Insurance & Commerce - Senate

So, uh, we're gonna start with the House Bill 1353. Uh, Senator Wallace is introduce yourself and you're welcome to begin. Thank you, Chairman, members and Chairman, I've got two witnesses I'd like to have come up with me at this time. Go right ahead. It's uh 1353. It's in the house. It's on the very in the under the blue in the back. Members and chair, just let, let them introduce yourselves so they if they get in the Uh, thank you, Mr. Chair. My name is Joe Sugg, an optometrist representing Arkansas Optometric Association. And thank you all. My name is Matt Jones. I'm an optometrist representing Arkansas Association and providers in Arkansas. Thank you gentlemen. Go ahead, Senator. Members, House Bill 1353 will address some of the unfair and anti-competitive practices being used against our Arkansas eye care providers and their patients. This bill will present measures to ensure the patient's choice and fair access to eye care while leveling the playing field between the large vertebrate integration. They should benefit managers in our small business owners, which are our local hometown doctors. Members's 27 states have passed laws concerning this issue. Texas and Oklahoma passed very recently similar laws within the last 3 years. In the past decade, There's been massive vertical integration in the vision care market with two VBNs, just 2. Controlling more than 80% of all vision plans sold. A VBM manages and sells vision insurance, but this is not like traditional insurance, like with our car or with our, our other health insurance. It's different because it's capped. It's a capped benefit that typically includes an annual eye exam and discounts on material. Here comes the major problem. The owners of these VBMs are also buying up all other aspects of the eye care industry. They've created a multi-billion dollar vertical integrated conglomerate that drives down competition. And controls competition. They, they provide and they manufacture most of the IFrames and the lenses on the market. They own and they operate most of the optical lamps where the lenses are made. They own the claim filing services that doctors use to get reimbursed. They're even buying doctors' offices. This, what this does, think back to the your local grocery store. You'll have, you'll have commodities. It might be Coca-Cola's one week. They call it a lead loss. They'll sell an item at a loss. To pull you into the store. And then they upgrade and sell you other items. That's what this VBMs are doing. The doctor's visits. Those fees are very low. Because they make up the money. When you have to start buying their lands. And to see succeed in this. An eye doctor has to become a good salesperson. When I go see my my optometrist sitting right there. I want him to be. The best optometrists that I can see. I don't care if he's a good sales guy or not. But that's what we're, that's what our industry is turning into. We're making our doctors become salespersons. So VPMs are still their patients to the doctor's office, not based on the quality of cure. But instead, those who can sell the most products or even in sensitized patients to see the doctors at clinics, the VPN's own. They'll often reimburse the doctor at a different rate based on where the doctor uses their lab, their services, or how much their their product that they sell. Again, Our optometrists are having to become sales folks. Instead of being all they can be as optometrists. We believe that VPMs and insurers. Should not have any influence. On whether a person seeks to get their eye care or material in the state of Arkansas, and there's no 0. There's 0 negotiation opportunities. You, they say, here's here's the price, this is what we're going to pay you. Take it or leave it. And there's a lack of transparency. They, they'll have uh internet uh. Ads where they'll show, hey, this doctor's a premier doctor. It's not based on how his skills are. It's based on how many of their products he sold. And with that I've got some witnesses and I would like to ask them to speak up and give their thoughts as well. So thank you, Mr. Chair and members of the committee. As I said, my name is Joe Sugg, and I'm a practicing optometrist and small business owner in Heber Springs, and here to represent the Arkansas Optometric Association, as well as my patients and colleagues around the state who help provide access to care and nearly 90% of the counties in Arkansas. Um, I appreciate the work by some of you and your predecessors in 2015 for unanimously passing Act 959, which was to curb some of the abuses our profession was experiencing at the hands of Vision Benefit managers or VBMs. While my colleagues and I use aspects of that law today. Uh, I'm here to ask you to expand on that law as a result of this massive vertical integration within the Visioncare market. Um, this vertical integration promotes self-dealing, anti-competitive practices, restricts patient choice and threatens patient access to care by the doctors they prefer to see. Uh, these vertically integrated multi-billion dollar conglomerates own the vast majority of frames and lenses. They own retail opticals where these frames and lenses are sold. They own optical labs where the lenses are made. They own doctors' offices, they own private equity that owns doctors' offices. They own group purchasing organizations and doctor alliances. They own claim filing services and electronic health records at doctors' offices use. And they own e-commerce sites that directly compete with their own in-network doctors. Are these companies use their power and influence to incentivize and steer patients to the products and locations they own. They also differentiate and tier doctors based not on quality of care, but on the amount of product each doctor's office purchases from these companies. We believe patient choice and access to care should not be affected or influenced by Vi benefit managers or the products and locations they themselves own. Ultimately we believe doctors within a particular vision benefit and network should be treated equally and not differentiated by the products they purchase, where they practice, and who who happens to own those products and locations. This bill also allows patients to combine and coordinate their vision benefits with their other insurance. In some cases, vision plans will not cover certain services they would otherwise cover if bill on a separate visit. Uh, we feel patients should be able to use the benefits they pay for and coordination of benefits allows for patient convenience and more efficient delivery of care. Some of these plans do this now, but not all of them. Um, there are certainly financial aspects of this bill and specifically reimbursement and my colleague Dr. Jones is going to speak more specifically to those aspects of this bill, so I appreciate your time. I'd be happy to answer any questions too once he's spoken. Thank you. All right, thank, thank you again Doctor Jones, you're signed up to speak for the bill. Do you want to wait and do that? Or do you want to, I mean, do you want to help? I would like Wallace, if it's OK with you, I'd like to follow that. All right, thank you. So again, yes, thank you, Mr. Chairman and thank you members of the committee. Like I said, my name's Matt Jones. I'm an optometrist. I live in Bloisville. I run and practice in clinics in Bravo, Osceola, West Memphis, and Perold, and I'm happy to be here today to speak on behalf of I care providers across the state and my patients. I certainly echo everything that Dr. Suggs said about the tearing and the steering and the transparency aspect. I just want to follow up with a little bit