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Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

AAMC Urges Government to Set Standards for Reference Pricing

August 1, 2014—The AAMC August 1 submitted comments  to the Departments of Health and Human Services, Labor, and Treasury in response to an inquiry posted on their websites regarding the use of reference-based pricing.

Under reference-based pricing structures, insurance plans provide payment up to a fixed amount for a particular service. Patients who elect to receive treatment at a facility charging more than that payment limit are personally responsible for paying the difference. The Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152) imposes annual limitations on out-of-pocket costs.

The issue the departments raise is whether the amount individuals pay above the reference price should count toward out-of-pocket maximums, and they ask whether “such a pricing structure may be a subterfuge for the imposition of otherwise prohibited limitations on coverage, without ensuring access to quality care and an adequate network of providers.”

In the comment letter, the AAMC expressed concern about patients’ ability to access care provided by a sufficient number of quality providers and about the potential for significant financial harm that could befall patients if amounts patients pay above the reference price are not counted toward out-of-pocket maximums.

The association urged the departments to require that the in-network portion of a health plan network meet network adequacy requirements applicable to non-grandfathered plans under the ACA, and to impose standards on plans using reference-based pricing structures.

To ensure patient access to high-quality, appropriate medical care, the AAMC believes the use of reference-based pricing should be limited to:

  • non-urgent, relatively standard services, for which consumers have sufficient time and ability to compare prices;

  • services for which there are a sufficient number of high-quality providers able and willing to perform the service at or below the reference price;

  • discrete services that would not be paid for as part of a larger episode of care; and

  • a small number of total services provided.  

The AAMC also urged the departments to ensure that patients benefit from the use of reference-based pricing and are educated as to when reference prices apply and what payments do not count toward out-of-pocket maximums.

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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org