Sedgwick Claims Management, Inc. continues to defy California law and regulations for properly responding to Second Review appeals. And why wouldn’t they, without any consequences from the Division of Workers’ Compensation (DWC)?

In California, providers must submit Second Review appeals to claims administrators to dispute incorrect denials or reductions in payment for workers’ comp services. California requires claims administrators to respond to Second Review appeals within 14 days.

Sedgwick, however, takes a different tack. Since May of 2022, Sedgwick has improperly denied 22% of our clients’ appeals by incorrectly designating them as “duplicates” of the original bills.

So far, despite daisyBill reporting thousands of violations in formal Audit Complaints, the Division of Workers’ Compensation (DWC) has displayed an almost pathological reluctance to fulfill its mandate and impose appropriate consequences.

This week, daisyBill reported over 17,000 additional violations directly to DWC Administrative Director George Parisotto. We cannot say what factors have thus far prevented Mr. Parisotto from exercising his authority to protect providers and, by extension, the injured workers these providers care for.

Sedgwick: Consequence-Free Non-Compliance

Sedgwick has been inappropriately denying Second Review appeals as supposed “duplicate” bills for years.

Even though every appeal from daisyBill is compliant and includes unmistakable indications—per DWC instructions—that the submission is an appeal and not an original bill, Sedgwick persistently and consistently incorrectly denies these appeals as duplicate bills.

In April 2022, daisyBill provided the DWC with evidence of over 4,000 incidents in which Sedgwick noncompliantly denied Second Review appeals sent by our clients. Despite alerting the DWC of the noncompliance, Sedgwick’s violations continued unabated.

This year, DWC representatives instructed daisyBill to submit Audit Complaints reporting Sedgwick’s “EOR issues” (Explanations of Review) directly to Administrative Director Parisotto and the DWC Legal Unit.

However, in response to these latest audit complaints, a DWC representative informed daisyBill that the Audit Unit would address the invalid Second Review denials as “billing issues” rather than an “EOR issue.” Further, upon receipt of the Audit Complaint, the DWC Audit Unit responded promptly: “This complaint was processed today.”

We hope this comprehensive data persuades the DWC to act appropriately to halt Sedgwick’s abuse of providers that treat California’s injured workers.

Below is the text of the audit complaint email submitted this week, which reports Sedgwick’s latest batch of violations. The only question remaining is whether this concrete, damning evidence of a well-established practice of non-compliance will result in consequences or simply be filed away.

To: XXXXXXXX@dir.ca.gov

Subject: Sedgwick Non-compliance: Second Reviews Denied as Duplicate - 17,225 bills

Hello George,

Per the directions of the DWC Workers’ Compensation Compliance Manager, Sedgwick Audit Complaints are now managed by the DWC Legal Unit and should be sent directly to you.

Below is an Audit Complaint reporting credible data from May 2022 through April 2024 that Sedgwick Claims Management Services, Inc. incorrectly denied 17,225 Second Review appeal submissions as duplicate bills. This Audit Complaint data represents California workers’ comp e-bills submitted to Sedgwick by daisyBill providers from May 1, 2022 through April 30, 2024.

Between May 1, 2022 and April 30, 2024, daisyBill clients submitted 79,718 Second Review appeals to Sedgwick to dispute improper payment amounts or denials of payment. In each instance, the provider complied with California CCR §9792.5.5(d)(2) and the California DWC Electronic Medical Billing and Payment Companion Guide. Each request for Second Review included:

1. Condition Code Qualifier BG and Condition Code W3 in Box 10d of the CMS-1500,
2. Resubmission Code and Original EOR Reference Number in Box 22 of the CMS-1500, and
3. DWC Form SBR-1

Additionally, each Second Review appeal included the Explanation of Review (EOR) Sedgwick sent to the provider in response to the original bill.

Despite providers meticulously complying with DWC Second Review regulations, Sedgwick improperly denied 17,225 (22%) of these Second Review appeals as duplicate bills.

This failure represents Sedgwick circumventing California regulations mandating that Sedgwick respond with a final written determination on each item or amount in dispute by issuing a compliant Explanation of Review.

Previously, on June 28, 2022, daisyBill filed 4,930 Audit Complaints with the DWC to report Sedgwick incorrectly denying Second Review appeal submissions as duplicate bills.

The table below shows that Sedgwick’s Second Review processing non-compliance increased from May 2022 to April 2024 compared to January 2019 to April 2022.

I’ve attached a CSV list containing 17,225 e-bills providers submitted where Sedgwick incorrectly denied the Second Review appeal submission as a duplicate. The attached CSV list includes the following columns:

• Column L: [Bill] Transmission Date
• Column AO: Patient Name
• Column AP: Claim Number
• Column BA: CARCs - Sedgwick incorrectly denied the Second Review appeal submission as a duplicate bill by returning CARC 18 in the 835 (e-EOR).

California workers' comp has strict billing laws and regulations that providers must follow; if a provider does not comply, claims administrators can enforce these billing requirements by denying payments for billed services.

In contrast, providers who treat injured workers cannot enforce California’s workers’ comp payment laws and regulations. As the data above indicates, without the DWC’s help, Sedgwick will continue ignoring California’s payment requirements.

Nationwide, daisyBill increases revenue and decreases hassle for providers who treat injured workers. Get a free demonstration below.

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