different discussion and share some information about these BBMs and the vision plans, so vision insurance, like Senator Wallace said is not traditional insurance in that a vision plan doesn't have any unexpected loss. It's a one year cap benefit. You get one routine eye exam a year, so it's not like traditional medical or or maybe pharmaceutical insurance where you don't know, you know, how often that might be used. So these VBMs are able to, you know, set premiums, set reimbursement. at what they need to continue to grow their profit and for 30 years now their profit has grown substantially. They've started using that profit to eat from the top down to create this market consolidation, you know what that, what that does, it certainly can push out providers in smaller areas, but more importantly, it's, it's making providers have to decide whether to accept the Vision Benefit plans or not, whether it makes sense financially in their offices. And what we're seeing is more and more providers deciding not to accept these insurances, which again is bad for the consumer in the smaller town. Um, I certainly have a choice to accept division plan or not. It's always been my practice philosophy that I'm going to accept any and all plans that I see a patient have or maybe a business have in my community, not because it's good business, because that's just what I feel is right, being in rural Arkansas. I practiced in Mississippi County, Greene County and Crittenden County. For the most part it's not an enrollee or a patient or a constituent's decision about what Vision Plan or VBM they have. It's based upon what, you know, maybe where they work. And so again, that's why I accept those plans for more than 30 years, there has not been an increase in service reimbursement from any of these plans in 1995, if they reimbursed 40 or 50 or 60 bucks. That is the exact same that we're getting today in 2025. Obviously a lot's happened in 30 years. Interestingly, the same corporations that refuse the increase in exam reimbursement also send frequent notices about their products and the costs going up, you know, the same vision exam that I give to a Medicare patient, a Medicaid patient, is the exact same that I would give to a person with vision insurance, these reimbursements had just become significantly lower than all, including Arkansas Medicaid. as providers, if we join together and decided not to take the plans that might help, but that's antitrust and that's collusion, and that is illegal. We can't do that. We have no negotiating power with these multibillion dollar companies, and we get these contracts of adhesion and take it or leave it kind of contracts. So again, unlike traditional insurance, they're allowed to make as much profit as possible. Market consolidation, and then control of the suppliers, which is the providers. So requiring vision plans to compensate eye care providers fairly. We have reimbursements that reflect the cost of doing business and in today's market we can see that they will continue to have our patients have access to quality care and you know, lower prices through Through competition. So thank you all for your time and we were happy to answer questions. Senator Murdoch. Thank you. um, thank you, Mr. Chair and thank you all for being here. Thank you, Cindy Wallace for bringing this. Just a couple of things I want to get clear on. So basically what you're saying I want to understand you is that Because of the capacity of power that these well first of all, let me ask you, who are these companies? Who name who we're talking about here. There's two major ones. I've got their names here. Um, one is VSP. And the others I met IMED. And those two together control 80% of all vision plans sold. OK, and what they're doing basically because there's nothing wrong with owning multiple companies. There's nothing wrong with owning um the components of industry, that's, that's OK, but what you're saying is happening is they're using that power to manipulate your ability to do business and ultimately the consumers' rates on what we pay and even our access to good vision care and vision plans. That's the problem, right, and center Murdoch, when we all go to the to our doctor optometrist. We go there. For our eyes we go there to keep our vision or to improve our vision. That's not where these VPNs make their money. That's why they lowered the price. They make their money by selling these right here, the lenses and the frames. That's the manipulation I'm talking about, that you're, you're a surgeon. Let me ask this question, and I'll move on. I think this is summarize for me right now until I hear from them. Who regulates, you know, with the PBMs we went through this, uh, I was part of the legislation as we tried to bring that for pharmacies into a um Reasonable state and continue that fight. Who does AID regulate? This OK, well, I'll be interested to hear from AID a little bit about this as well. I hear clearly what you're saying and I'm interested to hear the rest of the testimony. Thank you. And Dr. Jones, Dr. So, do you have anything to add? Now Senator Murdoch, thank you. I mean, that's a good question. Yes, it's, it is. The ranking distinguishing doctors based upon the who sells the majority of the products and then ultimately steering those patients to those practices that sell the majority of those products, and again that's what we inherently think is the not transparent part. Yes, sir. Senator Flowers. Thank you, Mr. Chair. Good morning. Um, I don't know if you will answer this, Senator Wallace, or the doctors there with you, but a couple of things, uh, one, Doctor Jones, I think you mentioned at the end of your presentation that it would be. Uh A violation of antitrust if All the optometrists, I guess you're including ophthalmologists too. Uh Decided not to accept these plans. I think that's what you said. So why is it that This isn't. A violation of antitrust on the part of the vision. Uh PVPs. Yes, ma'am. Thank you, Senator Flowers. Yes, this is providers, opticians, ophthalmologists, optometrist, we have its support for eye care providers. Um, there are now, to my knowledge, 3 FTC probes on a national level from accountability oversight committee, ways and means that have asked FTC to look into these monopolistic and vertically integrated antitrust policies. Again, they're just, they're they're huge, you know, we can't, we can't control that. From a local provider, but yes, my understanding is, you know, we can't in a city get together as doctors and say, all right, let's not accept this vision plan as that's antitrust, but that is something that's being looked at on the national level, and we are trying to hopefully take care of that on a state level to to level that playing field. I wonder how long has that been going on that the national at the national level they've been looking into it, I mean. It sounds like You're up against a very powerful and Uh, influential. And while they're looking up, I'd like to point out that the Ottoman optometrists in the eye surgeons are united on this. There's, there's not, they're not divided in the past we've had bills come forth where they're against each other. Everybody's united on this issue. And then my other question. Couple more uh chip. Uh Do these VPMs set doctor fees, it sounds like they lure you into the Doctor's office. With lower fees and then Up the price on the products. So Ma'am, you're spot on setting fees for your practices you're spot on. Uh, yeah, thank you for the, the question, Senator. I, you know, ultimately there's a contract between these companies and the doctors and that's where, as I mentioned, contracts of adhesion. I mean they