H.F. 2249 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 person’s 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 a vision benefit manager or subcontractor 13 is provided to a vision care provider by a covered person’s 14 plan contract, or for which a reimbursement would be available 15 but for the application of the covered person’s cost sharing, 16 regardless of how the materials are listed or described in a 17 covered person’s benefit plan’s definition of benefits. 18 4. “Covered person” means a policyholder, subscriber, 19 enrollee, or other individual participating in a health benefit 20 plan, vision benefit plan, or vision benefit discount plan 21 that provides for third-party payment or prepayment of covered 22 services or covered materials. 23 5. “Covered service” means a service performed by a 24 vision care provider for which reimbursement from a vision 25 benefit manager or subcontractor is provided to a vision care 26 provider by a covered person’s plan contract, or for which a 27 reimbursement would be available but for the application of the 28 covered person’s cost sharing, regardless of how the services 29 are listed or described in a covered person’s benefit plan’s 30 definition of benefits. 31 6. “Health benefit plan” means a policy, contract, 32 certificate, or agreement offered or issued by a third-party 33 administrator or a subcontractor to provide, deliver, arrange 34 for, pay for, or reimburse any of the costs of health care 35 -1- LSB 5672HH (6) 91 nls/ko 1/ 14

H.F. 2249 services. 1 7. “Material” means ophthalmic devices including but not 2 limited to lenses, devices containing lenses, artificial 3 intraocular lenses, ophthalmic frames and other lens mounting 4 apparatus, prisms, lens treatments and coatings, contact 5 lenses, low-vision devices, vision therapy devices, and 6 prosthetic devices to correct, relieve, or treat defects or 7 abnormal conditions of the human eye or its adnexa, or any 8 material allowed to be utilized by the Iowa board of optometry. 9 8. “Participating vision care provider” means a vision care 10 provider that has entered into a contractual agreement or 11 other business relationship with a vision benefit manager or 12 subcontractor to provide covered services or covered materials. 13 9. “Subcontractor” means a person, including but not 14 limited to the person’s agents, servants, brokers, wholesalers, 15 distributors, partially or wholly owned subsidiaries, and 16 controlled organizations, that is contracted by the vision 17 benefit manager to supply services or materials to another 18 vision benefit manager, vision care provider, or covered person 19 to execute or fulfill the health benefit plan, vision benefit 20 plan, or vision benefit discount plan of a vision benefit 21 manager. 22 10. “Third-party administrator” means a person that 23 provides services including but not limited to administrative, 24 operational, regulatory, human resource, compliance, and claim 25 adjudication services for a vision benefit manager, individual, 26 company, organization, group, or other entity under a contract 27 or agreement. 28 11. “Vision benefit discount plan” means a policy, contract, 29 or plan offered by a vision benefit manager to a covered person 30 that exclusively provides for a discount for vision care 31 services or materials. 32 12. “Vision benefit manager” means a person, including but 33 not limited to a third-party administrator or a subcontractor, 34 that creates, promotes, sells, provides, advertises, or 35 -2- LSB 5672HH (6) 91 nls/ko 2/ 14

H.F. 2249 administers an integrated or stand-alone vision benefit plan, 1 vision benefit discount plan, or other insurance policy or 2 contract which provides vision benefits or discounts pertaining 3 to the provision of covered services or covered materials to 4 a covered person. 5 13. “Vision benefit plan” means a policy, contract, or 6 plan offered or issued by a vision benefit manager to provide, 7 deliver, arrange for, pay for, or reimburse any of the costs of 8 health care services and vision care materials and services. 9 14. “Vision care provider” means an optometrist licensed 10 under chapter 154, or a person engaged in the practice of 11 medicine and surgery or osteopathic medicine and surgery 12 licensed under chapter 148. 13 Sec. 2. NEW SECTION . 514M.2 Standards of conduct —— vision 14 benefit managers. 15 1. A reimbursement paid by a vision benefit manager for 16 a covered service or covered material must meet all of the 17 following requirements: 18 a. Be clearly and individually listed on a reimbursement 19 schedule made available to the vision care provider. 20 b. Use the Medicare health care procedure coding system and 21 current procedural terminology codes. 22 c. Not be less than the calendar year Medicare physician fee 23 schedule for a covered service or covered material in effect at 24 the time of either of the following: 25 (1) On the date that a contract is offered to the vision 26 care provider by a vision benefit manager. 27 (2) Within five business days from the date a participating 28 vision care provider requests to execute a contract with the 29 vision benefit manager. 30 2. Reimbursement rate fee schedules for vision care 31 providers shall be increased annually to adjust for inflation 32 and, to the extent data is available, the rate of inflation for 33 office practice expenses for the relevant vision care provider 34 category. 35 -3- LSB 5672HH (6) 91 nls/ko 3/ 14

