Zelis lawsuit highlights broader optometrist payment concerns

Alleging a price fixing conspiracy, two dental care providers have filed a class action lawsuit against Zelis, the health care payment processing company, and several major health insurers. The complaint alleges that Zelis, with its health insurer clients, underpaid health care providers for out-of-network claims through a practice known as “repricing.” 

“Because Zelis sets the reimbursement rates for [out-of-network] services so low, often below operating costs,” the suit claims, “[p]roviders must lose money or decline to provide care.” 

The complaint alleges that this conduct has caused medical practices to stop offering services, merge with larger practices or even consider closing. The defendants seek damages and a stop to the behavior.

The AOA supports any actions that remove barriers between optometrists and their contracted fees for services provided, says Steve Eiss, O.D., chair of AOA’s Third Party Center Committee. “Unfair practices that divert any payment away from the provider should be eliminated,” he says. 

Zelis is on the AOA’s radar 

The AOA previously engaged Zelis for concerning practices. Earlier this year, Steven T. Reed, O.D., then-president of AOA, sent a letter to the company expressing concern about doctors being charged for patient care reimbursement. 

The AOA had received reports that doctors of optometry were being paid via virtual cards without an option to decline the virtual card payment, Dr. Reed wrote. He noted that virtual cards require the provider to pay credit card fees, decreasing their reimbursement. 

“For this reason, many providers are understandably opposed to incurring these fees,” Dr. Reed wrote, “especially when they did not choose to use this payment method and when they are faced with a manual, burdensome opt-out process that further delays payment.” 

The AOA had also heard from its members that when Zelis offered other payment options, providers faced additional burdens, Dr. Reed wrote. When a provider chose to receive a paper check by mail, for instance, they were unable to view their explanations of benefits online. This left no way for the doctor to determine what was being denied, he wrote, other than waiting weeks to see what was and wasn’t paid. 

In an emailed response, a Zelis representative wrote that providers can choose between ACH payments, virtual credit cards, and paper checks. The representative said Zelis only charges a processing fee for ACH payments, and that Zelis is not involved in virtual credit card processing fees. 

The email continued: “Providers are not obligated to process the virtual credit cards on their credit card terminals. There are two options: Either the provider can contact us to opt out of virtual credit card payments, or the provider may simply let the card expire (typically 45 days after it is sent), and it'll drop to paper check automatically.” 

The representative acknowledged that Zelis does not offer portal access to providers who receive paper checks. 

AOA continues fair payment advocacy 

The AOA’s Third Party Center has ramped up its advocacy for fair payment practices as fees on electronic payments become increasingly common. 

Members who are concerned about processing fees may request methods of payment that don’t require fees paid by the provider, Dr. Eiss says. “If any members run into barriers obtaining fee-free compensation,” he says, “we recommend they reach out to the AOA so we can outreach to the payer.” 

If your practice experiences challenges associated with a health or vision plan, or needs support on payer issues, contact the AOA Third Party Center at stopplanabuses@aoa.org.