Once again, daisyBill has filed a formal Audit Complaint with the California Division of Workers’ Compensation (CA DWC) against Sedgwick Claims Management, Inc.

The Third-Party Administrator (TPA) has continued its years-long practice of denying valid, compliant Second Review appeals submitted by providers to dispute payment denials and reductions—by incorrectly claiming the appeals are “duplicates” of the original bills.

As we reported previously, since January 2019 45% of the Second Review appeals denied by Sedgwick were denied as so-called “duplicates.” Today, daisyBill reported 5,415 new instances to the CA DWC, bringing the total reported number of these violations to 27,570. 

We continue to file Audit Complaints despite the fact that the CA DWC has taken no action to curb Sedgwick’s abuse. Instead, the CA DWC has repeatedly ignored Sedgwick’s apparent business practice of failing to comply with state laws and regulations.

These complaints, and articles exposing Sedgwick’s behavior, reveal the CA DWC's abject failure to do its job and protect California providers who are still—somehow—willing to treat injured workers.

​​Unmistakable Second Review Appeals

Sedgwick’s improper denial of 27,570 Second Review appeals as “duplicate bills” is indefensible.

Even claims administrator defense attorneys have noted the implausible rates at which Second Review appeals are denied in this manner, citing the volume of Audit Complaints against an unnamed claims administrator that (based on the exact number of complaints) can only be Sedgwick.

The CA DWC imposes strict requirements on providers submitting a Second Review appeal, to which every daisyBill client adhered in submitting the 27,570 appeals improperly denied by Sedgwick. Each appeal was submitted using DWC Form SBR-1 (below), the unmistakable form used for Second Review appeals since 2014.

Each appeal also included the Explanation of Review (EOR) Sedgwick sent in response to the original bill. An example is below:

Finally, per the instructions of the CA DWC, providers resubmitted the bills with required modifications unmistakably identifying them as appeals rather than “duplicates”:

1. Condition Code Qualifier BG and Condition Code W3 in Box 10d
2. Resubmission Code and Original EOR Reference Number in Box 22
3. “RECONSIDERATION!” in Box 19

Sedgwick’s (Long) History of Provider Payment Abuse

In all 27,570 instances, rather than processing the compliant Second Review appeal, Sedgwick denied the appeal as a “duplicate bill.”

For posterity, below are daisyNews articles dating back to 2019 and as recently as June 2024, exposing Sedgwick’s improper appeal denials and publicizing the Audit Complaints filed with the CA DWC:

• Claims Admins Deny Second Review Appeals as Duplicate Bills 7/2/2019
• Sedgwick Denies Second Review Appeals as "Duplicates" 7/12/2021
• Data: Sedgwick Fails to Process 16,261 Second Review Appeals 6/28/2022
• Audit Complaint: Sedgwick 16,261 Noncompliant Second Review Responses 6/28/2022
• Sedgwick: 49% of Appeals Incorrectly Denied 1/29/2024
• Sedgwick Denies/Ignores Hundreds of Appeals 6/10/2024
• Sedgwick: 17,225 Audit Complaints Sent to DWC 6/14/2024

CA DWC’s (Long) History of Ignoring Provider Payment Abuse

daisyBill has filed Audit Complaints with the CA DWC reporting Sedgwick on 14 occasions. In addition to incorrectly denying Second Review appeals as “duplicates,” Sedgwick consistently fails to send providers electronic EORs in response to electronic bills, as state law requires.

This week’s Audit Complaint for Second Review appeals brings Sedgwick’s total number of reported violations to 212,796.

The CA DWC is empowered to address Sedgwick’s non-compliance—but chooses instead to abdicate its enforcement responsibilities.  Labor Code Section 129.5(a) allows the CA DWC to impose penalties on Sedgwick for failure to pay the “reasonable cost of medical treatment” or to “comply with any [CA DWC] rule or regulation.”

The Labor Code instructs the CA DWC to impose penalties based on several factors, including the “history” and “frequency” of violations. As this article and our data demonstrate, there is more than enough “history” and “frequency” of violations to justify significant penalties against Sedgwick.

Sedgwick has been egregious in its long-standing violation of legal requirements, costing providers millions. The CA DWC cannot be relied upon. Injured workers need providers willing to treat them, and those providers cannot be expected to shoulder the financial burden of a TPA’s non-compliance.

Below is the full text of the latest Audit Complaint. We implore the CA DWC to fulfill its designated role. Failing that, we ask California legislators and other stakeholders to take notice. 

Audit Complaint

To: [Redacted]@dir.ca.gov

Subject: Sedgwick Non-compliance: Second Reviews Denied as Duplicate - 5,415 bills

Hello [Redacted],

Below is an Audit Complaint reporting credible data for workers’ comp e-bills submitted to Sedgwick by daisyBill providers from May 1, 2024, through October 31, 2024, showing that Sedgwick Claims Management Services, Inc. incorrectly denied 5,415 Second Review appeal submissions as duplicate bills.

Each provider's request for a Second Review that Sedgwick denied as a "duplicate bill" included the following:

1. Condition Code Qualifier BG and Condition Code W3 in Box 10d of the CMS-1500,
2. Resubmission Code and Original EOR Reference Number in Box 22 of the CMS-1500,
3. DWC Form SBR-1, and
4. Explanation of Review (EOR) Sedgwick sent to the provider in response to the original bill.

Despite providers meticulously complying with DWC Second Review regulations, Sedgwick improperly denied 5,415 (48%) Second Review appeals as duplicate bills.

Sedgwick is circumventing California regulations mandating that Sedgwick respond with a final written determination on each item or amount in dispute by issuing a compliant Explanation of Review.

As you know, if a provider fails to submit a timely Second Review appeal, they forfeit any reimbursement owed. However, Sedgwick suffers no financial consequences for failing to process providers’ Second Review appeals compliantly.

Previously, daisyBill filed 22,155 Audit Complaints with the DWC to report Sedgwick’s noncompliantly denying Second Review appeal submissions as duplicate bills. daisyBill has filed 27,570 instances to report Sedgwick’s clear business practice that harms California providers.

I’ve attached a CSV list containing 5,415 e-bills providers submitted where Sedgwick incorrectly denied the Second Review appeal submission as a duplicate. The attached CSV list includes the following columns:

• Column L: [Bill] Transmission Date
• Column AO: Patient Name
• Column AP: Claim Number
• Column BA: CARCs - Sedgwick incorrectly denied the Second Review appeal submission as a duplicate bill by returning CARC 18 in the 835 (e-EOR).

The table below[*] shows that Sedgwick’s Second Review processing non-compliance increased from May 2024 to October 2024 compared to May 2022 to April 2024.

 *Readers can view the table referenced in this daisyNews article

We can’t enforce the law—but we can make billing for workers’ comp faster, easier, and more accurate. Request a free demonstration below.

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