Liberty Mutual Trifecta of Incorrect Payments

In this, our fourth story on the fiasco of 2019 workers’ comp payments, we turn to the errors of Liberty Mutual. By now, from reading about Sedgwick, York, and Sedgwick (again), readers are familiar with the repeated payment abuses of providers by claims administrators.

Annually, DaisyBill processes millions of workers’ comp bills and historically Liberty Mutual has been one of the most cooperative and responsive claims administrators. Unfortunately, even one of the best claims administrators makes mistakes and Liberty Mutual’s systematic incorrect reimbursement is costing California providers dearly.

The background remains the same: California’s Division of Workers’ Compensation (DWC) adopted Medicare Geographic Practice Cost Indices (GPCIs) effective on January 1, 2019. So far, many administrators abide by the 2019 Official Medical Fee Schedule (OMFS) and issue payments that reflect this. But as we’ve seen, some don’t.

Providers Suffer, Trees Die, and Liberty Mutual Saves Money

In the examples below, a provider submitted three original bills to Liberty Mutual. The billed charges submitted by the provider equaled the exact reimbursement due per the 2019 Physician Fee Schedule. Liberty Mutual incorrectly reimbursed all three original bills using the 2018 fee schedule, and subsequently Liberty Mutual incorrectly denied the provider’s three Second Review appeals.

Based on this example, and the previous examples of payment offenses by Sedgwick and York, providers should ask the DWC to address two issues: first, the systematic incorrect reimbursements by claims administrators; and second, the extraordinarily unfair burden that IBR places on providers who are simply trying to receive the correct reimbursement per the OMFS. As demonstrated below, providers cannot economically justify the expenses of the state-mandated appeal process and claims administrators are clearly incentivized to incorrectly reimburse providers that treat injured workers.

Per the 2019 Physician Fee Schedule, for each bill in the examples below the total remaining balance due is under $20, and the cumulative balance due for these bills is $57.84. To collect the correct 2019 reimbursement of $57.84 this provider has submitted:

  • 3 Original Bills: 16 pages, including reports
  • 3 Second Review appeals: 22 pages, including resubmission of reports
  • 3 Indexed IBRs: 71 pages, including resubmission of bills, reports, explanations of review, and
  • Payment of 3 IBR fees: $585

For 2019 dates of services, DaisyBill providers have already submitted 2,893 bills to Liberty Mutual. In order to collect the correct 2019 reimbursement, some back of the envelope calculations indicate that DaisyBill providers would need to:

  • Incur huge sums in direct billing expenses from submitting appeals and IBRs;
  • Pay $564,135 in IBR fees; and
  • Destroy hundreds of trees to print and mail the IBRs

Alternatively, if these providers give up and acquiesce to being incorrectly paid, another back of envelope calculation indicates a savings of as much as $55,000 to Liberty Mutual from incorrectly reimbursing the 2,893 bills.

Liberty Mutual Examples

In each of the following examples for the same provider, Liberty Mutual not only mangles payments by omitting GPCIs from its calculation, it cuts reimbursement for WC002 down to the 2018 rate. Sure, GPCIs are hard, but the DWC publishes its California-specific codes annually -- in the same place on its Web site. This bears repeating: the provider submitted three bills, three Second Review appeals, and three IBR applications -- all for the same pattern of miscalculated payments.

  1. In this first Explanation of Review (EOR), for the payer Comcast, we can see that the provider billed at the 2019 Physician Fee Schedule rate for CPTs 90834 and 90875 and for the state-specific WC002 code. The reduction should be $0.00, pursuant to the 2019 OMFS. Helmsman is a third-party administrator and wholly owned subsidiary of Liberty Mutual.
  2. Liberty Mutual instead reduced reimbursement to the 2018 OMFS rates, resulting in a $19.28 underpayment which is over 8% of the total amount due.

  1. In the second EOR, where UPS is the payer, again the provider bills at the correct 2019 OMFS rates, netting the same 2018 rate reductions. Outcome: Another $19.28 incorrectly cut from the provider’s payment.
  2. Note the audit date of January 22, 2019. Liberty Mutual botched at least three weeks of reimbursements, so far.

  1. In this third example, the provider again bills at 2019 OMFS. Liberty Mutual stubbornly cuts $19.28 off the bill. The third time was certainly not the charm in this case.
  2. As it has in all these example EORs, Liberty Mutual states that the amount billed is in excess of what’s allowed by the fee schedule. Liberty Mutual is mistaken in all three cases.

  1. The provider submits complete and compliant Second Review appeals for each of the three incorrectly paid bills. We use the provider’s Comcast appeal as our example.
  2. DaisyBill shows the correct 2019 OMFS reimbursement as well as the balance due.
  3. The provider correctly explains that Liberty Mutual is reimbursing at the old 2018 OMFS rates, using plain, easy-to-understand language.

  1. The Second Review appeal is timely submitted to Liberty Mutual. Remember that the provider had to do this three times. MORE importantly, Liberty Mutual CONTINUES to incorrectly reimburse this provider.

  1. In the EOR for the appeal, using the Comcast response as our example, Liberty Mutual stubbornly insists that fees were reduced to fee schedule rates and denies the appeal. No further reimbursement is due.

The Costs to One Provider

To receive correct payment for a balance due of $57.84, the provider is now out $642.84 ($585 for the filing fees and $57.84 in botched reimbursements). That is, until Maximus weighs in on this issue.

Until such time as the DWC steps in, we’re here to help when payers create a cluster of complications. DaisyBill’s powerful and intuitive electronic billing platform renders original bills in a snap, and Second Review appeals are accomplished in mere seconds with three quick mouse clicks. Sign up for a demo today and see how DaisyBill can ease the burden of dealing with obstinate payers.

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