Medical groups say they need relief from insurers’ 'predatory' EFT fees

Medical groups say insurance companies are saddling them with fees unfairly, and they are looking to lawmakers to address the problem.

Medical groups are calling on Congress to clamp down on fees for processing reimbursements from insurers electronically. (Image credit: ©Jose Luis Stephens - stock.adoble.com)

The Medical Group Management Association released a brief Monday protesting the “predatory” fees insurers are imposing for reimbursements submitted electronically. The MGMA says many practices did not agree to those fees and they are impeding efforts to provide care.

Insurance companies, through third-party vendors, are essentially forcing practices to pay electronic funds transfer fees, the MGMA says in the paper. For some practices, the bulk of their reimbursements from insurers are transferred electronically.

Insurers utilize vendors to manage the electronic transfer of reimbursements to practices. Typically, the vendors charge processing fees of 2% to 5% on the electronic transaction, according to the MGMA.

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The MGMA surveyed nearly 150 medical groups in April and found that about two out of three respondents said insurers are charging fees they did not agree to when sending payments electronically.

The majority of the groups said the estimated fees amount to $100,000 or less, but some medical groups said the fees are up to $1 million annually.

Two-thirds of medical groups say that over 75% of their practice’s annual revenue is paid via electronic fund transfer (EFT). Medical groups in the survey said that 22% of their claims, on average, are subject to EFT fees.

One in five groups said they are getting transfer fees from Medicare Advantage plans.

If a provider doesn’t want to handle fees electronically, they must deal with the added administrative headaches of accepting checks or virtual credit cards, the MGMA says.

In the paper, MGMA included responses from survey participants.

“It is a significant financial and administrative burden to the practice,” one respondent said. “For many smaller (and some not so small) payers, our hands are tied because they only work with the third party companies that charge ridiculous fees for processing EFT's."

Another participant responded, “Contacted the payers and have been told the only way to receive payment is by these companies that charge fees.”

The MGMA wants Congress to bar insurers and vendors from charging fees for electronic payments. The association is also calling on the Centers for Medicare & Medicaid Services to take action against imposing fees for managing electronic payments.

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