Gallagher Bassett is violating California law and regulations through its vendor, InstaMed.

The Third-Party Administrator (TPA)’s non-compliance imposes a significant administrative burden on practices and cuts off providers’ legally mandated recourse to dispute payment denials and reductions. On behalf of our clients, daisyBill has filed an Audit Complaint with the California Division of Workers’ Compensation (CA DWC) reporting 3,569 violations.

From January 1 to April 30, 2026, Gallagher Bassett failed to send the required electronic Explanations of Review (e-EORs) in response to thousands of daisyBill providers’ electronic bills (e-bills). In many cases, remittance advice was available only through the InstaMed portal, forcing providers to spend significant time and resources manually entering payment information for electronically delivered bills.

Moreover, the payment documents on the InstaMed portal fail to meet even the legal standards for compliant paper EORs, as they lack several data elements required by CA DWC guidelines.

Without a compliant e-EOR or paper EOR, a provider cannot request Independent Bill Review (IBR) from the state, which requires submission of complete documentation, including a compliant EOR. IBR overwhelmingly results in additional payments to providers (91% of 2025 IBR decisions overturned payers’ denials or reductions). But through InstaMed, Gallagher Bassett has effectively precluded providers’ only feasible remedy for reimbursement disputes.

We urge the CA DWC in the strongest possible terms to uphold its mandate, enforce the law and its own regulations, and impose appropriate consequences on this TPA.

Historically, the CA DWC has taken little or no action to effectively deter payer non-compliance, even in the most extreme cases of documented patterns of violations. We hope that under new leadership, the agency will compel Gallagher Bassett to immediately issue e-EORs for all e-bills and compliant paper EORs for all bills received via mail.

Below is the message and formal Audit Complaint daisyBill submitted to the CA DWC, documenting and reporting the scope of Gallager Bassett’s violations.

Gallagher Bassett’s “Get Out of IBR Free” Card

California Labor Code 4603.4 mandates that payers respond compliantly to e-bills within 15 working days. California Code of Regulations Section 9792.5.1 incorporates the CA DWC’s Medical Billing and Payment Guide (MBPG), which explicitly mandates e-EORs in ANSI X12 835 format.

These electronic files automatically post payment details to the provider’s e-billing systems, sparing staff the time-consuming labor of manual posting.

To dispute an incorrect payment denial or reduction from Gallagher Bassett, a provider must first submit a Second Review appeal to the TPA. If Gallagher Bassett denies that appeal, the provider’s next step is to request IBR by paying a $195 filing fee and submitting a complete request with all relevant documentation (including the EOR) to Maximus, which conducts IBR on the CA DWC’s behalf.

In a recent dispute, Maximus explicitly deemed remittance documents from the InstaMed portal insufficient to serve as compliant EORs for IBR purposes.

For the CA DWC to fail to adequately address these violations would send an unmistakable signal: EOR non-compliance is a “get out of IBR free” card, depriving providers of their legally mandated right to dispute incorrect payment amounts (with no consequences for the payer).

Gallagher Bassett: Responsible for InstaMed Violations

Gallagher Bassett outsourced its responsibility for compliant e-bill responses to InstaMed, a payment platform from megabank JPMorgan. InstaMed failed to adhere to state requirements. Under the CA DWC’s Electronic Medical Billing and Payment Companion Guide, Gallagher Bassett is legally responsible for the failures of vendors acting on its behalf (emphases ours):

“Billing agents, electronic billing agents, third party administrators, bill review companies, software vendors, data collection agents, and clearinghouses are examples of companies that may have a role in electronic billing. Entities or persons using agents are responsible for the acts or omissions of those agents executed in the performance of services for the entity or person.”

To report Gallagher Bassett’s EDI non-compliance, daisyBill submitted the Audit Complaint below to the CA DWC on June 5, 2026.

Audit Complaint: 3,569 Gallagher Bassett Violations

To: [Redacted]@dir.ca.gov

CC: [Redacted]@dir.ca.gov

Subject: Gallagher Bassett EDI Non-compliance: X12 835 Missing - Jan 2026 through Apr 2026 Count 3,569

Hello [Redacted],

I am submitting an Audit Complaint that documents verified data regarding workers’ compensation e-bills submitted to Gallagher Bassett Services Inc. by daisyBill providers between January 1, 2026 and April 30, 2026.

• During this period, daisyBill providers sent Gallagher Bassett 45,054 e-bills.
• Gallagher Bassett failed to respond to 3,569 (8%) e-bills compliantly. In each instance, Gallagher Bassett failed to electronically send the provider an EOR (X12 835) as required by California EDI regulations.

Gallagher Bassett is also failing to mail or fax providers compliant paper EORs, as required by the Medical Billing and Payment Guide (MBPG); our clients report being forced to obtain payment explanations from Gallagher Bassett via the JPMorgan InstaMed Portal. These payment documents omit much of the information required by Appendix B of the MBPG.

An example of the InstaMed payment document is attached to this email.

Maximus, which conducts IBR on behalf of the state, has deemed these InstaMed documents unacceptable for the purpose of an IBR request.

By failing to send an EOR electronically and by delivering a non-compliant payment document via a portal, Gallagher Bassett precludes any possibility that a provider can dispute an erroneous reimbursement under Labor Code 4603.6.

EDI Non-Compliance Data

A provider's electronic receipt of an EOR (X12 835) is a critical component of electronic billing because when a claims administrator sends EORs electronically, the data contained in the 835 file automatically: 

1. Closes the payment loop for a workers’ comp e-bill and
2. Posts to the respective e-bill significantly reduce a provider's administrative burden of manually recording payment information.

The table below lists the e-bill and electronic EORs (X12 835) data gathered for Gallagher Bassett, showing Gallagher Bassett’s consistent electronic EOR non-compliance from January 2026 through April 2026.

I’ve attached a CSV file with the list of 3,569 e-bills providers submitted where Gallagher Bassett failed to return a mandated electronic EOR to the provider. The attached CSV list includes the following columns:

• Column I: [Bill] Transmission Date
• Column N: EOR (835) Compliance Due Date
• Column O: 835 EOR: Receipt Date - This column is BLANK because Gallagher Bassett failed to send the provider an electronic EOR (835).
• Column R: Patient Name
• Column S: Claim Number

Thank you for your attention to this matter.

daisyBill tracks every bill and payment for injured worker treatment, so you have a clear view of your comp revenue. Click below to learn more:

BILL BETTER: DAISYBILL