Insurance & Commerce- House

All right, members, I, I know Over the last few weeks you've been contacted by various people regarding this bill. It is as it states, an act to regulate vision benefit managers, uh, I'm gonna be honest with you, they would really like me to go through all these talking points, and I don't know. I think you're all very familiar with them. I'm going to hit some of the highlights and then I think Dr. Jones and, and Doctor Sugg can get into the details of it, but uh what we have, what we have seen is that vision benefit plans have started doing similar practices of uh pharmacy benefit plans as far as vertical in and how it affects the individual providers, uh, both on how they can manage their business and, and also dealing with uh Reimbursements. Specifically, uh, 1353, uh, prohibits certain business practices by Vision Benefit managers. Uh This will preserve the patient's choice while helping to keep their costs down. It requires vision, benefit managers to identify participating providers and a neutral manager. Man. As neutral managers, the BBM or Ensure can't uh use misleading advertising that additional services are covered if the plan does not actually reimburse the provider for those services or materials, a provider can't be required to accept reimbursement payment in the form of a virtual credit card or other payment form where a fee is assessed to the provider to get reimbursed. Also BBM shall not use their their batch-style formula or extrapolation to audit a participating provider any additional payment due to a provider or a refund due to an insurer must be based on the actual overpayment or underpayment. Also, I planned can't prohibit a provider from accepting cash payment from patient, if that is less costly to the patient than the total cost of out of pocket costs. And finally, A BBM insurer can't reimburse a provider at a different amount based on the optical lab, health record software equipment, the doctor, or that he uses, chooses to use. So basically, like I said, uh, these BBMs are are starting to dictate certain business practices to optometrists that I think are harmful to their profession and ultimately to our constituents and their patients, and at this time I'll turn it over to Whichever one wants to begin, Doctor. Thank you, thank you, Mr. Chair and members of the committee. Um, as I said, my name's Joe Sugg, and I am a practicing optometrist and um small business owner in Heber Springs, And um here represent the association of my patients and, and colleagues around the state, but, um, wanted to thank some of you and uh your predecessors for passing um Act 959 in 2015, which helped to curb some of the abuses from these vision plans. That was passed unanimously in 2015. Um, and so we still use aspects of that law today, um, but we're here to um ask you to expand on that law due to the massive vertical integration that's occurred in the Visioncare market in the last 10 years. Uh, 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 multibillion dollar conglomerates on the vast majority of frames and lenses. They own retail opticals where the frames and lenses are sold, they own optical labs where those lenses are made. They own doctors' offices around the country and, and private equity loans doctors' offices. They own group purchasing organizations and Do alliances. Uh, they own claim filing systems, electronic health records at doctors' offices use, and they even own e-commerce sites that directly compete with their own in-network doctors. These companies use their power and influence to incentivize and steer patients to the products and locations they own by offering enhanced benefits, um, such as lower copays or higher frame allowances. They then differentiate and tier doctors based not on quality of care, but um the amount of product each doctor purchases from these companies. Uh, we believe that, uh, patient choice and and access should not be affected or influenced by a vision benefit managers or the products and locations they themselves own. Ultimately, we believe doctors within a particular vision plan network should be treated equally or neutrally, um, and not differentiated by the products they purchase, where they practice, and who happens on those products and locations. Um, this bill also would allow um coordination or combination of benefits, um, with, with patients other insurances, um, There's some cases where vision plans won't cover services they would typically cover, um, if those are were built on a separate visit, but, um, you know, so patients aren't allowed to use those benefits that they pay for at the same time, and we think that coordinating these benefits would allow for patient convenience and more efficient delivery of care. Uh, some of these plans do this now, but not all of them. Um, there are certainly some financial aspects of this bill and specifically reimbursement, um, and I'm gonna let Doctor Jones speak more to that, uh, specifically, um, and I'll be happy to help answer questions when he does that. Thank you. All right, thank you. One of the parts that um representative Eubanks, um, I was gonna mention is there the rest of this bill does um have a financial reimbursement aspect where the same services that we would build to a vision care plan would be at no lower than that current year's Medicare reimbursement rate. Um, so I want to talk a little bit about that because I know that's a, that's a a talking point that we want to explain there, so um like I said, my name is Matt Jones. I'm optometrist. I live in Blaville. I have managed and run clinics in Bravo, Osceola, West Memphis, and in Perigold. Um, so what this bill does is it provides greater transparency as to who owns the products, um, provides greater transparency to our patients and to the doctors. So today I want to share a little bit about what vision plans are. Representative Eubanks talked a little bit about what's happening in the pharmacy, uh, world, so vision insurance is not traditional insurance, um, in that vision plans don't have any unexpected loss, uh, a vision insurance covers one comprehensive eye exam a year, and that's it, along with some materials, um, and a material allowable. So in since they are prepaid discount plans where a person's premium isn't tied to any actuarial risk. Um, so they're not like medical plans and pharmacy plans at all in that sense. What that does is that allows them to set, you know, premiums and reimbursement at any rate they want. It allows them to make as much money as they can, and with that money they have begun vertically integrating and monopolizing the market. In the sense, what that does is that certainly can affect small businesses, optometrists, and communities. I mean, if you know your optometrist, um, the other thing it does is it also puts a business decision on the optometrist or rather to even accept the vision plans or not, whether it's fiscally responsible for their business. So, I certainly have a choice of whether I'm going to accept a vision plan or not. My practice philosophy has always been, I'm going to accept each and every one, that my patients have or that maybe an employer within the community has, because I feel that's the right thing to do. Um, so other doctors though, it's up to them to decide that and unfortunately a lot of doctors are not providing these vision plans and so that that takes the benefit from the patient not to be able to use that within their community. So for more than 30 years, vision plans we have not seen any significant increase in reimbursement and in services. $40.50 dollars, and $60 or what these vision plans pay for comprehensive eye exams. That's the same as it was in the 90s. Um we have with the American Optometric Association that I work closely with too, I sat down with some of these big plan executives to try to work out some deals and and try to compromise when we always want to compromise, but nothing. has come from that. As you obviously know, a lot's changed in 30 years and the cost of business continually increased technology within our practices, and we provide living wages for our employees. So