Leave it to Sedgwick Claims Management Services, Inc. to pioneer yet another way to contort Independent Bill Review (IBR), the process by which California providers enlist the state to resolve payment disputes.

Yesterday, we shared how Gallagher Bassett and its vendor, JPMorgan, put a fresh twist on the classic game we call “IBR Chicken.” Sedgwick, ever the innovator, has invented a new approach.

For those unfamiliar, IBR Chicken is when a payer repeatedly denies a provider correct reimbursement for an injured worker’s treatment, only to reverse course and pay up after the provider pays $195 and requests IBR.

Maximus, the state’s independent reviewer, has confirmed that nothing in California regulations bars payers from withholding reimbursement until after an IBR request. In some cases, the payer subsequently asks the provider to withdraw the request, which conveniently releases the payer from its obligation to refund the filing fee (As we’ve written before, providers should never withdraw an IBR request, no matter how much the payer clucks.)

Per standard IBR Chicken protocol, Sedgwick denied payment for a bill and the subsequent Second Review appeal. When daisyCollect paid $195 to request IBR on the provider’s behalf, Sedgwick paid up.

But rather than asking the provider to withdraw the IBR request, Sedgwick waited until Maximus issued a Final Determination in the provider’s favor, then sent Maximus a formal objection asking Maximus to reverse its decision because the bill had been paid.

Welcome to IBR Chicken 3.0.

Sedgwick Denies a QME, Then Pays Following IBR Request

Sedgwick kicked off this round of IBR Chicken in a particularly galling way.

A defense attorney representing Sedgwick and the employer, Cheema Freightway, Inc., asked a Qualified Medical Evaluator (QME) to conduct a Follow-up Medical-Legal Evaluation (billing code ML202).

Sedgwick received the original bill on June 9, 2025 and denied payment on June 19, 2025, citing a lack of authorization, which does not apply to Medical-Legal bills. daisyCollect sent Sedgwick a Second Review appeal on June 26, 2025 to dispute the erroneous payment denial. On July 10, 2025, Sedgwick denied the appeal, resorting to its well-worn practice of classifying the appeal as a duplicate bill.

As daisyNews has documented, Sedgwick routinely denies Second Review appeals as duplicates, so much so that daisyBill has filed 36,226 Audit Complaints with the California Division of Workers’ Compensation (CA DWC) over the practice. Every one of those improper denials forces the provider to either accept the underpayment or pay $195 to request IBR, which, of course, is the entire point of IBR Chicken.

With no other option, daisyCollect requested IBR on behalf of the QME on August 8, 2025. Presumably, Sedgwick received its copy of the IBR application shortly thereafter.

Here’s where the IBR regulations work in Sedgwick’s favor: When a provider pays $195 to file for IBR, California Code of Regulations Section 9792.5.7 requires the provider to send a copy of the IBR to Sedgwick concurrently. This means that Sedgwick knows which providers lack the resources to fight improper duplicate-bill denials and which will pony up $195 to pursue correct payment.

On August 22, 2025, 14 days after filing the IBR application, Sedgwick paid the QME’s bill. Of course, Sedgwick did not pay the $195 IBR filing fee. Sedgwick also did not pay $150.56 in self-executing penalty and interest owed under California Labor Code Section 4622 for paying the bill late.

Sedgwick Levels Up Its Game of Chicken

California Labor Code Section 4603.6 requires the CA DWC to assign an IBR case to Maximus within 30 days of receiving the application. daisyCollect filed this IBR request on August 8, 2025, setting the CA DWC’s assignment deadline at September 7, 2025.

Yet, the agency didn’t assign the case until February 18, 2026, 164 days past the statutory deadline. (This is just one among many CA DWC violations of the 30-day assignment requirement.)

Once Maximus finally took up the case, Maximus ruled quickly, issuing the Final Determination on March 27, 2026. The seven-month gap between the IBR request and Final Determination is entirely on the CA DWC.

