Sedgwick Claims Management fined over $1M for its utilization review practices in CA

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Not long ago, we wrote about how Sedgwick CMS’s unreasonable delays in delivering treatment to an injured worker killed him.  Well, they’ve recently agreed to a $1,129,600 settlement in response to the allegations brought by the California Workers’ Compensation Appeals Board for labor code violations stemming from Sedgwick’s utilization review practices.

What is utilization review, anyway? An online search of the terms brings up a definition saying it’s a “safeguard against unnecessary and inappropriate medical care.”  That’s not what I’ve observed.  I’d define it in the workers’ compensation claims management process as this:  “a tool used by insurance adjusters to delay or deny medical treatment prescribed by an injured worker’s authorized treating physician, by sending select medical records to a non-practicing physician in another state who has never seen the injured worker and paying him a fee, with the expectation that said physician will declare the requested medical procedure unreasonable and/or unnecessary.” 

The Audit and Enforcement Unit investigation resulted in 75 “mandatory administrative penalties” against Sedgwick. The violations included allowing someone other than a licensed physician to modify, delay, or deny requests for authorization and failing to issue timely responses to requests for authorization.  Maybe my definition above needs quotes around “physician.”

Sedgwick released a statement saying, “[t]here was a settlement reached, but the most important part of our statement is Sedgwick’s commitment to ensuring injured workers received the best possible care when they need it so they are able to return to full health and productivity.”

Was the $1,129,600 adequate for Sedgwick’s alleged violations?  Its actions caused a man his life, and it physically, mentally, emotionally, and financially harmed several additional injured workers in California to create the need for this investigation to begin.

Do you think this only happens in California?

Sedgwick’s press release after the settlement mentions having 275 offices and 12,000 employees across the U.S., Canada, and United Kingdom. We’ve certainly seen them on many, many claims here in Georgia.

Do you think this only happens to claims managed by Sedgwick CMS?

It happens with many carriers or the companies carriers employ to help “manage” their open claims.  This is why having representation is essential if you’re badly injured at work.  Charles Romano hurt his shoulder stocking shelves for Ralph’s grocery store in Camarillo, CA, and now he’s dead. Hopefully, the investigation and the fine that resulted will deter continued delays, but that’s not what we observe every week in a our law practice dedicated to representing injured workers.  Don’t trust your health and recovery to an insurance adjuster.



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