Payment Processing for Medical Professionals
Payment Processing for Healthcare: Over the past a number of years, doctor’s expenditures have gone up quicker than before, while payments from insurance companies have declined. Many medical professionals have had their fees cut by insurance companies. Insurance companies negotiate bulk deals with many medical care professionals and then put the medical professional in their network of providers. The fact is that the medical care industry has changed a lot and change continues.
The Affordable Care Act
One of the bigger change has been the Affordable Health Care Act. ACA or popularly known as Obamacare has hit doctors and medical professionals with various new rules. In some cases there are even lower insurance reimbursements and more paperwork. With rising costs and lower payments medical people need to find ways to save money.
Medical people have virtually no control over the insurance reimbursements they receive. However, they can control their expenses. And one of the first things medical offices should be looking at is their cost to accept credit cards.
How to Save Money on Credit Card Processing
Most doctor’s offices are spending over $1000 a month to take their patients’ Visa™ and Mastercard™ payments. There are ways to reduce the fees that the medical office pays the credit card payment processor. Let’s walk through what you need to know.
Credit card companies charge everyone a fee called interchange. Interchange is the fee to the medical office for accepting credit card payments from patients. There is no way around interchange fees. However, some merchant account providers will do a markup on the interchange fee. They do this to hide or obscure the profit they are making. A better way of pricing so that you know what you are paying is called interchange plus. Interchange plus is when the fees to credit card companies are broken out separately from any other fees you pay your merchant account provider. This way you know the profit the merchant account provider is making from you. This gives you leverage to haggle and negotiate the price down. If a payment processor or merchant account provider won’t give you interchange pricing then tell them to go away. Any reputable merchant services provider should give what you want as there are many payment providers available
Monthly Subscription Fees
Many medical bills can be expensive. Or something in the amount of over $100 and sometimes into several hundred dollars. A typical payment processor will charge you for a percent of the transaction, plus credit card interchange and a flat fee per transaction. So how can you reduce the amount of money you pay? You need to find a payment processor who offers a monthly subscription fee. In other words, instead of paying a percent of the transaction you’ll only pay a monthly subscription fee plus interchange.
Old Way to Price a Medical Bill Transaction
If you have a $100 medical bill you might pay 2.0% of the transaction + $0.30 + 2.0% in credit card interchange fees. So you’ll pay $4.30 for the transaction in total.
New Way to Price a Medical Bill Transaction
If you have a $100 medical bill you might pay 0.0% of the transaction + $0.30 + 2.0% in credit card interchange fees. So you’ll pay $2.30 for the transaction in total. On top of that you’ll pay a monthly subscription fee of $70. If you have 50 medical bill charges for $100 a day you’ll save $200 a day.
Credit Card Terminal
You’ll need to have a credit card terminal in your medical office. How can you save money here? This can be pretty easy.
Free Credit Card Terminals
First off. You should ask for free credit card terminals from the payment processor. Your payment processor won’t make money unless you accept credit card payments so they should offer you the terminal for free. You may need to pay a small deposit but don’t offer that upfront. Just ask for a free credit card terminal. Don’t lease the terminal. Don’t pay monthly fees for the terminal.
- Get a free credit card terminal
- Don’t pay a lease fee for the terminal
- Don’t pay for the terminal to be programmed
- Don’t buy a terminal from a payment processor
Free Credit Card Terminal Programming
Don’t pay fees to get your credit card terminal programmed. This should also be a free service. It does not take much time to program a terminal and the payment processor should be able to handle this quickly.
There are other fees that some payment processors may try to charge you. PCI compliance fees. Reporting fees. Chargeback handling fees. Let’s go through these. Don’t pay a PCI compliance fee. PCI DSS is the industry standard to keep credit card numbers private and secure. Your payment processor should already be handling this on their own. Some payment processors will charge you to get a report of your transactions. Don’t pay this fee either. The payment processor should be able to provide you access to an online website for you to download the transactions that you had in a month. You’ll be able to provide this file to your bookkeeper. If you’re using Intuit you may be able to simply import the file into Intuit or another accounting package. Chargeback fees are a different story. You may have to pay a fee here. When a customer disputes a transaction or says they should not have been charged, the chargeback process kicks off. There is work for the payment processor here so they should be receiving some form of payment. Normally this will be less than $10 per chargeback. Chargebacks are rare in the medical industry so you won’t see this fee very often. When you do have a dispute sometimes you may want to consider a partial refund to the customer if they are deserving.
What payment processor is good for Medical Offices?
Fattmerchant is a payment processor that meets the criteria that we outlined in this article. Fattmerchant members get the true cost from Visa and Mastercard, without an added percentage. While traditional credit card processors add 1-2% to the actual rates from Visa, MasterCard, JCB, and others. Fattmerchant members pay only a flat fee per transaction and a monthly subscription fee to get the wholesale cost directly from Visa, MasterCard, Discover, JCB or UnionPay. You can look at their prices online here.
What about other payment processors?
As we find other payment processors that offer a deal similar to Fattmerchant, we will add to this article. Thank you for reading.