PaySpan Inc., which six months ago ventured into the virtual payment card market by offering health plans and providers a more convenient and easier way to support claims reimbursements, faced a problem: the product lacked sufficient security.
The health care payment network believes it has resolved the issue through an agreement it reached last week with Wright Express Inc., a fleet card processor that is venturing for the first time into health care payments.
Wright Express historically has used its virtual MasterCard to support the needs of online-travel companies and providers of insurance/warranty products. Its bank, Wright Express Financial Services Corp., a Utah industrial bank, issues the product.
“It’s a new market for them,” Kevin Arner, PaySpan CEO, says of Wright Express, which will process the single-use virtual card transactions. “There are some business processes in the fleet market that are similar to what we see in health care. And health care by itself is a multibillion market for this particular product.”
Wright Express will support what Arner calls the “second generation” platform for virtual cards in that transactions will comply with the Payment Card Industry data security standards and provide an improved reconciliation process. The virtual card provider PaySpan used at the product’s launch, which Arner declined to name, is not PCI-compliant, he says.
Jacksonville, Fla.-based PaySpan, whose health care payment network is second in size only to United Healthcare’s, will launch the second-generation virtual card platform with Wright Express in July, Arner says, noting the network has a backlog of payers in the implementation process.
PaySpan will devote all of its marketing focus behind the product as it reaches out to the 115 health plans and 335,000 providers is has as clients, Arner says, noting insurers use the virtual cards to reimburse health care providers.
“Card payments can be orchestrated faster and are more secure than other forms of payment, like checks,” Arner says. “For payers, this is a more strategic way for them to manage the flow of the reimbursement process.”
A Wright Express representative was not immediately available to comment on the venture.
Health plans do not require actual plastic, and offering virtual versions helps reduce exposure. “We know the payer and the payee, and with the virtual card we can control issuance and use of the card and can secure the transaction much more than would be allowed with a physical card,” Arner says.
In terms of revenue, the different types of relationships PaySpan has dictate a wide variety of charges, Arner says, noting payers will see their costs fall through reductions in expenses related to the processing of paper-based payments.