Insights from Christine Cooper, CEO aequum and Jack Towarnicky, member, aequum
As healthcare costs continue their upward climb, plan sponsors face intensifying pressure to manage expenses while maintaining quality benefits. Traditional PPO models, long relied upon for broad provider access, now contribute to unchecked cost growth.
In the July/August 2025 issue of Benefits Magazine, Christine Cooper and Jack Towarnicky explore reference-based pricing (RBP) as a strategic alternative for self-insured health plans. The article, “Reshaping Employer Health Care With Reference-Based Pricing,” outlines a step-by-step approach to implementing RBP—designed to drive savings, improve transparency and protect plan participants from excessive medical charges.
Understanding the Cost Challenge
Employer-sponsored health plans remain the backbone of coverage in the United States, serving more than 160 million Americans. Rising costs, driven by premium increases, higher deductibles and inflated provider payments, have placed a significant burden on both employers and employees. Employers expect a 5.8% increase in health plan costs in 2025, marking the third consecutive year of growth above five percent.
At the same time, plan participants are shouldering more financial responsibility. The average deductible for single coverage has increased by 57% since 2013 and more than tripled since 2006. Meanwhile, PPO-negotiated payments often reach 170% to 375% of Medicare rates for the same services. These inefficiencies underscore the need for a model that offers predictability, accountability and fairness.
The Case for Reference-Based Pricing
Cooper and Towarnicky describe RBP as a transparent, benchmark-driven approach to setting provider payments, one that typically caps reimbursement at 125% to 140% of Medicare rates. This method significantly reduces overpayment while maintaining provider compensation above cost.
The article cites an analysis of 326 high-cost claims, where $21.2 million of $35.5 million in charges were deemed ineligible under plan terms. By implementing RBP with clearly defined limits, plan sponsors can reduce spending without diminishing access or quality of care. Participants also benefit from lower contributions and out-of-pocket costs.
RBP may also simplify compliance with the No Surprises Act (NSA), since it operates outside traditional network structures. Although some providers may reject RBP rates or issue balance bills, strong participant advocacy can help mitigate these disputes and protect members from financial exposure.
A Structured Approach to RBP Implementation
RBP is not an all-or-nothing shift, it works best through a phased, well-communicated rollout. Cooper and Towarnicky outline a three-stage strategy for transitioning away from traditional PPO networks.
The first phase begins by applying RBP to out-of-network claims, preserving the existing PPO structure while introducing cost controls. This early step allows plans to measure financial impact and build participant confidence. The second phase expands RBP to certain in-network services, such as imaging or outpatient procedures, while retaining PPO arrangements for primary care. During this stage, communication is key, participants need education, reassurance and access to advocacy support. The final phase transitions the plan to a pure RBP model, removing network dependencies entirely and creating a fully benchmarked reimbursement system.
Throughout the process, the importance of transparency, participant engagement and proactive advocacy services to minimize disruption and build trust is essential. .
How aequum Supports the Transition
As a tech-driven firm rooted in legal and healthcare expertise, aequum is uniquely positioned to help plan sponsors navigate the complexities of RBP implementation. aequum offers a full suite of support—including claims intelligence, provider negotiations, compliance guidance and participant advocacy.
By ensuring accurate reimbursements, resolving billing disputes and defending against balance billing, aequum enables plan sponsors to adopt RBP without compromising participant protection or regulatory compliance.
Looking Ahead
RBP represents a clear opportunity for employers seeking a more sustainable path forward. With careful planning and the right partners, RBP can deliver meaningful savings, reduce compliance risks and restore fairness to employer-sponsored healthcare.
For a deeper dive into these insights and strategies, read the full Benefits Magazine article by Christine Cooper and Jack Towarnicky. With the right approach, expert support and trusted partners like aequum, plan sponsors can confidently transition to RBP—controlling costs, strengthening compliance and protecting both their workforce and their bottom lines.