House File 656 - Introduced HOUSE FILE 656 BY BOSSMAN A BILL FOR An Act relating to vision benefit plans, the regulation of 1 insurers and vision benefit managers, vision care providers, 2 and vision care provider contracts and including effective 3 date and applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2470HH (3) 91 nls/ko
H.F. 656 Section 1. NEW SECTION . 514M.1 Definitions. 1 As used in this chapter, unless the context otherwise 2 requires: 3 1. Chargeback means a dollar amount, fee, surcharge, 4 rebate, or item of value that reduces, modifies, or offsets 5 all or part of the covered persons responsibility, provider 6 reimbursement, allowed amount, or fee schedule for a covered 7 service or covered material. 8 2. Cost sharing means any coverage limit, copayment, 9 coinsurance, deductible, or other out-of-pocket expense 10 requirement. 11 3. Covered material means a material for which 12 reimbursement from an insurer, vision benefit manager, or 13 subcontractor is provided to a vision care provider by a 14 covered persons plan contract, or for which a reimbursement 15 would be available but for the application of the covered 16 persons cost sharing, regardless of how the materials are 17 listed or described in a covered persons benefit plans 18 definition of benefits. 19 4. Covered person means a policyholder, subscriber, 20 enrollee, or other individual participating in a health benefit 21 plan, vision benefit plan, or vision benefit discount plan 22 that provides for third-party payment or prepayment of covered 23 services or covered materials. 24 5. Covered service means a service performed by a vision 25 care provider for which reimbursement from an insurer, vision 26 benefit manager, or subcontractor is provided to a vision care 27 provider by a covered persons plan contract, or for which a 28 reimbursement would be available but for the application of the 29 covered persons cost sharing, regardless of how the services 30 are listed or described in a covered persons benefit plans 31 definition of benefits. 32 6. Health benefit plan means a policy, contract, 33 certificate, or agreement offered or issued by an insurer, 34 a third-party administrator, or a subcontractor to provide, 35 -1- LSB 2470HH (3) 91 nls/ko 1/ 14
H.F. 656 deliver, arrange for, pay for, or reimburse any of the costs 1 of health care services. 2 7. Insurer means an individual, company, organization, 3 managed care organization, group, or other entity that operates 4 a health benefit plan. 5 8. Material means ophthalmic devices including but not 6 limited to lenses, devices containing lenses, artificial 7 intraocular lenses, ophthalmic frames and other lens mounting 8 apparatus, prisms, lens treatments and coatings, contact 9 lenses, low-vision devices, vision therapy devices, and 10 prosthetic devices to correct, relieve, or treat defects or 11 abnormal conditions of the human eye or its adnexa, or any 12 material allowed to be utilized by the Iowa board of optometry. 13 9. Participating vision care provider means a vision care 14 provider that has entered into a contractual agreement or other 15 business relationship with an insurer, vision benefit manager, 16 or subcontractor to provide covered services or covered 17 materials. 18 10. Subcontractor means a person, including but not 19 limited to the persons agents, servants, brokers, wholesalers, 20 distributors, partially or wholly owned subsidiaries, and 21 controlled organizations, that is contracted by the vision 22 benefit manager to supply services or materials to another 23 vision benefit manager, vision care provider, or covered person 24 to execute or fulfill the health benefit plan, vision benefit 25 plan, or vision benefit discount plan of a vision benefit 26 manager. 27 11. Third-party administrator means a person that 28 provides services including but not limited to administrative, 29 operational, regulatory, human resource, compliance, and claim 30 adjudication services for an insurer, vision benefit manager, 31 individual, company, organization, group, or other entity under 32 a contract or agreement. 33 12. Vision benefit discount plan means a policy, contract, 34 or plan offered by a vision benefit manager to a covered person 35 -2- LSB 2470HH (3) 91 nls/ko 2/ 14
