Some providers hit with large fees for using EFT

Unautomated transfers disproportionately affect small practices, says Robert Tennant.


The Workgroup for Electronic Data Interchange, an industry advocacy organization, is raising awareness of changes in how insurers reimburse providers and the growth in transaction fees for those reimbursements.

A recent WEDI survey found that a quarter of provider respondents pay a transaction fee when they are paid via an electronic funds transfer.

The benefits of electronic payment are well established, says Jay Eisenstock, head of provider solutions at Aetna, who is a member of WEDI and discussed the results for the group. “However, provider adoption has not been as rapid as many had hoped, due to reluctance to modify existing workflows or purchase supporting software.”

Robert Tennant, director of HIT policy at the Medical Group Management Association, says there are other major reasons for slower-than-expected acceptance of EFT. These include excessive fees and “virtual” payment cards that negate the automation benefits that EFT was supposed to bring.

These fees, levied by a payer, bank or clearinghouse, often chop three percent off a provider’s reimbursement and sometimes as much as five percent. Tennant contends that these transactions actually only cost pennies to conduct. In effect, “physicians are being dinged for five percent of their salary,” he adds.

Also See: IT challenges await bundled payments approaches

The WEDI survey, conducted last spring, found 40 percent of provider respondents were required to accept a “virtual” credit card, which is a 16-digit card number that providers must manually type into a VISA or MasterCard terminal, and when they do, their saddled with another transaction fee from the card issuer.

A small provider, Tennant contends, thus may have a three percent fee subtracted from its payment, while a larger provider that has larger quantities of transactions, may only pay a transaction fee of less one-half percent.

As a result, “the automation opportunity is lost—you have to manually put the payment in the account,” he says. And that’s not how HIPAA operating rules, which mandate use of electronic funds transfer transactions, were supposed to work, Tennant adds.

Consequently, MGMA will launch an educational program giving members tools to identity businesses that are not adhering to WEDI principles and hope that the Centers for Medicare and Medicaid Services takes enforcement action to regulate fees, according to Tennant.

New electronic payments guidance from WEDI, entitled “Electronic Payments: Guiding Principles,” is available here.

More for you

Loading data for hdm_tax_topic #healthcare-equity...