CMS: health plans can't force you to take virtual credit cards

Physicians who are confused or concerned about health plans wanting to use virtual credit cards to pay them for patient care are learning they have more say in the matter than they thought.

Virtual credit cards are a new feature of electronic payment. Virtual credit card users like these one-shot payments because they have a set balance, which means less risk if a hacker or someone else intercepts the payment details, and they can be tied to a specific claim for better tracking. Practices, on the other hand, must typically pay an interchange fee charged by the credit card company when processing the payment as well as tie up staff time manually entering the card information and manually posting the payment and reconciliation. Essentially, the pratice is paying to get paid or, if you prefer, taking another discount on its fees beyond the one it already negotiated with the payer. Note, some payers offer cash rebates for using virtual credit cards, which could offset part of the additional costs.

According to a recent set of frequently asked questions posted by the Centers for Medicare & Medicaid Services (CMS), a health plan cannot require a practice to accept virtual credit card payments, and a practice has the right to request that a health plan use the adopted standard electronic fund transfer (EFT) transaction instead. In addition, the health plan is not permitted to charge the practice fees. Payment vendors contracted by a health plan to conduct payment activities on its behalf also cannot require practices to accept virtual credit card payments or charge fees for the HIPAA-standard EFT transaction.

The CMS also noted that the EFT standard was adopted as a mandatory standard by the U.S. Department of Health and Human Services, and health plans must deliver the practice's payments through EFT upon request. You are encouraged to contact your health plans to enroll in their individual EFT programs. In addition, CMS said that signing up for EFT with a health plan does not allow the plan or its business associates (e.g., vendors who conduct payment transactions on their behalf) to deduct money from the practice's account unless the practice authorizes it. You should carefully and thoroughly review enrollment and contract details during the enrollment process.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians