8062 Hospitals

Introduction

• What it is: This MCC code covers healthcare institutions providing a range of medical services, including emergency care and surgery.
• Risk level: Medium — Hospitals can be subject to high costs and complex billing, affecting risk assessments.
• Acceptance difficulty: Medium — While hospitals are crucial providers, their unique billing structures can complicate payment processing.
• Typical business models: general hospitals; specialty hospitals; psychiatric hospitals; surgical centers; rehabilitation facilities.
• For merchants: Expect longer onboarding processes; some payment service providers may require higher MDR due to the nature of healthcare payments.
• What PSPs expect: Comprehensive documentation of services offered; proof of accreditation; detailed billing practices and procedures.

Payment Insights & Benchmarks

Merchants in this MCC should plan for a complex payment landscape influenced by the nature of healthcare services. Expect unique challenges regarding patient payment behavior and insurance transactions, which can affect cash flow and acceptance rates.

Payment methods

Credit and debit cards: widely accepted, but many patients may resist using them for large payments.

• Health savings accounts (HSAs) and flexible spending accounts (FSAs): alternative funding methods but often require specific integration.
• E-wallets: growing popularity for out-of-pocket expenses, though acceptance may vary by location.
• Payment plans: installment options can improve payment rates but complicate transaction processing.

Authentication & security

Strong customer authentication (SCA) measures are increasingly standard to protect sensitive patient data.

• Healthcare fraud is a concern, necessitating robust monitoring and verification to reduce fraud losses.
• Patient identity verification processes should account for various payer scenarios, including insurance verifications.

Benchmarks (indicative, not guaranteed)

MDR: typically higher than average retail rates due to specialized payment processing needs.

• Rolling reserves: may be necessary, especially in high-risk cases (e.g., elective procedures).
• Settlement cycles: can be longer (7-14 days) due to delayed billing processes with insurance.
• Chargeback ratios: may be elevated due to disputes over services rendered and insurance claims.
• Approval rates: generally lower due to the potential for higher risk associated with healthcare transactions.

Key metrics to monitor

Patient payment method preferences and trends over time.

• Chargeback ratios specifically related to service disputes vs. transactional errors.
• Average time from service to payment completion for cash flow forecasting.
• Denial rates on insurance claims and their impact on overall financial performance.

Risk & Compliance

Merchants operating under the MCC 8062, which covers hospitals, face significant scrutiny due to the sensitive nature of healthcare transactions and the potential for high financial loss from fraud and chargebacks. PSPs and acquirers expect healthcare providers to address these risks proactively while ensuring compliance with regulations.

Chargebacks & fraud

High risks of friendly fraud, where patients dispute charges for legitimate services, citing issues like dissatisfaction with treatment or misunderstanding of billing.

• Instances of identity theft can occur when stolen personal information is used to obtain medical services fraudulently.
• Mitigation tools include transaction monitoring, behavioral analytics to identify unusual patient billing patterns, and stringent verification processes for new patients.

AML/KYC expectations

Strict customer identity verification (IDV) processes to confirm patient identity, including government-issued ID checks and insurance verification.

• Mandatory checks against sanctions lists and PEP lists to prevent fraud and ensure compliance.
• Manual review triggers might include high-value treatments, unusual billing patterns, or frequent billing from the same insurance provider that lacks proper documentation.

Operational red flags

Lack of transparency regarding hospital ownership or unclear affiliations with larger healthcare networks.

• Inadequate processes for handling patient disputes or unclear refund policies can alarm PSPs/acquirers.
• Failure to implement robust data protection measures, considering the sensitive information handled, which raises compliance concerns.
• Unverified or shadow billing practices that obscure the actual services rendered may lead to increased scrutiny and risk.

Onboarding Checklist

Merchants under this MCC should prepare a complete onboarding package before approaching PSPs or acquirers. A well-structured submission improves approval chances and shortens review times.

Legal & corporate documents

company registration and incorporation documents

• disclosure of beneficial owners (UBO) and corporate structure
• valid licenses for healthcare operations
• policies: Terms of Service, Privacy, AML/KYC, Refund Policy

Financials & risk management

recent financial statements and cashflow forecasts

• liquidity or reserve model for healthcare services
• description of antifraud setup and risk management strategies

Product & marketing

demo access or screenshots of the patient management system

• overview of services offered and marketing materials
• information on traffic sources, including partnerships with insurers
• details of KYC flow implemented for patient verification

Technical integration & security

payment architecture overview with supported methods/providers

• description of SCA/3DS flows and data tokenization processes
• PCI DSS compliance status and data storage policies

Operations

customer support setup, including availability and language offerings

• SLA for handling disputes and patient complaints
• policies on deposit, payment limits, and chargeback processes
• internal procedures for managing patient data and privacy concerns

Regulation & Licensing

Licensing and certification are essential for merchants in this MCC, as they ensure compliance with health regulations and standards necessary for patient safety and care. Recognition of licenses by PSPs can vary significantly based on the jurisdiction of the operation and the geographical markets served.