interestingly enough, the same corporations we receive letters every year talking about the price of how things should go up, um, you know, the cost of, cost of business keeps going up. Um, the same comprehensive eye exam that I provide to a Medicare patient, to a Medicaid patient, is the same comprehensive eye exam that I provided that vision care patient, no matter what insurance they have, but they reimburse significantly lower than Medicare and even significantly lower than Arkansas Medicaid. So you might ask why do we accept these plans? is, is we could all get together and decide not to accept a vision plan, but that's illegal. That violates antitrust laws, um, and that's colluding. In my case in Mississippi County, Greene County, Creon County. It's not. My my patient's fault or your constituent's fault of what vision plan they have, right? It's what the employers tend to offer, and again, that's why I decided to accept those plans. Um So talking about the the antitrust part. With these vertically integrated vision plans, you know, they use these extremely high profits to make themselves more powerful. Again, unlike traditional insurance plans, um, they're allowed to make as much profit as possible, and this helps achieve market consolidation, vertical integration, and so requiring these plans to compensate us fairly with reimbursements, um, with competition, we feel will help lower cost, um, it helps small business in Arkansas. So thank you if you have any questions, we'd be happy to answer. Thank you for your testimony. I believe we do have some questions. Representative Darby, you are recognized. Thank you, Mr. Chair. Uh, you made a statement a while ago and I'm just curious, can you give me an example of the coordination of benefits or the lack thereof because I, I, not being in that field, I'm not quite sure how, what, what you meant by that is with the service called refraction. Um, that's the test where the eye doctor determined measures your eyes and determines your prescription. Um, that's a service these routine plans typically cover. Um, say you're in, in the office and getting your exam. maybe you had cataract or dry eye and um therefore, the, the visit itself may be billed to your medical plan for because of the medical diagnosis. Um, some of these plans, even though they typically cover refraction and you performed it that day, um, won't allow you to coordinate those benefits so that the refraction could be covered that visit. So, um, that's probably the best example I can give you of it. OK, and one other question, I understood you to say that vision plans or maybe you that said vision plans often pay less than the floor of Medicaid. Or Medicare, I guess, and and this was a question that I asked Representative E bank, so it's not a surprise. I was just wondering why make that the low amount, why not be more than what they pay, I mean, sure, we, we've asked that we've been asked that and I appreciate that question. Um, We want to tie it to something. There have been other states that have used the words, you know, the nominal de minimis or, you know, reasonably, you know, a reasonable figure, uh, we want to at least have something to go by. I mean, CMS Medicare is something that's, you know, studied and universally um listed as, as what payments are and even that floor is a significant Advantage or a specific increase to the way that we can operate our businesses and hopefully again help optometrists want to provide those services to their constituents. Thank you, Representative Darby. Representative Baker, you're recognized. Thank you, Mr. Chairman. I appreciate both E's testimony. I'm Intimately sensitive to all of the challenges you guys have shared here today, and I, I appreciate um the efforts you put forth. Can you give a little insight into what it's like negotiating with these entities. Yes, I'll give an example. Um, most recently, uh, one of these plans sent out a new plan. They, they've made that reimbursed at about a 40% less rate than what they typically did. And When, when you say, well, no thanks, I don't want to be, I don't want to sign up for that plan, uh, then we were told, well, you'll be out of our network entirely. So it was basically sent a plan, sign on the line and send it back, um, and no ability otherwise to, to pick and choose on those plans, which one would be we would want to be a part of. And if you don't, if I may, uh, you know, we have no negotiating power really with these mega plans because of antitrust laws. I mean, they're, they're take it or leave it in their contracts of adhesion, pretty much. Yes, so follow up. I just, um, Um I hate to hear that you guys are going through that. Um, I, I deal with that on a daily basis in the pharmacy space, and I think what's a little misleading is that they assume all negotiations are done in good faith, and what's frustrating is the leverage they have is y'all's heart for your patience. It's not a real fair negotiation of take it or leave it when you're wanting to provide care and they know that they have a leverage of you're going to err on the side of even wanting the bare minimum just to provide that level of access. And so I commend you guys for Basically wearing that continually and thank you for your presentation. Thank you. Grandma, you are recognized. Thank you very much, Mr. Chair. Um, I, I think I'm supportive of this bill. I obvious question, how do you think this will affect insurance costs for like, you know, my vision premiums and stuff. What do you think will happen? Sure, you know, Visioncare premiums are, you know, extremely low as it sits right now and a lot of that is tied to the vertical integration if they can get you in the office, they're going to tear, you know, steer you into their products. Um, but we have seen in Texas and Oklahoma, we haven't seen any, you know, those bills are fairly new when it comes to the reimbursement part. We haven't seen any increase. We don't really have any um data right now. Um, I would say that if you know these benefits, if these Companies can't provide a reasonable product that would, you know, satisfy both consumer and provider. While again making this financial, you know, business decision as to, you know, what they continue to buy and vertically integrate, then I think they're broken in that, you know, as it is, um, but, you know, I, I certainly, I think that's a business decision as far as what premiums go, um, and again, we, we want to provide better Transparency in that we want to see um You want to see more. You know Prices go down through, through competition. So. Thank you, and you're recognized. Thank you, Mr. Chairman. Um, gentlemen, I appreciate you all being here today. Um, would you elaborate just a little bit more on the vertical integration like an insurance company buys a lens company, buys a frame company, would you, would you elaborate a little bit more on that. Yeah, so Like I said, it's, it's basically every step of the way. I mean, so you've got um offices and retail opticals and optical labs and um you know, basically over 80% of individual vision plans are owned by one of these two companies and then they own um a large portion of the branded frames that are out there. They make the lenses. They own the labs that make the lenses, um, and then the e-commerce sites, electronic health records is just so many steps of the way that they've bought. up, um, two vertically integrate the market. OK, and, and they also, these are insurance plans that have done that vision plans, do they have the attitude that here it is, if you want it, you sign it. If you ask, well, my attorney wants to look at it, or you told either sign it or we'll move on. Yes, that's correct, as I stated with that example earlier, it was basically, uh, you know, here's, we need your signature and your either accepting this or you're out of our network entirely. So they And they control and they have vision stores, um, where they have people examine to give eye exams and they sell lens there and they sell everything. That's correct. OK. Do they, they, in other words, they could steer people to their providers. That's