Wednesday, 21 November 2012 09:17

‘Information is Power’ Speaker Tells Santa Clara CAA Chapter

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How many times have you heard an insurance company tell you, We don’t pay for that! and you had to take their word for it? Because without any information to either confirm their claim or disprove it, you’re left hanging. It’s called “claim limbo” and it’s a situation body shops don’t want to be in, even though in many cases they end up there.

That’s why Chuck Gosney, the president of Collision Billing Services (CBS) in Jackson, MI, was telling body shops and personnel that information is empowering when it comes to dealing with insurance companies in a non-DRP situation. He was the featured speaker at the Santa Clara County California Autobody Association’s (SCC-CAA) October meeting held in San Jose, CA, at Three Flames restaurant.

Is this a significant problem for body shops in northern California? I asked a handful of owners/managers in attendance.

“More than you’d think!” exclaimed one, while another said, “We’re 85% DRP-driven, and so it’s not a major issue for us.”

One body shop with several locations estimated that he loses $30,000 to $40,000 annually in operations he never gets reimbursed for. “They start denying certain things and what they’re doing is training us to stop asking. But now we push back a little more, because charging for things like test drives and detailing the vehicles isn’t something we feel like we should eat.”

Gosney said that the collision industry is probably unique, but for the wrong reasons. “Most other types of businesses see no difference between what the bill says and what they’re charging for, but not in this industry. It’s become so prevalent, that many shops just accept it as a part of the game.”

CBS feels that any operation performed on a car should be reimbursed, without exception or interrogation. “We tell our subscribers to ask for everything; because that is the only way you’ll get paid for operations from the insurance companies. If they paid for something one time and are refusing it the next time around, we want to have that record to call them on it. Without the information, they can say pretty much whatever they want and there is no accountability without the documentation. Otherwise, the insurance companies will try and underpay every single chance they get. That’s why we want raw data from the body shops, so that we can have a more comprehensive claims database, complete with stats from all of the major insurance companies throughout the country.”

When CBS recognizes that certain insurance companies are denying the same operations over and over, they’re not afraid to pursue them in court, Gosney said. It’s a viable technique for companies like CBS, but not a realistic alternative for body shops, especially small moms and pops, he explained.

“One shop owner we know recently sued an insurance company for a $1,200 underpayment. He got everything he wanted, but it cost him $10,000 in legal fees. Was that a win for him? No. He won the battle but he lost the war.”

By creating a deep claims database, CBS is able to leverage its information and help its subscribers and the industry as a whole. “Our data shows what insurance companies will normally pay and what they won’t pay,” Gosney said. “As we grow and add new subscribers, the data that we’re accumulating is invaluable. By using our system, body shops can control the situation and prevent the insurance companies from dictating the relationship. Right now, it’s basically carte blanche for the insurance companies and the shops are at a definite disadvantage. With our data at their fingertips, body shops can ask to get paid on things like color tinting, draining and refilling fuel tanks, resetting electronic codes, sanding and priming recycled parts—items that many insurance companies refuse to pay for.”

Even with the information in hand, many insurance companies won’t pay anyway. “They can still say no, that’s for sure. But, in the end they know you’ve got some tools to rely on. When they do say yes, it’s usually pure profit for you, because you’ve already done the work anyway. In the end, both parties are trying to wear each other down. If the insurance companies say no enough, they’re hoping you’ll eventually give up asking. We tell our subscribers to keep asking—because they may say no on a Friday and yes on a Monday.”

Time after time, Gosney sees his subscribers getting paid for specific operations, by showing the insurance companies examples of how they paid for them in the past. “We’re using the insurance companies’ own policies to help body shops to get more of the revenue they’re already owed. As a good, honest body shop owner, you’re obligated to do these things on each car that comes in your shop, so why shouldn’t you get reimbursed for every penny?