Faced with shrinking federal reimbursements and a rise of high-deductible health insurance plans that leave patients responsible for a greater portion of the cost of care, most care facilities are eager to accept whatever payment means patients prefer. However, a new payment method known as virtual credit cards have become a thorn in the side of many providers.
According to FierceHealthFinance, virtual credit cards are a more secure alternative to traditional card payments. The numbers relating to a card are used only once, meaning that if anyone were to gain unauthorized access to payment information, the care number would be useless.
But as the Department of Health and Human Services' National Committee on Vital Health Statistics (NCVHS) explained, these cards are subject to interchange fees that run up to 5 percent of the amount of the debt. This fee can result in significant banking charges and administrative work for health care providers, slowing efficiency in a department where there is often already a backlog of medical receivables that need attention.
"While many health plans proclaim a high rate of acceptance of the virtual card by providers, this does not mean that providers would voluntarily accept the card if asked," Priscilla Holland, a senior director with the National Electronic Payments Association wrote in a report to NCVHS. "Many providers accept virtual cards only because they have no choice, and due to the extended time it takes to opt out of programs and to receive a replacement payment."
Because of the increased popularity of virtual card payments, many facilities may experience a delay in their accounts receivable management. Facilities are encouraged to outsource medical claims processing in order to maintain a more manageable claims load per employee, and decrease the amount of dollars written off to bad debt.