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Georgia law lets providers choose reimbursement method

June 25, 2018

Atlanta — A new Georgia law enables health care providers to choose the method by which they are reimbursed by insurers for health services and prohibits insurance companies from requiring electronic payments/virtual credit cards as the only way to receive a claims payment. 

HB 818, which Georgia Gov. Nathan Deal signed May 8, goes into effect Jan. 1. Georgia is only the second state in the country to pass this type of legislation, according to the Georgia Dental Association, which designated HB 818 as its primary legislative agenda item for 2018.

Georgia Rep. Dr. Lee Hawkins agreed to carry the bill as lead sponsor after discovering his office was processing virtual credit card payments without his knowledge and recognizing the negative financial impact on his practice. Reps. Richard Smith, Mark Newton, Sharon Cooper, Carolyn Hugley and James Beverly signed on to the bill as co-sponsors. A virtual credit card is defined in the new Georgia law as a single-use credit card exclusively provided in an electronic or digital format. 

“This is a more common sense approach,” said Dr. Hawkins, who figured out his practice averaged paying 3 percent in fees when the virtual credit cards were used. “Health care is expensive enough.”

HB 818 also states that when initiating payments to a provider using electronic funds transfer payments, insurers must notify the provider of any fees associated with a particular payment method, advise the provider of the available methods of payment and provide clear instructions to the health care provider on how to select an alternative payment method. This includes giving providers the option of choosing physical checks when being reimbursed, which the GDA said many of its members were told was no longer an option by some insurers. 

In an FAQ used to explain this issue to state legislators, GDA stated how the processing fees incurred by providers when processing virtual credit card reimbursements typically range from 2.5 to 5 percent being automatically subtracted from the reimbursement payment, which can have a serious financial impact on a dental practice. “For example, if a practice bills $1,000,000/year and only accepts virtual credit card payments, that is an automatic expense of $25,000-50,000/year for that practice.”

“Operating revenues are critical in any health care service practice and particularly critical in lower-income communities and single-practitioner practices,” said Frank J. Capaldo, GDA executive director.

Providers covered by this bill include dentists, physicians, pharmacists and any entity licensed to provide health care services in the state.

Read the bill here.