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Committee urged to address health plan use of Virtual Credit Card transactions

June 11, 2014

Some health plans are automatically using Virtual Credit Cards to pay claims, resulting in significant banking charges and administrative work for health care providers, a hospital representative told the Department of Health and Human Services’ National Committee on Vital Health Statistics Subcommittee on Standards yesterday. Doug Downey, testifying for Hospital Corporation of America, said the committee should discourage health plans from imposing a transaction fee for electronic payment or requiring hospitals to “opt out” of VCC payment, noting that HCA hospitals throughout the country were hit with significant banking charges when health plans selected the VCC payment method without the hospitals’ approval. In addition to having to contact each health plan to “opt out” of the VCC payment method, the hospitals had to reconcile the electronic remittance with the payment, a significant administrative burden, he said. The Automated Clearing House Network is the standard format for electronic fund transfers and electronic remittance advice under administrative simplification operating rules that took effect Jan. 1, and allows providers to fill out a single enrollment form to receive EFT and ERA transactions from different health plans.