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.