For payer organizations, claim payments represent far more than a back-office function for payers and health plans. Every payment sent to a provider is a touchpoint that can either strengthen or strain relationships, influence network stability, and ultimately affect the healthcare experience of members.
A strong provider network is essential for attracting employer groups, retaining members, and ensuring access to high-quality care. Yet, the reality is that many providers still face significant challenges in getting paid. According to industry surveys, a majority of providers continue to receive paper checks, and more than half report paying fees just to access electronic payments.
When payers rely on payment methods that introduce fees—such as virtual cards or fee-based ACH—they not only increase costs for providers but also contribute to a cycle of confusion, support calls, and wasted resources.
By prioritizing provider-friendly payment methods and eliminating hidden fees, organizations can build stronger networks, improve member satisfaction, and contribute to a healthier, more sustainable healthcare system.
The Payment Landscape: More Than Meets the Eye
Healthcare payments have come a long way from the days of paper checks. Today, payers have a variety of options for reimbursing providers, including:
Paper Checks: Traditional but costly and slow, with significant administrative overhead. Though familiar, paper checks are expensive to print, mail, and reconcile. They also introduce delays and increase the risk of lost or misdirected payments.
Virtual Cards: Payments processed like credit cards, often used as an alternative to checks. Virtual cards are attractive to payers because they reduce paper and postage costs. However, providers pay interchange fees—sometimes as high as 3%—every time they process a virtual card payment. These fees add up quickly, especially for high-volume practices, and can significantly erode provider margins.
Fee-Based ACH: Electronic payments that charge providers a fee for each transaction.
Some payment vendors offer ACH payments but charge providers a fee for each transaction. While this model may generate revenue for payers or vendors, it places an additional financial burden on providers who are already operating with narrow margins.
Free ERA/EFT: electronic remittance advice/electronic funds transfer with no fees to providers.
While electronic payments promise efficiency, not all digital options are created equal. Virtual cards and fee-based ACH, in particular, can introduce costs that are often overlooked.
The Bottom Line: Every dollar spent on payment fees is a dollar that providers can’t invest in patient care, technology, or staff. Over time, these hidden costs can damage payer-provider relationships and discourage providers from participating in your network.
Why Free ERA/EFT Should Be the Standard
1. Provider Satisfaction and Network Strength
Providers overwhelmingly prefer free EFT payments. According to industry surveys, the overwhelming majority of providers would choose EFT over other payment methods if given the option. By offering zero-cost ERA/EFT, payers can boost provider satisfaction, reduce administrative friction, and strengthen their networks.
2. Cost Savings for All
Eliminating payment fees doesn’t just benefit providers—it also reduces administrative costs for payers. Electronic payments are faster, more secure, and easier to reconcile, leading to fewer payment errors and support calls.
3. Compliance and Trust
Adhering to regulatory guidance and offering transparent, fee-free payment options builds trust with providers and demonstrates a commitment to fair business practices.
4. Competitive Advantage
In a competitive market, payers that prioritize provider-friendly payment methods stand out. A strong, satisfied provider network is a key differentiator for attracting employers and members.
Payment methods should never be a source of friction or financial strain for providers. That’s why zero-cost ERA/EFT should be the standard, with dedicated support to help providers enroll and manage their payments.
Conclusion
The way payers and health plans approach provider payments has far-reaching implications—not just for their own organizations, but for the entire healthcare ecosystem.
Hidden fees, administrative complexity, and inefficient payment methods can create unnecessary burdens for providers, ultimately impacting patient care and the stability of provider networks.
By recognizing the costs associated with different payment methods, payers can make informed decisions that support the long-term health of their networks and the communities they serve.