Georgia Supreme Court Affirms That Spectera Can’t Require Optometrists to Use Their Labs

By


ATLANTA—In a decision that could set a precedent for other states with similar laws, the Georgia Supreme Court has affirmed a lower court’s ruling that Spectera violated Georgia’s Patient Access to Eye Care Act when the managed vision care company required independent providers to use Spectera’s lab network for eyeglasses and/or contact lenses. While the full impact of the court’s Nov. 4, 2013 decision in the case of Spectera, Inc., v. Wilson, et. al. has yet to unfold, some industry observers feel that because there are laws with similar language in other states that it possibly could set a precedent for similar lawsuits elsewhere. Another scenario suggested to VMail by those representing managed vision care companies is that there could be efforts by providers to try to move toward this type of legislation in other states, as has been attempted unsuccessfully in Pennsylvania over the past few years.

Adopted in Georgia in 2010, the Patient Access to Eye Care Act is legislation written and advanced by the American Optometric Association (AOA). The Act has many components, a large part of which prevents insurance companies from discriminating between classes of eyecare providers. It also includes provisions that prevent managed care companies from precluding a covered person who seeks eyecare from obtaining such service directly from a provider on the health benefit plan provider panel who is licensed to provide eyecare.

While laws with similar language as this have also been adopted in a number of other states, including Alabama, Arkansas, Colorado, Maine and West Virginia, there are no similar lawsuits, challenging discrimination as well as the lab and materials issues, currently pending in these states. However, in response to a question about what the implications of this decision may be, Brian Reuwer, AOA associate director, state government relations, told VMail, “The law did what it was designed to do, and it’s possible that it could set a precedent for other states.”

A more direct and immediate result of the decision, however, will be its impact on Spectera and other organizations with their own labs that provide managed vision care in the state of Georgia that are not allowed to require providers to use only their own labs. In addition, according to those representing the major managed vision care plans, there is now the potential for materials costs and premiums to go up while quality could go down. In fact, the National Association of Vision Care Plans (NAVCP) filed an Amicus Curiae Brief along with this case in the Supreme Court of Georgia, predicting that a decision disallowing Spectera to require independent providers to use its own labs could result in “higher eyecare costs” and “limited access to such care.”

In a statement to VMail following the Georgia Supreme Court’s decision, the NAVCP said, “The court’s opinion makes clear that Georgia’s Patient Access to Eye Care Act requires a nuanced examination of provider contracts, and the outcome will be highly dependent on factors that may vary with each contract and provider at issue.”

The case began in 2010 when Steven M. Wilson, OD, of Wilson Eye Center in Valdosta, Ga., filed suit after Spectera announced in October 2010 that it was phasing out its Patriot provider agreement that had allowed independent participating providers to use their own materials (lenses, frames, contact lenses) or materials obtained from any other source to service Spectera insureds. Instead, the company was replacing Patriot contracts with independent participating provider (IPP) agreements that required providers to use Spectera’s lab network for eyeglasses and/or contact lenses. In contrast, Spectera did not require the same restriction for its retail chain providers.

The lawsuit argued that the new IPP contract had the effect of taking the preparing, supplying and selling of eyeglasses and contact lenses out of the private practitioner’s hands. Wilson’s lawsuit argued that this violated Georgia’s Patient Access to Eye Care Act. In September 2011, the county Superior Court agreed, but Spectera appealed. The Court of Appeals upheld the ruling, so Spectera took the case to the state Supreme Court, which issued its final ruling last month that affirmed in part, reversed in part, and vacated in part a lower court’s decisions.

In addition to affirming that Spectera could not require its independent providers in Georgia to use only Spectera’s lab network, the Supreme Court also ruled that Spectera cannot terminate providers or bar new providers from participating on its panel for any reason not related to the provision of eyecare.

Wilson, who remains on Spectera’s panel of providers, told VMail, “Obviously, we’re glad that we prevailed, but we’re also glad that it’s applicable to all optometrists in the state of Georgia. It will allow all optometrists in the state of Georgia to provide the full extent of their services directly to the patient.”

While the Court of Appeals had imposed a permanent injunction that included permanently barring Spectera from terminating its contracts with Wilson and his associates, the Georgia Supreme Court vacated that portion of the injunction. Also, in a reversal of the lower court’s decision, the Georgia Supreme Court agreed with Spectera’s contention that it did not discriminate between classes of eyecare providers in Georgia.

“We are pleased to have resolved this matter and agree with the Georgia Supreme Court’s holding that Spectera did not discriminate between classes of eyecare providers in Georgia,” said a statement provided to VMail by Spectera. “We are continuing to evaluate next steps, including quickly reaching out to any contracted vision providers in Georgia potentially impacted by the ruling. We will make any necessary adjustments to ensure we conform with all aspects of the Georgia Patient Access to Eye Care Act. Spectera’s focus has been and will continue to be on making vision care more affordable and accessible for residents in Georgia and nationwide.”

Spectera, which administers vision plans for UnitedHealthcare, is a nationwide network of more than 57,000 retail and private eyecare providers that manage the nationwide group vision care benefits for more than 12.5 million members enrolled in a variety of vision and medical plans. Spectera's network also includes an optical laboratory which produces around 450,000 pairs of glasses per year.