Physician groups urge CMS to put an end to coercive, fee-based EFT programs

October 19, 2021
Area(s) of Interest: Advocacy Practice Management 

The California Medical Association (CMA) recently joined the American Medical Association (AMA) and 28 other medical and specialty societies to express strong concerns over unfair business practices with respect to electronic payments in health care.

CMA has for many years urged the Centers for Medicare & Medicaid Services (CMS) to  clarify and enforce the right of physicians to receive electronic payments via the Automated Clearing House electronic funds transfer (EFT) standard without being forced to pay percentage-based fees for “value-added” services. In the absence of clear guidance and related enforcement on this issue, physicians  have been plagued by financial losses and administrative burdens—an alarming result.

The EFT transaction standard facilitates streamlined payer-to-provider claim payments and eliminates the manual burdens associated with processing paper checks for both health plans and physician practices. The 2020 CAQH Index estimates the per-transaction savings of replacing paper checks with the EFT at $0.49, with providers saving $1.99 per   claim payment.

Unfortunately, an increasing number of our physician members report that they are forced to incur mandatory, percentage-based fees for the receipt of electronic payments from health plans for payments made via the EFT transaction standard. A recent poll by the Medical Group Management Association (MGMA) confirms this trend: 57% of medical practices reported that health plans charge fees that the practice has not agreed to when sending payments via EFT, with 86% reporting average fees of 2-3% of the claim payment. These fees are most   often assessed by third-party vendors with which health plans require physicians to contract for EFT payment processing and represent charges for additional “value-added” services, such as customer service  hotlines. While some physicians may elect to receive supplementary services to the EFT standard for additional fees, these vendors do not offer practices the choice of electing basic EFT payments without charge. Consequently, physicians are left with no option but to “pay to get paid.”

Beyond just representing an unfair business practice, these coercive EFT fee-based programs can result in  downstream negative consequences for patient care. Physician practices that lose up to 5% of claims payments due to EFT fees are less able to invest in the additional staff, medical equipment, data analytics, and information technology that could improve care access and quality.

In a joint letter to CMS, CMA and the other signing organizations are urging the agency to immediately act to protect the right of physicians and other health care professionals to choose EFT payments without being forced to pay for additional services.

“At the time of the final rule implementing the EFT standard, CMS could not have foreseen that some industry players would view electronic health care payments as an opportunity for financial gain beyond the savings associated with the transition away from paper checks,” the letter said. “We believe that physicians should have the opportunity to make an informed business decision regarding their electronic payment choices. The alarming rise in complaints from physicians being forced to enroll in fee-based EFT services   warrants immediate guidance and enforcement from CMS to ensure fair business practices in health care.”

CMS and organized medicine share a mutual goal of improving the quality and efficiency of health care in our country. We are hopeful that CMS will take action on this  concerning issue that has financially and administratively burdened our nation’s physicians for far too long.

View the letter here.


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