set, they set those prices, they set the reimbursements. They set the language of those contracts. Yes, ma'am. Except that your, your price, they set the reimbursement prices with the with the doctors that can influence how much you're going to charge your patient overall. Well, and yes, ma'am, and we're, you know, we're ultimately bound by the terms of those contracts. And then last. Uh, some of what you're saying sounds like. False advertisement. On the part of the VPMs. If you say that they are uh putting out that this is a premier doctor and it's only based on how many products are not. Something else that you get maybe a rating from the I don't know, is there some kind of commission that governs optometrist and ophthalmologist looks like they would. Be the ones to say Who's The best who has the complaints against them or that kind of thing. You, you would think so, but what happens is they'll read a um Optometrists as a premier optometrist, and that's based on the amount of business he's produced. For that organization. Not based on his skill or his skill. So you're exactly right. Well, I'll tell you, uh, my eye doctor who I trust and I Assault after. Uh is for this bill. For that reason, I'm for the bill. Thank you. Senator Irvin. I just have a question on page 5. and this was an issue that kind of came into play with the PBMs, but where it says that The reimbursement paid can be, um, shall not be nominal or diminish de minimis, or less than the current calendar year, Medicare reimbursement rate for the covered service or covered materials provided to the enrollee. Do you have the same situation where some some things are above that right right now currently. Yes, Senator Irvin, thank you. um. So that the provision there with the nominal germanius addresses the practice where VBM's offer materials or services that are not fully covered or most often not covered, non-covered services, so that terminology nominal de minimis is the intent there is to prohibit VBMs from forcing providers to provide materials or services at the provider's expense, which I think is what you're getting at as far as what the PV and the pharmacists having to deal with. Yeah, but my, my, my concern though with the language, I mean it's it's not a huge, I'm just asking y'all if you have a concern, because what happened in that case is that things that were paid above the rate all of a sudden everything got paid at the very minimum because of the language in the bill. So it actually hurt. Pharmacist. Are you concerned about that because I'm not sure if you have things that are being paid above the Medicare reimbursement rate. But what I'm saying is when you set a floor, you know, everything will then come to that floor, which could be less in reimbursement for you. Does that make sense? Are you concerned about that at all that concern. We are not concerned because currently there's not reimbursement at that or or the reimbursements are below that rate, so, OK, OK, that's what I just needed to know. Thank you. Is any other questions from the committee? Seeing then we have Some folks to speak for and against the bill. We're going to begin with uh Lisa and hurt. She is against the bill if you would just introduce yourself and tell who you're with and you're welcome to begin. Good morning. My name's Lisa Ann Hert Forsyth and I represent the National Association of Vision Care Plans. This room is weird. It feels like an Alice in Wonderland kind of scenario happening here just cause y'all are so far down there. Um, so they, thank you for inviting. I don't know what happened here. Maybe the snowstorm, but thank you for allowing me to have a few moments to, to share our perspective. Since you've heard from the folks that are proponents of the pill. I wanted to present a couple alternative perspectives for your consideration. Um, firstly, I'd like to talk about the vision care market in general. This is the one small area of health insurance that's actually working. And by that I mean all of us, myself included, have been the unfortunate recipients of skyrocketing premium costs, higher deductibles, lower benefits, etc. in commercial health care. That's that's no secret. However vision care has not had those issues. As a matter of fact, we have kept our premiums relatively stable and our benefits relatively stable, which is incredibly unusual in the health care market. Unfortunately, we have done some analysis associated with this bill, and when you pass bills at this type, there will be unanticipated or anticipated, depending on your point of view, costs that will have to be passed along, and our initial cost estimates are that this will increase costs to Arkansas employers up to approximately 30%. Um, that's quite unfortunate, given, as I mentioned, that we've been the one area of health care that is stayed stable, so I just wanted to mention that out of the gate. Secondly, I wanted to talk about vision care in general and again I can use myself as an example as well as a lot of the people in this room. We are now at a point in the United States, where as of 2024, 70% of us require some sort of vision care assistance, and uh that's increased dramatically tied to a couple of things. One, quite frankly, the aging workforce, you know, put myself out there as an example, and the increased amount of screen time. We spent a lot of time looking at screens, so it's it's resulted in a lot of us, a lot more. of us as a percentage needing to go and get vision care services than used to be the case. So from a mathematics standpoint when we talk about why we've been able to keep our premiums low. The proponents of this bill are asserting that it is on the back of optometrists that this has happened when in case it's actually when in fact it's actually just basic mathematics, and that is as the demand for vision care has risen again because we have more Americans that have needed it now than ever before. We have more covered lives as a result, we've had a huge uptick in the percentage of employers that offer the coverage. So we've seen a 310% increase in the number of employers offering vision insurance, and that is directly tied to the increased demand in terms of folks that need those services. So when the denominator is bigger, we're able to take that risk and spread it over a larger base, and that is how we have been able to keep the premiums where they are now, of course, we have a finite number of people, so we're not going to be able to do that forever, right? Although at the rate we're going, the percentage of people needing care may may even increase more, but that has been the main driving factor. So I encourage you to think carefully about passing a measure that will increase the costs on a significant number of employers in this state. The other thing I will say is that there have been a number of studies done about the effectiveness in having vision care insurance in terms of driving patients to actually go and get a vision exam. I mean, we're all busy. We've all got a million things going on and it's not uncommon for us to say, oh, you know, I'll do that later or whatever, but if you have vision insurance, that is an independent predictor of whether you will be more likely to go and seek out a vision exam in the first place. So just having vision insurance encourages people to go. Furthermore, those plans help the patients to mitigate their out of pocket costs because we do provide a capitated benefit as the previous speakers mentioned, folks know when they go into to the eye doctor that they're only going to have to pay their copay, which is somewhere between 0 and 20 bucks. If we remove someone's ability if we remove someone's