ISASS Urges the White House to Eliminate Electronic Fund Transfer Fees for Medicare Reimbursement

On October 14, 2021, ISASS and other organizations representing state medical associations and the nation’s medical specialty societies submitted a letter to the Biden White House to express strong concerns over unfair business practices with respect to electronic payments in health care. For more than 7 years, ISASS and other organizations have urged the Centers for Medicare & Medicaid Services (CMS) National Standards Group 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 given the efficiencies expected with the adoption of an electronic transaction standard. The letter requests that the Biden Administration swiftly address this problem by (1) issuing guidance that affirms physicians’ right to choose and receive basic EFT payments without paying for additional services and (2) undertaking the associated enforcement activities.

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 standard for health plans at $0.49 ($0.57 vs. $0.08), with providers saving $1.99 per claim payment ($3.18 vs. $1.19).

Unfortunately, physicians are increasingly reporting 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 surveyed by MGMA reported that health plans charge fees that the practice has not agreed to when sending payments via the EFT standard, with 86% reporting average fees of 2% to 3% of the claim payment.^[1] 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.

Although ISASS recognizes that some physicians may elect to receive supplementary services to the EFT standard for additional fees, these vendors do not offer physician practices the choice of electing basic EFT payments without charge. Consequently, physicians are left with no option but to “pay to get paid.” This outrageous situation is analogous to an employee being required to enroll in a program that would deduct a percentage of each paycheck to receive direct deposit payments from an employer.

See the letter attached here.