Pennsylvania Vision Insurer Faces Antitrust Class Action

PHILADELPHIA (CN) – A class of independent eye care providers claims in a federal lawsuit that one of Pennsylvania’s largest vision insurers forces them to steer their patients to buy lenses from a factory owned by the insurer, often at a higher cost.

In a complaint filed Monday in Philadelphia federal court, lead plaintiff Alan Frank accuses Davis Vision, HVHC and parent company Highmark Health of forcing independent providers, but not major retailers like Walmart, to order lenses and frames from a lab owned by Davis Vision.

Davis Vision provides vision insurance to at least 65 percent of insured Pennsylvania eye care patients, according to the complaint.

Frank – who seeks to represent a class of independent ophthalmologists, optometrists and opticians – claims this market dominance prevents independent eye care providers from serving their patients’ best interests.

Instead of opting for relatively inexpensive and convenient in-house, same-day services, independent providers are allegedly coerced by Davis Vision’s “mandatory laboratory policy” to order frames and lenses from Davis’ own laboratory.

The lawsuit asserts Davis’ claim that the mandatory laboratory policy saves patients money is an excuse to cover up its “anticompetitive purpose and intent.”

“Davis Vision’s proclamation of so-called ‘savings’ is false and illusory,” the complaint states. “A direct consequence of Davis Vision’s mandatory laboratory policy is that independent Pennsylvania eyecare providers cannot fabricate frames or lenses through a competing laboratory – even if doing so would be less expensive, more convenient, or otherwise more beneficial for patients.”

The complaint alleges convenience and quality-related problems arise from having to mail frames and lenses to a Davis Vision lab, including delays in order fulfillment.

Davis has been sued before over its lab policy. It settled a similar case last year brought by Acuity Optical Laboratories after a judge denied in part its motion for summary judgment.

As a part of that case, Davis admitted that “each time Davis Vision is obliged to cover costs incurred when one of its members is prescribed a pair of eyeglasses by an optometrist … the optometrist is required to source the lenses … from a laboratory owned by Davis Vision,” according to Monday’s complaint.

The complaint goes on to allege that the lab policy is part of a “broader anticompetitive scheme in Pennsylvania” that includes allowing major retailer and fellow Highmark subsidiary Visionworks to provide in-house services while restricting independent providers.

“Defendants force independent Pennsylvania eyecare providers and their patients to endure the inconvenience and costs associated with mailing frames and lenses to Davis Vision-owned laboratories, but spares its corporate affiliate, Visionworks, from having to do this,” the lawsuit states.

Davis Vision also does not require big-box retailers like Walmart and Costco to agree to its mandatory laboratory policy, “presumably because they may possess countervailing market or negotiating power,” according to the complaint.

The proposed class further claims Davis Vision uses administration delays and reimbursement policies to the disadvantage of independent eye care providers.

Frank asserts 11 counts including unjust enrichment, unlawful monopolization and unlawful restraint of trade. He is represented by Richard M. Golomb of Golomb & Honik in Philadelphia, which declined to comment on the case.

Representatives from Davis Vision and Highmark did not return calls for comment by press time Tuesday.

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