Reclaiming customers from insurance companies

The advent of direct repair programs (DRPs), concierge programs and other insurance company offerings have muddied the waters when it comes to managing customer relationships, with many customers mistakenly believing that the insurance company is in charge of the repair process. A recent Society of Collision Repair Specialists survey even found that many shops consider the insurance company, not the vehicle owner, their actual customer.

"Years ago we competed for business by marketing to the consumer, not going through insurance companies," says Lou DiLisio, president of Automotive Industry Consulting. "Over the last 15 years or so a lot of shops have lost that focus on the customer. You have to build that relationship, even in a DRP environment. Once a customer comes through the door of the shop, it's the shop's responsibility to make that customer their own."

How can shops reclaim the customer relationship, even when their customers have come to them by way of insurance referrals or a DRP program?

A key part of that is building an identity for your shop, says Bobby Price, owner of Price's Collision Centers, a $12-million operation with three locations in Tennessee. "I allocate 3 percent of revenues to advertising, and I've been doing that for 10 years," Price says. "You have to deliver a consistent message and maintain top of mind in the marketplace."

Part of his advertising focuses on educating consumers about their rights. His most recent radio ads describe the deceptive word tracks sometimes used by insurance companies to steer work to their DRP shops. Price participates in one DRP, State Farm's Select Service program.

"My message is all about working for the consumer," Price says. "We try to educate the consumer on their right to choose a collision center, and we've built our message around the fact that we work for the customer."

Price says his biggest competition isn't other collision shops, but the word tracks that insurance companies use to steer customers. "In bringing those things to light, consumers are educated and not as apt to be steered," he says.

In fact, just passing out a "Motorists Rights" or "Customer Bill of Rights" document can go a long way to help educate those consumers. Many state auto body associations offer these pamphlets. Shops should have copies available and hand them out to every customer that comes in for an estimate.

"That explains that they have the right to get their car fixed anywhere they choose, and they don't have to go around getting multiple estimates," says Tom Franklin, author and industry consultant.


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Insurance company suing county, DA over auto accident

A large insurance company is taking Cayuga County and its district attorney to court over a car accident that took place this year in New Jersey.

The county received notice earlier this month that Allstate Insurance Company is suing the county and District Attorney Jon Budelmann for $9,494 over a Jan. 23 accident. According to the complaint, Budelmann was driving a county-owned vehicle at the time on Interstate 80 in Warren County, N.J., when his vehicle and that of Jeanne Zecchine collided.

According to the complaint filed Sept. 4 in Warren County, N.J. court, the requested sum would cover damage to Zecchine's vehicle. Allstate, Zecchine's insurance provider, will also seek court and attorney fees as part of the suit.

Budelmann said Monday that Zecchine's vehicle swerved into his lane and struck his vehicle. He was traveling on that highway after attending a New York State District Attorneys Association meeting in New York City, he said.

This is the first Budelmann has heard of the accident since the county handed the claim to the insurance company in January, he said.

“I assumed the insurance company had been handling it,” Budelmann said.

Budelmann does not have a personal, county-owned vehicle, he said, and was issued the vehicle for that specific meeting.

The county has 35 days to respond to the complaint.


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Cost of living and doing business pushing people to leave N.J.

CENTRAL JERSEY — Fanklin resident Jim Morano and his wife recently acquired a home in South Carolina after his wife's sister and mother passed away.The couple plans on keeping the home as a winter getaway, but they're also wondering whether it should be their permanent residence because of New Jersey's income-tax rates, among the highest in the nation. Both own small businesses.

“We're kind of scratching our head,” said Morano, who has a Ph.D. in food science and a master's degree in business administration. “If you already own a residence outside of New Jersey, at some point in time, the differential is going to pay you to leave.”

Affordability issues facing businesses and residents in New Jersey will be the focus of an Oct. 2 forum at Raritan Valley Community College sponsored by the Somerset County Business Partnership along with the Courier News and MyCentralJersey.com. Sponsors also include the college, Allstate Insurance and Affinity Federal Credit Union.Republican gubernatorial candidate Chris Christie and Independent candidate Chris Daggett both are expected to attend. Gov. Jon Corzine also has been invited.


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Allstate suing N.J. county, district attorney over auto accident

Allstate Insurance Co. is taking a New Jersey county and its district attorney to court over an auto accident involving one of its policyholders.
The suit seeks $9,494 for a Jan. 23 accident where Cayuga County District Attorney Jon Budelmann was driving a county-owned vehicle on Interstate 80 in Warren County, N.J., when it struck another vehicle driven by an Allstate customer, according to the Auburn Citizen.
The complaint, filed Sept. 4, in Warren County, says the requested sum would cover losses to Allstate’s customer. The insurer also will seek court and attorney fees as part of the suit, according to the report.
Budelmann told the Citizen the other vehicle swerved into his lane, striking him as he returned from a New York State District Attorneys Association meeting in a car issued to him by the county to attend the meeting. The district attorney added that the newspaper’s inquiry marked the first he heard about the suit, and that he assumed the county’s insurance company handled the claim.


