Existing law prohibits a licensed optometrist and a registered dispensing optician from having any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, with each other. Existing law prohibits a licensed optometrist from having any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, either by stock ownership, interlocking directors, trusteeship, mortgage, trust deed, or otherwise with any person who is engaged in the manufacture, sale, or distribution to physicians and surgeons, optometrists, or dispensing opticians of lenses, frames, optical supplies, optometric appliances or devices or kindred products. Existing law makes a violation of these provisions by a licensed optometrist and any other persons, whether or not a healing arts licensee, who participates with a licensed optometrist, subject to a crime.

Under existing law, the Medical Board of California is responsible for the registration and regulation of nonresident contact lens sellers and dispensing opticians. Existing law requires fees collected from nonresident contact lens sellers to be deposited in the Dispensing Opticians Fund, and to be available, upon appropriation, to the Medical Board of California. Existing law requires fees collected from registered dispensing optician to be paid into the Contingent Fund of the Medical Board of California. Existing law makes a violation of the registered dispensing optician provisions a crime. Existing law, the Optometry Practice Act, makes the State Board of Optometry responsible for the licensure and regulation of optometrists. A violation of the Optometry Practice Act is a crime. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime.

This bill would repeal those prohibitions. The bill would prohibit a licensed optometrist from having any membership, proprietary interest, coownership, or any profit-sharing arrangement, either by stock ownership, interlocking directors, trusteeship, mortgage, or trust deed, with any registered dispensing optician or any optical company, as defined, except as otherwise authorized. The bill would authorize a registered dispensing optician or optical company to operate, own, or have an ownership interest in a health plan, defined as a licensed health care service plan, if the health plan does not directly employ optometrists to provide optometric services directly to enrollees of the health plan, and would also provide for the direct or indirect provision of products and services to the health plan or its contracted providers or enrollees or to other optometrists, as specified. The bill would authorize an optometrist, a registered dispensing optician, an optical company, or a health plan to execute a lease or other written agreement giving rise to a direct or indirect landlord-tenant relationship with an optometrist if specified conditions are contained in a written agreement, as provided. The bill would authorize the State Board of Optometry, to inspect, upon request, an individual lease agreement, and the bill would require the landlord or tenant to comply. Because the failure to comply with that request would be a crime under specified acts, the bill would impose a state-mandated local program. The bill would prohibit a registered dispensing optician from having any membership, proprietary interest, coownership, or profit sharing arrangement either by stock ownership, interlocking directors, trusteeship, mortgage, or trust deed, with an optometrist, except as authorized. The bill would make a violation of these provisions a crime. By creating a new crime, the bill would impose a state-mandated local program.

This bill would instead make the State Board of Optometry responsible for the registration and regulation of nonresident contact lens sellers and dispensing opticians. The bill would direct fees collected from registered dispensing opticians and persons seeking registration as a dispensing optician to be paid into the Dispensing Opticians Fund, and to be available, upon appropriation, to the State Board of Optometry. The bill would make various conforming changes in that regard.

Existing law requires each registered dispensing optician to conspicuously and prominently display at each registered location the name of the registrants employee who is currently designated to handle customer inquiries and complaints and the telephone number where he or she may be reached during business hours.

This bill would instead require specified consumer information to be displayed. Because a violation of the registered dispensing provisions would be a crime, the bill would impose a state-mandated local program.

Existing law makes it unlawful to, among other things, advertise the furnishing of, or to furnish, the services of a refractionist, an optometrist, or a physician and surgeon, or to directly or indirectly employ or maintain on or near the premises used for optical dispensing, a refractionist, an optometrist, a physician and surgeon, or a practitioner of any other profession for the purpose of any examination or treatment of the eyes.

This bill, except as specified, would make it unlawful for a registered dispensing optician to, among other things, advertise the furnishing of, or to furnish, the services of an optometrist or a physician and surgeon or to directly employ an optometrist or physician and surgeon for the purpose of any examination or treatment of the eyes. The bill would authorize the State Board of Optometry, by regulation, to impose and issue administrative fines and citations for a violation of these provisions, as specified. The bill would require all licensed optometrists in a setting with a registered dispensing optician to report the business relationship to the State Board of Optometry. The bill would authorize the State Board of Optometry to inspect any premises at which the business of a registered dispensing optician is co-located with the practice of an optometrist for the purposes of determining compliance with the aforementioned written lease agreement provisions. The bill would also authorize the State Board of Optometry to take disciplinary action against a party who fails to comply with the inspection and would require the State Board of Optometry to provide specified copies of the inspection results. Because would be a crime a violation of the registered dispensing provisions would be a crime, the bill would impose a state-mandated local program

This bill, until January 1, 2019, would prohibit an individual, corporation, or firm operating as a registered dispensing optician before the effective date of the bill, or an employee of such an entity, from being subject to any action for engaging in that aforementioned unlawful conduct. Because a violation of the registered dispensing provisions would be a crime, the bill would impose a state-mandated local program. The bill would require any health plan subject to these provisions to report to the State Board of Optometry in writing that certain percentages of its locations no longer employ an optometrist by specified dates. The bill would require the State Board of Optometry to provide those reports to the Director of Consumer Affairs and the Legislature.

Under existing law, the State Board of Optometry consists of 11 members, 6 licensee members and 5 public members.

This bill would require one of the nonpublic members to be a registered dispensing optician and would require the Governor to make that appointment. The bill would establish a dispensing optician committee to advise and make recommendations to the board regarding the regulation of dispensing opticians, as provided. The bill would require the advisory committee to consist of 5 members, including 2 registered dispensing opticians, 2 public members, and a member of the State Board of Optometry.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law prohibits a licensed optometrist and a registered dispensing optician from having any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, with each other. Existing law prohibits a licensed optometrist from having any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, either by stock ownership, interlocking directors, trusteeship, mortgage, trust deed, or otherwise with any person who is engaged in the manufacture, sale, or distribution to physicians and surgeons, optometrists, or dispensing opticians of lenses, frames, optical supplies, optometric appliances or devices or kindred products. Existing law makes a violation of these provisions by a licensed optometrist and any other persons, whether or not a healing arts licensee, who participates with a licensed optometrist, subject to a crime.

Under existing law, the Medical Board of California is responsible for the registration and regulation of nonresident contact lens sellers and dispensing opticians. Existing law requires fees collected from nonresident contact lens sellers to be deposited in the Dispensing Opticians Fund, and to be available, upon appropriation, to the Medical Board of California. Existing law requires fees collected from registered dispensing optician to be paid into the Contingent Fund of the Medical Board of California. Existing law makes a violation of the registered dispensing optician provisions a crime. Existing law, the Optometry Practice Act, makes the State Board of Optometry responsible for the licensure and regulation of optometrists. A violation of the Optometry Practice Act is a crime. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime.

This bill would repeal those prohibitions. The bill would prohibit a licensed optometrist from having any membership, proprietary interest, coownership, or any profit-sharing arrangement, either by stock ownership, interlocking directors, trusteeship, mortgage, or trust deed, with any registered dispensing optician or any optical company, as defined, except as otherwise authorized. The bill would authorize a registered dispensing optician or optical company to operate, own, or have an ownership interest in a health plan, defined as a licensed health care service plan, if the health plan does not directly employ optometrists to provide optometric services directly to enrollees of the health plan, and would also provide for the direct or indirect provision of products and services to the health plan or its contracted providers or enrollees or to other optometrists, as specified. The bill would authorize an optometrist, a registered dispensing optician, an optical company, or a health plan to execute a lease or other written agreement giving rise to a direct or indirect landlord-tenant relationship with an optometrist if specified conditions are contained in a written agreement, as provided. The bill would authorize the State Board of Optometry, to inspect, upon request, an individual lease agreement, and the bill would require the landlord or tenant to comply. Because the failure to comply with that request would be a crime under specified acts, the bill would impose a state-mandated local program. The bill would prohibit a registered dispensing optician from having any membership, proprietary interest, coownership, or profit sharing arrangement either by stock ownership, interlocking directors, trusteeship, mortgage, or trust deed, with an optometrist, except as authorized. The bill would make a violation of these provisions a crime. By creating a new crime, the bill would impose a state-mandated local program.

This bill would instead make the State Board of Optometry responsible for the registration and regulation of nonresident contact lens sellers and dispensing opticians. The bill would direct fees collected from registered dispensing opticians and persons seeking registration as a dispensing optician to be paid into the Dispensing Opticians Fund, and to be available, upon appropriation, to the State Board of Optometry. The bill would make various conforming changes in that regard.

Existing law requires each registered dispensing optician to conspicuously and prominently display at each registered location the name of the registrants employee who is currently designated to handle customer inquiries and complaints and the telephone number where he or she may be reached during business hours.

This bill would instead require specified consumer information to be displayed. Because a violation of the registered dispensing provisions would be a crime, the bill would impose a state-mandated local program.

Existing law makes it unlawful to, among other things, advertise the furnishing of, or to furnish, the services of a refractionist, an optometrist, or a physician and surgeon, or to directly or indirectly employ or maintain on or near the premises used for optical dispensing, a refractionist, an optometrist, a physician and surgeon, or a practitioner of any other profession for the purpose of any examination or treatment of the eyes.

This bill, except as specified, would make it unlawful for a registered dispensing optician to, among other things, advertise the furnishing of, or to furnish, the services of an optometrist or a physician and surgeon or to directly employ an optometrist or physician and surgeon for the purpose of any examination or treatment of the eyes. The bill would authorize the State Board of Optometry, by regulation, to impose and issue administrative fines and citations for a violation of these provisions, as specified. The bill would require all licensed optometrists in a setting with a registered dispensing optician to report the business relationship to the State Board of Optometry. The bill would authorize the State Board of Optometry to inspect any premises at which the business of a registered dispensing optician is co-located with the practice of an optometrist for the purposes of determining compliance with the aforementioned written lease agreement provisions. The bill would also authorize the State Board of Optometry to take disciplinary action against a party who fails to comply with the inspection and would require the State Board of Optometry to provide specified copies of the inspection results. Because would be a crime a violation of the registered dispensing provisions would be a crime, the bill would impose a state-mandated local program

This bill, until January 1, 2019, would prohibit an individual, corporation, or firm operating as a registered dispensing optician before the effective date of the bill, or an employee of such an entity, from being subject to any action for engaging in that aforementioned unlawful conduct. Because a violation of the registered dispensing provisions would be a crime, the bill would impose a state-mandated local program. The bill would require any health plan subject to these provisions to report to the State Board of Optometry in writing that certain percentages of its locations no longer employ an optometrist by specified dates. The bill would require the State Board of Optometry to provide those reports to the Director of Consumer Affairs and the Legislature.

Under existing law, the State Board of Optometry consists of 11 members, 6 licensee members and 5 public members.

This bill would require one of the nonpublic members to be a registered dispensing optician and would require the Governor to make that appointment. The bill would establish a dispensing optician committee to advise and make recommendations to the board regarding the regulation of dispensing opticians, as provided. The bill would require the advisory committee to consist of 5 members, including 2 registered dispensing opticians, 2 public members, and a member of the State Board of Optometry.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law prohibits a licensed optometrist and a registered dispensing optician from having any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, with each other. Existing law prohibits a licensed optometrist from having any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, either by stock ownership, interlocking directors, trusteeship, mortgage, trust deed, or otherwise with any person who is engaged in the manufacture, sale, or distribution to physicians and surgeons, optometrists, or dispensing opticians of lenses, frames, optical supplies, optometric appliances or devices or kindred products. Existing law makes a violation of these provisions by a licensed optometrist and any other persons, whether or not a healing arts licensee, who participates with a licensed optometrist, subject to a crime.

Under existing law, the Medical Board of California is responsible for the registration and regulation of nonresident contact lens sellers and dispensing opticians. Existing law requires fees collected from nonresident contact lens sellers to be deposited in the Dispensing Opticians Fund, and to be available, upon appropriation, to the Medical Board of California. Existing law requires fees collected from registered dispensing optician to be paid into the Contingent Fund of the Medical Board of California. Existing law makes a violation of the registered dispensing optician provisions a crime. Existing law, the Optometry Practice Act, makes the State Board of Optometry responsible for the licensure and regulation of optometrists. A violation of the Optometry Practice Act is a crime. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime.

