"Want to get paid? Document everything your auto body shop does."

In an article written by John Huetter earlier this month, the insurance adjuster commented: "If you don't do it, I don't pay for it." and "If its not documented you don't get paid." Currently, only 5% - 10% of all auto body and collision shops are providing insurance companies with proper documentation for their work. At the end of the day (and the end of the repair), it falls on the shoulders of the body shop to show insurers (and customers) every repair completed and make sure that all work completed on the vehicle is listed in the invoice and/or estimate. Take these steps to establish a legally defensible invoice for your shop for every single job and get reimbursed fairly for each repair.

• Document the labor and paint and material use for every repair.
• Take photos of each step of the repair process.
• Include all labor, paint and materials on every estimate and/or invoice.

Let PMCLogic help take the work out of documenting P&M's used for your shop by requesting your complimentary program evaluation of PMCLogic today. CLICK HERE FOR MORE INFORMATION ON PMCLogic.

For more information on documenting your shop's repairs, continue reading the RDN article below:

Adjuster: Want to get paid? Document everything your auto body shop does

By John Huetter on January 5, 2018 in Repair Driven News

A staff appraiser for a small national insurer this week pushed collision repairers to document every element of a collision repair, describing it as “a little more work, to get paid a lot more.”

The adjuster, whom we’ve agreed to keep anonymous to protect his job, provided a fascinating look at the business from an insurer’s perspective in an interview with us. He strongly encouraged shops to follow the lead of Montana shop owner Matthew McDonnell and his message of “transparency.”

McDonnell, who owns the small MSO the McDonnell Group, in 2017 promoted the idea that documentation gets a shop paid in interviews with us, at a Collision Industry Conference and at SEMA. The Montana repairer has said he learned how to properly document a repair from Collision Advice CEO Mike Anderson and by asking two insurers to teach what they needed.

It’s paid off with what McDonnell said was a 90 percent accounts receivable success rate despite often having “200-line estimates.”

McDonnell teaches “show what you do, and get paid for what you do,” the adjuster said. Label parts, photograph every step of a repair, and provide the OEM information to support what you’re doing.

“You’re going to get paid if you do all of those things, without an argument,” the appraiser said. “… I’ll pay you. Just show me.”

Shops who provide a “half-done estimate with no photos, I’m not paying you,” he said.

The insurer agreed that “severity’s definitely higher” for his carrier when this happens, but as so few shops — he estimated 5 to 10 percent — show their work, “Are we really paying that much more?”

“I do not get dinged in no way shape or form,” the adjuster said of his higher severity. The company ceased to grade adjusters on severity. Instead, it cares about factors like “leakage” and how many claims a staffer is handling.

“If it’s required to be there … we will absolutely follow what the OEM standards say,” he said of his company.

“You could teach a 12-year-old to do our job,” he said: If it’s documented, it gets paid. If every shop in the country learned from McDonnell, “insurance companies aren’t gonna like it.”

Documentation protects insurer against ‘leakage’ audit

“Leakage” in this case involves the adjuster paying line items on an estimate without something to support the decision, according to the adjuster.

This reveals why documentation is crucial. You might be frustrated at having to prove your work or expert opinion over and over. But the adjuster will be audited on how much documentation he provides to back up what he paid you, and he needs that material to protect himself even if he knows you’re right.

“That’s exactly it,” he said.

The appraiser’s company always pays with the documentation, but even if it didn’t, a shop could give the proof of the repair and the OEM instructions supporting it to the customer and let them challenge the carrier for denying something that obviously needed to be done, he suggested.

“If it’s required, it needs to be paid,” the adjuster said.

Shops ‘lazy’ about documentation

The real reason many shops aren’t getting paid is “they’re lazy,” he said.

“They don’t want to show in-process photos,” he said.

Are you fixing marks left by a frame machine? Show pre- and post-repair photos. Welding a quarter panel? Do the same. “Show all the damage,” he said.

Is a trunk interior a different color than the exterior? “Show a picture.”  Want to get paid for a painter’s time cleaning their gun? Document it.

Nine out of 10 shops don’t bother showing pre- and post-measurements of frame straightening, so why pay for it?

Many shops, “they don’t show very many photos at all,” the appraiser said. He recalled a BMW X5 with $27,000 worth of damage — and the shop only took nine photos. “‘You know what, I’m not paying you,'” he said.”

“That’s the issue that a lot of shops have to insurance companies,” he said.

Asked why a professional opinion wouldn’t be enough, as seems to be the case with doctors, the appraiser recounted one example of a health insurer who had demanded a photo of a surgical procedure.

“It’s pretty much the same thing as us in this field,” the appraiser said.  “… They’re asking for photos as well.”

