Maximus, the private company that the state of California contracts to conduct Independent Bill Review (IBR) to resolve workers' comp payment disputes, has acknowledged an underhanded payer tactic that providers have long experienced.

Engaging in what daisyNews calls "IBR Chicken," the payer refuses to reimburse the provider's bill correctly, then denies the provider’s subsequent Second Review appeal disputing the incorrect payment. This forces the provider to pay $195 to request IBR.

Only after the provider requests IBR does the payer finally remit the correct payment, before Maximus even takes up the dispute.

In an email to daisyBill, Maximus acknowledged this unfortunate pattern, which forces providers to spend significant sums and compile extensive documentation to receive payment (emphases ours):

"While it is unfortunate that some claims administrators are waiting until after the filing of an IBR application to properly pay some of their bills, there is unfortunately nothing in the regulations that prevents claims administrators from making such belated payments, nor are providers automatically entitled to a refund of their full IBR filing fee or to penalties and interest in such cases.”

The state's independent reviewer acknowledged, in writing, that payers are gaming the system. IBR Chicken is real. Unfortunately, Maximus is powerless to stop it because of the lopsided regulations promulgated under the former Administrative Director of the California Division of Workers' Compensation (CA DWC).

How to Play IBR Chicken

IBR is providers' last resort when disputing incorrect reimbursement (and payers know it).

When a payer denies or underpays a bill, the provider must submit a Second Review appeal within 90 days; failure to do so allows the payer to keep the disputed amount by default. If the payer denies the Second Review appeal for any reason (or no reason), the provider’s only option is to, within 30 days, pay $195 to request IBR. Maximus then reviews the dispute and issues a binding determination.

Under California Labor Code Section 4603.6, if Maximus determines that the payer owes additional reimbursement, the payer must also reimburse the provider for the filing fee. However, payers are using IBR to stall payment to providers and, arguably, to avoid paying these bills.

For payers, IBR Chicken works as follows:

Step 1: Deny the bill. The payer issues an Explanation of Review (EOR) that denies or underpays the bill, often with inapplicable, invalid, or nonsensical reasoning. That's because the reasons don't matter: if the provider fails to submit a timely Second Review appeal, the payer retains the disputed amount by default.

Step 2: Deny the Second Review appeal. The payer denies the provider's Second Review appeal, often using the same (faulty) reasoning. If the provider fails to timely request IBR, again, the payer keeps the disputed amount by default.

Step 3: Pay the disputed amount only if the provider pays the $195 fee and requests IBR. There's no downside to waiting and seeing if the provider will request IBR. If the provider fails to timely request IBR, the payer keeps the disputed amount.

Step 4: Tell Maximus the provider's bill is paid in full. If the provider pays the fee and requests IBR, pay correctly and inform Maximus that the dispute is "ineligible" for IBR because the bill is paid. If the provider withdraws the request or the dispute is deemed ineligible, the payer is relieved of their obligation to refund the IBR filing fee.

Step 5: Refuse to reimburse the provider's $195 IBR fee absent a Workers’ Compensation Appeals Board (WCAB) order. In a shockingly common practice, payers often ignore California law and fail to reimburse providers for the filing fee after Maximus rules in the provider’s favor, forcing providers to retain legal counsel to pursue a WCAB order.

As Maximus has now confirmed, nothing in state regulations bars payers from playing this cynical game.

A Game Payers Can't Lose

For payers, IBR Chicken is a can't-lose. Plus, it scales nicely to encompass many bills.

Every bill a provider sends is an opportunity to run the same playbook. In the best-case scenario for the payer, the provider taps out, and the payer keeps the reimbursement owed. In the worst-case scenario, the payer coughs up exactly what they always owed (and not a penny more). The only losers are the providers.

daisyNews has documented many examples of payers engaging in IBR Chicken, including:

• Gallagher Bassett denied payment for Medical-Legal services, citing multiple incoherent reasons, including the state's medical fee schedule (which does not apply to Medical-Legal services). When the provider requested IBR, Gallagher Bassett paid immediately, then was aghast that the provider would request IBR, claiming that "a phone call would have resolved this.” We do not advise providers to accept non-binding promises of correct payment over the phone.
  
• Farmers Insurance withheld $277.50 from a Medical-Legal evaluator's bill by improperly denying a modifier. After two denials, the provider requested IBR. Farmers paid before Maximus reviewed the case, but failed to reimburse the provider for the IBR filing fee.
  
• Helmsman denied payment for thousands of dollars' worth of medical record review until the physician requested IBR. To its credit, Helmsman included penalty and interest payments when it finally "chickened out," but failed to reimburse the provider for the IBR filing fee.
  
• The City of Los Angeles denied payment for Evaluation and Management services, citing insufficient documentation, and denied the provider's Second Review appeal. When the provider requested IBR, LA paid the bill. When the provider refused to drop the IBR request, LA's bill review vendor, MedData, threw what we can only describe as an epic hissy fit.

How the CA DWC Enables the Game

The CA DWC has the authority to penalize payers for improper payment practices. Historically, it has not used that authority.

As noted above, the CA DWC has not enforced the requirement to reimburse the IBR filing fee when the provider prevails, nor has it penalized payers for belated payments, declaring that mandatory penalties and interest are "self-executing."

In 2025, providers collectively paid over half a million dollars in IBR filing fees. Maximus ruled in the provider's favor 82% of the time, meaning that providers spent the overwhelming majority of that money correcting payer screwups for which the state never held payers accountable.

In effect, the CA DWC has created a system that financially incentivizes payers to incorrectly reimburse providers. Maximus can see the abuse, but as long as the CA DWC's payer-friendly regulations remain in effect, payers will keep playing IBR Chicken.

The CA DWC recently welcomed new interim leadership, Acting Administrative Director Nicole Richardson. With that change comes an opportunity to course-correct. The abuse and the evidence proving it are available. Stopping it is simply a matter of regulatory will.

The CA DWC can address IBR Chicken with three concrete steps:

1. Reveal the names of the payers on IBR Final Determinations, which are available to the public on the CA DWC website.
2. Enforce the Labor Code requirement for payers to reimburse the IBR filing fee when Maximus rules in the provider's favor.
3. Impose meaningful penalties on payers that reimburse correctly only after the provider requests IBR.

For too long, the CA DWC has upheld a double standard of compliance in which providers who break the rules face automatic consequences, while the system defaults to the payer's advantage. We are cautiously optimistic that new agency leadership understands the urgency of taking a better approach.

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