Are Virtual Credit Cards A Solution For Hospitals?

The answer to that question is not as simple as it might seem.

According to a recent post by AHA News Now, virtual credit cards (VCC) serve as proxies for payment information and keep it more secure. However, the providers are often hit with significant fees from using those types of transactions.

The news source reported on the Vital Health Statistics Subcommittee on Standards hearing that took place last week. Doug Downey, an assistant vice president for the Hospital Corporation of America in its treasury department, was one of several health care executives to testify at the hearing. Downey explained that in 2013, HCA merchant credit card fees increased by an estimated $3 million as a result of the un-negotiated use of VCC payments by health plans and/or their c1earinghouse/aggregator payment service agents.

“HCA is not opposed to the use of VCC payments, as this form of payment may be appropriate for some providers,” he said. “HCA is opposed to the misapplication of the Credit Card Association rules as the basis for the un-negotiated unilateral opt-in approach used by the health plans and/or their agents.”

Priscilla Holland, a senior director with the National Electronic Payments Association, agreed, and said that health plans have a high acceptance rate when it comes to VCCs, they oftentimes do not have any choice in the matter.

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The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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