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You know that reference-based pricing is agreat cost containment tool. When it's been done right, we'veseen huge savings. But there's a lot of misconceptions outthere about RBP, and that can make trying to have a realconversation about it as frustrating as fighting the Black Knightof Monty Python fame.

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To help you fight this silly knight, here are five common mythsabout RBP, and the facts and figures you need to disarmthem. 

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Myth 1: RBP is plagued withbalance billing

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Fact: Fully insured plans face just asmuch balance billing as reference-based pricing. In fact, 16percent of fully insured inpatient visits in 2018 got a balancebill, and 18 percent were balanced bill for ER. If balance billingis the problem, the major carrier networks don't offer as muchcoverage as people think.

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⬆️ One reason balance billing might be so high hereis that 70 percent of people surveyed did not know they were out ofnetwork. 

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Myth 2: Balance bills arepurely the patient's responsibility

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Fact: Maybe this was true in the earlydays of RBP, but today, co-fiduciary partners typically indemnifypatients from any harm. They also provide services such aslitigation support, along with traditional bill auditing andpre-certification. Building the right "health stack" of re-pricer,medical manager, and member concierge gives all parties peace ofmind. This is important because 8 out of 10 medical bills containat least one error, even in PPO plans where you can't auditthem.  

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Myth 3: RBP is a fad, not along-term solution

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Fact: "High performance networks" aregrowing in popularity year-over-year. One key to any successful RBPlaunch is getting the C-suite, HR, and the advisor on the same pageand committed to the change. Up front and continuous membereducation makes all the difference.

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⬆️ From 2015 to 2016, the number of companiesrunning RBP plans grew by 50 percent. The number ofcompanies that said they were considering these plans grew by 16percent. 

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Myth 4: Carriers have betternegotiated rates

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Fact: Hospital prices are made up, andso are BUCAH discounts. Don't be fooled: Fifty percent off of a1,000 percent markup is still overpriced by 450 percent. RBP pricesare at least related to the cost of a procedure, rather thanarbitrary numbers that hospitals and big insurers agree on.

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⬆️ There is a huge range in the price thathospitals charge related to Medicare – sometimes as muchas 1600 percent! 

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Myth 5: Only second ratedoctors negotiate

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Fact: Hospital quality and hospitalbilling practices aren't related. According to data shared by6Degrees Health, hospital quality shows little relationship to thebilled price of various surgical procedures.

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In this instance, the most expensive,Temple University Hospital, is middle quality, while thehighest quality, UT Southwestern University Hospital, isamong the lowest bill rates

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Grant Parker is the director of marketing at Flume Health.This piece originally appeared on the Flume Healthblog

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