MGMA Says Plans, Clearinghouses Charging Excessive Fees on Virtual Credit Cards

Some health plans and clearinghouses are charging unreasonable fees for electronic fund transfer (EFT) transactions to providers who accept payment from virtual credit cards, according to the Medical Group Management Association (MGMA), an advocacy group for medical practice leaders and executives. Virtual credit cards are an electronic form of payment whereby a payer will send a physician practice (via fax, mail, or e-mail) information that needs to be punched into a credit card point-of-service (POS) system in order to receive contractual payments.

MGMA contends that the fees for EFT transactions are contrary to the intent of the Affordable Care Act (ACA). In a letter, the group is urging the Centers for Medicare & Medicaid Services (CMS) to issue clear guidance to payers discouraging these activities.

MGMA notes that CMS already has some regulations in effect which say that health plans cannot incentivize the provider to use an alternate payment method other than the adopted standard. In addition, payers should not promote a payment system that adversely affects the provider for using the standard transaction, ie, charging excessive fees.

In its letter, MGMA recommended more specific guidance, contending that virtual and other types of credit card payments from health plans do not meet ACA standards; that as part of their contracting process, health plans and clearinghouses should not require providers to accept virtual credit cards in lieu of EFT payments; and that CMS define what constitutes “excessive fees” in terms of what health plans are permitted to charge providers for EFT transactions.

The MGMA letter says CMS guidance should use the National Automated Clearing House Association’s (NACHA) “costs for health plans and financial institutions to conduct automated clearing house (ACH) EFT transactions (between 13 and 34 cents per transaction).” Also, MGMA contends that excessive fees may result in providers not transitioning EFT and the industry not realizing the significant efficiencies associated with this transaction.

A recent survey conducted by The American Medical Association regarding the impact on practices of health plans’ use of virtual credit card payments just closed on June 2, 2014 and results should be presented shortly.

MGMA represents more than 33,000 medical practice administrators and executives in practices of all sizes, types, structures and specialties in which more than 280,000 physicians practice.