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If you've noticed your practice's credit card processing fees creeping up over the past few years, there's a good chance virtual credit cards are the culprit. Insurance companies have been quietly shifting claim reimbursements from checks and electronic funds transfers (EFTs) to virtual credit cards (VCCs) — and it's costing dental practices thousands of dollars annually in merchant fees they never agreed to.
This isn't a minor bookkeeping nuisance. It's a systemic shift that affects your bottom line, your workflow, and even your exposure to fraud. The good news: you have every right to opt out, and doing so is more straightforward than most practice owners realize.
Here's what you need to know and exactly how to take action.
What Are Virtual Credit Cards, and Why Are Insurers Using Them?
A virtual credit card is a single-use or limited-use credit card number generated digitally by a payer (in this case, an insurance company). Instead of sending your practice a check or depositing funds directly into your bank account via EFT, the insurer sends a VCC number — typically by email, fax, or through a payment portal — that your front desk then processes like any other credit card transaction.
From the insurer's perspective, VCCs are attractive for several reasons:
- Revenue generation: Insurers and their payment intermediaries earn interchange revenue (rebates from the card networks) every time your practice processes a VCC. In other words, they're making money on paying you.
- Float management: VCCs let payers control exactly when funds leave their accounts, improving their cash flow at your expense.
- Administrative convenience: For the payer, issuing a VCC is faster and cheaper than cutting a check.
The problem is that none of these benefits flow to your practice. In fact, the economics work against you.
The Real Cost to Your Practice
Merchant Processing Fees Add Up Fast
When your office processes a VCC, you're paying merchant fees — typically between 2% and 5% of the transaction amount. On a standard credit card swipe from a patient paying a copay, that's manageable. But on an insurance reimbursement of several hundred or even several thousand dollars, those fees become significant.
Consider a practice collecting around half a million dollars in annual insurance reimbursements. If even a portion of those payments arrive as VCCs, the practice could be losing anywhere from several thousand to over ten thousand dollars a year in processing fees alone — money that would otherwise land in the bank account in full via EFT or check.
TMR Take: VCC processing fees are effectively a pay cut on your reimbursements. Every percentage point you lose to merchant fees is money you've already earned being siphoned away before it reaches your account.
Workflow Disruption Is Real
Beyond the fees, VCCs create operational friction:
- Manual processing: Someone on your team has to receive the VCC information, manually key it into your credit card terminal, and reconcile it against the claim. This is slower and more error-prone than an EFT that posts automatically.
- Expiration and authorization issues: VCCs often come with tight expiration windows or spending limits. If your team doesn't process them quickly enough — or if the amount doesn't match exactly — the transaction fails and you're chasing down a new card number.
- Reconciliation headaches: Matching VCC payments to specific claims is more cumbersome than matching EFT deposits, especially when multiple claims are bundled onto a single card.
The Embezzlement Risk
Here's a dimension that doesn't get enough attention: VCCs increase your practice's exposure to internal fraud. When card numbers are floating around via email or fax, and staff members are manually keying in transactions, there are more touchpoints where funds can be diverted.
This isn't about distrusting your team — it's about reducing unnecessary risk vectors in your payment workflow.
Your Right to Opt Out
Here's the part most practice owners don't realize: you are not required to accept virtual credit cards as a form of reimbursement. Federal regulations and most provider agreements give you the right to choose how you receive payment from insurers.
The NACHA (National Automated Clearing House Association) operating rules and CMS (Centers for Medicare & Medicaid Services) guidelines support providers' rights to receive EFT payments. Many state dental associations have also advocated for practices' right to refuse VCC payments and demand direct deposit instead.
The insurance company may not make this easy — they benefit from VCCs, so they're not exactly advertising the opt-out process. But the mechanism exists, and thousands of practices have already made the switch.
How to Opt Out: A Step-by-Step Action Plan
This is something your office manager can start working on this week. Here's the playbook.
