Massachusetts Auto Body Shops Fight for Better Reimbursement Rates by Ed Attanasio
Collision repair industry leaders, along with a row of tow trucks, paraded outside the Massachusetts State House on May 18 to demand action on two proposed bills before lawmakers that would raise the state’s lowest-in-the-nation reimbursement rates. House Bill 1111 and State Bill 709 are an “Act to establish a minimum reimbursement rate to insurance claimants” and are currently being argued in a joint committee. According to supporters, both bills would set the rate for repair at approximately $78 per hour for reimbursement. The current reimbursement rate is $40 per hour, which, according to the group, is the lowest in the nation and just $10 more than it was in 1988. Both bills have until June 30 to clear the committee, after which the legislature would have just a month before the end of the session to approve and send them to Gov. Char-
lie Baker’s desk. AASP-MA Executive Director Evangelos “Lucky” Papageorg is excited about the two proposed bills that might actually level the playing field. He offered a little history on House Bill 1111 and State Bill 709. “In 1988, insurance reform led to the reimbursement rate being at $30 an hour, which made Massachusetts have one of the highest-paid reimbursement rates in the country and best reimbursement rates,”
A vocal group of more than 60 people gathered outside the Massachusetts State House to demand action on two proposed bills currently before lawmakers. Credit: AASP-MA
Papageorg said. “But, once the Insurance Reform Act went through,
the reimbursement rates actually dropped from $30 to $28 per hour for about five years, based on contractual arrangements that shops had with the insurance companies. Today, they are at $40—35 years later. I wouldn’t call that a jump in rates, to say the least. “House Bill 1111 and State Bill 709 are essentially identical bills that take away the ability for insurance companies to stagnate the rates in the future, which is what they’ve effectively done,” Papageorg said. “It allows the insurance industry and body shops to be able to plan ahead as far as what they can anticipate for expenses and income, because the reimbursement rate will keep pace with the consumer pricing index here, with the language in these bills.” Papageorg has witnessed the results of not providing a livable wage to body technicians, causing many to exit the industry with prejudice, he said. “One of our members and a top body shop operator, Brian Bernard,
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has lost several of his top techs to other shops or to the industry altogether,” Papageorg said. “He lost several technicians over the last few years to other industries in neighboring states because the surrounding states are paying a higher rate. “One vocational school teacher told us recently that students get into collision repair because it’s cool and they love it. It’s exciting. It’s constantly changing,” Papageorg continued. “But all those things don’t pay the bills. The collision repair students don’t stay with it, and those who do leave the vocational schools and get into a collision repair shop don’t last very long because they can’t make a decent living. “These bills have the potential to rectify a situation. I can’t find any other industry or vocation out there that can say they have only increased their skills by only $10 an hour over the last 35 years,” Papageorg said. “Insurance companies are reporting record-breaking profits, and yet they’re still applying for increases in their premiums, and some of their
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