Doctors May No Longer Owe Surcharges for Electronic Payments

The practice of charging doctors additional fees to receive electronic insurance reimbursements may be coming to a close.

According to an investigation by ProPublica, insurers currently charge physicians as much as 5% to get paid electronically. But the U.S. House has introduced a bill that would prohibit insurers and their intermediaries from levying fees on doctors for receiving electronic payments.

The Affordable Care Act encouraged doctors to use electronic payments in health care, since they are faster and easier to process than checks. In 2012, the Centers for Medicare & Medicaid Services (CMS) predicted that shifting from paper to electronic billing would save $3 billion to $4.5 billion over 10 years.

Initially, the agency prohibited fees for electronic funds transfers. As of August 2017, CMS posted a notice informing insurance companies that they weren’t allowed to charge physicians a fee when the companies paid the doctors for their work. But in 2018, as the result of lobbying by the payment processor Zelis, CMS changed its stance. That year, the fee statement disappeared without explanation. In July 2022, CMS issued a directive explicitly stating that additional fees were permitted.

Breaking Down the Fees

Nearly 60% of medical practices said they were compelled to pay fees for electronic payments at least some of the time, according to a 2021 survey conducted by the Medical Group Management Association. At that time, the fees broke down as such:

• 10% were charged 1% of their total reimbursement

• 43% were charged 2%
• 43% were charged 3%
• 4% were charged 4% 

According to the Physicians for a National Health Program, even when doctors have asked to be paid by check to avoid the surcharge, insurers often resume the electronic payments—and the fees—against their wishes. 

The AMA Signs On

The proposed legislation has the backing of the American Medical Association. Last month the AMA adopted a resolution officially opposed to “growing and excessive” fees on electronic funds transfer payments.

“We don’t tolerate paying fees to receive direct deposit of a paycheck,” said the bill’s lead sponsor, Republican Rep. Greg Murphy of North Carolina. “Likewise, doctors and patients should not be forced to pay predatory fees on electronic payments on essential health services.”

For its part, Zelis has positioned itself as improving the B2B payment environment for healthcare providers. Although it hasn’t commented on the pending legislation, the payment processor told ProPublica that its services remove “many of the obstacles that keep providers from efficiently initiating, receiving, and benefitting from electronic payments.”