Asked if he paid a shop for the time they spent collecting such exhaustive documentation, he wrote in an email, “I have never paid for administrative time, I feel that is part of getting paid. If it’s not documented you don’t get paid.”

This adjuster requires documentation to educate himself, survive an audit, and encourage the car to be fixed properly by sending shops to the OEM repair procedures. However, there’s also a cost-containment element as well, he acknowledged.

“If you don’t do it, I don’t pay for it,” he said.

Scanning

This adjuster pays for his own training into auto body repair. It’s not provided by his company, nor do his colleagues seem to be pursuing it on their own, he said. This training has taught him the importance of certain procedures like scanning, but the knowledge also can be used to suit his needs as a carrier.

For example, the adjuster says he knows he will always pay for scanning; he knows it’s necessary. However, if a shop doesn’t ask for scanning, he doesn’t include it on an estimate.

If the shop is savvy enough to do so, he will approve that line item but zero it out ($0). Once documentation is provided proving the scan — for example, an output showing the codes and the VIN of the car — he automatically pays the shop’s bill.

“I will absolutely pay for it,” he said. “… I don’t question scanning at all.”

This has been convenient for shops who know him — they can go ahead and scan the car, as he won’t fight them on it as long as they ultimately support it with documentation.

The company formally authorized appraisers to pay for scanning in October 2017, but “I’ve been paying it since Day One” without issue, he said.

He said he’s even used his familiarity with OEM repair procedures to nudge a couple of shops eager to learn in the right direction and improve both the repair quality and his own knowledge. If they add a procedure, he’ll ask if it’s what the OEM states.

“I now know if they’ve pulled them or not,” he said. The customer ideally gets a better repair, the claim file has its documentation, and he gets a chance to read repair procedures.

When insurer knows correct repair, shop doesn’t

Trying to grow one’s expertise through training can produce situations where the adjuster knows a necessary repair procedure being done. He said his shops who show an interest in learning will get a nudge in the right direction. But he’s not going to include the item for just any shop unless the shop asks for and documents it.

“I know it needs to be done, and they’re not doing it,” he said, calling that a difficult thing.

But at the end of the day, “the shop repairs the car,” he said — he won’t add items that should be done to an estimate just so the repairer will do them. “I don’t say, ‘Why isn’t it on there?'” he said.

“I know it should be on there,” he said, but he said he also knows who pays his salary.

He said he encounters a dilemma “every single day” regarding shop choice; he can’t tell the customer to take it somewhere else if he doesn’t think the shop is correct. He won’t always nudge the customer to ask for the correct repair either,; however, if the policyholder asks the right questions, “I will not lie to them.”

Article Link: http://www.repairerdrivennews.com/2018/01/05/adjuster-want-to-get-paid-document-everything-your-auto-body-shop-does/

Five Ways to Get the Most Out of Your P&M Calculator

FENDER BENDER MAGAZINE - July 1, 2016 - Anna Zeck 

Rising paint and materials costs have been an issue for years, as insurance reimbursement rates have remained largely flat. According to data from Mitchell, paint and materials made up 10.5 percent of the average appraisal value during Q1 2016, representing a 0.5 increase from Q4 2015. The average paint and materials rate was $33.51 per refinish hour in Q1 2016, compared to $32.91 in Q1 2015.

Repairers commonly report underpayment or no payment for various materials used during repairs. Meanwhile, shops’ costs for those products have increased dramatically over the past decade, causing P&M profit margins to dwindle by the year, says Rick Palmer, president of ComputerLogic.

One way to combat this is by using a paint and materials calculator, such as Mitchell’s RMC, PMCLogic or PaintEx, which allow shops to implement diligent documentation practices and improve insurance negotiation strategies. These software programs help take the guesswork out of P&M accounting, allowing shops to easily document and itemize all materials—from sandpaper to car wash soap to razor blades—to come up with a true cost for refinishing and an itemized invoice of the paint and materials used in a particular repair.

What’s more, systems like PMCLogic integrate with established estimating and paint systems, making generating an accurate P&M estimate easy and quick to do. Estimates for a specific vehicle type, Palmer says, include the amount of paint and materials that are expected to be used based on all of the panels, plus other items repaired or replaced. That system also factors into the equation other special conditions or requirements for each particular job. The result is a price generated from a database of industry information and current prices for the products used.

Ted Williams, manager of business consulting services at Sherwin-Williams, and Rick Palmer, president of ComputerLogic, discuss the top five ways shops should use P&M calculators in the shop.

1) Use the reports as a guide.

After inputting the information into the P&M calculator system, Williams suggests using the report as a guide throughout the repair process. He says that shops he works with will even print out a copy and put it on the window of the car.

