A physician group management association is asking federal agencies to restrict health insurers and their payment vendors from imposing fees on physicians who get paid by electronic fund transfers.

Under the Affordable Care Act, health plans are required to offer automated payments to providers who request it. But some plans include transaction fees ranging from 2 to 5 percent to enable fund transfers, so providers that are paid by EFT don’t receive full payment.

The Medical Group Management Association, which represents more than 40,000 medical group practice leaders, is calling on the Centers for Medicare and Medicaid Services to eliminate the practice.

A recent MGMA poll, to which 900 members responded, found 17 percent of respondents reporting that a transaction fee was applied to their payments. By contrast, half of the respondents reported no fees imposed for EFT payments. Another one-third of respondents were not sure whether their practice was charged a transaction fee to enable EFT payments.

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“Even though health plans save money not printing and mailing paper checks, some bad actors are fleecing physician groups by charging them to simply receive an electronic paycheck,” says Anders Gilberg, senior vice president of government affairs at MGMA. “It is critical that CMS issue long overdue guidance explicitly prohibiting this practice.”

Providers appreciate EFT payments because they support automated re-association of the payment with electronic remittance advices, while also experiencing savings in staff time otherwise spent on manually processing and depositing checks. And health insurers, MGMA notes, save millions of dollars by paying via EFT.

Robert Tennant
Robert Tennant

CMS actually did issue guidance on August 11 on EFT and virtual credit cards that prohibited fees, notes Robert Tennant, director of health information policy at MGMA. Yet on August 14, the agency rescinded the guidance, saying it needed more time for more internal review and noting the guidance would return. “We’re still waiting to see it reposted,” he adds.

Practices also may face additional fees in gaining EFT payments, Tennant contends. For example, a health plan may mail or fax a number for a provider to get a one-time transaction payment. But the provider may have to pay a fee to a credit card company to run that number and get paid.

In general, the larger the provider is, the smaller the fee will be, Tennant says. He estimates that a 2 to 3 percent transaction fee for larger providers is common on virtual credit cards; smaller providers typically pay higher fees.

CMS did not respond to a request for comment on the MGMA study.

America's Health Insurance Plans, the trade association for payers, issued the following statement: "While we do not have a comment or stance on the various fees health plans may or may not decide to adopt as part of their business models, we believe that any fees should be transparent to the provider so they can accurately assess which available payment option works for them."

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