Committee advances bill requiring notice, choice for dental offices when insurers use virtual credit cards

House Industry, Business and Labor Committee members advanced House Bill 1471 after hearing testimony from the bill sponsor, insurers and dental representatives who said some carriers are mandating virtual-credit-card reimbursement that imposes processing fees on dental practices.

Representative Nels Christiansen, sponsor of HB1471, told the committee the language was developed with the North Dakota Dental Association and the Insurance Department to give dental offices “transparency and freedom of choice.” He said the bill “requires that insurance carriers notify dental offices if they plan to use virtual credit cards for their method of payment and also to notify dental offices of all the processing fees that are included in this method of payment type.”

The bill would not ban use of virtual credit cards, Christiansen said. Instead it would require carriers to disclose fees and offer a non–fee-bearing alternative — for example paper check or ACH — if the dental office requests it. “A dental practice or insurance carrier can still elect to use virtual credit cards if both parties agree to the method of payment process,” Christiansen said.

Crystal Bartusco of the North Dakota Insurance Department testified the department assisted in drafting the bill and is neutral on policy. She explained the bill covers the provider agreement between dentist and carrier (a “preferred provider arrangement”), rather than the consumer’s dental benefit plan: “Dental health benefit plan is actually the plan that you purchase as a consumer under North Dakota definitions. So this has nothing to do with the actual insurance policy itself. This is really the provider contract and the dental contract.”

Representatives of the dental community described how virtual-card processing fees affect small practices. William Sherwin, representing the North Dakota Dental Association, told the committee carriers sometimes require payment via virtual credit cards and those cards can carry processing fees that the dental office must absorb. He urged transparency and the right to opt out, saying carriers sometimes “share these profits from these fees with the credit card companies” and that providers are “losing out on that 3 to 5% window.”

Committee members asked whether virtual cards speed payment; witnesses said yes, timing can be faster than a paper check but the concern is the additional, sometimes sizable, processing fee. Witnesses and the sponsor said legislative council prepared a technical amendment (at the Insurance Department’s request) to place the language in the correct code section; the committee adopted that amendment by voice vote.

After testimony and brief questions, the committee voted to give HB1471 a do-pass recommendation as amended. The record shows the amendments carried by voice vote and the committee approved the do-pass motion in a roll call (do-pass as amended). The do-pass motion was made on the record by Representative Grimberg and seconded by Representative Koppelman; the roll call recorded unanimous "yes" votes from members present.

Why it matters: dentists and small dental practices told the committee that mandatory use of high-fee payment methods can materially reduce reimbursement and that requiring notice and an opt-out preserves practice-level choice while allowing carriers and offices to agree to card use where appropriate.

What the bill would change: insurers would be required to notify dental offices before using virtual-credit-card reimbursement, disclose processing fees tied to that payment method, and give the dental office the option of an alternative, lower-fee payment method (for example ACH or paper check).

Next steps: the committee recommended a do-pass on HB1471 as amended; the bill will move to the next step in the legislative process per committee procedure.