March 1 Compliance Alert for Dentists Offering Payment Plans

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February 22, 2010

Some Dentists Must Register Under State Consumer Credit Law
Attention dentists: do you offer payment plans to your patients? If so, you may be required to pay a fee and register with the state of Colorado before March 1.

Please review the following to determine whether this requirement applies to you:

• Do your payment plans have finance charges (interest)?

If “NO,” stop here. You do not have to register and pay the fee.
If “YES,” answer the question below.

• Have you offered or arranged payment plans more than 25 times either last year or so far this year?

If “NO,” stop here. You do not have to register and pay the fee.
If “YES,” please see below for instructions on registering.

Note: To be considered a “payment plan,” the dentist must have a written agreement with the patient that allows payment of the bill in more than four installment payments (not including the down payment).

Exemptions: The following activities do not trigger the filing requirements and fee payment:
• Accepting payment by a Care Credit charge, VISA or MasterCard
• Arranging a payment schedule where a patient makes payment for services in more than four monthly installments but no finance charge (interest) is imposed
• Billing a patient and charging interest when payment is not made within a certain number of days

Registration instructions:
If you answered “yes” to the questions above, you may need to complete an annual notification/registration form and pay a $50 fee to the state. Some dental offices have received a letter from the state attorney general about this registration. Most dental offices that have received the notification were identified as a result of their affiliation with a third-party used to help collect outstanding balances.

The registration form can be accessed at You must file by March 1, 2010. Failure to register on time can result in fines of up to $5 per day.

Once a dental office files initial notification, it will receive annual notification forms and may be subject to compliance examinations, disclosure requirements, credit limitations, as well as other requirements. You may want to check with your business attorney to find out what requirements would apply as a result of your registration.

Tips to avoid the registration and fee:
Dentists can avoid having to register and pay these fees by following these helpful hints:

• Do not apply finance charges/interest to your payment plans.
• If you offer payment plans, minimize the number of installment payments. Keep the plans to a down payment and four or fewer equal subsequent payments.
• Limit the number of payment plans you make or arrange less than 25 per calendar year.
• For more extensive payment plans, refer patients to Care Credit or a similar patient financing company.
• Be aware that if you assign your payment plans to a third party for collection (billing/collection agency), your name may be added to the state’s mailing list for filing notification letters.

If you have questions about these requirements, please contact Pam Brockhaus or Jennifer Goodrum at the CDA at 303-740-6900 or 800-343-3010.

Please Note: This material is intended for general informational purposes only and is not formal legal advice. You are urged to consult with individual legal counsel concerning your own specific situation or any specific legal questions that you may have.