RBP Benefit 1: No more Negotiating with Health Insurance Companies
When compared to traditional health insurance, reference-based pricing (RBP) has many advantages. Its benefits for employers and employees are well documented, but the benefits that reference-based pricing offers human resources representatives are less widely covered. Here’s a look at one of the benefits that RBP offers HR directors and representatives — the opportunity to stop negotiating with health insurance companies.
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(This is the first in a seven-part series that focuses on how human resources representatives benefit from reference-based pricing plans.)
The Old Way: Negotiating with Health Insurers is an Annual Obligation
Human resources representatives frequently serve as their companies’ liaisons to health insurers, which means they’re often the ones who interact with insurers the most. For many HR representatives, this responsibility includes negotiating with health insurance providers. They can expect to:
- negotiate rates with insurers when first signing the company up for a plan
- re-negotiate rates when a plan’s up for renewal and its premiums increase
- negotiate rates with a different insurer if a plan’s premiums increase too much and a new policy must be selected
These negotiations are so regular that some representatives who handle the bulk of this work for their company can pencil in an annual negotiation on their yearly calendars, much as they would for a regular family vacation.
The New Way: Reference-Based Pricing Doesn’t Require Negotiations
Reference-based pricing eliminates the role of traditional health insurance companies. As a result, human resources representatives don’t have to spend time every year haggling over premiums with insurers. Instead, they can focus on helping employees understand their coverage, helping train new employees and other HR responsibilities.
Reference-based pricing does require setting reimbursement rates for procedures, and HR representatives are frequently involved in this work. This is much different from a negotiation, though.
Under a reference-based pricing model, employers determine their reimbursement rates with the help of a third-party who specializes in reference based pricing plans. The rates are usually set as a percentage Medicare’s reimbursement rate, which makes them easy to set. Once rates are set, the third-party can assist providers who will offer care at those rates.
The result isn’t a back-and-forth between two opposing parties, but rather a cooperative relationship between an employer and a third-party agent who’s available to provide assistance. It’s a much smoother, and often faster, process.
The Result: Human Resources Representatives Save Time
The end result is that human resources departments save time. The hours, days or weeks they normally spend going back-and-forth with insurers can now be devoted to actual HR duties, like helping employees. Instead of being negotiators, representatives get to actually become resources again.
To learn more about setting up a reference-based pricing plan, including how long it takes, contact us at FairPrice. Even if your company isn’t ready to renegotiate its health insurance plan right now, one of our representatives would be happy to explain the process of setting up an RBP so you know how long it would take when the time comes.