H.F. 656 that exclusively provides for a discount for vision care 1 services or materials. 2 13. Vision benefit manager means a person, including 3 but not limited to an insurer, a third-party administrator, 4 or a subcontractor, that creates, promotes, sells, provides, 5 advertises, or administers an integrated or stand-alone vision 6 benefit plan, vision benefit discount plan, or other insurance 7 policy or contract which provides vision benefits or discounts 8 pertaining to the provision of covered services or covered 9 materials to a covered person. 10 14. Vision benefit plan means a policy, contract, or 11 plan offered or issued by a vision benefit manager to provide, 12 deliver, arrange for, pay for, or reimburse any of the costs of 13 health care services and vision care materials and services. 14 15. Vision care provider means an optometrist licensed 15 under chapter 154, or a person engaged in the practice of 16 medicine and surgery or osteopathic medicine and surgery 17 licensed under chapter 148. 18 Sec. 2. NEW SECTION . 514M.2 Standards of conduct 19 insurers and vision benefit managers. 20 1. A reimbursement paid by an insurer or vision benefit 21 manager for a covered service or covered material shall be 22 clearly and individually listed on a reimbursement schedule 23 made available to the vision care provider, and shall not 24 discriminate in the amount of reimbursement between physicians, 25 as that term is defined under section 135.1, as follows: 26 a. At the time a contract is offered to the vision care 27 provider by an insurer or vision benefit manager. 28 b. Within five business days from the date a contract is 29 requested of the insurer or vision benefit manager by the 30 participating vision care provider. 31 2. An insurer and vision benefit manager shall calculate an 32 annual adjustment using the increase, if any, in the consumer 33 price index for all urban consumers for the most recent 34 available five-year period published by the United States 35 -3- LSB 2470HH (3) 91 nls/ko 3/ 14
H.F. 656 department of labor, bureau of labor statistics, and shall 1 ensure that all contractually allowed amounts and reimbursement 2 rates reflect such increase. 3 3. The period of time, prescribed by a contract between a 4 vision care provider and either an insurer or vision benefit 5 manager, for the insurer or vision benefit manager to recover 6 a reimbursement amount from a vision care provider shall be 7 the same period of time allowed or required for an insurer or 8 vision benefit manager to remit the applicable reimbursement 9 following a vision care providers submission of a clean claim 10 for services rendered or materials furnished. This subsection 11 shall not be construed to limit an insurers or vision benefit 12 managers ability to conduct an audit of claims, in accordance 13 with the insurers or vision benefit plan managers written 14 policies and applicable law, if the insurer or vision benefit 15 manager has a reasonable belief that the vision care provider 16 has engaged in fraud, waste, or abuse. 17 4. The time frame for an audit of a claim or collection of 18 a claim shall be equal for an insurer, vision benefit manager, 19 and a vision care provider. The time frame for audit of a 20 claim shall be extended for the vision care provider if the 21 submission and claim correspondence is ongoing. 22 5. An insurer or vision benefit manager shall reimburse 23 a vision care provider the contracted amount for a covered 24 service or covered material provided to a covered person if the 25 covered person was verified to be eligible by the vision care 26 provider through customary verification methods of the insurer 27 or vision benefit manager to receive the covered service or 28 covered material on the date of service. 29 6. An insurer or vision benefit manager shall identify 30 participating vision care providers in a neutral manner, 31 which does not distinguish between participating vision care 32 providers based on any of the following characteristics: 33 a. A discount or incentive offered by the vision care 34 provider on services and materials that are not covered by the 35 -4- LSB 2470HH (3) 91 nls/ko 4/ 14
H.F. 656 insurer or vision benefit manager. 1 b. The dollar amount, volume amount, or percent usage amount 2 of any material purchased by the vision care provider. 3 c. The brand, source, manufacturer, or supplier of a 4 covered service or covered material utilized by the vision care 5 provider. 6 7. a. A vision benefit manager shall be licensed to conduct 7 the business of insurance in this state, and shall submit an 8 application for licensure to the commissioner of insurance as 9 prescribed by the commissioner by rule. 10 b. A vision benefit manager shall comply with all applicable 11 current procedural terminology code requirements. 12 Sec. 3. NEW SECTION . 514M.3 Prohibited conduct insurers 13 and vision benefit managers. 