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February 3, 2023

House Passes Bill to Limit Fees on Payments to Health Care Providers

DENVER, CO - The House today passed bipartisan legislation to expand payment options for health care insurance providers to reduce fees charged by insurance carriers. The bill passed by a vote of 57-4.

“Colorado health care providers have been forced to pay fees on every electronic payment transaction with insurance companies, which are often passed on to the patient to cover,” said Rep. Lindsey Daugherty, D-Arvada. “Insurance companies often require health care providers to accept payments through virtual credit cards so they can take advantage of ‘cash back’ features that boost their profits at the expense of consumers. This bill would allow providers to choose a payment option that works best for them, saving them and their patients money and protecting smaller providers that are struggling to keep their doors open in our communities.”

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 the high fees associated with the VCC method. 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.

The bill will now move to the Colorado State Senate.

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