Healthcare Electronic Payment Shenanigan
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https://www.propublica.org/article/the-hidden-fee-costing-doctors-millions-every-year
Where healthcare insurance is involved, the payment may go from an insurer through a payment processor to the healthcare service provider.
The complain is this: the payment processors take a percentage from the healthcare service providers when electronic fund transfer (EFT) is used, and often don’t allow the healthcare service provider to accept paper check payment to avoid the EFT fees.
A doctor pushed and pushed through FOIA requests and learnt that CMS (Medicare/Medicaid regulator) has essentially given up on regulating the payment processors. The report exposes various traces of lobbying leading up to that result.
According to the article, a behemoth like the VA has been able to stand firm against giving the payment processor any cut, but the smaller healthcare service providers often cannot.
So there you ago, yet another middleman taking a cut from healthcare dollars.
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Looks like you folks (maybe except @Copper) didn't actually read the article. Nobody expects the payment processors to work for free. The point isn't payment processor not entitled to getting paid. The insurance companies hire the payment processors, the insurance companies already pay the payment processors. But these payment processors are extracting another cut from the service providers just for using electronic fund transfers -- a cut that the payment processors would not be able to extract had they just stick with paper checks, and there seems to be shenanigans for these payment processors to force service providers into accepting electronic transfers even when the service providers wanted to opt for paper checks.
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@Mik said in Healthcare Electronic Payment Shenanigan:
Ok, so you will pay them more to cut you a paper check. Pick your poison.
No, you will not -- the article is quite clear that accepting paper checks would allow service providers to avoid paying a percentage to the payment processors and receive 100% of what they are due. Part of the complain is that the payment processors find ways to put and keep service providers on using electronic fund transfer against their preferences for paper checks.
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And the check gets lost in the mail and has to be processed in house and will not hit the bank for several more days. All these things are important to providers who operate on a very narrow window. Cash flow is king. Don’t read an article like that and assume you can divine the truth.
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And the check gets lost in the mail and has to be processed in house and will not hit the bank for several more days. All these things are important to providers who operate on a very narrow window. Cash flow is king. Don’t read an article like that and assume you can divine the truth.
@Mik said in Healthcare Electronic Payment Shenanigan:
And the check gets lost in the mail and has to be processed in house and will not hit the bank for several more days. All these things are important to providers who operate on a very narrow window. Cash flow is king. Don’t read an article like that and assume you can divine the truth.
Whether to take the risk with the checks missing in the mail and whether to accept delays due to the postal service are the service providers’ decisions. The payment processors have no right to use those pretexts to extract extra revenue from the payments’ rightful recipients.
Heck, if you read the article, you’d see that there is also dispute on whether the payment processors are legally allowed to take a cut at all.
The insurance company wants to “outsource” payment processing to another company to process payments to their service providers, fine. But why should the providers be made to give up a percentage of their fees to those payment processors just because the insurer outsourced the payment processing function?
In the world of “consulting,” I have seen some consultants voluntarily give up anywhere between 2% to 5% of their fees just to shorten the payment cycle (e.g., from NET 60 to NET 30). Those are all voluntary and (1) always something worked out with the consultant and the client, not something imposed by whatever third party “payment processor” hired by the client, and (2) a consultant can always just stick to their contracts’ payment terms and get 100% of what the client pays them.
I have even seen consultants pledging future consulting revenues to banks as collaterals to secure loans from banks and pay interest on such loans that, in a sense, is also a way of giving up a percentage of their revenues (in the form of interest payment) to get their money sooner. But again this would be voluntary as no consultant is required to take out such a loan.
For consultants who accept credit card payments or wire transfers, the consultants choose their payment processors (merchant account providers or banks); and even then the consultants can stick to ACH to avoid paying a percentage of revenue for payment processing.
In the case discussed in the article, the service providers are not the ones choosing the payment processor and the providers are often cheated out of using a fee-less option (the paper check) when it should be available.
Imagine W2 employees have to give up a cut of their salary or wages to some “payment processor” that their employers have hired; the employees will be up in arms.
