Employers whose plans use reference-based pricing should be aware of the recent government guidance regarding ACA compliance. Reference-based pricing is a benefit arrangement whereby a plan pays a fixed amount for specified procedures and certain providers agree that they will accept that amount as payment in full.
Under the ACA, a plan is not required to credit cost-sharing amounts paid to out-of-network providers against the maximum out-of-pocket (MOOP). This raised concerns that plans could use reference-based pricing as a way to avoid the MOOP limitations by creating narrow networks with few providers, in essence forcing most plan participants to use non-network providers. In prior guidance, the government stated that it would not consider such a plan as failing to comply with the MOOP requirements of the ACA, as long as the plan uses a “reasonable method” to ensure that it offers adequate access to quality providers.
In its most recent guidance, the government elaborated on what a plan must do to ensure adequate access to quality providers. It specifically mentioned 5 features that such a plan must exhibit:
- Reference-based pricing should apply only to those services for which the period between identification of the need for care and provision of the care is long enough for consumers to make an informed choice of provider. For example, limiting or excluding cost-sharing from counting toward the MOOP with respect to providers who do not accept the reference-based price would not be considered reasonable with respect to emergency services.
- Plans should have procedures to ensure that an adequate number of providers that accept the reference price are available to participants and beneficiaries. Relevant factors include geographic distances to the nearest provider and appointment waiting times.
- Plans should have procedures to ensure that an adequate number of providers accepting the reference price meet reasonable quality standards.
- Plans should have an easily accessible exceptions process, allowing services rendered by providers that do not accept the reference price to be treated as if the services were provided by a provider that accepts the reference price if access to a provider that accepts the reference price is unavailable (for example, the service cannot be obtained within a reasonable wait time or travel distance); or the quality of services with respect to a particular individual could be compromised with the reference price provider (for example, if co-morbidities present complications or patient safety issues).
- Plans should automatically provide information regarding the pricing structure, including a list of services to which the pricing structure applies and the exceptions process. Generally, this would be included as part of the plan’s SPD. In addition, plans should provide, upon request:
- a list of providers that will accept the reference price for each service;
- a list of providers that will accept a negotiated price above the reference price for each service; and
- information on the process and underlying data used to ensure that an adequate number of providers accepting the reference price meet reasonable quality standards.
Of, course, most employers use networks created by third party vendors. Accordingly, employers whose plans use reference-based pricing should confirm with their network vendors that the above requirements are being met.