In most states, payers must respond to healthcare providers’ workers’ comp treatment bills with remittance advice in the form of an Explanation of Review/Benefits (EOR/EOB) that includes all relevant payment details. This document allows practices to address denials and adjustments and keep reimbursement details in order.

The required information for a compliant EOR/EOB may vary slightly from state to state. At a minimum, the required information includes the billed line items and amounts charged, the date of service, and the reasons for any denials or adjustments.

Apparently, Cannon Cochran Management Services, Inc. (CCMSI) acts as if EOR/EOB requirements are optional.

The Third-Party Administrator (TPA) issued multiple payments with inadequate remittance advice documents that violate state payment requirements. Even more distressing, these documents make it difficult or impossible for the provider to even determine which bill the reimbursement applies to, let alone whether the payment amounts are correct.

Worse, the payments are in Virtual Credit Card (VCC) form, which imposes processing fees on the practice for treating injured workers.

We strongly urge any provider who receives a CCMSI payment like the ones below to immediately opt out of receiving VCCs and demand payment and remittance advice in accordance with their state’s requirements.

Always Say ‘No’ to VCCs

A California daisyBill provider billed CCMSI for the treatment of a Core Specialty employee. In response, the provider received the documents below from payment processing vendor ECHOBILT.

On the page to the left, ECHOBILT claims that VCC payments are “a fast, secure, and convenient way to get paid.”  This ignores some key facts:

• States already mandate legal payment deadlines for workers’ comp treatment.
• Payment for electronic bills (e-bills) is generally rapid, regardless of the payment method (daisyBill providers get paid in less than 10 days on average).

Worse, and as daisyBill has warned for years, VCC transaction fees can range from 2% to 7% of the total payment amount.

Because VCC payments are considered higher-risk as “card not present” transactions, the fees tend to be on the higher end. Those fees benefit credit card processors, VCC vendors, and, in some cases, the payer (through rebates or revenue sharing), all at the provider’s expense. The benefits to the practice: ZERO.

ECHOBILT’s letter includes instructions to opt out of VCCs, which every provider should follow.

According to ECHOBILT, providers must visit enroll.tenb.com, enter the ‘Draft Number’ from the remittance document and the provider’s Tax ID, and follow the steps provided to select a preferred payment method (ideally, one that doesn’t incur transaction fees).

ECHOBILT’s Failure = CCMSI’s Non-Compliance

The page on the right is what ECHOBILT apparently considers an adequate EOR. It is laughably non-compliant with California Division of Workers’ Compensation (CA DWC) regulations, including only the following information:

• Draft Amount
• Payment Date
• Draft Number
• Employer Name (“Client”)
• Claim Number
• Patient Name

This omits dozens of required data elements, as outlined in the CA DWC Medical Billing and Payment Guide. Moreover, the information is not enough even to identify the bill ECHOBILT is supposedly paying on CCMSI’s behalf.

Adding insult to injury, this farce of a remittance document came in response to an electronic bill (e-bill).

California law mandates that all payers respond to e-bills with an electronic EOR (e-EOR) in the required X12 837 format, including all data elements necessary to automatically post and update the provider’s e-billing system. It’s possible CCMSI also sent an e-EOR in response to the e-bill; however, we cannot determine which e-bill this payment applies to, given the EOR’s abject lack of information.

This is not the only example; another daisyBill client received a similar response from ECHOBILT after sending an e-bill to CCMSI for the treatment of a Bowlero Corp employee.

Under California law, CCMSI is directly responsible for ECHO’s failure. As CA DWC’s Electronic Medical Billing and Payment Companion Guide states (emphases ours):

“Electronic billing rules allow for use of agents to accomplish the requirements of electronic billing.

Entities using agents are responsible for the acts or omissions of those agents executed in the performance of services for the entity.”

No Consequences, No Compliance

To industry outsiders, non-compliance like CCMSI’s may appear audacious. Unfortunately, it’s unsurprising; for years under the previous administration of the California Division of Workers’ Compensation (CA DWC), payers enjoyed a largely consequence-free environment.

With disputes defaulting to the payer’s advantage and the CA DWC failing to act even when presented with hard proof of consistent, long-standing non-compliant business practices, payers have historically had little incentive to play by the rules.

California’s EOR requirements are no exception.

daisyBill has submitted Audit Complaints totaling hundreds of thousands of violations of the requirement to respond to e-bills with e-EORs by various payers, including CCMSI. None of these formal complaints have produced substantive results or deterrent action.

Fortunately, California recently confirmed new leadership at the CA DWC, appointing an Administrative Director seemingly willing to acknowledge and meaningfully address persistent issues. Only time, and data, will tell if payers will finally have a reason to prioritize compliance.

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