Automotive Service Association (ASA) leaders recently gathered in Washington, D.C., to meet with administration and Capitol Hill officials to discuss Most Favored Nation clauses contained in some direct repair program (DRP) agreements with insurance companies. ASA wrote administration officials in 2012 asking that they also consider the impact of MFN clauses on parties involved in property and casualty insurance. Testimony by administration officials on Capitol Hill to date have reflected more interest in health insurance agreements.
ASA maintains that the anti-competitive nature of the clauses puts both consumers and collision shops at a disadvantage. In 2010, the U.S. Department of Justice filed a suit against Blue Cross Blue Shield of Michigan regarding the use of MFN clauses. In 2012, the commissioner of the Office of Financial and Insurance Regulation of Michigan issued an order, which prohibited the use and enforcement of any MFN clause in a health insurer provider contract that has not been previously reviewed and approved by the commissioner.
The Michigan legislature followed with a ban on MFN clauses in health insurer contracts.
In addition, the North Carolina legislature approved House Bill 247, a bill that restricts MFN use by allowing health providers and health insurers to freely negotiate reimbursement rates by prohibiting contract provisions that restrict rate negotiations. The bill has been signed into law and will become effective Oct. 1, 2013.
“ASA continues to investigate the legality of MFN clauses. We believe these clauses are a threat to the industry and potentially harmful to consumers,” said Dan Risley, ASA executive director.
To view more on MFN clauses, visit ASA’s legislative website at www.TakingTheHill.com.
The Automotive Service Association is the largest not-for-profit trade association of its kind dedicated to and governed by independent automotive service and repair professionals. ASA serves an international membership base that includes numerous affiliate, state and chapter groups from both the mechanical and collision repair segments of the automotive service industry.
ASA advances professionalism and excellence in the automotive repair industry through education, representation and member services. For additional information about ASA, including past news releases, go to www.ASAshop.org, or visit ASA’s legislative website at www.TakingTheHill.com.