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January 31, 2023

Daugherty Bill Cracks Down on Insurance Plan Provider Fees

DENVER, CO - The House Health and Insurance Committee today unanimously passed bipartisan legislation to expand payment options for health care insurance providers to protect them from fees charged by insurance carriers. It passed 11-0.

“Navigating the COVID-19 pandemic emphasized the importance of supporting our health care providers within the medical community, “said Rep. Lindsey Daugherty, D-Arvada. “When providers are required to accept reimbursements from insurance companies through virtual credit cards, they must pay a fee, which is often passed along to patients to cover. This bill creates payment options for our providers that will save them and their patients money while improving the sustainability of smaller providers, especially in more rural parts of our state.”

Virtual credit cards (VCC) are one-time-use payment cards that don’t require bank account information for a health care claim payment to be made.  The use of VCC became popular in 2014 after the Affordable Care Act required all health care insurers to allow providers to pay electronically. Insurance companies favored VCC payment options because of utilizing “cash back” or other revenue share features that came with VCCs, but VCCs charge providers fees between 2-5% to accept payments.

Currently, some Colorado providers are forced to accept reimbursement payments through VCC payments, which makes the care they provide more expensive because of high fees associated with the VCC option. This bill expands payment options and requires Colorado providers to offer a method of payment that is not a credit card and does not require an additional fee paid by consumers. The bill also prevents the imposition of a fee for changing a payment method and requires an explanation of benefits be shared with each payment.

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