Zurich Insurance North America is failing to reimburse providers for treating injured workers.

Since early June, Zurich has incorrectly rejected 745 valid e-bills submitted by providers. Worse, the invalid rejections continue despite daisyBill representatives repeatedly reporting the problem to Jopari, the clearinghouse responsible for accepting e-bills on Zurich’s behalf.

Accordingly, today daisyBill submitted 745 formal Audit Complaints to report Zurich’s violations of the electronic billing rules and processes established by the California Division of Workers’ Compensation (DWC). Since daisyBill’s pleas for compliance failed, to receive payment for treating injured workers covered by Zurich, providers need the DWC to enforce its e-billing regulations.

Once Zurich complies with California e-billing rules, daisyBill will resubmit all rejected bills on behalf of our provider clients. e-Billing providers who do not use daisyBill should carefully monitor all e-bills rejections by Zurich and find an alternative delivery method.

Zurich’s Invalid e-Bill Rejections

Starting June 8, Zurich began sending providers 277 acknowledgements (277 ACKs) improperly rejecting e-bills sent by daisyBill providers.

On July 12, a client reported to daisyBill that Zurich refused to accept valid e-bills for treating injured workers covered by Zurich. The client provided an example of a 277 ACK Zurich sent to the provider, which claimed incorrectly that the “Patient cannot be identified as our insured.”

daisyBill contacted Zurich, and the  Zurich representative verified that the rejected e-bill was in fact, for an injured worker covered by Zurich. daisyBill asked about other similarly rejected e-bills; Zurich confirmed that the other bills in question were also for workers covered by Zurich.

daisyBill investigated further, and our data confirmed a marked increase in the rate at which Zurich sent daisyBill clients non-compliant, false 277 ACKs rejecting e-bills.  

Subsequently, our agents took the following actions:

Below are data daisyBill sent to Jopari, demonstrating that Zurich’s 277 ACK rejection error apparently began in June, when the invalid rejection rate jumped from 2% in May to 5% in June. Zurich’s rejection rate is now 11% so far in July.

Moreover, providers received these invalid 277 ACKs after receiving 277 ACKs indicating the e-bill was accepted.

These data show each instance in which Zurich non-compliantly sent a provider the following demonstrably invalid rejection reasons:

• STC Category A7: The bill has been rejected for Invalid Information.
• STC Code 97: Patient eligibility not found with entity. Note: This code requires use of an Entity Code.
• Note: Patient cannot be identified as our insured.

Zurich: 100% Responsible for EDI Compliance

Upon receipt of an e-bill, the DWC Medical Billing and Payment Guide Section 7.1 requires the claims administrator to either accept the e-bill as complete or reject the e-bill as incomplete. Within 2 working days of receipt of an e-bill, the claims administrator must send a provider an electronic file known as a  277 Acknowledgement (277 ACK) alerting the provider that either:  

• The complete e-bill submission was received and accepted (including supporting documentation), or
• The e-bill was rejected (and will not be processed)

Because they lack the technology to accept and respond to providers’ e-bills compliantly, claims administrators, including Zurich employ clearinghouses to do so on their behalf.

As noted in the contact log above, Zurich employs Jopari as its designated clearinghouse. It must be noted, however, that the DWC Electronic Medical Billing and Payment Companion Guide states in no uncertain terms:

Billing agents, electronic billing agents, third party administrators, bill review companies, software vendors, data collection agents, and clearinghouses are examples of companies that may have a role in electronic billing. Entities or persons using agents are responsible for the acts or omissions of those agents executed in the performance of services for the entity or person.

In other words, regardless of whether the technical glitch lies with Jopari or Zurich, the insurer is entirely responsible for timely delivering compliant 277 ACKs confirming acceptance of every compliant e-bill.

Zurich has made no apparent effort to correct this error, leaving over seven hundred valid e-bills rejected (and unpaid). Zurich is now out of compliance with mandatory deadlines for the timely payment of valid e-bills — for which a technical glitch is not an acceptable excuse.

daisyBill is left with no alternative but to report Zurich’s non-compliance to the DWC in the form of Audit Complaints and wait for the DWC to take action on behalf of providers.

We will update readers of any development in this story, here on daisyNews.

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