The Explanation of Review (EOR) — sometimes delivered electronically as an 835 remittance, sometimes as a paper document or portal posting — is the payer's official accounting of your bill. It states, line by line, what you billed, what the payer "allowed," what it actually paid, and the reason codes for any difference. Reading it well is the single highest-leverage skill in work-comp billing, because the EOR is where underpayments live.
The three numbers that matter
For every service line, find these three:
- Billed — what you charged.
- Allowed — what the payer says the fee schedule permits.
- Paid — what they actually remitted.
Then run two checks. First: does Allowed match the fee schedule? For a med-legal line, compute the MLFS allowance (the ML code times its compounded modifier stack) and compare. If the payer's "allowed" is lower than §9795 says, that's an underpayment regardless of how clean the rest of the EOR looks. Second: does Paid match Allowed? If the payer allowed the right amount but paid less, something — often a network discount — was applied after the fact.
The EOFS — your decoder ring
California EORs include or reference an Explanation of Fee Schedule (EOFS): the payer's stated basis for the allowed amount. The EOFS is where the payer shows its work — which fee schedule, which rate, which reductions. When the allowed amount looks wrong, the EOFS usually tells you why the payer arrived at it, which is exactly what you need to write a targeted rebuttal.
Adjustment codes — what the reductions mean
Reductions are explained with CAS adjustment codes. A few you'll see constantly on California work-comp EORs:
| Code | Meaning | Accept or dispute? |
|---|---|---|
CO-45 | Charge exceeds the fee-schedule/maximum allowable. | Accept only if the allowed amount truly matches the schedule. |
PR-242 | Services not provided by network/PPO provider — i.e., a PPO discount. | Dispute on med-legal (§9789.30(d)). |
CO-97 | Payment bundled into another service. | Verify the bundling is correct. |
CO-50 | Not deemed medically necessary. | Often disputable with documentation. |
CO-16 | Missing information / lacks documentation. | Fix and resubmit, or cite the 277CA acceptance. |
The PPO reduction hides in plain sight. A PR-242 (or any "network discount") on a medical-legal bill is the most common illegal reduction in California work-comp. The MLFS rate can't be discounted by a PPO contract under §9789.30(d) — so when you see it, the EOR has just handed you a winnable Second Review.
Watch the EOR clock
Reading the EOR isn't only about the dollars — it's about the deadlines it starts. The EOR date begins your 90-day Second Review window. And if a payer never issues an EOR within 60 days of receiving a med-legal bill, that itself is a violation (8 CCR §9792.5) that supports a DWC audit complaint and self-executing penalties. A missing EOR is as actionable as a wrong one.
Turn every EOR into a checklist
The discipline is mechanical: for each line, compare allowed to the fee schedule, compare paid to allowed, read the adjustment code, and decide accept-or-dispute. Do that on every EOR and nothing slips — because the EOR has already told you, in its own numbers, exactly where you were shorted.
This guide is general information for California workers'-comp and med-legal billers, not legal advice. Statutes, fee schedules, and forms change — confirm against the current DWC regulations for your dates of service.