access to vision and care insurance, then they will be forced to pay for everything out of pocket. The reality is out of pocket costs are what drives affordability and access to care. There are a lot of folks for whom $200 which is what they would be paying out of pocket. would make the difference between whether they would choose to go and seek care, or whether they would not. And Knowing that going to the eye doctor, and this was not, I was surprised that my previous speakers didn't mention this. If you go to the eye doctor and you get a vision exam, you are also, it's not just about your eyes. Vision care exams are early predictors of a lot of underlying health conditions that you might not expect, like cardiovascular issues. Oh sorry, is there a question? OK Sorry, I didn't want to, if you want to ask something, uh, so there, there's, there are benefits to going and seeking your vision care exam beyond just getting your eyes checked. So it is an independent predictor of whether you will go if you have insurance. If you have insurance, it mitigates your costs, which is also a further Further reason for you to go and it's a growing market. More employers are offering it and more employees are needing the service, so there are lots of benefits. One thing I thought that was interesting is that we've heard several speakers mentioned things along the lines along the following. This is not health insurance. This is not like health insurance, and there have been various statements to that effect. I think that's interesting because on page 9, line 26 of this bill, they are proposing to add vision care plans to the definition of healthcare insurer. So I would argue, well, which is it? You're saying we're a healthcare insurer like Vision Care, which is what I would say we are, or you're arguing that we're not, but please don't testify that we're not healthcare insurance and then buried in your bill. literally at us to the definition of healthcare insurance. So those two things don't seem to quite jive. Um, I just wanna make sure I've had all the points. One of the largest concerns that we have with this bill is ironically what some of the proponents are claiming, which is the anti-transparency impact associated with some of the provisions. So in the language of the bill, and I can refer to the specific pages if you would like. There are a number of provisions that prohibit the vision care plans from sharing information to the consumers in the provider directories. And this is information such as the discounts that might be available to the consumer at one. at one provider versus another, etc. So if we are prohibited from sharing information like that by definition, that is the very, that is the very definition of anti-transparency, which is prohibiting folks from being able to make informed healthcare decisions based on pricing. And This is not good for Arkansas consumers, quite frankly. Lastly, I will draw an analogy to general health care since we are Vision Care plans. In general healthcare today, If you say you need an MRI of the knee, for example, and you're trying to make an informed decision about where to get that MRI. It may be important to you to know what you're out of pocket costs would be with going to person A versus person B. This has been the driving force behind the transparency efforts in the hospital realm. That could be really important information. for you to have. This bill would prevent us from providing that information. Absolutely would directly prevent us from providing that. It also would undermine The plan's abilities to use volume purchasing power to keep the costs lower. This is another factor that will contribute to the 30% anticipated increase in costs that I mentioned previously. In summary, I will just say, this is a corner of health care, arguably the only corner of health care that's actually working. Premiums have been stable, benefits have been stable. More employers are offering the benefit and more. employees wanted it. Please don't mess with something that's not broken. Thank you, sir. Senator Boyd and Senator Murdoch and then Senator Irvin. Thank you, Mr. Chair. Um, I just want some clarity. Like you, you talk, um, I'm done here at the end of the table. So you talk a lot about how costs are going to go up. So when was the last time that BBM's increased pay to Independent optometrists. I don't know because we have 29 plans. There aren't just 2. We have 29 plans and I represent the association, not a particular plan, so I don't, so as far as you know one independent optometrists. I'm sorry, could you say that as far as you know, they really haven't increased pay to independent optometrists. I don't, I don't know whether they have or have not. OK. When, when was the last time that BBM's increased payments to entities or individuals in their vertically integrated system. I think that's the same question. No, it's a different question. If they own it. When was the last time they increased pay to themselves. I don't think I understand the question then, because to me that sounds like the same thing you just asked. So then would, would you agree that labor is likely the most expensive cost of doing business in an optometry practice. I can't speak to what drives costs within an optometry practice since I don't represent them, quite frankly. Would you agree that Arkansas mandated a minimum wage increase up to up to $11 an hour where it was $8.50 and that's about 30% increase. That that could be true. I'm not, I'm not, I'm not well versed on Arkansas minimum wages. I'm sorry. Thank you for your helpful testimony. Senator Murdoch Uh, thank you, chair. Um, uh, ma'am, Senator Boyd, kind of a summarized a lot of my questions and you. Frankly didn't have answers, um, or the answers I can understand that make us, make us really make me, excuse me, really comfortable with what you're you're purporting so. You talked about the 30% that if we do this, we're going to cause these increases, um. How and why would that be more specific to me on why no, that, that one I can answer that that's a better question. Um, How and why would that be more specific to me on why no, that, that one I can answer that that's a better question. Any time you artificially create a price block, uh, you're going to result in an increase in costs, so part of how the plans are able to keep costs lower is by using volume purchasing and a number of other Now a number of other ways to keep costs low. So if in fact, please define those for me. Well, as I mentioned, we use volume purchasing that's probably the biggest one is volume purchasing, quite frankly, um, Now where was I going? Uh, so, and any time that we are Anytime a mandate is passed that tells businesses how to run their businesses. It is just generally expected that there will be an increase in costs and because there will be an increase in cost to the plans, we would have to pass those costs along to our subscribers, which are the employers in the state. All right, but what you haven't done, and I'm going to go to my next question, just to let you, you have not answered my question outside of volume buy. That's the only answer you only response you gave me. Everything else was generic. Alright, let me, let me go a little bit further because really what I want to know is detailed answers because what they have asserted is the way these organizations are managing. Their ability to do business. And ultimately Through your, through those methods is prohibiting them from Being able to do business in a fair and equitable manner. I'm gonna hear from AID soon because I certainly want to hear their input in this, but, but, but, but what I want to hear from