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High Point Launches Free 'Get Home Safe' Program

RED BANK, N.J., July 22 /PRNewswire/ -- High Point Auto Insurance, a group of New Jersey car insurance companies, announced today that it is launching a free, first-in-the-industry customer safety benefit called Get Home Safe. Get Home Safe will offer High Point policyholders up to $50 for a free cab ride to get home safely by avoiding dangerous driving circumstances. The insurance carrier aims to take an active role in saving lives on New Jersey roads by preventing accidents, injury and death as a result of unsafe driving. The initiative is getting significant recognition from New Jersey non-profits and advocates for road safety and serious injury prevention.

"We are a special company made up of special people. Our customers are special too; they are part of our family, so of course we want to keep them safe," says Gerry Wilson, CEO. "Insurance companies generally go to work after the accident happens, but we're trying to stop accidents before they even happen. That's more than just insurance. If we can prevent even one accident or injury with this benefit, we'll consider this a big success," continued Wilson.

"We are excited about the Get Home Safe benefit not only because it is the first of its kind, but because it gives us the opportunity to show our customers how much we truly care about their safety," says President and COO Jim Tignanelli. "Customers who find themselves in an unsafe driving situation can take advantage of this free benefit simply by submitting their receipt from a cab or car service. High Point will reimburse them up to $50 as part of our Get Home Safe benefit," explained Tignanelli.

"There are a host of reasons why calling a taxi is a safer option than driving," says Marc V. Buro, President of High Point subsidiary company Teachers Auto Insurance Company of New Jersey. "Maybe you are just too tired to operate your vehicle safely, or your car is unfit to drive. Maybe you had one more glass of wine with dinner than expected. Get Home Safe makes it easier for policyholders to choose to travel safely, without worrying about the risk of driving or the cost of a cab."

"We hope that other insurance carriers replicate this offer for their policyholders because it's such a socially responsible program. It speaks to our mission of engaging individuals to create safer streets in our communities," says Tom Everson, Executive Director of Keep Kids Alive Drive 25((R)), a national non-profit safety organization.

"In New Jersey alone, there are 1,800 traumatic brain injuries sustained in car crashes every year which lead to disability or death. Many of these crashes are attributed to falling asleep at the wheel, intoxication and distraction," said Wendy Berk of the Brain Injury Association of New Jersey. "Some drivers don't consider the possibility of surviving with a traumatic brain injury after a collision, and choose to drive under unsafe circumstances. It's interesting to think about how many of these crashes could have been prevented with a free taxi ride."

"Every day, lives are permanently changed by injuries sustained in auto-related accidents. We applaud High Point for its Get Home Safe initiative; it is a concrete step toward making New Jersey's roads safer for everyone - drivers, passengers and pedestrians," said Ann Wilson, Director of the New Jersey Coalition for Prevention, an advocacy program that provides education about decreasing the incidence of traumatic injury and disabling conditions.

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Appeals court approves, N.J. implements controversial PIP fee schedule

New Jersey insurance regulators implemented a controversial medical fee schedule for reimbursing doctors who treat auto injuries, after an appeals court ruled it legal.
A three-judge panel upheld the use of the fee schedule, but ordered state insurance regulators to review their use of the Ingenix database, owned by UnitedHealth Group, for setting rates.
The New Jersey Superior Court, Appellate Division, in Trenton, agreed on the database’s use with a group of health care providers who appealed the New Jersey Department of Banking and Insurance’s revision to the Personal Injury Protection (PIP) medical fee schedule in 2007.
The alliance of medical providers argued that the Ingenix database is designed, because it is operated for health insurance companies, to reduce reimbursement rates paid to doctors, thus causing its use in determining PIP rates to cut fees paid for service.
The court said forcing a departmental review of the use of the Ingenix database was preferable to the other two options: allowing use of a “flawed database” or acting in a way that “might eliminate a valid, but untested, resource for the use of the insurer,” according to the 50-page ruling.
But the court, ruling seven months after a court hearing on the matter, sided with regulators on the regulators’ effort to change rates, saying the health care providers who filed the appeal failed to “provide any documentation to support their claims,” according to the ruling.
“Given the lack of documentation and being mindful that the burden remains with appellants challenging an agency determination,” the judges ruled, “we are unable to conclude that PIP reimbursement rates do not reflect the reasonable and prevailing fees of 75% of the providers in the region.”
The department argued that the “reasonable and prevailing rates” were derived from reliable data, including the Ingenix database of what is actually paid for coverage, and the Consolidated Services Group, a vendor hired by insurers to evaluate and approve certain treatment and care paths for PIP patients prior to services being provided.
The court ruled that the department set the schedule using considered and informed judgment, but added that while “many elements of the process can be criticized, ultimately, the entire scope of the process must be assessed.”
New Jersey officials say these PIP fee schedule changes – first proposed in 2005, then modified based on comments and concerns in 2006 – are critical to reining in higher insurance costs.
New Jersey has the highest auto insurance costs in the nation. The first PIP fee schedule was put into place in New Jersey in 1991, but more serious reform efforts, seeking to stem years of fast-rising premiums for vehicle owners, were undertaken over the last six years.


