The CMS National Standards Group (NSG) published guidance clarifying that health plans, as well as their payment vendors, must provide payments to providers using standardized electronic fund transfers (EFT) and electronic remittance advice (ERA) transactions without charging excessive fees.
For many years, health plans have increasingly relied on third-party payment vendors to facilitate EFT and ERA transactions on their behalf. These vendors would typically charge providers excessive fees on the EFT transactions. HIPAA regulations prohibit health plans from charging excessive fees for EFT transactions (they are allowed to charge a nominal fee for the transaction cost which averages $0.34 per transaction). However, third-party vendors claimed they were exempt from this prohibition because the regulations stopped health plans from charging the fee, but not third-party payment vendors.
The guidance makes it clear that health plans can be held accountable for violations of the standards made by their business associates, such as third-party payment vendors.
According to the guidance:
- Health plans are allowed to pay providers using virtual credit cards (VCC). However, health plans cannot require payment by VCC.
- Health plans and their business associates must provide payments using the EFT and ERA transaction standards if the provider requests payment in this way.
- As business associates of the health plan, third-party payment vendors are also subject to the EFT and ERA prohibitions on excessive fees for EFT transactions. Only the nominal transaction cost fee can be charged for EFT transactions. Health plans can be held accountable for violations by their third-party vendors.
- In addition to the EFT payment, third-party payment vendors must also provide ERA transactions directly to the provider or the provider’s business associate (such as a medical billing company).
- Health plans and their third-party vendors must also maintain a one-to-one relationship between each ERA and its related EFT.
- Health plans cannot require providers to receive payment or reassociation services from third-party vendors.
Providers can report violations of these standards to NSG using the NSG Administrative Simplification Enforcement and Testing Tool (ASETT) website. Providers can also email questions to the NSG.
The Advocacy Council – ADVOCATING FOR ALLERGISTS AND THEIR PATIENTS