you is, so you're paid by who to be here? Oh no, I represent the association. That's why I'm not quite as well versed on if I'm asked a specific specifics of what one particular plan does. We don't represent one plan. We're the overarching organization representing 29 different vision plans, so that's why I don't, I don't have the detail. I don't represent. One entity so I can speak to their business practices. They'd be irresponsible on my part. So you have no relationship with VSP or IMED in no way BSP and iMed are two of the 29 members that we have. Yes, so you are here for, yeah, they, they are members, but I don't work for them. OK, how, so how do you address the part about the, the farm, the the the previous um Speakers. Which part, sir? I'm coming to you that they assert. That the methodology that's being used, specifically in the other components on how the prices for those things, you're forcing them to be salespeople because you're giving them, you're paying them a low reimbursement rate, but you're and you're making your money from Other parts of the practice, so there's a monopolization of the whole industry going on that they're asserting that's causing them to have to be salespeople versus eye doctors. If I can be blunt, all optometrists are salespeople. That is how optome optometric practices make their money, generally speaking, not just in Arkansas everywhere. Explain that. As a percentage of revenue and perhaps you can bring the doctors up and ask them to provide details on their particular practices about what percentage of their revenue is associated with selling product. The reality is it's a large percentage of their revenue, so they have a self interest is that because of the way it's structured that they have to become that's what they're asserting. I understand that that that's what they're asserting. I would ask you to have them come up and testify about what percentage of their revenue is driven based on product. It's not just Arkansas, it's everywhere, because that is where they make money, and I think that's what they're trying to fight, but I'll hear from AID a little bit later as to what's really going on in between this situation, if I can. Thank you, Senator Irvin, thank you. Thank you for being here. Um, we only have 8 senators on this committee, but this committee room is used for joint. OK, so that's why there's that's why you know why you're in. So like that explains it. I do get the analogy. Rover. Um OK, I have a couple of questions. Um, let's go back to the purchasing power of the plan and the volume purchasing of what? What, what is the volume of the plan that is being purchased. Uh, so, uh, frames, lenses, things like that can be volume purchased. And that can be helpful to keep the cost down, but OK, but, but, but you're talking about the plan purchasing the frames and the lenses. So So the plans own their own optometric. So there's a, there's their affiliations between the entities. It's not always an ownership interest, but there are affiliations between the entities. So um just it's, it's very similar to, as I mentioned, how optometric doctor's offices operate where they have an affiliation with labs of their choosing, optometric labs, frames, lenses, that sort of thing. We also have that as well you that your vision. The plan is what we're talking about. We're talking about the plans. We're talking about the managed care companies. That's what we're talking about. And so those plans, so one of the things that you testified to was the purchasing power of the plan. that power of the plan. So you're, you're, you're equating the plan with their affiliated optometric. A clinic. That's what you just, you're testifying to. No, I understand what you're saying. And so that's why so framed lenses, that's the volume purchasing power that the plan has with their own affiliated optometric clinics. It's often not an ownership interest. That's why I appreciate you mentioning that because that's, I need to clarify, um, the, the medical plan is It's, it's, it is a, it's its own. How do I describe it? Similar to a PPO on the health side. So it doesn't own things in the sense that you're talking about, but we do, but there are definitely contractual relationships between manufacturers and other affiliated entities. So just similar, similar to how it is on the medical side. So that's why I was trying to draw an analogy where if you're trying to get an MRI done, and I was saying you can maximize your plan benefits by going to a versus B, it works very much the same way. Yeah, I understand that, but I think the conflict comes in play is that you're, you have a I mean, you have a very, very, very strong advantage. If that plan, as you're testifying, says there's purchasing power of the plan, you basically can, does it, so you have the ability just to give a contract that's worth this piece of paper basically to anybody that's not affiliated in that way with the plan. So if it's an independent person that's not affiliated with your plan, they don't get the same benefit even though they're contracting with you to pay. for reimbursement, they don't get the same benefits that you just testified to of the purchasing power of the plan. So it, it creates a very, very unbalanced scenario in my opinion. I don't really understand. I can tell you, I understand you don't understand, but here's the problem. When you have this company that owns now this clinic and all these other optometric clinics. OK, just clarify, we don't own Optometric clinics, so I'm not sure where that came from. Well, it came from your testimony. I'm sorry, it came from your testimony say we own clinics. I don't know where that came from, ma'am. I'm not going to let you step on the senator's purchasing power of the plan means purchasing power. I asked of what? And you said a volume to Senator Murdoch. He said volume of purchasing, and I said of what? And you said frames and lenses. frames and lenses are not provided by a plan. They're by the clinic. Where the patient goes to see the optometrist. That's where they get their frames and their lenses, unless your plans are directly sending them frames and lenses are is the plan that somebody Vision care plan, if it's a vision care plan, Are they then sending frames and lenses directly to their beneficiary without seeing an optometrist? Because that's what you're testifying to. May I answer? Yeah, I, I just didn't want to, um, I didn't want to interrupt you. Um I think we're getting things confused here. So the way it works today is someone goes to an optometrist. When we say, when you say clinic, I'm thinking you're meaning medical clinic, but maybe I misinterpreted optometrist has a clinic, right, and they're not all, I mean, and I'll take that'll be my next line of question. I need some leeway. Go ahead. It's a clinic. Let her, let her finish her statement, Senator. Thank you. So I was just going to clarify that we don't purchase. I care practices. I don't want to get hung up on the word clinic because that seems to be causing issues. So if you're talking about an eye care practice. We don't, it is rare that the ownership, ownership interest over clinics is extremely limited, very, very rare. Most of the time when it occurs, it's in a situation where we had a practicing optometrist that has desired decided to retire and sell his practice and we have a new incoming optometrist who would like to take the practice. But can't afford to purchase the practice outright. So in those circumstances sometimes again it's rare that the plan would purchase that. Practice and give it back to the incoming optometrist, but that is very rare. That is not a typical scenario just to