Is Sedgwick Claims Management Services, Inc. even trying?

The Third-Party Administrator (TPA) is the largest in workers’ comp, managing claims for a massive portfolio of employers. Yet, Sedgwick often fails to meet even the most basic obligations to providers and injured workers (it’s been described as a “menace” by labor representatives) and is notoriously non-compliant with state laws and regulations.

Most recently, Sedgwick failed to share the required remittance advice with a California provider who treated an injured Starbucks employee, forcing daisyCollect to expend time and resources searching for an Explanation of Review (EOR) that Sedgwick is legally bound to provide.

Starbucks, along with any doctor treating a Starbucks employee, should be aware of just how inept Sedgwick is and how difficult the TPA can make it for practices to accept workers’ comp patients.

Sedgwick: Non-Compliance and Buck-Passing

After Sedgwick improperly reduced the payment amount for a Starbucks employee’s treatment, daisyCollect submitted a timely, compliant Second Review appeal to dispute the reduction.

When the 14-day legal deadline for Sedgwick to respond to the appeal passed with no word from the TPA, daisyCollect called Sedgwick to investigate. An automated message instructed the caller to leave a voicemail with all the pertinent information to request an EOR, which our agent did.

But instead of receiving an EOR, we received the fax below, which claims that Sedgwick cannot provide an EOR (which Sedgwick refers to as an “EOB,” or Explanation of Benefits) because it is “not the bill review vendor for this claim.”

Sedgwick couldn’t even bother to fill in its own fax template; the fax instructs the provider to contact ‘EMPLOYER,’ without specifying the employer, for an EOR. Additionally, the fax instructs the provider to sign up for Sedgwick’s ViaOne Express portal to “print out your own Explanation of Review.”

To be absolutely clear: Sedgwick is the designated claims administrator, and therefore Sedgwick is legally responsible for providing a timely EOR (in this case, an electronic EOR (e-EOR), since the bill and appeal were submitted electronically).

If an outside party conducts bill review on Sedgwick’s behalf for Starbucks claims, that does not excuse Sedgwick from its responsibility for payment compliance.

Moreover, the instructions on the fax to print out an EOR do not constitute compliance by Sedgwick. Any documentation available on the ViaOne portal is no substitute for the required e-EOR, which automatically posts payment details to the provider’s e-billing system. Plus, when daisyCollect checked the ViaOne portal, there was no EOR of any kind available for the bill in question.

Do the Rules Apply to Sedgwick?

Providing timely and compliant responses to bills and appeals has never been Sedgwick’s strong suit.

Now, daisyCollect will have to climb down the rabbit hole to obtain the remittance advice the provider needs to resolve this bill. It’s a classic example of the needless administrative work and friction Sedgwick imposes on providers (and their billers) by consistently failing to comply with state laws and regulations.

Worse, for repeatedly increasing providers’ costs in time and resources, Sedgwick will likely face no repercussions.

daisyBill has submitted formal Audit Complaints to the California Division of Workers’ Compensation (CA DWC) documenting hundreds of thousands of violations like this one, to no apparent effect. The TPA repeatedly fails to send e-EORs in response to bills, denies valid appeals as so-called “duplicate” submissions, grants itself baseless reimbursement discounts, and commits other abuses.

The CA DWC has never, to our knowledge, imposed a meaningful consequence. Sedgwick therefore has no incentive to play by the rules, even as it disincentivizes the treatment of injured workers.

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