More than one in four physician practices report being forced to pay fees for receiving electronic payments

MGMA Stat - AugustĀ 26, 2020

Reimbursement

Contracting

Robert M. Tennant MA

The Medical Group Management Association’s most recent MGMA Stat poll asked healthcare leaders, “Is your practice charged a fee for EFT payments from any health plans or vendors?” The majority (51%) responded “no,” while 26% said “yes.” The remaining 23% answered “unsure.”  

The poll was conducted Aug. 25, 2020, with 580 applicable responses. 

Of those who responded “yes” to being charged fees for EFT payments in the 2020 poll:
  • 16% stated they were charged a fee of 1% of their total reimbursement
  • 42% responded they were charged 2%
  • 33% stated they were charged 3%
  • 8% indicated they were charged 4% or more per EFT transaction. 

This is an increase from a Sept. 5, 2017, MGMA Stat poll, in which 17% indicated they were charged a fee for their EFT transaction, 51% stated they were not charged a fee and 32% were unsure.
The unfair business practice of Electronic Funds Transfer (EFT)
Many physician practices now 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 2-5% of the total medical services payment. 

Despite aggressive advocacy from MGMA and other physician organizations, providers are forced to pay these EFT fees as the Centers for Medicare & Medicaid Services (CMS) has failed to issue definitive guidance preventing health plans and payment vendors from engaging in these unfair business practices.

These fees are contrary to the intent of the administrative simplification provisions of the Affordable Care Act (ACA) and its 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 are required to offer EFT should providers request it.

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 patients.

MGMA has developed a member-benefit EFT and ERA Guide to assist practices in making the transition from paper checks to electronic payments. The Association will continue to advocate for 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.
 

About the Author

Robert M. Tennant
Robert M. Tennant MA
Director, Health Information Technology Policy MGMA Government Affairs

Rtennant@mgma.org

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