Claims Processing

Banning health plan EFT fees could save practices big

Tanya Albert Henry , Contributing News Writer

What’s the news: The U.S. Senate now has a bill that would, if it becomes law, prohibit health plans from charging physicians and other health professionals unnecessary fees for standard electronic funds transfer (EFT) payment transactions.

Sens. Bill Cassidy, MD (R-La.), and Maria Cantwell (D-Wash) introduced the No Fees for EFTs Act (S. 3805). It is a companion bill to House legislation introduced by Reps. Greg Murphy, MD, (R-N.C.), Morgan Griffith (R-Va.), Mariannette Miller-Meeks, MD (R-Iowa), Ami Bera, MD (D-Calif.), Kim Schrier, MD (D-Wash.) and Derek Kilmer (D-Wash.).

Your Powerful Ally

The AMA helps physicians build a better future for medicine, advocating in the courts and on the Hill to remove obstacles to patient care and confront today’s greatest health crises.

Momentum for the companion bill grew during the AMA National Advocacy Conference when physicians met with lawmakers to push for the legislation (PDF). The AMA worked closely to help draft the House’s No Fees for EFTs Act (H.R. 6487) that was introduced late last year.

The AMA recently sent letters of support for the bills introduced in the House of Representatives (PDF) and in the Senate (PDF).

Why it’s important: The Affordable Care Act requires health plans to offer physician practices standardized electronic payment, but some insurers or their vendors are imposing fees of 2% to 5% of the claim payment for practices that choose to be paid through these transactions. It’s an unnecessary and costly burden for physicians who face many other administrative barriers to patient care.

Nearly 60% of practices surveyed by the Medical Group Management Association (MGMA) said that they are forced to pay these percentage-based fees without ever having agreed to them. A third-party vendor that health plans require practices to contract with most often assesses the fees for purported “value-added services,” such as a customer-service hotline.

MGMA says that 75% of practices’ annual revenue is paid via EFTs and that the fees can cost a large practice up to $1 million annually.

Passing the bills and removing the fees will contribute to a more streamlined and efficient health care system, the AMA tells House and Senate members in the letters of support.

“The AMA believes that eliminating such fees is a vital step towards reducing administrative burdens on physicians ensuring that they can focus more on patient care rather than navigating unnecessary financial complexities,” the letters say.

The fees have “become an unnecessary and burdensome financial strain on physicians,” the AMA letters say, noting that “these charges add to the operational costs of providing care, diverting resources that could be better used to enhance patient care.” Further, the AMA has told lawmakers that “the administrative burden associated with managing these fees can also detract from the time and attention physicians dedicate to patient care.”

Dr. Cassidy, who worked in hospitals for the underinsured and uninsured, said that he understands the burden that unnecessary fees like these can have on patients and the health care system.

“The only thing doctors and patients should be focused on is providing and receiving the best care, not worrying about added costs associated with electronic payment methods,” he said.

Cantwell added that patients “are already struggling with expensive health care without these unnecessary fees further driving up costs for providers and, ultimately, for patients too.”

Learn more: The AMA has developed electronic payment resources to help physician practices navigate the ins and outs of EFTs and avoid unwanted additional services and fees.