The first NYSDA bill that was signed into law by Gov. Hochul, as Chapter 647 of the Laws of 2025, was the NYSDA virtual credit card (VCC) bill - A.3986-A (Bores) / S.2105-A (Cooney). The law takes effect on June 17. The new law required agreed-on chapter amendments that were passed in 2026 as Chapter 33 of the Laws of 2026.

Chapter amendments are previously negotiated changes to a law that the governor insists on as a condition of signing legislation into law. In this case, the chapter amendments were designed to close a loophole that could have allowed insurance companies to delay payment and evade New York’s prompt claims payment law due to wrangling over the method of payment with a healthcare provider. The new law makes it clear that insurance companies must honor a dentist’s choice of payment method without delaying payment over the choice of that method.

Absolutely critical to this new law is that once an insurance company sends the mandated notice that it intends to use a virtual credit card or other payment method that costs the dentist money to accept, the dentist has 30 days to refuse that method of payment and choose a method that does not impose any fees on the dentist. Dental practices need to prepare in advance to receive such required notices from insurance companies and be ready to react quickly to the notice because the 30-day deadline to choose a payment method begins to run from the date the notice is received from the insurance company. Every dental practice should have staff on high alert to watch for such notices and flag them for immediate action. However, bear in mind that the default position if no choice is made by the dentist is that payment must be made without imposing any additional fees on the dentist.  Nevertheless, it is not recommended to do nothing when a notice is received from the insurer but to respond to create a clear record that you want a payment method without added fees.  The insurers will only send notice when a provider plan contract is amended, renewed, or is new.  While the law took effect on June 17 and is not retroactive, you can always still contact an insurer to request payment without added fees even if you received no notice from the insurer.

The VCC bill was a major priority for NYSDA. As alternative payment methods increase, provider choice in payment method has been decreasing. Payment types such as virtual credit cards may apply higher processing fees than those agreed upon for other payment methods under insurer contracts with providers. As a result, providers are left on the hook to deal with bank charges and other fees levied to counter the evolving software and security needs for new payment types.

Unless insurers are required to seek permission, they often begin paying providers using costly alternative payment types without providing any notice. To increase transparency and provider choice, this legislation requires that insurers give appropriate notice and allow providers to elect to utilize an alternative payment method for claims that does not impose fees.