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The Evils of Virtual Credit Cards (VCCs)
You may have heard me discuss this topic before (and there is some discussion of this topic in MY BOOK, but we continue to encounter practices that allow insurance companies to pay them via this odious method. There are lots of things to dislike about being paid by VCC. First, it costs you money. Taking a payment from an insurance company via credit card means that, in addition to whatever PPO discounts you are dealing with, you must also pay your credit card processing company its 2-3%.
Second, VCCs can seriously mess up your practice's accounting. Practice management software was built with the assumption that insurance companies pay by check or EFT, and that credit card payments come from patients. PMS keeps separate track of balances owing by patients from insurance company balances. It is really easy for staff to post VCC payments as coming from patients instead of insurance companies, which makes it hard to monitor and collect amounts owing.
And finally, while I won't get into details, many thieves have found a way to monetize these payment cards. This is, of course, in addition to the money that insurance companies and your credit card company are already taking from you.
What to do about this? In the words of a former First Lady, "just say no." Although insurance companies will default to paying by VCC, I am not aware of any state where the dentist is unable to opt out and be paid by EFT or check. Send them a letter opting out. You might have to send two letters, but do it. While VCCs are cheaper and easier for insurance companies, helping increase insurance company profits probably wasn't on your list of New Years' resolutions.
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Yours truly,
David Harris
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