This bill would repeal those prohibitions. The bill would prohibit a licensed optometrist from having any membership, proprietary interest, coownership, or any profit-sharing arrangement, either by stock ownership, interlocking directors, trusteeship, mortgage, or trust deed, with any registered dispensing optician or any person who is engaged in the manufacture, sale, or distribution to physicians and surgeons, optometrists, or registered dispensing opticians of lenses, frames, optical supplies, optometric appliances or devices or kindred products optical company, as defined, except as otherwise authorized. The bill would authorize a registered dispensing optician or optical company to operate, own, or have an ownership interest in a licensed health care service plan and to directly or indirectly provide products and services to the health care service plan or its contracted providers and enrollees, if the health care service plan meets certain requirements. health plan, defined as a licensed health care service plan, if the health plan does not directly employ optometrists to provide optometric services directly to enrollees of the health plan, and would also provide for the direct or indirect provision of products and services to the health plan or its contracted providers or enrollees or to other optometrists, as specified. The bill would authorize an optometrist, a registered dispensing optician, and an optical company, or a health care service plan to execute a lease or other written agreement giving rise to a direct or indirect landlord-tenant relationship with an optometrist if specified conditions are contained in a written agreement, as provided. The bill would require a landlord or tenant to comply with an enforcement entitys request to inspect a lease agreement. The bill would authorize the State Board of Optometry, to inspect, upon request, an individual lease agreement, and the bill would require the landlord or tenant to comply. Because the failure to comply with that request would be a crime under specified acts, the bill would impose a state-mandated local program. The bill would prohibit a registered dispensing optician from having any membership, proprietary interest, coownership, or profit sharing arrangement either by stock ownership, interlocking directors, trusteeship, mortgage, or trust deed, with an optometrist, except as authorized. The bill would make a violation of these provisions a crime. By creating a new crime, the bill would impose a state-mandated local program.

This bill would instead make the State Board of Optometry responsible for the registration and regulation of nonresident contact lens sellers and dispensing opticians. The bill would direct fees collected from registered dispensing opticians and persons seeking registration as a dispensing optician to be paid into the Dispensing Opticians Fund, and to be available, upon appropriation, to the State Board of Optometry. The bill would make various conforming changes in this regard.

Existing law makes it unlawful to, among other things, advertise the furnishing of, or to furnish, the services of a refractionist, an optometrist, or a physician and surgeon, or to directly or indirectly employ or maintain on or near the premises used for optical dispensing, a refractionist, an optometrist, a physician and surgeon, or a practitioner of any other profession for the purpose of any examination or treatment of the eyes.

This bill, except as specified, would make it unlawful for a registered dispensing optician to, among other things, advertise the furnishing of, or to furnish, the services of an optometrist or a physician and surgeon or to directly employ an optometrist or physician and surgeon for the purpose of any examination or treatment of the eyes. The bill would authorize the State Board of Optometry, by regulation, to impose and issue administrative fines and citations for a violation of these provisions, as specified. The bill would require all licensed optometrists in a setting with a registered dispensing optician to report the business relationship to the State Board of Optometry. The bill would authorize the State Board of Optometry to inspect any premises at which the business of a registered dispensing optician is co-located with the practice of an optometrist for the purposes of determining compliance with the aforementioned written lease agreement provisions. The bill would also authorize the State Board of Optometry to take disciplinary action against a party who fails to comply with the inspection and would require the State Board of Optometry to provide specified copies of the inspection results. Because the failure to comply with the inspection would be a crime under the registered dispensing provisions, a violation of the registered dispensing provisions would be a crime, the bill would impose a state-mandated local program

This bill, until January 1, 2019, would prohibit an individual, corporation, or firm operating as a registered dispensing optician before the effective date of the bill, or an employee of such an entity, from being subject to any action for engaging in that aforementioned unlawful conduct. The bill would require any health plan subject to these provisions to report to the State Board of Optometry in writing that certain percentages of its locations no longer employ an optometrist by specified dates. The bill would require the State Board of Optometry to provide those reports to the Director of Consumer Affairs and the Legislature.

Under existing law, the State Board of Optometry consists of 11 members, 6 licensee members and 5 public members.

This bill would require one of the nonpublic members to be a registered dispensing optician and would require the Governor to make that appointment. The bill would establish within the State Board of Optometry a Registered Dispensing Optician Committee to oversee the registration and enforcement of registered dispensing opticians to advise and make recommendations to the board regarding the regulation of dispensing opticians, as provided. The bill would require the advisory committee to consist of 5 members, including 2 registered dispensing opticians, 2 public members, and a member of the State Board of Optometry.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law prohibits a licensed optometrist and a registered dispensing optician from having any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, with each other. Existing law prohibits a licensed optometrist from having any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, either by stock ownership, interlocking directors, trusteeship, mortgage, trust deed, or otherwise with any person who is engaged in the manufacture, sale, or distribution to physicians and surgeons, optometrists, or dispensing opticians of lenses, frames, optical supplies, optometric appliances or devices or kindred products. Existing law makes a violation of these provisions by a licensed optometrist and any other persons, whether or not a healing arts licensee, who participates with a licensed optometrist optometrist, subject to a crime.

Under existing law, the Medical Board of California is responsible for the registration and regulation of nonresident contact lens sellers and dispensing opticians. Existing law requires fees collected from nonresident contact lens sellers to be deposited in the Dispensing Opticians Fund, and to be available, upon appropriation, to the Medical Board of California. Existing law requires fees collected from registered dispensing optician to be paid into the Contingent Fund of the Medical Board of California. Existing law makes a violation of the registered dispensing optician provisions a crime. Existing law law, the Optometry Practice Act, makes the State Board of Optometry responsible for the licensure and regulation of optometrists. A violation of the Optometry Practice Act is a crime. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime.

This bill, until January 1, 2017, 2019, would prohibit an individual, corporation, or firm operating as a registered dispensing optician before the effective date of the bill, or an employee of such an entity, from being subject to any action for engaging in that aforementioned unlawful conduct.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law prohibits a licensed optometrist and a registered dispensing optician from having any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, with each other. Existing law prohibits a licensed optometrist from having any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, either by stock ownership, interlocking directors, trusteeship, mortgage, trust deed, or otherwise with any person who is engaged in the manufacture, sale, or distribution to physicians and surgeons, optometrists, or dispensing opticians of lenses, frames, optical supplies, optometric appliances or devices or kindred products. Existing law makes a violation of these provisions by a licensed optometrist and any other persons, whether or not a healing arts licensee, who participates with a licensed optometrist subject to a crime.

Under existing law, the Medical Board of California is responsible for the registration and regulation of dispensing opticians. Existing law makes the State Board of Optometry responsible for the licensure of optometrists.

This bill, until January 1, 2017, would prohibit a registered dispensing optician or optometrist exempt a licensed optometrist or an individual, corporation, or firm operating as a registered dispensing optician licensed or registered before the effective date of the bill, or an employee of such an entity, from being subject to discipline any action by the Medical Board of California, the State Board of Optometry, or other another state agency agency, or a district attorney with enforcement authority for engaging in any of the aforementioned business relationships. The bill, with respect to an action subject to the exemption, would toll, for the effective period of the exemption, specific limitation periods imposed on the filing of accusations.

Existing law makes it unlawful to, among other things, advertise the furnishing of, or to furnish, the services of a refractionist, an optometrist, or a physician and surgeon, or to directly or indirectly employ or maintain on or near the premises used for optical dispensing, a refractionist, an optometrist, a physician and surgeon, or a practitioner of any other profession for the purpose of any examination or treatment of the eyes.

This bill, until January 1, 2017, would prohibit a an individual, corporation, or firm operating as a registered dispensing optician before the effective date of the bill, or an employee of such an entity, from being subject to discipline any action for engaging in that aforementioned conduct.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law prohibits a licensed optometrist and a registered dispensing optician from having any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, with each other. Existing law prohibits a licensed optometrist from having any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, either by stock ownership, interlocking directors, trusteeship, mortgage, trust deed, or otherwise with any person who is engaged in the manufacture, sale, or distribution to physicians and surgeons, optometrists, or dispensing opticians of lenses, frames, optical supplies, optometric appliances or devices or kindred products. Existing law makes a violation of these provisions by a licensed optometrist and any other persons, whether or not a healing arts licensee, who participates with a licensed optometrist subject to a crime.

Under existing law, the Medical Board of California is responsible for the registration and regulation of dispensing opticians. Existing law makes the State Board of Optometry responsible for the licensure of optometrists.

This bill, until January 1, 2017, would prohibit a registered dispensing optician or optometrist from being subject to discipline by the Medical Board of California, the State Board of Optometry, or other state agency with enforcement authority for engaging in any of the aforementioned business relationships.

Existing law makes it unlawful to, among other things, advertise the furnishing of, or to furnish, the services of a refractionist, an optometrist, or a physician and surgeon, or to directly or indirectly employ or maintain on or near the premises used for optical dispensing, a refractionist, an optometrist, a physician and surgeon, or a practitioner of any other profession for the purpose of any examination or treatment of the eyes.

This bill, until January 1, 2017, would prohibit a registered dispensing optician from being subject to discipline for engaging in that aforementioned conduct.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law prohibits a licensed optometrist and a registered dispensing optician from having any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, with each other. Existing law prohibits a licensed optometrist from having any membership, proprietary interest, coownership, landlord-tenant relationship, or any profit-sharing arrangement in any form, directly or indirectly, either by stock ownership, interlocking directors, trusteeship, mortgage, trust deed, or otherwise with any person who is engaged in the manufacture, sale, or distribution to physicians and surgeons, optometrists, or dispensing opticians of lenses, frames, optical supplies, optometric appliances or devices or kindred products. Existing law makes a violation of these provisions by a licensed optometrist and any other persons, whether or not a healing arts licensee, who participates with a licensed optometrist subject to a crime.

Under existing law, the Medical Board of California is responsible for the registration and regulation of dispensing opticians. Existing law makes the State Board of Optometry responsible for the licensure of optometrists.

This bill, until January 1, 2017, would prohibit a registered dispensing optician or optometrist from being subject to discipline by the Medical Board of California, the State Board of Optometry, or other state agency with enforcement authority for engaging in any of the aforementioned business relationships.

Existing law makes it unlawful to, among other things, advertise the furnishing of, or to furnish, the services of a refractionist, an optometrist, or a physician and surgeon, or to directly or indirectly employ or maintain on or near the premises used for optical dispensing, a refractionist, an optometrist, a physician and surgeon, or a practitioner of any other profession for the purpose of any examination or treatment of the eyes.

This bill, until January 1, 2017, would prohibit a registered dispensing optician from being subject to discipline for engaging in that aforementioned conduct.

Existing law, the Pharmacy Law, provides for the licensure and regulation of pharmacists by the California State Board of Pharmacy within the Department of Consumer Affairs. Existing law authorizes the board to license as a pharmacist an applicant who meets specified requirements, including passage of the North American Pharmacist Licensure Examination. Existing law requires the examination process to meet specified standards and federal guidelines and requires the board to terminate use of that examination if the department determines that the examination fails to meet those standards. Existing law requires the board to report to the now obsolete Joint Committee on Boards, Commissions, and Consumer Protection and the department specified examination pass rate information.

This bill would instead require the board to report that pass rate information to the appropriate policy committees of the Legislature and the department. The bill would also make nonsubstantive changes to those provisions.

(Without Reference to File)

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 684

Author:(Alejo and Bonilla)

As Amended Ver:September 4, 2015

Majority vote

(vote not available)

Original Committee Reference: B. & P.

SUMMARY: Authorizes the establishment of landlord-tenant relationships between a registered dispensing optician (RDO), optometrist and an optical company as specified; transfers the regulation of RDOs from the Medical Board of California (MBC) to the California State Board of Optometry (CBO); replaces an optometrist with a RDO on the CBO; establishes a RDO advisory committee; and establishes a three-year period for the transition of direct employment of optometrists to leasing arrangements.

The Senate amendments:

1. Define the following terms:

   1. "Health plan" means a health care service plan licensed pursuant to the Knox-Keene;

   2. "Optical company" means a person or entity that is engaged in the manufacture, sale, or distribution to physicians and surgeons, optometrists, health plans, or dispensing opticians of lenses, frames, optical supplies, or optometric appliances or devices or kindred products;

   3. "Optometrist" means a licensed person or an optometric corporation, as specified;

   4. "Registered dispensing optician" means a person so licensed; and,

   5. "Therapeutic ophthalmic product" means lenses or other products that provide direct treatment of eye disease or visual rehabilitation for diseased eyes.

2. Prohibit an optometrist from having any membership, proprietary interest, co-ownership, or any profit-sharing arrangement, either by stock ownership, interlocking directors, trusteeship, mortgage, or trust deed, with any RDO or any optical company, except as specified.

3. Permit a RDO or optical company to operate, own, or have an ownership interest in a health plan so long as the health plan does not directly employ optometrists to provide optometric services directly to enrollees of the health plan, and permits a RDO or optical company to provide, direct or indirectly, products and services to the health plan or its contracted providers, enrollees, or to other optometrists.

4. Permit, for purposes of this bill, an optometrist to be employed by a health plan as a clinical director or to perform services related to utilization management, quality assurance, or other similar related services that do not require the optometrist to directly provide health care services to enrollees. Prohibits an optometrist serving as a clinical director from employing optometrists to provide health care services to enrollees of the health plan.

5. Prohibit the RDO or optical company from interfering with the professional judgment of the optometrist.

6. Require the Department of Managed Health Care (DMHC) to forward consumer complaints to the CBO and requires DMHC and CBO to enter into an Inter-Agency Agreement regarding information sharing.

