Ok so we are looking at money streams once again, same thing we always talk about with electronic transactions and now it appears from reading this article that physician are being marketed to use Virtual Credit Cards to be reimbursed. image The rub here is the fee and as the article states on a small bill, it’s not a big deal but when thousand of dollars are involved it begins to add up.  When using a credit card the transaction is processed like any other credit card transaction and the fees can be as high as 5 percent so that adds up.

Insurers pay very low fees to the banks so there’s some add on revenue streams here with what the clearinghouse or insurer can cash in on with adding more to the fee and it sounds like this is the crux of the matter here.  Important, read the next paragraph as it has to do with HIPAA. 

"Federal regulations do allow the industry to use other, non-[Health Insurance Portability and Accountability Act-]mandated payment options such as virtual cards," CAQH CORE added. "However, should payers and providers decide to use virtual cards, they would not benefit from the many advantages driven by the CAQH CORE Operating Rules, such as electronically matched ERA and EFT."

MGMA has sent a letter to CMS regarding “virtual credit cards” addressing the unnecessary fees  attached to electronic fund transfers and states that clearinghouses and some health plans are not complying with the true intent of EFT standards and operating rules as set forth by the Affordable Care Act and taking unfair advantage of practices.  The article makes an example of the brochure used by Emdeon

We are seeing more and more transactions wanting to be linked to credit cards today and one thing to think about as well is that we have a lot of data selling going on today and would this fall right in there?  I mention this as we had this story to to where a hospital was buying up patient Master Card records. 

Oh Crap, Now Hospitals Are Now Buying Data From Acxiom - Data Selling Epidemic Continues to Evade on Personal Privacy As “Algo Duped-Stat Rat” People Try to Implement Virtual Models That Won’t Work…

Using a virtual credit card would certainly stand to make it easy to create a data base for sale and inside the healthcare industry there’s no secret as far as what a doctor is billing and getting paid; however does this make a market for selling this additional information to other outside industries or data brokers?  It’s just something to think about if you will.  In addition by using Virtual Credit Cards, is that the practice loses the ability to use “trace number” that can be used for automated payment posting.   BD

Some health plans and claims clearinghouses are improperly using "virtual" credit cards to pay physician practices or are charging excessive fees for electronic funds transfer (EFT), the Medical Group Management Association (MGMA) said in a recent letter to the Centers for Medicare & Medicaid Services (CMS).

According to MGMA, both activities run counter to the intent of the Affordable Care Act, which aims to encourage the use of EFT and other electronic transactions to reduce the administrative costs of healthcare.

In a list of frequently asked questions accompanying its regulations on standard operating rules for EFT, MGMA noted in its letter, CMS states "the health plan also cannot incentivize a provider to use an alternate payment method other than the adopted standard or adversely affect the provider for using the standard transaction (i.e., charging excessive fees)."

Virtual credit card numbers, which are linked to but do not reveal actual credit card numbers, are typically used with a single vendor, such as a physician's practice. When the practice receives a virtual proxy card number for a particular payment, a staff member keys in the number on a point-of-service terminal and the payment is deposited in the practice's bank account.

Although this approach seems innocuous on the surface, it can cost practices a lot of money, said Robert Tennant, senior policy advisor to MGMA, in an interview with Medscape Medical News. The reason is that the health plan is making a credit card payment that carries the same kind of bank charge to the payee as any other credit card payment. For physician practices, that fee can be as high as 5% of the payment, Tennant noted.

"If it's only a $45 payment, like a copay, that's no big deal," he said. "But if the payment is hundreds or thousands of dollars, 3% to 5% on $20,000 to $30,000 is a large amount of money."

In contrast, he observed, insurers pay very low fees to banks when they transfer money directly into practices' bank accounts. The MGMA letter said these fees range from 13 to 34 cents per transaction, regardless of how big the payment is.

MGMA does not believe practices should pay any fees to have their money transferred to them, said Tennant, but if a fee is charged, it should not be more than the payers' actual cost.

The leading health insurers and clearinghouses are promoting virtual credit cards, Tennant said, and MGMA has received many complaints about this from its members this year. Some practices have adamantly refused to accept the virtual card numbers, telling plans they must either use traditional EFT or cut paper checks.



  1. Once again, sleazebags in the health insurance industry have found a new source of revenue-by taking back some of their reimbursement to doctors. This is tantamount to contract fraud, by getting away with paying less than the contractually stated fee schedule. Will CMS do anything about it?


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