Getting Paid Series: How to Handle Shortpays

For any auto glass shop attempting to bill beyond insurance companies’ network rates, shortpays are an unfortunate reality. In the first part of AGRR’s three-part series on “Getting Paid,” we tackled how to bill insurance companies direct. (If you missed that article, see page 20 of the January-February 2018 edition.) But that’s only one half of the equation, so in the upcoming March-April issue, contributing editor Drew Vass takes a look at the next step: short pays. He investigates how to deal with them in order to get paid what you feel is a fair fee, which is often more than what insurance companies are offering.

The upcoming March-April issue looks at the shortpay issue in depth so be sure to look for that issue in the mail. Unfortunately, shortpays often end in litigation and here AGRR offers some tips on navigating through that process.

“Unfortunately, this is not an uncommon situation,” says Charlie Williams, of insideoutcounsel, a company that provides consultation and legal services nationwide to small businesses. And because glass claims often involve such small amounts of money, Williams says there’s little incentive for insurance companies or customers to pony up. For this reason, he says he isn’t surprised that most shortpays end in litigation.

“I learned a long time ago as a litigator,” he says, “that there’s only one way to get people or businesses to do the right thing when they won’t voluntarily do so.” And that, he says, is to litigate.

But before you make the leap from shortpay to courtroom, glass shop owners and independent experts all say there are a few checkmarks to make along the way, as well as some alternative tactics that have proved themselves to be worthwhile in some cases. (For all of that info look to the upcoming March-April issue.)

In the end, some auto glass shops suggest that the tit-for-tat game surrounding the direct billing process and shortpays may be designed to flush out weak-hearted or under-funded glass shops—forcing them into accepting network rates in order to stay in business. For those who manage this trial-by-fire process, however, some say there is a light at the end of the tunnel.

“We filed some lawsuits—and when I say some, I mean a few hundred,” one glass shop owner says. “It’s almost like it was a mechanism built in by the insurance company …” after which, he says, things got easier. Of course, those companies that survive the process also say they’ve grown smarter, sometimes by trial and error. Case in point: we found a handful who say they learned that by documenting absolutely everything, they’ve gained more leverage for negotiations.

Two of the glass shop owners interviewed for this article tell AGRR that after they have checked their state laws on recordings, they’ve gone so far as implementing systems for recording all of their companies’ phone calls. They have discovered that it forces insurance companies and TPAs to change the way they conduct over-the-phone business. Others have developed and use their own proprietary, cloud-based software systems for gathering and documenting data for each claim, including such things as photographic evidence and vehicle information. The ability to produce this information on a moment’s notice and submit it electronically they say helps to shut down excuses an insurance company or TPA might use along the way for delaying the process.

At the same time, some business owners and legal experts say they believe it’s possible that insurance companies don’t want to deal with shortpays any more than glass shops do, but are cornered into those situations by the agreements they hold with TPAs (which may preclude them from dealing direct or paying anything other than network rates). “

They’ve pigeon-holed themselves into a spot where they have contractual relationships with companies …,” says Doug Stroh, owner of Clear View Windshield Repair in Cape Coral, Fla.

In other words, the “game” of shortpays may be one of necessity, rather than frugality. And that, as they say, is debatable.

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1 Response to Getting Paid Series: How to Handle Shortpays

  1. DAVEYCREWCUT-RETIRED says:

    Insurance company contracts with TPA’s should be subject to review by the various state depts of insurance. The Minn. dept found out about Safelite’s GAI (guaranteed average invoice) contract with USAA and got USAA to agree not use that kind of contract. Then Safelite filed suit against the Minn. Commissioner and got some state reps to back them and the judges totally blew the ruling in Safelite’s favor. I personally attribute the problem to the plaintiffs failure to properly present the complaint to the court and then all the extraneous BS that Safelites uses to distract the judges from the real issues. (Big money talks!)

    TPA’s are only supposed to aid insurers to save money on “administrative costs” i.e. the costs the company spends on overhead, wages, postage, etc in settling claims, not what they pay to service providers for services rendered to policyholders. TPA’s shouldn’t have any influence on prices charged by service providers whatsoever!

    Insurers have no room to complain about terms of TPA contracts because they are the ones in control as to whether an agreement is reached. Cornered by the TPA? I think not. If all the TPA’s went out of business tomorrow, the insurers would have to deal with it because they have to, by law, provide for the fair and prompt settlement of claims.

    Assuming that the insurers are complaining about being cornered by the most prevalent TPA, Safelite Solutions, Inc, the truth is that the insurers are willing co-conspirators in helping one service provider gain an unfair advantage over the other 80% of auto glass service providers in order to have undue influence on what service providers can charge.

    Have your attorneys check out the following article and the cases involved:

    http://www.repairerdrivennews.com/2018/02/21/n-y-shop-settles-with-progressive-nationwide-loses-request-for-more-discovery-summary-judgment-2/

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