As the health care industry adopts technological advancements, health plans are shifting toward new physician payment methodologies. There is a growing trend among health insurers toward issuing virtual credit cards (VCCs) to pay for physician services, as opposed to sending paper checks or paying via electronic funds transfer (EFT) standard transactions. However, payment of claims using virtual credit cards incurs significantly greater costs, time burdens, and administrative hassles for physicians, providers and directly counters the objectives of the administration simplification provisions of the Health Insurance Portability and Accountability Act (HIPAA).

What initially may seem to be a valid electronic alternative to paper checks or EFTs, the use of VCCs for payment comes at a significant cost to physicians. When claim payments to physicians are made via a VCC, the insurers send single-use credit card payment information and instructions via mail, fax or email, after which the physician’s practice must process...

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