exactly what what's happening. So that's exactly what we want to address. you're basically, well, you have a tangible item in a pharmacist has a pill or, or liquid that they provide, uh, you, you still facing the same problems and difficulties in your business that they are facing. And it's all caused by the, in your case, it's a a um Well A vision Manager Correct. Versus a prescription. Yes, sir. Thank you. Thank you, Mr. Chair. Thank you, Repton. Um, I do have a couple of quick questions. So I think you touched on it and I don't want to put you on the spot, but have similar surrounding states passed similar legislation recently. Did you touch on that? And if so, what states were those, if you know, share Texas passed. Very similar language and they had when it all of the, the tiering and the steering, those types of things. They tied to reimbursement was a nominal or a reasonable rate, nominal de minimis again that didn't hold any water. They haven't seen anything like that happen. Oklahoma more recently passed a similar bill, um, it was passed and you might hear that it was passed with 0 no votes. You might hear that it was vetoed, it was vetoed by the governor and then overridden almost unanimously with only 3 no votes once the government once it was overridden by the governor, um, and then We are the next state that would pass something as wide reaching as this, and we wanted to do tie reimbursement again to something. That you can grasp Right. Thank you. Um, one other question. I'm taking notes, I want to make sure I'm right. Did you say no significant reimbursement on, I guess certain products for 30 years. Was that the testimony? Yes, sir. OK. OK. And yes, absolutely. 40 bucks in 1995 getting reimbursed 40 bucks in 2025. 660 bucks. It depends on what plan it is. OK. Thank you. Members, any further questions? Singing and gentlemen, thank you for your testimony. Thank you all. OK, we do have someone sign up to speak against this bill. Well, we have 2 people. The first person would be Miss um Forsyth. You are in the room. And Mr. Smith, if you want to accompany her, I see you're on the list. If y'all want to come together, however you guys would like to handle that, that's fine. Ma. preference No preference. You just have a seat wherever you'd like, hit that button to activate the microphone, introduce yourself and who you're with, and then you can proceed with your testimony. For people There you go. Uh, good afternoon. Uh, my name is Lisa Ann Hert Forsyth. I am the vice president of government affairs for the National Association of Vision Care Plans and um some of you may have seen me at NOIL. I testified recently in November, um, and I've testified in a number of different states, so I'd just like to respond to some of the points that were raised by the previous speakers and then mention a couple of other data point. points that I think are just worth hearing and of course happy to take questions. Um, firstly, regarding this vision benefit manager business. Um, that is a made-up acronym. It does not exist anywhere outside of the various affiliations of the American Optometric Association. And it is quite frankly a thinly veiled attempt to create some sort of correlation in people's minds between pharmacy benefit managers, which are much maligned entities, and I don't have to explain that to anyone here. And what we do in the vision care space. So from a lobbying perspective, it's brilliant from a reality perspective, it could not be further from the truth. Some of the largest criticisms of PBMs and I'm not here to bash PBMs at all, but rather to differentiate business models. So, pharmacy benefit managers, part of the largest criticisms lobbied against them are that they operate in an opaque manner, so you don't know what's happening sort of like a black box behind the scene kind of scenario. That's part of it. Also that they are making money off of a hidden margin, known as the spread and spread pricing. And a number of other things. None of those things have anything to do with our business model. And quite frankly, I find it amusing that the opposition is stating that this is a transparency bill when in fact it is putting a gag order, an effective gag order on the vision plans and preventing us from sharing discount-related information to consumers. So today when you go into your provider directory, I think all of us are aware that we're trying to be better in the health. care transparency space we want, we want folks to be making informed consumer decisions about their healthcare, just like they do with other things. So today, if you go into a provider directory, you will see information contained in there about the different types of discounts that various providers would offer to you as a consumer. And if you are a consumer that is price conscious, which many folks are. That information can be extremely valuable, and you may make your decision based on where you can go and get your glasses at the least cost possible. The reality is that the two largest contributing factors to the cost of a pair of glasses are where you are in the country, spoiler alert, you guys are doing great. Not Washington State. Um, so geographically wise, you're doing well. Although that said, if you are in a smaller town, you're more likely to pay more than you would in a larger town. However, the second biggest driver is what office you walk into, quite frankly, if you go into a regular vision center or a retail optical center, you're looking at 50, 70 bucks. If you go into a doctor's office, an optometric doctor's office, you're looking at around $150. on average. So for that same set of glasses that you could get, you could go to a Warby Parker and get it online. They're not one of our members. I don't have any vested interest in speaking to Warby Parker, but point being, if you have a relatively uncomplicated prescription and you are looking to go somewhere and save money, you want to be able to make that decision in an informed basis upfront. So running a bill that prohibits the plans from sharing. that's related to price transparency is not beneficial to Arkansas consumers, irrespective of where I stand as a plan. Secondly, I'm gonna share some additional information with you. And this is with respect to whether someone has vision insurance or not. In 2022, if I look at a baseline of 2,0006 versus, wait a minute, 2016, I apologize, 2016 to 2022. We have seen the number of employers offering vision care, increased from around 20% of employers to 84% of employers. Well, why is that? Well, I'm going to call out most of the people sitting here at the table with me. The reality is now we're at a situation where 70% of Americans require some sort of vision correction. And the vast majority of those require prescription correction. So the demand for vision care services now is larger than it ever, ever has been. So when we're talking about what is keeping the price of vision insurance low, and I'm being uh allegations are being lobbed at us because it's because of this fictitious vision integration. In fact, what it is is simple mathematics, and that is that the denominator, another words, the number of covered lives is much larger now than it ever has been. So we have more employers offering the insurance of those employers that offer the insurance over 3/4 of the employees actually choose to enroll in the plan. So we have many, many more covered lives today than we had, say, 10 years ago. So since we have a larger base, we are able to spread that risk amongst a larger base and so that has kept our premium. stable over the past 10 plus years they've stayed stable even with a slight decline. Um, and our benefit levels have maintained the same level that they have been all along. So, As far as health care goes, we are the one of the very small segments of healthcare that I would argue is actually working. We do not have sky skyrocketing premiums. We don't have, we don't have reductions in costs in giant copays. We don't have any of those things. We're one of the few areas that's actually working. From the transparency perspective, as I mentioned before, I