Michigan TPA Code of Conduct Bill Passed Unanimously by State Senate
January 26, 2012
by Penny Stacey, firstname.lastname@example.org
The Michigan State Senate has passed legislation that could place
several requirements on third-party administrators, including the
addition of a code of conduct by which those that also provide auto
glass services would have to abide in order to maintain both services.
The bill passed the Senate this morning with a vote of 38-0.
This was the third reading of the bill, S.B. 306, introduced by
Sen. Joseph Hune, though the final Senate version had
several changes from the original bill.
Industry reaction to the passage so far has been mixed. Some independent
shop owners have said the code of conduct suggested by the bill
needs to be strengthened.
"Work needs to be done in the House of Representatives to
strengthen the code of conduct to ensure the referral process for
non-preference work is equally distributed throughout to network
members," says Shari Montgomery, owner and president of Pollack
Glass in Lansing, Mich., and a member of the Independent Glass Association's
Michigan Chapter, which has been closely involved with the legislation's
Still, she is pleased with the results so far. "We are ecstatic,"
She adds, "The Michigan Senate unanimously stood up in opposition
to the unregulated opportunity of the TPA self referral and ignoring
Ron Overbeck Sr., co-owner of Auto One in Brighton, Mich., who
also has devoted much time to working with other glass shops in
the state on the bill, echoes Montgomery. "We're optimistic
that we'll still get the end result that we need," says Overbeck.
Brian DiMasi, senior corporate counsel for Safelite, whose third-party
administration arm could be affected by the bill, has a different
concern about the bill and how it could affect the company's network
in the state.
"The current version of the bill is significantly better than
the original draft, but it still presents challenges," he says.
"Consumers demand high-quality work from network shops. While
any shop is free to apply to the SGC Network, network shops must
have adequate liability insurance, warranty their work, provide
high-quality and agree to fair and reasonable pricing."
Further, he questions wording that would mandate that "the
third party biller will not close its network to new applicants
if the network contains automobile glass repair or replacement facilities
that are owned by or related to or affiliated with the third party
"The current draft opens up the network to any shop regardless
of quality," says DiMasi. "That eliminates the quality
standards and that hurts consumers."
He also questions the reporting requirements that would be required
of TPAs that are affiliated with retail divisions. "In addition,
the current draft would require confidential claim detail be disclosed
across the industry by insurance company and by repair shop,"
says DiMasi. "The insurance companies have expressed a significant
concerns with this. In addition, every network shop would have their
claim detail[s] disclosed to their competitors. Safelite Solutions
would also be required to violate the confidentiality provisions
in its agreements with insurance companies by disclosing their claim
detail. We stand ready to discuss these challenges in the House."
What are your thoughts on the passage of the bill? Please email email@example.com.
This story is an original story by AGRR™ magazine/glassBYTEs.com™. Subscribe to AGRR™ Magazine.
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