Authorization is, by definition, a promise.

It’s the promise that, once a doctor obtains authorization from an employer to treat an injured worker, the employer will pay the doctor for the injured employee’s care. Seems like a sensible promise; employer authorization guarantees payment.

But this is California workers’ comp, where promises go to die.

Below we explore how Sedgwick refused to pay a doctor who treated an injured Dollar Tree Stores employee — treatment that Dollar Tree Stores approved, through Sedgwick, as medically necessary for its injured worker.

Dollar Tree Authorizes Treatment, Sedgwick Denies Liability

Sedgwick acts as Dollar Tree’s workers’ comp claims administrator, managing this employer’s injured employee claims.*

Despite the lack of any standard format for granting authorization, Sedgwick clearly authorized treatment for an injured Dollar Tree employee. In fact, Sedgwick granted it twice — first on the fax’s cover sheet, and second in a letter sent by Sedgwick:

But rather than reimbursing the doctor, Sedgwick denied payment, and subsequently denied the Second Review appeal the doctor submitted to dispute the denial. In both Explanations of Review (EORs), Sedgwick denied the authorized treatment by indicating an issue of contested liability for the injury.

To receive payment for the treatment that Dollar Tree Stores and Sedgwick authorized, the doctor was forced to pay $180 to file for Independent Bill Review.

The case is now with Maximus to determine whether California keeps its promises, or denies payment to this doctor for treatment that Dollar Tree Stores authorized as necessary to heal its injured employee.

Authorization: No Take Backs Allowed

Before treating an injured worker, California law requires the provider to receive prior authorization from the employer or employer’s insurer for all treatment. The process for obtaining authorization is strict; doctors must request authorization using the standardized Request for Authorization (RFA) form.

If the provider fails to adhere to the rules, or if the employer decides to deny the treatment, no payment is due to the provider for all unauthorized treatment.

Rather than burdening payers with a standardized utilization review form, the Division of Workers’ Compensation (DWC) allows employers to respond to a provider’s RFA in any manner. If convenient for the employer, there are no rules forbidding the employer from sending authorization on the back of an iHOP receipt.

Nope, there are few hard rules for payers, except one: NO TAKE BACKS.

Once a doctor provides authorized medical treatment, the law forbids an employer or insurer (aka claims administrator) from rescinding or modifying the authorization for any reason. California Labor Code Section 4610.3 states (emphasis added):

...an employer that authorizes medical treatment shall not rescind or modify that authorization after the medical treatment has been provided based on that authorization for any reason, including, but not limited to, the employer’s subsequent determination that the physician who treated the employee was not eligible to treat that injured employee.

Authorization (Allegedly) Guarantees Payment  

When an employer approves proposed medical treatment, that employer acknowledges the treatment as medically necessary — and agrees to pay for it. The Division of Workers’ Compensation (DWC) Utilization Review FAQ webpage affirms that authorization means “assurance that appropriate reimbursement” is owed for the specified treatment (emphasis added):

*A previous version of this post incorrectly identified Dollar Tree as a self-insured employer.

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