Some health plans and claims clearinghouses are charging excessive fees for paying providers via the HIPAA-mandated electronic funds transfer transaction, or are using virtual credit cards to reimburse for care, according to the Medical Group Management Association.
Consequently, MGMA is asking the Centers for Medicare and Medicaid Services to quickly rein in these practices. Both actions are contrary to the intent of the Affordable Care Act--which mandated EFT payment--and existing CMS guidance, MGMA tells CMS Administrator Marilyn Tavenner in a recent letter.
According to the eHow.com website, a virtual credit card, often used in online shopping, is merely a credit card number and used to increase the security of the transaction. Providers that issue virtual cards will usually supply a piece of software to be installed on your computer. Using this software will generate a temporary credit card number, tied to your permanent one, which can be used to make purchases online. The number cant be traced to your real credit card or to your identity and wont last forever, so thieves or unscrupulous merchants wont be able to do much with it.
MGMA gives an example of virtual credit cards used in healthcare: Physician practices receive a 16-digit credit card number (in lieu of a direct deposit into a bank account) from a health plan/clearinghouse as payment for services. Every credit card transaction carries a fee for the recipient when numbers are entered manually.
MGMA is asking for specific guidance in three areas:
* That virtual or other types of credit card payments from health plans do not meet the ACA standard and operating rules requirements.
* That health plans and clearinghouses may not, as part of their contracting process, require providers to accept virtual credit cards in lieu of EFT payments.
* A clear definition of what constitutes excessive fees in terms of what health plans or financial institutions are permitted to charge providers for EFT transactions.
The association notes that typical EFT fees to health plans and financial institutions are between 13 and 34 cents per transaction. It is important to remember that fees in excess of these cost-based amounts will result in providers not transitioning to EFT and the industry not realizing the significant efficiencies associated with this transaction, MGMA asserts in the letter, available here.
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