14 1. a. An insurer or vision benefit manager that offers 15 multiple vision benefit plans or vision benefit discount plans 16 shall not require a vision care provider, as a condition of 17 participation in a vision benefit plan or vision benefit 18 discount plan, to participate in the insurers or vision 19 benefit managers other vision benefit plans or vision benefit 20 discount plans. 21 b. In addition to any penalties provided under this chapter, 22 a violation of this subsection shall constitute a prohibited 23 practice or act under section 714H.3. 24 c. A contract in violation of this subsection shall be void 25 as a matter of law. 26 2. An insurer or vision benefit manager shall not require a 27 vision care provider to do any of the following: 28 a. Establish a security interest in all or part of the 29 insurers or vision benefit managers property or assets, 30 including assets pertaining to the insurers or vision benefit 31 managers practice, in an amount equal to an amount owed to 32 an insurer or vision benefit manager upon termination of a 33 contract. 34 b. Disclose a covered persons confidential or protected 35 -5- LSB 2470HH (3) 91 nls/ko 5/ 14
H.F. 656 health information unless the disclosure is expressly 1 authorized by the covered person, or permitted without 2 authorization under the federal Health Insurance Portability 3 and Accountability Act of 1996, Pub. L. No. 104-191, including 4 amendments thereto and regulations promulgated thereunder. 5 c. Disclose or report a medical history or diagnosis as 6 a condition to file a claim, adjudicate a claim, or receive 7 reimbursement for a covered service. 8 d. Disclose or report a covered persons glasses 9 prescription, contact lens prescription, ophthalmic device 10 measurements, facial photograph, or unique anatomical 11 measurements as a condition to file a claim, adjudicate 12 a claim, or receive reimbursement for a claim, unless the 13 information is necessary for the vision benefit manager to 14 manufacture, or cause to be manufactured, a covered material 15 that is submitted on the applicable claim. 16 e. Disclose a covered persons information, other than 17 information identified in the most recent version of the 18 national uniform claim committee health insurance claim form, 19 as a condition to file a claim, adjudicate a claim, or receive 20 reimbursement for a claim unless the information is necessary 21 for the vision benefit manager to manufacture, or cause to 22 be manufactured, a covered material that is submitted on the 23 applicable claim. 24 3. An insurer or vision benefit manager shall not, directly 25 or indirectly, control or attempt to control the professional 26 judgment, manner of practice, or practice of a vision care 27 provider. 28 4. An insurer or vision benefit manager shall not, directly 29 or indirectly, withhold or recoup payment to a vision care 30 provider for a covered service or covered material provided for 31 a covered person if the covered person was shown to be eligible 32 on the date that the covered service or covered material was 33 provided. 34 5. An insurer or vision benefit manager shall not reimburse 35 -6- LSB 2470HH (3) 91 nls/ko 6/ 14
H.F. 656 a vision care provider a different amount for a covered service 1 or covered material because of the vision care providers 2 choice of any of the following: 3 a. Optical laboratory. 4 b. Source or supplier of contact lenses, ophthalmic lenses, 5 ophthalmic glasses frames or covered or noncovered services or 6 materials. 7 c. Equipment used for patient care. 8 d. Retail optical affiliation. 9 e. Vision support organization. 10 f. Group purchasing organization. 11 g. Doctor alliance. 12 h. Professional trade association membership. 13 i. Electronic health record software, electronic medical 14 record software, or practice management software. 15 j. Third-party claim filing service, billing service, or 16 electronic data interchange clearinghouse company. 17 6. An insurer or vision benefit manager shall not, directly 18 or indirectly, restrict, limit, or influence any of the 19 following: 20 a. A vision care providers choice of electronic health 21 record software, electronic medical record software, or 22 practice management software. 23 b. A vision care providers choice of third-party claim 24 filing service, billing service, or electronic data interchange 25 clearinghouse company. 26 c. A vision care providers access to a covered persons 27 complete plan coverage information, including in-network and 28 out-of-network coverage details. 29 7. An insurer or vision benefit manager shall not apply a 30 chargeback to a covered person or vision care provider if the 31 chargeback is for a covered service or covered material for 32 which the insurer or vision benefit manager does not incur the 33 cost to produce, deliver, or provide the covered service or 34 covered material to the covered person or vision care provider. 35 -7- LSB 2470HH (3) 91 nls/ko 7/ 14
