Virtual Cards

Sometimes called "disposable," "temporary" or "one-time use" numbers, a virtual credit card number is "like putting a wall" between your transaction and your regular account, says Steve Kenneally, vice president of the American Bankers Association. Although these cards can protect the cardholder from fraud, the use of virtual cards as a form of electronic funds transfers (EFT) payments for healthcare services can present some problems for healthcare providers.

Advantages - according to the NACHA (The Electronic Payments Association):

  • Providers do not have to enroll with each individual health plan to receive virtual card payments
  • Easy way to receive claims reimbursement payments from health plans not frequently used
  • Buyer direct model allows health plans/vendors to send funds directly to providers merchant account – eliminates manual processing and may reduce interchange fees (provider is responsible for negotiating reduced fees with merchant processor)
  • If virtual card number is lost or stolen it can be replaced by the health plan (standard card program rules)


  • Expensive for providers to accept virtual card payments. Providers pay an average of 3% interchange fee and per transaction charge for each payment processed
  • Shift the costs of payment processing from the health plan to the provider. Most vendors rebate a percentage of the interchange fee and/or transaction fees paid by the provider back to the health plan
  • Cannot receive a HIPAA compliant ERA (X12 835) with a virtual card transaction (X12 RFI 1887 – Jan 31, 2014)
  • Not immediate funds - funds are deposited to providers merchant account in 1-5 business days after processing (via ACH)
  • Providers must manually process the payment by keying the virtual card number into the office POS terminal
  • If amount of the payment is keyed incorrectly the virtual card is void and must be replaced by the health plan

The acceptance of virtual cards is NOT required to participate in EFT (see 45 CFR 162.925 (a) (1)). A provider may 'opt out' of receiving virtual cards. Even if you accept credit cards from patients, you are not legally obligated to accept credit card payments from payers. Under HIPAA rules, a health plan may not delay or offer incentive for a provider to receive the claims reimbursement payments using other payment options.

For more detailed information on how EFT works as part of the eHealth initiative, see

For more about virtual cards in general, click here.