Recently, it was announced that there is an effort in place to introduce the concept of the development and implementation of technical standards to address the insurance claims process, thereby leveling the playing field. As noted in those same announcements, technical standards would support independently owned glass shops in their ability to launch an offensive against the blatant, anti-competitive tactics used by insurers and their third-party administrator (TPA) partners. TPAs are getting bolder and bolder in their determination to capture market share, steer work to preferred providers and contain costs. The recent announcement by USAA Insurance that it may require inspections using technicians, employed by the competition, and following the lead of GEICO Insurance, was the catalyst for this development. Thank you, USAA. Using the latest in technology, the industry will unite to stop this brazenness. Enough is definitely enough.
When I began my career in the auto glass repair and replacement industry, I could not believe that any third party, insurer or otherwise, could dictate the terms of what a business should charge for its services. To me, it should never matter who is paying the bill. I viewed this as no different than if a credit card company would have any control over what a business charged, because a customer was using credit as a means of payment. As the years passed, I watched in amazement as insurers, through their TPAs, assumed expanded dictatorial powers regarding the terms of doing business, including the parts that shops were to install (that is, if you were fortunate enough to retain your customer in the process). And, as evidenced by the introduction of inspections, performed by the competition, and under the mask of fraud prevention, they continue to attempt to expand those powers. It is time for independents to take a stand—and we will!
I maintain that any business should be able to charge as it sees fit, because market forces will eventually determine its fate. Any significant variance on pricing in a free market, whether higher or lower, will be the determining factor in whether a business is successful or not. Am I suggesting that shops should charge insurance companies significantly more than the price they charge customers paying cash? Absolutely not. But the desire of insurers to contain costs does not justify the antics that are being experienced in the AGRR industry today.
I believe that independents have been remiss in their failure to address the ongoing interference in their ability to conduct their businesses. But, as they say, it is never too late and the introduction of technical standards will present an opportunity to address the interference that insurers and their partners instill on independent businesses as they attempt to further control the market. The technology is available and independents will be far better off if they embrace these efforts. In my opinion, the expanded use of technology in the claims process can eliminate the need for TPAs altogether, making them a page in the history books. And I believe that by presenting insurance companies with the option, TPAs may just sail off into the sunset.
Wednesday, January 19, 2011
Wednesday, January 5, 2011
“The Windshield Bullies”
Somebody, please stop those windshield bullies that are preying on the unsuspecting elderly, and, at all costs, stop them from using the glass shop of their choosing.
Recently, I learned that the National Insurance Crime Bureau (NICB) was escalating its sensationalism regarding “windshield bullies” by airing 30- and 60-second commercials on auto glass fraud. The ads feature what appears to be the voice of an elderly woman who states that a company changed her windshield before she could call her insurance company. Can you imagine that she did not have the chance to call her insurance company? What third-party administrator would like that? Why they would not have the opportunity to “steal” that claim out from under that glass shop?
The woman featured in the ad did not think that she needed a new windshield. I would be curious to determine how the woman in the commercial arrived at that conclusion. It sounds like the woman sat at the gas station the entire time while the company went and retrieved the windshield and did an actual replacement. Was this in actuality a repair? Certainly she must have some evidence that there was wrongdoing to get these people arrested for fraud. Were they arrested and were they convicted? This entire ad appears to be suspicious and fabricated.
With bullying running rampant and these claims circumventing the third-party administrators (TPA), one would think that TPAs would want to do whatever they could to put an end to these tactics that apparently are the cause of a dramatic increase in “questionable” claims. However, since when has the duty of claims processing been expanded to include claims policing? Third-party administrators are not regulatory agencies. The Arizona legislation passed in the spring of 2010 was about tightening the claims reporting process, and not fraud. I contend that this ongoing reporting and windshield bullies campaign is about the claims reporting process, not fraud.
For at least the past two quarters, the NICB reported this dramatic increase in “questionable” claims. Just who is the source of the “questionable” claims that are being reported to the NICB? Is it the third party-administrators? I have addressed the sensationalism of the NICB press releases in the past. NICB president and CEO Joe Wehrle is quoted as saying that auto glass fraud is happening across the nation, but has produced no hard statistics or convictions. In addition, can a parallel be drawn to the fact that this “dramatic” increase in so-called “questionable” claims may be the result of a “claims harvesting” media blitz? The same media blitz that not one major insurance company has publicly denounced. The same media blitz that urged automobile owners to inspect their windshields for any defect that they may never have paid attention to in the past.
I believe the time is right for glass shops to run a counter-campaign by producing and airing commercials that are based on the following theme: Have you ever been on the end of a telephone line when a third-party administrator CSR will not accept the fact that you already have chosen a glass company to replace or repair your windshield?
