GS Logo
The Green Sheet, Inc

Please Log in

Banner Ad
View Archives

View flipbook of this issue

Care to Share?


Table of Contents

Lead Story

Mobile gaining ground in stores

Ann Train

News

Industry Update

CVS Pay joins mobile payment roster

Walgreens rewards Android, Apple users

Oracle fails to predict, prevent POS breach

NFC a bargaining chip for Apple, Australian banks

Features

PayPal and Square: Q2 2016 earnings

Payments maintains strong presence on Inc. 5000

Mobile debit shift

Views

Virtual cards deserve a place among healthcare payment choices

Jeffrey W. Brown
VPay

No cash? No checks? Nonsense.

Patti Murphy
ProScribes Inc.

Education

Street SmartsSM:
To own or not to own the POS system sales process

John Tucker
1st Capital Loans LLC

Selecting the right ISO partner

Aaron Nasseh
Finical Inc.

Become an agent of change in payments

Jeff Fortney
Clearent LLC

Payfac: Fad or new norm?

Adam Atlas
Attorney at Law

Is it time to hunt for greener pastures?

Steven Feldshuh
Merchants' Choice Payment Solutions East

Company Profile

Forte Payment System

New Products

Comprehensive POS, business management

Groovv POS
Total Merchant Services Inc.

Compact mag stripe, smart card, contactless reader

UniPay III
International Technologies and Systems Corp.

Inspiration

Qualify prospects, save time

Departments

Letter from the editors

Readers Speak

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

September 12, 2016  •  Issue 16:09:01

previous next

Virtual cards deserve a place among healthcare payment choices

By Jeffrey W. Brown

It is rare in healthcare that the needs of its many functions can be served by a single, generic solution, and payments are no exception. There are as many different types of payers as there are providers, and within each group there can be widely varying requirements for managing payables and receivables.

The availability of different payment instruments can ease this and ensure that payers or providers can choose the solution that best suits them. As a number of states consider legislation that would limit the availability of one of these options – virtual card payments – now might be a good time to revisit what this innovative payment instrument has to offer.

Newer payment method, existing rails

Virtual card payments, often referred to as virtual credit cards (VCCs), currently coexist alongside automated clearing house (ACH) transactions and paper checks as a means of making and receiving healthcare payments.

As a newer technology, VCCs suffer from a lack of understanding and an associated degree of prejudice. This is usually focused on a skewed view of the cost of acceptance that fails to take into account the true costs involved in the use of older payment options. In fact, VCCs stack up well alongside paper checks and ACH transactions and offer significant advantages in efficiency and security.

VCCs deliver funds to the provider electronically, leveraging the payment network that the provider uses for consumer card transactions. They function by processing a one-time payment for a predetermined amount to a designated payee, via a unique card number. In this sense, VCCs function like a check or prepaid debit card.

The organization receiving the payment enters the unique card number into either a card terminal or web portal, and the funds are delivered electronically to the provider. The provider also receives remittance advice, electronically or as a hard copy (for example, an 835 remittance advice or explanation of payment [EOP]), which allows the provider to reconcile the claim and determine what, if any, amount must be collected from the patient.

VCCs can also utilize a new and growing virtual card payment method called straight through processing (STP). With STP, the card payment is processed automatically, without a terminal. This eliminates manually keying the card number into the terminal, further simplifying the payment process and reducing the chance for errors.

Added security, no extra costs

On top of these efficiencies, the case for VCCs is further bolstered by data security that exceeds those of other payment options. With VCC, providers do not have to provide bank account details, whereas with the ACH, they do.

Also, if fraud is suspected on a card transaction, VCC card network processes offer more efficient, effective and expeditious means of resolving transactions than typically found when addressing suspected ACH and check fraud. Further protection is provided by the fact that VCCs can be restricted to specific merchant category codes, which means those VCCs will only be chargeable by a specific type of merchant, such as doctors or hospitals.

Despite these unique and valuable aspects, VCCs are processed on the same hardware used to process traditional credit cards. This means no additional enrollment or hardware investment is required to accept VCCs. According to a study of its members conducted by Medical Group Management Association, 98 percent of survey respondents already accept payment cards. If the ability to leverage existing infrastructure in order to efficiently process payments is a critical variable to a provider, VCCs are a reasonable consideration.

Multiple positive attributes

All of these attributes add up to a modern means of payment worth preserving as an option on its own merits. Limiting providers' access to VCCs also ignores the fact that allowing alternative payment options to ACH is consistent with the Health Insurance Portability and Accountability Act of 1996 (HIPAA). HIPAA recognizes the broad diversity in the healthcare industry and that different standards may be necessary for different segments.

Jeffrey W. Brown is the President of VPay, overseeing business development, legal and governmental affairs for the company. VPay is a leading turnkey B2B payments platform recently closing a $76 million investment led by a growth equity investment firm with a strong track record in the payments industry. VPay's turnkey platform for outsourcing payments (checks, ACH, plastic and virtual cards) offers a compelling replacement to manage inefficient payment processes like paper checks. The company brings together flexible, purpose-built products with integrated service and support, patented technology, multiple funding models and unique expertise to streamline claims payments across a variety of insurance industries including: group health, workers' compensation and auto. Contact him at info@vpayusa.com.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

previous next

Spotlight Innovators:

North American Bancard | Harbortouch | USAePay | Humboldt Merchant Services | Impact Paysystems | Electronic Merchant Systems