Authorizes an insurer to pay a claim for reimbursement made by a provider using a credit card, virtual credit card or electronic funds transfer payment method that imposes on the provider a free or similar charge to process the payment; defines "virtual credit card" as a single-use series of numbers linked to a fixed dollar amount and provided by an insurer to a provider for the purpose of paying a claim for health care services performed by the provider; makes related provisions.
This bill regulates how insurers, certain health care corporations, and health care plans may reimburse providers for claims when using credit cards, virtual credit cards, or electronic funds transfer methods. It allows these payment methods only if the provider is first told about any associated fees, is offered an alternative payment method without such fees, and affirmatively chooses the fee-bearing method. The provider’s choice remains in effect until changed in writing, and any vendor used to process payments must follow the same rules.
The bill also prohibits new or amended policies and contracts from waiving these notice requirements. In addition, if an insurer, corporation, or health care plan initiates or changes a payment to a health care electronic funds transfer and remittance advice transaction, it may not charge a fee solely to transmit the payment unless the provider consents. The bill defines “provider” as a licensed health care professional or group with a participating provider contract, and defines “virtual credit card” as a single-use number tied to a fixed dollar amount used to pay a claim for health care services. The changes apply to policies and contracts issued, renewed, modified, altered, or amended on or after the effective date, which is 180 days after enactment.
The bill amends the Insurance Law and Public Health Law by adding parallel protections in three areas: commercial insurers, nonprofit health service corporations, and health care plans. It limits the use of virtual credit cards and similar payment methods when those methods impose processing fees on providers, and it bars fee charges for electronic funds transfer/remittance advice transactions unless the provider agrees. The measure would affect insurers, plan administrators, payment vendors, and participating health care providers by requiring disclosure, consent, and an alternative no-fee payment option before fee-bearing payment methods can be used.
The available context suggests the bill is generally consumer- and provider-protective, with its core purpose being to reduce surprise processing fees imposed on health care providers. Because there are no recorded committee transcripts or votes in the provided material, there is no documented floor or committee debate to indicate broader support or opposition. The bill’s structure, however, indicates a policy preference for provider choice and transparency over insurer payment convenience.
The main point of contention implied by the bill is whether insurers and health plans should be allowed to use virtual credit cards and similar payment tools that shift processing costs to providers. Providers are protected by the bill’s notice-and-consent requirements and by the requirement that a no-fee alternative be offered, while insurers and plan administrators may view those requirements as limiting payment flexibility and potentially increasing administrative costs. Another likely issue is the restriction on waiver provisions, which prevents contracts from bypassing these protections.