3 things physicians can do to avoid high virtual credit card fees


If your practice accepts virtual credit card (VCC) payments from health plans, you may be losing a significant amount of your contractual payments to high interchange fees. Fortunately, there are three steps you can take to make sure you aren’t paying unnecessary charges.

To disburse claims payments, health plans have increasingly shifted from paper checks to electronic payment methods, including payer-issued VCCs. With this method, a health plan sends credit card payment information and instructions to physicians, who process the payments using standard credit card technology. 

This method is beneficial to health plans, but costly for physicians. Health plans often receive cash-back incentives from credit card companies for VCC transactions. Meanwhile, VCC payments are subject to transaction and interchange fees, which can run as high as 5 percent per transaction for physician practices.  

In order to avoid sacrificing contracted payment amounts, here are three things physicians can do to prevent health plans from imposing VCC payments on their practice:

  •  Register for electronic funds transfer (EFT) payments. The Health Insurance Portability and Accountability Act (HIPAA) requires all health plans to offer standardized EFT using the Automated Clearinghouse (ACH) Network. Similar to direct deposit, ACH EFT allows health plan payments to be directly paid into a physician’s designated bank account. Each ACH EFT transaction carries only one fee of about 34 cents, far less than the potential 5 percent fee charged to VCC transactions. In order to receive ACH EFT, physicians should request and register for this payment method.
  • Be aware of restrictions in payment methods when contracting with health plans. Even though HIPAA requires health plans to make EFT payments available upon request, health plans may try to require other payment methods, such as VCC, within their contracts with physicians. Be cognizant of any restrictions and avoid signing contracts with inflexible payment terms.
  • Educate your practice staff. If your practice staff processes both patient and health plan payments, make sure they know how to differentiate between patient and health plan credit card payments to avoid authorization of VCC payments from health plans.

The AMA’s EFT toolkit has more information on EFT payment, including a VCC resource with more information on avoiding high fees.

If you have experience with VCCs in your practice, take a brief survey by June 1 to share your experiences and help the AMA bolster its advocacy on health plan payment issues. The survey will collect data on the scope and impact of VCC usage, which will support the AMA’s push to ensure physician choice in health plan payment methods.