clarify, and then as far as the volume purchasing as far as frame, we're talking frames and lenses like commodities, not people and practices and medical care. I feel like the two are kind of getting conflated here, but where are you distributing those frames and lenses and how. Where are you just you you you get, you testified that one of the benefits is the purchasing power of the plan, and then you said the volume that we were able to get in frames and lenses. So where are the frames and the lenses distributed from the plan. If the plan has got the purchase power of being able to get frames and lenses. Where are those frames and lenses then distributed? And how are they distributed by the plan to, to the patient, you mean is what you're asking? Yeah, how does it get to plan if the plan is purchasing, a plan, you testified that the plan of purchasing frames and lenses. So, how is the plan Then distributing the frames and the lenses. Distribute through their own. clinics, but they do not distribute frames and lenses to any provider that's got a contract just for reimbursement from that plan. Is that correct? No, that's not correct. That's why I think things are getting conflated here. You're, you're providing ask a question so she can answer directly and then don't don't get in the middle of each other anymore, OK? I'm just trying to understand. Where you're distributing the frames and the lenses into who. Um, Uh We have contractual relationships with manufacturing entities, which is the volume that I was mentioning before, I am not an expert on distribution channels, but my understanding is that the optometrist does the eye exam, says you need X, Y, Z prescription for your eyes, and then that prescription is then sent to a lab. that manufactures the lenses, pairs it with the frames and gives it to the consumer. That's my understanding of how the process works. OK, can I ask one more? OK, so the frames and the lenses that you purchased are those then provided to every um optometrist that has a contract with the plan. I I'm, I'm, I'm sorry. Could you ask that again? When you purchase the frames and the lenses as you were discussing and you have these deals with the manufacturers. So if I am independent optometrist Missy Irvin, and I am signed up with that plan. Do I get my frames and lenses from that plan? No, they would go through whoever your healthcare provider is. So if you go into the optometrist and if it's a contracted optometrist, which is, I think the example that you're giving, right? If it's a contracted optometrist and the person goes and uses their benefit. It's a flat benefit. It gives you an allowance towards your frames and your lenses and pays for your exam and then you use that allowance towards your glasses and however you as the consumer see fit. So if you're, you know, You would want, if you want Prada frames. You're 150 bucks probably isn't going to cover your Prada frames and you'd have to pay more out of pocket, whereas if you went for something less expensive, or if you went to a lower cost, if you want to save money, you could go to a place like a Pearl Vision or something like that where the costs are much less to minimize your out of pocket costs, and if you go there, they would be the ones to give you your glasses. So wherever you're going is where you would get your glasses. It's just how that loop works that OK, I, I, I apologize. I, I'll just equate it to like medical practice. You have a contract with this insurance company and they pay the reimbursement, but they do not, then that plan, that that plan does not then also have contracts with manufacturers of medical supplies that are that are, are basically part of the plan and then these people that are affiliated with the plan in some sort of a Ownership role or contract role, they don't get everything cheaper than everybody else, and so that's what I'm trying to understand. That's a separate thing. You have a payer system, a reimbursement system, but it looks like I'm trying to understand the world of optometry, I suppose, in that the frames and the lenses and all of that, it is, are those things not then independently acquired by a manufacturer. through a separate contract separate from the reimbursement plan. Yes, they're separate. That's right. So, so are you familiar with DME at all and the health care space because it's it's sort of analogous to that, there are situations where, because we're talking about a commodity here, right? So to your point, it's not just the healthcare service, but the associated commodity, which I think is what you were mentioning, and it and it so I think a good analogy on the healthcare side would be DME. So durable medical. There are often times where healthcare plans will have a contractual relationship to offer DME crutches, wheelchairs, that sort of thing, at a reduced cost because they have a contractual relationship with the manufacturer, the supplier, that sort of thing. It's very similar. So if you can think of that as an analogy, I guess. No, I think Senator Evan. We're going to move on and you can come back. So, uh, There's a situation where you have a, a clinic that the the person has, you know, retired and, and in that situation you said there's situations where you have bought that clinic for a provider, so that would be you own the clinic. You're the, you're the vision care plan and you have agreements with These manufacturers, so you control all three sides of that entity. Is that correct? Um, that is very rare circumstance, as I mentioned, but I, we would, there would be contractual relationships in place with the suppliers, as I mentioned, analogous to the DME, yes, and in those I don't know if any, if there are any plan-owned facilities in our practices in Arkansas, I'd have to ask, but I know it's less than 1% of all practices nationwide. wide. So if there were some, it'd be very rare, as I mentioned, usually the driving force behind that is associated with optometric debt from from students coming out of school. It's now $200,000 on average, whereas it used to be 100,000, so these students come out, they're burned in debt, and they don't have the ability to purchase a practice, so in the scenario I mentioned before, again, it's rare. Um, we do offer, we do offer to Just the practice front the capital, and then Sorry Offer that practice to the incoming optometrists who would not have been able to afford to do so otherwise, which you control him on every level. And, and you said this is working. This system is working. Sounds like it's working for your practice, so Senator Flowers. Thank you, Mr. Chair. I'm kind of losing sight on all of this discussion. That's fair. Uh, me too. She'll be here all week almost getting blind about this, but I, I'm trying to understand and I've looked back at Act 9:59 of 2015. Dealing with these vision care plans. But when you, when you're 29 entities that you represent. I think that's what you said. Yeah. So they negotiate with optometrist or Ophthalmologists' offices for vision care plans. And so, The vision care plan might include just regular checkups. Yes. And it might include Products like the frames or the lenses, contact lenses or whatever. It's an allowance towards the frames and lenses, yes, so it's it's $10. Well, in that negotiation with that doctor's office. Is it Does it include the type of products or the uh type of uh what I'm saying is if say you have a company called Flowers Eyeglasses. I produced the eyeglasses. Do you, do you negotiate with that eye doctor's office where to get the lenses or the um friends from, um, yes, quite frankly, We have again, similar to healthcare, we have affiliated in-network labs where we