think it's critical that we provide as much information to consumers. As possible for them to make informed healthcare decisions, and this bill will greatly undermine that. Partnered with the issue that was meant, was mentioned with respect to uh extrapolation for auditing. What's all extrapolation is, is doing statistics sampling to make a determination about a lot of claims. That's what it is. It's used considerably in the Medicare space, um, the Macs use it. It's used a lot. Um. Back in 2019, Medicare passed some guidelines with respect to extrapolation that we can talk about using if we want to talk about modifications to the extrapolation methodology, but I have a lot of concerns with passing a bill that eliminates transparency and pricing and partners that also with elimination of the fraud, waste, and abuse tools that extrapolation uses to help. Catch folks that are doing things that they shouldn't be doing, quite frankly. So, The fact that we have more folks enrolling in our plans, more folks that are covered today more employers offering it level premiums, level benefit levels. I, I don't, I'm having trouble seeing when I look at the data, which I've spent a lot of time doing in Arkansas, you have more licensed optometrists today than you ever have had, so there's no shortage of optometrists in the state. Quite to the contrary, your own data would say otherwise. So, This state seems to be doing extremely well in that space, so I'm not sure what we're solving for here or why. So I'll leave it at that, and of course, I'm happy to take any questions, but um yeah. Just that. Thank you for your testimony. I believe we have some questions Dalby, you're recognized. Thank you, Mr. Chair. Um, in your testimony a few moments ago, you said you couldn't see how it was. That this bill was preventing transparency or something to that, but when I'm looking at page 6 line 6. Hang on, let me pull it back up. Um Page 6, line 6 says an Ensure vision benefit manager, vision care plan or vision discount plan shall not incentivize, recommend, encourage, persuade, or attempt to persuade an enrollee to obtain covered insurance, non-covered services, etc. but it doesn't say that it's not preventing them from being able to put that out. It is in another section they can put that information. Can you point to me because I can't find where it says you can't have the excuse me, that you can't put the information out. It's just saying that you can't. Say go to this person that you could still list if I and and I'd be happy to find out where that was. I missed it, but it doesn't, I don't see where that is. It is, it's on page 5. And thank you for asking the question, because it is confusing because there are multiple terms that are in there, so I had, I had to reread it several times myself, but on page 5, Under sub G like Grover. It states that an insurer shall not shall not distinguish between participating vision care providers based on the following characteristics, and there's a huge laundry list in there, including discounts, dollar amounts, all of these things. So today, when you go in and look at a directory, as I mentioned before, sometimes there'll be a star by a provider that's an in-network provider that offers a greater discount, etc. This would prohibit us from being able to distinguish on that basis. I guess I'll ask the. The sponsor when he gets back up there, but I just, I'm afraid I'm not seeing that interpretation as you interpret it, it sure seems, and, and I'm not trying to argue that and I have to look at that, but it just seems like to me they can still list those things out, can still list how much it is and then the consumer, I mean, I don't see how that, I guess we can differ. I'm, I'm sorry, but I just don't see it, but I'll accept your explanation. No, yeah, that's fine, um, to their own testimony, they were trying to basically reduce optometrists to a commodity, which is an inability for us to distinguish between one and another. I would argue that health care is not a commodity and certainly medical services are not a commodity, and so being not being able to share that kind of Information about one versus another. I don't see how anyone can argue that that benefits consumers. I also realized I forgot to mention chair, if I might, um, with respect to the Texas, uh, and the Oklahoma, um, legislation that was introduced, um, you should be aware that the Texas, uh, the Texas bill that passed was immediately enjoined, um, it was never put into law and it was challenged on constitutional grounds very much similar to those that this is what reminded me of it, that the representative just mentioned, which is that It doesn't make sense from a consumer and a healthcare transparency perspective to not be able to share that distinguishing information about providers. That is the crux of that lawsuit. It is on appeal, but at this point, our appellate arguments went well. We expect it to be found in our favor, but as of this moment that Texas law was completely enjoined. Thank you for your testimony. I believe we have some more questions. Do you work? Thank you. You say it's on appeal? It is. So that means that a court found in favor of the optometrist. No, the court found in favor of the plans and the optometrists to get up on appeal. Why would it be appealed? Who's appealing it? The Texas version of the AOA has appealed it. Yeah. Would you tell me one more time who you represent. I'm sorry. No, no worries, it's a mouthful. It's the national association of Vision Care Plants, NABCP. It's an alphabet soup you represent the insurance companies. We represent, yes, we, so we have most of you have? How many do you have that own the retail store? Um, I don't know how many of them. We have 29 members, so I don't know who owns you can't tell me how many of them have retail stores of the 29, I don't know because we don't quite frankly from an association perspective, we're not focused as much on the retail aspects of the medical. How many of them have lens companies. Lens companies again, that's not really, I sort of focus on the medical aspects of frame companies that make frames. Again, that's kind of the same question, so I'm I'm not, I can find out and get back to you. I just don't know off the top of my head knowing how many companies you have to have a retail stores. And if you're plan is so good, do you have a, a facility available in every community, in every 75 counties of the state. Uh, no, no one has community. There aren't even optometrists in all 75 counties of the state I didn't ask that question. I ask you, do you all, if, if your plan is so good, and you say it's costing the consumers this bill would cost the consumers. How can you say that when you don't have retail stores to be able to provide the elderly who maybe can't drive 75 miles to Metropolitan area. I think I think if you look and check, I think you'll find that most of your retail stores that offer the advertising on television or located in the large states in in large communities where the population is. Absolutely, but the elderly people out in the state, they, they cannot get to those facilities sometimes, is that correct? I totally agree, Representative. Um, I will say, given that we have a state with 40 % population located in rural areas. We have to look to alternative solutions for those coverage in those areas, to your point, I agree, and that's where, that's where we have had some of our members, not all, but some members have looked at online um examination options and uh telehealth as an alternative for some of those rural areas because that is admittedly an issue, um, as far as the geographic representation of Arkansas, um, what Thankfully, it's stayed pretty stable in terms of the percentages of optometrists in the different geographic areas, the one exception though, sir, is in the Northwestern quadrant. There has been a growth there from 33% to 39%, which is probably similar to your population growth in that area. OK. Let me ask you another question. How, how do you handle plans with uh how do you remember, how does your membership handel plans that are with a a company