MediStreams, a healthcare payment and remittance automation solutions provider, commissioned independent research detailing the financial and operational impact of virtual credit cards (VCCs) and other fee-based payment programs on healthcare organizations. The study highlights how these electronic payment methods are affecting margins, increasing administrative workload, and limiting financial visibility within the healthcare revenue cycle.
The research, conducted by In90group Research, surveyed over 100 healthcare finance and revenue cycle leaders across hospitals, health systems, physician groups, and specialty providers nationwide. The report, titled “Paying to Get Paid: How Virtual Card Fees Erode Healthcare Margins,” is available for download on the MediStreams website.
The findings indicate that fee-based reimbursement is increasingly common across healthcare providers. Eighty-one percent of organizations surveyed currently or recently received reimbursements through VCCs or other fee-based payment programs. Eighty percent reported that at least 5% of their total reimbursement revenue is subject to these fees, with 54% of providers paying 3–5% or more per VCC transaction. The use of VCCs has increased for 61% of organizations in the past two years, and 67% anticipate further increases over the next one to two years. Eighty-three percent of respondents stated that implementing a solution to eliminate these fees is urgent or very urgent.
Joe Maher, President of MediStreams, commented, “Virtual credit cards have quietly become one of the most expensive ways for healthcare organizations to get paid. At a time when providers are facing cost pressure from every direction, losing 3–5% of earned reimbursement to payment fees is simply not sustainable.” Beyond direct financial costs, respondents noted downstream effects such as increased administrative workload, difficulty in revenue forecasting, reduced confidence in reported net revenue, and extended month-end close cycles.
The study also explored why fee-based payments continue despite widespread dissatisfaction. Sixty-four percent of organizations reported accepting these payments to accelerate revenue collection, while 49% indicated a lack of capacity to manage the manual workload associated with opting out. Thirty-one percent stated their organization accepted VCCs accidentally, often through a single enrollment action. Additionally, 55% described the opt-out process as very difficult or had not yet attempted it. When providers try to avoid fees, payers often revert to paper checks or PDF remittances, which forces organizations to choose between incurring fees or managing increased manual work.
Maher added, “For many healthcare organizations, the alternative of taking paper checks through their medical lockbox and manually posting and reconciling these payments is not an option, given today’s staffing constraints and cash flow urgency.”
The research suggests that healthcare organizations do not need to choose between electronic payments and protecting their margins. Automation solutions can enable organizations to remain digital, avoid fee-based payment models, and maintain efficient posting and reconciliation. MediStreams offers solutions that automate remittance workflows, convert paper and PDF EOBs into posting-ready data, and provide visibility across payment sources.
According to Maher, “Healthcare providers shouldn’t have to pay to get paid. With the right automation in place, like that offered by MediStreams, organizations can eliminate unnecessary fees, reduce manual effort, and regain control over how they receive and reconcile payments — without slowing cash flow.” The full research report provides further analysis, data, and guidance for healthcare leaders.
