Auto Glass Company Finds Success in Writing to TPA about Unfair Pricing

Tired of accepting discounts off NAGS rates, Christina Risinger, manager at Bartak Glass in O’Neill, Neb., contacted higher ups at a third party administrator (TPA)with whom they work, stating that the company would be happy to negotiate prices they considered to be “fair and reasonable,” for a windshield replacement that was referred to them.

“Had today been yesterday, I would have surely thought the dispatch I received was an April Fool’s joke,” Risinger wrote to the TPA. “ … The rates printed on the dispatch would not allow any business to make a profit.  I invite you to follow me along as this information is surely helpful to you and how you make your future business decisions.”

The dispatch sent to Bartak represented a 65-percent off of the NAGS list price. This, Risinger argued, would put the company at a $17.60 loss for the windshield alone, not including labor rates and kit costs—a common sentiment expressed by independents.

“After it’s all said and done, the total [the TPA] wants to pay us to install that windshield for our customer is $216.08 when that windshield costs us $168.68, our labor costs us $36.80 and our kit costs us $12.00 for a total job cost of $217.48,” she said. “That would be a job done at a loss of $1.40 … I don’t know how you can possibly think the rates you dictate are fair and reasonable.”

In closing, Risinger suggested a certain level discount off list price, as well as certain flat rates for labor and kit.

“That’s a discounted NAGS rate, super standard kit and a labor discount,” she said. “That is a fair and reasonable transaction to nurture a business relationship.”

Rinsinger admitted she knew that there was a chance the TPA would offer the job to another company, but it was a risk she was willing take. In the end, the manager there agreed to her requested rates and made the company a regular fleet auto glass service provider in the area.

“I’m so sick of auto glass profit margins shrinking year after year because auto glass companies are working for less and less money while glass prices go up, up and up,” she wrote to glassBYTEs.com. “I want people to know that these terrible rates exist, and glass companies often feel compelled to accept them. In this instance, the job would have been a loss.”

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7 Responses to Auto Glass Company Finds Success in Writing to TPA about Unfair Pricing

  1. Bob H. says:

    Good for you for standing up for a fair price. Not sure how you calculated only a $1.40 loss though. I’m assuming you pay FICA on your employees wages, Workers Compensation insurance, liability insurance, truck insurance, gas, overhead expenses including electric, phones, computers, NAGS subscription, EDI fees and so on and so on. My guess is that if you didn’t negotiate at least another $100.00 on that invoice, you still lost money. Keep up the good fight.

  2. Good for you in trying to gain a fair amount. But like Bob says there are many different parts to the equation when it comes to auto glass replacement that many shops aren’t considering, let alone insurance companies or their networks. Insurance companies are a business, just like any other, with the exception that they determine many factors outside of insurance purposes, you can’t blame them for trying to save the most money possible on any claim or loss, you just have to do your best to point it out, like in this case and hope for the best because arguing with them takes a whole department of your company and lawyers while those are easy to come by for them not so much for the small auto glass shop.

  3. Carlos says:

    “Rinsinger admitted she knew that there was a chance the TPA would offer the job to another company”

    And God forbid, if that had happened, she would have lost the opportunity to lose money!

    Wake up people, wake up!!!!!!!

  4. Lynn says:

    Been in the windshield repair/replacement business for 32 years. Anyone willing to talk about direct bill and how to get started weaning myself off of TPA(s)? I would be willing to go to you to discuss possibilities of what has worked for you. Be willing to pay for good information.

  5. Gary says:

    Now you know why Safelite is so successful, in the end they are getting list price for answering the insurance companies phone on glass claims, plus online glass claim filing
    guarantees more profit for them. What a racket ! I love this free enterprise system !

  6. Lynn says:

    Actually, I know a local agent with an insurance company that uses Safelite as their TPA. He pulled a few client’s files to see how much his client’s claims were that Safelite got paid (they turned around and paid me) to see if the amounts matched.
    This agent, like many others, is not happy with the Safelite agreements that the head office has made. Anyway, he wanted to know how much mark up Safelite was getting from what my glass shop billed for and the amounts that his client was ‘charged for’ on his policy and the amount that I billed for and received from Safelite matched exactly.
    So the advantages for Safelite and their TPA division are as follows:
    1)Safelite is able to collect market share and general information on their competitors by processing claims.
    2)Safelite can use that information to determine where to send salespeople to pick up more work than their ‘local’ stores are currently doing.
    3)Safelite gets paid a flat fee, depending on their agreement with each insurance company, to process the claims.
    4)Safelite can use confusing/dishonest tactics to get callers to use their company owned stores instead of an independent, whether that independent is signed up as an affiliate shop or not.

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