If you’ve ever spotted a small service fee on a bill or receipt, whether at a restaurant, concert, or even your doctor’s office, you’re not alone. These added fees are becoming increasingly common across industries, including healthcare. For providers, they can help offset rising operational costs, but if applied incorrectly, they may create compliance risks. For patients, these fees can be confusing and, at times, frustrating.
So, what are the different types of payment card fees and how can healthcare providers manage them responsibly?
The card brands, such as Visa and Mastercard, define several different types of fees, each with specific rules. Here are three important ones to note:
1. Surcharges
A surcharge is a fee added to help cover the cost of processing a credit card transaction. While this may sound simple, surcharges are subject to both card brand and state regulations. Some states prohibit them altogether, while others require specific disclosures and caps on the amount charged. Importantly, surcharges can’t be applied to debit card transactions.
2. Convenience Fees
These are added when a business offers a more convenient payment option. For example, if a medical practice typically accepts in-office payments but gives patients the option to pay online through a secure portal, that online payment channel may include a small convenience fee. However, these fees can’t be charged for in-person transactions or by businesses that operate solely online.
3. Service Fees
Service fees generally apply to government or education-related organizations, such as public hospitals, universities, or utility offices. They require a special code in the transaction message to show that the entity is eligible to charge the fee. While most private healthcare providers don’t fall into this category, it’s helpful to understand the distinction.
One Fee at a Time
It’s important to note that merchants can only charge one of these fees in alignment with card brands. For example, if a patient pays their bill online, the provider can apply either a convenience fee or a surcharge, but not both. Keeping these rules straight helps ensure a compliant and transparent billing experience.
Navigating Complex Rules the Right Way
Between varying card brand requirements and evolving state laws, navigating payment fees can get complicated.
For healthcare leaders, the key takeaway is this: payment card fees can help offset operational costs, but they must be applied correctly. Implementing them without a full understanding of the rules could expose your organization to fines, penalties, or patient frustration.
Keeping the Patient Experience First
Patients already face enough confusion when it comes to healthcare payments. Adding unexpected fees can erode trust and impact satisfaction. Clear communication, explaining why a fee exists and ensuring it’s compliant, goes a long way toward maintaining a positive patient payment experience.
At TrustCommerce, we help healthcare organizations manage payments with transparency, security, and compliance at every step.
If your organization is exploring ways to simplify and modernize healthcare payments, connect with our team.
