Once again, Third-Party Administrator (TPA) Sedgwick Claims Management Services authorized treatment for an injured FedEx employee, only to refuse to pay for it. More concerning, Sedgwick won’t provide an Explanation of Review (EOR) explaining why, in direct violation of state law and regulations.

Sedgwick insists that its bill review vendor for FedEx claims, Genex, is the only entity capable of providing the EOR. Genex insists that Sedgwick is the only entity capable of providing the EOR.

This frequently non-compliant TPA and its vendor’s binary incompetence created a circular error that left the provider unpaid, with no formal rationale for the non-payment and no way to properly dispute it.

Compounding the clownishness, Sedgwick maintains a phone line to a dedicated FedEx claims unit…which no one answers, at least not when we call.

As we noted last time this happened, FedEx should be asking its TPA some hard questions. The shipping giant entrusts Sedgwick to manage its employees’ claims, which includes paying for medical care and ensuring general compliance with state laws and regulations.

daisyBill has filed formal Audit Complaints with the California Division of Workers’ Compensation (CA DWC), reporting hundreds of thousands of violations by Sedgwick over the years. The TPA currently maintains an Electronic Data Interchange (EDI) compliance “Grade” of D in our Claims Administrator Directory.

In our view, Sedgwick is not representing FedEx well, to the detriment of its employees and the healthcare providers who treat them.

Sedgwick's Disregard of the Rules

Like the worst possible sequel to Groundhog Day, Sedgwick and Genex failed in almost the exact same manner as last time:

1. Sedgwick authorized treatment for the FedEx employee as medically necessary.
2. The provider rendered the authorized treatment and submitted a compliant electronic bill (e-bill) to Sedgwick, with all the required supporting documentation (including proof of authorization).
3. Sedgwick failed to send the required electronic Explanation of Review (e-EOR).
4. The provider sent a duplicate e-bill.
5. Sedgwick failed to respond to the duplicate e-bill.
6. The provider contacted Sedgwick’s in-house bill review department, which told the provider to call Genex, Sedgwick’s bill review vendor for FedEx claims.
7. The provider called Genex, which claimed that the bill was denied for lack of documentation. However, Genex couldn't provide an EOR and told the provider to contact Sedgwick's dedicated FedEx claim unit.
8. The provider called Sedgwick's dedicated FedEx claim unit. No one answered (as was the case last time).
9. The provider called Sedgwick’s primary bill review department, which repeated the instructions to contact Genex for an EOR.

The provider's only recourse in this situation is to manually post a $0 payment amount to their e-billing system and submit a Second Review appeal asking Sedgwick to reconsider its erroneous denial, which was based on patently untrue claims of missing documentation.

However, there’s a problem: California Code of Regulations Section 9792.5.5 dictates that a Second Review appeal include (emphases ours):

• “The date of the explanation of review and the claim number or other unique identifying number provided on the explanation of review.”
• “The additional information provided in response to a request in the first explanation of review or any other additional information provided in support of the additional payment requested.”

With no EOR to speak of, Sedgwick could technically dismiss any Second Review appeal the provider submits as non-compliant. Not that it necessarily matters; Sedgwick has a well-documented history of improperly denying perfectly compliant appeals, too.

Workers’ Comp’s Sedgwick Problem

Sedgwick is the largest TPA in the nation, handling a massive volume of claims for major employers nationwide. With its incomparable market share, Sedgwick’s many persistent failures are a drag on the entire system.

Sedgwick maintains the worst grade among major payers on daisyBill's Claims Administrator Directory for EDI compliance, a solid D.

Note that Sedgwick’s specific grade for electronic EOR compliance is at 54%, a well-deserved F.

While Sedgwick’s lackluster compliance hurts providers and injured workers, it does not seem to have harmed the TPA’s profitability. Sedgwick is flush with private equity funding, even as it fails to compensate providers for delivering the care it authorizes, and once touted refusals to authorize care as a metric worth celebrating.

Moreover, Sedgwick's frequent violations may discourage provider participation in the workers’ comp system, further imperiling workers’ access to care.

FedEx reportedly employs over half a million people; its choice of TPA to manage their claims is critical. By objective measures of legal compliance, Sedgwick is a deeply questionable choice that FedEx should reconsider.

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