The House Committee on Insurance met on May 9, 2023 to take up SB 2476 (King) and SB 1083 (Zaffirini). The hearing notice can be found here and a video archive of the hearing can be found here.
This report is intended to give you an overview and highlight of the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer.
SB 2476 (Zaffirini) – Relating to consumer protections against certain medical and health care billing by emergency medical services providers.
- Chair Oliverson – Has to do with ambulance medical billing, in 2019 TX led the way with the medical billing law for surprises, blueprint for the no surprises act
- Bill does not use arbitration to process or resolve disputes. Uses a benchmark rate
- Determined by prevailing rate in the county to which something happens
- Sunset date in two years, expiring 9/1/25, there is a federal effort to protect consumers with this now
Blake Hutson, Texas Association of Health Plans – On
- The arbitration side is pretty expensive relative to ambulances, it is an imperfect solution
- We will be neutral on this bill
Chair Oliverson closes
- This bill is such an important issue, last big area where patients can get hammered with a bill out of network and they could not choose
- Really only factors in non-EMS transports
- Decisions get made by hospital administrators, not the patients, this protection is meaningful
CS withdrawn, SB 2476 left pending
SB 1083 (King) – Relating to insurer restrictions and duties regarding repair of a motor vehicle covered under an insurance policy.
- Johnson – current Texas law, insurers are not required to use a particular product or method of repair to return motor vehicle to pre-damaged conditions
- Puts body shop people in a bind where insurance companies would dictate terms, this could have potential damage to the general public
Edward Salamy, Automotive Parts Association – Against
- Prices for repairs have been increases, the association has been doing their job and providing aftermarket parts
- This could affect supply chain issues with car parts
- Chair Oliverson – is there a certification for a non OEM part?
- Called CAPA certification based in DC, they take an OEM part to an aftermarket part and meet very strict regulatory requirements
- It is a good system, identifies if a product is not up to snuff
Jay Thompson, AFACT – Against
- Issue with bill, page one, line ten through 11, it reads that a new vehicle is any car, that has not been sold in retail regardless of mileage
- Very broad language with this, could have negative implications
- Chair Oliverson – put a price tag on premiums with this concern
- There is a number of companies that offer when you buy a new model year car, they offer an endorsement and agree to only use OEM parts in repair of that
- Cost of OEM is substantially higher anywhere from 10% to 14%
Claire McDonald, Texas Automobile Dealers Association – For
- Bill gives customers a choice on use of OEM parts on a motor vehicle within the first 36 months, this bill will protect consumers
- Chair Oliverson – I have a truck, I have never heard of or had a situation where I was told you have to use OEM parts, how is this even enforced?
- I have never seen it enforced, but it is a concern
- Chair Oliverson – Your construct puts consumers in a weird position, they might have to opt out of manufacturer parts, the language here is a little odd; why not go to something simple like asking consumer when they purchase insurance to have an optional rider for OEM parts?
- Bill says they can opt into this
- Chair Oliverson – I think this mandates insurers to be forced to use OEM parts
Mark Mitchell, Texas Farm Bureau Insurance – Against
- We use mixtures of OE parts and aftermarket parts, that have to be certified to meet standards
- Opposed because it will drive up insurance, mess up supply chain, increases car rentals
- Flexibility keeps members whole and keeps price in mind
Gary Byrd, Ford Motor Credit – For
- OEM parts ensure safety and afford vehicles that as well, match manufacturers standards
- Chair Oliverson – is there court precedent on voiding manufacturers warranty for the use of an aftermarket part?
- I do not know
- Chair Oliverson – Are you able to provide us with documentation where we can objectively point to that these vehicles aren’t as valuable as others?
- We can get back to you on that, but there is diminished value in my opinion from vehicle damage and putting it back to standards for OEM would be good
- Chair Oliverson – I need to visualize the difference between after market parts and OEM parts, this would increase insurance and I want to have all the facts here
Tchad Taormina, Automotive Body Recyclers Association – Against
- We have OEM parts in our vehicles, but parts availability is an issue
- Aftermarket parts have the exact same affect as any part would
Todd Moore, Auto Care Association – Against
- Rigorous testing enables people to understand these parts are up to high standards
Cathy DeWitt, USAA – Against
- There has been no adverse effect as a result of no mandate with parts
- Chair Oliverson – I have never been offered as an optional coverage the ability to purchase coverage for parts, is there a way to determine a differential and residual value between a vehicle that was damaged?
- No
Beaman Floyd, Texas Coalition for Affordable Insurance Solutions – Against
- This bill could codify current abusive processes as outlined in a Trump Administration two year report
- Chair Oliverson – Forward us that study please
Kevin Fisk, LKQ Corporation – Against
- Aftermarket parts are made in same facilities as OEM parts
- Backordering issue could lead to car repairs not being fulfilled timely
Tom Tucker, Safelite – Against
- Glass specialties from manufacturers and from safelight it will not have a logo depending on who you purchase from
SB 1083 left pending