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PIP Medical Fee Schedule Upheld By N.J. Appeals Court

A New Jersey appeals court has ruled that state officials can go ahead and implement a controversial medical fee schedule for auto injuries that doctors charged was too low.

The decision by a three-judge panel of the New Jersey Superior Court, Appellate Division in Trenton upheld a New Jersey Department of Banking and Insurance revision of the Personal Injury Protection (PIP) medical fee schedule that was challenged in 2007 by a group of health care providers.

In ruling that the schedule could go forward, however, the court told the department it must review its use of a private provider’s data base it contracted for to help it set rates.

Health care providers had argued that the data provider Ingenix was owned by medical insurer United Health Care, which has a goal of reducing physician reimbursement.

Ed Rogan, a department spokesman said the rates went into effect today. He said the department had referred providers to Ingenix as a guide to set rates that were not on a list of fees the department set for 1,000 common medical procedures.

Among insurance trade groups that backed the department’s fee schedule, the decision was hailed by Richard Stokes, counsel for the Property Casualty Insurers Association of America (PCI).

“This long-awaited ruling will enable New Jersey to move forward with an important reform to the PIP reimbursement system which is expensive, inefficient and anti-consumer,” he said.

Implementation of the PIP medical fee schedule, he added, is “an important component in controlling costs in New Jersey.  While the state has made progress in addressing many of the conditions that contribute to higher auto insurance costs, medical care continue to be expensive.  The new PIP medical fee schedule will put in place a system that is fairer and ultimately delivers cost savings.”

The department began work to revise the rates for the state’s no-fault auto insurance system after finding “an increasing difference between fees billed by health care providers and the fees actually accepted by them as payment for services rendered."

The Department noted that the amount charged on the Explanation of Benefits (EOB) form was "almost always higher than the payment to the provider by the health benefit carrier."

Under New Jersey’s current no-fault statute, the department was mandated to develop a schedule incorporating the reasonable and prevailing fees of 75 percent of practitioners within a region.

The move to revise the rates, the court noted, provoked protests from “surgeons and emergency care physicians, who threatened to stop treating auto accident victims due to the low and, in their view, arbitrary fees for PIP services.”

But the court said it could rule against the decision of the department only if it was “arbitrary, capricious, unreasonable or violated express or implied legislative policies.”

The health care providers who sued to block the rates, the court, found had failed to provide enough specific data on rates in their challenge.

The panel ruled that the Department had made a considered and informed judgment in setting the schedule, adding that while “many elements of the process can be criticized, ultimately, the entire scope of the process must be assessed.”

“We conclude that appellants have not met their burden of showing that the methodology for setting the PIP reimbursement rates was flawed or that the rates set violated the statutory mandate to represent the reasonable and prevailing rates of 75 percent of the practitioners in the area,” the court said.

A call to the New Jersey Medical Association was not immediately returned.

New Jersey Banking and Insurance Commissioner Neil N. Jasey said in a statement his department is pleased the decision affirmed “many years of work along with many interested parties and the provider community in developing this fee schedule,”

“PIP costs have been rising dramatically, which has been a major factor pushing auto insurers to seek rate increases recently. The implementation of this fee schedule will exert downward pressure on auto insurance rates and benefit New Jersey’s consumers,” continued Mr. Jasey.

“The fee schedule helps contain rapidly rising health care costs by setting reasonable limits on insurer payments for medical services. It also reduces costly and time-consuming payment disputes by preventing unnecessary court and arbitration proceedings,” he concluded.

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New Jersey to Implement Fee Schedule for PIP Payments

The New Jersey Department of Banking and Insurance can legally implement a fee schedule for doctors who treat patients with injuries covered through Personal Injury Protection (PIP) coverage, a New Jersey Court has ruled.

The fee schedule, which some doctors say is too low, is tied to recent reforms in the state's personal auto insurance market.

The fees were determined by state regulators based on a prevailing rate of 75 percent of doctors within a given region. The use of the schedule, however, has been held up in litigation since 2007, following a suit by the Medical Society of New Jersey, a trade group for doctors, which argued that the fees were too low. They also challenged the use of a health-insurer owned database system to determine the rate.

The court, in ruling for against the doctors did enjoin the use of that database, perhaps setting the stage for further wrangling over rates.

Insurers groups, however, such as the Property Casualty Insurers Association of America (PCI) supported the use of the fee schedule and are trumpeting the court's decision as a victory for reform.

"This long-awaited ruling will enable New Jersey to move forward with an important reform to the PIP reimbursement system which is expensive, inefficient and anti-consumer," said Richard Stokes counsel for PCI. "Implementation of the PIP medical fee schedule is an important component in controlling costs in New Jersey. While the state has made progress in addressing many of the conditions that contribute to higher auto insurance costs, medical care continue to be expensive. The new PIP medical fee schedule will put in place a system that is fairer and ultimately delivers cost savings."

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