H.F. 2249 3. The period of time prescribed by a contract executed 1 by a vision care provider and a vision benefit manager for 2 the vision benefit manager to recover a reimbursement amount 3 from the vision care provider shall be the same period of time 4 allowed or required for a vision benefit manager to remit the 5 applicable reimbursement following a vision care provider’s 6 submission of a clean claim for services rendered or materials 7 furnished. This subsection shall not be construed to limit a 8 vision benefit manager’s ability to conduct an audit of claims, 9 in accordance with the vision benefit plan manager’s written 10 policies and applicable law, if the vision benefit manager has 11 a reasonable belief that the vision care provider has engaged 12 in fraud, waste, or abuse. 13 4. The time frame for an audit of a claim or collection of a 14 claim shall be equal for a vision benefit manager and a vision 15 care provider. The time frame for audit of a claim shall be 16 extended for the vision care provider if the submission and 17 claim correspondence is ongoing. 18 5. A vision benefit manager shall reimburse a vision care 19 provider the contracted amount for a covered service or covered 20 material provided to a covered person if the covered person 21 was verified to be eligible to receive the covered service or 22 covered material on the date of service by the vision care 23 provider through the customary verification methods of the 24 vision benefit manager. 25 6. A vision benefit manager shall identify participating 26 vision care providers in a neutral manner that does not 27 distinguish between participating vision care providers based 28 on any of the following characteristics: 29 a. A discount or incentive offered by the vision care 30 provider on services and materials that are not covered by the 31 vision benefit manager. 32 b. The dollar amount, volume amount, or percent usage amount 33 of any material purchased by the vision care provider. 34 c. The brand, source, manufacturer, or supplier of a 35 -4- LSB 5672HH (6) 91 nls/ko 4/ 14

H.F. 2249 covered service or covered material utilized by the vision care 1 provider. 2 7. a. A vision benefit manager shall be licensed to conduct 3 the business of insurance in this state, and shall submit an 4 application for licensure to the commissioner of insurance as 5 prescribed by the commissioner by rule. 6 b. A vision benefit manager shall comply with all applicable 7 current procedural terminology code requirements. 8 Sec. 3. NEW SECTION . 514M.3 Prohibited conduct —— vision 9 benefit managers. 10 1. a. A vision benefit manager that offers multiple vision 11 benefit plans or vision benefit discount plans shall not 12 require a vision care provider, as a condition of participation 13 in a vision benefit plan or vision benefit discount plan, 14 to participate in the vision benefit manager’s other vision 15 benefit plans or vision benefit discount plans. 16 b. In addition to any penalties provided under this chapter, 17 a violation of this subsection shall constitute a prohibited 18 practice or act under section 714H.3. 19 c. A contract in violation of this subsection shall be void 20 as a matter of law. 21 2. A vision benefit manager shall not require a vision care 22 provider to do any of the following: 23 a. Establish a security interest in all or part of the 24 vision benefit manager’s property or assets, including assets 25 pertaining to the vision benefit manager’s practice, in an 26 amount equal to an amount owed to a vision benefit manager upon 27 termination of a contract. 28 b. Disclose a covered person’s confidential or protected 29 health information unless the disclosure is expressly 30 authorized by the covered person, or permitted without 31 authorization under the federal Health Insurance Portability 32 and Accountability Act of 1996, Pub. L. No. 104-191, including 33 amendments thereto and regulations promulgated thereunder. 34 c. Disclose or report a medical history or diagnosis as 35 -5- LSB 5672HH (6) 91 nls/ko 5/ 14

H.F. 2249 a condition to file a claim, adjudicate a claim, or receive 1 reimbursement for a covered service. 2 d. Disclose or report a covered person’s glasses 3 prescription, contact lens prescription, ophthalmic device 4 measurements, facial photograph, or unique anatomical 5 measurements as a condition to file a claim, adjudicate 6 a claim, or receive reimbursement for a claim, unless the 7 information is necessary for the vision benefit manager to 8 manufacture, or cause to be manufactured, a covered material 9 that is submitted on the applicable claim. 10 e. Disclose a covered person’s information, other than 11 information identified in the most recent version of the 12 national uniform claim committee health insurance claim form, 13 as a condition to file a claim, adjudicate a claim, or receive 14 reimbursement for a claim unless the information is necessary 15 for the vision benefit manager to manufacture, or cause to 16 be manufactured, a covered material that is submitted on the 17 applicable claim. 18 3. A vision benefit manager shall not, directly or 19 indirectly, control or attempt to control the professional 20 judgment, manner of practice, or practice of a vision care 21 provider. 22 4. A vision benefit manager shall not, directly or 23 indirectly, withhold or recoup payment to a vision care 24 provider for a covered service or covered material provided for 25 a covered person if the covered person was shown to be eligible 26 on the date that the covered service or covered material was 27 provided. 28 5. A vision benefit manager shall not reimburse a vision 29 care provider a different amount for a covered service or 30 covered material because of the vision care provider’s choice 31 of any of the following: 32 a. Optical laboratory. 33 b. Source or supplier of contact lenses, ophthalmic lenses, 34 ophthalmic glasses frames or covered or noncovered services or 35 -6- LSB 5672HH (6) 91 nls/ko 6/ 14

