Not everything in California workers’ comp is complicated.

For example: when a provider chooses to bill electronically for medical services, California regulations require the claims administrator to send the provider an electronic Explanation of Review (e-EOR) with payment (or denial) information. It’s easy to understand the reasons for mandatory e-EORs:

• e-EORs close the loop on the transaction by automatically posting payment to the e-bill in the provider’s e-billing system. This makes revenue management easy for the practice, vastly reducing the time, person-power, and administrative resources necessary to treat injured workers sustainably.

• e-EORs offer instantly verifiable proof of timely (or untimely) payment.

When claims administrators fail to return e-EORs, it places an undue administrative burden on the practice, which must manually enter the data from a paper EOR into the e-billing system. Failure to send an e-EOR is a kind of theft of practice resources, including the time and effort that would otherwise be devoted to the care of patients.

As a companion to our 2022 e-bill acceptance report card, below we list the claims administrators that consistently adhered to the e-EOR requirement last year — and the claims administrators that failed to adhere to the requirement in contravention of California regulations.

Meanwhile, in 2022, the Division of Workers’ Compensation (DWC) reportedly went on a record-breaking provider suspension spree. Where is the commensurate concern with enforcement when payers break the rules? It’s nonexistent, allowing claims administrators to game California workers’ comp with impunity.

The irrefutable data below exposes claims administrators’ blatant disregard for payment law, and demonstrates California’s lopsided approach to payer and provider non-compliance.

The Good News: Top CA Claims Admins by e-EOR Compliance

First, the 2022 winners.

In 2022, daisyBill providers submitted 1,571,375 California workers’ compensation medical treatment bills to 295 claims administrators, plus the federal Department of Labor (DOL).

The data below list the 25 top claims administrators that adhered to California’s e-EOR requirement, and returned an e-EOR at least 98% of the time; i.e. these claims administrators failed to return an e-EOR 2% or less of the time in all of 2022.

Claims administrators are listed in ascending order by ‘e-EOR Missing %,’ i.e. the percentage of e-bills for which the claims administrator failed to send an e-EOR. This list includes both large and small claims administrators, proving that all claims administrators are capable of adhering to the e-EOR requirement, 100% of the time.

Note that The Zenith and Sentry Insurance so rarely failed to return an e-EOR in 2022 that, given the volume of e-bills submitted, both claims administrators’ non-compliance rate was statistically 0%. Kudos!

Note also that while California’s State Compensation Insurance Fund (SCIF) maintained a 1% non-compliance rate, the sheer volume of e-bills submitted to SCIF means that SCIF failed to return an e-EOR for over a thousand e-bills — proof that larger claims administrators bear a commensurately greater responsibility to pursue 100% compliance.

The Bad News: Bottom CA Claims Admin by e-EOR Compliance

And now, the (long) list of 2022 losers.

The data below list the 78 claims administrators that failed to adhere to California’s e-EOR requirement (some much more consistently than others). The companies on this list failed to return at least 100 e-EORs in 2022, and the count of missing e-EORs represented more than 2% of the e-bill volume sent to the claims administrator.

Claims administrators with a non-compliance rate of 10% or greater are bolded.

In total, these claims administrators received 1,210,757 e-bills from daisyBill providers, and failed to return 180,958 e-EORs — a collective 15% non-compliance rate. The administrative cost incurred by providers can be calculated under the following assumptions:

• It takes roughly 2 minutes to post a paper EOR (receive and open envelope, locate e-bill in billing system, manually post the payment information, upload the paper EOR to the billing system).
• Multiply 2 minutes by 180,958 missing e-EORs; that’s 361,916 minutes wasted to post paper EORs.
• Divide 361,916 minutes by 60 minutes; that’s 6,032 administrative hours wasted, simply to work around the non-compliance of 78 claims administrators.

The above analysis of provider administrative costs assumes these claims administrators actually sent a paper EOR, rather than simply ignoring the bill — not always a safe assumption.

Two honorable mentions:

• AmTrust North America closed 2022 with an overall non-compliance rate of 48.1% — not pretty. However, that reflects an incredible turnaround over the course of the year. AmTrust failed to return e-EORs 99.5% of the time in January, but by December AmTrust’s non-compliance rate plummeted to just 4%.
• Berkshire Hathaway also made significant strides, from a January non-compliance rate of 40.3% to a low of 2.3% in July, before relapsing to a December rate of 17.3%.

Coming in first (or really, dead last): Sedgwick Claims Management Services, the largest claims administrator by bill volume — and one of the most notoriously non-compliant companies ever to saddle California providers with unwarranted, costly payment friction.

In 2022, Sedgwick received over 61,000 e-bills from California providers that Sedgwick either failed to pay, or non-compliantly answered with a paper EOR.

The data above produces the same conclusion as our recently released data on e-bill acceptance. If some providers are slow to embrace e-billing for workers’ comp, it’s not because they enjoy wasting time and resources on analog revenue management. It’s arguably because California is not doing enough to ensure that if providers play ball, claims administrators will too.

Provider fraud and other crimes are clearly not tolerated; the DWC suspended more providers in 2022 than in any year since 2017. Yet this 15%+ payer non-compliance rate stands.

California legislators and regulators, this is what’s holding back the statewide transition to faster, more efficient statewide e-billing. Employers, this is how your workers’ comp premiums are being wasted. Injured workers, this is what’s driving providers from the system and making it unnecessarily difficult to find care.

daisyBill tracks responses to your bills, appeals, and RFAs — so your practice knows when payers break the rules. Click below to learn more, or request a demonstration.

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