You’re Billing for Fire Remediation Projects Incorrectly… and It’s All Xactimate’s Fault!!!

What category do you use when billing for cleaning and remediating fire projects with Xactimate line items? There are a few options. Some use the Xactimate category DMO or CLN. Others use WTR and HMR. Is there a correct category for these fire projects when using Xactimate line items? It depends on who you ask.

The challenge is when a contractor uses HMR line items and the adjuster requests them to revise the line items to DMO, what justification is there for either position? Are there line items for demoing entire rooms in DMO? Yes. Are the materials being removed considered hazardous? Possibly so. Are those hazardous materials wet? Maybe. So, how can this be resolved?

Table of Contents

1. Justify Your Fire Remediation Xactimate Line Items
2. Perform the Work
3. Use the Accurate Xactimate Line Items to Create Invoice
4. Do Your Part to Make a Change

Step 1. Justify Your Fire Remediation Xactimate Line Items 

An important key to estimating is not allowing line items to determine what the right job is. Instead, just do the right job and bill accordingly. For example, the most important step in any restoration project is the safety of the residents and employees on site. According to OSHA regulations, “The employer shall assess the workplace to determine if hazards are present, or are likely to be present, which necessitate the use of personal protective equipment (PPE).”This hazard analysis must be performed by a qualified or competent person. When dealing with fire remediation, bringing in an Indoor Environmental Professional to determine what hazards are present is the best option. They don’t necessarily need to write a protocol. But how can you know what steps to take to clean the building and contents (and what to bill) if you don’t even know what potential contaminants are on site.

For tips on handling pushback from an adjuster for requesting an IEP, come to our Estimating and Negotiating course

Step 2. Perform the Work 

If the IEP finds evidence of hazardous materials (which on a fire project is certainly possible), then you will know what precautions should be taken, what PPE shall be worn and how to handle the removal of materials. Handle the project accordingly if the IEP does not find evidence of hazardous contamination.

Documentation throughout the remediation process will be important. Taking pictures of the necessary PPE, respirators, cleaning process, etc. will provide further justification for your invoice. 

The billing portion is just a history of what you did. So, figure out what to do, figure out the justification, and then document what you do.

If you have questions on how to clean and remediate fire restoration projects, book a IICRC Fire and Smoke Damage Restoration Technician (FSRT) here.

Step 3. Use Accurate Xactimate Line Items to Create Invoice

Many would say this step is the issue. Xactimate line items aren’t sufficient. They aren’t specific to what we are trying to accomplish. As a matter of fact, the entire program is trash…. In my experience, issues with the first two steps tend to show up on step 3. Then, employers blame either the estimator or the estimating software. Want proof?

If you handle a fire project and use HRM line items, at this point, you should expect to explain the category selection. When an adjuster or third-party requests justification, what is your response? What justification can you provide? Not just quotes from OSHA or “my IICRC instructor said”… but what facts about your specific project can you provide? That justification has next to nothing to do with your estimator (unless you gave them justification and they didn’t provide it in the billing package). Not providing justification also has nothing to do with Xactimate’s definition of what HMR is. Providing proof that you followed protocols and actually followed the OSHA standards has nothing to do with the Xactimate line items either. Instead, completing steps 1 and 2 properly can either make or break your negotiations.

Imagine how a conversation would go if you have documentation from a third party that states a hazardous substance like benzopyrene was found when testing was done. At that time, you presented it to the adjuster and your client and gave options as to how you planned on restore the home. Finally, you decontaminate the home and bill accordingly. By providing justification at the right time, do you think your negotiations would go differently (sometimes)?

But how do you decide what Xactimate line item category to use? And could that process make it even easier?

Step 4. Do Your Part to Make a Change 

When probed, Xactimate stated that they’ve looked at creating a fire category in the past. They said they would look at this issue again in the future. The reason they haven’t made this change was because “Fire, smoke, soot damage, residues, coverages, etc. can vary a lot depending on the extent and/or type of fire damage which may or may not reflect a particular line item’s assumptions.” They also mentioned that you should “determine what is appropriate for the specific job and adjust the modifications.” That would mean based on the specific job, using HMR line items or adjusting labor trades to HMRT, could be appropriate. 

If you don’t know how to adjust labor trades in Xactimate, we have a video to help in the Estimating Pro Series on ReetsTV

The other part of making a change is trying to adjust things permanently. How can you do that? Let Xactimate know, with facts, why a fire category should exist. Or why the HMR description, could add regulated items like asbestos, mold, lead and carcinogenic particles of incomplete combustion. 10 years ago, how many companies were testing for asbestos on projects they were performing demo on? A change has started once the facts were established. Our industry needs to establish a standard practice of testing fire projects. The history has been there for many years! But the more we test, the more evidence we build, the more billing practices will adjust. 

If we change the standard of care on fire projects, it will cause a change to the billing practices. How? After evidence is gained, it can be presented to adjusters if there’s pushback. We can also send this information to Xactimate. Consider emailing pricing@verisk.com. Xactimate stated, they don’t hear this is an issue very often. So they haven’t made a change. Well, if you think it’s an issue. Let them know it. The more people that tell them it’s an issue, the higher the chances this will get addressed. Consider joining an association like Restoration Industry Association. They advocate in behalf of restoration contractors in to both government officials but also companies like Xactimate.

Do you want a change for the industry when it comes to executing and billing for fire remediation? We owe it to the wider community of restoration contractors. Your employees and their families are depending on you.

We can make this change together! 

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