Credit Card Surcharges and Chiropractic Physicians in Illinois

As chiropractic physicians in Illinois, it is essential to understand the implications and legal considerations surrounding the practice of adding credit card surcharges to patients. While the Medical Practice Act and Rules in Illinois do not specifically address credit card payments, it is crucial to navigate this terrain cautiously. This article discusses potential challenges and offers recommendations for chiropractic physicians.

The Complexities of Credit Card Surcharges for Chiropractic Physicians

Adding surcharges to credit card transactions involves passing along to the purchaser the “swipe fee” or “transaction fee “that credit card companies charge the merchant. While some merchants opt for convenience fees or fixed fees, the term “surcharge” encompasses all additional charges associated with credit card payments. However, several factors make the implementation of credit card surcharges a complex and potentially risky choice for chiropractic physicians.

1. Legal Ambiguity:

The legal permissibility of surcharges varies from state to state and continues to evolve.  Although Illinois does not ban surcharges for general merchants, there are no published cases specifically addressing credit card surcharges related to healthcare services in physician offices. As a result, it is uncertain how state regulators would interpret the addition of surcharges to medical fees. Regulators might view these surcharges as overcharging under the Medical Practice Act, potentially leading to regulatory repercussions.

2. Compliance and Uniformity:

To ensure compliance with various healthcare programs, it is crucial for physicians to maintain consistency in their fee structures. Charging more for the same service when paid by credit card can raise concerns about impermissible discounts or inducements, particularly in programs like Medicare and Medicaid. By adhering to a “one fee for one service” policy, chiropractic physicians can mitigate the risk associated with multiple pricing structures.

3. Managed Care Provider Agreements:

Providers should also review their agreements for the networks in which they participate.  Managed care agreements require the provider to accept the plan’s fee schedule listed amount as full payment for in-network patients.  A health plan could view a surcharge over the allowed fee amount to be a violation of the provider agreement, where the physician and patient are in-network for that plan. For example, BCBSIL states the following in their Billing and Reimbursement policy, “A Contracting Provider shall not bill or collect from the member, or BCBSIL, charges itemized and distinguished from the professional services provided. Such charges include, but are not limited to, malpractice surcharges, overhead fees or facility fees, concierge fees or fees for completing claim forms or submitting additional information to BCBSIL.” The unrestricted breadth of prohibited non-professional fees is another compelling reason for physicians to pay their own credit card fees and avoid adding any surcharges to the patient’s portion.

Legal Considerations for Credit Card Surcharges

If, after reviewing the information above, you still want to charge credit card surcharges to your patients, major credit card institutions have set forth specific rules and regulations set forth by that must be followed. It is crucial for chiropractic physicians to adhere to these guidelines when considering the implementation of credit card surcharges:

1. Notify the Credit Card Institution:

Physicians must inform major credit card institutions, in writing, of the physician’s intention to surcharge. This notification process can typically be completed by sending a letter to the financial account representative or through paperwork provided on the credit card company’s website. Check with your credit card processing merchant account representative as to that merchant’s process.

2. Notify Your Patients:

Clear communication with patients is vital. Physicians must inform their patients explicitly about the surcharges, ensuring the information is not buried within contracts or obscured by fine print. Including the surcharge on invoices or displaying signage in the office can effectively communicate this information. For online payment solutions, the surcharge should be clearly stated on the payment page.

3. Reasonable Surcharge Amount:

Typically, surcharges range from 1.5% to 3%.  Chiropractic physicians must not implement surcharges that exceed the actual cost of their credit card processing fees within the 1.5-3% range.

4. Restrictions on Debit Card Transactions:

Surcharges are limited to credit card transactions only. It is not permissible to apply surcharges to debit card transactions, even if processed as credit transactions. Additionally, prepaid cards are exempt from surcharge fees.

5. Transparent Line-Item Reporting:

To ensure transparency and facilitate accurate record-keeping, each surcharge should be listed as a separate line item on invoices. This practice clarifies to patients that they are being charged an additional fee for credit card usage while simplifying financial reconciliation for chiropractic physicians.

Recommendations

Given the legal complexities, potential compliance issues, and uncertainties surrounding credit card surcharges, the Illinois Chiropractic Society (ICS) does not recommend adding surcharges to patient fees. By maintaining a straightforward fee structure and avoiding additional credit card fee surcharges, chiropractic physicians can mitigate potential legal risks and maintain compliance with managed care agreements.

For more information regarding the processing of credit cards in the chiropractic practice see our article Credit Card Payments for Physician Fees: A Regulatory Tapestry.