7. Permit an optometrist, a RDO, an optical company, or a health plan to enter into a direct or indirect landlord-tenant relationship with an optometrist under the following conditions:

   1. The practice shall be owned by the optometrist and in every phase be under the optometrist’s exclusive control, including:

      1. Selection and supervision of optometric staff;

      2. Scheduling patients;

      3. Determining the amount of time the optometrist spends with patients;

      4. Fees charged for optometric products and services;

      5. The examination procedures and treatment provided to patients; and,

      6. The optometrist's contracting with managed care organizations.

   2. The optometrist's records shall be the sole property of the optometrist. Only the optometrist and those persons with written authorization from the optometrist shall have access to the patient records and the examination room, except as otherwise provided by law;

   3. The optometrist's leased space shall be definite and distinct from space occupied by other occupants of the premises, have a sign designating that the leased space is occupied by an independent optometrist and be accessible to the optometrist after hours or in the case of an emergency, subject to the facility's general accessibility. This shall not require a separate entrance to the optometrist's leased space;

   4. All signs and displays shall be separate and distinct from that of the other occupants and shall have the optometrist's name and the word "optometrist" prominently displayed. This shall not prohibit the optometrist from advertising the optometrist's practice location with reference to other occupants or prohibit the optometrist or RDO from advertising participation in any health plan's network or the health plan's products in which the optometrist or RDO participates;

   5. There shall be no signs displayed on any part of the premises or in any advertising indicating that the optometrist is employed or controlled by the RDO, health plan, or optical company;

   6. Except as otherwise permitted by this bill, the RDO or optical company shall not link its advertising with the optometrist's name, practice, or fees. However, a health plan may advertise its products and associated premium costs and any copayments, coinsurance, deductibles, or other forms of cost-sharing, and the names and locations of the health plan's providers, including any optometrists or RDOs that provide professional services, in compliance with the Knox-Keene. However, a health plan shall not advertise the optometrist's fees for products and services that are not included in the health plan's contract with the optometrist;

   7. The optometrist shall not be precluded from collecting fees for services that are not included in a health plan's products and services, subject to any patient disclosure requirements contained in the health plan's provider agreement with the optometrist or that are not otherwise prohibited by the Knox-Keene;

   8. The term of the lease shall be no less than one year and shall not require the optometrist to contract exclusively with a health plan;

   9. The lease, rent terms, or payments shall not be based on the number of eye exams performed, prescriptions written, patient referrals, or the sale or promotion of the products of a RDO or an optical company; and,

   10. The landlord shall provide the optometrist with written notice of the scheduled expiration date of a lease at least 60 days prior to the scheduled expiration date. The landlord shall not interfere with an outgoing optometrist's efforts to inform the optometrist's patients, in accordance with customary practice and professional obligations, of the relocation of the optometrist's practice.

8. Permit the landlord to terminate the lease for the following reasons:

   1. The optometrist’s failure to maintain a license to practice optometry or the imposition of restrictions, suspension, or revocation of the optometrist's license, or if the optometrist or the optometrist's employee is or becomes ineligible to participate in state or federal government-funded programs;

   2. Termination of any underlying lease where the optometrist has subleased space, or the optometrist’s failure to comply with the underlying lease provisions that are made applicable to the optometrist;

   3. If the health plan is the landlord, the termination of the provider agreement between the health plan and the optometrist, in accordance with the Knox-Keene; and,

   4. Other reasons pursuant to the terms of the lease or permitted under the Civil Code.

9. Require the landlord to act in good faith in terminating the lease and prohibits the landlord from terminating the lease for reasons that constitute interference with the practice of optometry.

10. Prohibit the landlord from terminating the lease solely because of a report, complaint, or allegation filed by the optometrist against the landlord, a RDO or a health plan, to the CBO, the DMHC, or any other law enforcement or regulatory agency.

11. Authorize the CBO to inspect, upon request, an individual lease agreement and requires the landlord or tenant, as applicable, to promptly comply with the request. Failure or refusal to comply with the request for a lease agreement within 30 days of receiving the request constitutes unprofessional conduct and is grounds for disciplinary action by the appropriate regulatory agency. This bill permits only the redaction of personal information on the lease agreements, as specified by Civil Code.

12. Declare any financial information contained in the lease submitted to a regulatory entity to be considered confidential trade secret information and is exempt from disclosure under the California Public Records Act.

13. Permit a lease to include commercially reasonable terms that:

    1. Require the provision of optometric services at the leased space during certain days and hours;

    2. Restrict the leased space from being used for the sale or offer for sale of spectacles, frames, lenses, contact lenses, or other ophthalmic products, except that the optometrist shall be permitted to sell therapeutic ophthalmic products if the RDO, health plan, or optical company located on or adjacent to the optometrist's leased space does not offer any substantially similar therapeutic ophthalmic products for sale;

    3. Require the optometrist to contract with a health plan network, health plan, or health insurer; and,

    4. Permit the landlord to directly or indirectly provide furnishings and equipment in the leased space.

14. Prohibit a RDO from having any membership, proprietary interest, coownership, or profit sharing arrangement either by stock ownership, interlocking directors, trusteeship, mortgage, or trust deed, with an optometrist, except as permitted under this bill.

15. Clarify that nothing in this bill shall prohibit a physician and surgeon or his or her professional corporation from contracting with or employing optometrists, ophthalmologists, or optometric assistants and entering into a contract or landlord tenant relationship with a health plan, optical company, or RDO, as specified.

16. State that any violation of this bill constitutes a misdemeanor.

17. Permit the CBO to promulgate regulations that impose administrative fines, which may be assessed in addition to any other applicable fines, citations, or administrative or criminal actions.

18. Transfer the regulation of RDOs from the MBC to the CBO.

19. Require an RDO to display specified consumer information related to the CBO.

20. Require an optometrist who practices in a setting with a RDO to report the business relationship to the CBO, as determined by the CBO.

21. Authorize the CBO to inspect any premises at which the business of a RDO is co-located with the practice of an optometrist. Requires the CBO to provide a copy of its inspection results, if applicable, to the DMHC.

22. Prohibit any individual, corporation, or firm operating as a RDO before January 1, 2016, or an employee of such an entity, from being subject to any action for engaging in conduct prohibited by specified current laws as they exist prior to this bill’s enactment until January 1, 2019, except that a RDO shall be subject to discipline for duplicating or changing lenses without a prescription or order.

23. State that nothing in this bill shall be construed to imply or suggest that an RDO is in violation of or in compliance with the law.

24. State that the exemption shall not apply to any business relationships prohibited by current law commencing registration or operations on or after January 1, 2016.

25. Permit an individual, corporation, or firm operating as a RDO engaging in a business relationship with an optometrist at locations registered with the MBC before January 1, 2016 to continue to do so until January 1, 2019.

26. State that the three-year safe harbor period does not apply to any administrative action or litigation pending, cause for discipline, or cause of action accruing prior to September 1, 2015.

27. Require any health plan, as specified, to report to the CBO in writing that:

    1. Fifteen percent of its locations no longer employ an optometrist by January 1, 2017;

    2. Forty five percent of its locations no longer employ an optometrist by August 1, 2017; and,

    3. One hundred percent of its locations no longer employ an optometrist by January 1, 2019.

28. Require the CBO to provide health plans' compliance reports to the director of the DCA and the Legislature.

29. Replace one optometrist with an RDO on the CBO.

30. Permit the RDO member of the CBO to be a stockholder in, owner of, or a member of the board of trustees of any school of optometry, or financially interested, directly or indirectly, in any concern manufacturing or dealing in optical supplies at wholesale.

31. Establish a RDO committee to advise and make recommendations to CBO regarding the regulation of a RDO. The committee shall consist of five members, two of whom shall be RDOs, two of whom shall be public members, and one of whom shall be a member of the CBO. Initial appointments to the committee shall be made by the CBO.

32. State that the RDO committee shall be responsible for:

    1. Recommending registration standards and criteria for the registration of dispensing opticians;

    2. Reviewing of the disciplinary guidelines relating to RDOs;

    3. Recommending to the CBO changes or additions to regulations; and,

    4. Carrying out and implementing all responsibilities and duties imposed upon it pursuant to this bill or as delegated to it by the CBO.

33. Require the RDO committee to meet at least twice a year and as needed.

34. Require recommendations by the RDO committee regarding scope of practice or regulatory changes to be approved, modified, or rejected by the CBO within 90 days of submission to the CBO. If the CBO rejects or significantly modifies the intent or scope of the recommendation, the RDO committee may request that the CBO provide its reasons in writing, which shall be provided within 30 days.

35. Require the Governor to appoint the RDO and public members to the RDO committee after the initial appointments by the CBO. The RDO committee shall submit a recommendation to the CBO regarding which CBO member should be appointed to serve on the RDO committee, and the CBO shall appoint the member to serve. Committee members shall serve a term of four years except for the initial staggered terms. A member may be reappointed, but no person shall serve as a member of the committee for more than two consecutive terms.

36. Make clarifying and technical amendments.

FISCAL EFFECT: Unknown

COMMENTS: Purpose. This bill is author sponsored. According to the author, "Co-located vision models have existed in California for nearly three decades. They serve millions of patients annually and employ thousands of optometrists and opticians. With the conclusion of legal suits over the last few years, the state is compelled to enforce a decades old law that has found this business model to be unlawful. AB 684 is seeking a legislative solution that allows multiple models to continue to operate, while also leveling the playing field for both large and small operators, ensuring that consumers' interests are protected, and optometrists' clinical judgment is preserved. This legislation would clarify and modernize the law."

Background. In California, there are two eye care service models: an optometrist’s private office and a "co-location" office, where an optical retail store is co-located with a Department of Managed Health Care (DMHC)-regulated health plan, also called a Knox-Keene plan, that provides optometry care. At co-location sites, patients receive an eye exam and can fill their prescription for corrective eyewear during the same visit at the co-located optical retail store [e.g. Walmart, LensCrafters]. At private optometrist offices, patients receive an eye exam and can take a prescription elsewhere or have the optometrist send it out for them. California law provides that prescriptions are mobile, so the patient is not required in either setting to have the prescription filled on site.

Under Business and Professions Code (BPC) Sections 655 and 2556, optometrists and RDOs cannot have any membership, proprietary interest, co-ownership, landlord-tenant relationship or any profit-sharing agreement with each other. Optometrists also cannot have any membership, proprietary interest, co-ownership, landlord-tenant relationship or any profit-sharing arrangement in any form with those who manufacture, sell, or distribute lenses, frames, optical supplies, optometric appliances or devices or kindred products to physicians and surgeons, optometrists or RDOs.

Under these code sections, it is also unlawful for RDOs to do any of the following:

1. Advertise the furnishing of, or to furnish, the services of a refractionist, an optometrist or a physician and surgeon;

2. Directly or indirectly employ or maintain on or near the premises used for optical dispensing, a refractionist, and optometrist, a physician and surgeon or a practitioner of any other profession for the purpose of any examination or treatment of the eyes; or,

3. Duplicate or change lenses without a prescription or order from a person duly licensed to issue the same.

The Pearle Case. In February of 2002, Attorney General (AG) Bill Lockyer brought suit against Pearle Vision, arguing that the company had violated the Optometry Practice Act. The AG challenged the business relationship between the Knox–Keene plan, Pearle VisionCare, and the optical sister company, Pearle Vision, as well as the ownership of the Knox-Keene plan by an optical company, claiming that such relationships violated BPC Sections 655 and 2556.

The Snow Case. In March 2002, a private plaintiff brought suit against LensCrafters (the Snow case), raising some of the same business relationship issues as those raised in the Pearle case. LensCrafters and others subsequently filed a case in federal district court to defend their business operations in California, challenging the constitutionality of BPC Sections 655 and 2556.

California Supreme Court Decision. On appeal, the Pearle case reached the California Supreme Court, which declared that the Knox-Keene Act does not create an exemption from restrictions that BPC Sections 655and 2556 impose on relationships between optometrists and optical companies for Knox-Keene plans that employ optometrists and affiliate with optical companies. The Supreme Court remanded the case to trial court for determination of whether relationships involved in Pearle Vision's Knox-Keene arrangement violate BPC Sections 655 and 2556. The Pearle case ultimately settled, with no determination on the Knox-Keene/optical company co-location issue. The Snow case also settled, without a determination on the Knox-Keene/optical company co-location issue.

Federal Court Decision. The federal court, in December 2006, struck down BPC Sections 655 and 2556 as unconstitutional, interpreting the California Supreme Court’s ruling in the Pearle case as a bar to LensCrafters' Knox-Keene plan arrangement (National Association of Optometrists & Opticians v. Lockyer, 463 F.Supp.2d 1116 (E.D.Cal.2006). The federal court determined, "the challenged laws substantially effect and discriminate against interstate commerce." The Court also held that "[a]lthough California has legitimate interests in regulating the provision of health services, defendants have failed to meet its burden of showing that it has no other means to advance its legitimate interests." The Court noted that the Knox-Keene plan arrangement, if permitted by law, would be a viable means for the State to achieve its legitimate interests with less impact on interstate commerce.

Ninth Circuit Court of Appeals Decision. On June 13, 2012, BPC Section 655 was upheld as constitutional by the Ninth Circuit Court of Appeals in National Association of Optometrists & Opticians v. Harris, 682 F.3d 1144 (9th Cir.2012). The optical industry plaintiffs then petitioned the Supreme Court of the United States for certiorari review, but on February 19, 2013, the United States Supreme Court declined to hear the case, and the Ninth Circuit decision upholding the law became final.

