News
Transparency and Choice: Keys to a Healthy Virtual Credit Card Partnership
By Mike Adelberg, NADP Executive Director
Dental providers and dental benefits plans agree that claims reimbursement should be efficient and fast. Electronic transactions, including those by virtual credit cards (VCC), accomplish both objectives. Many providers prefer VCC because of their convenience, security, and faster processing times compared to paper payment methods.
Plans offer multiple payment electronic options in addition to VCC, including ACH and EFT. According to a major payment processing company, there is a tendency to treat ACH as the default payment method and everything else as secondary. Public policy proposals in some states have sought to restrict viable alternatives like VCCs in the name of standardization. This approach risks further slowing the adoption of electronic payments at precisely the time when there is policy-maker consensus for reducing paper transactions.
NADP understands that a VCC might not be right for every dental practice. Many providers consider the small fees associated with VCC a good tradeoff for near-immediate payment. Other providers might decide that other payment methods work best for their office. Providers should have that choice and should always have the right to opt-out of a VCC. A provider told me he believes he was returned to VCC payment without his consent. I investigated and have been unable to verify this practice. The two large vendors I spoke with shared their policy of honoring permanent opt-out unless a provider explicitly agrees to accept a VCC payment. If other vendors are operating differently, it is a practice that NADP does not support.
Some dental providers want more regulations around VCC arrangements, including an opt-in requirement. This is a case where a proposed solution may create more problems than it solves. Establishing strict requirements around a VCC opt-in does little to increase choice or transparency, but it does increase administrative burdens on providers, i.e., if a written, mailed signature is required. This type of opt-in also can result in reimbursement delays, which neither dental providers nor dental plans want.
NADP firmly believes an opt-out approach offers the best solution for all parties because it:
- Preserves provider choice
- Minimizes administrative burdens for providers and plans
- Supports timely reimbursement while reducing confusion and disputes
A few states have mandated an opt‑in approach relative to VCC. For reasons stated above, NADP does not support this. But, where it exists, the implementation of opt-in can be structured in a way that strikes balance between informed choice and administrative burden.
California’s approach offers an example of how an opt‑in framework can be implemented responsibly. The state is permitting dentists with a history of participating in VCC to be deemed as opt-in; only new providers must be affirmatively opted in after the statutes’ effective date. This avoids the operational nightmare associated with requiring providers that already like and use VCCs to formally opt-in again, avoiding potential payment interruptions. The approach also allows provider consent via email or checking a box, which makes the opt-in easier for dental offices.
California’s approach stands in contrast to a few state bills. A recent proposal in Rhode Island (SB 3156) is particularly troubling. In addition to administrative burdens, it would prohibit any fees associated with the transmission, processing, or issuance of payments, which would effectively eliminate the use of virtual credit cards as a payment option.
Regardless of payment method, NADP supports clear communication when payment methods change, with plans notifying providers of any change before implementation, and clear instructions on how to select an alternative payment method. I spoke with a representative of a major payment processing company who said that they review their VCC notices annually to ensure the information is complete, transparent, and easy to understand. They are happy to receive feedback from providers to improve their communications.
NADP supports electronic reimbursement; we do not promote VCCs over any other e-payment method. We will vigorously oppose legislation that impairs any type of e-payments. Therefore, NADP must oppose opt-in legislation that, practically speaking, erects barriers to using VCC.