Predictably, Maximus ruled in the QME's favor, citing the defense attorney's own letter designating the QME and requesting the evaluation (emphases ours):

“Submitted letter from the Defense Attorney addressed to the Provider dated 04/25/2025 reflects, ‘...you have been designated by the parties to act in the capacity of Qualified Medical Evaluator. You are scheduled to re-evaluate Applicant (Name Redacted)...’”

Maximus ordered Sedgwick to pay the QME $1,511.25 total  ($1,316.25 for the ML202 service plus the $195 IBR filing fee) within 45 days.

It seemed as though this round of IBR Chicken was over. But Sedgwick had another move to make. On April 3, 2026, Sedgwick sent Maximus a formal letter (below) objecting to the Final Determination, noting that it had paid the original amount owed in full (emphasis ours):

“Please note the 05/08/2025 date of service in question, was paid on 08/22/2025 in full for $1,316.25 and the check cleared our account on 08/28/2025.

There has been no request or invoice from [QME] office regarding this payment.”

Notably, Sedgwick's letter does not mention the $195 IBR filing fee at all or argue against the refund. It simply asks Maximus to reverse the Final Determination because the underlying bill had already been paid. This would presumably (quietly) vacate the obligation to refund the filing fee and leave the QME out of pocket for the privilege of forcing Sedgwick to pay a bill Sedgwick should have paid without a fight.

As of this writing, we are not aware of any plans by Maximus to change its decision.

IBR Chicken 3.0, Explained

Sedgwick’s innovation is the “pay-and-object” maneuver, the first we’ve seen. In earlier rounds of IBR Chicken, payers who paid a bill after the provider filed for IBR would typically ask the provider to withdraw the IBR request or ask Maximus to deem the dispute ineligible, as payers occasionally do. Sedgwick did neither. Instead, Sedgwick simply:

1. Denied the bill for an inapplicable reason (lack of authorization on a Medical-Legal evaluation the defense requested).
2. Denied the Second Review appeal as a “duplicate bill,” Sedgwick’s longstanding tactic.
3. Waited until the QME paid $195 to request IBR, then paid the bill.
4. Let Maximus proceed with the IBR decision.
5. Objected to Maximus’ Final Determination, arguing the bill was paid, without ever mentioning the $195 filing fee.

If Maximus accedes, Sedgwick walks away from its legal obligation to refund the $195 filing fee.

If Maximus does not, Sedgwick can refuse to refund the $195 filing fee until the QME hires an attorney to obtain a Workers’ Compensation Appeals Board (WCAB) order compelling payment.

For Sedgwick, IBR Chicken 3.0 is a can't-lose.

The Bigger Picture

The economics of fighting for a $1,316.25 Medical-Legal bill ($195 out of pocket, months of waiting, extensive documentation requirements, potentially an attorney at the WCAB) can just barely pencil out. The provider eventually gets paid (probably), with some chance of also recovering the $195 (eventually, maybe).

But most of the 36,226 Second Review appeals that Sedgwick has denied as duplicate bills involve routine treatment, with the disputed amount a fraction of the $195 IBR filing fee. No provider can afford to pay $195 to chase $60. No provider has seven months to wait on the CA DWC and then chase down the filing fee at the WCAB for a $100 underpayment.

This is why California injured workers are increasingly unable to find providers willing to treat them.

This pattern isn’t just about filing fees; it affects access to care. Payer tactics like this contribute to a reimbursement dispute environment that deters provider participation in the system. We urge the CA DWC to use its regulatory authority to address this payer misconduct not just for the sake of providers, but for injured workers as well.

That the CA DWC has historically done nothing about any of this is how we got IBR Chicken 1.0, 2.0, and now 3.0. We can only hope the new leadership at the CA DWC recognizes that the cost of letting payers play these games is ultimately paid by employers and their injured employees, who struggle to find care.

daisyBill lets providers submit instant payment appeals and includes tools for easier IBR requests. Click below to learn more:

BILL BETTER: DAISYBILL