The script read by the actor/actress could read: “I called the toll-free number on my insurance identification card to report my glass claim and, when I told the young lady that I wanted to use Joe’s Auto Glass, she was relentless and insisted that I would incur out-of-pocket expenses and that my windshield would not be guaranteed. After approximately 30 minutes on the line, I was able to make an appointment with Joe. The next day, a van was in my driveway that did not say Joe’s Auto Glass and, before I was aware of it, my windshield was replaced before I could stop it.” Here is a real customer who was bullied into using a shop that he/she did not choose in the first place. Since the inception of third-party administrators, there has been a “dramatic” increase in automobile owners being steered to shops they did not intend to use. We must put an end to this CSR bullying.
Insurers and the industry must accept that there are direct marketers that are selling windshield repair and replacement services to consumers that are legitimate and do not subscribe to fraudulent practices. The NICB should cease painting the industry with such a broad brush because one affiliated company, in particular, does not appreciate direct marketing. In the name of credibility, NICB CEO Wehrle should produce the number of convictions in his organization’s next quarterly report and insurers must end their silence on the “no cost to you” media blitz. Rather than dividing the industry, let’s work together to clean it up. No one condones fraud and many in the industry would want to work together to clean it up if it actually is as bad as portrayed. Mr. Wehrle, sensationalism must be left to the tabloids. I contend this issue is not about fraud at all. Rather, it is about exerting control over the claims reporting process.
Recently, I learned that the National Insurance Crime Bureau (NICB) was escalating its sensationalism regarding “windshield bullies” by airing 30- and 60-second commercials on auto glass fraud. The ads feature what appears to be the voice of an elderly woman who states that a company changed her windshield before she could call her insurance company. Can you imagine that she did not have the chance to call her insurance company? What third-party administrator would like that? Why they would not have the opportunity to “steal” that claim out from under that glass shop?
The woman featured in the ad did not think that she needed a new windshield. I would be curious to determine how the woman in the commercial arrived at that conclusion. It sounds like the woman sat at the gas station the entire time while the company went and retrieved the windshield and did an actual replacement. Was this in actuality a repair? Certainly she must have some evidence that there was wrongdoing to get these people arrested for fraud. Were they arrested and were they convicted? This entire ad appears to be suspicious and fabricated.
With bullying running rampant and these claims circumventing the third-party administrators (TPA), one would think that TPAs would want to do whatever they could to put an end to these tactics that apparently are the cause of a dramatic increase in “questionable” claims. However, since when has the duty of claims processing been expanded to include claims policing? Third-party administrators are not regulatory agencies. The Arizona legislation passed in the spring of 2010 was about tightening the claims reporting process, and not fraud. I contend that this ongoing reporting and windshield bullies campaign is about the claims reporting process, not fraud.
For at least the past two quarters, the NICB reported this dramatic increase in “questionable” claims. Just who is the source of the “questionable” claims that are being reported to the NICB? Is it the third party-administrators? I have addressed the sensationalism of the NICB press releases in the past. NICB president and CEO Joe Wehrle is quoted as saying that auto glass fraud is happening across the nation, but has produced no hard statistics or convictions. In addition, can a parallel be drawn to the fact that this “dramatic” increase in so-called “questionable” claims may be the result of a “claims harvesting” media blitz? The same media blitz that not one major insurance company has publicly denounced. The same media blitz that urged automobile owners to inspect their windshields for any defect that they may never have paid attention to in the past.
I believe the time is right for glass shops to run a counter-campaign by producing and airing commercials that are based on the following theme: Have you ever been on the end of a telephone line when a third-party administrator CSR will not accept the fact that you already have chosen a glass company to replace or repair your windshield?
The script read by the actor/actress could read: “I called the toll-free number on my insurance identification card to report my glass claim and, when I told the young lady that I wanted to use Joe’s Auto Glass, she was relentless and insisted that I would incur out-of-pocket expenses and that my windshield would not be guaranteed. After approximately 30 minutes on the line, I was able to make an appointment with Joe. The next day, a van was in my driveway that did not say Joe’s Auto Glass and, before I was aware of it, my windshield was replaced before I could stop it.” Here is a real customer who was bullied into using a shop that he/she did not choose in the first place. Since the inception of third-party administrators, there has been a “dramatic” increase in automobile owners being steered to shops they did not intend to use. We must put an end to this CSR bullying.
Insurers and the industry must accept that there are direct marketers that are selling windshield repair and replacement services to consumers that are legitimate and do not subscribe to fraudulent practices. The NICB should cease painting the industry with such a broad brush because one affiliated company, in particular, does not appreciate direct marketing. In the name of credibility, NICB CEO Wehrle should produce the number of convictions in his organization’s next quarterly report and insurers must end their silence on the “no cost to you” media blitz. Rather than dividing the industry, let’s work together to clean it up. No one condones fraud and many in the industry would want to work together to clean it up if it actually is as bad as portrayed. Mr. Wehrle, sensationalism must be left to the tabloids. I contend this issue is not about fraud at all. Rather, it is about exerting control over the claims reporting process.
Subscribe to:
Posts (Atom)