Other States. There are 14 United States jurisdictions that allow direct employment of optometrists by optical companies. Direct landlord-tenant relationships are permitted in 47 states. Additionally, 49 states allow optical companies to franchise to optometrists.

Need for This Legislation. This bill clarifies and modernizes modern law by allowing multiple models to continue to operate for a three-year period during which the businesses will transition from direct employment of optometrists to leasing arrangements. Without the transition period, these businesses are under threat of closure, which would cause significant job loss and cut off care for the more than two million California patients served by these businesses every year.

Analysis Prepared by: Le Ondra Clark Harvey / B. & P. / (916) 319-3301 FN: 0002394

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Jerry Hill, Chair

2015 - 2016 Regular

Bill No: AB 684 Hearing Date: September 10, 2015

Subject: State Board of Optometry: optometrists: nonresident contact lens sellers: registered dispensing opticians

SUMMARY:

Authorizes the establishment of landlord-tenant relationships between a registered dispensing optician (RDO), optometrist and an optical company as specified; transfers the regulation of RDOs from the Medical Board of California (MBC) to the California State Board of Optometry (CBO); replaces an optometrist with a RDO on the CBO; establishes a RDO advisory committee; and establishes a three-year period for the transition of direct employment of optometrists to leasing arrangements.

Existing law:

1. Declares that individuals, corporations, and firms engaged in the business of filling prescriptions of physicians and surgeons or optometrists for prescription lenses and kindred products, and, as incidental to the filling of those prescriptions, taking facial measurements, fitting and adjusting those lenses and fitting and adjusting spectacle frames, shall be known as dispensing opticians and shall not engage in that business unless registered with the MBC. (Business and Professions Code (BPC) § 2550)

2. Establishes the CBO within the Department of Consumer Affairs (DCA) to license optometrists and regulate the practice of optometry. (BPC § 3000 et seq.)

3. Prohibits optometrists and RDOs from having any membership, proprietary interest, co-ownership, landlord-tenant relationship or any profit-sharing agreement with each other. (BPC § 655)

3. Prohibits optometrists from having any membership, proprietary interest, co-ownership, landlord-tenant relationship or any profit-sharing arrangement in any form, directly or indirectly, either by stock ownership, interlocking directors, trusteeship, mortgage, trust deed or otherwise with those who manufacture, sell, or distribute lenses, frames, optical supplies, optometric appliances or devices or kindred products to physicians and surgeons, optometrists, or dispensing opticians. (BPC § 655)

3. Provides that it is unlawful for RDOs to:

1. Advertise the furnishing of, or to furnish, the services of a refractionist, an optometrist, or a physician and surgeon;

2. Directly or indirectly employ or maintain on or near the premises used for optical dispensing, a refractionist, an optometrist, a physician and surgeon, or a practitioner of any other profession for the purpose of any examination or treatment of the eyes; or,

3. Duplicate or change lenses without a prescription or order from a licensed person. (BPC § 2556)

3. Establishes the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene) which establishes rules for mandatory basic services, financial stability, availability and accessibility of providers, and other standards for patient care.
   (Health and Safety Code (HSC) §§ 1340 et seq.)

3. Declares Legislative intent and purpose to promote the delivery and the quality of health and medical care to the people of the State of California who participate in a health care service plan by:

1. Ensuring the continued role of the professional as the determiner of the patient’s health needs which fosters the traditional relationship of trust and confidence between the patient and the professional;

2. Prosecuting malefactors who make fraudulent solicitations or who use deceptive methods, misrepresentations, or practices which are inimical to the general purpose of enabling a rational choice for the consumer public; and,

3. Ensuring that subscribers and enrollees receive available and accessible health and medical services rendered in a manner providing continuity of care.
   (HSC § 1342)

3. Defines “personal information” as any information that is maintained by an agency that identifies or describes an individual, including, but not limited to, his or her name, social security number, physical description, home address, home telephone number, education, financial matters, and medical or employment history. It includes statements made by, or attributed to, the individual. (Civil Code § 1798.3).  

This bill:

1. Defines the following terms:

1. “Health plan” means a health care service plan licensed pursuant to the Knox-Keene;

2. “Optical company” means a person or entity that is engaged in the manufacture, sale, or distribution to physicians and surgeons, optometrists, health plans, or dispensing opticians of lenses, frames, optical supplies, or optometric appliances or devices or kindred products;

3. “Optometrist” means a licensed person or an optometric corporation, as specified;

4. “Registered dispensing optician” means a person so licensed; and,

5. “Therapeutic ophthalmic product” means lenses or other products that provide direct treatment of eye disease or visual rehabilitation for diseased eyes.

2. Prohibits an optometrist from having any membership, proprietary interest, co-ownership, or any profit-sharing arrangement, either by stock ownership, interlocking directors, trusteeship, mortgage, or trust deed, with any RDO or any optical company, except as specified.

3. Permits a RDO or optical company to operate, own, or have an ownership interest in a health plan so long as the health plan does not directly employ optometrists to provide optometric services directly to enrollees of the health plan, and permits a RDO or optical company to provide, direct or indirectly, products and services to the health plan or its contracted providers, enrollees, or to other optometrists.

4. Permits, for purposes of this bill, an optometrist to be employed by a health plan as a clinical director or to perform services related to utilization management, quality assurance, or other similar related services that do not require the optometrist to directly provide health care services to enrollees. Prohibits an optometrist serving as a clinical director from employing optometrists to provide health care services to enrollees of the health plan.

5. Prohibits the RDO or optical company from interfering with the professional judgment of the optometrist.

6. Requires the Department of Managed Health Care (DMHC) to forward consumer complaints to the CBO and requires DMHC and CBO to enter into an Inter-Agency Agreement regarding information sharing.

7. Permits an optometrist, a RDO, an optical company, or a health plan to enter into a direct or indirect landlord-tenant relationship with an optometrist under the following conditions:

1. The practice shall be owned by the optometrist and in every phase be under the optometrist’s exclusive control, including:

1. Selection and supervision of optometric staff;

2. Scheduling patients;

3. Determining the amount of time the optometrist spends with patients;

4. Fees charged for optometric products and services;

5. The examination procedures and treatment provided to patients; and,

6. The optometrist’s contracting with managed care organizations.

2. The optometrist’s records shall be the sole property of the optometrist. Only the optometrist and those persons with written authorization from the optometrist shall have access to the patient records and the examination room, except as otherwise provided by law;

3. The optometrist’s leased space shall be definite and distinct from space occupied by other occupants of the premises, have a sign designating that the leased space is occupied by an independent optometrist and be accessible to the optometrist after hours or in the case of an emergency, subject to the facility’s general accessibility. This shall not require a separate entrance to the optometrist’s leased space;

4. All signs and displays shall be separate and distinct from that of the other occupants and shall have the optometrist's name and the word “optometrist” prominently displayed. This shall not prohibit the optometrist from advertising the optometrist’s practice location with reference to other occupants or prohibit the optometrist or RDO from advertising participation in any health plan’s network or the health plan’s products in which the optometrist or RDO participates;

5. There shall be no signs displayed on any part of the premises or in any advertising indicating that the optometrist is employed or controlled by the RDO, health plan, or optical company;

6. Except as otherwise permitted by this bill, the RDO or optical company shall not link its advertising with the optometrist's name, practice, or fees. However, a health plan may advertise its products and associated premium costs and any copayments, coinsurance, deductibles, or other forms of cost-sharing, and the names and locations of the health plan’s providers, including any optometrists or RDOs that provide professional services, in compliance with the Knox-Keene. However, a health plan shall not advertise the optometrist’s fees for products and services that are not included in the health plan’s contract with the optometrist;

7. The optometrist shall not be precluded from collecting fees for services that are not included in a health plan’s products and services, subject to any patient disclosure requirements contained in the health plan’s provider agreement with the optometrist or that are not otherwise prohibited by the Knox-Keene;

8. The term of the lease shall be no less than one year and shall not require the optometrist to contract exclusively with a health plan;

9. The lease, rent terms, or payments shall not be based on the number of eye exams performed, prescriptions written, patient referrals, or the sale or promotion of the products of a RDO or an optical company; and,

10. The landlord shall provide the optometrist with written notice of the scheduled expiration date of a lease at least 60 days prior to the scheduled expiration date. The landlord shall not interfere with an outgoing optometrist’s efforts to inform the optometrist’s patients, in accordance with customary practice and professional obligations, of the relocation of the optometrist's practice.

8. Permits the landlord to terminate the lease for the following reasons:

1. The optometrist’s failure to maintain a license to practice optometry or the imposition of restrictions, suspension, or revocation of the optometrist’s license, or if the optometrist or the optometrist’s employee is or becomes ineligible to participate in state or federal government-funded programs;

2. Termination of any underlying lease where the optometrist has subleased space, or the optometrist’s failure to comply with the underlying lease provisions that are made applicable to the optometrist;

3. If the health plan is the landlord, the termination of the provider agreement between the health plan and the optometrist, in accordance with the Knox-Keene; and,

4. Other reasons pursuant to the terms of the lease or permitted under the Civil Code.

9. Requires the landlord to act in good faith in terminating the lease and prohibits the landlord from terminating the lease for reasons that constitute interference with the practice of optometry.

10. Prohibits the landlord from terminating the lease solely because of a report, complaint, or allegation filed by the optometrist against the landlord, a RDO or a health plan, to the CBO, the DMHC, or any other law enforcement or regulatory agency.

11. Authorizes the CBO to inspect, upon request, an individual lease agreement and requires the landlord or tenant, as applicable, to promptly comply with the request. Failure or refusal to comply with the request for a lease agreement within 30 days of receiving the request constitutes unprofessional conduct and is grounds for disciplinary action by the appropriate regulatory agency. This bill permits only the redaction of personal information on the lease agreements, as specified by Civil Code.

12. Declares any financial information contained in the lease submitted to a regulatory entity to be considered confidential trade secret information and is exempt from disclosure under the California Public Records Act.

13. Permits a lease to include commercially reasonable terms that:

1. Require the provision of optometric services at the leased space during certain days and hours;

2. Restrict the leased space from being used for the sale or offer for sale of spectacles, frames, lenses, contact lenses, or other ophthalmic products, except that the optometrist shall be permitted to sell therapeutic ophthalmic products if the RDO, health plan, or optical company located on or adjacent to the optometrist’s leased space does not offer any substantially similar therapeutic ophthalmic products for sale;

3. Require the optometrist to contract with a health plan network, health plan, or health insurer; and,

4. Permit the landlord to directly or indirectly provide furnishings and equipment in the leased space.

14. Prohibits a RDO from having any membership, proprietary interest, coownership, or profit sharing arrangement either by stock ownership, interlocking directors, trusteeship, mortgage, or trust deed, with an optometrist, except as permitted under this bill.

15. Clarifies that nothing in this bill shall prohibit a physician and surgeon or his or her professional corporation from contracting with or employing optometrists, ophthalmologists, or optometric assistants and entering into a contract or landlord tenant relationship with a health plan, optical company, or RDO, as specified.

16. States that any violation of this bill constitutes a misdemeanor.

17. Permits the CBO to promulgate regulations that impose administrative fines, which may be assessed in addition to any other applicable fines, citations, or administrative or criminal actions.

18. Transfers the regulation of RDOs from the MBC to the CBO.

19. Requires an RDO to display specified consumer information related to the CBO.

20. Requires an optometrist who practices in a setting with a RDO to report the business relationship to the CBO, as determined by the CBO.

21. Authorizes the CBO to inspect any premises at which the business of a RDO is co-located with the practice of an optometrist. Requires the CBO to provide a copy of its inspection results, if applicable, to the DMHC.

22. Prohibits any individual, corporation, or firm operating as a RDO before January 1, 2016, or an employee of such an entity, from being subject to any action for engaging in conduct prohibited by specified current laws as they exist prior to this bill’s enactment until January 1, 2019, except that a RDO shall be subject to discipline for duplicating or changing lenses without a prescription or order.

23. States that nothing in this bill shall be construed to imply or suggest that an RDO is in violation of or in compliance with the law.

24. States that the exemption shall not apply to any business relationships prohibited by current law commencing registration or operations on or after January 1, 2016.

25. Permits an individual, corporation, or firm operating as a RDO engaging in a business relationship with an optometrist at locations registered with the MBC before January 1, 2016 to continue to do so until January 1, 2019.

26. States that the three-year safe harbor period does not apply to any administrative action or litigation pending, cause for discipline, or cause of action accruing prior to September 1, 2015.

27. Requires any health plan, as specified, to report to the CBO in writing that:

1. 15% of its locations no longer employ an optometrist by January 1, 2017;

2. 45% of its locations no longer employ an optometrist by August 1, 2017; and,

3. 100% of its locations no longer employ an optometrist by January 1, 2019.

