A DaisyBill client recently reminded us of a long-running issue with the claims administrator Zurich Insurance North America. Some time ago, Zurich adopted a policy of no longer issuing paper Explanations of Review (EORs) for workers’ comp bills submitted electronically. While we applaud Zurich for embracing the power of e-billing, many of the electronic EORs Zurich is issuing in place of paper EORs do not conform to the requirements Labor Code 4603.3 and the DWC Medical Billing and Payment Guide, Appendix B.

A recent customer support case detailing Zurich’s struggles with compliant electronic EORs appears below:

March 2017

Hello. I need help getting paper EORs from Zurich – the electronic EORs I receive from Zurich don’t explain why they are not paying for codes. I called Zurich, and they said I could download the EORs from their clearinghouse, Jopari. But Jopari says they send all the information Jopari receives from Zurich. Jopari says they’ve told Zurich about this many times. Any suggestions?

Both California Labor Code 4603.3 and the DWC Medical Billing and Payment Guide mandate that claims administrators must issue complete EORs, with a clear explanation for the denial of any billed codes (emphasis ours):

“(a) Upon payment, adjustment, or denial of a complete or incomplete itemization of medical services, an employer shall provide an explanation of review in the manner prescribed by the administrative director that shall include all of the following:
(1) A statement of the items or procedures billed and the amounts requested by the provider to be paid.
(2) The amount paid.
(3) The basis for any adjustment, change, or denial of the item or procedure billed.
(4) The additional information required to make a decision for an incomplete itemization.
(5) If a denial of payment is for some reason other than a fee dispute, the reason for the denial.
(6) Information on whom to contact on behalf of the employer if a dispute arises over the payment of the billing. The explanation of review shall inform the medical provider of the time limit to raise any objection regarding the items or procedures paid or disputed and how to obtain an independent review of the medical bill pursuant to Section 4603.6.”^[1]

Any EOR lacking this information is not in compliance with California law. DaisyBill’s Compliance Team has been in contact with both Zurich and Jopari in regards to this issue. We are still waiting for a response from either entity.

In the meantime, we recommend the following course of action for any provider who receives a deficient electronic EOR from Zurich:

1. Submit the bill for Second Review (SBR) using the following language:

“The EOR remitted for this original bill lacks required information explaining the reduction in payment.  Per Labor Code 4603.3(3) “The basis for any adjustment, change, or denial of the item or procedure billed“ is a required element of an EOR. Further, DWC Medical Billing and Payment Guide, Appendix B outlines electronic EOR requirements for medical treatment bills submitted electronically.

2. File an Audit Complaint* with the DWC. Audit Complaints are a simple way to affect change, and you can file anonymously, so reporting improper behavior poses no risk to your relationship with the claims administrator in question.
   
3. Let us know. If you’re a DaisyBill client, you can report an error on a bill directly from your DaisyBill account. We encourage non-clients to send us an email – we want to improve the workers’ compensation billing process for all parties.  

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

Want to learn more about e-billing for California workers’ comp? Schedule a DaisyBill demo below with one of our e-billing experts.

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