Yet another Patient Protection and Affordable Care Act (PPACA) deadline is rapidly approaching. By Dec. 31, 2013, health plans must have their electronic reimbursement systems up and running, ready to remit claims electronically at a provider’s request. 

Looking for Innovation, Self-Funded Employers are Turning to Virtual Card Technologies

10.15.14

Yet another Patient Protection and Affordable Care Act (PPACA) deadline is rapidly approaching. By Dec. 31, 2013, health plans must have their electronic reimbursement systems up and running, ready to remit claims electronically at a provider’s request.

In the law, the federal government promoted automated clearing house (ACH) technologies. In fact, PPACA rules say that if a provider desires to utilize this method for billing, then so be it. Health plans must comply.

It’s true that ACH is an effective platform for quickly reimbursing providers in a secure environment. It also helps to strip unnecessary costs from the system by eliminating paper-based payments. But it also has some significant drawbacks. Namely, ACH promises to create administrative hassles for healthcare organizations that must enroll with each payer separately. And if the provider receives a relatively low number of reimbursements from a certain health plan, there is little incentive for either party to move away from anything more than paper checks.

While they must be prepared for any contingency, more and more plans are looking to virtual payments via credit card networks as a way of efficiently facilitating healthcare transactions. Leveraging a trusted communications infrastructure, virtual payments work like a normal credit card. A healthcare organization will send a claim to the self-funded insurer. In return, the employer supplies the provider with a one-time-use number. They can then run the transaction through their point-of-service (POS) terminal, with funds electronically routed to an existing bank account.

Virtual card transactions offer health plans and providers alike a host of benefits, including significant administrative efficiencies. By eliminating manual, paper-based processes, healthcare organizations will not only save money, they will also be in a position to maximize staff resources. And it’s a highly secure method of payment, taking advantage of the same security protections and fraud prevention mechanisms inherent in the credit card network.

Providers are always looking for ways to lower costs and create a more efficient revenue cycle. Self-funded health plans have an excellent opportunity to help them achieve their goals by promoting a virtual payment solution.

Read more about the benefits of virtual payments in this month’s issue of The Self-Insurer.