Insurance Payments: Virtual Credit Cards vs. Electronic Funds Transfers

Hey there! Today, let’s talk about insurance payments and explore the world of virtual credit cards vs. electronic funds transfers (EFTs). I must admit; that I have a bone to pick with virtual credit card payments, and I’ll share my reasons with you. But first, let’s understand virtual credit cards and why they can be frustrating.

Virtual Credit Cards Explained

Virtual credit cards are a form of payment made by insurance companies to providers. Instead of sending traditional paper checks or electronic funds transfers, insurers issue a one-time use credit card number. This number is delivered via fax or email to the provider’s office. The provider then manually enters the credit card information into their merchant service system to receive the payment.

The Annoying Aspects of Virtual Credit Cards

Now, I’m sure you’re wondering why I find virtual credit cards frustrating, so let me break it down for you:

Confusing for Staff and Patients: Virtual credit cards can be puzzling for both staff and patients. The credit card-like format might be easily overlooked, leading to delayed or missed payments.

Additional Costs: Manual entry of credit card payments on merchant service systems often incurs extra charges, impacting a provider’s revenue.

Paper vs. Electronic: While the goal is to reduce paper waste, virtual credit cards aren’t necessarily the most efficient electronic payment method.

Why Electronic Funds Transfers (EFTs) are Preferable

EFTs, on the other hand, are a breeze compared to virtual credit cards. EFTs transfer funds electronically from the insurance company’s account directly to the provider’s bank account. Here’s why EFTs are a much better option:

Cost-Effective: EFTs usually have lower processing fees than manual credit card entries.

Streamlined Reconciliation: EFTs facilitate easy and accurate payment reconciliation, simplifying accounting.

Time-Saving: EFTs quickly deposit funds into the provider’s bank account, ensuring a smoother cash flow.

Opting Out of Virtual Credit Cards

If you share my frustration with virtual credit cards, don’t fret! You can opt-out and request paper checks or enroll in EFTs instead. Pay attention to the information on the virtual credit card documents, as there’s often a phone number to call for alternative payment methods.

Beware of United Healthcare Changes

As of June 1st, United Healthcare no longer sends paper checks, pushing providers towards virtual credit cards or EFTs. But here’s a helpful tip: if you enroll in Electronic Remittance Advice (ERA), United Healthcare will send the ERAs once you process the virtual credit card payment. It’s a little trick to keep in mind!

At the end of the day, it’s your practice and your decision whether to use Virtual Credit Cards vs. Electronic Funds Transfers to receive insurance payments. Electronic Funds Transfers (EFTs) are more efficient and hassle-free, especially for smaller practices. The ability to easily reconcile payments and track transactions is invaluable, and EFTs offer just that.

So, if you’re dealing with virtual credit card payments and not loving the process, don’t hesitate to explore other options. Contact the insurance companies, understand your alternatives, and choose what’s best for your practice.

I’d love to hear your thoughts and experiences with virtual credit cards and EFTs. Leave a comment below, and let’s continue this conversation! Until next time, bye!