Reference-Based Pricing

The Reference-Based Pricing (RBP) approach can result in significant plan savings - up to 30% or more.

RBP uses the baseline set by the government (Medicare) as reasonable and customary medical charges and pays 30%-50% above that price. Typical PPO networks pay 100%-500% above Medicare.

Savings accrue to the sponsor of the Limited Liability plan because 150% of Medicare reimbursement is typically far less than what is allowed by the commercial PPO networks. In addition, medical stop loss premium rates should be lower under an RBP plan because the lower level of allowed charges reduces the level of the insurance carrier.

Employer plan sponsors retain all the traditional advantages of limited liability group medical plans including the ability to avoid state insurance mandates and state premium taxes, while retaining the ability to offer identical plan designs to employees who reside in different states.

When a company uses an RBP plan, the PPO network arrangement is removed from the health plan for hospitals and facility access. This means that plan participants are no longer limited to a set network of hospitals, but rather are permitted to choose any qualified facility. In conjunction, a network is still utilized for physician access, meaning providers such as family doctors do not see a change. The health plan simply reimburses claims on a set fee schedule.

SVG has the relationships in place to enable its clients to realize their full potential in health care savings.