Around the country, states have been enacting laws in recent years to prevent dental plans from reimbursing dentists using single-use credit cards in either electronic or digital format as the sole payment methodology. These cards are commonly referred to as “prepaid debit,” “stored-value credit cards” or “virtual credit cards.” These types of payments can result in lost revenue for dental offices due to the credit card processing fees incurred in cashing out the card. Sometimes, the dental plan issuing the stored-value credit card even receives some kind of financial incentive or additional revenue from the credit card vendor for issuing the card.
In addressing this type of inequitable payment structure, many states have recently enacted notification requirements as well as opt-in or opt-out provisions around the stored-value credit card payment methodology. Many states have required dental plans to offer at least one other payment methodology to providers – including Electronic Benefits Transfer (EBT) payment or traditional paper check.
In Colorado, there is a Division of Insurance policy (Bulletin B-6.3) updated in October 2019 that provides guidance to Colorado regulated insurers on the use of stored-value credit cards. This policy addresses many common concerns articulated by Colorado dentists. Colorado’s policy outlines the following principles that should be honored by carriers offering payment by single-use credit cards in either electronic or digital format:
- Stored value credit cards should be used only upon the affirmative opt-in to the payment methodology by a dentist, and the opt-in should be accompanied by a full disclosure of card terms;
- A dentist may revoke his/her opt-in to use of the cards at any time;
- A dentist should be given the option to receive claims payment by other methods, such as by traditional check, draft or EBT;
- Stored-value credit cards should be able to be cashed at the dentist’s usual financial institution with no fee, access charge or surcharge for cashing (and the dentist must be notified if there are fees to use the card at other vendors);
- Dental plans are responsible for any outstanding amount that has not been cashed from the stored-value credit card in the event of insolvency or insufficiency of funds by the issuer of the card.
The Division of Insurance guideline infers that lack of compliance with policies outlined in the bulletin could be considered unfair competition or a deceptive trade practice.
If a dental plan is not currently complying with Colorado law, rules or policies, sending them a copy of the relevant guideline can often be helpful in getting a favorable resolution to the concern. A direct copy of the Division of Insurance guidance can be accessed at: https://drive.google.com/file/d/0B7EeY5Lrg3_qbFNKd3Z3SEdLYTQ/view. If Colorado regulated dental plans are continually non-compliant with this policy, a complaint can be submitted to the Colorado Division of Insurance at: https://www.colorado.gov/pacific/dora/ask-question-make-complaint-division-insurance.