What worked for me
as told to AGRR
Working with Insurers
Scott Harkey, owner of Windshield Glass in Greensboro, N.C., spoke with AGRR about how his company works with insurance companies.
AGRR: What techniques have you found most useful in dealing with insurance companies and third-party administrators (TPAs)?
Scott Harkey: Documentation of each insurance companyís definition of reasonable and customary (R&C). Itís important to document jobs involving net- or specially-priced parts that donít follow the normal rules. We try to let each insurance company define its reasonable and customary markup, whether itís 20 percent or 50 percent above cost or 15 percent above list, whatever. Then, in future cases, we can remind them of the R&C number that they chose if we need to use it again. The recent increases to most insurance-paid labor rates were welcome but we still donít want to sell parts below R&C. We shouldnít have to. All weíre asking is to be treated fairly.
AGRR: How do you get that R&C number?
SH: Itís a little tricky. You have to pay attention to the strange jobs that come into your office. An example might be a backlite that has a low benchmark list price but a high OE list price. The dealer may be your only source for the glass; therefore the benchmark pricing can be irrelevant. During negotiations, when the TPA realizes that this one is not following normal pricing guidelines, they may propose a pricing structure that is below what might be considered R&C. You better have your facts together because you either have to go around them or you have to have leverage working for you such as the car owner on your side, ready to go to bat for you.
AGRR: When you say go around the TPAs, are you talking about using the insurance agents?
SH: No. Iím talking about the claims manager of the insurance company in question. Itís important to compile a list of the heads of each insurance company glass claim department so that you can call them if you think you are not being treated fairly. You also need to know the wording of the contracts covering each job.
AGRR: Are your shops members of all the TPAs or glass networks?
SH: No. We donít join the ones that play shops off against each other and rank by price. We also choose not to contract with TPAs that have their own retail shops.
AGRR: Do insurance company O&A agreements or TPA contracts address R&C?
SH: I canít comment on all the network agreements, but we are a contracted participant of the big TPA that is owned by a glass manufacturer. Look at its Participant Agreement regarding specially-priced parts. It states: ďIf the program arrangement ... does not determine the pricing for any portion of the Work, the Participant shall coordinate such Work with (TPA #2) through its authorizations approval process.Ē What does that mean? This approval process is not defined.
AGRR: Is that where they may request a proof of purchase in order to give approval?
SH: Good question. If so, it still does not state that you must divulge your cost as a condition of payment. We have a real problem with being told we must share our private cost information with a TPA. Especially with the MacGiant TPA that is also a competitor. A top five insurance account of its once told us that we had to show our cost to MacGiant so it could then apply the R&C markup to our cost. Show our cost to a competitor as a condition of payment? I donít think so. Iíd like to see a judgeís ruling on that one. We refused and they still paid our bill in full.
AGRR: Does billing the vehicle owner ever come into play?
SH: Our industry has a history of trying to avoid that. I wish the same were true with my dentistís office. They donít have a problem billing me for short payments. Some of the insurance company and TPA agreements address the issue of billing vehicle owners and some donít. Thatís where documenting R&C helps. If the TPAís approval process for specially-priced parts is not defined, then how can a shop be penalized for ďfailure to obtain approval?Ē We shouldnít lose a job because we refuse to show our private cost information to a TPA. The question becomes: Is the non-defined approval process mightier than previously documented R&C? I donít think so.
AGRR: How often do these specially-priced part situations occur?
SH: More every day. Look at some of the Ď06 models that have already hit the streets. Do you notice more bonded stationary glass roof panels? These are dealer-only parts. Thereís no question that the number of special parts will continue to increase. It will pay to adopt a policy of not accepting below R&C. You shouldnít have to. R&C is just what it saysóreasonable and customary. Let the insurance companies define it and then hold them to it. If you canít survive on fair labor and R&C markup on parts, you need to get out of the glass business.
AGRR: In seminars on how to work with insurance companies and TPAs, youíve mentioned that glass shops need to have caller ID and the ability to Conference call.
SH: Caller ID is crucial because it helps to know as many facts as possible about the person on the other end of the line when quoting a job. It would be nice if all the TPAs would allow their phone numbers to be non-private so that we could tell them apart from the myriad of solicitors that also call with their numbers blocked.
You need the ability to conference call so that when an insured customer calls, you can basically hold his or her hand and walk them through the claim reporting process and thus ensure that they are not steered away by the (sometimes ulterior motives of a certain) TPA. Another tip for getting a claim handled quickly on conference calls is to announce at the beginning, ďThis call may be monitored for quality assurance purposes.Ē
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