Texas’ vision plan law takes effect, court challenge continues

September 7, 2023
The nation’s first comprehensive state law prohibiting vision plans’ anti-competitive behaviors threatening the doctor-patient relationship and patient eye care access took effect amid plans’ legal challenge.
Courtroom Image - Texas’ vision plan

Vision benefit managers (VBMs) and health plans operating within Texas must now abide by new legal requirements taking effect as optometry’s advocates anticipate further court challenges over the “first-in-the-nation” vision plan reform law.

On. Sept. 1, Texas H.B. 1696 took full effect after a judge denied opponents’ initial attempt to halt implementation of the comprehensive reform law approved unanimously by the Texas Legislature and signed into law by Gov. Greg Abbot on June 16. Texas’ “groundbreaking legislation” checks many of the egregious anti-competitive, anti-patient policies and requirements mandated by managed care plans in dealings with doctors of optometry and therapeutic optometrists. Such is the case, the law comes at a pivotal time in the AOA and affiliates’ redoubled vision plan advocacy nationwide.

“The Texas Optometric Association (TOA) has sent a clear message that it will not tolerate abuses of optometrists and patients by vision plans,” noted Jennifer Deakins, O.D., TOA president, following H.B. 1696’s passage.

While further court challenges are anticipated, the TOA announced the creation of a dedicated fund to be used for the purposes of legal defense and implementation of H.B. 1696. All donations will be earmarked at TOA and used exclusively for legal, regulatory and compliance matters involving the implementation of H.B. 1696.

What’s in Texas’ vision plan reform law?

Nationwide, some 200 million Americans rely on supplemental preventive eye exam and materials benefits through VBMs. However, seeing as two-thirds of these people are covered by the two most dominant VBMs, plans can monopolize markets in communities and force costly mandates on doctors. In turn, doctors face a difficult decision of providing much-needed patient care in their communities or keeping their practices viable.

Texas’ law draws a line in the sand. Outlining direct counters to plan mandates spoiling the relationship between patients and doctors, the law reins in plans’ infringement on doctors’ independent judgement and patient choice caused by the lack of competition and untenably low fee schedules through vertical integration and market consolidation. Specifically, the Texas law prevents plan abuses, such as:

  • Patient steering.Plans cannot encourage or incentivize patients to seek services at any particular in-network provider, or at locations, retailers or e-commerce sites that the plan owns or affiliates with.
  • Doctor tiering.Plans cannot tier in-network providers based on noncovered service discounts, amount doctors spend on products or brands, etc.
  • Practice control. Plans cannot offer different fee schedules based on doctors’ practice or business decisions, such as lab or supplier choice or affiliations.
  • Chargebacks. Plans cannot utilize chargebacks when the plan isn’t paying for the cost of goods to be delivered.
  • Covered services.Plans cannot call a product or service “covered” when there is no reimbursement from the plan to the doctor nor can plans require doctors to provide a covered service or product at a loss.
  • Requiring unrelated information on claims. Plans cannot require reporting of unrelated or unneeded patient information to file a claim or receive reimbursement, e.g., prescription information or facial measurements and photographs.
  • Extrapolation in audits.Vision plans cannot use extrapolation as a technique to complete an audit.

Additionally, the Texas law will require plans to provide transparency about in- and out-of-network coverage for both patients and doctors, as well as require a 90-day notice for contract changes. But importantly, the law also empowers doctors to call out violations directly to the state.

Read more about the significance of Texas H.B. 1696, as well as how the AOA and affiliates are challenging vision plans.

If you or your practice are experiencing difficulties with a health or vision plan, please report this to the AOA Third Party Center at stopplanabuses@aoa.org. Review the recent actions that AOA has taken to challenge plans in the AOA Health and Vision Plan Action Report.

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