Readers may recall last year’s daisyNews report on how Third-Party Administrator (TPA) Sedgwick Claims Management Services, Inc. underpaid a California orthopedic provider by over $300,000—violating the clear terms of a Coventry Preferred Provider Organization (PPO) contract.  

The provider’s Coventry contract stipulated payment at 90% of the Official Medical Fee Schedule (OMFS) rate, but Sedgwick discounted the provider’s reimbursement to rates as low as 52% of the OMFS.

In our follow-up article, daisyNews detailed how the California Division of Workers’ Compensation (CA DWC) ignored formal Audit Complaints, which we submitted with clear and complete documentation of the contracted payment violations. Sedgwick's payment abuse continued unchecked, and the state regulator was missing in action.

Today, we reveal that Sedgwick has seemingly finally admitted fault—but still refuses to reimburse the orthopedist for the funds the TPA improperly withheld.

Below, we demonstrate how—unfortunately for providers who treat California’s injured workers—the CA DWC props up a payment system that systematically enriches claims administrators and their private equity owners while these entities financially crush providers.

Recap: Sedgwick Ignored Demands for Proof of Contract, CA DWC Looked the Other Way

This story stretches back to March 2024, when daisyBill contacted Sedgwick directly, demanding copies of any PPO contracts justifying the massive discounts that Sedgwick had applied to the orthopedic practice’s reimbursements. California Labor Code Section 4609 mandates that Sedgwick respond to a provider’s request for proof of contract within 30 days or cease taking reimbursement discounts.

Sedgwick ignored California law and failed to respond to the provider’s request with a contract legitimizing Sedgwick’s large payment reductions.

When daisyBill turned to the CA DWC for help, the state regulator responded (as usual) with the sound of silence.

Sedgwick ignored California law and continued to reduce the orthopedic practice’s reimbursements, applying discounts without proof of any contractual right.

COA Steps In, the Excuses Begin

In December 2024, after nine months of Sedgwick’s stonewalling, daisyBill enlisted the help of the California Orthopaedic Association (COA). Executive Director Diane Przepiorski agreed to intervene on behalf of its orthopedic member.

Sedgwick and Coventry began scrambling for explanations.

After months of silence, Sedgwick claimed that the discounts weren’t based on the Coventry contract (which Sedgwick cited in the Explanations of Review it sent to the provider). Instead, allegedly, the discounts were based on a Multiplan contract.

However, there was one problem: the provider terminated their Multiplan contract in 2019.

When the unflappable Ms. Przepiorski pressed for answers, neither Sedgwick nor Coventry could explain who authorized the use of a defunct contract—or why Sedgwick refused to respond to the orthopedists’ original request for proof of a legitimate PPO contract nine months earlier.

Sedgwick Says It Will Reprocess Claims—But Where’s the Money?

By January 2025, faced with the avalanche of documentation and payment data daisyBill provided and under pressure from COA, Sedgwick finally agreed to reprocess the bills that Sedgwick had underpaid and reimburse the provider at 90% OMFS as contracted.

daisyBill provided Sedgwick a comprehensive audit listing over 9,800 instances where Sedgwick reimbursed the practice less than its contracted rate of 90% of the OMFS for bills paid from August 1, 2023 through January 27, 2025. According to the daisyBill’s audit, Sedgwick owed the practice over $574,350.

Over two months later, as of this writing, the total Sedgwick has paid the practice: $12,604.

That’s it. Two months after acknowledging hundreds of thousands worth of violations, Sedgwick has repaid just 2% of its debt to this practice.

California Providers: You Are Sitting Ducks

Every provider in California is vulnerable to the exact same payment abuse this orthopedic practice suffered.

Here’s what should terrify every workers’ comp provider in California:

• Claims administrators ignore Labor Code §4609 and will not provide proof of PPO contracts when requested by providers.
• The CA DWC refuses to take action when claims administrators slash reimbursements without substantiating a valid contract.
• The CA DWC does not allow these disputes to go to the Independent Bill Review (IBR).
• Providers have no formal path to challenging improper PPO reductions, even when the payer refuses to produce proof of a valid contract.

The CA DWC has rigged a workers’ comp payment system that allows such blatant, demonstrable violations, allowing claims administrators to plunder practices with reimbursement discounts that enrich claims administrators and their private equity owners.

Final Word (For Now)

Sedgwick admits it underpaid the practice.

Sedgwick agreed to reprocess the claims.

However, months later, the orthopedic group still waits for their money.

This is what happens when the CA DWC fails to perform its function as a regulator: to regulate. When payers can operate without oversight or consequences for violations, they don’t follow the law out of duty; they act in financial self-and private equity-interest.

This is why providers are walking away from workers’ comp.

This is why access to care for injured workers is collapsing in California.

And this is why daisyBill will keep exposing every abuse, every time. Because someone has to—even if the state will do nothing about it.

daisyBill can’t make claims admins follow the law—but we can make workers’ comp billing smooth, fast, and low-friction. Schedule a chat to see how.

SCHEDULE CALL