In a shocking revelation, a recent ProPublica investigation has uncovered a hidden fee system that is costing healthcare providers millions of dollars annually. This practice, which has largely escaped public notice, has significant financial consequences rippling through the healthcare industry.
The Invisible Victory of Insurance Companies
In 2017, a federal agency posted a notice prohibiting insurance companies from charging providers a fee when paying them for their work. Six months later, this notice mysteriously disappeared without explanation. This vanishing act was the result of a behind-the-scenes campaign by the insurance industry and its middlemen.
The Electronic Payment Fee Dilemma
Insurers now routinely require doctors to pay a fee of up to 5% to receive electronic payments. Even when physicians request payment by check, insurers often revert to electronic payments - and fees - against their wishes. This practice has become so widespread that almost 60% of medical practices reported being compelled to pay these fees at least some of the time, according to a 2021 survey.
Financial Impact on Healthcare Providers
The consequences of these fees are severe:
Larger medical practices can lose up to $1 million a year
Smaller clinics estimate annual losses of $100,000 or less
These losses could otherwise cover salaries for medical staff or fund community health initiatives
The Rise of Middlemen
The shift from paper to electronic processing, which began in the early 2000s, was intended to increase efficiency and save money. However, it has instead given rise to a new industry of middlemen, owned by private equity funds and large conglomerates like UnitedHealth Group.
One Doctor's Fight
Dr. Alex Shteynshlyuger, a urologist in New York City, has taken on both the insurers and the federal bureaucracy to challenge these fees. Through extensive public records requests, he uncovered a troubling picture of federal officials deferring to industry lobbyists, particularly Matthew Albright, a former CMS staffer now working for Zelis, a payment processing company.
The Regulatory Revolving Door
Albright's transition from regulator to industry lobbyist highlights the complex relationships between government agencies and the industries they regulate. His influence appears to have played a significant role in shaping CMS policies on electronic payment fees.
Conclusion
This hidden fee system represents a significant drain on healthcare resources, diverting funds that could be used for patient care into the pockets of insurers and middlemen. As the healthcare industry continues to grapple with rising costs and administrative burdens, addressing this issue could be crucial for ensuring the financial stability of medical practices and improving overall healthcare delivery.
See the ProPublica article here: https://www.propublica.org/article/the-hidden-fee-costing-doctors-millions-every-year
After We Cry, Laugh a Little
A popular YouTuber, Dr. Glaucomflecken does a very funny, yet sad, skit about this problem. It is very funny, in a sad but true kind of way! See it here: https://www.youtube.com/watch?v=DJRmDjtwsbA
Contact us for help navigating reducing fees paid for payment processing.
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