Legislature Passes Chapter Amendment to New Law Requiring Greater Transparency and Consent for Use of Virtual Credit Cards (VCCs)
Click to Enlarge
In response to complaints of health plans unilaterally attempting to make payment for patient care services using VCCs that impose steep fees on physicians for their use, in December Governor Hochul signed into law legislation (A3986-A/S2105-A) to facilitate greater transparency and require express consent to permit a health plan or insurer to make payment through use of a VCC.
The new law requires that a health plan seeking to pay a physician or other health care provider using a VCC or other form of electronic funds transfer that imposes a fee or similar charge to process the payment must first (1) notify the physician or provider of the potential fees or charge, (2) offer the physician or provider an alternative payment method that does not impose such fees or charge, and (3) permit the physician or provider to elect to accept such payment types. Moreover, it enables the physician or other provider to change the designated payment type by notifying the health plan or insurer in writing.
The legislation was signed by the Governor with the understanding the State Legislature would enact a chapter amendment in early 2026. The agreed-upon chapter amendments set forth that the payment method election must be acted on by the physician or other care provider within 30 days of receipt of notice from the insurer. If the physician or provider does not respond within 30 days, the insurer must pay the physician or other provider using a fee-free method of payment. That legislation A9510 passed the Assembly this week, and will likely pass the Senate next week. It applies to contracts entered, altered, or modified on or after June 17, 2026.
