SACRAMENTO, Calif.—After years of political wrangling, the California legislature voted Friday, Sept. 11, 2015, to approve transformative new legislation (AB 684) governing the relationships among optometrists, opticians, optical companies and managed vision care plans.

The new law, which is expected to be signed by California Governor Jerry Brown no later than Oct. 11, 2015, and go into effect by Jan. 1, 2016, will allow the establishment of landlord-tenant relationships between a registered dispensing optician (RDO), optician and an optical company, among other provisions, including allowing an optician or optical company to own a health plan if they do not employ doctors and allowing optometrists to contract with other health plans, according to the language found in AB 684. In addition, health plans that employ doctors must transition them to lease arrangements within three years (excluding medical groups that employ doctors).

Existing law in effect prior to this new bill prohibited a licensed optometrist and a registered dispensing optician from having any profit-sharing relationship in any form, directly or indirectly, including a landlord-tenant relationship, with each other, the bill’s language explains. Before the implementation of this new law, a licensed optometrist was also not allowed to have any profit-sharing arrangement in any form, directly or indirectly, with any person who is engaged in the manufacture, sale or distribution to physicians and surgeons, optometrists, or dispensing opticians of lenses, frames, optical supplies, optometric appliances or devices or kindred products. These restrictions will now change.

Under the new law, optometrists will be permitted to lease space from an optician or health plan with a lease term that cannot be less than one year and cannot be terminated for a reason that interferes with the practice of optometry. Other provisions of the new law include transferring the regulation of RDOs from the Medical Board of California to the California State Board of Optometry, replacing an optometrist with an RDO on the state board, establishing an RDO advisory committee, and establishing a three-year period for the transition of direct employment of optometrists to leasing arrangements. In addition, the new law will allow ownership of a health plan by an optical company or by an RDO.

Although the new law will allow a landlord to require optometric services to be provided during business hours, landlords cannot control the doctor’s schedule, how many patients the doctor sees or the time interval for appointments, according to a statement released by the California Optometric Association, which stated that the “decades of litigation . . . leading up to this bill stem from years of discussions about the business model utilized by some retail optical establishments that violates California statutes that prohibit economic relationships between optometrists and opticians.”

California Optometric Association president Barry Weissman, OD, PhD, FAAO, said, “The agreement finally puts to rest almost two decades of litigation. It allows optometrists to lease space from an optician or health plan and includes sufficient protections to ensure the doctors who work in these settings can practice independently. Most importantly, it includes real enforcement provisions to ensure any violation of the law will be penalized.”

Also according to the new agreement, lease payments cannot be based on the number of eye exams performed, prescriptions written, patient referrals or the sale or promotion of the products of an optician, optical company or health plan; the optometrist has exclusive control over the selection and supervision of optometric staff; and the optometrist has exclusive control over the fees charged, examination procedures and treatments provided, according to the statement released by the COA.

The COA statement further states that the bill also includes key new enforcement provisions, transferring the regulation and enforcement of the laws governing opticians and nonresident contact lens sellers to the California State Board of Optometry in an effort to consolidate the investigation of consumer complaints. Currently, enforcement of complaints against retail optometry stores is shared between the optometry board, the Medical Board of California and the state Department of Managed Health Care.

The agreement also allows the California State Board of Optometry to inspect leases and the premises where optometrists lease from an optician or vision plan and to establish administrative fines and citations that can be issued for violation of the new law, the COA statement said.

In support of the new law, the National Association of Optometrists and Opticians said, “We believe that AB 684 will eliminate the ambiguity in existing law, which governs the relationships between optometrists and registered dispensing opticians, co-located sellers of eyewear. By including important protections and prohibitions, we believe that this bill serves to protect doctor's clinical judgment and provide greater transparency for both patients and regulatory entities.”

Also in support of the law, National Vision, Inc. and FirstSight Vision Services, Inc., said “We are pleased to write in support of Assembly Bill 684, which will protect vision care access for working Californians by bringing clarity to outdated laws governing how and where optometrists can provide eyecare services in the state.

“National Vision and FirstSight have been part of a robust stakeholder process that included our industry partners, the Attorney General's office and the Governor's Office that has resulted in the language that was amended into AB 684 on Sept. 4, 2015. AB 684 will now ensure that the more than two million Californians who receive eyecare at one of California's more than 600 vision care centers continue to have access to the high-quality care provided by the nearly 2,000 optometrists and support employees who work at these locations.”