Photo Credit: Getty Images
Why a reimbursement floor could backfire on independent optometry
By Don Railsback, OD
July 28, 2026
Quick summary:
- Vertically integrated vision plans will profit from payment floors because mandated rate increases flow right back into their own their own ecosystem.
- Doctor-owned and regional plans lack corporate safety nets, forcing them to raise premiums and making it harder to compete.
- Rising plan costs will likely drive price-conscious patients away from independent practices and toward big-box corporate retailers.
- The focus should shift from price floors to targeted reforms like ending patient steering, lab restrictions and forced plan participation.
As an optometrist and the CEO of a doctor-owned vision benefits company, I find myself straddling a barbed-wire fence that seems to be growing. I have felt the frustration of flat reimbursements as a provider, and I have negotiated provider contracts as a plan executive. So when I say I understand why so many of my colleagues support the NCOIL Vision Care Plan Model Act, I mean it. But I also believe that one of its central provisions—a mandated minimum reimbursement schedule—will not deliver what independent optometry is hoping for. In fact, I believe the biggest beneficiaries ultimately will be the large national vision plans the act is meant to rein in.
Why the Act Has So Much Support
Let’s start with what I think is right about the model act. The frustrations that have led us here are real. Independent doctors have watched reimbursements stagnate for more than a decade. Factors like staff wages, employee benefits and lab and frame costs have continually climbed.
The profession is right to pursue provisions aimed at fairness, like transparency in plan details, limits on forced participation in discount programs and protections around patient and materials steering. These all address legitimate grievances that have given vision plans an unfair advantage in the marketplace.
My hope is that nothing I’m sharing here will be read as a defense of the status quo. The question is not whether independent optometry deserves a fairer market. It does. The question is whether a government-set price floor is the tool that gets us there.
The Floor Helps the Companies It’s Supposed to Constrain
Here is the dynamic I would ask every practice owner to think through. The largest national vision plans are vertically integrated. They own the labs, frame and lens brands, retail locations and, increasingly, practices. When legislation mandates a higher minimum reimbursement, those companies are on both sides of the transaction: the payment they are required to make comes back to locations and supply chains they own. A mandate that raises reimbursement across the board doesn’t squeeze a vertically integrated conglomerate. It increases the revenue flowing into its own corporate-owned channels, funded in part by every other plan in the market, by your patients and even by you.
So, who does the mandate squeeze? Smaller, regional and doctor-owned plans. The ones that have historically been aligned with private practice, who already pay higher reimbursements than the corporate plans. These plans have no captive retail network to collect those higher payments to help offset a mandated reimbursement. They don’t have lab margin to offset the increases, and have far less actuarial cushion to absorb them. Their costs rise with nowhere to recover them except increased monthly premiums. That makes it even harder to compete in a price-sensitive market. A statutory floor built to discipline the giants instead raises the cost of competing with them. Over time, that is how markets consolidate. It doesn’t happen because the big players win on merit, but because regulation sets a cost structure only they can comfortably carry.
Increased Costs for Consumers
There is another negative effect worth talking about. These increased costs will be passed directly to consumers. Plans facing higher mandated costs will respond the way payers always do. They will create leaner benefit designs, impose higher co-pays, tighter materials allowances and premium increases. Vision benefits survive in the employer market because they are relatively inexpensive compared to other benefits and have a higher perceived value. When they stop being affordable, employers will trim or drop them or consumers will determine that the value doesn’t justify the expense.
Patients who lose coverage or choose to drop plans don’t stop needing eye care and eyewear. They take their cash to big-box retail and online sellers. Many of them are owned by the same integrated conglomerates. The independent practice loses the insured patient and the retail sale. So, the conglomerates win in both scenarios. Smaller provider-friendly plans are forced out because they can’t compete on price. The conglomerates get more business because when consumers flee the increasingly higher price they find on the vision plan, they are encouraged to run to retail to find affordability.
Competition Is the Independent OD’s Best Protection
The healthiest thing that has happened to the vision benefits market in the past two decades is the emergence of alternatives. Options like doctor-owned plans, direct-to-employer models and benefit designs are built around independent networks. That competition gives practice owners leverage. When a plan’s terms are unacceptable, independent-friendly plans that better support providers offer a place for independents to land. When providers independently choose to support plans that support them, and not the ones that don’t, they can change the market in their area without government mandates. Employers and consumers benefit because these newer models work to move patient decision-making to the doctor instead of the vision plan. Now competition is based on value, network quality and service.
Legislation that mandates the largest cost factor across all plans doesn’t strengthen competition. It will increase the cost of care and drive more consumers to retail and online options. Eventually, it will eliminate the smaller plans that exist to support independents. And, worst of all, it gives retailers and the conglomerate vision plans the narrative that independents are greedy and don’t care about helping control the cost of healthcare. What if we could concentrate on issues that actually do foster competition and help to level the field, like materials steering, discounts on non-covered services, lab choice and allowing providers to participate in one plan without being forced onto a different panel? We can make a real difference and protect the reputation of independent eye care providers.
What I’d Ask Policymakers to Weigh
Before finalizing the model act, legislators should ask a simple question about each provision. Five years from now, does this make the market more competitive or more consolidated? Reimbursement floors fail that test. Much of the proposed act does pass the test. There is a version of this legislation the whole profession could rally behind. That’s one with
- robust transparency requirements so doctors can see and compare plan terms
- genuine limits on vertical-integration abuses, including steering patients and materials toward plan-owned channels
- protections for a doctor’s ability to decline discount programs without losing panel access
- rules that lower the barriers for new and smaller plans to enter the market and compete for employer business
Those reforms attack the actual source of the imbalance—concentrated, vertically integrated market power—rather than handing that same concentrated power a legislated price advantage.
What I’d ask Providers to Weigh
Are you forced to participate in any plan by some existential force in the universe, or have you joined because you have the fear of missing out? Participation should be a business decision based on potential patient volume, marketing value and practice economics. The problem we are trying to solve now was created by providers who were sold on the idea that you have to participate in vision plans, regardless of reimbursements, to grow and maintain your practice. The same is true when choosing what vendors you support. Take a look at your frame boards. Are over 50% of your materials purchased from the same companies that you are currently trying to legislate?
What about your lab choices? Your purchasing decisions are funding this race to the bottom and killing independently owned suppliers in the process. The proposed legislation removes the responsibility for sound, business-based decision-making and replaces it with a legislated minimum. This is a band-aid. It won’t magically fix all the woes you are experiencing with vision plans. We must be willing to take a long, hard look at the continued contributions we make as independent providers in fueling this race.
Let’s Support Optometry
Independent optometry has fought too hard, for too long, to win a reform that quietly strengthens the companies consolidating our profession. Let’s fix the market’s fairness problems without freezing its competition, start analyzing our everyday purchasing habits and support plans that were created and built to support optometry. Our practices, our patients and the future independence of this profession depend on getting that distinction right.
 |
Don C. Railsback, OD, is CEO of Vision Care Direct, where he leads efforts to make high quality eye care more affordable while strengthening independent practices. He was drawn to optometry after his own nearsightedness was corrected early in life. Inspired by his childhood optometrist, he later practiced alongside that mentor for seven years. In 2001, a serious hand injury ended his clinical practice. This prompted him to help introduce the Vision Care Direct model in Kansas, focusing on plan design and physician advocacy. Today, Vision Care Direct offers flexible, membership-based plans that emphasize value for patients and fair, sustainable reimbursement for providers. As a clinician, Dr. Railsback was proud to help children see and learn better and to detect serious eye disease early. He remains committed to building a company that puts patients and doctors first and to leading with a servant’s heart. |
