Craig Steinberg and I have been friends for many years. If you don’t know Craig or his work, you should. In addition to being an OD, he is also among the most knowledgeable and active lawyers representing optometry and optometric interests. I don’t know anyone more devoted to the profession or an individual who is more of a straight shooter than Craig. Much of his work involves representing ODs when they run afoul of VSP and other insurers. I have given Craig my weekly space to share some urgent and ominous news about VSP. I urge you to heed his words and call your state association and the AOA to ask that they take action to stop this proposed legislation before it seriously harms the profession. By as soon as early August it may be too late. Act now!

Arthur B. Epstein, OD, FAAO Chief Medical Editor artepstein@optometricphysician.com

A Warning
By Craig S Steinberg, OD, JD

Vision care plans are an important and largely inescapable part of most optometric practices. There is no denying it. And VSP is, unquestionably, the most important for many practices. That’s not surprising, as VSP provides vision care coverage to about 80,000,000 people in the United States, and about 35,000 eye care providers are contracted with VSP. What might surprise you, however, is that, no matter where you live or practice, if you are contracted by VSP and you have a dispute with them or are audited by them, that dispute or the outcome of that audit will be settled based on California law.

You may wonder: how can that be? Well, it’s simple. Every doctor contracted with VSP signs a Network Doctor Agreement (an NDA). That NDA contains a common provision called a choice of law clause, and it says that California law applies to the interpretation or enforcement of the NDA, or to any dispute arising out of it. Does it really matter that much? Yes, it does. It matters because, as I write this, VSP is advancing legislation in California—known as AB 1092—that, if passed, will govern VSP’s process for resolving disputes, including audit outcomes. And, because your NDA says California law applies, that means AB 1092 will govern disputes and VSP audits no matter where you practice.

AB 1092 does two important things. First, it gives VSP the right, by law, to determine how much you owe them for any alleged overbilling by using sampling and statistical extrapolation. VSP will be allowed to examine only a few records, usually only about 12 to 15 records from any given year, and from that small sample determine that you owe them potentially hundreds of thousands of dollars. While VSP has been using this process for some time, the California Department of Managed Health Care, which regulates VSP, recently ruled that VSP was never authorized to use sampling and extrapolation. Through AB 1092, VSP wants to pass a law that prevents you from challenging their right to use this methodology. Though Medicare and Medicaid are allowed to do this, I’m not aware of any private insurer in the country that can, because it is inherently inaccurate, and it prevents you from using your actual records, other than the sample records chosen by VSP to audit, to prove you were not overpaid.

But, AB 1092 doesn’t stop there. It also prevents you from ever obtaining a judicial review of a VSP audit. Instead, AB 1092 forces you into a binding arbitration process under rules written by VSP. These rules are so favorable to VSP that, in February 2017, a United States Federal Judge in Sacramento issued an injunction against VSP using arbitration in a dispute with a doctor, ruling that the VSP arbitration procedure was probably illegal and likely so unfair that it was unconscionable.

The California Optometric Association (COA) has taken a “neutral” position on this bill—tantamount to support. Without any meaningful investigation, such as interviewing doctors that have actually been audited, they say the bill only applies to the “most egregious” cases of fraud by a provider, and not to “billing disputes.” Sadly, the COA has drank VSP’s proverbial Kool-Aid. VSP considers any adverse finding by its fraud investigators to be proof of “fraud.” That includes failing to adequately document that materials were dispensed (even if they were, in fact, dispensed), inadequate documentation of a contact lens fitting and even failing to find a chart at the time of the audit. VSP has a very broad definition of “fraud.” And, to rub salt on the wound, because the new law does not allow you to defend yourself in court, the only way you can prove you should not be forced into VSP’s unfair dispute resolution process is through VSP’s unfair dispute resolution process!

Many of us are dependent on vision care plans, and VSP in particular, in our practices. We work hard to provide great care for our VSP patients, often at levels of reimbursement that hardly cover our costs. Hopefully the AOA and our state associations will look carefully at what VSP is proposing in AB 1092 and protect the interests of their members by gaining a thorough understanding of the real implications of this legislation—independent of what VSP is telling them. Every state association should encourage the COA to oppose this bill, at least until they have carefully—and thoroughly—investigated its implications for almost every private practice optometrist in the United States. I urge you to ask your association and the AOA to contact the COA and ask them to block this bill from becoming law until it can be carefully evaluated, and its real impact fully understood.