The Silent Leak in EMS Reimbursement: How Insurers Use Virtual Credit Cards

I discovered $325,590 in EMS transport claims sitting uncollected at our former billing vendor’s office — all “paid” by insurers with virtual credit cards. On their books the claims showed PAID; on ours, the money never reached the bank.

This isn’t an isolated error. It’s part of a growing trend that favors insurers while leaving EMS providers exposed to lost revenue, stranded funds, and unnecessary fees.

Even when VCCs “work,” they don’t work for you. Each payment siphons off 3–5% in processing fees — that’s $30,000 to $50,000 lost for every $1 million collected — compared to just $0.34 per ACH/EFT transaction. At the same time, some health plans actually earn up to 1.75% in card-network rebates for steering payments to VCCs, which means they profit while you pay.

Why This Problem Is Emerging Now

EMS agencies have long dealt with delayed reimbursements and complicated payer processes. But the rise of virtual credit card (VCC) payments has quietly created a new challenge - one that shifts cost and risk from insurers to providers.

Instead of sending funds by ACH or EFT, insurers are increasingly issuing one-time VCC numbers, delivered by fax, mail, or portals (without notifying you). On paper, they can mark claims “PAID.” But in reality, the dollars may never land in your account - or they arrive minus hefty transaction fees.

The result? Providers shoulder unnecessary losses while insurers benefit from convenience, rebates, and clean accounting.

What’s Happening (and Why It Favors Insurers)

1) Lockbox not VCC-enabled Insurers are paying claims through one-time VCC numbers. If your lockbox isn’t configured to accept them, payments get rejected or kicked into manual handling. On the payer’s system, the claim shows “paid.” On yours, no money ever posts.

2) Outdated forwarding address Rejected payments are forwarded to the address on file. If that address still points to a previous billing vendor, those dollars will sit in a drawer indefinitely. The Change Healthcare cyberattack underscored just how fragile payment operations are. If your remit/forwarding data wasn’t updated, funds may be stranded.

3) Even when VCC “works,” you lose 3–5% Accepting VCCs costs providers 3–5% per transaction (vs. ~$0.34 for ACH/EFT). That’s $30–$50K lost for every $1M collected. Meanwhile, some health plans actually receive card-network rebates (up to 1.75%) for routing payments this way. In other words: they profit while you pay.

👉 The good news: Under federal administrative-simplification rules, providers have the right to refuse VCCs and require ACH/EFT + ERA. If you request EFT, the payer must support it.

Why Your Billing Company May Not Catch It

Even strong billing partners can miss this issue because:

• They usually don’t control the lockbox.
• VCC payments arrive via fax/mail/portal — channels they may never see.
• Forwarding addresses are managed by banks and payers, not your billing company.
• Billing dashboards track days-to-pay and denials, but not the gap between “paid” vs. actually posted unless you enforce TRN-level reconciliation.

In other words: you can’t assume your billing company has this covered.

What EMS Leaders Should Do - A Tactical Checklist

Here’s where leadership matters. The fix isn’t flashy — but it requires clarity, ownership, and process discipline.

✅ Audit your lockbox Confirm whether your lockbox can accept and auto-process VCC payments. If not, work with your bank or lockbox provider to configure VCC handling while you begin the process of opting out entirely with each payer.

✅ Fix address hygiene Check that all remit/forwarding addresses point to your current billing partner, not a prior vendor. Outdated routing is a silent trap.

✅ Show the math Run the numbers for your agency. A 3–5% fee on VCC payments = $30–$50K per $1M collected. Compare that to pennies for ACH. Bring this to your leadership team and board — the financial impact is too large to ignore.

✅ Reconcile at TRN level Make sure your team (or billing company) tracks not just denials and days-to-pay, but also the gap between “PAID” and actually posted.

The Leadership Takeaway

This is a classic us vs. them problem. Insurance company checks the “paid” box, but providers never receive the funds - or give back 3–5% in fees when they do.

The fix isn’t innovation. It’s process:

• Control the rail (EFT)
• Configure the lockbox
• Clean the addresses
• Reconcile like clockwork

Do those four things, and the leak closes. Ignore them, and you’ll keep losing money you’ve already earned.

Questions? Reach out directly: Raul@emssoap.com