that's providing vision plans for their employees. Do they steer them to their facilities to get their vision test. Um, I'm not sure I answered, I understand the question. Would you mind, do they steer, do they tell the employer that's purchasing the visual plan that there are people have to buy uh get their eyes checked and then they have to buy their lands there or at a facility that is owned by the company which the insurance company may very well own. Um, there's never a have to do. do anything our networks are very broad based, so while there are planned offerings where someone who goes to a plan offered plan owned facility may be able to secure those services at a lower price. The choice is still theirs to go anywhere within the network, so many of the folks that are in the optometric association are in our networks.t have a choice, do they, if their plan is being paid for by the company. No, they do still have a choice. All that all that's offered is that to pay out of pocket. Uh Because they they plan perhaps will not be accepted anywhere, but where your insurance company steers them usually it is a static benefit. It's a flat benefit irrespective of where you go, but the question is what would be the out of pocket above that flat amount that you keep avoiding to your plan steer their their their clientele in a company. Do they direct that directly to a facility that's owned by one of your companies. I have never I'm not familiar with how self-insured employers, um, if you're referring to is convenient to me that questions that are very relevant, you don't know the answer to, and yet you're here representing 29 members. I'm representing Vision Care plans, sir. I'm not representing employers, so I wouldn't be able to speak on behalf of employers, but again, that is certainly information I could get for you not apply to employers. My question should apply to you have companies that tell employers where they plan can be used. That's my question. I've never heard of such a provision. That's all I can say. I've never heard of such a thing. I've never heard of telling anybody anything. as I mentioned you're not saying it doesn't exist. Well, I can't prove a negative, sir, but based on my knowledge thus far, a plan offering includes some plan-owned facilities that are often offered at a discount and many that are not, and the consumer has the choice of where they would like to go within that network offering. So, I believe that's what I did explain before. That is, that is how the plans operate. I don't know what else to say, but for I can't speak to the details of every single individual plan because of course the plan offerings vary. So you're not saying that they don't. Uh I, I, I think I've answered the question. I don't, we're going in a circle. Anyway, thank you, Mr. Chair. Saying, are there any further questions from the committee? OK, now, thank you for your testimony. There's no one else. So bad, but is there anyone who wants to speak for the bill. At this time, no. OK, then we will go back to speaking against, I believe, Mr. Smith. Mr. Smith, just introduce yourself, who you're with. And Present your testimony. Thank you, Mr. Chairman. Committee, thank you for the opportunity to to visit about House Bill 1353. Uh, my name is Derek Smith. I'm with the Mitchell Williams law firm here in Little Rock, Arkansas. Today I'm representing the American Council of Life Insurers. The ACLI is the leading trade association representing the life insurance industry. They promote and protect consumers' financial well-being through life insurance annuities, retirement plans, long term care, disability income insurance and dental vision and other supplemental benefits. ACLI has 275 members throughout the country and in Arkansas, ACLI's members represent over 93%. % of life premiums, 97% of annuity considerations and has 245 members licensed in the state. Today I find myself in the unfortunate circumstance of having to testify against a bill being sponsored by my good friend, Representative Eubanks. And I have to oppose it today, not because we disagree with everything that's in the bill or have objections to the entirety of the bill, but there are certain provisions in it that that do cause a significant concern and because it was only filed on Friday, we haven't had a chance to negotiate any of them. Uh, most of them were referenced uh by the previous witness, but I, I do have to say that the provision on transparency is of significant concern, and I know there were some conversation back and forth, but we read the bill in the same way that it prevents a visit insurer. From disclosing discount information of providers and we can't see any reason why a consumer should not be able to know truthful information about the providers in its network. We see no reason why a vision carrier should not be able to tell its consumers that some optometrists offer discounts at one level while other offices offer discounts a different level. We say no reason why you can't describe the products that are sold, the brands that are offered at different optometrists as long as the information is true, we see no reason why that shouldn't be permitted. Again, but there are other things in the bill that we quite frankly don't understand, would like the opportunity to to visit about them, but primarily it's a transparency and if if The sponsors or others are willing to say that the bill doesn't prohibit the things that we think it does, then we'd certainly take that, but based on our reading that says in insurer, Uh, she identify participating providers on a neutral manner and shall not. Distinguish between uh vision care providers based on the following characteristics including discounts, uh, dollar amounts, brands, sources, materials covered in our mind that means you can't do it, and we see no reason why you shouldn't be able to. Thank you, Mr. Smith. It appears we do have some questions of Acre, you're recognized. Thank you, Mr. Chair. I, I think the issue is not on the transparency of it being listed. The issue is how those discounts were negotiated on the back end and the transparency that doesn't exist and the lack of negotiating power that the providers have. So should these exist, the reason that they're, I'm assuming, wanting to be prevented is because they weren't negotiated in good faith across all participating providers. So, um, I understand the concern there that the consumer needs to be made aware. But transparency starts well before it shows up on a website that's owned by the company who makes the product. I don't know if there was a question there, but if I could. I agree. Do you agree Representative Baker, it's a, it's a reasonable point. And if the concern is the negotiating position, I suggest we get together and talk about that, not about telling consumers what is factual, actual information. Follow up. Uh, so I guess my concern is that we heard testimony about a growth in them paying into this program, and they've used that to spread the risk, um, to provide this level of care. But what it sounds like is that they've reinvested those funds into actually vertically integrating and creating a position where there is no negotiation, so I respect your request that negotiations happen, but it looks like we're well past that and so um I would just I guess argue that the transparency starts again well before. the consumer sees it. Wouldn't you agree? Sure, transparency is transparent. We believe in transparency. Thank you, Mr. Smith. I see no any further questions from the committee for Mr. Smith. OK. Thank you for your testimony. Thank you. Is there anyone else in the audience who would like to speak for the bill. Absolutely. Just refresh our memories, you know, we know who you are, but go ahead and restate who you are. Matt Jones. I'm an optometrist and live and work in Bliel. Um, I just wanted to, um, clarify a few points. It was said that the Texas law was put on hold and that it's not in law, that is, it's not factual. The law is actually well in effect. There is a lawsuit against two provisions, which is the tiering and the steering part of which in ABCP and