'It's ridiculous': Why hospitals pay millions to get paid electronically

Hospitals and physicians are paying millions of dollars for a hidden fee to receive reimbursement from payers electronically, ProPublica reported Aug. 15.

Payers and middlemen charge healthcare providers as much as 5 percent to process electronic payments, according to the story. The ACA required payers to offer electronic funds transfers and nudged physicians to take them. CMS at one time prohibited the processing fees before reversing course.

Tim Reiner, senior vice president of revenue management of Altamonte Springs, Fla.-based AdventHealth, complained to CMS about the fees in 2020, the news outlet reported. "I have to pay $1.8M in expenses that I could use on PPE for our employees, or setting up testing sites, or providing charity care, or covering other community benefits," he wrote.

"It's ridiculous," Karen Jackson, a retired senior CMS official, told the news outlet.

The U.S. Department of Veterans of Affairs has declined to pay the fees, declaring them illegal, according to the story.

The pushback against the fees has been led by Alex Shteynshlyuger, MD, a private urologist in New York City, while the campaign to keep them has been spearheaded by Matthew Albright, chief lobbyist at payment processing company Zelis, according to the article. Mr. Albright, a former CMS official, had pressed CMS on getting rid of its ban on the fees. The agency told ProPublica it had no legal authority to outlaw the fees, adding that it "receives feedback from a wide range of stakeholders on an ongoing basis."

Other electronic payment vendors include UnitedHealth Group subsidiaries Change Healthcare and VPay. UnitedHealth told ProPublica the companies cut down on administrative burden and speed up payments for providers. Zelis told the news outlet that it helps prevent "many of the obstacles that keep providers from efficiently initiating, receiving, and benefitting from electronic payments."

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