Governor Hochul has signed into law, as Chapter 647 of the Laws of 2025, the NYSDA virtual credit card (VCC) bill – A.3986-A (Bores) / S.2105-A (Cooney).  The Governor’s Approval Memorandum #31 is attached here: Hochul Approval Memorandum #31 Virtual Credit Card Bill.  A copy of the bill is below as is the Sponsor Memorandum explaining the bill.  The law takes effect 180 days after having been signed into law on December 19, 2025, or June 17, 2026, to be precise.  The new law will require agreed on chapter amendments in 2026.

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                                         3986--A

                               2025-2026 Regular Sessions

                                    January 30, 2025

                                       ___________

        Introduced  by  M. of A. BORES, EPSTEIN -- read once and referred to the

          Committee on Insurance -- committee discharged, bill amended,  ordered

          reprinted as amended and recommitted to said committee

        AN ACT to amend the insurance law and the public health law, in relation

          to the use of virtual credit cards by insurers and certain health care

          plans

          The  People of the State of New York, represented in Senate and Assem-

        bly, do enact as follows:

  1      Section 1. Section 3217-b of the insurance law is amended by adding  a

  2    new subsection (p) to read as follows:

  3      (p)(1) An insurer may pay a claim for reimbursement made by a provider

  4    using  a  credit card, virtual credit card, or electronic funds transfer

  5    payment method that imposes on the provider  a  specifically  identified

  6    fee  or similar dedicated charge to process the payment if in advance of

  7    using such reimbursement method:

  8      (A) The insurer notifies the provider of the potential fees  or  other

  9    charges associated with the use of the credit card, virtual credit card,

10    or electronic funds transfer payment;

11      (B) The insurer offers the provider an alternative payment method that

12    does not impose fees or similar charges on the provider; and

13      (C)  The  provider  or  a  designee  of  the provider elects to accept

14    payment of the claim using the credit  card,  virtual  credit  card,  or

15    electronic funds transfer payment method.

16      (2)  A  decision  pursuant  to  paragraph one of this subsection shall

17    remain in effect until the provider notifies the insurer, in writing, of

18    a change in the designated payment type.

19      (3) If an insurer contracts with  a  vendor  to  process  payments  of

20    providers'  claims,  the insurer shall require the vendor to comply with

21    the provisions of paragraph one of this subsection.

22      (4) No policy  or  contract  issued,  renewed,  modified,  altered  or

23    amended   after  the  effective  date  of  this  section  shall  contain

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets

                              [ ] is old law to be omitted.

                                                                   LBD03607-04-5

        A. 3986--A                          2

  1    provisions allowing for waiver of the notice requirements  contained  in

  2    this subsection.

  3      (5) For any contract that is in effect on or before the effective date

  4    of  this  subsection  or  that is entered into, amended or renewed on or

  5    after the effective date of this subsection, an insurer that initiates a

  6    payment to a provider using, or changes the payment method to, a  health

  7    care  electronic funds transfers and remittance advice transaction shall

  8    not charge a fee solely to transmit the payment to the  provider  unless

  9    the provider consents to the fee.

10      (6)  For  purposes  of this subsection, the following terms shall have

11    the following meanings:

12      (A) "Provider" shall mean a health care professional  or  a  group  of

13    health care professionals licensed pursuant to title eight of the educa-

14    tion  law  that has a participating provider contract with an insurer to

15    provide health care services to an insured.

16      (B) "Virtual credit card" shall mean a single-use  series  of  numbers

17    linked to a fixed dollar amount and provided by an insurer to a provider

18    for  the purpose of paying a claim for health care services performed by

19    the provider.

20      § 2. Section 4325 of the insurance law is  amended  by  adding  a  new

21    subsection (p) to read as follows:

22      (p) (1) A corporation organized under this article may pay a claim for

23    reimbursement  made  by  a  provider using a credit card, virtual credit

24    card, or electronic funds transfer payment method that  imposes  on  the

25    provider  a  specifically  identified fee or similar charge dedicated to

26    process the payment if in advance of using such reimbursement method:

27      (A) The corporation notifies the provider of  the  potential  fees  or

28    other charges associated with the use of the credit card, virtual credit

29    card, or electronic funds transfer payment;

30      (B)  The corporation offers the provider an alternative payment method

31    that does not impose fees or similar charges on the provider; and

32      (C) The provider or a  designee  of  the  provider  elects  to  accept

33    payment  of  the  claim  using  the credit card, virtual credit card, or

34    electronic funds transfer payment method.

35      (2) A decision pursuant to paragraph  one  of  this  subsection  shall

36    remain  in  effect until the provider notifies the corporation, in writ-

37    ing, of a change to the designated payment type.

38      (3) If a corporation contracts with a vendor to  process  payments  of

39    providers'  claims,  the insurer shall require the vendor to comply with

40    the provisions of paragraph one of this subsection.

41      (4) No policy  or  contract  issued,  renewed,  modified,  altered  or

42    amended   after  the  effective  date  of  this  section  shall  contain

43    provisions allowing for waiver of the notice requirements  contained  in

44    this subsection.

45      (5) For any contract that is in effect on or before the effective date

46    of  this  subsection  or  that is entered into, amended or renewed on or

47    after the effective date of this subsection, a corporation  that  initi-

48    ates  a payment to a provider using, or changes the payment method to, a

49    health care electronic funds transfers and remittance advice transaction

50    shall not charge a fee solely to transmit the payment  to  the  provider

51    unless the provider elects to accept payment in accordance with subpara-

52    graph (B) of paragraph one of this subsection.

