It may be a new year, but it’s the same ol’ Sedgwick.

However, the California Division of Workers’ Compensation (DWC) has indicated it may take a different (and hopefully more effective) approach to reigning in the Third-Party Administrator (TPA)’s persistent non-compliance.

The DWC Audit and Enforcement Unit instructed daisyBill that the Legal Unit is now handling Sedgwick’s non-compliance and that Audit Complaints should be sent directly to DWC Administrative Director George Parisotto. 

As instructed, today daisyBill reported 7,203 new violations in which Sedgwick failed to remit mandated electronic Explanations of Review (e-EORs) in response to electronic bills sent by providers in January 2024. This batch of audit complaints brings the total number of Sedgwick violations reported by daisyBill to over 176,000 since June 2022.

Below, we list the top 20 employer clients for which Sedgwick failed to comply with California workers’ comp regulations when administering claims on behalf of those employers’ injured workers.

We urge the DWC to take substantive action against Sedgwick and to clarify that California laws, regulations, and rules designed to protect providers and injured workers are more than just words on paper.

Sedgwick Non-Compliance Increases in 2024

Complete daisyBill data from January 2024 show that Sedgwick continues to violate an essential requirement of e-billing: responding to e-bills with e-EORs. Even worse, data demonstrates that Sedgwick’s January 2024 non-compliance increased compared to January 2023.

As we remind readers and the DWC again and again and again (and again), e-EORs are essential because they automatically post payment details to the provider’s e-billing system, saving countless hours of manual work. e-EORs make workers’ comp billing exponentially easier, less time-consuming, and less costly.

In other words, e-EORs are integral to making treating injured workers more feasible for providers. Yet despite truckloads of formal Audit Complaints submitted by daisyBill to report Sedgwick’s failure to return e-EORs consistently, the TPA committed fresh violations right out of the gate in 2024.

Sedgwick Employers: Know Your TPA

Sedgwick’s scofflaw behavior reflects poorly on its employer clients, which trust Sedgwick to ensure that doctors are paid promptly and correctly for treating their employees.

Given the administrative costs and bureaucratic hassles, getting doctors to accept workers’ comp patients is difficult enough. However, treating an injured worker is an even less attractive prospect when the bill goes to Sedgwick.

Per data from the 7,203 Audit Complaints filed today with Administrative Director Parisotto, below is the list of most frequently reported employers where Sedgwick failed to comply with California payment regulations.

When injured employees of these companies walk into a doctor’s office, that doctor must navigate Sedgwick’s consistent non-compliance at a completely unwarranted cost to practice time and resources.

County of Los Angeles
University of California
Los Angeles Unified School District
Walmart
Reyes Coca-Cola Bottling
Federal Express
Cast & Crew Entertainment Services
Amazon
City of Los Angeles
Target
Field Fresh Foods
Albertsons Companies
Northrop Grumman Corporation
Aramark
Big Lots
Kaiser Permanente
Mercy San Juan Medical Center
Adventist Health
Enterprise Rent-A-Car
Delta Airlines

Below is the formal complaint submitted today to Administrative Director Parisotto.

To: XXXXXXXX@dir.ca.gov

Subject: Sedgwick EDI Non-compliance: X12 835 Missing - January 2024 Count 7,203

Hello George,

Per an email exchanged on January 23, 2024 with the DWC Workers’ Compensation Compliance Manager, Sedgwick Audit Complaints are now managed by the DWC Legal Unit. The email exchange confirmed that Sedgwick Audit Complaints should be sent directly to you.

Below is an Audit Complaint reporting credible data that in January 2024 Sedgwick Claims Management Services, Inc. failed to send 7,203 electronic EORs (X12 835) to daisyBill providers as mandated by California law. This Audit Complaint data represents California workers’ comp e-bills submitted to Sedgwick by daisyBill providers from January 1, 2024 through January 31, 2024.

Since June 22, 2022, daisyBill has filed 176,256 Audit Complaints with the DWC to report Sedgwick for failing to adhere to California EDI regulations.

The yearly data in the tables below demonstrate that Sedgwick’s January 2024 EDI non-compliance increased compared to January 2023 EDI compliance data.

Faced with evidence of over 176,000 compliance breaches filed by daisyBill, the DWC continues to fail to enforce California workers’ compensation regulations, which harms the providers who treat injured workers.

A provider's receipt of an electronic EOR (X12 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 essential payment data about the claims administrator hidden in the paper EORs mailed to individual providers.

I’ve attached a CSV list containing 7,203 e-bills providers submitted where Sedgwick failed to return a mandated electronic EOR to the provider. The attached CSV list includes the following columns:

• Column L: [Bill] Transmission Date
• Column W: EOR (835) Compliance Due Date
• Column X: 835 EOR: Receipt Date - This column is BLANK because Sedgwick failed to send the provider an electronic EOR (835).
• Column AO: Patient Name
• Column AP: Claim Number

Audit Complaint Details

This Audit Complaint Data submitted to the DWC represents a credible complaint and credible information on claims handling violations. Per Title 8, California Code of Regulations section 10111.2(b)(10),(11), Sedgwick should be subject to audit penalties.

EDI Non-compliance: 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).

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