H.F. 2249 materials. 1 c. Equipment used for patient care. 2 d. Retail optical affiliation. 3 e. Vision support organization. 4 f. Group purchasing organization. 5 g. Doctor alliance. 6 h. Professional trade association membership. 7 i. Electronic health record software, electronic medical 8 record software, or practice management software. 9 j. Third-party claim filing service, billing service, or 10 electronic data interchange clearinghouse company. 11 6. A vision benefit manager shall not, directly or 12 indirectly, restrict, limit, or influence any of the following: 13 a. A vision care provider’s choice of electronic health 14 record software, electronic medical record software, or 15 practice management software. 16 b. A vision care provider’s choice of third-party claim 17 filing service, billing service, or electronic data interchange 18 clearinghouse company. 19 c. A vision care provider’s access to a covered person’s 20 complete plan coverage information, including in-network and 21 out-of-network coverage details. 22 7. A vision benefit manager shall not apply a chargeback to 23 a covered person or vision care provider if the chargeback is 24 for a covered service or covered material for which the vision 25 benefit manager does not incur the cost to produce, deliver, or 26 provide the covered service or covered material to the covered 27 person or vision care provider. 28 8. A vision benefit manager shall not require or request 29 a vision care provider to opt in or opt out, or waive by 30 contract, the requirements of this section and section 514M.4. 31 9. A vision benefit manager shall not do any of the 32 following: 33 a. Mandate, or otherwise condition, a reimbursement or 34 participation on a price term for a service or material that is 35 -7- LSB 5672HH (6) 91 nls/ko 7/ 14

H.F. 2249 not a covered service or covered material. 1 b. Direct or limit a covered person’s choice of vision 2 care provider for a service or material that is not a covered 3 service or covered material. 4 10. a. A vision benefit manager shall not engage in 5 marketing or advertising activities that may be misleading 6 or deceptive to the public. Upon request by an enforcement 7 agency, a vision benefit manager shall submit all information 8 regarding alleged savings and discounts offered by affiliates 9 of the vision benefit manager. 10 b. A vision benefit manager shall not promote or use in 11 any marketing or advertising that a covered service or covered 12 material is “free”, “no charge”, or “complimentary”, or any 13 materially similar language, to a client, purchaser, company, 14 covered person or prospective covered person. 15 11. A vision benefit manager shall not offer a covered 16 person varying cost sharing, coverage amounts, rebates, gift 17 cards, or other incentives to obtain covered or noncovered 18 materials or services at any of the following: 19 a. A particular participating vision care provider. 20 b. A retail establishment owned by, partially owned by, 21 contracted with, or otherwise affiliated with the vision 22 benefit manager. 23 c. An internet or virtual vision care provider or retailer 24 owned by, partially owned by, contracted with, or otherwise 25 affiliated with the vision benefit manager. 26 12. A vision benefit manager shall not retroactively 27 reverse reimbursement to a vision care provider who relied in 28 good faith on a covered person’s presented coverage credentials 29 and the customary verification methods of the vision benefits 30 manager if the vision benefit manager later determines that the 31 covered person was ineligible to receive covered services or 32 covered materials on the date of service. 33 Sec. 4. NEW SECTION . 514M.4 Prohibited conduct —— 34 contracts. 35 -8- LSB 5672HH (6) 91 nls/ko 8/ 14

