From the Desk of Mike Anderson: 4 Questions To Consider Ahead of Negotiating for Any ‘Not-Included’ Estimate Line Item
Written by Mike Anderson, Autobody News
Published October 5, 2018
Among the most common types of questions I get from shops is something like this:
“Mike, I see this particular procedure you ask about in one of your ‘Who Pays for What’ surveys, but we just can’t seem to ever get paid for that. How are shops negotiating for that?”
I take a two-track response to this type of question. First, I challenge them to ensure that they’ve actually really tried to get paid for whatever the procedure is. After three years of conducting “Who Pays” surveys, I never cease to be amazed at the percentage of shops that acknowledge they’ve never negotiated to be paid for some of the procedures.
Take “airbag residue clean-up” as an example of one such not-included procedure. Our survey last spring found that even though more than one-third of shops (36 percent) said they are paid for this procedure “always” or “most of the time” by the eight largest national insurers when it is a necessary step they perform, more than 60 percent of shops have never sought to be paid for it.
But once a shop shows me they have asked to be paid for a procedure but just aren’t being successful, I suggest they use a four-question process to prepare for future negotiations.
Question #1: Is it required to return the vehicle back to pre-accident condition?
Have you documented that the procedure is necessary? Check out the OEM repair procedures, ideally through the automaker websites directly. Get the appropriate bulletins from your paint manufacturer. Other manufacturers of materials or equipment offer bulletins detailing the need for some of these procedures. Scanning the vehicle may provide documentation of the need for some operations.
Question #2: Is it included in any other labor operation?
No estimator should be without a copy of the estimating guides (often referred to as “p-pages”) for all the estimating systems. You can download them from the “Estimate Toolbox” section on the Database Enhancement Gateway (DEG) website (www.DEGweb.org). You can also search the DEG database of inquiries submitted to the estimating system providers; there may already be a response confirming that the procedure you are working to negotiate for is “not-included.” (Our “Who Pays” survey reports now include those DEG inquiries related to each procedure.) If there isn’t already an inquiry related to the procedure, you can submit one yourself.
The associations offer some great free tools to help as well. The Automotive Service Association (ASA) regularly updates what it calls “not-included operations” charts and the Society of Collision Repair Specialists (SCRS) offers a 24-page “Guide to Complete Repair Planning.” Check those out at the association’s websites.
Question #3: Are there pre-determined times?
In a few cases, the estimating systems have established a formula for some not-included procedures. CCC, Mitchell and Audatex all have pre-determined times for prepping raw plastic parts, for example. Audatex is 20 percent of the basecoat time (with a minimum of two-tenths), CCC is 25 percent of the basecoat time (with a maximum of an hour) and Mitchell is 20 percent of the basecoat time (with no minimum or maximum).
Again, the estimating system estimating guides or the DEG are your best sources to determine whether a pre-determined time has been established for a not-included procedure.
Question #4: What is it worth?
If it’s required, it’s not-included, and there’s no formula or pre-determined time for a procedure, you will have to determine an appropriate amount. I can’t tell you what to charge. You have to figure out what your labor is going to be and any materials you’re going to use.
But keep in mind that the time you charge should reflect how long it takes the average technician to gather up their tools, equipment and supplies and perform the task in a safe and proper manner, and then return their tools and equipment.
If it’s a procedure done frequently in your shop, you may want to set up some time studies to determine an appropriate charge. I highly recommend using an invoicing system for materials or supplies. You can check to see if there’s an OEM warranty labor time.
The four negotiating questions can apply to just about any line item on your estimate. Arm your estimators with the tools and resources needed to answer those four questions and you can be among the shops successfully being paid for many not-included procedures when they are necessary and your shop does them.