Why Reference-based Pricing Makes Sense…Stop-loss

Every self-funded employer should consider how Reference-based Pricing (RBP) will affect their health plan.  In addition to reducing the medical claims payments on behalf of members, reference-based pricing can have an impact on the risk assessment and pricing of stop-loss underwriters.

A well-chosen stop-loss carrier is vital for the Self-Funded Planning team since it can be more than a commodity purchase, similar to the TPA purchase. Stop-loss insurers must be familiar with how the various RBP vendors handle several issues, such as large claims, transplants, specialty drugs, and even billing.

Stop-loss carriers typically want to know what networks are being utilized and rate each one differently based on the network contracts and the carrier’s own experience with that network.  However, many carriers view RBP as a single “idea” and ask “what percentage of MediCare is used” to determine reimbursement levels.  While this is important, what makes a vendor stand out more is how they handle the outlier claim or transplant. Do they have a history of great results?

6 Degrees Health was built on the practice of reference-based pricing – utilizing transparent, defensible data from years of experience.  In 2020, a study of 40 of the largest claim events revealed (after negotiation) a final savings of nearly $18M off charges of over $21M, or nearly 80% off billed charges. These results saved stop-loss carriers on specific reimbursements and allowed the clients to pay flat rates or minimal increases for their renewals.

Ask your 6 Degrees Health representative for a comprehensive savings analysis, including an analysis of our new ProPlus Physician network. The analysis can then be used as a part of your stop-loss proposal request. By incorporating 6 Degrees Health’s Transplant and Specialty claim management into every RBP program, you could reduce the stop-loss premium and factors by as much as 30% over a traditional “network-based” plan. 6 Degrees Health has offered stop-loss quotes with lower rates and factors when compared to other RBP suppliers.