Sedgwick Claims Management Services, Inc. is raking in profits one unpaid bill at a time through non-compliance, invalid denial reasoning, and a staggering lack of accountability.

Employers’ workers’ comp premiums fund this plunder, but injured workers ultimately pay the price.

Recently, Sedgwick refused to pay a California provider for a Medical-Legal evaluation despite the defense attorney specifically requesting that the Qualified Medical Evaluator (QME) perform a follow-up evaluation.

Sedgwick “denial dumped” a dozen baseless denial codes onto the Explanation of Review (EOR), citing a grab bag of excuses that have zero relevance to Med-Legal services. Anyone with even a basic understanding of workers’ comp billing would recognize the denial reasons as invalid in a Medical-Legal context:

• Lack of authorization: Medical-legal exams aren’t subject to authorization; they’re conducted at the parties' or the Workers’ Compensation Appeals Board's request.
  
• The claim is non-compensable: Determining compensability is the purpose of a Medical-Legal exam.
  
• The provider is “out of network”:  Medical Provider Networks (MPNs) do not apply to Medical-Legal services.

What kind of claims “management” spits out this nonsense? A misinformed adjuster? An unmonitored algorithm? A Ouiji Board?

While the provider gets stiffed, Sedgwick continues to enjoy profit courtesy of the employer, Cheema Freightway, Inc., and Cheema’s workers’ comp insurer, Clear Spring Property and Casualty Company, for which Sedgwick serves as Third-Party Administrator (TPA).

While the provider fights for payment, the injured worker waits for care and the employer’s costs keep climbing.

See the EOR below, and ask: how long will employers tolerate a TPA that turns their premium dollars into profit by shortchanging care?

Sedgwick’s Denial Playbook

Over and over, California providers endure the same denial gauntlet from Sedgwick:

1. The provider performs a service that either Sedgwick authorized or that a party to a Medical-Legal dispute requested.
2. Sedgwick denies the original bill based on invalid, inapplicable, seemingly random reasons.
3. When the provider submits a Second Review appeal to dispute the denial, Sedgwick denies the appeal as a “duplicate” of the original bill.
4. The provider must then capitulate, or pay $195 to request Independent Bill Review (IBR) from the state (and hope the California Division of Workers’ Compensation doesn’t roadblock the process).
5. In many instances, the provider must hire an attorney to recoup the $195 IBR fee and the penalties and interest owed (all of which the employer ultimately pays for).

In this case, the defense attorney (i.e., the attorneys representing the payer’s side of the dispute) sent the letter below to the provider, a QME who had previously conducted a Medical-Legal evaluation on this injured worker. The letter formally requests a follow-up evaluation.

Yet, in response to the QME’s bill, Sedgwick paid $0 and sent the EOR below, which features a grab bag of 12 demonstrably absurd reasons (a perfect example of Step 2 above).

Most of the denial reasons boil down to some version of the following baloney:

• The doctor is “out of network.”
• The services were not authorized.
• The claim is not compensable.

This is, to put it bluntly, bonkers.

QMEs are selected from state panels; the parties request that they perform a Medical-Legal evaluation to determine compensability.

Fun fact: Sedgwick knows all of this. In 2022, the state ordered Sedgwick to pay the largest amount ever awarded to a daisyBill client via IBR after Sedgwick pulled this same stunt.

As with our last “denial dump,” below we lay out the reasons for the denial and why each makes precisely zero sense.

Providers and Employers: Sedgwick’s “Incompetence” Is Costing You

If you treat injured workers, odds are you’ll eventually face a claim administered by Sedgwick.

Prepare accordingly.

Sedgwick’s improper denials aren’t a possibility; they’re practically an inevitability. Your practice needs airtight procedures (or smart software) to quickly file appeals. Plus, you’ll want to keep plenty of funds available for IBR filing fees, because Sedgwick will almost certainly pull the old “duplicate bill” maneuver.

Providers can’t count on the state to intervene. Despite years of obvious violations of regulations, laws, and basic billing logic, Sedgwick continues its plunder unchecked.

Employers are footing the bill for this. Arguably, Sedgwick’s denials don’t save money; they shift costs, delay care, and drive up claim expenses in the long term.

This is beyond harmless incompetence; Sedgwick’s consistent, repeated behavior represents a business model that profits from administrative friction at the expense of providers and employers alike.

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