We have a question for California’s Division of Workers’ Compensation (CA attorney comments are always welcomed, too):

What should a medical practice do in the following scenario?

1. A Third-Party Administrator (TPA) applies invalid reimbursement discounts to a doctor’s workers’ comp bills, improperly withholding hundreds of thousands of dollars.
2. After persistent questioning, the TPA acknowledged that the discounts were invalid and pledged to repay the practice.
3. …but the TPA has paid only a tiny fraction of the balance due after nearly four months.

As daisyNews has repeatedly reported since March 2024, Sedgwick Claims Management Services, Inc., misapplied Preferred Provider Organization (PPO) contracts to extract bogus reimbursement discounts from an orthopedic practice.

After taking $461,857 in erroneous discounts, Sedgwick agreed to reprocess the claims in January of this year.

• With penalties and interest per Labor Code Section 4603.2, Sedgwick owed the practice $574,350.
• Sedgwick has paid the practice $12,896 since admitting their “mistakes" in January, or about 2% of the total amount owed with penalties.

The CA DWC is fully aware of the issue, as per a formal audit complaint that daisyBill submitted to the (so-called) regulatory agency. We’ve repeatedly brought the issue to the CA DWC, each time hoping the agency would stop enabling abuse and take action—much like Charlie Brown keeps hoping Lucy will finally let him kick that football.

So we can only ask the DWC: What should this practice do to receive proper payment?

Please advise.

Sedgwick Plays Contract Roulette—daisyBill & COA Call Bull

The payment torment began with Sedgwick reducing the practice’s reimbursement to as low as 52% of Official Medical Fee Schedule (OMFS) rates—and citing a Coventry contract that expressly stipulates payment at 90% of OMFS rates.

daisyBill contacted Sedgwick in March 2024 with every detail of their PPO violations, including the amounts Sedgwick owed.

When Sedgwick responded with a series of go-play-in-traffic emails, we enlisted the California Orthopaedic Association (COA), which demanded answers on the orthopedists’ behalf.

Sedgwick attempted to pivot by citing a Multiplan contract to justify the PPO discounts. daisyBill immediately pointed out that the practice canceled the Multiplan contract many years ago.

In January 2025, with daisyBill and COA backing the TPA into a corner, Sedgwick finally blinked, agreeing to reprocess the practice’s bills and pay appropriately.

Orthopedists Receive Trickle of Payment

Unfortunately, Sedgwick’s word is as bad as its arithmetic.

Having acknowledged that it failed to adequately reimburse the doctors (and by our calculations, owing a total of $574,350 with penalties and interest), Sedgwick has a long way to go to make this practice whole.

On April 2nd, we reported that Sedgwick had only sent $12,604 in additional reimbursement. As of this writing, Sedgwick has increased that total to $12,806.

In the last month, Sedgwick also issued the checks below totaling $90.47 towards the tens of thousands Sedgwick owes in penalties.

For those keeping score (which does not include the CA DWC, of course), that’s pennies on the dollar for what Sedgwick owes this practice, over a year after daisyBill first alerted Sedgwick to the problem, and nearly four months since Sedgwick grudgingly agreed to make amends.

What Are the Practice’s Options?

Sedgwick owes this orthopedic practice over half a million dollars, thanks to errors Sedgwick acknowledged in full view of the state agency responsible for payer compliance.

So, what can these orthopedists do?

• Hire lawyers, wait years for a resolution, and spend thousands (or tens of thousands) more?
• Write the losses off?
• Wish upon a star that Sedgwick will pay sometime this century—even though the CA DWC repeatedly demonstrates its disinterest in performing its regulatory duties?

If there’s any doubt about the effects of the CA DWC’s inaction, consider this story's grotesque epilogue. As recently as last month, Sedgwick took further erroneous discounts from this same practice, citing a WellComp agreement that does not apply to the employer, and the discounts exceed the agreement’s terms.

But who cares? Sedgwick gonna Sedgwick, and there’s no expectation that the CA DWC (aka: Lucy) will do anything to help providers.

We’ve dared the CA DWC to do its job enough times during this ordeal. Now, we lower the bar even further and simply ask this slumbering agency what these providers can do to protect their financial interests (besides stop seeing injured workers).

We’ll wait to hear back.

- daisyBill

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