“When a technician looks at it, they can use it as a guide,” Williams says. “‘Based on the repair that we’ve got, they’re saying we should use three sheets of this grit sandpaper.’ They can guide themselves. If they use five sheets, they know they used too much. They know what to shoot for as far as the amount of materials.”

Some shops even create job packs of product to put on the repair cart at the beginning of the repair based on that printout. For example, if the invoice says the repair should use three sheets of 180 grit sandpaper, the shop will get three sheets of 180 grit and store it on the cart. Williams says this ensures that technicians don’t use too much, and if they need more, they can easily record this in the system and can note the reason for needing more.

2) Negotiate more effectively with insurance companies.

Williams says that above all, the benefit of a P&M calculator is that it is a tool for negotiating with insurers regarding reimbursement, which is something that Williams says many shops struggle with.

“They have to go into it with the right mindset,” he says. “They have to have the data and they have to talk about the data in a way to negotiate to get more materials.”

Williams says that the P&M calculator acts as documentation and should be used to prove to insurance companies everything that was needed to provide a quality repair for their policyholders.

“These systems clearly put materials usage in black and white,” he says. “The documentation details all of the expenses and provides logical explanations of the costs. And that’s what helps shops get reimbursed from insurance companies.”

One reason is because it provides adjusters with an argument to use when speaking with their supervisors. They’re able to explain why certain items were needed, and why they allowed the shop to exceed the P&M cap, Williams says.

“Insurers tend to side with shops more often when repairers can provide this type of documentation,” Williams says. “It doesn’t guarantee proper reimbursement, but it certainly helps you and will get you a lot more than not using it.”

Before negotiating, Williams suggests being as accurate as you can with the documentation and deciding beforehand what your minimum is.

“You can sit here and do the material calculator and it will tell you that you have $900 worth of materials and the material cap was $450. At what point are you going to be satisfied?” he says. “Are you going to fight for the full $900 or are you going to be satisfied with the negotiation if the insurance company decides to give you $700? You’ve still dramatically increased your material margin.”

3) Involve your jobber to speed up restocking orders.

One of the benefits of P&M calculators is that they interface with multiple systems, such as paint, estimating and vendor systems. This makes it easier to integrate multiple processes in the system, as well as get your jobber involved in the process. Palmer says that by allowing jobbers access to the system, they can rely on the information for reordering and purchasing.

“The jobber doesn’t have to go to the shop every week and count inventory,” he says. “They only have to go out twice a month. Either the shop can generate the purchase order for restocking from the system or the jobber can do it himself. They have their own login and can create a purchase order for the shop.” Palmer says allowing jobbers access to the P&M system ensures that they are ordering the correct amount of materials for the shop based on prior usage, meaning the shop doesn’t end up with an excess of inventory or too little with frequent restocking.

4) Bring the painters and technicians up front during the damage analysis.

Williams says that the key to using P&M calculators effectively is being accurate from the very beginning. One way to do that, he says, is by getting your experienced body technicians and painters involved in the damage analysis.

“They can tell you, based on experience, here’s how many tubes of adhesive and different things you’re going to need for that repair,” he says. “You can add to the initial invoice at the very beginning. I find even with the best shops, they’re not doing this and bringing the painter up to the front.”

Williams says to have the painter and technician review the estimate for estimate accuracy, verify the actual color, get the color match up front and have the technician map out any repair panels.

“What I’ve found is that typically by bringing the paint tech up there, we’re going to get more accurate estimates right out the gate as far as the right amount of hours, we capture materials that we probably aren’t getting paid for right now and we can do it at the beginning of the repair process,” he says.

5) Use the data as KPI reports to reduce waste.

Palmer says that in his experience, when shops embark on using paint and material calculators, they explore details of their materials costs that may have been overlooked before. And while the biggest gains in P&M profitability generally come from stronger sales and capturing all needed processes and procedures, there are gains to be made by measuring and managing your costs. That means that the shop is better able to track its P&M usage and reduce waste.

“How many sheets of sandpaper should they be using? For the last 90 days, according to what was used on that car, you should’ve used 5.5 boxes of sandpaper. You bought 10 boxes. I need to look into that,” he says. “They’ll say, ‘I got paid X dollars for paint and materials.’ We’d say, based on your actual cost factors, this is what you should have gotten back.”

If there are discrepancies in that data, Palmer says that you need to take a closer look and figure out where the shop is experiencing significant waste and the reasons for that. He says that common reasons include employees taking a can or two of materials for personal use, painters mixing too much paint, or simply incorrect cost accounting.

https://www.fenderbender.com/articles/6248-five-ways-to-get-the-most-out-of-your-p-amp-m-calculator