H.F. 2249 1. A contract between a vision benefit manager and a vision 1 care provider shall not exceed a term of two years from the 2 date that the contract is fully executed. 3 2. A vision benefit manager shall not construe 4 re-credentialing as renewing a contract with a participating 5 vision care provider. A vision care provider contract shall 6 be a distinct and separate document from any credentialing 7 materials, and shall be signed by the vision care provider and 8 the vision benefit manager. 9 3. A vision benefit manager shall include a copy of a 10 current plan provider manual referred to in a vision care 11 provider contract at the time the contract is delivered to a 12 vision care provider or prospective vision care provider. 13 4. A contract entered into by a vision benefit manager with 14 a vision care provider shall not require a vision care provider 15 to do any of the following: 16 a. Provide services or materials at a fee limited or set 17 by the vision benefit manager, unless the service or material 18 is reimbursed as a covered service or covered material under 19 the contract. 20 b. Consider applicable discounts and chargebacks to provide 21 a covered service or covered material to a covered person at 22 a financial loss. 23 c. Accept a reimbursement payment in the form of a virtual 24 credit card or any other payment method wherein a processing 25 fee, administrative fee, percentage amount, or dollar amount 26 is assessed for the vision care provider to receive the 27 reimbursement payment. 28 d. Equally share the expenses of arbitration. Each party 29 shall bear the party’s own arbitration costs, contingent upon a 30 fee-shifting provision that grants prevailing party status. 31 5. A contract entered into by a vision benefit manager with 32 a vision care provider shall not restrict or limit, either 33 directly or indirectly, the vision care provider’s choice 34 of, or use of, a source or supplier of covered or uncovered 35 -9- LSB 5672HH (6) 91 nls/ko 9/ 14

H.F. 2249 services or materials provided to a covered person, including 1 the choice or use of an optical laboratory. 2 6. A vision benefit manager shall not change or alter a 3 contract, including any terms, reimbursements, or fee schedules 4 contained in the contract, entered into with a participating 5 vision care provider unless the vision benefit manager, at 6 least ninety calendar days prior to the effective date of the 7 proposed change, does all of the following: 8 a. Delivers a certified letter, or an electronic 9 communication requiring an electronic signature proving 10 receipt, to the vision care provider detailing the proposed 11 change. 12 b. Upon request by a vision care provider, the vision 13 benefit manager meets face-to-face or virtually, to discuss the 14 proposed change with the vision care provider. 15 c. Receives a written agreement from the vision care 16 provider approving the proposed change. If the vision care 17 provider does not agree in writing to the proposed change, the 18 current contract shall continue and the vision benefit manager 19 shall not remove the vision care provider from a network panel 20 or plan as retaliation for not accepting the proposed change. 21 d. If a vision benefit manager seeks to make three or more 22 material changes to an existing contract, the vision benefit 23 manager shall enter into a new contract with the vision care 24 provider. 25 e. A proposed amendment to an existing contract between 26 a vision benefit manager and a vision care provider shall 27 be delivered to the vision care provider for the provider’s 28 review. The proposed amendment shall be enumerated in a cover 29 letter and clearly marked within the body of the applicable 30 contract. 31 7. a. Except as provided in this subsection, a vision 32 benefit manager shall not terminate a contract with a vision 33 care provider prior to the expiration of the contract. 34 b. If a vision benefit manager believes that a vision care 35 -10- LSB 5672HH (6) 91 nls/ko 10/ 14

H.F. 2249 provider has breached a contract between the vision benefit 1 manager and the vision care provider, the vision benefit 2 manager shall provide written notice specifying the alleged 3 breach to the vision care provider. If the vision care 4 provider fails to remedy the breach to the satisfaction of the 5 vision benefit manager within thirty calendar days of receipt 6 of the written notice, the vision benefit manager may terminate 7 the contract with the vision care provider. 8 Sec. 5. NEW SECTION . 514M.5 Coordination of benefits. 9 1. A vision benefit manager shall comply with the national 10 association of insurance commissioners coordination of benefits 11 regulations. 12 2. Coordination of benefits shall allow for a covered person 13 to apply all the covered person’s benefits to the cost of a 14 covered service and covered material. 15 Sec. 6. NEW SECTION . 514M.6 Vision benefit managers —— 16 merger or acquisition. 17 For an acquisition or merger of a vision benefit manager, 18 all parties to the acquisition or merger shall provide for all 19 of the following: 20 1. A reenrollment period for vision care providers. 21 The reenrollment process and details must be well defined 22 and provide for a minimum of six months notice to vision 23 care providers prior to the activation of a new plan by 24 the prevailing vision benefit manager after the merger or 25 acquisition. 26 2. During the merger or acquisition, a vision care provider 27 shall be entitled to opt out of reenrollment without penalty or 28 obligation as provided in the vision care provider’s current 29 contract with a vision benefit manager. 30 3. The prevailing vision benefit manager to the merger or 31 acquisition shall enter into updated contracts with all vision 32 benefit providers who choose to reenroll. 33 Sec. 7. NEW SECTION . 514M.7 Penalties. 34 1. A vision care provider adversely affected by a violation 35 -11- LSB 5672HH (6) 91 nls/ko 11/ 14

