A heads-up to New York providers treating Metropolitan Transportation Authority (MTA) employees: Sedgwick Claims Management Services, Inc. is reportedly creating havoc since taking over MTA claims.

After Sedgwick failed to issue indemnity and differential payments to thousands of injured transit workers, Transit Workers Union (TWU) President John Chiarello blasted the MTA, casting doubt on Sedgwick’s ability to handle MTA claims and citing previous concerns regarding MTA’s decision to use Sedgwick as Third-Party Administrator (TPA).

This comes as no surprise to daisyNews.

We have reported extensively on Sedgwick’s persistent failures and abuses in California. Given that Sedgwick consistently neglects to pay California providers timely or correctly for medical treatment, its failure to pay New York workers is perfectly on-brand.

Now, the TWU asserts that the MTA “botched” its claims processing by handing the reins to Sedgwick. New York providers treating injured MTA workers may be in for trouble—read on to learn what to expect from Sedgwick (and how to prepare).

TWU: Sedgwick Fumbles Not “Unexpected”

According to TWU messages, union leadership was against the MTA’s decision to hand claims off to Sedgwick from the beginning, and expressed serious concern about Sedgwick’s ability to do the job.

In a scathing message to MTA Chairman and CEO Janno Lieber regarding the missing payments, Chiarello wrote (emphases ours):

“Your management team informed us earlier this year of your determination to subcontract Workers Compensation claims processing (which had previously been done in-house) to Sedgwick…This decision, with which Local 100 did not agree, was a foregone conclusion by the time we were informed.

…however, we received multiple assurances as to the capacity of Sedgwick to handle the current inventory of claims and we were further assured that an extended transition was not necessary as Sedgwick’s expertise was indisputable.”

An MTA representative claimed that the payment delays were “the result of unexpected processing issues in the transition to Sedgwick, an expert third-party workers’ compensation administrator.” In response, as first reported by Workers’ Comp Advisor, Chiarello excoriated Lieber for the transition to Sedgwick  (emphases ours):

“The defense of Sedgwick is as incomprehensible as it is typical…

…the cause of the missing payments was not “unexpected” as you characterize them: I told you that the system Sedgwick was taking over was too complex for a rushed roll-out, but you ignored my warnings.”

Sedgwick’s Abysmal Track Record

For years, daisyNews has documented Sedgwick’s systematic non-compliance with state laws and regulations designed to protect providers and injured workers. With seeming impunity, Sedgwick consistently:

• Fails to respond to electronic bills (e-bills) with electronic Explanations of Review (e-EORs)—costing doctors incalculable time and resources
• Fails to pay at correct fee schedule rates
• Imposes unsubstantiated reimbursement discounts
• Denies providers’ legitimate appeals against incorrect payment denials and adjustments

Among the TPA’s many violations, Sedgwick currently owes a single California practice over half a million dollars in improperly withheld reimbursement, penalties, and interest payments.

Given Sedgwick’s approach to compliance and its obligations to providers and injured workers in California, it seems TWU leadership was prescient in warning the MTA that Sedgwick is a questionable choice for employers.

Protecting Your Practice

Providers who treat injured workers should always adhere to certain best practices to avoid billing problems and pre-empt abuse from claims administrators—especially Sedgwick.

If your practice treats MTA workers or any workers that Sedgwick covers, be sure to:

• Scrutinize every EOR. Check for timeliness, correct payment at fee schedule or contractual rates, and look out for potentially bogus Preferred Provider Organization discounts.
• Challenge improper denials and reductions. Sedgwick and other payers will inevitably fail to remit revenue they owe your practice at some point.
• Flag non-compliance with e-billing requirements. All payers must respond to providers’ e-bills (which are mandatory starting August 1, 2025) with the required electronic acknowledgements and timely e-EORs. Payers must also reimburse doctors for some of the cost of e-billing where applicable.
• Use analytics tools. Use an e-billing software that allows you to run reports on patterns of non-compliance or underpayment by certain claims administrators.

Hope for NY Providers

The good news: New York providers will likely fare better with Sedgwick than their California counterparts.

In our experience, New York’s Workers’ Compensation Board is infinitely more proactive and committed to enforcing provider and injured worker protections than the California Division of Workers’ Compensation. This should give providers cause for optimism—but not for complacency.

Monitor your billing and payments carefully, and use technology to level the playing field.

We make workers’ comp e-billing simple. Click below to see how daisyBill can save your practice time and money:

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