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Feds: Keep ER use out of reference-based pricing

By Allison Bell

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Plans can copy Priceline when they’re designing pricing systems — but only if they make sure patients have reasonably quick access to well-located health care providers.

Officials at the U.S. Labor Department, the U.S. Department of Health and Human Services (HHS) and the U.S. Treasury Department have given that advice in a new batch of answers to frequently asked questions about the Patient Protection and Affordable Care Act (PPACA).

In the FAQ answer, the officials talk about guidelines for using “reference-based pricing” arrangements. A reference-based pricing arrangement resembles Priceline, but for health care.

In the Priceline system, a consumer names a price for a hotel room at a given quality level in a given area. The consumer then sees, through the Priceline computer system, whether any suitable hotel providers will supply a room at that price.

See also: Feds allow reference-based pricing.

Supporters say the system could be a good way to hold down the price of care. Critics have argued that the system has not been especially effective at holding down prices in the real world, and that a poorly designed arrangement could interfere with patients getting prompt access to medically necessary care.

In the new guidelines, federal officials advice against including emergency room services in a reference-based pricing arrangement.

“In general, reference-based pricing that treats providers that accept the reference amount as the only in-network providers 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,” officials write.

Officials do not give detailed guidelines about how arrangement designers should decide whether an arrangement offers patients enough providers, but they say arrangement designers should consider state provider network adequacy guidelines, how long patients might have to travel to get to providers willing to take the reference price, and how long patients might have to wait to see providers willing to take the reference price.