Protecting Your Reimbursement: Taking Action on Virtual Credit Card Payments (Template Included)
Background on the Issue
The Illinois Chiropractic Society is increasingly hearing from doctors statewide about receiving insurance payments via virtual credit cards (VCCs). These payment methods often result in the doctors’ payment of substantial transaction fees—frequently ranging from 2 to 5 percent—which reduce the net reimbursement to your practice. In many cases, providers report that they were not clearly given a choice or were defaulted into credit card payments by third-party payment vendors contracted by insurers.
Federal Regulations and Your Rights
Although the situation is frustrating, providers do have rights under federal law. The federal HIPAA Administrative Simplification regulations require health plans to support electronic funds transfer (EFT) via the Automated Clearing House (ACH) network as a “specific standard format.” These same regulations prohibit insurers from discouraging the use of EFT, including by charging fees or defaulting providers to other forms of payment.
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Unfortunately, despite these federal protections, enforcement has been limited. Many insurers and their vendors continue to make the process of receiving ACH payments unnecessarily cumbersome. Some require extensive opt-out procedures, while others fail to inform providers that fee-free ACH payment is even an option.
New State Protections Coming Soon
To address these challenges more directly, Illinois enacted Public Act 103-0618, which takes effect on January 1, 2025. This law will explicitly prohibit insurers and their vendors from requiring providers to accept virtual credit card payments and from imposing fees without written consent. It will also require insurers to offer ACH payments as an alternative.
While this new law will offer meaningful protection once it is in effect, Illinois doctors still face these issues today.
A Possible Interim Solution
Until the new state protections take effect, Illinois Chiropractic Society members may be able to reduce or eliminate VCC-related fees by formally asserting their rights to receive EFT payment under federal HIPAA rules. Although results may vary, some insurers or vendors will honor a direct, formal request to enroll in electronic payment using the required federal standards.
To assist with this effort, the Illinois Chiropractic Society has developed a template letter [ICS Members Only] that you can use to request enrollment in EFT and opt out of virtual credit card payments. The letter references the specific federal regulations and requests ACH payment via the standard NACHA format. While this approach does not guarantee success in all cases, it has proven helpful for some providers seeking to avoid unnecessary fees.
Download the template here [ICS Members Only].
We Are Here to Support You
This complex area involves federal regulations, payer contracts, third-party vendors, and evolving state laws. However, Illinois doctors are not without options. The Illinois Chiropractic Society is actively engaged in addressing and improving these regulatory challenges. We continue collaborating with other state and national organizations to advocate for fair and practical reimbursement policies. The ICS remains committed to supporting your practice and championing transparent, fee-free payment options that protect your bottom line.
