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Designed to bring clarity to health care pricing, reference‑based pricing offers employers an alternative approach to controlling costs.

Reference-based pricing (RBP) is a reimbursement plan design that uses Medicare reimbursement rates (or a derived equivalent) as a reference point and prices claims based on a multiple of that rate. Here are the key differences between reference-based pricing and a traditional PPO plan.
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No network restrictions

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 a member chooses. There’s no need to worry about out-of-network charges. Please note that our reference-based pricing plans still rely on the use of a network for pharmacy benefits and transplants.

If a group would prefer to offer their employees a health coverage plan with a network, we also offer RBP options with access to provider networks. Check out our RBP solutions.

The benefits of reference-based pricing

Reference-based pricing is designed to reduce cost variations for the same service or procedure across providers. By setting objective payments for services and procedures:

Employers have more control over health care costs

Employers may pay less for members’ claims — which saves money for both the employer and the group members

Employers and employees can budget for benefits and health care with more certainty

Traditional PPO health plans negotiate prices individually with each health care provider in their network. This means that prices may vary widely in the same community for the same care. Health plans that use a reference-based pricing model pay based on widely accepted Medicare reimbursement rates, meaning that providers are compensated equally for the same care.

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

  • Helps reduce health care costs 
  • Eliminates wide variations in the cost of care
  • Increases transparency to give members a better idea of service costs
  • Empowers members to make informed health care decisions 

The U.S. Centers for Medicare and Medicaid Services (CMS) establish Medicare reimbursement rates based on the actual cost of providing care. Nationwide RBP plans pay 100% to 150%1 of the Medicare reimbursement rates or other derived equivalents for services. 

Benefit example for an outpatient service

This is not an actual case, presented for illustrative purposes only.
Billed charge for outpatient covered services $3,376.00
Medicare reimbursement rate $1,571.20
Plan maximum allowable amount (MAA)
130% of Medicare reimbursement rate
 $2,042.562
Member co-insurance responsibility (80/20) $408.51
Plan pays:
$1,634.05
Everyone wins
Providers are compensated in an equitable way while members and employers save money.

Reference-based pricing with Nationwide®

Our goal is to make health care more affordable, accessible and transparent without sacrificing the quality care plan members deserve. From flexible provider access3 to hybrid network options with integrated primary and virtual care, Core Value RBP plans are customizable and designed to meet the unique needs of each employer group. Learn more about our suite of RBP plan options.

Plan availability varies by state. Talk to your sales representative for more information.

Member Advocacy Program (MAP)

Core Value plans with Nationwide have a specialized support team to help members seamlessly transition and work with a reference-based pricing plan.

The team works with members to help understand their benefits, use their plans, find providers and understand their Explanation of Benefits (EOB) documents. They also work to resolve any bill discrepancies4 and keep members informed and represented when unexpected billing occurs.

Plan features

At its heart, Core Value is about its members, their experience and ensuring care is accessible when they need it.

Intuitive navigation5: With our easy-to-use search and scheduling tool, plan members receive tailored recommendations for high-quality, cost-effective providers available to them. These results also provide a complete overview of providers, including transparent cost estimates for services. When additional discounts may be available, the tool will alert members so they can make the most of their benefits.

Comprehensive virtual care6: Includes access to high-quality virtual urgent, behavioral health and musculoskeletal services to improve accessibility, experience and cost management. Virtual care benefits are available to members at no cost.7

Assistance in moments that matter: Lifestyle coaching is included for complex diagnoses, such as cancer, to drive better outcomes and flexible caregiver support.

Money back in employers’ pockets8: Make the most of the opportunity to save more in years with lower-than-expected claims — boosting your savings.

Wellness program: Available as an additional upgrade, add the Vitality® wellness program. Vitality incorporates scientifically and clinically proven strategies to have the greatest impact on wellness.

Key takeaways

Reference-based pricing plans are a great and innovative way to help employers save on health care costs. These plans provide transparency and up-front knowledge of health care costs, and they 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.
Want to learn more?
Call a sales representative at 1-877-877-0245.
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[1] 100% of the Medicare reimbursement rate or other derived equivalent. 

[2] Sometimes members may be balance billed for the amounts in excess of the plan MAA. This is where the Member Advocacy Program can help.

[3] Pharmacy benefits and transplants still rely on the use of network providers.

[4] Noncovered services and certain other charges are not eligible for the program.

[5] Member navigation tool steers to low-cost, quality providers likely to accept the plan based on claims experience. It does not guarantee access to care.

[6] Core Value, Core Value Flex and Core Value Access plan members have access to Recuro Health virtual care services. Recuro virtual counseling is available only for covered individuals age 10 or older. Dependents under the age of 18 require a parent or guardian present for their first virtual counseling visit. Core Value Connect plan members utilize virtual services through One Medical. 

[7] Charges for services with $0 access fees will be charged to the employer claims fund. 

[8] In years when claims are lower than expected, a portion (or all, depending on your plan selection) of the difference between your group’s anticipated and actual claims is credited back to you — and that could add up to significant savings. The refund is subject to any Terminal Liability Coverage fee.

The Self-Funded Program through Nationwide provides tools for employers owning small to midsize businesses to establish a self-funded health benefit plan for their employees. The benefit plan is established by the employer and is not an insurance product. Stop loss insurance policies are underwritten by Nationwide Life and Benefits Insurance Company, Columbus, Ohio, in AK, AR, AZ, CT, IL, MA, PA, TX and WI; Integon National Insurance Company in NY; and National Health Insurance Company in CO, WA and all other states where offered. Product availability and specific provisions may vary by state.