Operator licenses

State Medical Licenses — required for hospitals to operate legally in their respective states, with recognition varying by region.

• Joint Commission Accreditation — a respected certification that demonstrates commitment to meeting high standards of care and operational effectiveness.
• Medicare and Medicaid Certification — necessary for hospitals to receive federal funding; recognition by payers is crucial for revenue.
• Local Health Department Licenses — some areas require additional licenses to operate health facilities based on local regulations.

Geo-restrictions

Countries with stringent health regulations may impose additional licensing requirements on foreign hospital operators, limiting access.

• In the US, each state sets its own regulations, requiring hospitals to be licensed per state laws.
• International operations may be subject to varying healthcare regulations, affecting service delivery and compliance.

Certifications & audits

Healthcare Facilities Accreditation Program (HFAP) reviews for compliance with standards.

• Risk management audits to assess patient safety practices.
• Regular assessments for HIPAA compliance regarding patient privacy and data security.
• Medicare and Medicaid compliance audits ensuring adherence to federal guidelines.

Official Definitions & Network Comparisons

This section shows how major card networks define this MCC and highlights practical differences that affect merchant onboarding.

Explanation:

The definitions across networks highlight a core focus on healthcare services, but the wording varies (e.g., “healthcare facilities” vs. “medical services”). Each network may have unique onboarding requirements or compliance checks, such as the need for insurance or specific licenses. Common denial reasons for healthcare providers include non-compliance with healthcare regulations, lack of appropriate documentation, or concerns regarding billing practices.

Alternative MCC Codes

Merchants often confuse this MCC with other categories. The table below shows which codes are related, why they are confused, and what risks misclassification brings.

Rule of thumb for merchants:

Always ensure that your business's primary services align directly with your assigned MCC. Misclassifying for practices outside of your primary healthcare services can lead to compliance issues and financial penalties.

Best Practices for Merchants

Merchants operating under the Hospitals MCC must be vigilant about their payment practices and operational policies due to the sensitivity of healthcare transactions. Following these best practices will enhance acceptance, mitigate risks, and foster a positive relationship with payment service providers (PSPs).

Classification & transparency

always use the correct MCC; incorrect classification can lead to increased scrutiny and potential account termination

• provide clear information about healthcare services, billing practices, and financial assistance options on your website
• ensure that your business model is transparent and that customers understand the nature of charges

Fraud & chargeback reduction

implement 3DS or step-up authentication for high-risk payment scenarios, particularly for large or unusual transactions

• use clear billing descriptors to prevent confusion and facilitate quick recognition of charges by patients
• maintain detailed logs of patient interactions and transactions to support any dispute representments

Payment acceptance optimization

offer various payment methods (credit/debit cards, insurance billing, payment plans) to accommodate patient preferences

• optimize payment routing based on patient location or preferred method to enhance transaction success rates
• consider using separate merchant IDs (MIDs) for different departments or services to streamline processes and comply with risk management protocols

Operational discipline

monitor key performance indicators (KPIs) such as approval rates, chargeback ratios, and customer inquiries to assess payment performance

• conduct regular compliance audits to ensure adherence to healthcare regulations and company policies
• establish a dedicated team to handle payment disputes, ensuring timely responses and effective resolution capabilities

Payouts & liquidity

maintain adequate liquidity to manage rolling reserves and potential delays in insurance reimbursements

• implement automated checks for anti-money laundering (AML) during withdrawal processes, especially for large sums
• keep close track of payout frequencies and any patterns in withdrawal requests that may raise flags

Business Scope & Examples

This MCC encompasses businesses primarily involved in healthcare services, particularly those offering medical treatments and hospital-related services. Merchants classified under this category generally operate facilities where patients receive diagnostic, therapeutic, and preventive health care services.

Models

general hospitals providing a range of medical services

• specialty hospitals focused on particular medical fields (e.g., oncology, cardiology)
• outpatient care centers offering diagnostic and treatment procedures
• urgent care facilities for non-emergency medical situations
• clinics providing preventive care and wellness services

Borderline cases

Medical supply stores — while they provide healthcare-related products, they typically do not offer direct medical services and thus fall outside this MCC.

• Health clubs and fitness centers — although they promote wellness, they do not provide medical treatments and are classified differently.

Signals for correct classification

the business directly provides medical services or treatments to patients

• facilities are licensed to operate as healthcare providers
• services include consultations, surgeries, or emergency care