Opt Out Options on Payer Reimbursements Made by Credit Card
By: Jeanne Lugli, General Manager, Mediware Reimbursement Services
Initially receiving a quick payment from your payer via credit card seems like a great solution. In some instances, it may be a good thing for your business, but at what cost? Home infusion and DME providers operate on slim margins, and every dollar counts. So if any of your payers reimburse you via credit card, forcing you to incur costly fees associated credit card transactions, you may want to ask your payers to reimburse you the way that had previously and if possible, only with electronic funds transfers (EFT).
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For various reasons, some of which may include card user incentives, some payers are now reimbursing with credit cards. While that means quick payment for you, it also means significant credit card transaction fees that can take a big bite out of your profit because, for every dollar you are reimbursed, you are paying a portion to credit card processing.
With transaction fees often ranging from 1% to 5% of the value of each transaction, you pay anywhere from $100 to $500 on a $10,000 reimbursement. Over the course of just a single month, the cost of the fees can really add up. And if you do the math over the course of a year, you’ll quickly see that those speedy credit card reimbursements come at a very high cost to your business.
While payers don’t have to get your approval to reimburse you via credit card, you are not obligated to accept credit card payments. They must offer the option to opt out of receiving payments via credit card. If it is an option, request your payers to complete their transactions via EFT. This way, you can still receive your money quickly, but your fees will be significantly less.
If you have questions about payer credit card payments or need assistance with your home infusion and DME reimbursement, contact Mediware Reimbursement Services. We can help you achieve cash to net revenue of 97%, bad debt of 5% or less, and an average DSO of 50 days or fewer.