Exploring Direct Billing as a Viable Payment Option

Over the course of nearly two decades, automotive insurance providers have slowly but surely offloaded their responsibilities to third-party administrators (TPAs)—businesses (or business divisions) set up for the sole purposes of dolling out referrals, making payments and shuffling electronic paperwork for auto glass claims. But some auto glass shops continue to persist in billing direct—and are finding success. AGRR and glassBYTEs.com has started a new series about getting paid for company owners, and the first installment in that series looks at direct billing. In fact, four pages has been devoted to this topic in AGRR magazine’s upcoming January-February issue. Here’s a preview:

It’s Not Easy

With most auto glass claims and billing outsourced to TPAs, it comes as no surprise that insurance companies don’t make billing direct a breeze. And that, some argue, is an understatement.

“When it comes to billing insurance companies direct, there is no one right answer,” says Rob Arnold, president of Independent Auto Glass Consulting, a Palm Harbor, Fla.-based company that provides consultation to glass shop owners to help increase the profitability of their businesses. “This is something that every glass shop has to figure out for itself.”

And if you do figure it out, we’re told that if and when you manage to get paid (either by the insurance company or their TPA), when billing anything higher than the network rate, you may expect to be “short paid,” which requires follow-up efforts to collect (Look to AGRR March-April for more information on handling short pays.)

“This is where most glass shops decide, ‘I’m not willing to lose money. I’m just going to acquiesce, send the invoice through [the TPA], take the short-pay, and that’s life,’” says Gary Hart, executive director for the Independent Glass Association. He adds that, as far as he can tell, that’s the course that “99 percent” of glass shops take.

“Back in the late 1990s, we used to get together … and we would exchange [that] information,” says Rick Rosar, owner of Rapid City Glass in Pine City, Minn. “Someone would ask, ‘Oh, did you find somebody that paid at [a certain insurance company]?’ and someone else would answer, ‘Oh, yeah. Here’s her name. Here’s her address. Send the bill there. She’ll send you a check directly.’ We would share and exchange information like that in spreadsheets.”

But as billing direct becomes less common, companies keep that information closer to their own proprietary vest.

“[With] each year that goes by,” says one glass shop owner, “we’re less and less successful. I just think the industry missed the boat … now, I personally think … in a way, it’s too little too late.” At the same time, others suggest that, “It just takes a couple people to start doing something—pushing back—and then things can change.”

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1 Response to Exploring Direct Billing as a Viable Payment Option

  1. Direct Billing is the ONLY way to go if you want to be paid truly “Fair and Reasonable” rates. We have 5 years experience in doing just that.

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