What is reference-based pricing in employer-sponsored health insurance, and what risk does it create for employees?

Reference-based pricing (RBP) plans cap reimbursement at a multiple of Medicare rates — typically 120 to 160% — rather than negotiating contracts with specific hospitals. This eliminates traditional network contracts, theoretically giving employees access to any provider. However, providers are not obligated to accept these reimbursement rates and can balance bill employees for the difference, which can be substantial. Employees need to be proactive about confirming before a procedure whether a provider will accept the plan's reference rate or negotiate in advance to avoid large unexpected bills.