Doctors are up in arms over excessive fees they have to pay to health insurance companies because of the Affordable Care Act, and they're asking the Obama administration to get involved.
The dispute centers on who pays for processing the payments that insurers make to doctors. These fees – about 2% per transaction, or $20 in fees for every $1,000 payment – add up quickly. Insurers, who have always paid the processing fees before, have forced doctors to pay them instead since the advent of the ACA. The doctors are now fighting it.
"They are charging excessive fees of 2% per transaction, basically discounting the payments to [doctors]," says Robert Tennant, a senior policy advisor at the Medical Group Management Association, which represents 33,000 members who manage medical practices for more than 280,000 doctors.
The Centers for Medicaid and Medicare Services previously advised that health insurers can't try to push doctors "to use an alternate payment method" by doing things like charging excessive fees. Unfortunately, the CMS never addressed what qualified as "excessive".
As more insurers are turning to electronic payments, it's time for that extra guidance, says MGMA.
The Medical Group Management Association sent a letter on 11 June to Centers for Medicaid and Medicare Services asking to determine if virtual or other types of credit card payments from insurers "meet the Affordable Care Act standard and operating rules requirements".
"When a mother comes into the practice and wants to pay with a credit card, it's one thing. But when it's an insurer who is sitting on a pile of cash and their method of payment effectively cuts our hard-fought payment rates by 3%, it is unacceptable," Dr Christoph Diasio told American Medical News.
It's one more tangle in the Affordable Care Act, whose implementation has been so rocky it has seemed cursed. The law sought to make less paperwork for doctors, and save about $16bn over the next 10 years, so the law set new standards requiring insurance companies to pay doctors electronically.
With the payments, come the fees. The insurance companies are charging the doctors to collect their payments on a "virtual credit card", which is in fact no more than a 16-digit string of numbers in an email. The doctors then type the digits into their credit-card machines.
While the virtual credit card system is supposed to save money for all of those involved, it pushes the cost onto doctors, who are forced to pay processing fees every time they collect a payment. The arrangement has the effect of reducing doctors' pay, in nickels and dimes, on every treatment.
Some would argue that paying fees is the cost of doing business, but Tennant argues that forcing doctors to pay the processing fees is an unfair departure from usual business practice.
In the past, insurers covered the cost of cutting and printing checks as well as the cost of postage. That cost was not passed onto the doctors receiving the checks – and neither, says Tennant, should the fees associated with electronic payments.
What's worse for many doctors and healthcare providers is that they are enrolled into the "virtual credit card" automatically. A brochure for Emdeon, a payment management company specializing in healthcare, notes that doctors are automatically set up to receive virtual card payments "unless or until" they alert Emdeon that they are opting out for a different form of payment. Doctors are protesting this should change to an opt-in system.
