The Obama administration has approved “reference pricing” for insurance companies, which means they can put a cap on what health plans will pay for expensive procedures like knee and hip replacements. Critics of the move argue that this will leave patients with more expensive hospital bills and undercuts the protections put in place in the president’s health-care reform law. Insurers and their advocates argue it’s a much needed tool to reduce costs. Even federal regulators are skeptical, however, recently admitting in a policy ruling that reference pricing “may be subterfuge” on “otherwise prohibited limitations on coverage.” The Departments of Labor and Health and Human Services say they will monitor the effects.
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