H.F. 2249 of this chapter by a vision benefit manager may bring an action 1 in a court of competent jurisdiction for injunctive relief 2 against the vision benefit manager. 3 2. The attorney general may bring an action on behalf of 4 a vision care provider for injunctive relief against a vision 5 benefit manager. 6 3. If a vision care provider prevails in an action under 7 subsection 1, in addition to injunctive relief, the vision care 8 provider shall be entitled to recover all of the following: 9 a. Monetary damages, including but not limited to direct, 10 indirect, special, and punitive damages. 11 b. A penalty of no more than ten thousand dollars for each 12 violation. 13 c. Attorney fees and costs. 14 Sec. 8. NEW SECTION . 514M.8 Applicability. 15 1. This chapter shall apply to policies, contracts, and 16 plans between a vision benefit manager and a vision care 17 provider delivered, issued for delivery, continued, or renewed 18 in this state on or after the effective date of this Act. 19 2. This chapter shall apply to an affiliate or subcontractor 20 used by a vision benefit manager to supply covered services 21 or covered materials to a vision care provider or a covered 22 person. 23 Sec. 9. NEW SECTION . 514M.9 Rules. 24 The commissioner of insurance may adopt rules pursuant to 25 chapter 17A to administer this chapter. 26 Sec. 10. Section 714H.3, subsection 2, Code 2026, is amended 27 by adding the following new paragraph: 28 NEW PARAGRAPH . i. Section 514M.3, subsection 1. 29 Sec. 11. EFFECTIVE DATE. This Act, being deemed of 30 immediate importance, takes effect upon enactment. 31 EXPLANATION 32 The inclusion of this explanation does not constitute agreement with 33 the explanation’s substance by the members of the general assembly. 34 This bill relates to vision benefit plans, vision benefit 35 -12- LSB 5672HH (6) 91 nls/ko 12/ 14

H.F. 2249 managers, vision care providers, and vision care provider 1 contracts. 2 The bill details the standards of conduct for vision 3 benefit managers (managers), including the requirements 4 for a reimbursement paid by a manager to a vision care 5 provider (provider), annual increases in reimbursement 6 rate fee schedules, the period of time for a manager to 7 recover a reimbursement amount from a provider, the auditing 8 time frame for an audit of a claim or a collection of a 9 claim, a reimbursement for a covered service or covered 10 material provided to a covered person, the identification of 11 participating providers, and the licensure requirements for 12 managers. “Covered person”, “vision benefit manager”, and 13 “vision care provider” are defined in the bill. 14 A manager shall not engage in any of the conduct prohibited 15 by the bill. A contract between a manager and a provider shall 16 not violate the provisions of the bill. 17 A manager shall comply with the national association of 18 insurance commissioners coordination of benefits regulations, 19 and the coordination of benefits shall allow for a covered 20 person to apply all benefits to the cost of a covered service 21 and covered material. 22 Under the bill, for the acquisition or merger of managers, 23 the parties to the acquisition or merger shall provide for a 24 reenrollment period for providers. The reenrollment process 25 and details must be well defined and provide for a minimum of 26 six months notice to providers prior to the activation of a new 27 plan by the prevailing manager after the merger or acquisition. 28 During the merger or acquisition, a provider shall be entitled 29 to opt out of reenrollment without penalty or obligation to 30 the previous contract. The prevailing manager to the merger 31 or acquisition shall enter into updated contracts with all 32 providers who choose to reenroll. 33 A provider adversely affected by a violation of the bill 34 by a manager may bring an action in a court of competent 35 -13- LSB 5672HH (6) 91 nls/ko 13/ 14

H.F. 2249 jurisdiction for injunctive relief against the manager. If a 1 provider prevails in such action, in addition to injunctive 2 relief, the provider shall be entitled to recover monetary 3 damages, penalties not to exceed $10,000 for each violation, 4 and attorney fees and costs. The attorney general may bring an 5 action on behalf of a provider for injunctive relief against 6 a manager. 7 The bill applies to policies, contracts, and plans between 8 a manager and a provider delivered, issued for delivery, 9 continued, or renewed in this state on or after the effective 10 date of the bill. The bill also applies to an affiliate or 11 subcontractor used by a manager to supply covered services or 12 covered materials to a provider or a covered person. 13 The commissioner of insurance may adopt rules to administer 14 the bill. 15 The bill makes a conforming change to Code section 16 714H.3(2). 17 The bill takes effect upon enactment. 18 -14- LSB 5672HH (6) 91 nls/ko 14/ 14