28. Requires the CBO to provide health plans’ compliance reports to the director of the DCA and the Legislature.

29. Replaces one optometrist with an RDO on the CBO.

30. Permits the RDO member of the CBO to be a stockholder in, owner of, or a member of the board of trustees of any school of optometry, or financially interested, directly or indirectly, in any concern manufacturing or dealing in optical supplies at wholesale.

31. Establishes a RDO committee to advise and make recommendations to CBO regarding the regulation of a RDO. The committee shall consist of five members, two of whom shall be RDOs, two of whom shall be public members, and one of whom shall be a member of the CBO. Initial appointments to the committee shall be made by the CBO.

32. States that the RDO committee shall be responsible for:

1. Recommending registration standards and criteria for the registration of dispensing opticians;

2. Reviewing of the disciplinary guidelines relating to RDOs;

3. Recommending to the CBO changes or additions to regulations; and,

4. Carrying out and implementing all responsibilities and duties imposed upon it pursuant to this bill or as delegated to it by the CBO.

33. Requires the RDO committee to meet at least twice a year and as needed.

34. Requires recommendations by the RDO committee regarding scope of practice or regulatory changes to be approved, modified, or rejected by the CBO within 90 days of submission to the CBO. If the CBO rejects or significantly modifies the intent or scope of the recommendation, the RDO committee may request that the CBO provide its reasons in writing, which shall be provided within 30 days.

35. Requires the Governor to appoint the RDO and public members to the RDO committee after the initial appointments by the CBO. The RDO committee shall submit a recommendation to the CBO regarding which CBO member should be appointed to serve on the RDO committee, and the CBO shall appoint the member to serve. Committee members shall serve a term of four years except for the initial staggered terms. A member may be reappointed, but no person shall serve as a member of the committee for more than two consecutive terms.

36. Makes clarifying and technical amendments.

FISCAL EFFECT:

This bill is keyed fiscal by Legislative Counsel. According to the Senate Appropriations Committee analysis dated August 27, 2015, this bill will result in unknown additional costs for the CBO to assume licensing and enforcement responsibilities for dispensing opticians from the MBC (State Optometry Fund), offset by reduced costs to the MBC (Contingent Fund of the Medical Board of California). The bill will also result in unknown additional enforcement costs for the CBO to enforce licensing requirements on dispensing opticians and optometrists that enter into lease agreements (State Optometry Fund).

COMMENTS:

1. Purpose. According to the Author, “AB 684 is seeking a legislative solution that allows multiple models to continue to operate, while also leveling the playing field for both large and small operators, ensuring that consumers’ interests are protected, and optometrists’ clinical judgment is preserved. This legislation would clarify and modernize the law. Without legislative action, these centers are under threat of closure, which would cause significant job loss and cut off care for the more than 2 million California patients served by these centers every year.”

2. Background.

1. RDOs and optometrists. This bill is a result of over a decade of litigation debating the legitimacy of current law prohibiting certain business relationships between an optometrist and a RDO. The final case, National Association of Optometrists & Opticians v. Harris, confirmed the constitutionality of California statutes.

The plaintiffs in the case, the National Association of Optometrists and Opticians, LensCrafters, Inc., and Eye Care Centers of America, Inc., argued that the laws restricting business arrangements between opticians and optometrists violate the dormant Commerce Clause of the United States Constitution. The plaintiffs argued it was unfair that optometrists and ophthalmologists may set up a practice where patients may receive both eye examinations and prescription eyewear, but opticians may offer only the sale of eyewear, not eye examinations, and therefore are unable to offer the convenience of "one-stop shopping" in California.

The Court upheld the California law as constitutional, stating that the law was not discriminatory and did not place a significant burden on interstate commerce “just because it precludes a preferred, more profitable method of operating in a retail market.”

While the decision placed a final affirmation on existing law, determining its impact on California’s optical market was not concluded. The law did not anticipate the myriad leasing, co-locating, and employment relationships that rose during its debated legality.

This bill authorizes leasing arrangements between an optometrist, RDO, and an optical company under specified terms, and establishes a three year transition period for entities not currently in compliance with the terms of this bill.

2. Transition of RDOs from MBC to CBO. MBC began regulating individuals selling eyewear and related products in the 1930s. While it seems incongruous for the MBC to handle this population, the MBC has long been a catch-all for various license and registration types. Polysomnographic trainees, technicians, and technologists are currently regulated by the MBC, as are midwives and research psychoanalysts. Prior to getting its own board, the Physician Assistant Committee was also housed under the MBC.

The MBC raised the possibility of transferring regulation of the RDO program to the CBO in its 2013 Sunset Review report. MBC indicated that many complaints it received involve optometrists and optometric assistants, in addition to RDOs, and moving the program to CBO may lead to more efficient complaint resolution.

Stakeholder RDOs expressed concern over the combination of the professions’ regulation in this bill because RDOs and optometrists may be in direct competition over the sale of eyewear and related products. However, this bill adds an RDO to the CBO, giving voice and vote to the regulated population – representation not available under the MBC -- and establishes an advisory committee with a requirement that the CBO hear its concerns.

Further, there has been little realization of industry concerns about domination in the combination of related professions into a single board. Of particular note are the following:

• Cosmetology regulation was added to barbering, creating the Board of Barbering and Cosmetology;

• The funeral home and cemetery industries are regulated by the Cemetery and Funeral Bureau;

• Land surveyors, professional engineers, geologists, and geophysicists share regulation by the Board for Professional Engineers, Land Surveyors and Geologists.

• The Speech-Language Pathology, Audiology and Hearing Aid Dispensers Board regulate those named individuals.

This bill directs the transfer of all funds, duties, powers, purposes, responsibilities, and records from the MBC to the CBO to regulate RDOs.

3. Related Legislation. AB 595 (Alejo) of 2015 would authorize in law existing business models under which a RDO is located next to an optometrist. (Status: This bill is pending in the Assembly Business and Professions Committee.)

AB 778 (Atkins) of 2011 would have authorized a registered dispensing optician, an optical company, a manufacturer or distributor of optical goods, or a non-optometric corporation to own a specialized health care service plan that provides or arranges for the provision of vision care services. (Status: The bill was held in this Committee.)

4. Arguments in Support. National Vision, Inc. and FirstSight Vision Services, Inc. write, “[W]e are pleased to write in support of Assembly Bill 684, which will protect vision care access for working Californians by bringing clarity to outdated laws governing how and where optometrists can provide eye care services in the state.

“Optometrists have been providing quality vision care to patients next to National Vision optical locations for over 20 years. These optometrists are closely regulated by the state, and patients value the convenience, accessibility and flexibility of being able to receive comprehensive eye care at a location where they do other shopping and where they can receive services during the evenings and on weekends. However, years of litigation relating to a 1960s law have caused ambiguity about whether doctors can continue seeing patients at vision care centers like ours.

“National Vision and FirstSight have been part of a robust stakeholder process that included our industry partners, the Attorney General’s office and the Governor’s Office that has resulted in the language that was amended into AB 684 on September 4th, 2015. AB 684 will now ensure that the more than 2 million Californians who receive eye care at one of California’s more than 600 vision care centers continue to have access to the high-quality care provided by the nearly 2,000 optometrists and support employees who work at these locations.”

The California Optometric Association writes, “Recent litigation prompted by issues of consumer safety created uncertainty. AB 684 solves that by allowing optometrists to lease space from an optician, optical company or health plan and includes sufficient protections to ensure the doctors who work in these settings can practice independently. Most importantly, it consolidates enforcement under one regulatory entity and authorizes new enforcement tools to ensure any violation of the law will be penalized.”

National Association of Optometrists and Opticians writes, “We believe that AB 684 will eliminate the ambiguity in existing law, which governs the relationships between optometrists and registered dispensing opticians, co-located sellers of eyewear. By including important protections and prohibitions, we believe that this bill serves to protect doctor’s clinical judgment and provide greater transparency for both patients and regulatory entities.”

Wal-Mart Stores, Inc., LensCrafters, and EYEXAM also express support for AB 684 and the opportunities for new business forms it will provide.

5. Arguments in Opposition. The CBO writes, “We recognize that AB 684 now contains more than just an enforcement moratorium. However, the Board believes this late emerging solution both creates some problematic issues and leaves some key policy concerns unresolved, which cannot be addressed in the remainder of the legislative session. In order to put consumer protection first, the Board opposes this bill. While we acknowledge the substantial amount of effort that interested parties put into the current version of AB 684, the Board respectfully believes additional debate, meetings, and discussions with the Board and the Legislature is warranted.”

SUPPORT AND OPPOSITION:

Support:

California Optometric Association

EYEXAM

FirstSight Vision Services, Inc.

LensCrafters

National Association of Optometrists and Opticians

National Vision, Inc.

Wal-Mart Stores, Inc.

Opposition:

California State Board of Optometry

-- END --

 THIRD READING  

Bill No: AB 684

Author: Alejo (D) and Bonilla (D)

Amended: 9/4/15 in Senate

Vote: 21

PRIOR SENATE VOTES NOT RELEVANT

SENATE APPROPRIATIONS COMMITTEE: 5-0, 8/27/15

AYES: Lara, Beall, Hill, Leyva, Mendoza

NO VOTE RECORDED: Bates, Nielsen

SENATE BUS, PROF. & ECON. DEV. COMMITTEE: 8-0, 9/10/15 (pursuant to Senate Rule 29.10)

AYES: Hill, Bates, Block, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski

NO VOTE RECORDED: Berryhill

ASSEMBLY FLOOR: Not relevant

SUBJECT: State Board of Optometry: optometrists: nonresident contact lens sellers: registered dispensing opticians

SOURCE: Author

DIGEST: This bill authorizes the establishment of landlord-tenant relationships between a registered dispensing optician (RDO), optometrist and an optical company as specified; transfers the regulation of RDOs from the Medical Board of California (MBC) to the California State Board of Optometry (CBO); replaces an optometrist with a RDO on the CBO; establishes a RDO advisory committee; and establishes a three-year period for the transition of direct employment of optometrists to leasing arrangements.

ANALYSIS:

Existing law:

1. Prohibits optometrists from having any membership, proprietary interest, co-ownership, landlord-tenant relationship or any profit-sharing arrangement in any form, directly or indirectly, either by stock ownership, interlocking directors, trusteeship, mortgage, trust deed or otherwise with those who manufacture, sell, or distribute lenses, frames, optical supplies, optometric appliances or devices or kindred products to physicians and surgeons, optometrists, or dispensing opticians. (Business and Professions Code (BPC) § 655)

2. Prohibits optometrists and RDOs from having any membership, proprietary interest, co-ownership, landlord-tenant relationship or any profit-sharing agreement with each other. (BPC § 655)

This bill:

1. Prohibits an optometrist from having any membership, proprietary interest, co-ownership, or any profit-sharing arrangement, either by stock ownership, interlocking directors, trusteeship, mortgage, or trust deed, with any RDO or any optical company, except as specified.

2. Permits a RDO or optical company to operate, own, or have an ownership interest in a health plan so long as the health plan does not directly employ optometrists to provide optometric services directly to enrollees of the health plan, and permits a RDO or optical company to provide, direct or indirectly, products and services to the health plan or its contracted providers, enrollees, or to other optometrists.

3. Permits, for purposes of this bill, an optometrist to be employed by a health plan as a clinical director or to perform services related to utilization management, quality assurance, or other similar related services that do not require the optometrist to directly provide health care services to enrollees. Prohibits an optometrist serving as a clinical director from employing optometrists to provide health care services to enrollees of the health plan.

4. Prohibits the RDO or optical company from interfering with the professional judgment of the optometrist.

5. Permits an optometrist, a RDO, an optical company, or a health plan to enter into a direct or indirect landlord-tenant relationship with an optometrist under specified conditions, including:

1. The practice shall be owned by the optometrist and in every phase be under the optometrist’s exclusive control, as specified;

2. The optometrist’s records shall be the sole property of the optometrist. Only the optometrist and those persons with written authorization from the optometrist shall have access to the patient records and the examination room, except as otherwise provided by law;

3. The optometrist’s leased space shall be definite and distinct from space occupied by other occupants of the premises, have a sign designating that the leased space is occupied by an independent optometrist and be accessible to the optometrist after hours or in the case of an emergency, subject to the facility’s general accessibility. This shall not require a separate entrance to the optometrist’s leased space;

4. All signs and displays shall be separate and distinct from that of the other occupants and shall have the optometrist's name and the word “optometrist” prominently displayed;

5. Except as otherwise permitted by this bill, the RDO or optical company shall not link its advertising with the optometrist's name, practice, or fees. However, a health plan may advertise its products and associated premium costs and any copayments, coinsurance, deductibles, or other forms of cost-sharing, and the names and locations of the health plan’s providers, including any optometrists or RDOs that provide professional services, in compliance with the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene);

6. The optometrist shall not be precluded from collecting fees for services that are not included in a health plan’s products and services, subject to any patient disclosure requirements contained in the health plan’s provider agreement with the optometrist or that are not otherwise prohibited by the Knox-Keene;

7. The term of the lease shall be no less than one year and shall not require the optometrist to contract exclusively with a health plan; and,

8. The lease, rent terms, or payments shall not be based on the number of eye exams performed, prescriptions written, patient referrals, or the sale or promotion of the products of a RDO or an optical company.

