An App a Day Keeps the Doctors Away: Opternative Challenges State Ban

November 1, 2016

Not all states are willing to put their trust into technology just yet. In May of 2016, the South Carolina General Assembly ratified amendments to their Eye Care Consumer Protection Law. Under the new law, “[a] prescription for spectacles or contact lenses may not be based solely on the refractive eye error of the human eye or be generated by a kiosk.” A “kiosk” is defined as automated equipment or applications designed for use on phones, computers, or other Internet-based devices that can be used to provide refractive data or information. These amendments, which were justified as furthering public health and safety, effectively banned healthcare applications such as Opternative from doing business in South Carolina.
To note, Governor Nikki Haley went on to veto the bill because it “uses health practice mandates to stifle competition for the benefit of a single industry.” Her veto was quickly overturned though by the House and Senate of South Carolina.
In reaction to the ban, Opternative, a health-tech startup, recently filed suit against South Carolina to regain its right to operate within the state. Aaron Dallek, CEO and founder of Opternative, stated that the suit’s purpose is to “protect patients’ right to accessible and affordable eye care services.” The company claims that the Eye Care Consumer Protection Law violates both antitrust laws and the state constitution. The state constitution forbids regulations of business for no purpose beyond economic protectionism. In South Carolina state legislature is granted immunity from antitrust claims though, so Opternative has instead pushed the theory that their rights to due process and equal treatment have been violated. Senior Attorney for the Institute of Justice Robert McNamara describes the case as being “a simple choice between new technologies that expand access to care and protectionist legislation to preserve the profits of established businesses.
Opternative is a digital health company that offers online eye exam services. Their process is fairly simple. According to the company’s website, customers can sign up for free online. Next, customers can take a free eye exam using a smartphone or computer. Customers then pay a $40 or $60 fee, a licensed ophthalmologist in the state reviews the exam, and a prescription is provided in less than 24 hours. The prescription is signed and can be used anywhere. The company does note that their services are not designed to replace comprehensive eye health examinations. Opternative currently operates in 38 states across the country.
The company has faced its fair share of backlash. Optometrists have publicly claimed that these services are unproven, unsafe, and misleading. Doctors point to the fact that Opternative’s exams fail to check for eye diseases and other potential problems. Lobbyists in South Carolina, such as the American Optometric Association, have also aggressively defended the bill arguing that the technology is not yet safe for patients. Mike Pence, Governor of Indiana, recently signed a similar bill that prevents providers from issuing prescriptions via telemedice.

Pence stated, “There are people and companies and entities out there that are trying to market things that are maybe before (their) time.” Many agree with his stance.

The Court’s judgment will be an important decision because 10 other states currently have legislation that prohibits similar types of healthcare services. An official copy of the Complaint can be found on the Institute for Justice’s website.