Sedgwick Claims Management Services is breaking the law. We encourage the California Division of Workers’ Compensation (DWC) to assert its role in upholding workers’ comp law, and to impose appropriate consequences on this claims administrator for its blatant disregard of e-billing requirements.

From January 1 to May 15, 2022, Sedgwick failed to timely send electronic Explanations of Review (X12 835 e-EORs ) in response to daisyBill providers’ e-bills 13,999 times.

Below is the message and formal Audit Complaints daisyBill submitted to the DWC on our provider clients’ behalf, documenting and reporting the scope of Sedgwick’s violations.

e-EORs significantly reduce providers’ administrative burden by automatically posting to the e-bill sent by the provider, closing the payment loop, and cutting the time and effort necessary to manage practice revenue.

Bottom line: failing to return timely e-EORs, as Sedgwick did, breaks the law. California Labor Code 4603.4 guarantees providers who choose to e-bill an electronic EOR response and payment in 15 working days.

To: XXXXXXX@dir.ca.gov

Subject: Sedgwick - X12 835 Late: EDI Non-compliance for 13,999 bills

Below is an Audit Complaint reporting credible data that Sedgwick failed to timely send 13,999 electronic EORs (X12 835) to California providers as mandated by California law. This Audit Complaint data represents California workers’ comp e-bills submitted to Sedgwick by providers from January 1, 2022 through May 15, 2022.

Please note that concurrently with this email we are sending a separate communication regarding Sedgwick’s failure to send electronic EORs at all in another 25,970 instances.

For providers who choose to submit electronically, California law LC 4603.4 guarantees those providers that claims administrators will adjudicate and pay those e-bills within 15 working days of receipt of the e-bill. Accordingly, the California Medical Billing and Payment Guide mandates that a claims administrator must both 

1. Electronically send the provider an EOR within 15 working days of receipt of an e-bill from the provider, and
2. Pay the e-bill within 15 working days of receipt of an e-bill.

Per Title 8, California Code of Regulations section 10111.2(b)(10),(11), Sedgwick should be subject to audit penalties for failure to adhere to California law.

For 2022, attached is a CSV list containing 13,999 e-bills providers submitted where Sedgwick failed to timely return a mandated electronic EOR to the provider. The attached CSV list includes the following columns:

• Column L: [Bill] Transmission Date
• Column V: EOR (835) Compliance Due Date 
• Column W: EOR (835) Receipt Date - The dates in this column are AFTER the EOR (835) Compliance Due Date
• Column AN: Patient Name
• Column AO: Claim Number

On 6/15/2022, daisyBill emailed four Sedgwick representatives to report the lack of compliance:

• XXXXXXX, Vice President of Quality
• XXXXXXX, Workers' Compensation Compliance Specialist
• XXXXXXX, IT Software QA Specialist
• XXXXXXX, [Title unknown]

As of 6/22/2022, Sedgwick has failed to respond.

Audit Complaint Details

This Audit Complaint Data submitted to the DWC represents a credible complaint and credible information of claims handling violations.

Bill Transmission: Original Bill / Second Review - 835 EOR Late

Non-compliance: Claims administrator failed to timely 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 the 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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