often have contractual arrangements for turnaround times, minimal defects, quality standards, etc. and the type of product are Um, What I'm trying when I say type, I don't mean just eyeglasses, but who makes them? The manufacturer. Do, do you, in other words, do you, in your terms with the the eye doctor's office, do you tell them? Where to get the glasses from, where to get the lenses from, Uh, no, you don't negotiate that's not a term in the contract. Where, so again, is it not? Is that a term in the contract with the eye doctor's office. I Now that's pretty simple. Come on. Um, again, I think I've tried to explain this several times. The consumer has the ultimate choice of where they want to go. I can maximize their benefit by going to a plan-owned. Or a plan, a sorry, plan affiliated. Labs, we have we have contracts, existing contracts with particular labs, suppliers, that sort of thing. Those contracts that we have with the suppliers, we have those contracts for several reasons. One, to keep the costs low, 2, to guarantee the turnaround time back to the patients, so they're not waiting weeks and weeks and weeks for their glasses. Thirdly, to have minimal defects, all of those. are in the contracts directly with the labs if that's the question that you're asking. But if the consumer chooses to go a different route, they can do so, but it's similar to going out of network on the medical side. So this consumer can make that choice, but there will be implications associated with that choice. Thank you for your testimony. uh, next we have Matt Jones and Joe Sugg. Doctors, do you want to, do you want to testify for? All right, thank you. Then we have Derek Smith. Which is against. I introduce yourself and and who you're with and and you're welcome to again. Good morning. Thank you, Mr. Chair. Committee. My name is Derek Smith. I'm with the Mitchell Williams law firm here in Little Rock here on behalf of the American Council of Life Insurers, frequently referred to as the ACLI. The ACLI is a trade association that represents the life insurance industry and the Smith, could you pull that up to you so members can hear. My apologies. Is that better? The ACLI again is the trade association that represents the life insurance industry throughout the country. Its members provide various products, including life insurance, annuities, long term care insurance, disability income insurance, dental, vision, and other supplemental benefits in Arkansas, ACLI members 245 licensed members represent about 93% of life insurance premium in the state or almost 97% of annuity considerations. The ACLI is principally concerned with again the transparency provisions or anti-transparency provisions of the bill, and that's where I'll focus my testimony. primarily on page 5 lines 21 through 31, That language provides that carriers cannot provide truthful information about discounts or other products provided by network providers. I think we have heard in testimony today, and I think when the bill was presented and on the House side that this is primarily ri ly intended to prohibit distinguishing providers based on I think the volume or amount of product purchased from an affiliate to the plan. While paragraph 2 does appear or sub 2 does appear to do that. The provision goes much further again, it prohibits vision plans from telling consumers otherwise truthful information about discounts or products available from consumers. These are precisely the provisions that have been found to be unconstitutional in the one other jurisdiction where the bill was passed and tried to be enforced and is currently enjoined and so that's our primary concern. happy to answer any questions about it. Senator Boyden. Thank you, Mr. Chair. Uh, Mr. Smith, thank you for your testimony. I do, I understand why this is needed. I do have some, some pause about any time we limit transparency. I guess my question to you is, is after this bill passes and is in effect, like in say a year, a year and a half a quarter, would you be willing to come back to testify about what's going on in the marketplace. Always welcome the visit with the committee, Senator. Thank you. Do you have any other questions? Go ahead, Senator Flowers. So Jonny Smith. You, you mentioned this one state where this, this particular part of the bill has our law has been declared unconstitutional. Are you, how many states have Such a law. As what's proposed here. Thank you, Senator, and perhaps I overstate it, not declared unconstitutional preliminary injunction has been issued in joining the enforcement of that particular provision, so there's no final judgment. There is no final. The preliminary injunction is currently on appeal, but the bill has not been enforced. For these provisions. I am aware of similar laws being passed in two jurisdictions, and I'm certain that I can be corrected if it's more than 2. Those two are Texas, which I believe passed the law in 2003, subsequently enjoined in 2000, I'm sorry, 2023 and joined in 2024 currently on appeal and waiting a decision there. The other state that I believe passed the similar language is the state of Oklahoma, and I believe it was just passed last year, 2024. I'm looking to see if that's correct, and I don't, I think it's, it's new, so we don't really can't speak to the impact there. Senator Ervin, thank you, Mr. Chair. Thank you, Mr. Smith, for your testimony and for being specific to the parts of the bill where you have problems. That is very helpful. Um, when I read this, it says that um 922 and 23 says they shall identify participating vision care providers in a neutral manner. And I I am similar with Senator Boyd in that, I hear you and I understand the concern, and I don't want to discount that at all. I think the pro I think I like the language neutral manner because the problem, I think just that's highlighted with the previous testimony. is The ability to utilize The everything that's within that plan's ownership against everybody else, and it drives, it really does create a monopoly. And that's, that's the problem, and I, I hear you and I see this, but If everybody was just an even playing field and you had all the 29 you had a plans and the plans were all just, just reimbursement. Then I could see where this would not be necessary, but it's not just reimbursement that we're talking about. It's we're talking about purchasing power. We're talking about frames, lenses. We're talking about everything steering, we're talking about now owning clinics. We're talking, I mean, my husband is a family practice physician. Everybody knows that he can't even get a pen. With a pharmaceutical company's name on it anymore. I mean that that is how separated all this has become in the medical world and so it's really quite I don't understand how it's been allowed in these other worlds of optometry and pharmacy and Who knows what may be next, but and so I have a real problem with how and and a lot of that's done federally with the sunshine laws and things like that, but I don't quite understand why those sunshine laws at the federal level aren't that are very specific with with with medical clinics isn't translated into vision and pharmacy. I'm not sure if you can answer that or if you have a position on that, but Is, is there, do you see any distinction or changes to language that would avoid this very, very strong advantage that they have. This is like an NFL NFL football team playing a high school team. And and that's the way I see it because of all that that they own and their volume, their purchasing power and everything under that plan. And so I'm, I'm not sure if you can answer that question. I know you're here on behalf of your client, but