April 2, 2018: Urging an end electronic payments abuses

April 2, 2018     

The Honorable Seema Verma 
Administrator 
Centers for Medicare & Medicaid Services 
Department of Health and Human Services 
200 Independence Avenue, S.W. 
Washington, D.C. 20201 
 
Re: Reinstatement of Electronic Payments Guidance on the CMS Website 
 
Dear Administrator Verma: 
 
We write today to convey our great concern regarding the recent removal from the Centers for Medicare & Medicaid Services (CMS) website several frequently asked questions (FAQs) instructing providers of their rights and prohibiting unfair business practices regarding electronic payments (e-payments) from health plans to providers. We urge you to expeditiously re-post these FAQs. 
 
MGMA is the premier association for professionals who lead medical practices. Since 1926, through data, advocacy and education, MGMA empowers medical group practices to create meaningful change in healthcare. With a membership of more than 40,000 medical practice administrators, executives, and leaders, MGMA represents more than 12,500 organizations of all sizes, types, structures, and specialties that deliver almost half of the healthcare in the United States.  
 
At issue are the unfair business practices related to two forms of payments made from health plans to providers, “virtual” credit cards (VCCs) and electronic funds transfer (EFT), and the various impediments health plans and third-party payment vendors have implemented that discourage provider adoption of EFT. Health plan use of third-party payment vendors has become a significant issue in the payment environment. A March 20, 2018 MGMA poll with over 850 responses found that nearly 3 in 10 respondents (29%) report that their payment from the health plan is routed through a third-party payment vendor. Of these, 58% reported being charged a fee by the vendor to receive their payment. Less than one quarter of respondents (24%) stated that no fee was attached to their payment and an additional 18% were unsure. 
 
In a VCC payment, a health plan or its payment vendor sends a single-use credit card number to a provider by mail, fax, or email which the provider must then manually enter. This is known as a “virtual” card because a physical credit card is never created or presented to the provider. For these authorizations, providers are required to pay credit card interchange fees, typically ranging from 3 to 5% of the value of the payment.  


 

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