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AADO Changes its Name to Union of American Eye Care Providers

AADO Hires Washington D.C. Anti-Trust Attorney David Balto, Esq.

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Recent Positive Events and News

  • After many years of relative silence, the American Optometric Association (AOA) has recently become actively engaged in the battle against unfair practices and policies by vision care plans, including in particular, VSP. A nice summary of AOA involvement and legislative activities can be found at This Link. The AADO welcomes and supports the AOA in helping defend optometry against these abusive and invasive practices, and encourages all optometrists to support the now pending DOC Access Act through contributions to the AOA-PAC.
  • VSP Postpones Implementation of New Frame Reimbursement Policy. On July 1, VSP announced that it was postponing implementation of its new frame reimbursement policy, a policy which the AADO believes constituted an illegal kickback scheme. According to VSP, the postponement is "to allow further review and consideration of frame reimbursements in relation to industry pricing and practices."  In their note announcing the postponement VSP asserts that the new frame policy was to "better align frame reimbursements with frame industry pricing." However, it is clear to the AADO that that's untrue since the new policy (which reduced reimbursement by 20%) applied only to non-VSP frames and was not applied if you spent a sufficiently large amount of money on VSP frames. Thus, in the AADO's opinion, the obvious purpose of the new policy was to force doctors to sell more VSP frame lines, and not to "align" with "frame industry pricing."
  • AADO Challenges New VSP Frame Reimbursement Policy as Illegal. The AADO has notified VSP by letter dated May 5, 2016, that it believes it's newly announced frame payment policy violates Federal Anti-Kickback Statutes and could subject both VSP and any doctor accepting it to criminal penalties up to 5 years in prison. The AADO has demanded that VSP immediately rescind this program. Read a copy of the AADO letter to VSP explaining the basis of the opinion by clicking here.
    • By letter dated May 18, 2016 (and received on May 23), VSP has officially responded to the AADO letter above. Click HERE to read VSP's reply to the letter above, explaining the change VSP is proposing to make to its new frame policy in response to the AADO concerns of illegality.
    • After analysis, the AADO does not believe this change alleviates the illegality because it does not eliminate the kickback earned for selling $6,000 of Marchon/Altair frames to VSP members covered under federal healthcare programs. Click HERE to read the AADO reply to VSP's General Counsel.
  • The American Optometric Association and the American Dental Association have introduced the "DOC Acess Act," bipartison legislation now pending in the U.S. House of Representatives (H.R. 3323). The AADO strongly supports the Doc Access Act, and encourages all optometrists to support the AOA in its efforts to get this bill passed into law. The AADO recommends contributions to the AOA PAC to support this legislation. The DOC Access Act would prohibit plans from:
    • Forcing discounts on noncovered services
    • Forcing doctors to participate in a vision or dental plan as a condition for participation in a medical plan
    • Restricting a doctor's choice of a lab.
  • Several states, including Virginia and Texas, are or have introduced legislation that would end several unfair business practices by vision care plans, including mandatory discounts on non-convered items and/or restrictions on what labs can be used. The Union's attorney, David Balto, is preparing to offer testimony before state legislators in support of these laws by explaining how they are pro-consumer and pro-competition.
  • Wilson v. Spectera. In a lawsuit brought by Georgia optometrist Steven Wilson, O.D., the Georgia Supreme Court upheld the trial court's ruling that Georgia's "Patient Access to Eye Care Act" invalidated the Spectera rule that required Spectera's eye care providers to obtain materials from Spectera. (Read Supreme Court decsion here.)
  • Acuity Labs v. Davis Vision, A private independent lab in Illinois has filed a Federal Anti-trust lawsuit against Davis Vision claiming that it's requirement that all lab work be performed at Davis' own lab violates federal anti-trust laws. About 150 optometrist from the Illinois Optometric Association and the Union of American Eye Care Providers have come out in support of this lawsuit, as has the AOA. (Read the Complaint filed in this case here.)
  • Union of American Eye Care Providers Meets with DOJ, the Union recently held a meeting with senior officials of the anti-trust division of the Department of Justice to discuss the anti-competitive effects and harm to consumers resulting from the vertical integration occuring in major vision care plans whereby the plans own the frames lines, lenses, and the labs in addition to being the vision care plan. (Read the Press Release here.)
  • States Pass Access Laws. Several states, including Kansas (Vision Care Services Act) and Vermont, have passed or introduced legislation that make some of the unfair VCP business practices illegal. An action virtually identical to the Georga Patient Access to Eye Care Act has been intruced in Illinois. Both the Kansas and Vermont bills prohibit rules requiring optometrists to offer discounts to patients on non-covered services and materials. (Read a Summary of the Kansas law here.)
  • VSP Ends Illegal Practice. Following an adverse ruling, VSP appears to have ended its practice of charging providers $2,000 to appeal an adverse audit finding. They continue to charge for the audit, which appears to be a violation of the terms of the VSP Network Doctor Agreement. They also appear to be re-instituting a form of "most favored nations" clause, which the United States previously asserted was illegal in an anti-trust lawsuit filed against VSP in 1994 (Read U.S. v. VSP Complaint, Impact Statement, and Final Judgment here), by disallowing contact lens material and fitting fees billed to VSP if those fees exceed fees charged to some non-VSP patients.