is there anything that would make that a fair playing field for the other provider that's the high school team in this scenario. Well, thank you, Senator. I think, well, first, I appreciate the opportunity to offer suggestions. This is the first time anyone's asked if we have a suggestion that might correct some of it. I do think that I understand the concern about steering towards affiliates. We can agree to disagree on how large of an issue that is, I think the 29 plans are members of the National Association of Vision Care Plans. I don't think it encompasses all plans that provide vision care insurance. In fact, I know it doesn't encompass all, and I think all plans that provide vision care do not also own facilities, manufacturers, or practices and so I do think this provision is overly broad. If the concern is if the concern is with affiliate relationships. I think the language could be refined to address just that, but for barriers that have absolutely no none of these affiliate relationships. I don't know who benefits by telling that carrier that it can't tell its members that if it goes to one optometrist, it can receive one discount if it goes to a different optometrist, it could receive a greater or lesser discount. That certainly does not help the consumer, nor does it help the consumer to prevent such a carrier from telling its customers or its its its policyholders that if you go to one. Optometrists, it provides these types of frames. If you go to this other optomes, it provides a completely different type of frame. There's no benefit to the consumer from for that, and we would suggest that the language be removed. I appreciate your thoughtful response. Thank you. There's nobody else set up to testify for against Senator. Do you want to close your bill. Huh? OK, hang on a minute, senator. He wants Senator Murdoch wants AID to speak on this bill. Introduce yourself and you're welcome. Good morning. Good morning. This is Booth Rand, general counsel, Arkansas Insurance Department here to answer any questions if I can. Well, well, basically we've been here before and we're put in position obviously, uh, as we try to represent and protect our citizens, businesses, everyone in the state in the business and the ability for people to do business in the state that we provide a level playing field as the senator mentioned that, you know, big brother, little brother, NFL high school what is presented here is a very strong, strong pitcher of Someone being manipulated, if you will, and dominated and though what Attorney Smith just brought to the fore as Some recommendations, you know, those type of conversations need to be had early. I mean, but what's been brought to us to make a decision on leaves us in a very difficult position. If you could, yeah, I think you're saying a tremendous amount and I have seen a tremendous amount of vertical integration just like you have in PBMs. where the health plans own are beginning to own all of the downstream affiliates that control supplies and merchandise, and so there's been concern by providers. at the patient and that a lot of that reimbursement and discounts are not endearing to their benefit, as they are to the affiliates, OK, just a little bit of background by this legislature, Senator Flowers mentioned this the last time we looked at vision care plans here at the legislature was in 2015, and the insurance commissioner was given jurisdiction over vision care plans and issued Rule 113. About vision care plans at that time, the issues about reimbursements being low, not not being high to even equal Medicare rates. Those were concerns, but the issue in 2015 was the extent to which the vision care plans could require steering of their merchandise to optical labs that they own. And so what this body did was say basically, that vision care plans cannot require the patient to be steered to an optical lab that the the vision care plan owns if they don't want to. There was also some language about fees being charged. This bill much bigger, wide sweeping. Senator Irvin put her finger on it, one of the most significant parts of this bill to me is the provision that requires that all covered materials and services at These have to be reimbursed at Medicare rates, OK, or at de minimis rates. Right now the insurance commissioner does not have jurisdiction outside of this proposed bill to regulate the reimbursement amounts that these optometrists are being provided, nor what we are required to reimburse for services, merchandise, lenses, frames, all that. We have nothing in regulatory space that gives the commissioner authority to determine what those reimbursement amounts are now what's being proposed is that we look at reimbursement now having to at least Medicare rates. You're seeing a lot of this with PBMs already, as you know, where the insurance commissioner is getting more involved in reimbursement issues. Senator Ervin's got a great point, which is once you establish a standard reimbursement, it tends to be the floor, OK? And so what, what I heard from the optometrists is they're not even getting the floor Medicare, so this is addressing Medicare rates. We have not done a premium health care impact study to see what this sort of impact would have on the vision care plan rates, so I can't tell you what this is going to cost, so this bill does a lot of things that the 25 legislation does not do, and that was my. question. I was going to my final question was that 30% that she asserts is going to how it's going to affect the cost and that's very concerning and I want to your opinion on that, but because you have not done an analysis, we have not done a physical impact, and I think the surplus is a self-funded government plans as well, so I don't know why it's, it has not been reviewed by our actuary, but I can, you know, if you really need me, I can ask him what his he would only be able to give an estimate, but we do, we do not. know what impact it is whether it's 30% or anything like that right now. Yeah. Thank you. Thank you. We're going to move on. It is 15 after and we got to be on the floor at if Senator, if you Motion for immediate consideration, non-debatable, all in favor say aye. I'll oppose like signed senator, you don't get close to your bill. Sorry about that. Uh, so, uh, motion by Senator Flowers to pass, second by Senator Penzo, all in favor. Say aye. All opposed like sign. Thank you, Senators. Thank you, Senator passed your bill, so yes, ma'am. So once again we're here and I see the people on this sport power the UTV ATV here and You know, I, I personally think it's unfair that Citizens keep coming back and forth, not knowing whether something's going to be heard, even though it's on the agenda, they expect for it to be heard. Maybe this needs to be Senate Bill 94 set for a special order of business. Well, Senator, it is my intention, it is my intention to adjourn and come back at one o'clock. Today, yes, well, I I'm not going to be here and uh I think this is the 3rd time and I think this, if I'm uh remembering the rules right, it should be moved to deferred. No, no, it, it, this is a this was pulled, pulled off at the request, and he's not here right now. I mean, we would have heard it today if if, you know, we hadn't went, you know, so long when the last bill, so I mean we're going to be here, so I have intention to come back at 1 o'clock, so unless the Senate Senate says we're done for the day. Is that your understanding? We're here. Even if we can't be here, even if the Senate declares us out of here, go home. That's not happening as far as I know. Well, I'm going home. All right, thank you, Senator Flowers. We're adjourned until 1 o'clock.