A credible source has informed daisyBill that a claims administrator's bill reviewer charged an employer $10,000 in fees to reduce a hospital bill to an amount the state fee schedule already required.

Bill review services market themselves to employers as cost-saving measures. These entities review medical bills and determine the correct application of state fee schedules. They also peddle a slew of mechanisms to adjust bills further downward, from downcoding to contractual discounts, and charge employers different fees depending on the reduction mechanism used.

A fee schedule reduction often carries a modest fee, while "savings" based on Preferred Provider Organization (PPO) discounts are often billed as a percentage of the amount saved. That fee gap gives bill reviewers an obvious incentive to label reductions as PPO savings rather than fee schedule adjustments, at the employer's expense.

According to our source, the bill reviewer attributed a hospital bill reduction to PPO "savings" rather than to the fee schedule, generating a $10,000 fee for the employer. Had the reviewer simply applied the fee schedule, the employer would have paid a $45 bill review fee. Either way, the hospital received exactly the same reimbursement.

The only difference was $9,955 out of the employer's pocket.

daisyBill has long warned about payer and vendor bill review practices that (literally) don't add up. If true, this account suggests that employers, like providers, are paying a steep price for opaque PPO-related bill review.

From bundling payments across employers, to filtering reimbursements through layers of networks, bill review opacity makes it easy for middlepeople to profit off employers with dubious claims of "savings."

A Bill Review Fee-for-All

daisyBill has no direct knowledge of the events our source described and cannot independently confirm them. That said, our source is well-placed, credible, and deeply knowledgeable in claims and bill review management.

According to our source, the employer, being "not knowledgeable in matters of medical bill review," had no reason to question the charge. In fact, the employer was impressed by the "savings" and only too happy to pay the $10,000 fee.

Worse, the adjuster on the claim reportedly recognized the PPO fee as unnecessary and raised the issue with management. In response, the claims administrator explicitly instructed the adjuster not to tell the employer that it had paid a cool $10k for…nothing.

A tip for employers: There is no magic in reducing a bill to fee schedule rates; it's simple math. Most importantly, a legitimate PPO discount applies only after the fee schedule reduction. All employers should be alarmed by any arrangement in which a bill reviewer charges steep fees to simply bring reimbursement down to fee schedule rates.

Providers have long known that PPOs can serve as a mechanism for middlepeople to extract profit from workers' comp reimbursements. Employers should know it too. In this case, the PPO provided zero care or services to the injured worker, but cost the employer $10,000 for “savings” that the fee schedule already mandated.

The Threat to the Golden Goose

daisyBill’s Fee Schedule Calculator precisely calculates the correct fee schedule amounts for California and New York workers’ comp treatment and generates in-depth summaries that include every detail of the calculation formula. The total cost for an unlimited number of bills is $49 per month.

daisyBill has offered to spare certain payers the cost of bill review by submitting all of our clients’ bills at the exact fee schedule rates, only for those payers to decline.

One Third-Party Administrator (TPA) explicitly acknowledged to daisyBill, albeit off the record, that receiving correct fee-schedule bills would negate their business model of charging their employer clients to make allowable reductions.

Especially in states like California, which spends $0.52 on administrative expenses for every dollar it spends on actual care and benefits for injured workers, it would be cheaper and more efficient for all parties to simply charge and pay at fee schedule rates, which technology makes incredibly easy.

After all, it’s 2026. The software exists.

However, this novel idea would disrupt the extremely profitable industries that depend on opaque webs of discount contracting and leasing, PPO “stacking,” and other “cost control” measures that add needless complexity to workers’ comp while feeding billions to TPAs and private equity investors.

As it stands, the convoluted, inefficient status quo is simply too lucrative for the middlepeople, including bill review companies.

Do you work for a bill review vendor or have knowledge of practices that cost employers by replacing fee schedule adjustments with PPO reductions? If so, daisyNews would love to hear from you. Email us at cmontgomery@daisybill.com.

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