Virtual payments are an emerging payment method for payers to send payments to providers using the card networks. These payments are more commonly known as “virtual cards,” since the recipient can process them just like a credit card.
- Thirty-seven percent of providers indicated that they received virtual payments from some payers.
This statistic accurately demonstrates what many providers are currently experiencing: Virtual payments are increasingly leveraged by payers as an alternative to mailing paper checks. While many believe that virtual payments are a temporary solution for payments, based on the trends and data in the changing industry, it is safe to assume that virtual payments are here to stay.
Although virtual payments do not meet the requirements for the PPACA electronic remittance advice (ERA) and electronic funds transfer (EFT) mandate, virtual payments are less expensive for payers than paper checks. As payers face increasing cost pressure from PPACA, especially regarding the MLR requirements, payers are aggressively looking to cut every cost. However, for providers, this payment type is subject to interchange fees that would not be incurred if the payments were sent via a paper check.
Virtual payments are beginning to cause friction between payers and providers. Many providers object to virtual payments because of the lack of choice in payment methods. To ease this friction and improve the payment process between payers and providers, payment methods will need to become flexible.
Fortunately, the virtual payment process is evolving. Virtual payments are becoming just one payment option available to providers.
Flexible payment options are a key component to successfully implementing electronic payments. Specifically, when a provider receives a virtual payment, it will be important that they have the choice to process the payment or enroll to receive that payment, and future payments, directly deposited (EFT) at no cost. With more payment choices, providers have the opportunity to accept payments in a way that is best for their organization.
It is important to note that participating providers may have more options than out-of-network providers. Specifically, participating providers may be able to choose to continue receiving paper checks for a small processing fee, while out-of-network providers may only be able to choose between virtual payments or EFT.
When providers register for EFT payments, they have the opportunity to accelerate payments while eliminating the time and money spent processing paper checks. However, there are best practices to ensure that providers achieve success with this process. The checklist below includes these best practices for virtual payments.
Checklist for Virtual Payments:
- The process to enroll for EFT payments must include a simple online registration tool
- Providers should be able to complete enrollment once to receive EFT from multiple payers
- In order to better manage payments, a provider should be able to access reporting on all payments using one login
- Receive a free, secure Provider Portal to access payment reports 24/7, download and print remittances, and automate posting to your system
- Payers must work with a payment vendor that is independently certified and audited for the necessary levels of security and compliance
Article Source: 2013 Trends in Healthcare Payments Annual Report.