Knowledge Center

The Centers for Medicare & Medicaid Services (CMS) today issued guidance to clarify requirements for covered entities conducting transactions using Virtual Credit Cards (VCCs), electronic funds transfer (EFT) and electronic remittance advice (ERA). In the guidance, CMS addresses three specific questions:

1. Do the adopted HIPAA EFT and ERA standards permit health plans to pay claims by VCCs?
2. If a health care provider requests that a health plan pay the provider’s claims using the adopted HIPAA EFT and ERA standards, must the health plan comply?
3. Can a health plan require a provider to agree to receive payment or reassociation services from a vendor of the health plan’s choosing as condition of receiving EFT or ERA using the adopted standards?

To the first question, the agency confirms that health plans are permitted to issue VCCs. The guidance also states that the Department of Health and Human Services (HHS) has not promulgated HIPAA regulations governing claims payments made with VCCs. Therefore, HHS does not regulate common business practices associated with VCC payments, including fees assessed by health plans or credit card networks for VCC payments.

On the second question, the guidance reiterates that health plans are required to offer providers payment via EFT and remittance using ERA when requested by the provider and the health plan must adhere to HIPAA and CAQH CORE requirements.

On the third question, the guidance states that “…a health plan may not require that a provider agree to receive payment or reassociation services from its business associate (nor may the business associate otherwise require this) as a condition of receiving health care payments using the adopted EFT and ERA standards.”

The guidance contains background on the EFT and ERA and key regulatory provisions, additional information on each of the three questions and an illustration of the EFT and ERA workflows.