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    A March 20, 2018 MGMA Stat poll found that more than one in four respondents (29%) report that their payment from the health plan is routed through a third-party payment vendor, with 41% stating that their payment came directly from the health plan. Less than one-third (30%) responded that they were unsure. Of those indicating that they received their payment via a third-party payment vendor, nearly six out of 10 (58%) reported that they are charged a fee from the vendor for their payment. Just 24% stated that no fee was attached to their EFT payment and a further 18% responded that they were unsure.

    In 2012, the Centers for Medicare & Medicaid Services (CMS) established a standard for the Electronic Funds Transfer (EFT) payment transaction and supporting operating rules. This was done to improve system efficiency by reducing the number of paper checks processed by health plans and handled by physician practices.

    The use of EFT for business and consumer payments (for example, direct deposits of paychecks by employers) have clear benefits. Practices can save both money and time by reassociating the electronic payment with the Electronic Remittance Advice (ERA) and manually processing and depositing paper checks. By law, health plans are required to offer EFT payments when requested by providers and achieve operational efficiencies by eliminating printing and mailing costs. The hours and resources physician practices spend on billing and related tasks are better spent on delivering direct patient care.

    Rather than adhere to the intent of the law, and seek to reduce administrative costs from the healthcare system, some health plans have contracted with third-party payment vendors to issue provider reimbursement. The concern is that these payment vendors charge physicians a fee (1-5%) for receiving payment for the medical services they provide to their patients. In many cases, practices do not have the option of receiving a no fee paper check from either the health plan or their payment vendor. Refusing payment via EFT to avoid the fee generally results in the practice being paid via “virtual” credit card (VCC) — a one-time-use 16-digit credit card number emailed or faxed to the practice. Practices, of course, are responsible for paying all credit card merchant fees associated with the transaction (typically 2-5%).

    With practices reporting payment abuses associated with EFT fees and VCCs, MGMA has strongly advocated that the CMS prohibit unfair business practices employed by health plans and their associated payment vendors. Disappointingly, the CMS recently removed guidelines on its website that addressed the issue of EFT fees and the use of VCCs. MGMA will continue to push for these guidelines to be reissued as soon as possible and is working with other organizations to pressure CMS.

    MGMA proposes the following practice action steps:

    1. Request EFT payment using MGMA's sample letter or by visiting CAQH’s EnrollHub
    2. Remember that payers MUST send you EFT if you make a request
    3. Determine who is charging EFT fees or sending you VCCs
    4. Talk to your financial institution about any financial transaction fees
    5. Stand firm against VCCs, EFT fees
    6. Lodge a formal complaint directly with CMS or through MGMA

    For more information, access MGMA's EFT/ERA Guide

    MGMA Stat is a national poll that addresses practice management topics, the impact of new legislation, and related topics. Participation is open to all healthcare professionals. Results of other polls and information on how to participate in MGMA Stat are available here.


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

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