House Insurance Committee hears bill to require fee-free dental payment option

The Michigan House Insurance Committee heard testimony on House Bill 4860 at a committee meeting where the measure's sponsor and dental industry representatives described how so-called virtual credit card payments can reduce reimbursements to dentists and increase office administrative burdens.

House Bill 4860 would require that a health plan or nonprofit dental care organization offer at least one method of payment that is free from fees so that dentists receive the full agreed-upon amount for services. Chair Harris introduced the bill and called Bill Sullivan of the Michigan Dental Association to testify in support.

“This is an issue facing every dentist in Michigan, and it costs them anywhere from several 100 to several thousand dollars a year,” Sullivan said. He described virtual credit card systems that pay providers through a third party and then assess processing fees, saying those fees come off “the already reduced fee paid by the insurance company” and can cut another 2%–5% from the dentist's payment. Sullivan also said virtual card systems increase administrative work—staff must track balances, expiration dates and other information needed to access funds.

Sullivan clarified the bill does not ban virtual credit cards. “The bill does not ban the use of virtual credit cards. It only requires a dental insurance provider to offer at least 1 form of payment that gives the dentist 100% of the agreed upon amount,” he said. Under the bill, once a dental office chooses the fee-free method, the insurer would be required to continue using that method until the office revokes it, Sullivan said.

Committee members asked whether insurers could simply “gross up” virtual card payments to cover the processing fee. Vice Chair Tisdale asked whether an insurer could add an amount to the payment so providers net 100%; Sullivan said he was not aware of insurers doing that. Representative Fitzgerald asked whether the bill would make the choice of payment method the responsibility of the dental office; Sullivan confirmed the office would choose the fee-free option when it is offered.

Several organizations registered their support on cards and did not appear to speak: Kevin McKinney of the Michigan Association of Orthodontists; Christine Shearer of the Michigan Association of Health Plans; Parker Fisher of the Department of Insurance and Financial Services (DIFS); and Manny Lentine of the Council of Michigan Dental Specialties.

The committee took testimony and read supporting registrations but did not record a committee vote on House Bill 4860 during the session. The committee approved routine minutes from its Sept. 10 meeting and excused absent members before adjourning.