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California comp regulators assess $868,318 in audit penalties

workers comp

The California Division of Workers’ Compensation fined claims administrators a combined $868,318 and ordered them to make good on $332,826 in unpaid indemnity benefits following audits conducted in 2020, according to the agency’s latest Profile Audit Review report.

The 2020 audits found unpaid indemnity benefits on 10.06% of the 2,833 claims that were reviewed. In 2019 auditors found unpaid indemnity in 11.82% of the 3,005 claims reviewed, according to DWC.

The division said its Profile Audit Review and Full Compliance Audit found and cited 5,051 violations last year, with administrative penalties totaling nearly $1.2 million. However, not all penalties are subject to collection.

Violations for failure to pay temporary disability benefits or paying late resulted in the largest penalty assessments. The 242 violations for failing to pay any temporary disability or salary continuation benefits in lieu of TD resulted in $156,285 in assessed penalties. The 549 violations for late first payment of temporary disability resulted in $177,332 in assessed penalties, according to the report.

The division also issued 534 citations for late subsequent payment of indemnity benefits and assessed $117,409 in penalties for these violations. Audit penalties in 2020 were down from the $1.1 million assessed in 2019 and the $1.5 million assessed in 2018. The largest penalty assessment was in 2014 when the DWC collected $1.8 million.

The DWC is required to report to the state legislature its audit findings, including the number and types of violations cited and the amount of outstanding undisputed compensation.

WorkCompCentral is a sister publication of Business Insurance. More stories here.