VPay Error Impacts Thousands of Sedgwick EORs

VPay Error Impacts Thousands of Sedgwick EORs

VPay, a payment processing company which issues explanation of reviews (EORs) and virtual credit card payments from claims administrators to providers, suffered a technical glitch in early November 2017. VPay did not timely send thousands of EORs denying payment from Sedgwick Claims Management Services.

To rectify the glitch, VPay recently flooded providers with EORs denying payment on Sedgwick’s behalf. Some of the EORs recently received by providers are dated as far back as November.

Crucially, these EORs are backdated to the date processed, rather than reflecting the date on which VPay actually sent the EORs out. This falsely alters the timeline, potentially narrowing or closing the timeframe in which providers may request second review. Providers should review these EORs, submit timely requests for second review where necessary, and submit audit complaints* regarding Sedgwick’s flagrant violation of relevant Labor Codes.

VPay issues payments for several workers’ compensation insurers and third-party administrators (TPAs), including Sedgwick, Broadspire, Employers, and York. The glitch affected EORs for Sedgwick only. According to VPay representatives, the company failed to notice the problem for months, before finally resolving it on February 16.

Some EORs reached providers within the mandated deadline for issuing EORs, while others, depending on the date Sedgwick received the original bill, may be non-compliant. Further obscuring this possible noncompliance is the decision to backdate these EORs, creating the impression that Sedgwick met the timelines — regardless of whether they actually did.

Per Labor Code Section 4603.4, claims administrators have 15 days from receipt of an original electronic bill to return an EOR (the timeframes are longer for non-electronic bills, depending on several factors).

Some of the faxed EORs in question are duplicates of EORs previously sent by mail. VPay issues all EORs for Sedgwick Claims Management Services. Providers known to DaisyBill have received these delayed EORs as recently as February 20.

Providers that receive denials of payment from Sedgwick should review them for accuracy and timeliness, bearing in mind that some are mendaciously backdated. For illegitimate denials, submit a compliant request for second review within 90 days of actual receipt of the EOR.

For untimely EORs, we recommend submitting an Audit Complaint to the Division of Workers’ Compensation (DWC)’s Enforcement Unit.

We’ve questioned the financial wisdom of accepting credit card payments from claims administrators, virtual or otherwise. Given that even small credit card fees can add up to significant loss of revenue for medical bills, the practice would only seem to benefit the payor. And despite pressure from some, no claims administrator may require providers to accept payments via credit card.

Providers can contact VPay Support at (855) 523-9635 to customize their EOR preferences, if they wish to receive EORs via mail rather than fax. We’ll keep readers informed of any updates to this story.

*NOTE: The Audit Complaint form was updated in 2019. Access the updated form here: https://www.dir.ca.gov/dwc/Auditref.pdf

DaisyBill helps providers keep claims administrators honest, with automatic tracking of original bills, requests for authorization, and requests for second review. Keep your office (and theirs) compliant with our Billing Software. Schedule a free demonstration for your office today.


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