Federal agencies may need to step in and tighten the rules of reference pricing before they cause more harm than good.
Reference pricing, for the most part, is a good concept, but it does raise issues regarding consumers' quality of and access to care. However, with some improvements to the current strategy, reference pricing may prove to be effective.
In the second half of a two-part series, the Health Affairs blog outlined why slow and steady may win the race, and why federal agencies--including the Centers for Medicare and Medicaid Services (CMS) and the Department of Labor--need to step up their game when it comes to regulations.
Contradicting definitions
Under requirements established under the Affordable Care Act, health plans are able to use two definitions of "network" simultaneously. By not setting a clear definition of "network," patients could be forced to dish out hefty out-of-pocket costs as a result of out-of-network balance-billing by seeing a provider who is in a network but is not considered a "designated provider." Nothing in the ACA suggests that plans can create a network within a network, noted the blog post.
What's more, the federal agencies implementing the ACA decided to exclude reference price-linked cost sharing from annual limits on cost sharing. By doing so, plans need not build their networks with the intention of ensuring members reasonable access to providers.
Because these rules don't exist, plans that use reference pricing put patients at greater financial and health risk, Health Affairs said.
Loose requirements
The agencies stated that plans are "encouraged to consider network adequacy approaches developed by States, as well as reasonable geographic distance measures, and whether patient wait times are reasonable," noted the blog post. "Encouraging" is not the same as "enforcing."
Both CMS and the Department of Labor will look into revising federal standards for reference pricing--but more needs to be done, especially at a state level, where requirements are at times non-existent. While some states require certain standards, such as reasonableness, some impose different requirements, such as the number of providers accepting new patients, according to Health Affairs.
"With regard to reference pricing, federal regulators should not put the cart before the horse by allowing reference pricing before network ground rules are set," the post concluded.
For more:
- here's the blog post