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Thirty-seven of the 41 total workers compensation insurers, self-insurers and third-party administrators audited by the California Department of Industrial Relations in 2017 met or exceeded the state’s performance standards and therefore had no penalty citations assessed in accordance with state law, according to an audit report released Tuesday.
However, a handful of audit subjects were ordered to pay all unpaid compensation.
According to the report, 10% failed to meet or exceed the “profile audit review” standard and their audits expanded into a full compliance audit of indemnity claims. One of these audit subjects met or exceeded the performance standard and therefore had penalty citations assessed for unpaid and late payment of indemnity in accordance with state law.
The remaining audit subjects failed to meet or exceed the performance standard and their audits expanded into full compliance audit of indemnity claims and added a sample of denied claims to be audited. These audit subjects were assessed administrative penalties for all penalty citations in accordance with state law, according to the report.
As a result of audits conducted during the calendar year 2017, the department’s Audit & Enforcement Unit found and cited 4,510 violations against claims administrators, with administrative penalties totaling $1,115,605, all of which are not subject to collection, according to state law that gives payers opportunities to review claims with the enforcement unit, the report states.
The audits conducted in 2017 reveal that 9% of the 2,638 claims reviewed had unpaid indemnity, forcing the Audit & Enforcement Unit to issue 246 Notices of Compensation Due with the final audit reports, citing payers with $237,186 total in unpaid compensation, an average of $964 per file, according to the report.
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