November 3, 2021, 11:50 a.m. News Staff ― Would you be surprised to learn that a regulatory standard CMS implemented in 2012 to streamline payer-to-physician claims payments has effectively been hijacked by payers and third-party vendors, resulting in lost revenue for physician practices?
According to a recent AAFP letter to CMS, that’s exactly what has happened over the past several years.
“Specifically, family practices report that they are increasingly forced to pay mandatory, percentage-based fees for the receipt of electronic payments made from health plans via the electronic funds transfer transaction standard,” says the Oct. 22 letter to CMS Administrator Chiquita Brooks-LaSure signed by Academy Board Chair Ada Stewart, M.D., of Columbia, S.C.
Adding insult to injury, the AAFP strongly supported the standard when it was proposed, saying it stood to “eliminate administrative and cost burdens associated with processing paper checks for both payers and physician practices.”
And indeed, the current letter notes, a recent analysis confirmed that the EFT standard has produced savings for both health plans and clinicians.
The problem stems from a growing trend among payers to require physicians to contract with third-party vendors to process EFT payments. These vendors then attach mandatory, percentage-based fees for receipt of the payments, often representing them as charges for additional “value-added” services.
“A recent poll by the Medical Group Management Association confirms this trend: 57 percent 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,” says the AAFP in its letter, adding that many of these vendors fail to provide practices the choice to receive basic EFT payments without the additional services and accompanying fees tacked on.
“These fees are adding to practices’ already overwhelming administrative burden and ongoing financial strain,” the letter contends.
The Academy recommends that CMS take the following actions to remedy the problem:
This issue has caught the attention of other medical professional groups, as well. An Oct. 14 letter spearheaded by the AMA that nearly 100 other state and national medical organizations signed on to bemoans the payers’ actions as “unfair business practice.”
“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,” the AMA letter addressed to CMS’ Brooks-LaSure declares. Like the Academy’s correspondence, the letter calls on CMS to issue guidance schooling payers and vendors on the practice and enforce their compliance.
And although it remains to be seen whether the agency will drag its feet on correcting the situation, the issue isn’t going away anytime soon. AAFP members will have an opportunity to personally weigh in on this third-party intrusion in the coming months.
The Arizona AFP has introduced a resolution in response to the proliferation of such “intermediary companies” (some of which are actually owned by the payers they contract with) that will be addressed by the 2021 Congress of Delegates when it convenes in February 2022.
Aptly titled “Paying to Be Paid,” the measure calls for the AAFP to “advocate for federal legislation which would make payer and intermediary-initiated fees for Automated Clearing House payments, as well as other electronic means of payment to physicians for covered services, illegal.” It further directs the Academy to “advocate for payers to eliminate payer and intermediary-initiated transactional fees for payment of covered services.”
How can you register your thoughts on the matter? Virtual reference committee hearings will commence on Jan. 22 and continue Jan. 23 ― before the Congress convenes on Feb. 5. Academy members are invited to testify on this and all other resolutions delegates will consider during the event. Further details on navigating that process will be posted in the coming weeks.