WEDI submits letter to CMS on virtual credit card concerns

The use of VCCs, which are designed to reduce the potential for fraud, can cause challenges for healthcare providers, the organization contends.

The Workgroup for Electronic Data Interchange is warning that the use of virtual credit cards by healthcare payers to make payments to providers, while mitigating some fraud issues, can cause problems for providers that are out of a plan’s network or use alternative ways to settle claims.

WEDI, an organization that addresses emerging health information technology issues related to information exchange, raised its concerns in a recent comment letter (registration required) submitted to the Centers for Medicare & Medicaid Services.

CMS, which oversees operations of federal health insurance programs, requested guidance recently on two issues. One (GL-2022-04) covers health plans’ payment of claims using virtual credit cards and adopted HIPAA standards for electronic fund transfers and remittance advice transactions. The other (GL-2022-03) regards HIPAA-covered entities’ responsibility for ensuring business associates comply with HIPAA.

Virtual credit cards, designed for one-time use, mask the actual card number. Card issuers generally provide software that helps a customer to generate an interim credit card number, linked with their permanent one, to enhance security and help prevent fraud.

In its comments, WEDI asks CMS for more specifics on particular topics surrounding virtual credit cards and electronic funds transfers. It asks CMS to provide information about the security of electronic payments compared with paper checks.

“VCC payments may not be more secure than EFT payments made via the ACH Network (the national automated clearing house ACH for electronic funds transfers), but this type of payment does reduce credit card fraud,” WEDI notes.

Some providers are reluctant to adopt EFT payments “because they are uncomfortable using portals (or other mechanisms) to reveal their banking information,” WEDI contends. And more work needs to be done to ensure that some standards created by ANSI X12 can work well with virtual credit card payments.

Problems with electronic funds transfer and electronic remittance advice also can arise if an out-of-network provider does not complete a health plan’s EFT and ERA enrollment process. WEDI says CMS needs to provide more clarity around how out-of-network providers can receive electronic payments, particularly when enrollment in electronic payment processes have not been completed.

The WEDI letter, which discusses these and other concerns with CMS on these guidance topics, can be found here.

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