Sacramento, Calif. — CDA is deeply disappointed with Gov. Gavin Newsom’s veto of Senate Bill 1369, which would have restricted dental plans’ coercive collection of fees associated with virtual credit card (VCC) payments.
Dental plan use of VCCs to pay for dental services has exploded in recent years, resulting in high fees charged to dental offices that divert resources away from patient care and line the pockets of third-party companies. Unjustly high VCC processing fees can take up to 10% of the amount paid by dental plans for treatment, denying dental practices the full reimbursement they are owed for contracted services. This is compounded by coercive behavior that often forces dental offices to accept payment via VCCs.
SB 1369, authored by Sen. Monique Limón (D-Santa Barbara), would have addressed this predatory behavior by simply barring dental plans from using virtual credit cards as the default method when reimbursing dentists, and would have required plans to provide a clear and permanent opt out process. Dental plans are known to reinstitute the VCC payment method even after the provider opts out, sometimes as soon as the very next payment.
“CDA is proud to have worked with Senator Limón and the Legislature this year on SB 1369, a reasonable and balanced solution on a priority dental issue that received unanimous bipartisan support,” said CDA President Carliza Marcos, DDS. “This is a basic issue of fairness and stopping an underhanded tactic by dental plans that wastes health care dollars. Despite the very disappointing outcome and veto message on this bill, CDA is consistently shining a spotlight on the problems with the dental plan industry, and it’s clearly resonating with lawmakers. We will continue this work in earnest as we pursue comprehensive reform of dental plans.”
“It is unfortunate that SB 1369 was not signed into law,” said Senator Limón. “Dentists should have the information and choice on whether to accept or decline virtual credit card payment processing fees. I am grateful to have worked with our sponsor, the California Dental Association, on such an important measure that received bipartisan support in the Legislature.”
This issue is another example of how dental plan coverage doesn’t function as real insurance, despite the fact that dental care is essential to a person’s overall health. CDA has sponsored several laws enacted in recent years taking steps to hold dental plans accountable. This includes strengthening state regulatory review of plans, prohibiting denials of coverage for pre-existing conditions, restricting the use of waiting periods, improving transparency about the value of plans and enhancing provider network leasing requirements. CDA will continue fighting for stronger requirements that hold the dental plan industry accountable and improve access to dental care for all Californians.
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