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Electronic EORs for Workers’ Comp: Timing and Compliance

January 27, 2017 by Catherine Montgomery

This month, we’ve placed an emphasis on analyzing and explaining the vagaries of electronic billing for California workers’ compensation medical bills. The state’s Division of Workers’ Compensation (DWC) requires that providers who choose to submit electronic bills and all claims administrators follow the electronic billing rules set out in its 65-page Electronic Billing and Payment Companion Guide. To be clear, these rules are not optional. Yet some claims administrators demonstrate habitual non-compliance. Today, we zero in on the failure to return an electronic Explanation of Review (EOR).

To recap, compliant electronic workers’ comp billing consists of three basic steps:

  1. Providers: Compliantly submit an electronic bill (837) and supporting documents (275) directly to the claims administrator or the claims administrator’s designated clearinghouse.
  2. Claims Administrators: Within two days, return an acknowledgment (277) to the provider accepting or rejecting the electronic bill.
  3. Claims Administrators: WIthin fifteen working days return an electronic explanation of review (EOR) (835) for accepted bills to the provider.

For bills submitted electronically, returning compliant electronic EORs is a requirement of the workers’ comp e-billing system. Failure to return an electronic EOR leads to all sorts of complications:

  1. Increased billing expenses. Electronic EORs save providers the significant processing costs associated with manually posting paper EORs.
  2. Transparency. Electronic EORs make it possible for providers, claims administrators, and regulators to easily track exactly if and when bills are paid, as well as payment amounts.
  3. DWC rules are not optional for claims administrators. Claims administrators need to follow the rules (including EOR compliance) in order for the workers’ comp system to truly benefit from electronic billing.

Even so, our analysis of the top 20 claims administrators by volume of bills submitted in 2016 shows flagrant non-compliance almost across the board.

Claims Administrator

Electronic EOR

EOR Outstanding

Manual EOR

Grand Total

Electronic EOR Percent

Sedgwick Claims Management Services

28953

27935

28412

85300

34%

State Compensation Insurance Fund

53432

13530

7886

74848

71%

Gallagher Bassett

47692

5114

5105

57911

82%

CorVel

12839

16276

8578

37693

34%

York Risk Services Group

4658

15630

14322

34610

13%

Liberty Mutual Insurance

17802

3789

1400

22991

77%

Travelers

10844

3791

7485

22120

49%

Zurich Insurance North America

13284

6460

1759

21503

62%

AIG Claims, Inc.

0

10374

7423

17797

0%

Employers Compensation Insurance Company

0

7796

3618

11414

0%

ICW - Insurance Company of the West

4357

3569

1958

9884

44%

Intercare Insurance Services

3948

4034

1377

9359

42%

Berkshire Hathaway Homestate Companies

6774

1181

409

8364

81%

California Insurance Guarantee Association

3451

3734

7185

0%

Keenan & Associates

5338

440

303

6081

88%

Acclamation Insurance Management Services

41

1859

2672

4572

1%

Cannon Cochran Management Services Inc.

0

3323

1058

4381

0%

Athens Administrators

239

1127

1802

3168

8%

Sea Bright Insurance

1729

154

278

2161

80%

Fireman's Fund Insurance Company

1417

211

342

1970

72%

AIG, Employers Compensation Insurance Company, California Insurance Guarantee Association, and Cannon Cochran Management Services each failed to remit a single electronic EOR throughout the calendar year. Acclamation Insurance Management Services escaped this ignominious distinction by remitting 41 electronic EORs out of 4572, for an underwhelming 1%.

On the other end of the spectrum, Gallagher Bassett, Liberty Mutual, Berkshire Hathaway, Keenan & Associates, and Sea Bright all returned electronic EORs more than 75% of the time, with Keenan & Associates leading the way at 88%. We don’t expect perfection, but even this figure leaves something to be desired.

For providers, electronic bill submissions means faster payments, and for claims administrators, reduced processing costs associated with traditional paper bills. In other words, compliant electronic billing is in everyone’s best interest.

We’re always happy to share our data and knowledge of electronic billing. If you represent a claims administrator that struggles with electronic EOR compliance, please don’t hesitate to reach out.

If you’re a provider and you aren’t regularly receiving electronic EORs, we strongly encourage you to file an audit complaint to alert the DWC of non-compliance. At best, it could lead to DWC intervention. At worst, it gives the DWC valuable data and serves as a quick, simple way to affect change.


To learn more about e-Billing for California workers’ compensation, sign up for our webinar below. We’ll analyze all aspects of compliant e-billing, including the responsibilities of providers and claims administrators.

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