H.F. 656 8. An insurer or vision benefit manager shall not require or 1 request a vision care provider to opt in or opt out, or waive by 2 contract, the requirements of this section and section 514M.4. 3 9. An insurer or vision benefit manager shall not do any of 4 the following: 5 a. Mandate, or otherwise condition, a reimbursement or 6 participation on a price term for a service or material that is 7 not a covered service or covered material. 8 b. Direct or limit a covered persons choice of vision 9 care provider for a service or material that is not a covered 10 service or covered material. 11 10. a. An insurer or vision benefit manager shall not 12 engage in marketing or advertising activities that may be 13 misleading or deceptive to the public. Upon request by an 14 enforcement agency, an insurer and vision benefit manager shall 15 submit all information regarding alleged savings and discounts 16 offered by affiliates of the insurer or vision benefit manager. 17 b. An insurer or vision benefit manager shall not promote or 18 use in any marketing or advertising that a covered service or 19 covered material is free, no charge, or complimentary, 20 or any materially similar language, to a client, purchaser, 21 company, covered person or prospective covered person. 22 11. An insurer or vision benefit manager shall not offer a 23 covered person varying cost sharing, coverage amounts, rebates, 24 gift cards, or other incentives to obtain covered or noncovered 25 materials or services at any of the following: 26 a. A particular participating vision care provider. 27 b. A retail establishment owned by, partially owned by, 28 contracted with, or otherwise affiliated with the vision 29 benefit manager. 30 c. An internet or virtual vision care provider or retailer 31 owned by, partially owned by, contracted with, or otherwise 32 affiliated with the vision benefit manager. 33 12. An insurer or vision benefit manager shall not 34 retroactively reverse reimbursement to a vision care provider 35 -8- LSB 2470HH (3) 91 nls/ko 8/ 14
H.F. 656 who relied in good faith on a covered persons presented 1 coverage credentials and the customary verification methods of 2 the insurer or vision benefits manager, if the vision benefit 3 manager later determines that the covered person was ineligible 4 to receive covered services or covered materials on the date 5 of service. 6 Sec. 4. NEW SECTION . 514M.4 Prohibited conduct 7 contracts. 8 1. A contract between an insurer or vision benefit manager 9 and a vision care provider shall not exceed a term of two years 10 from the date that the contract is fully executed. 11 2. An insurer or vision benefit manager shall not construe 12 re-credentialing as renewing a contract with a participating 13 vision care provider. A vision care provider contract shall 14 be a distinct and separate document from any credentialing 15 materials, and shall be signed by the vision care provider and 16 the insurer or vision benefit manager. 17 3. An insurer or vision benefit manager shall include a copy 18 of a current plan provider manual referred to in a vision care 19 provider contract at the time the contract is delivered to a 20 vision care provider or prospective vision care provider. 21 4. A contract entered into by an insurer or vision benefit 22 manager with a vision care provider shall not require a vision 23 care provider to do any of the following: 24 a. Provide services or materials at a fee limited or set 25 by the vision benefit manager, unless the service or material 26 is reimbursed as a covered service or covered material under 27 the contract. 28 b. Consider applicable discounts and chargebacks to provide 29 a covered service or covered material to a covered person at 30 a financial loss. 31 c. Accept a reimbursement payment in the form of a virtual 32 credit card or any other payment method wherein a processing 33 fee, administrative fee, percentage amount, or dollar amount 34 is assessed for the vision care provider to receive the 35 -9- LSB 2470HH (3) 91 nls/ko 9/ 14
