Zurich seems committed to a policy of improperly denying reimbursement for telehealth services, during a pandemic in which remote treatment is crucial to maintaining care for workers.
Zurich denies reimbursement by applying bill adjustment reasoning that California’s Division of Workers’ Compensation (DWC) specifically identified as inapplicable. Despite clear DWC instructions, Zurich justifies the invalid denials by citing providers’ failure to apply a billing code modifier, which designates services as occurring via telehealth.
The question is: why?
Zurich Employers Affected
As of this writing, Zurich has improperly denied reimbursement for telehealth services to injured employees of the following companies:
ADL Painting and Wallcovering
American Justice Inc
Anthem Blue Cross
Atrium Windows and Doors
Bay Home & Window
Bold Quail Holdings
BSA Framing, Inc.
C & H Sugar
Centric Parts Inc.
Cognizant Technology Solutions
Fairmont Miramar Hotel
Flagship Facility Services
Flying Flood Group LLC
Four Seasons Landscaping
Frank Crum, Inc.
Giampolini & Co
Greystone Plastering, Inc.
Household Finance Corp
JR Filanc Construction
La Jolla Nursing and RehabLifelong Medical Care
Makeup Art Cosmetics, MAC
Martin Luther King, Jr. Community Hospital
Old Republic Insurance
Pacific Coast Manor
Prospect Medical Holdings
Red Lobster Management
San Jose Job Corps/CSD
Santa Clara Health Authority
Taylor Farms Food Service
The Fairmont Sonoma
The Kingdom Group
TJX COMPANIES/ MARSHALL'S
Worldwide Tech Services
Zumiez Distribution Center
By incorrectly denying reimbursement to providers, Zurich does a disservice to the above companies and their employees. Worse, Zurich does so by exploiting a technicality peculiar to telehealth billing, in contravention of DWC guidelines, when remote services are more important than ever.
Zurich denies the bills in question using Claims Adjustment Reason Code (CARC) 4. CARCs represent standardized universal language for common denial reasons. CARC 4 states:
“The procedure code is inconsistent with the modifier used or a required modifier is missing.”
The “required modifier” in question is modifier 95, which providers use to bill for medical services furnished via telehealth. In April of 2020, the DWC adjusted its telehealth regulations to include the use of modifier 95 when providers bill for telehealth services.
However, the DWC Medical Billing and Payment Guide specifically addresses CARC 4, stating:
“If modifier is incorrect, billed OMFS code should still be considered for payment either without use of the modifier or with adjustment by the reviewer to the correct modifier, when the service is otherwise payable.”
As shown below, the Billing and Payment Guide is unambiguous:
In other words, as long as the billing code reflects the correct authorized service, claims administrators have no reason to deny reimbursement for lack of the modifier. Unless, of course, the reason is to strip providers of due reimbursement.
How to Fight Improper Modifier-Based Denials
If your office faces similar denials from Zurich or other claims administrators, submit a Second Review appeal within 90 days, with the following language:
“Provider failed to report the correct modifier. This bill should be reprocessed with modifier 95 as follows [billing code]. Per CA Payer Instructions ‘If modifier is incorrect, billed OMFS code should still be considered for payment either without use of the modifier or with adjustment by the reviewer to the correct modifier, when the service is otherwise payable. Indicate alternative modifier if assigned.’”
Unfortunately, providers must be ready to battle blatantly invalid denials like Zurich’s. At this point, Zurich cannot plausibly claim ignorance of the relevant DWC guidelines, as DaisyBill clients and our own agents consistently appeal these telehealth denials with the language above.
And yet, the denials continue. So must the fight to keep payers like Zurich from making it even harder to treat injured workers than COVID already has.