6. Permits the landlord to terminate the lease for specified reasons, including the following:

1. The optometrist’s failure to maintain a license to practice optometry or the imposition of restrictions, suspension, or revocation of the optometrist’s license, or if the optometrist or the optometrist’s employee is or becomes ineligible to participate in state or federal government-funded programs;

2. Termination of any underlying lease where the optometrist has subleased space, or the optometrist’s failure to comply with the underlying lease provisions that are made applicable to the optometrist;

3. If the health plan is the landlord, the termination of the provider agreement between the health plan and the optometrist, in accordance with the Knox-Keene; and,

4. Other reasons pursuant to the terms of the lease or permitted under the Civil Code.

7. Authorizes the CBO to inspect, upon request, an individual lease agreement and requires the landlord or tenant, as applicable, to promptly comply with the request.

8. Declares any financial information contained in the lease submitted to a regulatory entity to be considered confidential trade secret information and is exempt from disclosure under the California Public Records Act.

9. Permits a lease to include commercially reasonable terms, including those that:

1. Require the provision of optometric services at the leased space during certain days and hours; and,

2. Restrict the leased space from being used for the sale or offer for sale of spectacles, frames, lenses, contact lenses, or other ophthalmic products, except that the optometrist shall be permitted to sell therapeutic ophthalmic products if the RDO, health plan, or optical company located on or adjacent to the optometrist’s leased space does not offer any substantially similar therapeutic ophthalmic products for sale.

10. States that any violation of this bill constitutes a misdemeanor.

11. Transfers the regulation of RDOs from the MBC to the CBO.

12. Authorizes the CBO to inspect any premises at which the business of a RDO is co-located with the practice of an optometrist. Requires the CBO to provide a copy of its inspection results, if applicable, to the Department of Managed Health Care.

13. Prohibits any individual, corporation, or firm operating as a RDO before January 1, 2016, or an employee of such an entity, from being subject to any action for engaging in conduct prohibited by specified current laws as they exist prior to this bill’s enactment until January 1, 2019, except that a RDO shall be subject to discipline for duplicating or changing lenses without a prescription or order.

14. States that nothing in this bill shall be construed to imply or suggest that an RDO is in violation of or in compliance with the law.

15. States that the exemption shall not apply to any business relationships prohibited by current law commencing registration or operations on or after January 1, 2016.

16. Permits an individual, corporation, or firm operating as a RDO engaging in a business relationship with an optometrist at locations registered with the MBC before January 1, 2016 to continue to do so until January 1, 2019.

17. States that the three-year safe harbor period does not apply to any administrative action or litigation pending, cause for discipline, or cause of action accruing prior to September 1, 2015.

18. Requires any health plan, as specified, to report to the CBO in writing that:

1. 15% of its locations no longer employ an optometrist by January 1, 2017;

2. 45% of its locations no longer employ an optometrist by August 1, 2017; and,

3. 100% of its locations no longer employ an optometrist by January 1, 2019.

19. Replaces one optometrist with an RDO on the CBO.

20. Establishes a RDO committee to advise and make recommendations to CBO regarding the regulation of a RDO. The committee shall consist of five members, two of whom shall be RDOs, two of whom shall be public members, and one of whom shall be a member of the CBO.

21. Makes other changes, as specified.

Background

RDOs and optometrists. This bill is a result of over a decade of litigation debating the legitimacy of current law prohibiting certain business relationships between an optometrist and a RDO. The final case, National Association of Optometrists & Opticians v. Harris, confirmed the constitutionality of California statutes.

The plaintiffs in the case, the National Association of Optometrists and Opticians, LensCrafters, Inc., and Eye Care Centers of America, Inc., argued that the laws restricting business arrangements between opticians and optometrists violate the dormant Commerce Clause of the United States Constitution. The plaintiffs argued it was unfair that optometrists and ophthalmologists may set up a practice where patients may receive both eye examinations and prescription eyewear, but opticians may offer only the sale of eyewear, not eye examinations, and therefore are unable to offer the convenience of "one-stop shopping" in California.

The Court upheld the California law as constitutional, stating that the law was not discriminatory and did not place a significant burden on interstate commerce “just because it precludes a preferred, more profitable method of operating in a retail market.”

While the decision placed a final affirmation on existing law, determining its impact on California’s optical market was not concluded. The law did not anticipate the myriad leasing, co-locating, and employment relationships that rose during its debated legality.

This bill authorizes leasing arrangements between an optometrist, RDO, and an optical company under specified terms, and establishes a three year transition period for entities not currently in compliance with the terms of this bill.

Transition of RDOs from MBC to CBO. MBC began regulating individuals selling eyewear and related products in the 1930s. While it seems incongruous for the MBC to handle this population, the MBC has long been a catch-all for various license and registration types. Polysomnographic trainees, technicians, and technologists are currently regulated by the MBC, as are midwives and research psychoanalysts. Prior to getting its own board, the Physician Assistant Committee was also housed under the MBC.

The MBC raised the possibility of transferring regulation of the RDO program to the CBO in its 2013 Sunset Review report. MBC indicated that many complaints it received involve optometrists and optometric assistants, in addition to RDOs, and moving the program to CBO may lead to more efficient complaint resolution.

Stakeholder RDOs expressed concern over the combination of the professions’ regulation in this bill because RDOs and optometrists may be in direct competition over the sale of eyewear and related products. However, this bill adds an RDO to the CBO, giving voice and vote to the regulated population – representation not available under the MBC -- and establishes an advisory committee with a requirement that the CBO hear its concerns.

This bill directs the transfer of all funds, duties, powers, purposes, responsibilities, and records from the MBC to the CBO to regulate RDOs.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee, this bill will result in unknown additional costs for the CBO to assume licensing and enforcement responsibilities for dispensing opticians from the MBC (State Optometry Fund), offset by reduced costs to the MBC (Contingent Fund of the Medical Board of California). This bill will also result in unknown additional enforcement costs for the CBO to enforce licensing requirements on dispensing opticians and optometrists that enter into lease agreements (State Optometry Fund).

SUPPORT: (Verified 9/10/15)

California Optometric Association

Consumer Attorneys of California

EYEXAM

FirstSight Vision Services, Inc.

LensCrafters

National Association of Optometrists and Opticians

National Vision, Inc.

Wal-Mart Stores, Inc.

OPPOSITION: (Verified 9/10/15)

California State Board of Optometry

ARGUMENTS IN SUPPORT: The California Optometric Association writes, “Recent litigation prompted by issues of consumer safety created uncertainty. AB 684 solves that by allowing optometrists to lease space from an optician, optical company or health plan and includes sufficient protections to ensure the doctors who work in these settings can practice independently. Most importantly, it consolidates enforcement under one regulatory entity and authorizes new enforcement tools to ensure any violation of the law will be penalized.”

“National Vision and FirstSight have been part of a robust stakeholder process that included our industry partners, the Attorney General’s office and the Governor’s Office that has resulted in the language that was amended into AB 684 on September 4th, 2015. AB 684 will now ensure that the more than 2 million Californians who receive eye care at one of California’s more than 600 vision care centers continue to have access to the high-quality care provided by the nearly 2,000 optometrists and support employees who work at these locations.”

Wal-Mart Stores, Inc., LensCrafters, and EYEXAM also express support for AB 684 and the opportunities for new business forms it will provide.

ARGUMENTS IN OPPOSITION: The CBO writes, “We recognize that AB 684 now contains more than just an enforcement moratorium. However, the Board believes this late emerging solution both creates some problematic issues and leaves some key policy concerns unresolved, which cannot be addressed in the remainder of the legislative session. In order to put consumer protection first, the Board opposes this bill. While we acknowledge the substantial amount of effort that interested parties put into the current version of AB 684, the Board respectfully believes additional debate, meetings, and discussions with the Board and the Legislature is warranted.”

ASSEMBLY FLOOR: 76-0, 5/26/15

AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins

NO VOTE RECORDED: Bloom, Chávez, Harper, Mathis

Prepared by: Sarah Huchel / B., P. & E.D. / (916) 651-4104

9/10/15 23:08:56

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 684 (Alejo) - Healing arts: licensees: disciplinary actions.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 27, 2015

Bill Summary:

AB 684 would transfer authority for licensing dispensing opticians from the Medical Board to the Board of Optometry. The bill would authorize lease agreements between opticians and optometrists. The bill would prohibit the enforcement of the existing prohibition on financial relationships between licensed optometrists and dispensing opticians until January 1, 2019.

Fiscal Impact:

• Unknown additional costs for the Board of Optometry to assume licensing and enforcement responsibilities for dispensing opticians from the Medical Board (State Optometry Fund), offset by reduced costs to the Medical Board (Contingent Fund of the Medical Board of California).

• Unknown additional enforcement costs for the Board of Optometry to enforce licensing requirements on dispensing opticians and optometrists that enter into lease agreements (State Optometry Fund).

Committee Amendments:

Delete the existing provisions of the bill, transfer authority for licensing dispensing opticians from the Medical Board to the Board of Optometry, authorize lease agreements between opticians and optometrists, and prohibit the enforcement of the existing prohibition on financial relationships between licensed optometrists and dispensing opticians until January 1, 2019.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 684 (Alejo) - Healing arts: licensees: disciplinary actions

This bill does not meet the criteria for referral to the Suspense File.

Bill Summary:

AB 684 would prohibit the enforcement of an existing prohibition on financial relationships between licensed optometrists and dispensing opticians until January 1, 2017.

Fiscal Impact:

No significant fiscal impact is anticipated by the Medical Board or the State Board of Optometry.

Background:

Current law generally prohibits financial relationships between licensed optometrists and dispensing opticians (which can be an individual or a corporation that fills prescription lenses). While this prohibition has existing in law for decades, it has been subject to ongoing legal challenges. In practice, those prohibited financial relationships have existed while state law was under challenge. For example, one-stop shop chains for eyeglasses have either employed optometrists directly or contracted with optometrists to provide co-located space. Those opticians fill resulting prescriptions on site. Recently, the federal Ninth Circuit Court of Appeals upheld state law in this area.

Proposed Law:

AB 684 would prohibit the enforcement of an existing prohibition on financial relationships between licensed optometrists and dispensing opticians until January 1, 2017.

The bill’s provisions would only provide protection from enforcement for business relationships that existed before enactment of the bill.

This bill is an urgency measure.

Related Legislation:

AB 595 (Alejo) would authorize in law existing business models under which a registered dispensing optician is located next to an optometrist. That bill is pending in the Assembly Business and Professions Committee.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 684 (Alejo) - Healing arts: licensees: disciplinary actions

This bill does not meet the criteria for referral to the Suspense File.

Bill Summary:

AB 684 would prohibit the enforcement of an existing prohibition on financial relationships between licensed optometrists and dispensing opticians until January 1, 2017.

Fiscal Impact:

No significant fiscal impact is anticipated by the Medical Board or the State Board of Optometry.

Background:

Current law generally prohibits financial relationships between licensed optometrists and dispensing opticians (which can be an individual or a corporation that fills prescription lenses). While this prohibition has existing in law for decades, it has been subject to ongoing legal challenges. In practice, those prohibited financial relationships have existed while state law was under challenge. For example, one-stop shop chains for eyeglasses have either employed optometrists directly or contracted with optometrists to provide co-located space. Those opticians fill resulting prescriptions on site. Recently, the federal Ninth Circuit Court of Appeals upheld state law in this area.

Proposed Law:

AB 684 would prohibit the enforcement of an existing prohibition on financial relationships between licensed optometrists and dispensing opticians until January 1, 2017.

The bill’s provisions would only provide protection from enforcement for business relationships that existed before enactment of the bill.

This bill is an urgency measure.

Related Legislation:

AB 595 (Alejo) would authorize in law existing business models under which a registered dispensing optician is located next to an optometrist. That bill is pending in the Assembly Business and Professions Committee.

-- END --

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Jerry Hill, Chair

2015 - 2016 Regular

Bill No: AB 684 Hearing Date: July 6, 2015

Subject: Healing arts: licensees: disciplinary actions.

SUMMARY:

Prohibits the Medical Board of California (MBC) and the California Board of Optometry (CBO) from enforcing provisions related to business relationships between registered dispensing opticians (RDOs) and optometrists.

Existing law:

1. Defines individuals, corporations, and firms engaged in the business of filling prescriptions lenses and related products and performing allied services as “dispensing opticians” and states that they are prohibited from engaging in that business unless registered with the MBC. (Business and Professions Code (BPC) § 2550)

2. Establishes the CBO within the Department of Consumer Affairs to license optometrists and regulate the practice of optometry. (BPC § 3000 et seq.)

