Fraud

With each passing day, the AGRR industry seems to shifting its’ focus on fraud. Whether it is the central theme of newly-introduced legislation or the culmination of an investigation, fraud is making the headlines. Before I proceed, fraud should not be condoned in any manner. And I would bet that every state in the union already has laws on the books dealing with insurance fraud. Is what we are seeing labeled as a "fraudulent practice" truly fraud? Or is it fraud because it does not meet the guidelines established under the TPA system, thereby giving the insurance companies and their TPA partners further control over the industry, especially pricing?

For purposes of our discussion here, I will focus on one issue. For example, where did this nonsense come from about billing different amounts in different zip codes? While it may apply to a network shop, it should not make any difference to the shop that is not. There would be no justifiable reason for a non-network shop to fabricate where the work was done. None, that is unless you want to commit an act of fraud. Perform the service and bill accordingly. You are a non-network shop so do not attend to those rules for network shops. Bill your customer for the work that you performed and the products you used wherever you do the work, it’s that simple. I can draw the comparison to the “good” witch in the Wizard of Oz, where she tells the bad witch to “be gone” because she has no power in Munchkin Land.

As I see it, a non-network shop has no contractual obligation to an insurance company under any circumstances. So why pay any attention to network rules? Again using a phrase from the Wizard of Oz, pay no attention to the man behind the curtain. Run your business and pay no attention who is paying the bill. You have every right to bill your price, whether cash or otherwise. The independent shop owner does the work requested by its customer, an implied contract. The customer is then obligated to pay for your services. In some cases, the customer uses an insurance policy to pay and does so under the assignment of proceeds. So obviously, you want to ensure that your customer has coverage. In other transactions, the shop’s customer may pay the shop directly and submit it to his/her insurer. There is nothing unique about any of this at all. It should not matter who ultimately pays the bill. Maintain your integrity and you should have nothing to worry about.

The only shops that should be guilty of this zip code nonsense are those that are network participants. And if they fabricate the zip code, then they are committing fraud. THERE IS NO REASON WHY A NON NETWORK SHOP SHOULD FOLLOW THIS RULE. THAT IS, UNLESS YOU ARE CONCEDING TO NETWORK RULES AND PRICING, TRYING TO MAKE MORE MONEY. IF YOU DO THIS, YOU ARE COMMITTING A FRAUDULENT ACT, AND DOING SO FOR NO VALID REASON.

So why does an insurance company believe that it has the power to intervene when it has no contract for repair or replacement with the shop owner? Perhaps this is the million dollar question of two decades or perhaps even the century.

As long as an independent shop is non-network, it should bill according to its own guidelines. Take care of your customers, apply integrity when billing for the service and product that you provide, and you should have nothing to worry about. If you as a non-network shop, try to adapt your billing to network guidelines to gain enrichment, then you do have something to worry about.

Pennsylvania Takes on Consumer Rights

A resolution has been introduced in the State of Pennsylvania requesting the commissioner of insurance to investigate steering. I cannot understand why, when we all know that steering does not exist (ha!). Pennsylvania is the latest state to have the initiative to take action in the name of protecting consumers’ rights. To my knowledge, many states have “right to choose” laws. But actions taken by third-party administrators have proven time and again that they are loosely enforced or not at all. You do not have to look very far to see that many states across the nation are making the effort in this regard, consumer protection. This resolution proposed in Pennsylvania is just the latest.

Before I proceed, let me ask each and every one of you. Is the Pennsylvania Senator who introduced the resolution a whiner? According to the glassBYTEs.com article, the resolution includes words like coerce and the phrase “otherwise attempting to aggressively direct their insureds.” That’s pretty powerful stuff. Therefore, do you think it is the senator’s intention to protect the consumer and their right to choose or is his motive to protect the service providers? “Whiners.” That is the label that many of you have given to many of your fellow glass shop owners that are sounding off against the third-party administrators. This Senator is taking action because he knows, like all of us, that motor vehicle owners are being “coerced.”

The glassBYTEs article does not indicate whether this is true, but I would be willing to bet that this Senator either is acting out of personal frustration, or he knows someone who has encountered an experience with either a TPA or an insurer directly. I can tell you from personal experience that I watched as a member of the New York State Assembly called in a glass claim with one of the dominant TPAs in the industry. After he hung up the phone, he asked, “is this what a person must go through to get their windshield replaced?”

And now for the consumer. Ah yes, the consumer. It is the consumer that is the forgotten orphan in the entire process. It is the consumer, our customer, who has chosen our glass shop to have his or her car serviced, only to be harassed when he or she calls in the claim. It is the consumer who has purchased a product, insurance, only to learn when he or she goes to use it, discovers that they are not getting what they paid for. It is the consumer who chooses his or her service provider, only to be “coerced” to think that he or she has an obligation to use someone else. I don’t know about you, but I for one believe that involving the consumer, whom this is really all about, may be the catalyst in turning this industry around.

Food for Thought

I continue to read comments on various forums pertaining to the state of the AGRR industry and how independents are advised to quit their whining and “coexist” with the third-party administrators. Yes, it is proclaimed that independents should work around the TPAs. To that, I say “nonsense.” Independents are being forced out of business through no fault of their own, while doing most things right. Businesses should be allowed to compete fairly and thereby succeed or fail on their merits, nothing more and nothing less.

Yes, independents should focus on branding their businesses and providing a service that is second to none, but I fail to see where they should not be allowed to voice their opinions. I would not call that whining. We are talking about blatant unfair trade practices, consumers being denied their “right to choose,” and perhaps consumers being defrauded because they are purchasing a product, an indemnification policy, in which the seller is not delivering what the consumer has paid for. Just the other day, I heard that an insurance company is withholding payments, because the shop owner would not have his customer call the TPA, who happens to be in direct competition. I applaud him.

In an effort to brand, I expect that each and every “legitimate” shop owner is advertising his/her business through a variety of outlets, and spending a considerable amount of their operating budgets in doing so. Having said that, let me pose a fair question to you. How many customers are you losing to TPAs, who are directing your potential business elsewhere? Is it one, five, ten, or twenty? Not a single one of us has a clue—do we? And we should accept that?

And one other point—the customer service rep says that they have one of your customers on the other end of the line and they won’t send over the referral until you accept the price. Huh? They aren’t referring a thing. A referral would be if the customer on the other end of the line didn’t have a shop in mind, and they were referring them to that shop.

So we should stop voicing our frustrations because a handful of people have labeled it whining? I don’t think so.

And another important point for consideration is this. Those who label this process whining do so behind a screen name, so we really do not know what side of the industry they are coming from or their real intent. When I challenge them to come forward and tell the audience their stake in the industry, they fade away. Therefore, I can only conclude that they are not on the side of the independents at all. I stand by my principle that if a shop loses one, just one customer, to these practices, they should not be tolerated. To that, I say keep up the whining. Turn up the volume and bring down the house.