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S 704

Enacts the New York gift certificate scam prevention act

2025 Regular Session Introduced by Liz Krueger

The bill bars insurers from forcing credit-card–only payments to dental providers without consent, and requires fee disclosures and remittance advice with electronic payments.

ORDERED TO THIRD READING CAL.1338
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WeVote Research Nonpartisan
Bill Summary · S 704

Summary — S.704 (Senate No. 704) — An Act relative to the use of virtual credit cards by dental insurance providers

Note: The header in the request mentioned a "New York gift certificate scam prevention act," but the bill text and docket provided are for Massachusetts Senate No. 704 (filed Jan 14, 2025 / introduced Feb 25, 2025) and address the use of virtual credit cards and other electronic payments by dental insurers. This summary covers the actual bill text provided (Massachusetts, dental insurer payments).

Purpose / Intent

To protect dental care providers from being forced to accept credit‑card–only payment methods (including virtual credit cards) by dental insurers, to require clear disclosure of any fees tied to electronic payment methods, and to ensure providers receive remittance information (explanations of benefits) with electronic payments.

Key provisions

  • Prohibits contract terms that make a credit card payment the sole acceptable payment method from a dental insurer to a dental care provider.
  • If a dental insurer initiates payment by credit card (including virtual credit card), it may only do so with the dental care provider’s express consent.
  • A provider’s decision not to accept a payment method remains in effect until the provider elects otherwise or a new contract is executed.
  • Where providers accept electronic funds transfer (EFT) payments (including virtual credit cards), the dental insurer must:
    • Notify the provider of any fee associated with a particular payment method.
    • Advise the provider of available payment methods and provide clear instructions on how the provider can select an alternative payment method.
    • Remit, or associate with each payment, the Explanation of Benefits (EOB) / remittance advice.
  • A dental insurer using standard HIPAA-format dental electronic funds transfers and remittance advice transactions (citing 45 C.F.R. §§ 162.1601–162.1602) may not charge a fee solely to transmit the payment unless the provider has agreed to the fee.
  • Dental care provider agents (third‑party billing agents) may charge reasonable fees for value‑added services (transaction/data management, portal services, etc.) beyond bank transmittal fees.
  • Definitions included: “electronic funds transfer payment” (other than standard HIPAA dental EFT/remittance), “dental care provider” (licensed dental professionals, labs, durable medical equipment providers who separately bill enrollees), “dental care provider agent,” and “dental insurer” (broadly defined to include disability insurers and various service corporations and designees).

Who is affected

  • Dental care providers (individual dentists, dental clinics, labs, DME suppliers) — gain protections against mandatory credit‑card–only payment terms and better fee transparency.
  • Dental insurers and their designees — required to obtain consent before imposing credit‑card payments, to disclose fees, and to attach EOBs to payments.
  • Third‑party billing agents — may continue to charge reasonable, disclosed fees for added services.
  • Patients/enrollees — indirectly affected insofar as payment flow and potential administrative costs/fees may influence provider operations.

Procedural status & timeline (from provided docket)

  • Filed: Jan 14, 2025 (Senate Docket No. 694). Introduced in Senate: Feb 25, 2025.
  • Referred to Senate committee(s): Financial Services; later actions reference Consumer Protection / Consumer Affairs & Protection.
  • Passed Senate: June 11, 2025 (amended on third reading, 704A, June 5, 2025). Delivered to Assembly and referred to Consumer Affairs & Protection on June 11, 2025.
  • Hearing(s) scheduled in Assembly committee: October 30, 2025 (times updated).
  • Companion/related measures listed: multiple chamber and prior-session bills (e.g., HR 1565, A 7916, SD 694, S 9900).

Notes on enforcement and limitations

  • The text specifies consent, disclosure, and remittance rules but does not set out explicit penalties or enforcement mechanisms within the excerpt provided.
  • The bill cross‑references federal transaction standards (45 C.F.R. §§ 162.1601–162.1602) for electronic dental remittance transactions.

Potential impact

  • Increases transparency and provider control over payment methods; likely to discourage insurers from unilaterally switching providers to virtual credit cards that carry transaction fees.
  • May require insurers and payers to update billing/payment notice procedures and systems to provide fee notices, alternative method selection instructions, and to attach remittance advices to EFTs.
  • Could shift some costs or administrative burdens (or negotiations over them) between insurers, providers, and third‑party billing agents depending on consent and agreed‑upon fees.

Compiled from official sources — confirm details with the bill’s official record.

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