard to make RBP a thoroughly positive experience. No networks to navigate. Simple plan documents. The freedom to seek care anywhere. No worries about out-of-network charges. Direct access to the Trusted Member Care Team to answer questions and resolve issues fast.

Trustmark is a unified, end-to-end solution as a stop-loss carrier and third-party administrator (TPA). Thomas explained the value that brings: “We are not a cobbled together solution. The left hand knows with the right hand is doing so everything works together to create an awesome service experience.”
 

Will RBP work for your clients?

Brokers appreciated the webinar’s interactive format with live Q&A. The conversation shifted from
“Does RBP work?” to “How can I bring this to my clients successfully?”

We took another poll asking brokers what was their biggest barrier to recommending RBP.

• 35% said client hesitation
• 27% said provider pushback
• 22% said lack of education/resources
• 16% mentioned other issues

Coffey shared hard data from Trustmark’s experience implementing RBP plans across diverse industries and workforce sizes. “Since we’ve been offering RBP so long, we have a ton of data and expertise you can use to identify your best opportunities and show where RBP works best.”

The participants took a deep dive into regional and city-by-city data on where reference-based pricing is most likely to work and studied “profile of success” criteria brokers can use to assess when to bring the RBP option to a client. The webinar showed when dual options make sense in offering employers and members flexibility and choices—without the typical 4% load. Brokers got involved in exploring the data for their individual territories, asking questions such as:

• “Are these plans more successful in urban areas vs. rural areas?”
• “Can you tell me the RBP score for Miami?” Western Michigan? Central Kansas?
• “Which is the smallest group you can cover? What is the ideal group size?”
• “Do you have a tool on the Trustmark site where we can check scores?”

One attendee: “I see clearly how much the RBP conversation has matured—this is no longer an experiment; it’s a proven strategy.”

Another said the data “gave me the confidence to bring RBP back to clients who were hesitant before.”

And a third said: “I thought I knew a lot about RBP, but you taught me a lot today!”

What brokers found most valuable

The webinar showed brokers when, where and how to bring RBP to the table.

Brokers can benefit from a differentiation that offers a competitive edge. They are not limited to showing clients the same PPO options which may include 20% rate hikes and higher deductibles. Instead, they can bring an innovation with lower premiums and higher claims fund credits. Brokers benefit from:

• Long-term beneficial relationships that underpin block stability—groups are 15 times likelier to renew.
• Winning new business with a 20 to 35% less expensive premium solution can beat out the incumbent.
• Opening new opportunities with a product that can serve employers that might otherwise struggle to afford coverage for their employees.

Benefit from the shift from resistance to results

The webinar made it clear that the RBP conversation has changed—and that RBP is an untapped opportunity. Employers are ready for solutions that can deliver sustainable savings without sacrificing care quality, and brokers are ready to lead that change with the right knowledge and support. Coffey encapsulated the opportunity: “The story of RBP isn’t about resistance anymore—it’s about results. When brokers understand the evolution, they can help employers take control of their healthcare spending with confidence.”

If you missed the webinar, you can watch the recording here.

* Balance bill protection applies to covered eligible charges; additional member responsibility may apply for CDHP plans prior to deductible being met due to federal regulation.

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