An Illinois law that took effect on Jan. 1, 2025, places restrictions on dental practices arranging third-party patient financing for their services with an intent to protect patients entering into deferred-interest and open-end credit plans.
The statute was significantly pared down from the originally proposed version. Initial drafts would have eliminated deferred-interest patient financing plans, required dental offices to provide detailed disclosures of treatment costs to patients before treatment and financing, and prohibited pre-charging patients for services not yet rendered. The Illinois State Dental Society contended that the initial draft of the statute would present a significant administrative burden on dental offices and reduce access to critical patient care. The final version of the law eliminated many of these provisions and focuses on patient financing practices that the legislature believes could lead to conflicts of interest and reduce transparency.
Under the new law, dentists and their employees and agents are prohibited from the following:
- Arranging, brokering or establishing financing extended by a third party to a patient.
- Completing any portion of a patient’s application for financing extended by a third party.
- Providing an electronic device so the patient can apply for financing extended by a third party in the dental office.
- Promoting, advertising or providing marketing or application materials for financing extended by a third party to a patient who has been administered or is under the influence of general anesthesia, conscious sedation, moderate sedation or nitrous oxide; is being administered treatment; or is in a treatment area, such as an exam or surgical room.
The law specifies that “arrange for, broker, or establish” means “submitting an application to a third-party creditor, lender, or creditor’s intermediary for approval or rejection on behalf of a patient.” Application submission includes use of any third-party creditor’s patient software, URL or QR code that is customized with the practice’s branding. A practice is not prohibited from using third-party creditors’ marketing or advertising materials if they are not customized for the practice.
It would be acceptable to do the following:
- Maintain creditor brochures in waiting rooms.
- Provide patients with financing applications that are not branded for the dental practice before or after treatment, as long as the required notice is given and the patient is not in a treatment area.
- Provide paper copies of third-party financing applications, so long as the patient is solely responsible for filling them out.
The law also requires practices to give patients a specific written notice as it appears in the statute, called a “Dental Services Third-Party Financing Disclosure,” when discussing third-party financing options or providing an application for such financing. This written notice must be provided beginning Jan. 1, 2025, whenever the practice is discussing third-party financing with patients or providing patients with applications for third-party financing. The specific language and format are included in the statute and cannot be written or changed by the practice.
Penalties for violation are tiered, beginning at $500 for an initial violation and up to $1,000 for each additional violation. The Illinois Department of Financial & Professional Regulation also may take “other disciplinary action” if the provider’s action rises to the level of improper conduct under state law.
McGuireWoods will continue to monitor state legislative activity in this and related areas. Please contact the authors with questions or for assistance in preparing the written notice required by the statute.