Recent Concerns and Issues

  • VSP, in a major policy change that takes effect his summer, announced that starting July 1, 2016, it will start reducing your frame non-VSP frame reimbursement by to 80% of the listed wholesale price unless you sell a Marchon or Altair frame, or purchase at least $6,000 of the VSP-owed Marchon and Altair frames in the prior 12-months. This will cause an immediate and palatable reduction in your bottom line, and is simply a reduction in your VSP reimbursement unless you sell a sufficient quanity of VSP-owned frames. The AADO believes this  is a form of illegal kickback and has demanded that VSP rescind this program immediately. Read the AADO's letter to VSP by clicking here.
  • VSP has modified their Network Provider Agreements as of their 2015 agreements. The modifications include provisions permitting VSP to charge you audit fees for the auditors time, potentially at rates of up to $200 per hour, permitting VSP to withhold funds owed to you as payment for amounts they claim you have been overpaid, even before you have an opportunity to appeal or challenge their determination, permitting VSP to put a secured lien on your practice, your personal property and your personal assets to ensure repayment of any amounts they determine they have overpaid you, and extending the time before you have an opportunity to have an appeal of an audit heard by a hearing panel to 5 months or more.
  • VSP has announced that commercial retailer/franchise Pearle Vision Centers is now an in-network participating provider for VSP, in direct conflict with its provider contract which says network providers cannot be "affiliated" with commercial retail or franchise locations because support for independent providers is the "cornerstone" of VSP's philosophy. Notably, Pearle is owned by Luxottica, which also owns VSP's primary competitor, EyeMed. So, we see the company that owns EyeMed now contracting directly with EyeMed's primary competitor, VSP.
  • Superior Vision, which merged with Block Vision and now provides benefits to about 8.5 million people, announced that it was going to begin a program where all contact lenses would be supplied by them and the independent providers would no longer be able to sell contact lens materials. This rule would not have applied to corporate and commercial owned providers, it only applied to independent practices and providers. As compensation for losing all revenue from contact lens sales, Superior would increase the contact lens fitting fee by $5. Though Superior has now put this program on hold, AADO views this plan, which would transfer your CL sales revenue to the VCP, as a window into what the VCP's may be planning, and has being profoundly detrimental to both independent Eye Care Providers and consumers of contact lenses because it limits consumer choice and eliminates competition.
  • EyeMed: In Texas and a few other states it is illegal for a plan to require discounts on non-covered services/materials. EyeMed is asking providers to give the discount anyway, and is notifying beneficiaries which providers having not agreed to provide discounts and which ones have.
  • VSP: VSP has notified providers that they will be offering a better (more money) frame benefit for their company-owned Marchon and Altair frames, and will be advising beneficiaries that they will obtain better benefits by going to a provider that carries those two VSP-owned frame lines.
  • Vision Care Plans are increasingly requiring that all eyeglasses be manufactured at their designated labs, prohibiting providers from using in-house labs or labs with favorable rates or services. This anti-competitive behavior inevitably results in higher costs to consumers, and lower quality of care that providers can offer their patients, in that patients must wait days, sometimes weeks, to receive glasses.
  • Blue View (Anthem): At least one OD is reporting that a patient advised him that, when calling to confirm benefits, she was told that she should purchase her contact lenses from 1-800 Contacts (owned by Blue View parent WellPoint) because, "the doctors are usually more expensive."
  • VSP: VSP announced that it has opened a VSP operated office on the campus of Apple to serve the eye care needs of Apple's 44,000 employees. VSP claims it will have minimal impact on surrounding doctors because only 6% of Apple employees are currently obtaining care from the VSP operated office.
  • EyeMed: EyeMed is now using your billing data to send YOUR patients a notice encouraging them to use their EyeMed benefits, reminding them it is time for an exam, BUT, listing up to 10 offices that accept EyeMed that are located close to the patient's home, including LensCrafters and other EyeMed owned locations. EyeMed says they will include your office. The impact, however, is to inform YOUR patients that they can user their benefits at commercial EyeMed associated locations like LensCrafters.
  • EyeMed: Under the new contract, Multi-focal lenses cannot be fabricated in-house unless you have your own surfacing system (effectively permitting LensCrafters to fabricate in-house, while most others must send the frame out to an EyeMed approved lab)
  • EyeMed: Under new contract, doctors cannot bill medical insurance without first obtaining the patient's approval, even if the visit is for a purely medical problem, and any patient for whom you can get a "good" refraction must be billed to EyeMed, whether or not medical conditions are present and whether or not the reason for the visit was medical in nature.
  • EyeMed: In at least some situations, providers cannot bill Aetna for annual or "routine" eye exams if the patient has EyeMed coverage, even if Aetna provides coverage for these services.
  • VSP: Has begun identifying high volume sellers of Marchon and Altair frames as "Premium" VSP providers and featuring them in on-line doctor searches and on the VSP website, giving those that sell a lot of VSP's own frames an advantage in obtaining new VSP patients. Those that carry and sell a lot of VSP product are displayed first in online searches, and those that do not are listed last.
  • VSP: In addition to their expanding network of VSP supported out-of-network commercial retail locations, VSP now has its "own" offices on the campus of certain large employers, putting them in direct competition with nearby VSP providers that often depend upon those large employers for a significant part of their business.