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Paying to Get Paid: How Healthcare Providers Are Losing Millions That Should Be Funding Care, Staff, and Growth

Author: Joe Maher

Healthcare organizations are under extraordinary pressure to do more with less. Staffing shortages persist. Margins are thin. Patient expectations are rising. And every dollar matters.

Yet new research reveals a troubling reality: healthcare providers are quietly giving up a meaningful percentage of their reimbursement revenue just to access their own payments.

This isn’t an edge case. It’s becoming standard practice.

According to new independent research of more than 100 healthcare finance and revenue cycle leaders, 81% of organizations currently or recently received reimbursements through virtual credit cards (VCCs) or other fee-based payment programs, and 80% report that at least 5% of their total reimbursement revenue is now subject to these fees.

In an industry already operating on razor-thin margins, that should raise serious concern.

Callout: What Are Virtual Credit Cards — and Why Do They Cost Providers Money?

Virtual credit cards (VCCs) are single-use or limited-use card numbers issued by payers to reimburse providers electronically. They’re often marketed as a faster, more secure alternative to paper checks.

But there’s a catch.

When a payer reimburses a provider via a virtual credit card, the provider pays a processing fee — often 3–5% or more of the total payment amount — just to access the funds. That fee is deducted automatically when the payment is processed.

Unlike electronic funds transfer (EFT) paired with ANSI 835 EDI transactions — which are fee-free — VCCs shift the cost of payment processing onto providers.

What appears to be “convenient” on the surface becomes a recurring toll on every transaction.

The Hidden Cost No One Budgeted For

A 3% fee on $100 million in annual reimbursements equals $3 million lost every year — not to denials, not to underpayments, but to transaction fees alone.

The research shows this is not hypothetical:

• 54% of organizations typically pay 3–5% or more per VCC transaction
• 46% say between 5–10% of their reimbursement revenue is impacted
• 26% report that 11–25% of their revenue flows through fee-based payment methods

And the trend is accelerating. 61% of respondents say the use of VCCs has increased in the past two years, while 67% expect it to rise further in the near future.

This is no longer a short-term inconvenience. It’s a structural shift in how healthcare payments are being routed — and taxed.

Why This Revenue Loss Often Goes Unnoticed

One reason this problem persists is that VCC fees don’t look like traditional expenses. They’re embedded directly in healthcare payment processing and deducted before funds ever reach the bank.

Because the payment is still “electronic,” it often escapes the scrutiny applied to vendor contracts, staffing costs, or supply expenses.Meanwhile, revenue cycle teams are left reconciling deposits that don’t match expectations — without always knowing why.

The research highlights the downstream impact:

• 38% of leaders rank increased administrative burden as the top business impact
• 32% cite direct margin reduction as their biggest concern
• 32% report lack of visibility or control over payment methods
• 28% point to difficulty budgeting and forecasting due to variable fees

What starts as a payment method issue quickly becomes a revenue integrity problem.

The Opportunity Cost Is Bigger Than the Fee

Every dollar lost to payment fees is a dollar that can’t be reinvested.

The research makes this painfully clear: fee-based payments don’t just erode margins — they divert funding away from staff, patient care, and operational improvement.

Revenue cycle teams spend time reconciling variable card deposits and managing opaque payer correspondence instead of focusing on:

• Denials management
• Underpayment recovery
• Audit defense
• Strategic revenue optimization

As one respondent put it, these fees create a “silent revenue leak” — draining value from otherwise well-run organizations.

Paying Fees Isn’t a Choice — It’s a Constraint

Importantly, the research shows providers are rarely opting into these programs strategically.

Among respondents:

• 64% accept fee-based payments to accelerate revenue collection despite high costs
• 49% lack the capacity to manage the manual workload required to opt out
• 31% say their organization accepted VCCs accidentally, often through a single enrollment click
• 55% report that opting out is very difficult or hasn’t yet been attempted

Even when organizations try to avoid fees, payers often revert to paper checks or PDF remittances — forcing providers to choose between paying fees or absorbing more manual work.

It’s a no-win scenario.

Why This Matters Now More Than Ever

This issue scales with growth.

Large health systems handling billions in claims report the highest exposure to VCC fees. Mid-sized organizations often feel the greatest operational strain. Smaller providers may not realize how much they’re losing at all.

That’s why 83% of revenue cycle leaders rate solving this problem as urgent or very urgent, and 85% expect to implement a new solution within the next 24 months.

The industry is reaching a tipping point.

You Shouldn’t Have to Pay to Get Paid

Electronic payments were meant to improve efficiency, transparency, and fairness. But fee-based reimbursement models do the opposite — quietly transferring margin from providers to intermediaries.

The data is clear. The impact is real.

The only remaining question is: how much of your organization’s revenue is quietly being siphoned away — and what could you do with it if it stayed?

Learn What the Data Reveals — and What to Do Next

This blog highlights just a portion of the findings.

The full research report explores:

• How widespread VCC and fee-based payments really are
• The average percentage of revenue impacted
• Why opting out is so difficult
• Practical steps providers can take to stay electronic without paying fees

Download the full research report to understand the true cost of paying to get paid — and how healthcare organizations are reclaiming control.

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