Reference Based Pricing (RBP) is a method of reimbursing claims based on payment levels defined by the Medicare fee schedule or another industry reference, such as the costs that providers report to the Centers for Medicare and Medicaid Services (CMS), also known as the CMS Cost Ratio. With this approach, language in the plan specifies the payment level as the scheduled Medicare reimbursement amount plus a certain percent, such as Medicare plus 40 percent, or “Cost” plus a certain percent or another fee schedule. This is used more-so with high-cost hospital and facility claims, while a physician network typically remains in place for managing physician charges. SMR specializes in these models and they are a key factor to having a successful risk sharing program for program managers.
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