One of the most arduous, time-consuming tasks in the collision repair process has always been collecting what’s owed to your shop — and in full. With each passing year, insurers become more brazen and exacting concerning what they contend is owed for shop services.
“We don’t pay for that!” has been very lucrative for insurers and very frustrating for shops, leaving many millions of dollars in insurers’ pockets each year.
But now there’s a shop-friendly service dedicated to billing and collection of overdue, negligent and insurer-contested accounts — one that takes up where you might be tempted to throw in the towel. For a nominal charge, NEON — www.chooseneon.biz, (402) 223-4700 — can return valuable profits to your diminishing bottom line. NEON’s been providing this service for the auto glass repair and replacement industry since 1998, so expanding their services to include collections for collision repairs was a natural for them.
The Short-Pay Collection Program
Insurer short-paying has become a lucrative business practice for insurers since, to date, most shops haven’t put up much of a fight for the money they leave in insurers’ pockets.
“What most shops don’t understand is that ‘fair and reasonable’ compensation for services rendered is a range, not a specific price,” says NEON co-owner, Lynn Hartman. “Of course, what one considers fair and reasonable depends on what side of the fence you’re on. Insurance companies will attempt to pay the lowest price in the range — the low side of ‘fair and reasonable’ or somewhat below that.
“But at NEON we use the wealth of information we’ve accumulated over the years to aid you in collecting a fair and reasonable price.”
not a specific price.”
NEON’s Short-Pay Collection Program policies are based on hard facts, accumulated information and years of experience in settling glass claims. Their staff is composed of professionals — such as a former head of glass claims for an insurer — who know the importance of cash flow, cash recovery and regenerated profits. They employ experienced adjustors with the technical skills needed to best serve the needs of the glass and collision industries.
“Since settling claims fairly and [quickly] is primarily a ‘people’ business, we don’t use computers to attempt to do the job that personal contact can do more effectively,” says Hartman.
NEON offers Open Claims Status Reports upon request, listing all of your pending invoices, placement date, amount collected and present status. They also offer Computerized Management Reports Analysis of all claims placed with them, each broken down by the month, the quarter and year. These reports provide the shop with important facts and figures, including NEON’s effectiveness, fees, attorney data, uncollectible claim data, etc.
Collection Techniques
Neon’s approach to collecting short-pays is to provide the insurer/debtor with every opportunity to resolve the accounts in a timely manner. Says Hartman: “We’re professional and treat the insurance company with the utmost respect. We feel it’s in everyone’s best interest to first take a ‘friendly, second-chance approach’ when settling claims. We remain firm, but fair.”
Says NEON customer, Brad Teberg of Novus Auto Glass in Fargo, N.D.: “NEON always recovers for us more of the money we’re owed than we would have gotten dealing directly with the insurer. Generally, the insurer will short-pay us at its network rate, so NEON recovers whatever else we have coming.
“When we finish the job we fax the work-order to NEON, which generally submits it to the insurer within 24 hours. From that point, when we’ll get paid depends on the insurer, but generally this takes place within a couple weeks to a month, which is much better than the up to six months it’s sometimes taken without NEON.
“When the insurer tries to get in between us, I politely instruct them to, ‘Contact NEON because they are my billing company.’ NEON is my blood-pressure medicine.”
But what happens in those instances when the insurer refuses to pay?
“If the insurance company refuses to acknowledge their responsibility to pay or we don’t receive the desired cooperation, the insurance company will face serious consequences including possible litigation,” says Hartman.
Immediately upon assignment of an account for short-pay collection, the account is entered into NEON’s automated collection system. The claim is checked for ‘fair and reasonable’ for the state requirements and time the work was completed. A demand letter is then mailed to the insurer/debtor notifying them that the claim is in dispute, demanding immediate payment and advising the insurer of their rights and responsibilities. The account is then placed with an agent from NEON’s office to resolve the account.
“Our automated collection system assures that the account is followed up in a thorough and systematic manner with telephone calls and letters,” says Hartman. “Our collection supervisor regularly reviews the claim queues to assure that appropriate actions are taken for each account, and our general manager is always available to the client if they feel they have a complaint. And we reserve the right to not handle claims we feel are unreasonable.
“If needed, we’ll arbitrate or litigate our clients’ claims against the insurer.”
Arbitration is a legal alternative to the courts, whereby the parties to a dispute agree to submit their respective positions to a neutral third party — the arbitrator — for resolution. High litigation costs and the time-consuming nature of lawsuits can be a deterrent to anyone needing to solve a legal problem.
“Generally speaking, arbitration offers parties the same outcomes they’d receive in court, but in less time and with less expense,” says Hartman. “While several mechanisms such as mediation or negotiation can help parties reach an amicable settlement, these depend on the goodwill and cooperation of the parties. A final and enforceable decision can generally be obtained only by recourse to the courts or by binding arbitration. … Because arbitration awards aren’t subject to appeal, they’re much more likely to be final than the judgments of courts. Although arbitral awards may be subject to challenge, the grounds are limited.
“Arbitration helps to ensure that the parties will not subsequently be entangled in a prolonged and costly series of appeals,” says Hartman.
And if the losing party fails to pay the award amount, the winner can transfer the decision to a court, which will enforce the award.
Receivables Financing Program
Neon’s QUICK-PAY-Cash in a flash is another of NEON’s programs. For shops whose cash flow is tied up in their accounts receivables (whose isn’t?) — hindering their growth — NEON provides a receivables financing program.
“Accounts Receivable Purchasing,” a common practice among multi-billion-dollar businesses for years, is the practice of purchasing a company’s invoices, thus freeing up capital needed for business expansion. NEON can provide this same service for collision repair shops, since most banks are generally reluctant to lend funds. NEON’s accounts receivable purchasing also frees up shop owners — who, before, were wasting their time tracking down delinquent accounts receivables.
“We buy the right to collect payments owed you by an individual or business,” says Hartman. “We aren’t concerned with your credit or your assets, as a bank loan would require. We simply look at the money that’s owed you, and who owes it. Then you get your cash up front and quickly.
“And there are no ‘startup’ fees, no requirement for a long-term credit history, no monthly payments to repay and no long-term commitments.”
Hartman says that NEON is generally able to turn your receivables into cash in as little as 48 hours after their receipt of the shop’s invoices.
With NEON’s QUICK-PAY, you decide what invoices you want them to pursue and when you want them pursued. In essence, upon purchasing your invoices, NEON notifies the insurer that their payment should be sent directly to NEON, leaving the shop free of further insurer interference. (The shop’s invoices must meet NEON’s basic underwriting and credit standards, and the proper paperwork must accompany each invoice.)
The more invoices you send NEON, the more cash that’s available for your business. And, according to NEON, the cost of their services is generally much more than offset by the lost and delinquent monies they recover.
Get the Money You’re Owed
Most shops are frustrated by and tired of attempting to collect on insurer-paid accounts — which is why NEON’s service is a welcome relief.
“Like most other shops, I was getting steamrolled by insurers and their vested-interest networks,” says NEON customer Dick Thien of Windshields Plus in Ashland, Neb. “Safelite is known for conveniently losing invoices, stalling the payment process significantly and making the shop desperate to get whatever they can from the insurer. NEON’s approach to billing is unique in that insurers aren’t used to being challenged.
“NEON is persistent, and their policies are backed up by attorney advice. … They — and we — aren’t trying to steamroll insurers. We just want to be paid fairly for what we do.”
Writer Dick Strom is owner of Modern Collision Rebuild on Bainbridge Island, Wash. You can reach him at [email protected].
For more information about NEON, go to www.chooseneon.biz or call (402) 223-4700.
