The City of Los Angeles (LA) is a self-insured, self-administered employer. This means that the city assumes all of the responsibilities of a claims administrator to compliantly manage and pay for workers’ comp claims for employees of the City of LA.
As most readers know, claims administrators, in this case, the City of LA, must compliantly accept electronic bills from providers and must also compliantly return electronic explanations of review (EORs) to providers. This is the LAW in California.
The formats for providers and claims administrators to exchange workers’ comp electronic billing and payment files are standardized. The electronic format that providers use to send bills is known as an “837” file. In response to an electronically transmitted bill, the claims administrator must electronically send the provider a complete EOR, or “835” file.
Often claims administrators engage vendors to assist in receiving electronic bills and returning electronic EORs. Even though a claims administrator may elect to use a vendor to assist with this electronic process, ultimately the claims administrator is responsible for complying with all rules and regulations.
The state of California does not penalize the vendor for noncompliance, the state penalizes the claims administrator.
Currently, the City of LA fails to comply with California rules because it fails to send electronic EORs to providers who electronically transmit workers’ comp bills to the city.
DaisyBill recently contacted the City of LA about its noncompliant EORs. We reached out to the city because, as a self-administered employer, it serves as its own claims administrator and is therefore responsible for compliance.
Below is an email sent by DaisyBill to the City of LA Account Manager where we try to determine the reason for the missing transmission of electronic EORs:
The City of LA forwarded our email to its bill review vendor which did not respond with an answer to our question.
This all started when a DaisyBill client asked us to determine the reason for the City of LA failing to electronically transmit EORs. We looked at the EOR metrics for the City of LA and emailed the City of LA a simple question: “Are 835's for City of LA bills issued? If so, I'd love to figure out why DaisyBill isn't receiving them.”
DaisyBill keeps precise metrics on claims administrator compliance. Below is a graph showing the historical receipt of the EORs from the City of LA. The red represents paper EORs which require “Manual Posting” by provider staff. The blue represents the receipt of electronic EORs; as you can see from the graph, the City of LA stopped sending electronic EORs in early 2014.
Clearly, DaisyBill clients are not receiving the required electronic EORs from the City of LA.
DaisyBill’s mission is to improve workers’ comp for all stakeholders by bringing transparency to the friction encountered by providers who treat injured workers. Our goal is simple: to reduce provider friction so more providers agree to treat injured workers. More providers are a win for both employers and injured workers.
We want to make workers’ comp better for all stakeholders, preferably in partnership with claims administrators and vendors.
DaisyBill provides content as an insightful service to its readers and clients. It does not offer legal advice and cannot guarantee the accuracy or suitability of its content for a particular purpose.