LWP Non-Compliant 835 e-EORs: Invalid and Unpostable - 1,960 Audit Complaints

LWP Non-Compliant 835 e-EORs: Invalid and Unpostable - 1,960 Audit Complaints

Third-Party Administrator (TPA) LWP Claims Solutions is in violation of California workers’ comp e-billing law. LWP’s persistent failure to honor state requirements places an undue burden on medical practices, and defeats the purpose of e-billing, which was designed to make workers’ comp more efficient and facilitate the treatment of injured workers.

Below, see the details of the latest batch of formal Audit Complaints daisyBill submitted to the Division of Workers’ Compensation, on behalf of our clients and all California providers who choose to treat injured workers.

LWP: Ignoring CA Law

To: XXXXXX@dir.ca.gov

Subject: #6 LWP Noncompliant 835 e-EORs: Invalid and Unpostable - 1,960 Audit Complaints


For California workers’ compensation EDI transactions the Division of Workers’ Compensation (DWC) issued a comprehensive Electronic Medical Billing and Payment Companion Guide that lists EDI requirements that providers and payers must follow.

LWP fails to adhere to the X12 835 requirements mandated by the DWC.

Noncompliance: LWP fails to electronically transmit providers compliant Explanation of Reviews (835) with valid data.

  • The data from daisyBill e-bills demonstrates that between 1/1/2022 and 7/31/2022, LWP  responded to 1,960 e-bills with invalid electronic EORs that contained both incorrect data and incorrect math thereby, rendering the 835s unpostable to e-bills.

Below we offer extensive evidence documenting how LWP ignores California EDI X12 835 (electronic EOR) requirements.

835 Unpostable/Invalid Explained

DWC Rule 7.1 requires the claims administrator to electronically send an EOR to the provider using the X12 835 EDI standard within 15 working days of receipt of an e-bill. Per Chapter 7 Companion Guide: “The ASC X12N/005010X221A1 Health Care Claim Payment/Advice (835) Technical Report Type 3 is used by the payer to advise the provider of payment remittance and is also used to convey objections to the bill.”

A provider's receipt of an electronic EOR (835) is a critical component of electronic billing for the following three reasons:

  1. The electronic EOR closes the payment loop for a workers’ comp e-bill, and
  2. Automatically posts to the respective e-bill, thereby significantly reducing a provider's administrative burden of manually recording payment information to the respective e-bill, and
  3. Allows the gathering of important payment data about the claims administrator that heretofore was hidden in the paper EORs mailed to individual providers.

For the period 1/1/2022 through 7/31/2022, for 1,960 e-bills submitted to LWP, LWP failed to comply with the DWC electronic EOR (835) requirements per the ASC X12 Standards for Electronic Data Interchange (ASC X12N/005010X221A1 Health Care Claim Payment/Advice (835) Technical Report Type 3) as noted in the California Division of Workers’ Compensation Electronic Medical Billing and Payment Companion Guide.

LWP sent 835s with wrong payees, arithmetic errors, and missing required information as noted below.

CSV: 835s Invalid and Unpostable - Attached is a CSV containing the 1,960 e-bills that providers submitted where LWP failed to send a compliant 835 with valid data:

  • [Bill] Transmission Date: Column L
  • 835 EOR: Status: Column Y - This column is all Invalid because LWP Claims Solutions failed to send daisyBill compliant electronic EORs (835) with valid data.
  • 835 EOR: Invalid Reason: Column Z - This column contains the Invalid Reason for the noncompliant electronic EORs (835) LWP Claims Solutions sent in response to e-bills.
  • Patient Name: Column AN
  • Claim Number: Column AO

On 7/1/2022, daisyBill emailed XXXXXXXX, LWP Chief Information Officer, to report the lack of compliance. XXXXXXXX, LWP Chief Financial Officer, replied: “We did find the issue here and we think it was corrected.  DD [Data Dimensions] made an error in consolidating what they thought was one check and it was actually two.”

As of 8/17/2022, LWP has failed to send any additional 835s.

Audit Complaint Details

This Audit Complaint Data submitted to the DWC represents a credible complaint and credible information of claims handling violations for 1,960 e-bills submitted to LWP by providers that treat injured workers.

Noncompliance: Claims administrator failed to send an electronic Explanation of Review (EOR) in the mandated ASC X12N/005010X221A1 (835) format, despite the claims administrator sending a 277 Acknowledgement accepting the Original Bill / Second Review Appeal.

DWC Rule 7.1 requires the claims administrator to electronically send an EOR to the provider using the X12 835 EDI standard within 15 working days of receipt of an e-bill.

Per California DWC Medical Billing and Payment Guide 7.2, any electronically submitted bill determined to be completed, not paid, or objected to within the 15 working day period, shall be subject to audit penalties per Title 8, California Code of Regulations section 10111.2(b)(10),(11).


daisyBill fights the good fight on behalf of workers’ comp providers. Reach out to see how we can help your practice obtain fast, correct reimbursement for treating injured workers.

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