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The Payment Chaos Continues: Sedgwick Denies Appeal for Correct 2019 Reimbursements

February 8, 2019 by James Carey

Sedgwick’s payment mistakes multiply. First, Sedgwick incorrectly paid California providers by applying an old workers’ comp fee schedule. Now Sedgwick compounds its error by denying appeals of those incorrect payments.

As we reported recently, Sedgwick incorrectly applies the 2018 Physician Fee Schedule to workers’ comp bills for 2019 dates of service. This means providers must file Second Review appeals to seek correct payment. Unfortunately, Sedgwick is also mangling these appeals. Sedgwick continues to apply an out-of-date fee schedule to the appeals, confounding providers’ good faith efforts to correct Sedgwick’s flagrant mistake.

On behalf of our providers, DaisyBill reached out to Sedgwick requesting correct payment for incorrectly processed bills. As we await a substantive answer, providers respond to denied Second Review appeals by filing Independent Bill Reviews (IBRs) and paying the $195 fees.

Regulatory Assistance Required

In order to receive the correct payment established by the California Division of Workers’ Compensation (DWC), providers need assistance from the DWC. The DWC should require Sedgwick, York, and any other non-compliant claims administrator to correctly reprocess the many thousands of incorrect 2019 payments (DaisyBill can very easily provide the DWC with extensive payment data regarding claims administrators that are systematically incorrectly reimbursing providers).

Providers need protection from the reimbursement chaos foisted on them with impunity by these non-compliant payers. The DWC should not abandon providers and expect these providers to manage tens of thousands of appeals and to subsequently either pay thousands of dollars to file IBRs or give up on being paid correctly.

Payers need to be penalized and providers need to be reimbursed for expending additional resources to correct payer mistakes. Otherwise, there is zero incentive to stop payers from incorrectly reimbursing providers and then abusing this Second Review and IBR process.

The example below demonstrates how payers can use the current Second Review and IBR processes to essentially cheat providers who treat injured workers. It is but a single anecdote among many of the extraordinary resources required for a provider to receive correct reimbursement.

Sedgwick Bill Review Wreck

The first screenshot shows that the provider correctly used the 2019 Fee Schedule as the Billed Charges for a date of service of 1/8/2019. In other words, the provider billed exactly the amount due per the new Physician Fee Schedule.

  1. The Sedgwick explanation of review (EOR) reveals the provider billed the correct 2019 reimbursement for CPT 90834 for $127.87; $92.69 for CPT 90875; and $12.65 for WC002.
  2. Sedgwick incorrectly reduced the billed charges using the 2018 reimbursement rates. The Sedgwick error resulted in this provider receiving an underpayment for services in the amount of $12.65, an error that cost the provider more than 8%
  1. For each code, the EOR gives the reason for denial as: “Workers’ Compensation Jurisdictional Fee Schedule Adjustment.” This is generic corporate-speak for: “we’re using the correct fee schedule for California.  Are employers actually paying Sedgwick for this astounding lack of payment accuracy?

Valid Second Review Appeal

  1. Using DaisyBill, the provider filed a timely Second Review appeal with Sedgwick. Our software shows the correct reimbursement amount for the DOS and CPT in question.
  2. For ease of reference, DaisyBill’s software also automatically calculates the balance due per the Official Medical Fee Schedule (OMFS).
  3. For the Second Review reason, the provider, in plain language, clearly explains that Sedgwick incorrectly paid at 2018 rates in the original reimbursement.

  1. The provider sent Sedgwick a fully compliant Second Review appeal on January 21 with the appropriate fields filled in.

Sedgwick Incorrectly Denies Second Review Appeal

  1. Yet again, Sedgwick fails to acknowledge the 2019 Physician Services Fee Schedule. Instead, Sedgwick incorrectly denies the Second Review appeal relying once more on the same incorrect rationale that Sedgwick used for the original bill reimbursement.

From this denial, it appears no one at Sedgwick takes the time to read the text of the Second Review appeal before generating an erroneous denial. Again, are employers actually paying Sedgwick for this astounding lack of attention to the most basic fundamentals of bill and appeal processing?

Next Step: IBR

  1. To collect the correct 2019 reimbursement, the provider must request an Independent Bill Review (IBR) by Maximus. Per the IBR regulations, the provider must pay a $195 IBR filing fee and produce an indexed IBR packet. For this IBR appeal, the index packet consists of 25 pages of supporting documents.

All of this over a $19.28 Sedgwick fee schedule error. When Maximus decides in favor of the provider, Sedgwick must refund the provider the $195 filing fee, but NO one is refunding the provider the time that was spent on obtaining proper payment.

Don’t let this reimbursement debacle keep you up at night. DaisyBill can help you sleep better with fully compliant SBR appeals prepared with just three quick clicks. DaisyBill makes fighting for the correct reimbursement straightforward. Take a look for yourself and request a demo today.

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