Predatory EFT Fees

EFT Fees – MGMA Pushes Back Against Predatory Business Practices

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Medical Group Management Association (MGMA) released findings from their Stat poll, conducted on August 10, 2021, regarding medical practices being forced to pay fees to receive EFT payments from payers. According to their research, 57% of respondents, when asked “Are insurers charging your practice fees you didn’t agree to when sending payments via EFT?”, responded “yes” and 43% said “no”.  For this same Stat poll a year ago only 26% said “yes” and 51% answered “no” and 23% were “unsure”. The data comparison year over year shows that this issue has doubled in just the last year.

For the most recent poll, of those who responded “yes”, 86% stated they were being charged anywhere from 2 – 3% of the total medical services payment by the payment vendor to receive EFT payments. In other words, they are having to “pay to get paid”. Obviously, the problem has grown since the Centers for Medicare & Medicaid Services (CMS) eliminated specific guidance in 2017 that prevented insurers and payment vendors from participating in these unfair business practices.

Part of the Affordable Care Act (ACA) of 2014 requires payers to offer medical practitioners the option of obtaining their payments through EFT. This idea was implemented to help streamline payment processes. However, payer partners have been more frequently telling providers that they must get payments through a specific vendor, which then imposes a seemingly inescapable administrative fee.

In light of this information, MGMA has written a letter to CMS asking them to utilize their authority to prohibit these EFT fees. They called on CMS to clearly restate prior industry guidance, which was removed in 2017 by the previous administration, or repost the previous guidance that was removed.  They also are of the opinion that if CMS will not present clear guidance, they should then provide the reason why they are not using their authority to stop these abuses.

MGMA stressed that they are not opposed to a vendor’s ability to offer services that have administrative fees.  Just that health plans should be clear in stating the details of the fees and practitioners should have an option instead of being forced to utilize the third-party service.


EFT Fees – Unfair and Counterproductive to Interoperability

As the EFT option was developed with the desire of stimulating cost savings, payers are hindering progress by taking a cut out of what they agree to reimburse medical providers. These fees are counter to the intent of the administrative simplification terms of the ACA and the law’s intent of decreasing administrative wastefulness and cost. In implementing the supporting ACA regulations, CMS ordered a standard EFT transaction and supporting operating rules which means that health plans are mandated to offer EFT reimbursement to practitioners.

The benefits and savings associated with the use of EFT are well established. Payers have saved millions of dollars providing payments via EFT as they do not have to print and mail a paper check. For medical providers, the most prevalent savings has been in the ability to automate the connecting of the electronic payment with the Electronic Remittance Advice (ERA), as well as the time saved by staff to manually process paper checks, allowing more time to be spent on patient care.

Moving forward MGMA will continue to put pressure on the federal government to take action to prohibit insurers and their payment vendors from imposing EFT fees on medical practices.


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