“The largest entity using [reference-based pricing (RBP)] is Medicare, which uses bottom-up pricing based on providers’ costs of doing business … Medicare determines a base rate for each service and then makes adjustments based on patient complications, geographic cost differences, and other factors. Employers who use RBP often pay providers the Medicare rate plus 20-50%. In contrast, PPOs provide a top-down discount off of billed charges for their in-network providers. With RBP, employers are shifting from discount-based to cost-based payments to providers.” (Marsh Consulting Group)