Investigation Finds Hidden Fees Are Costing Physicians Millions Annually
By Jarrod Fowler, MHA, FMA Director of Healthcare Policy and Innovation | Aug. 17, 2023

According to a recent ProPublica investigation, physicians are being forced to pay millions of dollars in fees each year — likely adding up to billions collectively — to receive payments electronically. The Medical Group Management Association says these fees can add up to $1 million a year for large medical groups and around $100,000 for smaller groups. On occasion, these fees can run even higher. Meanwhile, the middlemen processing these fees share millions of dollars in revenue per year with insurance companies. These fees come on top of the expenses that practices are already dealing with due to prior authorizations, denied claims, navigating step-therapy protocols, and managing network contracting issues.

ProPublica reports that once-banned fees were re-legalized by CMS as a result of lobbying by insurance companies and the payment processors that serve as middlemen. Consequently, according to survey data, nearly 60% of practices reported that they were forced to pay fees on electronic payments in 2021. The article notes that this frequency has increased since then, per direct conversations with medical practices. In many cases, physicians have little recourse except demanding paper checks rather than allowing middlemen to take a cut of their payments.

While electronic payments were supposed to save money and increase efficiency, they have, in practice, siphoned off enormous sums of money that could be allocated toward serving patients. CMS has the authority to stop these fees from occurring but has failed to act despite lobbying by the AMA and other medical societies. The FMA is monitoring this developing story and will advocate as necessary to help fight these unfair electronic fund transfer fees.