It is with joyous glee that I announce to my readers that the Texas Optometry Association has been successful in obtaining Governor Rick Perry’s signature for Senate Bill 632. This very short piece of legislation (attached below) carries HUGE implications for both optometrists and consumers in the state of Texas.
With these simple words: “A contract between an insurer and an optometrist or therapeutic optometrist may not require a discount on a product or service that is not a covered product or service,” optometrists in Texas now have the freedom to build their brands and market their services and products as they see fit, a first step in removing the chains of slavery to vision plans.
I first called for this action in a post back in 2008. I am thrilled that the TOA took up this effort and is now (to my knowledge) the first state to be successful with this legislation. I know of several other state optometric associations who are working on this legislation. They deserve your support.
What does it mean?
Today, virtually every vision plan provider agreement has language requiring the offering of a discount on services that the plan doesn’t cover. As but one example, VSP requires a 30% discount on non-covered materials provided on the same day of service as the exam. That means that a provider is required to extend a 30% discount to all patients. As a result, providers are limited in their ability to promote their services in any sort of creative way. That’s a brand destroyer.
As but one example of the opportunity that this new freedom provides, imagine the ability to work out a deal with local hairdressers to provide a coupon for a new hairstyling to go with that new pair of eyewear. That incentive has far more perceived value than a percentage discount and is likely less costly to the provider. Or how about dinner for two? Or a new handbag? The contractual obligation is overreaching and limits the provider’s ability to compete. Let’s get rid of it in every state!
My strong belief is that now is the time for all state associations to get behind this legislation and make it a top priority. Why? Simply stated, this legislation provides vision plans with the ability to effectively increase provider reimbursements at no cost to them. Additionally, this change provides no competitive advantage/disadvantage to the individual plans. The legislation provides a level playing field for all vision plans since they can simply tell their employer groups that “the discount is eliminated due to the law of the land.” It’s really a win-win-win. Further, as an industry, our second-pair sales have been abysmal with these discounts, let’s see what happens when providers can get creative with their offerings. Eliminate percentage discounts and provide more creative incentives. Your brand will be better off for it.
My hat’s off to the Texas Optometric Association Legal and their Legislative Chair, Tommy Lucas, O.D., for removing these chains from Texas Optometry. Congratulations!