It helps to know the particulars of payment overrides
By Janice Salmon, JustPressOne
The textbook definition of authorization is “the raising of revenue and the authorization of spending, paying over and above your negotiated rate.”
In the world of in-home appliance service, “authorization” is an override to pay a service provider more to repair a product under warranty or to pay for a repair that is out of warranty. There are also instances in which a manufacturer may even issue an authorization for a product that is covered by a third-party contract or a whole-home warranty.
Authorizations are also given for in-warranty repairs if the authorizing entity agrees to pay for such things as additional mileage, bulky parts freight costs, a two-person job, several days out of warranty, customer education, or unit damages.
There are also so-called special authorizations, which are issued when manufacturers have reasons to pay certain fees for repairs that are out of warranty. When this happens a service provider is supplied with an authorization number that will allow a claim to be processed as warranty. All authorizations must be on the warranty claim form for payment. The codes in the authorization number vary but here are a few examples of codes and their meaning:
P = Parts
L = Labor
PL = Parts & Labor
LT = Labor & Travel
PT = Parts & Travel
PLT = Parts & Labor & Travel
1 = Pays Single call Rate
1.5 = Pays one and one-half labor rate
2 = Pays two times labor
You should also know if the product manufacturer has exceptions or specific terms.
Here is just one of many examples used by Whirlpool: PAD W03XXX0APL1. This authorizes parts and labor at the standard rate, with PAD standing for policy adjustment.
In ServiceBench, any automated modification to what would normally be paid on a claim is a pre-authorization. Whirlpool makes the distinction between modifying what would normally be paid on a warranty claim as per the servicer’s negotiated rates (PAD) vs. pre-authorizing service that would not normally be paid under warranty.
Let’s take a closer look at pre-authorizations. If a service provider is working with an extended warranty or home warranty company, they must be pre-authorized for the initial visit to the customer’s home. These authorizations are called by many names, including service order number (SWO#), dispatch number, call number and work order # (W.O. or WO#).
Upon completion of the initial visit you would follow one of these processes:
- If the initial authorization amount is enough to cover the entire repair, especially when no parts are required, then you can file your claim upon completion using the authorization number.
- If the initial authorization is for the service call and diagnostic fee only, then you must provide a fixed price quote to be authorized for the total repair amount. This process differs by payee, and requires either calling the service administrator or requesting an authorization online (for example, under the Service Calls tab on ServicePower).
As a service provider, you’d better know the answers to the following questions before filing claims with authorizations or chances are you’ll either get paid the incorrect amount or not get paid at all:
How much is the initial repair covering?
What is your standard appliance rate for the service call and diagnosis of the product?
How do you request additional money to cover the repair?
How and where do you submit your claim for payment?
What authorization(s) numbers or codes must be added to the claim for payment?
Do you need to indicated the total time spent by the technician that performed the service?
Does the authorization cover multiple appliances?
If your company performs warranty services for multiple companies, it’s time to get out their authorized service provider guidelines and review their authorization procedures, as they vary by service administrator.
Janice Salmon is the founder and CEO of JustPressOne, a business process outsourcing company and AVB partner that provides claims administration services for independent servicers and self-servicing dealers in the home appliance industry. For more information visit JustPressOne.com.
