York Risk Services, which was acquired this month by Sedgwick, has significant math troubles. York recently returned Explanations of Review (EORs) which obfuscated the effects of PPO discounts and/or contained baffling errors in basic reimbursement arithmetic. And while York’s failure to add and subtract is laughable, the resulting confusion and underpayments are anything but amusing.

Providers and employers, be aware: claims administrators’ math “errors” can cost your office revenue. York is both calculating (in their attempts to hide discounts), and miscalculating (your payments).

Incoherent, Baffling Math Errors

In this first example, York made some truly perplexing math errors.

• Billed Amount = $596.68
• York’s applied PPO Reductions =  $28.98
• York’s EOR states that the Net Allowed = $579.59 (which is a mystery amount because it is not the Billed Amount less the PPO Reductions. That amount would be $567.70)
• York’s actual Check Total = $550.61 (which is neither the Billed Amount nor the Net Allowed amount; it is seemingly a magical amount pulled out of the ether).

We’re not sure how York arrived at its figures for Net Allowed and Check Total, as neither seems to have any mathematical relationship to the PPO Reduction taken.

The EOR simply reaches a new, stunning level of incoherence:

Hidden PPO Reductions

In this second example, York returned an EOR that displayed PPO reductions for each line item, but misstated the total “Net Allowed” by omitting those reductions. The check total, of course, reflects the incorrectly reduced reimbursement slashed by the PPO discount.

To break it down:

• Billed Amount = $416.35
• York’s applied PPO Reductions =  $20.81
• York’s EOR states that the Net Allowed = $416.35 (not subtracting the PPO Reductions)
• York’s actual Check Total = $395.54 (subtracting the PPO Reductions)

The result? This provider could not blithely trust that the Net Allowed amount stated on York’s EOR was the amount that York actually paid. The provider is losing revenue via PPO discounts — but one wouldn’t know it from the opaque math displayed on the EOR.

Incorrect payments are nothing new in workers’ comp. Claims administrators regularly misinterpret fee schedules and otherwise fail to comply with the regulations, forcing providers to fight to protect their revenue. But putting providers in a position to have to check claims administrators’ math is a ridiculous new imposition — one for which York (and now Sedgwick) should be embarrassed.

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