Congressman Greg Murphy (R-NC), along with Reps. Marianette Miller-Meeks (R-IA), Kim Schrier (D-WA) and Ami Bera (D-CA), introduced the No Fees for EFTs Act, which would close the Electronic Funds Transfer (EFT) fee loophole that third-party vendors exploit to charge fees to physicians when facilitating EFT transactions between health plans and providers.


Under the Affordable Care Act, health insurers must offer medical practices the option to receive reimbursements electronically. However, many impose charges between 2% to 5% on providers who prefer to use such EFTs. It has been estimated that over 75% of revenues for practices come from such transfers, costing some upward of $1 million annually.


While CMS allows for health plans to charge physicians a nominal transaction fee of $0.34 to cover banking costs, CMS does not allow for health plans to charge fees beyond the nominal transaction fee for EFT payments conducted using HIPAA’s transaction standards. However, some health plans use third-party companies to facilitate the EFT transaction on their behalf. These companies claim that no restriction applies to third parties who facilitate EFT transactions based on a strict interpretation of how the language for the EFT standard is worded.


The bill, if signed into law, would close the loophole via the operating rules for the EFT transaction standard. While CMS has the authority to regulate the HIPAA transaction standards, they have not acted to close the loophole, meaning Congressional action is necessary to solve the problem.


ADVOCATE will keep close watch on the progression of this proposed legislation and provide further updates as they become available.


Kirk Reinitz, President