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What is Reference-Based Pricing?

Reference-based pricing can help combat the rising cost of medical care

Reference-based pricing (RBP) is a reimbursement method that uses Medicare reimbursement rates (or a derived equivalent) as a reference and prices claims based on a multiple of that rate.

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No Networks

Unlike traditional PPO plans, reference-based pricing doesn't require the use of a network. The plan reimburses the same amount—no matter which health care provider members choose. So there's no need to worry about out-of-network charges.

The Benefits of Reference-Based Pricing

Reference-based pricing is designed to deal with cost variations for the same service or procedure across providers.

Reference Based Pricing Infographic

Traditional PPO health plans negotiate prices individually with each health care provider in their network. Prices can vary widely in the same community for the same care. However, health plans that use the reference-based pricing model pay based on widely-accepted Medicare reimbursement rates.

RBP plans use a fair, collaborative approach to health coverage that:

  • Reduces health care costs by up to 20%.1
  • Eliminates wide variations in the cost of care, compensating providers equally for the same care.
  • Increases transparency of cost and empowers plan members to make better decisions.

The U.S. Centers for Medicare and Medicaid Services (CMS) establish Medicare reimbursement rates based on the actual cost of providing care. Allstate Benefits' RBP plans pay 100% to 150%2 of the Medicare reimbursement rates or other derived equivalents for services.

Everyone wins: providers are compensated in an equitable way while members and employers save money.

Are there different reference-based pricing plan designs?

Yes! We have a suite of Core Value reference-based pricing products, our original Core Value plan, Core Value Flex, and Core Value Access. All three can be customized to fit the needs of the business.

Not only that, but with Allstate Benefits Core Value plans the Member Advocacy Program (MAP) team is included to help members seamlessly transition and work with a reference-based pricing plan.

Nuts and Bolts

Reference-based pricing plans are a great and innovative way to help employers save on health care costs. They provide transparency and up-front knowledge of health care costs and pay the providers a set amount regardless of the price the provider or hospital charges for care.

Learn more about our reference-based-pricing products.

Product availability varies by state.

1 Source:

2 100% of the Medicare reimbursement rate or other derived equivalent.

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