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Texas, Maryland enact legislation that prohibits forced discounts on services

July 20, 2013
Texas Gov. Rick Perry signs S.B. 632. From left, Tom Annunziato, O.D.; TOA Past President Steve Nguyen, O.D., TOA Third Party chair; Rep. J.M. Lozano (R) (bill author); Bj Avery, TOA executive director; Fred Farias, O.D., TOA president-elect; Gov. Perry (seated); Ron Hopping, O.D., AOA immediate past president; Kevin Gee, O.D., TOA president; Tommy Lucas, O.D., TOA legislative chair; and Joe DeLoach, O.D., TOA past president.

Texas Gov. Rick Perry signs S.B. 632. From left,
Tom Annunziato, O.D.; TOA Past President Steve Nguyen, O.D., TOA Third Party chair; Rep. J.M. Lozano (R) (bill author); Bj Avery, TOA executive director; Fred Farias, O.D., TOA president-elect; Gov. Perry (seated); Ron Hopping, O.D., AOA immediate past president; Kevin Gee, O.D., TOA president; Tommy Lucas, O.D., TOA legislative chair; and Joe DeLoach, O.D., TOA past president.

Several state affiliates are promoting legislation to stop an unfair business practice used by vision plans to force optometrists to give discounts on services and materials not covered by a patient’s vision plan. The practice forces optometrists to charge varying prices to patients for services and materials not covered under the contract. The legislation is based on similar legislation pushed by dentists that has passed in at least 30 states that prohibit forced discounts on services.

The optometric version of the legislation was first passed by Kentucky in 2012 and then passed by both Maryland and Texas in 2014. The optometry version of the law would prohibit anti-competitive behavior by health plans and vision plans and allow providers and patients to reach reasonable fees for services and materials. Also, it will stop health and vision plans from hurting small businesses by forcing unfair contract terms on them.

Regarding the Maryland bill, John L. Burns, O.D., Maryland Optometric Association president, called the passage of House Bill 1160 a victory for optometry and for all vision care providers in Maryland.

He noted that Maryland’s bill not only prevents insurers from mandating optometrists provide discounts on uncovered materials and services, but goes one step further: it also provides protections against contract provisions forcing optometrists to join a discount vision plan in order to participate with the insurer’s major medical network.

“The MOA is thrilled to have passed this piece of legislation in just one year,” Dr. Burns added. “There is a lot more to do, but this was a great start.”

On the Texas bill, Thomas A. Lucas, Jr., O.D., legislative chair for the Texas Optometric Association, said, “This is an important victory for the profession of optometry, not only now but for the future. We are happy that Texas could lead the way on this state-by-state initiative to restore a small amount of independent decision making to our practices.”

“What this bill is really about is common-sense fairness to our small businesses. This law sets what most consider to be very reasonable and obvious limits on what is out-of-bounds in a contracting situation that can be inherently unfair to the small business optometrist,” said Dr. Lucas. “Allowing optometrists to be competitive and responsive to local marketplace conditions for products and services beyond the defined covered benefit is a good thing for optometrists, employers and patients.”

When talking to legislators, it’s important to point out that this bill does not mandate a benefit on the insurance companies or raise insurance costs for patients because this requirement does not require health plans, vision plans or consumers to add any additional services to their plan. In addition, the bills do not prohibit one business from forcing another business to reduce its charges for services when it does not pay any part of the purchase cost.

State leaders interested in the legislation should attend the 2013 State Legislative and Third Party National Conference Sept. 8-9 in Washington, D.C., to learn more about this bill. For more information, contact Brian Reuwer at the AOA’s State Government Relations Center at 703-837-1343 or via email at breuwer@aoa.org.

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