The California law regarding electronic explanations of review (EORs) is crystal clear and completely unambiguous -- at least to the vast majority of the workers’ comp community. Since 2012, the California Division of Workers’ Comp (DWC) requires payers (aka ‘claims administrators’) to send a provider an electronic EOR within 15 calendar days of receipt of a provider’s electronic bill. Unbelievably, 8.5 years after California mandated electronic billing rules, some payers refuse to believe, much less, adhere to this electronic EOR rule.

Recently, DaisyBill emailed a director of a self-administered municipal employer to alert the director that DaisyBill clients had stopped receiving electronic EORs in July 2020. This timing coincides with the employer switching its bill review vendor to Lien On Me. In the email exchange, this director responded that, after checking with Lien On Me, there “is no specific regulation that requires the EOR to be sent electronically.”

DaisyBill emailed the director the precise, extremely clear, DWC rule that requires payers to transmit electronic EORs to providers (emphasis added):

California Division of Workers’ Compensation Medical Billing and Payment Guide
7.0 Bill Processing and Payment Requirements for Electronically
Submitted Medical Treatment Bills
7.1 Timeframes
Except for bills that have been rejected at the Acknowledgment stage, the ASC X12N/005010X221A1 Health Care Claim Payment/Advice (835) must be transmitted to the provider within 15 working days of receipt of the electronic bill, extended by the number of days the bill was placed in pending status under 7.1(a)(3)(A), if any. The 005010X221A1 should be issued to notify the provider of the payment, denial of payment, or objection to the entire bill or portions of the bill as set forth below. The 005010X221A1 serves as the Explanation of Review, and notice of denial or objection. Uncontested portions of the bill must be paid within 15 working days of receipt of the bill.

For anybody who is involved in medical billing and payment, it is obvious and undeniable that the required EOR -- the ASC X12N/005010X221A1 Health Care Claim Payment/Advice (835) -- is an electronic transmittal. By California workers’ comp electronic billing standards, the clarity of this rule is equivalent to that of a children's first ABC book.

Yet, even after receiving the information above, the director doubled down and incorrectly declared the rule made “no specific requirement as to what method is to be used (electronic or mail)” for sending EORs. Further, the payer declared that Lien On Me will continue to send paper EORs, thereby ignoring the plain language of the electronic EOR requirements.

This payer’s continued noncompliance with rules, whether misguided (or not), exemplifies the inequity of California workers’ comp. Even if this payer continues to refuse to comply with the rules mandated by the California DWC, there is no recourse for providers when payers willfully choose to ignore California rules and regulations.

Below, we give you the excruciating screenshots of our email exchanges with this director of a municipal employer, redacted to preserve the anonymity of both the director and the employer.

1. DaisyBill sends the payer a friendly email alerting the payer that it is no longer compliant with the mandated rules of California electronic billing. Specifically, since July 2020, the claims administrator has failed to send electronic EORs.

2. The director promptly replies that they spoke with Lien On Me and “based on their response no regulation stating an EOR must be issued electronically.” Further, the director states, “since there is no regulation that it [the EOR] must be sent electronically it [Lien On Me] will continue to do [sic] out in paper format.” (Highlights added)

3. DaisyBill replies to the email and provides the exact reference to the DWC requirement that claims administrators must send an electronic EOR.

4. The director, in a display of what we can only guess to be misreading or perhaps a misplaced trust of the dubious legal interpretation skills of Lien On Me, insists that the rule “only points even more so that the EORs are only to be transmitted, but no specific requirement as to what method is to be used (electronic or mail).

5. Finally, we are at a loss as to how to explain 2+2=4 (and not infinity) and we respond that “There is zero ambiguity regarding this [electronic EOR] requirement.”

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