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Pennsylvania State Senate
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Senate of Pennsylvania
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted: December 1, 2016 03:17 PM
From: Senator Kim L. Ward
To: All Senate members
Subject: Eye Care Parity
 
I am re-introducing legislation amending the Insurance Company Law (Act 284 of 1921) to place certain restrictions on vision benefit plan participating provider agreements so eye care doctors have predictability in reimbursement rates and are not placed at a competitive marketplace disadvantage compared to other providers within the plans.

Patients across Pennsylvania are being significantly limited in the choices they may make when it comes to eye care by growing consolidation practices and policies implemented by insurers.

A growing number of eye care insurers now own and operate both commercial optical centers as well as large-scale optical laboratories. These are very profitable entities for the insurers, particularly in the way they are driving their own policyholders to them by limiting the choices their doctors may make when prescribing the best care possible.

I was made aware by an eye care provider in my district of the growing trend among vision benefit plans (VBPs) to severely limit participating provider reimbursement if they choose an optical lab not owned by the VBP or outright mandate its use through their provider contracts. Regardless of the doctor’s concerns over the quality of the lenses fabricated by a VBP-owned lab, the time in which it takes for the patient to receive lenses from them, or the amount charged, the doctor – and therefore the patient – is left with no choice in situations such as this one.

Furthermore, eye care insurers who own and operate optical centers are now competing with their own participating providers. These optical centers have huge unfair competitive advantages over the VBP’s credentialed providers because they have the names of all of their subscribers, and therefore can direct market to them to promote their optical centers over other eye care providers in or out of the network.

This all makes competition among providers, optical laboratories, many of which are small businesses located in our communities, and optical centers very skewed in favor of those employed by, owned and operated by eye care insurers and jeopardizes patient access.

My legislation attempts to restore a “level playing field” in the eye care industry, and ensure both patient freedom of choice when selecting a provider and providers’ freedom of choice to choose materials, fabrication and source of products and a uniform provider contract to allow a fair and equitable provider reimbursement.

The bill I am introducing will be similar to SB 978 of last session but changes made in the Senate Banking & Insurance Committee will be incorporated. Specifically, the legislation will:
  • Prohibit vision benefit plans in their provider contracts, from setting fees for non-covered vision services.
  • Require vision benefit plans to provide uniformity among providers in reimbursements for covered and non-covered services.
  • Prohibit vision benefit plans from limiting the eye care provider's choice of sources and suppliers of services or materials or the use of optical laboratories.
  • Stipulate that any changes in reimbursement rates must be agreed upon in writing by the eye care provider.
  • Prohibit insurance plans from requiring an eye care provider to participate in any other of the insurer's plans.
  • Prohibit insurance plans or programs from direct marketing their own eye care services to enrollees.
  • Make it an unfair method of competition and unfair deceptive act or practice under the Unfair Insurance Practices Act (Act 205 of 1974) if an insurer or a vision care plan violates the bill’s provisions with frequency sufficient to constitute a general business practice.
Co-sponsors of SB 978 were Senators Scarnati, Folmer, Rafferty, Gordner, Vogel, Boscola, McGarrigle, Yudichak, Brooks, Hutchinson, Sabatina, Stefano, White, Schwank, Leach, McIlhinney, and Corman.


Introduced as SB257