H.F. 656 reimbursement payment. 1 d. Equally share the expenses of arbitration. Each party 2 shall bear the partys own arbitration costs, contingent upon a 3 fee-shifting provision that grants prevailing party status. 4 5. A contract entered into by an insurer or vision benefit 5 manager with a vision care provider shall not restrict 6 or limit, either directly or indirectly, the vision care 7 providers choice of, or use of, a source or supplier of 8 covered or uncovered services or materials provided to a 9 covered person, including the choice or use of an optical 10 laboratory. 11 6. An insurer or vision benefit manager shall not change 12 or alter a contract, including any terms, reimbursements, or 13 fee schedules contained in the contract, entered into with 14 a participating vision care provider unless the insurer or 15 vision benefit manager, at least ninety calendar days prior 16 to the effective date of the proposed change, does all of the 17 following: 18 a. Delivers a certified letter, or an electronic 19 communication requiring an electronic signature proving 20 receipt, to the vision care provider detailing the proposed 21 change. 22 b. Upon request by a vision care provider, the insurer or 23 vision benefit manager meets face-to-face or virtually, to 24 discuss the proposed change with the vision care provider. 25 c. Receives a written agreement from the vision care 26 provider approving the proposed change. If the vision care 27 provider does not agree in writing to the proposed change, 28 the current contract shall continue and the insurer or vision 29 benefit manager shall not remove the vision care provider from 30 a network panel or plan as retaliation for not accepting the 31 proposed change. 32 d. If an insurer or vision benefit manager seeks to make 33 three or more material changes to an existing contract, the 34 insurer or vision benefit manager shall enter into a new 35 -10- LSB 2470HH (3) 91 nls/ko 10/ 14
H.F. 656 contract with the vision care provider. 1 e. A proposed amendment to an existing contract between an 2 insurer or vision benefit manager and a vision care provider 3 shall be delivered to the vision care provider for the 4 providers review. The proposed amendment shall be enumerated 5 in a cover letter and clearly marked within the body of the 6 applicable contract. 7 7. a. Except as provided in this subsection, an insurer or 8 vision benefit manager shall not terminate a contract with a 9 vision care provider prior to the expiration of the contract. 10 b. If an insurer or vision benefit manager believes that 11 a vision care provider has breached a contract between either 12 the insurer or vision benefit manager and the vision care 13 provider, the insurer or vision benefit manager shall provide 14 written notice specifying the alleged breach to the vision care 15 provider. If the vision care provider fails to remedy the 16 breach to the satisfaction of the insurer or vision benefit 17 manager within thirty calendar days of receipt of the written 18 notice, the insurer or vision benefit manager may terminate the 19 contract with the vision care provider. 20 Sec. 5. NEW SECTION . 514M.5 Coordination of benefits. 21 1. An insurer and a vision benefit manager shall comply 22 with the national association of insurance commissioners 23 coordination of benefits regulations. 24 2. Coordination of benefits shall allow for a covered person 25 to apply all the covered persons benefits to the cost of a 26 covered service and covered material. 27 Sec. 6. NEW SECTION . 514M.6 Insurers or vision benefit 28 managers merger or acquisition. 29 For an acquisition or merger of an insurer and a vision 30 benefit manager, all parties to the acquisition or merger shall 31 provide for all of the following: 32 1. A reenrollment period for vision care providers. The 33 reenrollment process and details shall be well defined and 34 shall provide for a minimum of six months notice to vision 35 -11- LSB 2470HH (3) 91 nls/ko 11/ 14
H.F. 656 care providers prior to the activation of a new plan by the 1 prevailing entity after the merger or acquisition. 2 2. During the merger or acquisition, a vision care provider 3 shall be entitled to opt out of reenrollment without penalty or 4 obligation as provided in the vision care providers current 5 contract with either an insurer or a vision benefit manager. 6 3. The prevailing entity to the merger or acquisition shall 7 enter into updated contracts with all vision benefit providers 8 who choose to reenroll. 9 Sec. 7. NEW SECTION . 514M.7 Penalties. 10 1. A vision care provider adversely affected by a violation 11 of this chapter by an insurer or vision benefit manager 12 may bring an action in a court of competent jurisdiction 13 for injunctive relief against the insurer or vision benefit 14 manager. 15 2. The attorney general may bring an action on behalf of a 16 vision care provider for injunctive relief against an insurer 17 or vision benefit manager. 