3. Prohibits optometrists and RDOs from having any membership, proprietary interest, co-ownership, landlord-tenant relationship or any profit-sharing agreement with each other. (BPC § 655)

3. Prohibits optometrists from having any membership, proprietary interest, coownership, landlord-tenant relationship or any profit-sharing arrangement in any form, directly or indirectly, either by stock ownership, interlocking directors, trusteeship, mortgage, trust deed or otherwise with those who manufacture, sell, or distribute lenses, frames, optical supplies, optometric appliances or devices or kindred products to physicians and surgeons, optometrists, or dispensing opticians. (BPC § 655)

3. Provides that it is unlawful for RDOs to:

1. Advertise the furnishing of, or to furnish, the services of a refractionist, an optometrist or a physician and surgeon;

2. Directly or indirectly employ or maintain on or near the premises used for optical dispensing, a refractionist, an optometrist, a physician and surgeon or a practitioner of any other profession for the purpose of any examination or treatment of the eyes; or,

3. Duplicate or change lenses without a prescription or order from a person duly licensed to issue the same. (BPC § 2556)

3. Establishes the Knox-Keene Health Care Service Plan Act of 1975 which establishes rules for mandatory basic services, financial stability, availability and accessibility of providers, and other standards for patient care. (Health and Safety Code (HSC) §§ 1340 et seq.)

3. Declares Legislative intent and purpose to promote the delivery and the quality of health and medical care to the people of the State of California who participate in a health care service plan by:

1. Ensuring the continued role of the professional as the determiner of the patient’s health needs which fosters the traditional relationship of trust and confidence between the patient and the professional.

2. Prosecuting malefactors who make fraudulent solicitations or who use deceptive methods, misrepresentations, or practices which are inimical to the general purpose of enabling a rational choice for the consumer public.

3. Ensuring that subscribers and enrollees receive available and accessible health and medical services rendered in a manner providing continuity of care. (HSC § 1342)

This bill:

1. Prohibits an individual, corporation, or firm operating as a RDO before the effective date of this bill, or an employee of such an entity, or an optometrist licensed before the effective date of this bill, from being subject to any action by the MBC, the CBO, another state agency, or a district attorney for engaging in any prohibited business relationship between optometrists and RDOs, as specified.

2. Prohibits this bill from being construed to imply or suggest that a RDO or optometrist engaging in any business relationship is in violation of or in compliance with the law.

3. Prohibits this bill from applying to any business relationships prohibited by specified law that are registered and operating on or after the effective date of this bill.

4. States that nothing in this bill shall prohibit an individual, corporation, or firm operating as a RDO from engaging in a business relationship with a licensed optometrist before the effective date of this bill at locations registered with the MBC before the effective date of this bill.

5. Prohibits any individual, corporation, or firm, or an employee of such an entity, operating as a RDO before the effective date of this bill, from being subject to any action for advertising the furnishing of, or furnishing, the services of a refractionist, an optometrist, or a physician and surgeon; or directly or indirectly employing or maintaining on or near the premises used for optical dispensing, a refractionist, an optometrist, a physician and surgeon or a practitioner of any other profession for the purpose of any examination or treatment of the eyes.

6. Prohibits this bill from being construed to imply or suggest that a RDO is in violation of or in compliance with the law.

7. Prohibits this bill from applying to any business relationships prohibited by specified law that are registered and operating on or after the effective date of this bill.

8. States that nothing in this bill shall prohibit an individual, corporation, or firm operating as a RDO from engaging in a business relationship with a licensed optometrist before the effective date of this bill at locations registered with the MBC before the effective date of this section.

9. Sunsets the above provisions of this bill on January 1, 2017.

10. Tolls the limitations period during the time this bill is in effect for any actions taken against an individual or entity’s license or registration in regards to a violation discussed in this bill.

11. States that this bill is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to protect various businesses, opticians, and optometrists who engage in a business relationship that is prohibited by specified law from discipline by the MBC, the CBO, or other state agency with enforcement authority while the Legislature, with the assistance of appropriate regulatory agencies, develops a model that will allow California businesses to provide services to patients and also protect the interests of practitioners.

FISCAL EFFECT:

This bill is keyed “fiscal” by the Legislative Counsel. According to the analysis by the Assembly Appropriations Committee dated May 20, 2015, this bill will have negligible state fiscal effect.

COMMENTS:

1. Purpose. This bill is sponsored by the Author. According to the Author’s office, “Current state law governing the relationship between optometrists and opticians, co-located sellers of eyewear has not been updated for many years. The result is that these laws no longer reflect today’s realities and needs as the health care landscape has evolved significantly. This evolution, evidenced by the rise of HMO’s, proliferation of convenient care and co-located healthcare clinics, changing provider relationships, and now the Affordable Care Act, requires that California law and policy also evolve to effectuate the state’s goals of increased access to quality, affordable care….

“AB 684 will temporarily allow [vision care centers] to continue to operate in the state by suspending any new disciplinary action against optometrists and opticians by the Board of Optometry and the Medical Board of California until January 1, 2017, while negotiations continue on a permanent fix [to California law restricting certain business arrangements affecting optometrists and opticians].”

2. Background. This bill is a result of over a decade of litigation debating the legitimacy of current law prohibiting certain business relationships between an optometrist and a registered dispensing optician. The final case, National Association of Optometrists & Opticians v. Harris, 682 F.3d 1144 (9th Cir.2012) affirmed California statutes.

The plaintiffs in the case, the National Association of Optometrists and Opticians, LensCrafters, Inc., and Eye Care Centers of America, Inc., argued that the laws prohibiting licensed opticians from offering prescription eyewear at the same location in which eye examinations are provided and the advertising that eyewear and eye examinations are available in the same location, violate the dormant Commerce Clause. The plaintiffs argued it was unfair that optometrists and ophthalmologists may set up a practice where patients may receive both eye examinations and prescription eyewear, but opticians may offer only the sale of eyewear, not eye examinations, and therefore are unable to offer the convenience of "one-stop shopping" in California.

The Court upheld the California law as constitutional, stating that the law was not discriminatory and did not place a significant burden on interstate commerce “just because it precludes a preferred, more profitable method of operating in a retail market.”

While the decision placed a final affirmation on existing law, determining its impact on California’s optical market has not been concluded. The law did not anticipate the myriad leasing, co-locating, and employment relationships that sprung up during its debated legality.

3. Practice Models. There are several basic ways in which California consumers obtain eye exams and prescription eyewear:

1. Private practice. An optometrist owns his or her own location in which the optometrist provides eye examinations and sells prescription eyewear.

2. Co-located optician and optometrist. Many department stores, warehouse stores, and retail stores have a full-service optical department that offer an eye exam and prescription eyewear in one place. The business arrangements governing these entities vary, but there is usually a lease of space involved, with varying contract terms.

3. Full Service HMO: Kaiser Permanente offers eye examination services and optical dispensing services at same location.

4. Optician-Owned Dispensary: A RDO offers prescription eyewear but does not offer or provide access to optometrist/eye examination services.

It is currently unsettled as to the legality of co-located optometrists and opticians, and hundreds of jobs and access to eye care are at stake until there is agreement as to the appropriate nature of the business types.

This bill will provide a safe harbor to individuals involved in business relationships that may be subject to current prohibitions until January 1, 2017, at which time an agreement among stakeholders is anticipated.

4. Related Legislation. AB 595 (Alejo) of 2015 would have specifically authorized in statute vision care models that currently exist in California where a registered dispensing optician is located next to an optometrist. (Status: This bill is currently pending in the Assembly Business and Professions Committee.)

5. Arguments in Support. Wal-Mart Stores, Inc., on behalf of Walmart Vision Centers and Sam’s Club Opticals … is pleased to write in supp9ort of AB 684, which will protect vision care access for Californians while the state deliberates the best way to bring clarity to outdated laws governing how and where optometrists may provide vision care services in the state.”

LensCrafters writes in support, “Optometrists associated with EYEXAM of California, our sister company, and a Knox-Keene licensed vision care plan have been providing quality vision care to patients at LensCrafters locations for 28 years. These optometrists are closely regulated by the state, and patients value the convenience, accessibility and flexibility of being able to receive comprehensive eye care at a location where they do other shopping and where they can receive services during the evenings and on weekends. However, years of litigation relating to a 1960s law have caused ambiguity about whether doctors can continue seeing patients at vision care centers like ours.

“LensCrafters has been part of a robust stakeholder process that includes our industry partners, the Attorney General’s office, and the Governor’s Office designed to put this issue to rest once and for all. As we continue these productive conversations, it is critically important that the more than 2 million Californians who receive eye care at one of California’s more than 600 vision care centers continue to have access to the high-quality care provided by the nearly 2,000 optometrists and support employees who work at these locations.”

EYEXAM of California, For Eyes Optical Company, National Association of Optometrists and Opticians, National Vision, Inc. and its subsidiaries, Sears Optical, The California Chamber of Commerce, U.S. Vision, and numerous individuals express the same sentiment.

6. Arguments in Opposition. The California Optometric Association (COA) writes in opposition, “As amended, this measure would prohibit enforcement of Business and Professions Code Section 655 and 2556 until January 2017, and allow large corporate optical chains to put undue influence on an optometrist’s business practices, potentially impacting their clinical judgment about what is best for their patients. …

“COA has fought for more than a decade to see these two laws enforced. The problems that have occurred have been severe and patient care has suffered. LensCrafters alone has paid more than $20 million in class action awards and has silenced critics with confidential settlements. The AG has official court examples of real harm that have happened when a patient believes they are getting a comprehensive eye exam that in a traditional setting would detect eye disease and end up receiving a cursory exam that is given to only sell eyeglasses and other product. In fact, the AG first initiated litigation because they found that the poor quality eye exam at Pearle Vision (owned by Luxottica, which is the same parent company as LensCrafters) was responsible for a patient’s blindness. These laws are in place for a good reason and they have been affirmed by the courts.

“If a tweak to California law is necessary to modernize the statute and ensure retail optometry businesses like Costco that do not employ eye doctors can continue to operate, COA is more than willing to address those legitimate concerns this year. We can do that now without the need for a moratorium. COA cannot support a proposal that prevents the optometry and medical board from enforcing the law against all bad actors in the marketplace.”

California Association of Dispensing Opticians “believes that [AB 684]’s proponents should not be rewarded for years of violation of California patient protection laws by a ‘get out of jail free card’ embodied in [this bill].”

VSP Vision Care writes, “The sponsors and proponents of the bill failed in years of federal litigation to invalidate state patient protection laws. Those laws bar the specific business model established in California by the multinational corporate sponsors of the bill, and operated without regard to existing law during the sustained period of that unsuccessful litigation. …

“Now, after over two-years of advertised meetings and discussions with the Department of Justice, ostensibly on how to come into compliance with California law, AB 684 is simply the latest bill sponsored by proponents to prolong operations in California while not complying with California law. “

SUPPORT AND OPPOSITION:

Support:

EYEXAM of California

For Eyes Optical Company

LensCrafters

National Association of Optometrists and Opticians

National Vision, Inc. and its subsidiaries

Sears Optical

The California Chamber of Commerce

U.S. Vision

Wal-Mart Stores, Inc.

Numerous individuals

Opposition:

California Association of Dispensing Opticians

The California Optometric Association

VSP Vision Care

-- END --

Date of Hearing: May 20, 2015

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Jimmy Gomez, Chair

ABPCA Bill Id:AB 684

Author:(Alejo) – As Amended Ver:May 11, 2015

Urgency: Yes State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill exempts, until January 1, 2017, a registered dispensing optician or optometrist from any disciplinary action from the Medical Board of California, the Board of Optometry or any other state agency with enforcement authority, when both an optometrist and optician practice in the same location.

FISCAL EFFECT:

Negligible state fiscal effect.

COMMENTS:

1. Purpose. This bill proposes a safe harbor provision from state law prohibiting co-location and other business relationships between optometrists and opticians until January 1, 2017, that will allow for constructive dialogue between stakeholders and regulatory entities to resolve a series of legal disputes. According to the author, the evolution of healthcare requires that California law and policy also evolve to effectuate the state’s goals of increased access to quality affordable care. The ultimate goal is to create a comprehensive legislative solution that protects patient access to care, respects optometrists’ clinical judgment and professional choice and provides regulatory entities with clear direction. This bill provides a temporary exemption from prosecution and enforcement until a sensible regulatory regime can be negotiated.

2. Background. A series of enforcement actions and legal disputes over the last five years has created regulatory uncertainty for businesses like Walmart and Lenscrafters that operate co-located optical retail stores that also provide optometry care. Current state law prohibits these common business relationships.

3. Related Legislation. AB 595 (Alejo), pending in Business and Professions Committee, prohibits a licensed registered dispensing optician or a manufacturer or distributor of optical goods that is renting or leasing office space to or from, sharing office space with, or receiving space from an optometrist, from engaging in conduct that would influence or interfere with the clinical decisions of that optometrist.

Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081

Date of Hearing: May 7, 2015

ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS

Susan Bonilla, Chair

ABPCA Bill Id:AB 684

Author:(Bonilla) – As Amended Ver:April 30, 2015

NOTE: This bill adds an urgency clause.

SUBJECT: Healing arts: licensees: disciplinary actions.

SUMMARY: Until January 1, 2017, prohibits a registered dispensing optician (RDO) or optometrist from any disciplinary action from the Medical Board of California (MBC), the Board of Optometry or any other state agency with enforcement authority when both an optometrist and optician practice in the same location.

