This error is returned when you indicate on the claim that the injury is related to an auto accident but you do not give the state. You can add the state from the Advanced tab on the edit client form (see image to the right).
From the error page: You can quickly get to the edit client form from the claim error page in Therabill by clicking the edit icon next to the client name on the right hand side of the claim error page. Remember to save your changes. You can then click Resubmit Electronically at the top of the claim error page.