Sedgwick Claims Management Services, Inc. has withheld hundreds of thousands of dollars in reimbursement from a single California orthopedic practice for over a year.

Sedgwick initially withheld the funds by applying invalid Preferred Provider Organization (PPO) discounts, which Sedgwick acknowledged only after serious pressure from daisyBill and the California Orthopedic Association (COA).

Yet, months after agreeing to reprocess the bills in question, Sedgwick has paid less than 3% of what it owes with penalty and interest included:

• Total amount Sedgwick owes: $574,350.27
• Total reimbursement amount paid: $12,978.17
• Total penalty amount paid: $1,697.85
• Percentage of total due that Segwick has paid: 2.6%

Sedgwick improperly slashed reimbursement for bills the practice submitted from June 2023 through January of 2025. As of this writing in October 2025, Sedgwick has remitted only a trickle of payment.

Sedgwick has paid nothing since May 21, 2025.

This is the abuse providers risk when they treat injured workers covered by Sedgwick, somehow the nation’s largest workers’ comp claims administrator despite its consistently abysmal performance.

Sedgwick: Months of Invalid Discounts

The practice has a Coventry discount contract whereby Sedgwick agreed to pay 90% of the amounts owed under California’s workers’ comp fee schedule.

Yet, for months, Sedgwick cited Coventry PPO agreements to reduce the orthopedists’ reimbursements by seemingly random amounts, often to less than half the state fee schedule amounts.

In the example below (one among thousands), Sedgwick slashed reimbursement for common Evaluation and Management code 99214 down to 44% of the fee schedule rate.

Sedgwick applied invalid discounts like the one above for several months, citing contracts that didn’t apply or didn’t exist (including one that the practice had terminated years earlier).

Ultimately, Sedgwick improperly reduced the practice’s reimbursements by well over $300,000.

When daisyBill contacted Sedgwick to correct the error, Sedgwick responded with excuses and stonewalling but no substantive action (ditto for the California Division of Workers’ Compensation (CA DWC), which refused to intervene).

Meanwhile, Sedgwick continued the plunder.

Finally, we enlisted help from COA’s Executive Director, who demanded answers from Sedgwick. Subsequently, Sedgwick agreed to reprocess all of the affected bills.

Sedgwick Moves at Snail’s Pace to Fix Its Error

Sedgwick made its pledge to reprocess the bills in January 2025. By this time, with penalties and interest, the amount due from Sedgwick exceeded half a million dollars. However:

• By April, Sedgwick had paid only $12,604.
• By May 2025, Sedgwick had paid $12,896.
• By July 2025, Sedgwick had paid $13,992.

As of this writing, Sedgwick has paid a grand total of $14,676. By our (accurate) calculations, that leaves Sedgwick short by $559,674, or 97% of the total due.

Sedgwick has issued zero new payments since daisyNews’ last payment update to this story on July 16, 2025 (the practice has since uploaded older payments Sedgwick issued prior to July 16, hence the total paid increasing to $14,676).

Every day that goes by without full reimbursement increases the interest Sedgwick owes. Yet, this TPA seems in no hurry to pay a practice it starved for months based on (admittedly) invalid discounts.

Does it actually take Sedgwick this long to reprocess these bills, or does Sedgwick think they can wait the doctors out? Is Sedgwick secure in the knowledge that the CA DWC will take no action whatsoever, and hoping the practice can’t or won’t commit the necessary resources for a lawsuit?

Whatever’s keeping Sedgwick from paying up (incompetence, hubris, or a lack of intention to reimburse the doctors fully), this story is emblematic of the problem in California workers’ comp.

Payers fear no consequences, face no consequences, and have no incentive to fulfill their legal obligations.

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