certain vision plans have filed a lawsuit against the state because the bill was passed, so it is actually in fact it's just the tearing and the steering part, um, has been put on hold by that is listed, you know, Do you talk about transparency again and a debate on whether you can talk about this, but um, you know, I was offered um A six-figure deal we talk about transparency to the to the consumers. I was offered 6 figures last summer by one of the insurers to increase my percentage of my bill in their labs and to sell frames that they own again, when you're talking about vertical integration, one of the particular insurers owns Ray-Ban, Oakley, Costa, number of DKNY. I mean, they actually own these companies, Ray Ban Costa Oakley. Um, I tried once to not Carry these plans to try to help independent providers, and I did, and slowly they started getting bought up by them. And so I was offered a six-figure deal to increase my my product that's not transparent to the patient, um, where I would have to sell their products, which ended up costing more, and I turned it down because that's not the way I want to do business, so that's not transparent either, and you know, as far as representative Doby, um, Your question, and I think that goes back to what Mr. Smith was talking about. The language in our mind reads that they could advertise discounted products. You just can't rank or distinguish distinguished doctors, not on quality of care, but rank and distinguished doctors based on discounts. Based upon these companies that these VBMs own. Thank you. Any questions. Thank you for your testimony, works of Eve, she recognized for her question. Thank you. I don't think I understand this issue quite as well or even close to the way that Representative Anchor does, but at the end of the At the end of the day, you know, if we're trying to do what's best for our constituents. I'm trying to understand the sentencing in here that says shall not distinguish between participating in vision care providers um based on discount or incentive offered by the vision care provider that are not, not covered by the insurer. I mean, what would be wrong with telling the consumer there's a discount available. Hell, I don't, I mean. Help me understand that. Get Conduct yourself against that I is he able to come back up Blake can answer if he wants to. I don't care. Absolutely we're still in the testimony. Absolutely. Doctor Soga, if you want to come back, reintroduce yourself. Um, we are still in the 4, portion of this, so absolutely we can do that and we The nose will have a chance to respond, of course, too, so just reintroduce yourself, please, and you may proceed. Yes, Dr. Joe Sugg from Heber Springs, optometrist and of course for this bill. Um, and so If you would, if you mind to rephrase your or to repeat your question. Yeah, I'm just trying to figure out, I think I'm understanding the vertical integration part, but there's a sentence in here that says that uh the vision benefit manager, uh, shall not distinguish. Um, based on the following characteristics discount or incentive offered. By the vision care provider and then, uh, that are not covered by the insurer. I mean, Are we saying we don't want the end user to realize there's a discount available or am I misreading you? I just help me understand, example I can give you, um, with these companies, if you go on their directory and search for a doctor, those doctors are gonna be listed as premier or plus providers if they've purchased more of that company's product, so they're they're differentiated as, you know, a different level or recognized differently on those directories, based on how much product they've purchased, and that's what that, that top tier or or better looking appearance on the directory. So are you talking about? So, so the vision plans have their website directory. So if you're going to find a provider in your network, um, and you search for that, then they offer lower copays, higher frame allowances, etc. to these providers who are considered premier or plus providers based on the amount of that their product they have purchased and sell in their offices. OK, thanks. Real Gramli recognized. Uh, thank you. I've got a, I've got a series of questions, um, so do you know if you were to go on to a search engine and just search up uh an optometrist locator, it would take you to a website called Iolocator.com. Did you know that if you were to go onto an AI and look up who owns this particular company, they would tell you it's a cellular lux Luxottica. And did you know that if I ask, well, do they own any insurance companies, they'll say that yeah, we owe iMed vision care, which when I went back to the website, it said, uh oh, it is I locator. I iMed vision care. So, um, did you know that? Did you know that if I asked Uh, do they own any other things and they would say that uh They own a variety of brick and mortars, ophthalmic lenses, optical equipment, and vision care solutions along with design, manufacturing and distribution. I didn't know any of this just a few minutes ago, so it's really, it really kind of puts it in the context and I know we had someone who spoke earlier who said, Well, I just don't know if anyone owns this stuff, but apparently, um, at least this one iMed Vision Care owns um different companies such as Glasses.com, Contactsdirect.com, LensCrafters, Ray-Ban, Target Optical, and Oakley. Did you know that? Yes. Is that Thank you Oh, Representative Dalby, you recognized. Thank you, Mr. Chair. Representative Es uh made me think of something and I guess I wanted to ask this question, um, I'm fascinated by the fact that they're they're ranking doctors as preferred by how many services or. In my world, we'd call it widges and the law world, how many things they're buying from this company, so maybe should this bill have a provision in there that uh in in. What they can list and everything that they have to then uh identify that these doctors are ranked by how many products are. Glasses, lenses, or whatever that they buy. Have y'all thought of that? It seems like that would certainly tell the consumer that the reason why they're being preferred is because they've bought 10 number of things. Just a question, thought, yeah, so I think that's that's to a degree what we're trying to achieve by not allowing Providers to be differentiated based on that. Not, I mean, obviously, it doesn't Neutrality in not differentiating those providers that carry more of that product. I appreciate that. I just didn't see that clearly in the bill and if that's, if that's the purpose and understand I'm a, I'm a co-sponsor. I'm not against the bill necessarily, but I want it to be really the very best bill that we send out in a really strong bill to put people on equal footing, and I'm not sure after hearing representative E's question whether or not. This has been accomplished, but you're telling me you feel like it is by this wording. Is that correct? That is our goal to try to accomplish that with this. We feel like we we're trying to address that. I don't think I answered his question very well as far as prohibiting anyone from from advertising discounts, just not differentiating between in-network doctors, you know, doctors in the same network just based on that amount of product they've purchased and what, what level of provider they are. You could tell him. You want to answer? I think you're, Um Mr. Chairman. Um, so if I, if I get this correctly, what you have is the insurance company that you've agreed to be a network with. Listing its providers that it's members. have paid for this plan to use it, and it shows that there is a ranking and some sort of uh For lack of a better word, steering towards providers who have purchased product. that the insurance company has another indirect affiliated relationship with. Is that correct? Yes, that's correct. OK, so I think that to answer your question, the issue is, is that they're steering patients based off of a pay to play sort of scenario where it has nothing to do with the insurance companies's agreement between the insurance and the provider, it has to do with this