Healthcare Guide to Virtual Card Payments Now Available

Electronic payments enhance transparency, efficiency, and security for many types of commercial transactions. One proven application that provides affordable, efficient payments in the healthcare space is the virtual card. Virtual cards offer medical payers a low cost, electronic payment option to pay providers in addition to Automated Clearing House (ACH) transactions, and can help group health payers meet the medical loss ratio (MLR) requirements included under the Affordable Care Act (ACA). So whether the payment is via ACH or virtual cards, processing and paying claims electronically can help decrease administrative costs for both payers and providers alike.

While similar to a credit card in your wallet, a virtual card is not a plastic card, but typically a single-time use virtual card number issued for a predetermined dollar amount and for a specific payment, just like a check. The processing of this one-time payment is done by either a credit card terminal or a web portal, where the provider receiving the payment enters the unique card number, or obtains payment directly in its bank account just like an ACH payment through an increasingly common virtual payment method called Straight Through Processing (STP).

Virtual cards have been used for secure business-to-business (B2B) transactions for years. Many hospitals and health systems already use them to make payments to suppliers and vendors. However, use of virtual cards for health insurance claim payments (i.e. Payer to Provider payments) is still relatively new.

The payments industry came together to develop a best practices guideline document entitled “Healthcare Guide to Virtual Card Payments” intended to educate practitioners on how virtual cards and electronic payments alleviate administrative burden and create additional efficiency and transparency in healthcare payments. Access to the Guide is available on the website of the Electronic Transactions Association, here.