53      (6)  For  purposes  of this subsection, the following terms shall have

54    the following meanings:

55      (A) "Provider" shall mean a health care professional  or  a  group  of

56    health care professionals licensed pursuant to title eight of the educa-

        A. 3986--A                          3

  1    tion  law  that has a participating provider contract with a corporation

  2    to provide health care services to an insured.

  3      (B)  "Virtual  credit  card" shall mean a single-use series of numbers

  4    linked to a fixed dollar amount and provided by a corporation  organized

  5    under  this  article to a provider for the purpose of paying a claim for

  6    health care services performed by the provider.

  7      § 3. Section 4406-c of the public health law is amended  by  adding  a

  8    new subdivision 14 to read as follows:

  9      14. (a) A health care plan may pay a claim for reimbursement made by a

10    provider  using  a credit card, virtual credit card, or electronic funds

11    transfer payment method that imposes  on  the  provider  a  specifically

12    identified  fee or similar dedicated charge to process the payment if in

13    advance of using such reimbursement method:

14      (i) The health care plan notifies the provider of the  potential  fees

15    or  other  charges  associated  with the use of the credit card, virtual

16    credit card, or electronic funds transfer payment;

17      (ii) The health care plan offers the provider an  alternative  payment

18    method that does not impose fees or similar charges on the provider; and

19      (iii)  The  provider  or  a  designee of the provider elects to accept

20    payment of the claim using the credit  card,  virtual  credit  card,  or

21    electronic funds transfer payment method.

22      (b)  A  decision  pursuant  to paragraph (a) of this subdivision shall

23    remain in effect until the provider notifies the health  care  plan,  in

24    writing, of a change to the designated payment type.

25      (c)  If a health care plan contracts with a vendor to process payments

26    of providers' claims, the health care plan shall require the  vendor  to

27    comply with the provisions of paragraph (a) of this subdivision.

28      (d)  No  policy  or  contract  issued,  renewed,  modified, altered or

29    amended  after  the  effective  date  of  this  section  shall   contain

30    provisions  allowing  for waiver of the notice requirements contained in

31    this subdivision.

32      (e) For any contract that is in effect on or before the effective date

33    of this subdivision or that is entered into, amended or  renewed  on  or

34    after  the  effective  date of this subdivision, a health care plan that

35    initiates a payment to a provider using, or changes the  payment  method

36    to, a health care electronic funds transfers and remittance advice tran-

37    saction  shall  not  charge  a fee solely to transmit the payment to the

38    provider unless the provider elects to accept payment in accordance with

39    subparagraph (ii) of paragraph (a) of this subdivision.

40      (f) For purposes of this  section,  the  following  definitions  shall

41    apply:

42      (i)  "Provider"  shall  mean  a health care professional or a group of

43    health care professionals licensed pursuant to title eight of the educa-

44    tion law that has a participating provider contract with a  health  care

45    plan to provide health care services to an enrollee.

46      (ii)  "Virtual  credit card" shall mean a single-use series of numbers

47    linked to a fixed dollar amount and provided by a health care plan to  a

48    provider  for  the  purpose  of  paying a claim for health care services

49    performed by the provider.

50      § 4. This act shall take effect on the one hundred eightieth day after

51    it shall have become a law and shall apply  to  policies  and  contracts

52    issued, renewed, modified, altered or amended on and after such date.

BILL NUMBER: A3986A 

      SPONSOR: Bores 

      TITLE OF BILL: 

      An act to amend the insurance law and the public health law, in relation

      to the use of virtual credit cards by insurers and certain health care

      plans 

      SUMMARY OF PROVISIONS: 

      Section 1. Amends Section 3217-b of the Insurance Law to require that an

      insurer seeking to pay a provider using a credit card, virtual credit

      card, or EFT that imposes a fee or similar charge on the provider to

      process the payment must first (1) notify the provider, of the potential

      fees or charges, (2) offer the provider an alternative payment method

      that does not impose fees or charges, and (3) allow the provider or a

      designee to elect to accept such payment types. Further, this section

      establishes that an election to accept or decline a specific type of

      payment shall remain in effect until the provider notifies the insurer,

      in writing, of a change in the designated payment type. It requires

      contracted vendors to adhere to these provisions, prohibits waiving this

      section in new contracts, and mandates that an insurer have permission

      before charging a fee solely for transmitting a payment to a provider. 

      The section also defines provider and virtual credit card for purposes

      of this section of law. 

      Section 2. Creates a new Section 4242 of the Insurance Law to include

      the same provisions as section 1. 

      Section 3. Amends section 4325 of the Insurance Law to include the same

      provisions as section 1. 

      Section 4. Amends section 4406-C of the Public Health Law to include the

      same provisions as section 1. 

      Section 5. Establishes an effective date. 

      JUSTIFICATION: 

      As alternative payment methods increase, provider choice in payment

      method decreases. Payment types such as virtual credit cards may apply

      higher processing fees than those agreed upon for regular credit cards

      under insurer-provider contracts. As a result, providers are left to

      deal with bank charges and other fees levied to counter the evolving

      software and security needs for new payment types.  Unless insurers are

      required to seek permission, they often begin paying providers using

      costly alternative payment types without providing any notice. 

      To increase transparency and provider choice, this legislation would

      require insurers give appropriate notice and allow providers to elect to

     utilize an alternative payment method for claims. 

      LEGISLATIVE HISTORY: 

      S9621 of 2023-24: Referred to Insurance Committee 

      FISCAL IMPLICATIONS:

      None. 

      EFFECTIVE DATE:

      This act shall take effect one hundred eighty days after it becomes a

      law and shall apply to policies and contracts issued, renewed, modified,

      altered or amended on and after such date.