Recently, we shared how Sedgwick Claims Management Services repeatedly took inflated Preferred Provider Organization (PPO) discounts from a California orthopedic practice in violation of a Coventry PPO contract, which stipulates reimbursement at 90% of state fee schedule rates.

Over several months, Sedgwick cited the practice’s Coventry PPO contract to justify reductions; however, Sedgwick paid the practice substantially less than the contractual 90% rate, ultimately improperly withholding over $300,000 (and counting) in reimbursement owed.

daisyBill reported every detail of these thousands of improper reimbursements directly to Sedgwick and to the California Division of Workers’ Compensation (DWC).

Unfortunately, neither entity's actions suggest that either gives the proverbial rat’s hindquarters. When daisyBill demanded that Sedgwick make restitution, Sedgwick representatives blandly assured us that they were “working on it”—while continuing to take excessive discounts from the practice and citing the Coventry contract.

To stop Sedgwick from continuing to violate the contract, daisyBill submitted a formal complaint to the DWC, which responded with silence.

Below, see Sedgwick’s and the DWC’s responses to daisyBill’s efforts to stop this abuse. Ask yourself: what is the point of a state fee schedule or a state regulatory agency, if a claims administrator is allowed to dictate the reimbursement amounts it pays providers?

daisyBill Contacts Sedgwick

In March 2024, daisyBill contacted Sedgwick to demand that the TPA reimburse the practice for the improper reductions, and cease further improper reductions.

The email included:

• The number of bills known to be affected for dates of service up to January 18, 2024
• The differences between the amounts Sedgwick paid and the amounts owed under the contractual agreement
• The amounts of penalty and interest payments due

daisyBill’s email to Sedgwick included screenshots of the Coventry contract, and a spreadsheet detailing every bill where Sedgwick cited the contract to improperly take a “Network Reduction” greater than 10% of the fee schedule amount due.

Sedgwick Continues Plunder

In response to daisyBill’s email, Sedgwick assured us that the TPA had taken the matter seriously and was working to resolve the problem. But over a week later, Sedgwick had failed to take substantive action.

daisyBill reached out to Sedgwick a second time with updated numbers reflecting Sedgwick’s continued application of invalid discounts and the rising amounts the TPA owed to the provider. Once again, Sedgwick representatives replied with empty platitudes—and zero additional payment.

daisyBill followed up again, announcing our intention to report Sedgwick’s violations to the DWC. Yet again, Sedgwick offered only hollow promises and no action. In its most recent email on April 11, 2024, Sedgwick requested “more time.”

It has now been 195 days since Sedgwick’s most recent email. Sedgwick continues to cite the Coventry contract while reducing the orthopedists' reimbursements to rates well below 90% of the fee schedule.

Below, see several examples of Sedgwick representatives offering every excuse, as the plunder continued unabated.

DWC Does What It Does Best: Nothing

With no alternative, on April 16, 2024, daisyBill submitted a formal Audit Compliant to the DWC, including personally submitting the details to Administrative Director George Parisotto.

The Audit Complaint included the Coventry contract and a spreadsheet detailing every bill for which Sedgwick paid less than 90% of the fee schedule amount and cited the Coventry PPO.

As detailed in the email, by the time of the Audit Complaint Sedgwick owed the practice over $197,000 in improperly denied reimbursement across over 4,400 bills, plus tens of thousands in penalties and interest.

With incontrovertible proof of a business practice of consistent, repeated, ongoing non-compliance in violation of signed agreement, costing a California practice nearly $200,000, the DWC did what it does best: Nothing.

The only response from the DWC was a message indicating that the matter was referred from the DWC Audit Unit to the agency’s Legal Unit.

As of this writing, 190 days have passed since daisyBill submitted this complaint—and the DWC has taken no action of which we are aware. And of course…Sedgwick continues to take the improper PPO discounts.

Why Treat Injured Workers in CA?

The bottom of this article features a detailed log of every effort the practice and daisyBill made to resolve this. It is long, painful, and indicative of the reasons providers are increasingly refusing to treat California’s injured workers.

Note the facts:

• An unambiguous contract with Coventry PPO stipulates that the practice is owed 90% of the Official Medical Fee Schedule (OMFS) rates.
• There have been almost 7,000 instances of Sedgwick improperly reducing the reimbursement owed to the practice to rates below 90% OMFS.
• daisyBill provided Sedgwick with all relevant reimbursement data necessary for the TPA to recognize its error (or “error”) and take appropriate action. Sedgwick continued the inappropriate discounting.
• daisyBill sent the DWC incontestable proof of Sedgwick's major, persistent violations of California reimbursement regulations. The agency never stirred from its slumber.

Payment rules are unenforced, non-compliance goes unpunished, and even the most meticulous efforts to protect a practice from illegal discounting fail. Claims administrators like Sedgwick trample on practices with impunity, raking in billions for their private equity overlords—while the DWC sits idle in its Oakland offices.

As advocates for providers who treat injured workers, we see the consequences as providers choose to stop treating injured workers. The financial risk of workers’ comp is real, thanks to the lawlessness enabled by the DWC's unbelievable passivity.

Timeline: Sedgwick & DWC Fail to Act

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