The American Optometric Association (AOA) outside counsel sent a cease-and-desist letter dated June 18 to VSP. It states contracting concerns raised by California optometrists earlier this year and calls for an amicable resolution. However, the AOA notes it will consider all potential avenues of relief from VSP’s conduct. The cease-and-desist letter points to VSP’s considerable market position in the state as a means for compelling doctors to accept potentially unfair business practices. This complaint echoes a 2023 lawsuit by a group of California-based eye care practices.
“When a multi-billion-dollar company prioritizes winning a contract over valuing the small businesses that provide patient care, it sets up a downward spiral that ends badly for all involved,” says AOA President Steven T. Reed, OD.
Earlier this year, VSP informed doctors in an area of California that should they refuse to accept the terms of a new VSP plan with a substantially reduced fee schedule, they would then be dropped from all other VSP plans.
The AOA has long been concerned about the terms and conditions of provider agreements that are profoundly lopsided in favor of vision benefit managers (VBMs), and in this case, believes this sort of forced contracting is unacceptable.
PUTTING DOCTORS IN A NO-WIN SITUATION
“VSP appears to be leveraging doctors’ reliance on participation in other VSP plans for the express purpose of compelling the doctors to accept the onerous, economically irrational…terms,” the letter reads. “With no meaningful opportunity to negotiate, the doctors are effectively forced, under duress, to furnish their professional services at a net loss, or else face economic extinction, due to VSP’s dominant vision plan market share in California alone, as well as elsewhere.”
The letter continues that when reimbursement rates are at, or below, the actual cost of providing care, it places doctors in an untenable position to
- Accept financial losses for services rendered.
- Break even, leaving no margin for reinvestment, staff compensation or operational improvements.
- Sacrifice participation in all VSP plans, resulting in a significant number of patients losing access to quality vision care.
“In a healthy competitive environment, VSP would treat the doctors fairly so the doctors’ optometric practice could remain operational, helping VSP to meet its network adequacy objectives,” the letter reads. “Instead, it appears that VSP is intentionally seeking to reduce its network to only those providers within its control.”
CALIFORNIA LAWSUIT
Such is the case, the AOA’s cease-and-desist letter comes on the heels of a recent court settlement between VSP and Total Vision, a group of independent optometry practices in California.
Filed in 2023 in the U.S. District Court in the Central District of California, Total Vision accused VSP of using its market position to impose unfair business restrictions. Per allegations, VSP required Total Vision to purchase large quantities of frames and lenses from VSP suppliers and mandated the use of VSP’s practice management software. These requirements allegedly prevented Total Vision from seeking competitive prices from other vendors.
Total Vision believed refusing these forced arrangements would risk losing access to VSP’s provider network, in turn devastating Total Vision’s business. Total Vision alleged that VSP attempted to pressure the company into accepting a below-market buyout offer or allowing VSP to make an investment at an unfavorable valuation. When Total Vision rejected these attempts, VSP allegedly removed the chain from its provider network.
On May 21, 2025, a court order paused the lawsuit pending a settlement.
ADVOCACY FOR VBM REFORMS
Roughly 200 million Americans have preventive eye exam and materials benefits administered by a VBM—the two most dominant of which cover as much as 85% of the market. But years of strategic, vertical integration by these conglomerates mean VBMs exact an oversized role in the market, controlling patient choice and squeezing independent optometry practices ever tighter. Plans stagnant pay scales and anticompetitive policies have placed doctors of optometry in a bind as they grapple with the increased costs and challenges of delivering care.
However, the AOA and affiliates continue to push for VBM reforms that curb costs and bolster the doctor-patient relationship, all the while building a coalition of advocates that have demanded Congress’ attention.
In addition to numerous state efforts to pass VBM reform legislation, the AOA is also championing VBM reforms with:
- Federal legislation. The AOA supports both H.R. 1521, the Dental and Optometric Care (DOC) Access Act, as well as S. 1716, the Vision Lab Choice Act. Both bills look to outlaw VBM’s controlling, care-limiting policies.
- Federal investigations. No fewer than three Congressional investigations into VBMs, their policies and market actions have been launched by the U.S. House Oversight Committee, House Energy & Commerce Committee and U.S. Senate Appropriations Committee.
- Direct plan advocacy. Doctors can email stopplanabuses@aoa.org with a health or vision plan challenge and the AOA will help fight on their behalf. This direct advocacy has already had an effect, driving over $2.9 million back into optometry practices. Additionally, the AOA offers resources to empower doctors in these issues, including responding to automatic downcoding programs.
AOA ON CAPITOL HILL
AOA on Capitol Hill, will take place Sept. 28-30, 2025, in Washington, D.C. The AOA’s single-largest federal advocacy event connects the profession’s leaders with the nation’s policy leaders. AOA on Capitol Hill encourages doctors to participate and share their real-world stories of these policies and mandates with congressional leaders and staff. Registration for AOA on Capitol Hill is open through Aug. 29.
Read VSP Vision’s response here.
Read about the AOA on Capitol Hill 2024 event here.
Featured photo credit: Audtakorn Sutarmjam/EyeEm
