The Maryland Optometric Association filed an antitrust suit last month against Davis Vision Inc. and CareFirst BlueCross BlueShield in the U.S. District Court of Maryland, alleging that Davis Vision and CareFirst have unlawfully restrained competition in the sale of prescription eyeglasses.
Last month, CareFirst BlueCross BlueShield announced that it would consolidate its vision products under Davis Vision for all its members in Maryland, Washington, D.C., and northern Virginia beginning October 1. CareFirst says it provides health insurance products, direct health care and administrative services to more than 3.2 million individuals and groups in these areas and in Delaware.
At issue: MOA says that the defendants have established a two-tier reimbursement system. Under this system, an independent community-based optometrist would be required to sell patients eyewear from the Davis frame tower and use out-of-state Davis Vision labs, says Tom Shaner, executive director of the MOA. By contrast, members of a preferred classincluding national retail chains such as Wal-Mart, Doctors Vision Works, Hour Eyes and Pearl Visionhave no restrictions on eyewear they can offer patients and may use labs of their choice.
Fundamentally, we see this as a very unfair approach in how its going to impact on the community-based optometrist, Mr. Shaner says. The MOA believes this would push more patients away from the independent optometrist and toward larger retail establishments.
That impact is at the heart of the lawsuit. This isnt about optometry, but the method of distribution of eyewear, Mr. Shaner says. Its not about reimbursement schedules. They may not be the best reimbursement schedules, but thats not what this is about.
Rather, a study by RESI Research and Consulting at Towson University, says that adoption of the contract would result in a loss of more than 400 jobs, an annual loss of roughly $18.4 million in average annual wages, an annual loss of nearly $1.7 million in state and local tax revenues and an annual decline in economic activity or gross regional product in excess of $33 million in Maryland, the District of Columbia and Northern Virginia.
A statement from Davis Vision says it has been extremely diligent in complying with all state and federal laws in the implementation of CareFirsts vision care program. The program has been reviewed by the Maryland Insurance Administration. We are confident that our program and contractual arrangement with providers fully complies with applicable state insurance law and federal and state antitrust laws. The suit recently brought by the Maryland Optometric Association attacks a program that is legal, cost-effective, and beneficial to members in Maryland. We expect to demonstrate in court that the claims alleged in this suit are baseless.
In a statement, CareFirst says that its policy prohibits comments on pending litigation, but adds, We are confident that CareFirsts arrangement with Davis Vision is legally permissible in all respects.