Virtual Credit Cards As Payment from Health Plans

Does your practice accept virtual credit cards (VCC) as payment from health plans? Some plans are paying physicians for their services with a virtual credit card and it can cost the practice from 3% to 5% of the amount of the transaction in interchange fees.

A virtual credit card is a single use 16-digit credit card number that a health plan sends to a physician’s office as payment for claims. A tangible card is never created. To obtain payment using the VCC number, staff would key the number into the credit card terminal. The standard credit card interchange fee is incurred for each transaction.

In the era of electronic funds transfers, use of VCCs has become more popular with payers. Often the health plan can also get a “cash back” deal of up to 1.75% from the issuing bank for paying with a VCC.

Just because you accept credit cards from your patients does not mean you have to accept virtual credit cards from a health plan.

What you can do:

  • Check with your staff or clearinghouse to see if they are accepting virtual credit cards from health plans as payment.
  • Check your payer contracts to see if you have agreed to this form of payment
  • Avoid signing new contracts that require this type of payment
  • Refuse to accept this form of payment from payers. Do not process the payment. Contact the payer and request payment in a different form.
  • Contact the payer and opt out of this form of payment. Some plans have an automatic opt-in and require physicians to initiate the opt-out option.
  • Request ACH EFT payments from the health plan.

As of January 1, 2014, HIPAA requires that plans make available Automated Clearinghouse (ACH) Electronic Funds Transfer (EFT). This mandated payment option is similar to direct-deposit. The ACH EFT is operated by NACHA, the electronic funds transfer organization. There is a flat fee of $0.34 per transaction. A percentage rate cannot be charged on ACH EFT transactions.


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