secondary relationship where if you've purchased product. Owned by our sister company, you'll be listed higher in the provider database. That's exactly right. The end. Represent this maybe hard way to do it, but so the discount or incentive offered is that the discount and incentive offered to the consumer, or are we talking about the discounts and incentives that have been offered to the The vision care provider. I don't care who answers it again. No, yeah. speak for. Yes. So, I mean, it could be both. I mean, it's our lower copays or higher frame allowances to the consumer, um, but again, based on how much of that product that provider is purchased, not on any other. Not for any other reason. Thank you, Representatives. Any further questions from the committee? OK. Thank you, gentlemen. OK, is there anyone else who would like to speak against the bill. Absolutely. Thank you, Mr. Chair. Um, just to clarify several of the points that were brought up in the last discussion. Firstly, it is a flat out misstatement to say that the Texas law is in effect. It just isn't. Um, I have the case number here for you. Um, it is 5 colon 23-C like Charlie, V like Victor hyphen 187-C like Charlie. So I've read that into the record. You can look it up. The law has been enjoined period. There's no further discussion to be had there, so that just needs to stop that whole discussion. With respect to disclosing discounts. Uh, it is. Subjective at best to make a guess as to what the ranking criteria is in the directories. If, as the representative asked, we want to have a disclosure that indicates what the ranking is based on, we would not necessarily even be opposed to that and would be willing to speak to the author's office about entertaining language of that sort. However, that is not the language that is in the bill today. The language in the bill today prohibits us from sharing discount information of any kind with consumers in any way in the directories. So the bill itself does not draw any differentiation based on anything. So if there is a desire for greater transparency in terms of how the rankings are achieved, then I think it would be great for us to have a discussion about that and figure out how best to achieve those goals, and I don't believe that we would even be opposed to that. I just would like to have a discussion about it. Um, so that, that, that'd be great. Let's talk about it and figure out a way to achieve those goals because I believe where we are coming from is in favor of transparency. So if we need to provide more information to consumers to make that more clear, so be it. But I don't think putting a gag order on the vision plans prohibiting us to tell a consumer where they can go to obtain those services at a lower cost. is beneficial to consumers, and I will say that all day long, um, Yeah, so the ranking doctors based on amount of product purchased. Uh, I've never heard of such a practice. So, uh, if it exists, I certainly don't know about it. And as I mentioned, if we are going to aim for further clarification and disclosure to consumers. I believe that that issue would be alleviated entirely. And I do agree with the comment that the current language doesn't achieve the goal of trying to improve transparency for the end consumer, and that was what I said at the outset of this discussion. And I really feel that we need to revisit the language as a result. With the question that was asked about are the discounts transferring to the end consumer, or are they only going to the insurer. They are absolutely going to the end consumer. That's the entire point. So when they are listed in the directory and they indicate which providers offer what discounts. It is the discount that will ultimately be received by the consumer, whether that's in the form of a higher frame allowance or what there's different ones depending on the different plans. But that definitely goes directly to the end consumer. That is the target audience of that. So, And Just wanted to clarify those points. Thank you, Mr. Chair. OK, thank you. We do have some questions. Representative Eaves, I believe you were first. Thanks. So are any of the doctors punished in any way or deemed in any way if they don't sell the products that these vision benefit managers want them to sell. I don't know about dinged, um. Um, in terms of I know contracted providers just like anywhere else in healthcare, you've got in-network and out of network providers. And if you go in that network, you'll recognize more bang for your buck, as it were, than if you go out of network, it's exactly the same in vision care, so I'm really not understanding the differentiation there because it's the same exact idea, um, you're going to have preferential providers just like you do in commercial healthcare, same. true for vision healthcare, so I, I guess I don't really understand the distinction because that's exactly the same managers trying to steer patients to those particular doctors that buy more stuff. From the PB whatever called BBM. Firstly, BBM is a false acronym, as I mentioned before, so I will object to use of that term for vision care insurers, do they offer incentives to go to certain contracted providers. Absolutely. But again, this is no different than we see in all of healthcare. If I go to get an MRI, I can go out of network and pay a higher deductible and higher coinsurance, or I can go in that. work and get a lower cost. It's exactly the same model, so I don't really understand the distinction, actually. I don't understand why you're saying vision benefit manager is a made up term. It is a made up term. Centen Vision uses that term. I don't know who Centene Vision is, but none of our members use that term, and I've never seen such a thing I just Googled it. They're all over the place. It's not I believe you. Well, I don't know about Sun team, but we have 29 vision plans, none of which use that terminology. Yeah OK. Thank you, Representative Eaves. Representative Ladyman, you recognize? Yeah. Representative Acer, he recognized. Thank you, Mr. Chairman. Um, I appreciate you helping close some loopholes here. I do think there is a concern here where you're using the term in of network and out of network as far as being a price differentiator, all of these providers are in-network. You're differentiating them. They've signed a contract to be a provider and then they're tied to a separate incentive that involves purchasing certain products, and that's how those people are being, so they've agreed to offer your members a service. They're held to a quality standard. They can be kicked out of network, and yet they are Under-recognized for not purchasing a separate line of services that is owned by the insurance company, so this is not an in of network out of network issue. They're all in network and they're being ranked on a separate non quality based issue. It is not a quality-based issue for the consumer to know that provider X bought more of the product than provider Y? I would agree with you if that was actually correct, except that that is not the basis for the differentiation. That's that's convenient. What is the basis for the different Some providers are willing to offer a lower contracted rate to see folks than other providers. That is the bottom line, especially newer practices are more likely to charge less money for folks who come in and they're willing to charge less to see that same patient, then another provider. So, like I said, if we offer transparency in terms of the differentiation, I believe that addresses the issue that you're mentioning. So you're saying there are in-network providers who have agreed to be a more further in-network provider? I guess you could look at it that way, sort of, yes, and those opportunities are not offered universally or they are offered universally to all the current network providers. I don't know every company does things differently and that's proprietary. I could, I could find out. I don't know about all the specifics of the contracting, but to your point about the product purchasing that you mentioned a minute ago, I believe that that is something that we