Mary Pat Whaley at Manage My Practice has posted great information about payers ‘encouraging’ practices to accept payment by virtual credit card, instead of by check or EFT.
This method of payment is not a good deal for practices. Merchant fees are deducted from credit card payments — meaning a further reduction in the reimbursement received from health plans that use this credit card method. Additionally, it adds costs because the virtual cards have to be manually keyed (increasing potential for errors and hassles — and usually meaning a higher merchant fee than a swiped transaction as well). If the credit cards are set aside to be keyed in batches (as it seems they would inevitably be in many busy practices), that introduces another delay in receiving payment that would already be in the bank if transmitted by EFT. And, as the AMA pointed out in its letter to the CMS objecting to the use of virtual cards for VA reimbursement, credit card remittance advices are not standardized as payer EFT remittances are — another source of inefficiency and cost.
EFT is still the best way for practices to receive payments quickly, without any extra fee deductions, and without requiring additional, costly staff handling. (Minimizing staff handling also reduces embezzlement risk.)
All payers are required to meet federal standards for EFT in 2014 — and that means that you can request EFT from any payer you work with. As you know, we always recommend that practices use EFT with every payer: no checks in the office means less chance of one ‘disappearing,’ less aggravation taking them to the bank, etc. Virtual credit card payments are just one more inferior alternative to EFT.
As Mary Pat noted in her post, it’s important to check any new contract you sign to be sure you’re not inadvertently agreeing to credit card reimbursement. (And, as we’re always reminding you, this is another reason for a tickler to review your contracts annually, to be sure they don’t already contain language that allows changing reimbursement mechanisms. And watch those amendments and other mailings from plans, too!)
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