More than half of medical practices report being forced to pay to receive electronic payments from insurers

The Medical Group Management Association’s most recent MGMA Stat poll conducted on Aug. 10, 2021, asked healthcare leaders, “Are insurers charging your practice fees you didn’t agree to when sending payments via EFT?” More than half (57%) responded “yes,” while 43% responded “no.”

The poll had 391 applicable responses.

Of those who responded “yes” to being charged fees for EFT payments in the poll:

• 10% stated they were charged a fee of 1% of their total reimbursement
• 43% responded they were charged 2%
• 43% stated they were charged 3%
• 4% indicated they were charged 4% or more per EFT transaction. 

An Aug. 26, 2020, MGMA Stat poll revealed that 26% of medical groups were paying fees to receive EFT reimbursement from payers. Of those who responded “yes” to being charged these fees, 42% reported that a fee of 2% of the total reimbursement was withheld. This new data from MGMA Stat show that this problem is becoming more prevalent as medical groups report that this abusive practice has doubled over the past year.

#MGMAAdvocacy

This problem has only been growing since the Centers for Medicare & Medicaid Services (CMS) removed definitive guidance in 2017 that prevented health plans and payment vendors from engaging in these unfair business practices. MGMA believes CMS has the statutory authority and the statutory requirement to prohibit EFT fees. The Association has called on CMS to repost prior industry guidance that was removed in 2017, or for CMS to clearly restate this guidance in a definitive manner. Additionally, MGMA believes if CMS will not provide clear guidance, the agency should clearly state why it is not using its authority to prohibit these abuses.

EFT fees are unfair to practices and counterproductive to interoperability

The data show that many physician practices continue to face the challenge of having to “pay to get paid.” Certain health plans and their contracted payment vendors are taking advantage of physician practices by requiring them to pay fees to receive their payments for medical services via electronic funds transfer (EFT). These transaction fees typically range from 2% to 5% of the total medical services payment. 

These fees are contrary to the intent of the administrative simplification provisions of the Affordable Care Act (ACA) and the law’s goal of decreasing healthcare administrative inefficiencies and cost. In implementing the supporting ACA regulations, CMS mandated a standard EFT transaction and supporting operating rules. Since 2014, health plans have been required to offer EFT to reimburse providers.

The savings and benefits related to use of EFT for business and consumer payments are well established. Health plans save millions of dollars sending payments via EFT by not printing and mailing paper checks. For practices, the most common savings are in the ability to automate the reassociation of the electronic payment with the Electronic Remittance Advice (ERA), as well as savings in staff time to manually process and deposit paper checks. The time and resources that physician practices spend on billing and related tasks are better spent on delivering healthcare to America’s patients, particularly during the COVID-19 pandemic.

As a member-benefit, MGMA has developed resources to help practices in their transition from paper checks to electronic payments.

• EFT and ERA Guide 
• Tips on Automating your Revenue Cycle and Avoiding EFT Fees

The Association will continue to press the federal government to take action to prohibit plans and their payment vendors from imposing EFT fees on practices.
 
MGMA Stat
Would you like to join our polling panel to voice your opinion on important practice management topics? MGMA Stat is a national poll that addresses practice management issues, the impact of new legislation and related topics. Participation is open to all healthcare leaders. Results of other polls and information on how to participate in MGMA Stat are available at: mgma.com/stat.