could easily handle by differentiation to provide different ation in the directory on that basis. So if that's where disclosure would be helpful, then I think we should talk about that as I mentioned before again, and I'll just reiterate that the concern is that these are not quality-based metrics that you're ranking these providers on that your members don't receive a higher quality of service. So you, so, OK, let me ask a question in response then. When you go and look at a directory today for commercial health, and you're looking at, I don't know, uh, I'm trying to think of an example, orthopedists, for example. How would you How in your estimation, how would one create a differentiation amongst those providers. Well, we use the in-network and out of network that they've agreed to those contracted terms and the rates, so the cost sharing of 2040, 60 or the cost of percentages 1020, 30, it's in network and it's out of network. I've I've never seen a chart that shows a flow of here are the in-networks that play. Ball in a whole different arena. Here are the in-networks that don't. I mean, you either are in-network or you're not, and so for to hear that. You have in-network providers and you have them competing against each other in the network they've agreed. It seems counterintuitive to the consumer actually that this isn't quality based, that it's, you're talking about metrics where they've agreed to take things cheaper or they've agreed possibly we don't know, are they buying from a certain product line that's owned by the insurance company. I mean, you're ranking providers, which is a I would say direct way to steer patients to a higher ranked provider that is not based on a higher quality of care. OK, so then I guess my question to you would be, how would this bill address that issue? Because I don't feel that in any way it would address that issue if you're removing the ranking process altogether, then you're just informing your members that you are the people who have agreed to participate in our network with no differentiation whatsoever for something that the consumer will ultimately have to purchase. I don't see that makes any sense. the, the hours, the location. There's a lot more differentiation in healthcare than hours and location with all due respect, and y'all have offered 0. Of differentiators. The only differentiator you've offered is I guess that they are willing to do stuff cheaper. When it differentiators are your members willing to offer? Perhaps what would be best would be to have a discussion about how to address that issue if you feel that that is truly the issue, and we could amend the bill language to accomplish that goal, because nothing in this bill would improve the issue that you are raising. I respectfully disagree. Yeah Thank you, Represent Baker. Moving, um, Rexton Wooton, you're recognized. Yes sir, Mr. Chairman. Thank you. Would you, would you give me another definition of, of why vision benefit manager is inadequate or not. Yes I will I didn't discuss this before, but I will. Vision care plans are not VBMs and bear no resemblance to pharmacy benefit managers or PBMs. Firstly, Vision care is a voluntary benefit, meaning that people opt in or out if they would like to participate in the plan. If you have a health plan and your health plan uses a PBM, you don't get a vote as to whether the PBM will be utilized for that health plan or not. Completely different business model. Vision care can be purchased with or without a medical plan. on your own. No one goes and buys anything from a PBM directly. It is a B2B model. It is not a B to C model. Vision insurance can also be purchased independently by consumers on the open market. So you can go out today and buy a standalone plan yourself. I have not met a person yet who bought anything directly from a PBM. I don't think that's a real thing. Negotiated discounts are passed on to consumers with the vision plan, whereas the PBM savings are the black box that I referenced before that are opaque and often those savings flow back to the PBM itself or possibly the underlying insurer. Vision plans have simple or no formularies, whereas The vision on the vision vision plans of simple or no formularies, and we offer patients choices based on different tiers, whereas PBMs have complicated and non-transparent formularies, and the PBMs will dictate the medication choices that the consumer has to abide by if they're participating in that plan. Vision plans provide specified annual benefits. I mentioned that before. I usually get a frame and allowance and usually get something towards your, uh, your vision exam. It helps to lower the out of pocket costs for the patient, whereas one of the largest criticisms leveled at PBMs is that they are cost drivers as opposed to driving the costs down for the consumer. Um, and healthcare members do not always benefit from PBM negotiated prices. That's been all over the news quite often the opposite is true. Uh, rebates can serve as a cost driver on the PBM side and then the drug space. None of that is applicable in our space at all. So really we have nothing in common with pharmacy benefit managers. We don't operate similar to them in any way, shape, or form. Thank you. Thank you, Representative Morton, saying no further questions, ma'am, I appreciate, we appreciate, I appreciate your testimony. Thank you, you being here today, Mr. Smith, you, you came to the table. Would you like to, do you have anything you'd like to testify to since you're here? Since I'm here, I'll only say briefly that you know the discussion that's happened in the last few minutes, especially involving Representative E, Representative Dalby. Uh, I think highlights the point of really wanting an opportunity to discuss real concerns and real issues. Not all vision care plans own uh materials providers or facilities yet. This bill as written would prevent all of those plans from disclosing discount information and things of the sort that would be beneficial to a consumer. If the real if the concern is um integrated offerings certainly happy to have a conversation about that. Um, we think a conversation would be helpful to the committee. We think the conversation will be helpful to the sponsor and the proponents of the bill, and that's what we're asking for is opportunity to do that rather than passing a bill that does way more than has been described. Thank you. Thank you, Mr. Smith. Any questions for Mr. Smith committee? OK. Thank you for your testimony. Representing viewbanks, you are recognized to close for your bill. Thank you, Mr. Chair. Tort reform was easier than this, my gosh. Members, I, I, I live in a rural Community. I have one optometrist in one town and one optometrist in another town, and they provide services to people that cannot travel to uh larger metropolitan areas, whether it be Fort Smith, Russellville, or Little Rock. So, My goal here is to try to make sure that my local optometrist, they, my local providers are in business to serve my constituents, and that is the sole purpose of me running this bill. I, I, I am very familiar with vertical integration and and not in the health care arena, but in the farming arena, and I know that there is no possibility that you ever have an opportunity to really negotiate. It is a take it or leave it. situation And with that, I would make a motion to pass. We have a motion to pass for banks. That is a proper motion at this time, members, we've had a lot of debate, but is there any discussion on the motion. seeing none, all in favor of motion do pass, say aye. Any post say no. Congratulations, direction you banks, you have passed your bill. Members, we're not leaving just yet. um we have some announcements, um. Don't, do not forget the picture, 9:45 next Wednesday. And We're going to hear HB 1177 on special order next Wednesday. So that's gonna be the bill we hear first. And if and only if we get through that, are we gonna hear other bills, um, subsequent to the HB 1177. And, and again, the photo is on the house steps, um, for clarification on that. Any other business before the committee today? Thank you. We are adjourned.