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How virtual credit cards can cost your dental practice: avoid auto-enrollment

December 23rd, 2021 | 5 min. read

How virtual credit cards can cost your dental practice: avoid auto-enrollment Blog Feature

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As you become in-network with some insurance companies, you notice you have options for how you’ll receive payments from them. Since it’s a digital world, you’re probably thinking that a paper check in the mail is outdated, so you choose the virtual credit card option. 

But over time, you notice that every time you receive a claim payment in the form of a virtual credit card, you’re charged a merchant fee. At first, it may not seem like much, but as you accept more payments this way, this fee starts to add up. 

At Dental ClaimSupport we’ve seen how this unnecessary fee eats away at your profitability as a dental practice. Another frustrating discovery: Insurance companies can impose auto-enrollment that puts you into their virtual credit card payment program without a conscious choice on your part. 

This is why we always recommend that you don’t accept payment in the form of virtual credit cards, pay attention to your enrollment status, and call and ask the insurance company for a check. 

In this article, we will explain why getting a paper check is a better alternative to a virtual credit card. We will also explain why (if there is an option) your best option may be to receive electronic funds transfers (EFTs) from insurance companies. 

What is a virtual credit card?  

Some dental insurance companies offer options for forms of payment you can receive for your insurance claims. One of these options is a virtual credit card. A virtual credit card allows the insurance company to transfer money electronically with a temporary credit card number that is never used again. It’s one way for your practice to receive insurance payments for procedures covered by the patient’s plan. 

Insurance companies provide the option to use virtual credit cards instead of paper checks for their own convenience - it saves them the overhead of printing and mailing checks. 

Now let’s explain two important reasons that you should avoid accepting virtual credit for insurance payments:

Virtual credit cards have high merchant fees

Should you really have to pay to receive your claim payment from insurance? How does it make sense to pay for reimbursement for the services you’ve performed? 


Are you aware of the 6 myths about submitting dental insurance claims? Learn the truth about those myths in our Learning Center. 


Merchant fees for virtual credit cards can range from 3% to 5% and aren’t worth the cost especially if you have a high volume of claims. It's a common mistake for those working in the front office to dismiss this fee because it seems small and you want automatic deposits going into your bank as soon as possible

However, the convenience factor comes at a high cost, especially when you compare the pennies it costs to take EFT (electronic fund transfers) or paper checks. 

Let’s do the math. Say the merchant fee for one virtual credit card transaction is 3% 

Now let’s say the insurance payment is $200. 3% of $200 is $6, which seems small. That’s just for one transaction  That fee comes out of your reimbursement, and when you multiply that by every single treatment covered by insurance, that fee is going to hurt your bottom line.

If you create 20 claims a day at $200, that’s $120 a day that you’re missing out on. What about the entire year? There are 365 days in a year, but let’s assume your practice is only open on weekdays and closed for a few holidays. 

Over a year, this is a staggering hit to your overhead: $120 x 251 days a year = $30,120 in merchant fees

You now know just how much virtual credit cards could cost you. Now let’s get into why virtual credit cards are, for lack of better words - a little scammy. 

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Avoid involuntary auto-enrollment

You can steer clear of high-cost options by avoiding virtual credit cards as an insurance payment option. But there’s another danger you need to watch out for: auto-enrollment by default. 

If you simply accept payment from insurance in the form of a virtual credit card, you will likely be auto-enrolled into their virtual credit card program, even if you weren’t before. 

Your payouts are now subject to those merchant fees that you want to avoid. 

Why do they do this? Why do they enroll you into a program you don’t want to be in? Because they can! And as we said, it saves the insurance company money by not mailing you a paper check. 

How can you avoid involuntary auto-enrollment into the virtual credit card program?

The answer to this question is pretty simple. If you’re doing this yourself, you’ll have to be being okay with a delayed insurance claim payment and picking up the phone to call the insurance company. 

Do NOT accept these virtual credit cards as payment from insurance. 

Talk to the insurance company, and tell them you want payment in the form of checks mailed to your office. This will prevent your dental office from being enrolled into their virtual credit card program and in turn, save your practice money from paying those merchant fees. 

You can also opt-out of virtual credit cards by going to echovcards.com. You can opt-in for EFTs with ECHO as well, but they charge a fee to process. The caveat is that most practices opt-out of virtual credit cards due to the merchant fee, so turning around and signing up for EFTs through them is not really a good idea since they do charge the fee to process EFTs. You would just need to weigh the costs of both fees. 

If the dental insurance company gives you the option, choose to receive payments via EFTs

If you don’t want to deal with paper checks by mail, but you want to avoid the merchant fees from virtual credit cards, you may have the option of electronic fund transfers (EFTs). 

This form of payment is similar to a direct deposit. There may be no fee or a nominal one, under $1, as ACH transfers are typically quick deposits straight into the dental practice’s bank account. Of course, some people prefer checks because there is a physical copy for record-keeping. This is just another option to be aware of that won’t cost your practice. 

Don’t get us wrong, EFTs have some disadvantages too. Learn about the upside and the downside of EFTs in our Learning Center to make an informed decision when choosing your payment method from insurance.

Don’t let dental insurance cost your dental practice money

Avoiding merchant fees and default enrollment in virtual credit card programs can save your dental practice a lot of money. Insurance companies can take unfair advantage of your busy schedule by bombarding you with fine print, and many dental teams never notice when new fees have crept into the insurance billing process. 

That's why we always recommend you work with a team of billing experts who are trained to watch out for insurance tactics like this and who can guide you as you participate with insurance networks.

Your expert biller at Dental ClaimSupport can chat with you about these payment options and help you choose the right option for your dental practice. After all, our billers are pros at getting that claim paid by insurance and making sure you receive everything you’re owed. 

Learn more about how you can get your insurance claims paid quicker and easier by scheduling a call with one of our expert dental billers. 

See your practice thrive with healthier claims income

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