Step 1: Know What You're Dealing With
Before you start making calls, audit your current payment mix:
- Pull three months of payment records and identify which payers are sending VCCs
- Calculate the total merchant fees you've paid on those VCC transactions
- Note the specific payment intermediaries involved (companies like Zelis, ECHO Health, or VPay often facilitate VCC programs on behalf of insurers)
Having concrete numbers makes every subsequent conversation more productive.
Step 2: Educate Your Team
Make sure everyone who touches payments understands the issue:
- Front desk staff should know that VCCs are not the same as patient credit card payments and that the practice is actively opting out
- Office managers should be empowered to handle opt-out calls and correspondence
- Billers (in-house or outsourced) should flag any new VCC payments that appear after you've opted out
TMR Take: This is a great topic for your next team huddle. A ten-minute explanation of why VCCs cost the practice money and what's changing will save you weeks of confusion down the line.
Step 3: Contact Each Payer Directly
For each insurer sending VCCs, you'll need to request a switch to EFT or paper check. Here's how:
- Call the provider services line (not the member services line) and ask to opt out of their virtual credit card program
- Request EFT enrollment as your preferred payment method. Most insurers have an EFT enrollment form — ask them to send it or point you to it online
- Get confirmation in writing — an email or reference number confirming your opt-out request and the expected timeline for the switch
- Follow up if VCC payments continue beyond the stated timeline (it typically takes one to two billing cycles)
Some specific tips:
- For payers using third-party payment platforms (Zelis, Payspan, etc.): You may need to opt out through the platform directly, not just the insurer. Ask the insurer who facilitates their VCC program and get contact information for that entity.
- Be persistent: First-line reps may not be familiar with the opt-out process. Ask for a supervisor or the provider enrollment department if you're hitting a wall.
- Document everything: Keep a log of who you spoke with, when, and what was promised. This protects you if the insurer drags its feet.
Step 4: Contact the Card Issuer if Needed
If a payer is unresponsive or claims you can't opt out (you can), contact the credit card network directly:
- Your merchant services provider may be able to help you block VCC transactions from specific sources
- You can also explore chargeback or dispute mechanisms through your card network as a last resort
Step 5: Enroll in EFT With Every Payer
Don't just opt out of VCCs — opt in to EFT. Electronic funds transfer is the fastest and most secure way to receive insurance reimbursements:
- No processing fees on incoming EFT deposits
- Automatic posting to your bank account (no manual keying required)
- Clear ERA (Electronic Remittance Advice) that matches deposits to claims for easy reconciliation
- Reduced fraud exposure since funds go directly to your verified bank account
Most payers can set up EFT within a few weeks once you submit the enrollment form with your banking details.
What If a Payer Won't Cooperate?
It's rare, but some insurers make the opt-out process unnecessarily difficult. If you're stuck:
- File a complaint with your state dental association — many have advocacy teams that deal with payer behavior issues
- Contact your state insurance commissioner — payers are regulated entities, and regulators take provider payment complaints seriously
- Consult the ADA's guidance on EFT and VCC opt-out — the American Dental Association has published resources and template letters for this exact situation
- As a last resort, request paper checks — not ideal, but still better than losing a percentage of every reimbursement to merchant fees
TMR Take: We've seen practices recover meaningful revenue simply by switching from VCCs to EFTs across their top payers. This is one of the highest-ROI administrative tasks a dental practice can tackle — it requires nothing but time and pays dividends every month.
The Bigger Picture: Take Control of Your Revenue Cycle
Virtual credit cards are just one example of how third parties can quietly erode your practice's profitability. The broader principle here is that your revenue cycle deserves the same scrutiny as your clinical protocols. Small inefficiencies compound over time, and the practices that thrive are the ones that treat their business operations with the same rigor they bring to patient care.
If you're evaluating how your practice management software handles payment posting, ERA reconciliation, and insurance payment tracking, those capabilities matter more than most feature comparison checklists suggest. The right software can make it significantly easier to spot VCC payments, track opt-out progress, and ensure your EFT enrollments are working correctly.
Looking for dental software that gives you better visibility into your revenue cycle? Browse our independent vendor reviews to find the right fit for your practice, or take our practice match quiz to get personalized recommendations in under two minutes.