California dentists finally have clear choices and real protection when dealing with virtual credit cards for payments. Gov. Gavin Newsom yesterday signed CDA-sponsored SB 386 (Monique Limón, D-Santa Barbara), which accomplished its primary goal: Dental plans can no longer use a virtual credit card or any payment method that includes a fee as the default payment method when reimbursing dentists the amount they are owed for contracted services.
Beginning April 1, 2026, under the new law, dental plans must provide a clear and easy way for dentists to opt in and out of VCC payments. This requirement ensures dentists receive the full payment for dental services they provide.
Dentists had ‘too long contended with the predatory use of VCCs’
While dental practices previously could opt out of VCC services, the opt-out process was not often easy and not always permanent. VCC companies were known to reinstitute the payment method with its excessive fees — up to 10% per transaction — after the provider opted out, even as soon as the next payment owed. In many cases, VCC payments become the default payment method.
“Getting SB 386 signed into law is a huge victory for California dentists, who have contended too long with the predatory use of VCCs,” said CDA President Max Martinez, DDS. “No more must dental office staff make the difficult ‘choice’ of either spending hours repeatedly opting out of VCC payments or accepting the VCC payments with high fees in order to keep the practice running most efficiently.”
SB 386 is the latest achievement in CDA’s ongoing advocacy for comprehensive dental plan reform.
Plans must notify dentists of alternative payment methods and any fees
The new law also requires dental plans to notify dentists of alternative payment methods, how to select a payment method and any fees associated with each payment method.
Dental practices will know exactly what fees they’re paying so they can make an informed decision about accepting or refusing a payment method with excessive fees. Dentists who would like to use VCCs as their primary payment method can do so but only by written authorization — and, critically, they can opt out of VCCs again at any time.
Bill signing caps off two-year effort
Dentists might remember that CDA sponsored similar legislation (SB 1369) last year after the issue was brought to the 2023 House of Delegates by two local dental societies frustrated with dental plans’ predatory use of VCCs. SB 1369 passed the Legislature before it was vetoed.
Because fixing the VCC issue for dentists remained a major issue for CDA in 2025, CDA worked quickly to introduce the new bill with updates that resolved the governor’s earlier concerns. As a result, the new law does not apply if a dentist’s plan contract already specifically addresses the type of payment methods used for services rendered.
SB 386 passed both houses of the Legislature unanimously. Nearly 700 members joined CDA’s calls to action to contact their legislators, and the topic was a top priority during CDA’s eight advocacy days over the past two years.
The governor has until Oct. 12 to sign or veto remaining bills, including a bill co-sponsored by CDA to protect patients and providers from private equity interference. CDA will update members on the status of this bill and other advocacy successes in the weekly member newsletter, Inside California Dentistry. Members who are not receiving the newsletter or are not sure if they are receiving it are encouraged to review their CDA email preferences and subscribe or opt back in.
