Sedgwick’s consistent refusal to comply with California workers’ comp laws and regulations shows no signs of abating—in fact, it’s getting worse.

Having been instructed by the Division of Workers’ Compensation (DWC) to bypass the agency’s Audit Unit and submit formal complaints against Sedgwick directly to Administrative Director George Parisotto, today daisyBill reported 13,900 new violations.

As has been the Third-Party Administrator (TPA)’s consistent practice, Sedgwick continues to fail to remit electronic Explanations of Review (EORs) in response to providers’ electronic bills, as legally required.

Since June 2022, daisyBill has reported over 190,000 instances of this non-compliance to the DWC.

We urge the DWC to take meaningful action against Sedgwick to demonstrate that non-compliance has consequences. Sedgwick’s intransigence has been tolerated long enough, even as other formerly non-compliant claims administrators do the work required to follow the law.

Sedgwick Non-Compliance Ramps Up in Q1 2024

Complete daisyBill data from the first quarter of 2024 show that Sedgwick continues to violate an essential requirement of e-billing: responding to e-bills with e-EORs. Even worse, data demonstrate that Sedgwick’s rate of non-compliance was even higher in the first quarter of 2024 than in the first quarter of 2023.

As we keep reminding readers (and the DWC), e-EORs are critical. These electronic files automatically post payment details to the provider’s e-billing system, saving loads of manual work and making the treatment of injured workers easier, less time-consuming, and less costly.

For any claims administrator to so consistently violate this requirement, year after year, is an affront to every stakeholder in the system.

Sedgwick Employers: Know Your TPA

Sedgwick’s unapologetic failure is a terrible look for the TPA, but also for its employer clients, who trust Sedgwick to ensure that doctors are paid correctly for treating their employees. As things stand, treating workers whose claims are administered by Sedgwick is a potentially fraught prospect for providers.

Using data from the Audit Complaints filed today with Administrative Director Parisotto, below we list the entities that are most often the employer listed on bills for which Sedgwick fails to remit e-EORs.

When employees of the entities below enter a doctor’s office, there is every chance the doctor will lose time, resources, and revenue as a result of Sedgwick’s non-compliance.

County of Los Angeles
University of California
Walmart
Federal Express
Los Angeles Unified School District
Amazon
Cast & Crew Entertainment Services
Reyes Coca-Cola Bottling
Northrop Grumman Corporation
Target
City of Los Angeles
Aramark
ABM Industries
Ross Dress for Less
Delta Airlines
Pomona Unified School District
Kaiser Permanente
Enterprise Rent-A-Car
Trader Joe's
Big Lots

Below is the formal complaint submitted today to Administrative Director Parisotto.

To: XXXXXXXX@dir.ca.gov

Subject: Sedgwick EDI Non-compliance: X12 835 Missing - Feb & Mar 2024 Count 13,900

Hello George,

Per an email exchanged on January 23, 2024 with the DWC Workers’ Compensation Compliance Manager, Sedgwick Audit Complaints are now managed by the DWC Legal Unit. The email exchange confirmed that Sedgwick Audit Complaints should be sent directly to you.

Below is an Audit Complaint reporting credible data from February through March 2024 Sedgwick Claims Management Services, Inc. failed to send 13,900 electronic EORs (X12 835) to daisyBill providers as mandated by California law. This Audit Complaint data represents California workers’ comp e-bills submitted to Sedgwick by daisyBill providers from February 1, 2024 through March 31, 2024.

Since June 22, 2022, daisyBill has filed 190,156 Audit Complaints with the DWC to report Sedgwick for failing to adhere to California EDI regulations.

The yearly data in the tables below demonstrate that Sedgwick’s February and March 2024 EDI non-compliance increased compared to February and March 2023 EDI compliance data.

Faced with evidence of over 190,000 compliance breaches filed by daisyBill, the DWC continues to fail to enforce California workers’ compensation regulations, which harms the providers who treat injured workers.

A provider's receipt of an electronic EOR (X12 835) is a critical component of electronic billing for the following three reasons:

1. The electronic EOR closes the payment loop for a workers’ comp e-bill and
2. Automatically posts to the respective e-bill, thereby significantly reducing a provider's administrative burden of manually recording payment information to the respective e-bill and
3. Allows the gathering of essential payment data about the claims administrator hidden in the paper EORs mailed to individual providers.

I’ve attached a CSV list containing 13,900 e-bills providers submitted where Sedgwick failed to return a mandated electronic EOR to the provider. The attached CSV list includes the following columns:

• Column L: [Bill] Transmission Date
• Column W: EOR (835) Compliance Due Date
• Column X: 835 EOR: Receipt Date - This column is BLANK because Sedgwick failed to send the provider an electronic EOR (835).
• Column AO: Patient Name
• Column AP: Claim Number

Audit Complaint Details

This Audit Complaint Data submitted to the DWC represents a credible complaint and credible information on claims handling violations. Per Title 8, California Code of Regulations section 10111.2(b)(10),(11), Sedgwick should be subject to audit penalties.

EDI Non-compliance: Claims administrator failed to send an electronic Explanation of Review (EOR) in the mandated ASC X12N/005010X221A1 (835) format, despite the claims administrator sending a 277 Acknowledgement accepting the Original Bill / Second Review Appeal.

DWC Rule 7.1 requires the claims administrator to electronically send an EOR to the provider using the X12 835 EDI standard within 15 working days of receipt of an e-bill.

Per California DWC Medical Billing and Payment Guide 7.2, any electronically submitted bill determined to be completed, not paid, or objected to within the 15 working day period shall be subject to audit penalties per Title 8, California Code of Regulations section 10111.2(b)(10),(11).

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