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Are Virtual Credit Cards (VCCs) bad for your dental practice?

October 29th, 2020 | 8 min. read

Are Virtual Credit Cards (VCCs) bad for your dental practice? Blog Feature

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Are Virtual Credit Cards (VCCs) bad for your dental practice?

“Show me the money!”

Tom Cruise said it right.

Sometimes that’s all we care about when it comes to collecting money from dental insurance companies. Cash flow in all forms should be welcome, right? Well, maybe they shouldn’t.

There are always claims that need additional information, attention, and research. Therefore, when a payment, virtual credit card or not, arrives in your mailbox it’s tempting to just get it in the bank. Especially since the claims game, from clearinghouse, to insurance company for processing all the way to payment is like pulling teeth.  Yes, pun intended. 

We at Dental ClaimSupport, an outsourced dental billing company, play the claims game on a daily basis. We specialize in making sure dentists get paid by eliminating insurance strain. We also point out where offices can be more efficient and cost saving.  If you accept dental insurance, then you have undoubtedly run into a virtual credit card payment.

This is a standard occurrence for dental offices across the United States.

Many dental insurance companies have transitioned from standard check payment or direct deposit to these virtual credit card payments. So what exactly is a virtual credit card?


What is a virtual credit card?

A virtual credit card is a form of claim payment from insurance companies. VCCs are printed on sheets of paper accompanying the Explanation of Benefits (EOB) provided by the insurance company. 

They show an image of a “credit card” including a credit card number, expiration date, and the exact dollar amount loaded on the card for the claim being paid.  

If you are like other dental practices, you LOVE getting payments.

Some forms of payments, such as the virtual credit card, can actually be less safe than others and costly to your practice.

So how are these virtual credit card insurance payments UNSAFE and actually TAKING your money rather than SHOWING YOU THE MONEY?

This article will explore the 5 reasons virtual credits cards may be unsafe and bad for your practice.


Problems With Virtual Credit Cards

Possible Embezzlement in your Dental Practice 

Embezzlement is the biggest issue with virtual credit cards.  Embezzlement experts warn against the use of virtual credit cards in a dental practice.  A virtual credit card payment may be mailed or even faxed to the office. This type of payment could fall into the hands of anyone, not just dental teams. 

Anyone with access to this virtual credit card payment may use the funds for any purchase from anywhere. 

Many people know about Square credit card readers. Square card readers can be bought on Amazon for less than $20. Basically any individual can own one and run credit card payments through the software. This presents a major problem. 

Image obtained from Amazon. All rights owned by Amazon.com.

Since anyone can own one, it’s safe to say the person in charge of payments and finances at any dental practice can own one too. This same person typically handles virtual credit card payments and posts them to accounts. This makes the practice vulnerable to embezzlement. 


Unfortunately, embezzlement does happen in any business and a dental practice is no different.  Embezzlers are constantly discovering ways to embezzle and the Square is another trend. Practice owners should be aware of these trends to do their best to safeguard their practice. 


Remember, virtual credit cards are printed on paper and are entered manually into credit card terminals. Handheld credit card readers, such as Square, allow for manually entered credit card numbers to accept payment, therefore nothing is actually swiped. This creates two options for embezzlement:

Embezzlers can have funds automatically deposited into their own account using this method.

Embezzlers can utilize these cards for online purchases on any ecommerce site.  

As a practice owner, you need to have a grasp on your own reports and monitor certain reports for a successful dental practice.


Less revenue for your practice due to merchant fees

The typical VCC merchant fee for a practice is 3-4% and can be even higher with cards that have to be keyed in. There is no reason a merchant service should make money from your insurance collections. 

3-4% of your collections add up quickly over the course of a month or year. By accepting VCCs, you’re decreasing your bottom line and leaving money on the table. The cost to insurance companies to mail you a check has been part of their cost of doing business since they’ve been in existence. 

To save on these costs, insurance companies are replacing paper checks with a virtual credit card. The follow up to get a claim paid can is time-consuming and costly all on its own. Paying a merchant service a percentage of your insurance collections after your own follow up work simply doesn’t make sense. 

The use of virtual credit cards passes on the fee to process the reimbursement to your dental practice and is like asking an employee to pay fees to receive their paycheck.


Running a virtual credit card requires more labor

Virtual credit card payments add an additional step to the posting process. Instead of simply posting an insurance payment to a claim and ledger, your staff now has to post that payment, then run the card through the terminal. 

This additional step compounded with the number of virtual credit card payments processed wastes time and creates an opportunity for additional errors.


Virtual credit card payments are NOT collected any faster than checks or EFTs

As stated above, a virtual credit card payment accompanies an EOB sent from the insurance company. In no way is this faster than receiving a standard check payment attached to the same EOB.

Although you may be told by an insurance rep that a VCC is a faster form of payment, it’s not always the case. Mailed envelopes are mailed envelopes… The USPS doesn’t magically know there is a VCC in an envelope as opposed to a typical insurance check, so how could it be any faster?


Streamline your payment types.

Processing many different payment types adds time to reconciliation and can create confusion.  Some dental software does not have the capability to apply these insurance credit card payments to actual insurance revenue. Instead they apply the revenue to patient credit card payments on your deposit report. 

Although your overall collection totals could be correct, your totals by payment type will be inaccurate having patient credit card totals inflated and insurance collections deflated.

Dental practices need to know how much of their income is patient income and how much is insurance income. By streamlining your payment types and only utilizing insurance checks or EFTs, you will never have to question how much of your income stems from insurance payments as opposed to patient payments. 

The best way to do that is to avoid virtual credit cards as a whole. 


How to avoid virtual credit card payment in medical and dental billing

While a lot of dental insurances are sending payments via a virtual credit card without your consent, you can opt out of receiving VCCs for future payments. Depending on the insurance company, get set up with EFTs or demand a check. 



Call the customer Service/provider payments number listed on the payment and ask to opt out of their virtual credit card payment system. Once your Tax ID has been opted out, you will begin to receive check payments, and all active virtual credit card payments can also be reissued as checks.

I’m Josh Smith, with Dental ClaimSupport. Now you know what a virtual credit card is and exactly how it may negatively affect your practice. Our expert dental billers at Dental ClaimSupport know the most common dental billing issues that plague most offices because we are one of their team members and see it daily. Our billing experts are passionate about helping you avoid the headaches of dental insurance billing

Consider our outsourced dental billing services to increase your production, collections, and maximize your profitability. 

Schedule a call with Dental ClaimSupport

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