18 3. If a vision care provider prevails in an action under 19 subsection 1, in addition to injunctive relief, the vision care 20 provider shall be entitled to recover all of the following: 21 a. Monetary damages, including but not limited to direct, 22 indirect, special, and punitive damages. 23 b. A penalty of no more than ten thousand dollars for each 24 violation. 25 c. Attorney fees and costs. 26 Sec. 8. NEW SECTION . 514M.8 Applicability. 27 1. This chapter shall apply to policies, contracts, and 28 plans between an insurer or vision benefit manager and a vision 29 care provider delivered, issued for delivery, continued, or 30 renewed in this state on or after the effective date of this 31 Act. 32 2. This chapter shall apply to an affiliate or subcontractor 33 used by an insurer or vision benefit manager to supply covered 34 services or covered materials to a vision care provider or a 35 -12- LSB 2470HH (3) 91 nls/ko 12/ 14
H.F. 656 covered person. 1 Sec. 9. NEW SECTION . 514M.9 Rules. 2 The commissioner of insurance may adopt rules pursuant to 3 chapter 17A to administer this chapter. 4 Sec. 10. Section 714H.3, subsection 2, Code 2025, is amended 5 by adding the following new paragraph: 6 NEW PARAGRAPH . h. Section 514M.3, subsection 1. 7 Sec. 11. EFFECTIVE DATE. This Act, being deemed of 8 immediate importance, takes effect upon enactment. 9 EXPLANATION 10 The inclusion of this explanation does not constitute agreement with 11 the explanations substance by the members of the general assembly. 12 This bill relates to vision benefit plans, the regulation of 13 insurers and vision benefit managers, vision care providers, 14 and vision care provider contracts. 15 The bill details the standards of conduct for insurers 16 and vision benefit managers (managers), including the 17 requirements for a reimbursement paid by an insurer or manager 18 to a vision care provider (provider), the calculation of 19 an annual adjustment, the period of time for an insurer or 20 manager to recover a reimbursement amount from a provider, the 21 auditing time frame for an audit of a claim or a collection 22 of a claim, a reimbursement for a covered service or covered 23 material provided to a covered person, the identification 24 of participating providers, and the licensure requirements 25 for managers. Covered person, insurer, vision benefit 26 manager, and vision care provider are defined in the bill. 27 An insurer or manager shall not engage in any of the conduct 28 prohibited by the bill. A contract between an insurer or 29 manager and a provider shall not violate the provisions of the 30 bill. 31 An insurer and a manager shall comply with the national 32 association of insurance commissioners coordination of benefits 33 regulations, and the coordination of benefits shall allow for a 34 covered person to apply all benefits to the cost of a covered 35 -13- LSB 2470HH (3) 91 nls/ko 13/ 14
H.F. 656 service and covered material. 1 Under the bill, for the acquisition or merger of insurers 2 and managers, the parties to the acquisition or merger 3 shall provide for a reenrollment period for providers. The 4 reenrollment process and details shall be well defined and 5 shall provide for a minimum of six months notice to providers 6 prior to the activation of a new plan by the prevailing 7 entity after the merger or acquisition. During the merger 8 or acquisition, a provider shall be entitled to opt out of 9 reenrollment without penalty or obligation to the previous 10 contract. The prevailing entity to the merger or acquisition 11 shall enter into updated contracts with all providers who 12 choose to reenroll. 13 A provider adversely affected by a violation of the bill 14 by an insurer or manager may bring an action in a court of 15 competent jurisdiction for injunctive relief against the 16 insurer or manager. If a provider prevails in such action, in 17 addition to injunctive relief, the provider shall be entitled 18 to recover monetary damages, penalties not to exceed $10,000 19 for each violation, and attorney fees and costs. The attorney 20 general may bring an action on behalf of a provider for 21 injunctive relief against an insurer or manager. 22 The bill applies to policies, contracts, and plans between 23 an insurer or manager and a provider delivered, issued for 24 delivery, continued, or renewed in this state on or after 25 the effective date of the bill. The bill also applies to an 26 affiliate or subcontractor used by an insurer or manager to 27 supply covered services or covered materials to a provider or 28 a covered person. 29 The commissioner of insurance may adopt rules to administer 30 the bill. 31 The bill makes a conforming change to Code section 32 714H.3(2). 33 The bill takes effect upon enactment. 34 -14- LSB 2470HH (3) 91 nls/ko 14/ 14