How it works
Priced from a public basis, then defended.
A walk through reference-based pricing, the dual-network option, what a plan year looks like, and where the line sits between ESC100's work and yours.
Reference-based pricing
The allowed amount comes from a cost basis, not a charge
In a traditional plan, a facility sets its own billed charge, and the network negotiates a discount off it. Because the starting number is chosen by the facility, the discount says very little about whether the payment is reasonable.
Under reference-based pricing, the plan document defines the allowed amount as a multiple of a published cost basis for the service — a benchmark that exists independently of any one hospital’s pricing. The claim is adjudicated against that figure. The employer knows the rule before the claim arrives.
Most providers accept the payment. Some do not, and send the member a bill for the difference. That is where the defense obligation begins, and it belongs to the administrator, not the member.
Dual network
Keep contracted rates where they already make sense
A dual-network design pairs a contracted network with the benchmark. Primary care, specialists, and outpatient services often run through the network, where rates are competitive and members value the familiarity of a directory.
Facility and high-cost services — where chargemaster inflation is largest — are priced against the benchmark. Employers who want a softer member experience during the first plan year frequently start here.
Implementation
A typical timeline
- Weeks 1–2
Plan design and documents
Benefit design confirmed, plan document drafted, pricing basis and multiple set in writing.
- Weeks 3–4
Data and vendors
Eligibility file built, stop-loss and pharmacy vendors connected, banking and funding set up.
- Weeks 5–6
Enrollment and communication
Member materials, meetings, and clear instruction on what to do with a balance bill.
- Week 7+
Live
ID cards issued, claims adjudicating, first monthly reporting cycle delivered.
[[TIMELINE: confirm standard implementation duration]]
Division of work
Who does what
ESC100 handles
- Claims adjudication and payment
- Reference-based pricing and repricing
- Balance-bill defense and provider disputes
- Eligibility maintenance and vendor feeds
- Member and provider service lines
- Monthly and annual reporting
- Appeals administration under the plan document
The employer handles
- Adopting the plan document and benefit design
- Funding the claims account on schedule
- Sending accurate enrollment changes
- Selecting stop-loss coverage with its advisor
- Employee communication with our materials
- Fiduciary decisions reserved to the plan sponsor
Request a plan review.
Send your current plan documents and claims experience. We will price a representative sample against our benchmark and walk you through what we find.