Louisiana unanimously approves comprehensive VBM regulations

In a win for patients and optometric practices, Louisiana unanimously passed a comprehensive new law regulating vision benefit middlemen (VBMs). 

The bill, S.B. 404 by Sen. Patrick McMath, was introduced in March, unanimously passed the State Senate and House, and was signed into law by Gov. Jeff Landry on May 22. It takes effect immediately. 

“VBMs narrow patient choice and steer care, and that limits patient access to independent providers and materials,” says Robert Janot, O.D., executive director of the Optometry Association of Louisiana. “On the practitioner side, there’s predatory contracting and harm to Louisiana small businesses, which most optometry practices are. Those pressures were a problem for us.” 

AOA President Jacquie M. Bowen, O.D., adds: "Louisiana's enactment of comprehensive VBM reform adds to the growing momentum across the country to hold plans accountable and put patients first. As more states take action to address anti-competitive practices, improve transparency and protect patient choice, Louisiana's leadership sends a clear message that policymakers recognize the need for stronger oversight of VBMs. The AOA applauds the Optometry Association of Louisiana and state leaders for advancing reforms that protect both patients and independent optometric practices." 

New law regulates VBM reimbursements and contracting, promotes transparency and oversight 

• Fair reimbursements: Fee schedules must be transparent and at least equal to the current Medicare or Medicaid rates. If not listed, compensation must be reasonable. 
• Contracting: VBMs must provide all contract details, procedures and fee schedules to providers prior to contracting and after contracting through electronic means. The law provides specific contracting timelines and allows providers to appeal if the provider is not credentialed. 
• Multiple plans: VBMs that offer multiple health, vision or vision discount plans cannot require a provider to participate in more than one plan as a condition of participating in a single plan. 
• Noncovered services: VBMs cannot require providers to give discounts on noncovered services and materials. 
• Audit protections: VBMs are prohibited from using “extrapolation” audits of participating providers. Any additional payments due must be based on actual overpayments or underpayments. 
• Reimbursement consistency: VBMs are prohibited from reimbursing at a different amount based on providers’ choice of optical lab, health record software, or equipment. 
• Choice of reimbursement method: VBMs cannot require providers to accept forms of payment in which a processing fee is assessed to get reimbursed. 
• Transparent provider and service listings: VBMs are prohibited from misleading enrollees about what services are fully covered. They are also prevented from “steering” enrollees to particular providers, retail establishments, or internet or virtual providers affiliated with the VBM. 
• Withholding reimbursement: VBMs are prohibited from withholding current or future reimbursement if, at the time the service or material was provided, the provider used the VBMs’ process to verify the patient’s coverage credentials. 
• Increased oversight: The law expands the regulatory authority of Louisiana’s Department of Insurance by adding VBMs to the definition of a health benefit plan. 

“This is a pro-patient, pro-small-business law,” Dr. Janot says. “It protects patient access and prevents the anti-competitive contracting that harms Louisiana providers.”