Demystifying Reference-Based Pricing: Why Navigation Makes the Difference

For years, benefits leaders have tried to manage rising healthcare costs with familiar tools: plan design changes, pharmacy management, wellness incentives, high-performing networks and more employee cost sharing. But as healthcare trend continues to climb, those levers are producing less relief.

During a recent webinar, Lowering Cost of Care with Reference-Based Pricing, held in partnership with Imagine360, Monica Foster, VP of Total Rewards and Well-being at Quantum Health, put it plainly: “Honestly, it’s overwhelming. It’s unsustainable.” Later, she summed up the challenge even more directly: “We’re out of levers.”

That pressure makes reference-based pricing, or RBP, such an important conversation for employers. RBP changes how healthcare claims are paid. Instead of starting with a provider’s billed charge and applying a negotiated discount, RBP uses an objective benchmark, such as the provider’s reported cost or the Medicare rate for the same service, to determine a fair payment amount.

How RBP drives savings

Chris Cigarran, Chief Commercial Officer at Imagine360, shared a personal example that made the concept tangible. A scan billed at $8,414 could have cost $4,200 under a traditional carrier discount model. Under the reference-based pricing model, the paid amount was $174.

That kind of difference matters for both employers and employees. Imagine360 noted that employers can see first-year savings guarantees between 15% and 30%. Ensemble Health Partners saw $600,000 in savings in year one across a small RBP population of about 800 members, focused on out-of-network and dialysis claims. Further demonstrating the benefits of RBP, Quantum Health itself introduced an RBP option in 2025. The results?

• Enrollment grew from 24% to 51%
• Q1 costs decreased $1.4 million year over year
• Inpatient unit costs decreased without a negative impact on utilization

Despite benefits like these, there's still a great deal of hesitancy around RBP.

For many employers, the hesitation around RBP comes from fear: Will members lose access to care? Will they receive balance bills? Will HR teams get buried in escalations?

The data shared during the webinar challenged those assumptions. In one national study, consultants and brokers estimated RBP denial-of-service rates at 10% to 12%. The actual rate? Just 0.2%. They estimated facility balance bill rates at 21% to 25%. Meanwhile, the actual rate was 3%. Monica Foster added that Quantum Health’s balance bill rate was under 0.5%.

The importance of pairing RBP with healthcare navigation

Still, RBP works best when paired with strong healthcare navigation. A pricing model alone can't answer a member’s billing question, explain an EOB or help someone understand what to do when a provider charge does not match the plan’s payment. Navigation turns RBP from a cost strategy into a supported member experience.

The experts emphasized education, communication and hands-on support. As both a benefits leader and a member on the plan herself, Monica Foster described a simple process: wait for the EOB, compare it with the provider invoice and contact the Quantum Health team if something does not match. That kind of support helps remove fear and confusion.

Andrea Langdon, Director of Benefits at Ensemble Health Partners, reinforced that employers need solutions that lower costs without shifting the burden to employees. “The risk is doing nothing,” she said. For organizations facing double-digit increases, inaction is not neutral. It means costs keep rising, and employees often end up paying more.

Monica Foster echoed that point from the member perspective: “You can’t continue to put the increases on the backs of them.”

Reference-based pricing helps employers address the actual price of care. Healthcare navigation helps members understand the model, resolve issues and stay confident using their benefits. Together, they create a more sustainable path: one that controls costs while giving members guidance when they need it most.

FAQs

What is reference-based pricing?
Reference-based pricing is a claims payment strategy that uses an objective benchmark, such as provider cost or Medicare rates, to determine a fair payment amount.

Does RBP mean members cannot see their doctors?
Not necessarily. The webinar emphasized that provider access concerns are often overstated, with an actual denial-of-service rate of 0.2% cited during the discussion.

Will members get balance bills?
Balance bills can happen, but the webinar cited an actual facility balance bill rate of 3%, with Quantum Health’s experience under 0.5%.

Why pair RBP with healthcare navigation?
Navigation helps members understand the plan, resolve billing questions and get support when RBP could otherwise feel confusing or disruptive.