EXISTING LAW:

1. Establishes the MBC, within the Department of Consumer Affairs, to license RDOs and regulate their practice. (Business and Professions Code (BPC) § 2000 et seq.)

2. Establishes the Board of Optometry, within the Department of Consumer Affairs, to license optometrists and regulate the practice of optometry. (BPC § 3000 et seq.)

3. Prohibits optometrists and RDOs from having any membership, proprietary interest, co-ownership, landlord-tenant relationship or any profit-sharing agreement with each other. (BPC § 655)

3. Prohibits optometrists from having any membership, proprietary interest, coownership, landlord-tenant relationship or any profit-sharing arrangement in any form, directly or indirectly, either by stock ownership, interlocking directors, trusteeship, mortgage, trust deed or otherwise with those who manufacture, sell, or distribute lenses, frames, optical supplies, optometric appliances or devices or kindred products to physicians and surgeons, optometrists, or dispensing opticians. (BPC § 655)

3. Provides that it is unlawful for RDOs to: (BPC § 2556)

1. Advertise the furnishing of, or to furnish, the services of a refractionist, an optometrist or a physician and surgeon;

2. Directly or indirectly employ or maintain on or near the premises used for optical dispensing, a refractionist, and optometrist, a physician and surgeon or a practitioner of any other profession for the purpose of any examination or treatment of the eyes; or,

3. Duplicate or change lenses without a prescription or order from a person duly licensed to issue the same.

THIS BILL:

1. Specifies that on or after January 1, 2016, and until January 1, 2017, no dispensing optician or optometrist shall be subject to discipline by the MBC, Board of Optometry or any other state agency with enforcement authority, for engaging in any business relationship prohibited by BPC §§ 655 and 2556.

2. Declares that this is an urgency measure necessary for the immediate preservation of the public peace, health or safety and is needed in order to protect various businesses, opticians and optometrists who engage in a business relationship prohibited by BPC § 655.

FISCAL EFFECT: Unknown. This bill is keyed fiscal by the Legislative Counsel.

COMMENTS:

Purpose. This bill is author sponsored. According to the author, “Co-located vision models have existed in California for nearly three decades. They serve millions of patients annually and employ thousands of optometrists and opticians. With the conclusion of legal suits over the last few years, the state is compelled to enforce a decades old law. AB 684 will provide a safe harbor as the Legislature, stakeholders and the Administration work toward statutory solutions that will maintain patient access to these models and ensure clinical independence for Optometrists.”

Background. In California, there are two eye care service models: an optometrist’s private office and a “co-location” office, where an optical retail store is co-located with a Department of Managed Health Care (DMHC)-regulated health plan, also called a Knox-Keene plan, that provides optometry care. At co-location sites, patients receive an eye exam and can fill their prescription for corrective eyewear during the same visit at the co-located optical retail store [e.g. Walmart, LensCrafters]. At private optometrist offices, patients receive an eye exam and can take a prescription elsewhere or have the optometrist send it out for them. California law provides that prescriptions are mobile, so the patient is not required in either setting to have the prescription filled on site.

Under BPC §§ 655 and 2556, optometrists and RDOs cannot have any membership, proprietary interest, co-ownership, landlord-tenant relationship or any profit-sharing agreement with each other. Optometrists also cannot have any membership, proprietary interest, co-ownership, landlord-tenant relationship or any profit-sharing arrangement in any form with those who manufacture, sell, or distribute lenses, frames, optical supplies, optometric appliances or devices or kindred products to physicians and surgeons, optometrists or RDOs.

Under these code sections, it is also unlawful for RDOs to do any of the following:

• Advertise the furnishing of, or to furnish, the services of a refractionist, an optometrist or a physician and surgeon;

• Directly or indirectly employ or maintain on or near the premises used for optical dispensing, a refractionist, and optometrist, a physician and surgeon or a practitioner of any other profession for the purpose of any examination or treatment of the eyes; or,

• Duplicate or change lenses without a prescription or order from a person duly licensed to issue the same.

The Pearle Case. In February of 2002, Attorney General (AG) Bill Lockyer brought suit against Pearle Vision, arguing that the company had violated the Optometry Practice Act. The AG challenged the business relationship between the Knox–Keene plan, Pearle VisionCare, and the optical sister company, Pearle Vision, as well as the ownership of the Knox-Keene plan by an optical company, claiming that such relationships violated BPC §§ 655 and 2556.

The Snow Case. In March 2002, a private plaintiff brought suit against LensCrafters (the Snow case), raising some of the same business relationship issues as those raised in the Pearle case. LensCrafters and others subsequently filed a case in federal district court to defend their business operations in California, challenging the constitutionality of BPC §§ 655 and 2556.

California Supreme Court Decision. On appeal, the Pearle case reached the California Supreme Court, which declared that the Knox-Keene Act does not create an exemption from restrictions that BPC §§ 655and 2556 impose on relationships between optometrists and optical companies for Knox-Keene plans that employ optometrists and affiliate with optical companies. The Supreme Court remanded the case to trial court for determination of whether relationships involved in Pearle Vision's Knox-Keene arrangement violate BPC §§ 655 and 2556. The Pearle case ultimately settled, with no determination on the Knox-Keene/optical company co-location issue. The Snow case also settled, without a determination on the Knox-Keene/optical company co-location issue.

Federal Court Decision. The federal court, in December 2006, struck down BPC §§ 655 and 2556 as unconstitutional, interpreting the California Supreme Court’s ruling in the Pearle case as a bar to LensCrafters’ Knox-Keene plan arrangement (National Association of Optometrists & Opticians v. Lockyer, 463 F.Supp.2d 1116 (E.D.Cal.2006). The federal court determined, “the challenged laws substantially effect and discriminate against interstate commerce.” The Court also held that “[a]lthough California has legitimate interests in regulating the provision of health services, defendants have failed to meet its burden of showing that it has no other means to advance its legitimate interests.” The Court noted that the Knox-Keene plan arrangement, if permitted by law, would be a viable means for the State to achieve its legitimate interests with less impact on interstate commerce.

Ninth Circuit Court of Appeals Decision. On June 13, 2012, BPC § 655 was upheld as constitutional by the Ninth Circuit Court of Appeals in National Association of Optometrists & Opticians v. Harris, 682 F.3d 1144 (9th Cir.2012). The optical industry plaintiffs then petitioned the Supreme Court of the United States for certiorari review, but on February 19, 2013, the U.S. Supreme Court declined to hear the case, and the Ninth Circuit decision upholding the law became final.

Other States. There are 14 U.S. jurisdictions that allow direct employment of optometrists by optical companies. Direct landlord-tenant relationships are permitted in 47 states. Additionally, 49 states allow optical companies to franchise to optometrists.

Need for This Legislation. Given the complexities of the issue and the multiple regulatory bodies involved including the Board of Optometry, the MBC, the AG and other interested stakeholders, additional time is necessary to develop a comprehensive legislative solution that includes statutory language to provide clarity to all parties, including regulatory bodies.

Without the safe harbor provisions proposed in this bill, the state may be compelled to take enforcement action against licensed optometrists who practice in co-located models which serve to expand patient choice. These locations also offer choices for optometrists who may seek to serve patients who may not traditionally have access to care. Additionally, according to the Board of Optometry, “Retail optical practices are becoming increasingly popular for both new graduates and established Optometrists due to the level of income they provide, low risk, flexibility they can offer, and the ability to focus more on the clinical side of the practice rather than the business operations” (Business Models of Optometry, Agenda Item 11, California Board of Optometry Memo, June 21, 2011).

According to the author, the evolution of healthcare, evidenced by the rise of health maintenance organizations, proliferation of convenient care and co-located healthcare clinics and changing provider relationships, requires that California law and policy also evolve to effectuate the state’s goals of increased access to quality affordable care. This bill proposes a safe harbor provision until January 1, 2017, that will allow for constructive dialogue between stakeholders and regulatory entities. The goal is to create a comprehensive legislative solution that protects patient access to care, respects optometrists’ clinical judgment and professional choice and provides regulatory entities with clear direction.

Current Related Legislation. AB 595 (Alejo) of the current legislative session, prohibits a licensed registered dispensing optician or a manufacturer or distributor of optical goods that is renting or leasing office space to or from, sharing office space with, or receiving space from an optometrist from engaging in conduct that would influence or interfere with the clinical decisions, as defined, of that optometrist, as specified. STATUS: This bill is in the Assembly Committee on Business and Professions.

Prior Related Legislation. AB 778 (Atkins) of 2011, would have specifically permitted a licensed vision health plan, who is owned by an optical manufacturer, to locate next to a registered dispensing optician. NOTE: This bill was never set for hearing in the Senate Committee on Business, Professions and Economic Development.

ARGUMENTS IN SUPPORT:

The National Association of Optometrists and Opticians support the bill and write in their letter, “Ambiguity in current law has created confusion about whether vision care centers can continue to operate in California; years of past litigation have not resolved this ambiguity…It is critically important that the state guarantees uninterrupted vision care for the working families that depend on optometrists who work at vision care centers.”

Sears Optical also supports the bill. They write, “Sears Optical is pleased to write in support of AB 684, which will protect vision care access for working Californians while the state deliberates the best way to bring clarity to outdated laws governing how and where optometrists can provide eye care services in the state.”

Walmart Inc., on behalf of Walmart Vision Centers and Sam’s Club Opticals, U.S. Vision, owner of JCPenney Optical, National Vision Inc., LensCrafters, Eyexam and For Eyes Opticals, supports the bill and writes, “[We] have been a part of a stakeholder process that includes out industry partners, the Attorney General’s office and the Governor’s office designed to put this issue to rest once and for all. As we continue these productive conversations, it critically important that Californians continue to have access to the high-quality care provided by optometrists and support employees who work at these locations. AB 684 guarantees uninterrupted vision care for the patients that depend on the Doctors practicing at our Walmart and Sam’s Club locations. This bill provides the Doctors and patients assurance that they can continue providing and receiving high quality care as the state continues working toward a collaborative, comprehensive eye care solution.”

ARGUMENTS IN OPPOSITION:

None on file.

AMENDMENTS:

Assemblymember Alejo carried legislation (AB 595, of the current legislation session) that sought to provide a solution for the issues as outlined in this analysis. As such, Assemblymember Bonilla desires to add Assemblymember Alejo as a joint author to this measure.

Since this is an urgency measure, the following amendments should be made to ensure the legislation goes into effect immediately:

On page 2, line 4, strike: January 1, 2016

On page 3, line 8, strike: and on and after

On page 3, line 9, strike: January1, 2016

REGISTERED SUPPORT:

EYEXAM of California

For Eyes Optical Company

LensCrafters

National Association of Optometrists and Opticians

National Vision, Inc.

Sam’s Club Opticals

Sears Optical

U.S. Vision, JCPenny Optical

Walmart Stores Inc.

2 individuals

REGISTERED OPPOSITION:

None on file.

Analysis Prepared by: Le Ondra Clark Harvey, Ph.D. / B. & P. / (916) 319-3301

Date of Hearing: April 14, 2015

ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS

Susan Bonilla, Chair

ABPCA Bill Id:AB 684

Author:(Bonilla) – As Introduced Ver:February 25, 2015

SUBJECT: Pharmacy.

SUMMARY: Requires the California State Board of Pharmacy to report the pass rates of its applicant examination to the appropriate policy committee and makes other nonsubstantive changes.

EXISTING LAW

1. Provides for the licensure and regulation of pharmacies and pharmacists by the Board of Pharmacy (Board) within the Department of Consumer Affairs (DCA). (Business and Professions Code (BPC) § 4000-4426)

2. Authorizes the Board to license as a pharmacist an applicant who meets specified requirements, including passage of the North American Pharmacist Licensure Examination. (BPC § 4200.3)

3. Requires the examination process to meet specified standards and federal guidelines and requires the Board to terminate use of that examination if the department determines that the examination fails to meet those standards. (BPC § 4200.3)

4. Requires the Board to report to the Joint Committee on Boards, Commissions, and Consumer Protection, and the DCA, specified examination pass rate information. (BPC § 4200.3)

THIS BILL

1. Requires the Board to report specified examination pass rate information to the appropriate policy committees of the Legislature and the DCA instead of the now obsolete Joint Committee on Boards, Commissions, and Consumer Protection.

2. Makes the subdivision inoperative on January 1, 2020, pursuant to § 10231.5 of the Government Code.

3. Makes other nonsubstantive corrections.

FISCAL EFFECT: Unknown. This bill is keyed fiscal by the Legislative Counsel.

COMMENTS

1. Purpose. This bill is sponsored by the author. According to the author, the code section is out of date. This bill will update the code to conform to the most current composition of the Committees that oversee the Board. It will also perform other code clean-up.

2. Background. In 1994, the Joint Legislative Sunset Review Committee was established to review the DCA boards and bureaus. In 2004, the committee’s name was changed to the Joint Committee on Boards, Commissions & Consumer Protection. In 2005, the committee disbanded.

The current committees that oversee the boards are the Assembly Committee on Business & Professions and the Senate Committee on Business, Professions & Economic Development.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

None on file.

Analysis Prepared by: Vincent Chee / B. & P. / (916) 319-3301