Dwc Audit and Enforcement Unit: Overview and Instructions for the Industry User

• Publication year: 2018
• Author: CHRISTINA FENIMORE, CPCU

DWC Audit and Enforcement Unit: Overview and Instructions for the Industry User

CHRISTINA FENIMORE, CPCU

Los Angeles, California

Pursuant to the authority delegated in Labor Code sections 129 and 129.5, the Audit and Enforcement Unit (Audit Unit) of the Division of Workers' Compensation (DWC) audits insurance companies, self-insured employers, and third-party administrators to ensure they have met their obligations under the Labor Code and the DWC Administrative Director's regulations. This article provides the industry user an overview of the Audit Unit and instructions on how to utilize it when needed.

PAR Audits

The Audit Unit conducts a routine profile audit review (PAR audit) for all adjusting locations of California workers' compensation claims at least once every five years. Currently, there are 353 active adjusting locations. The Audit Unit performs approximately 50 PAR audits each year. The performance of an audit subject is rated for provision of specific workers' compensation benefits and is measured against standards set by the results of prior audits within the industry. The Administrative Director annually establishes the standards for profile audit review and full compliance. California Code of Regulations, Title 8, sections 10100 through 10115.2, comprise the comprehensive regulations that implement the mandates of the Labor Code. By assessing penalties and ordering that unpaid compensation be paid, the Audit Unit ensures that proper benefits are delivered accurately and in a timely manner.

Target Audits

In accordance with CCR section 10106.1(c), the Audit Unit may target administrators for audit based on:

• Complaints the Division of Workers' Compensation receives regarding claims handling
• Failure to meet or exceed full compliance audit performance standards
• High numbers of penalties awarded pursuant to Labor Code section 5814
• Information received from the workers' compensation information system
• Specific circumstances for an audit subject for any of the following:

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• Failure to timely respond to a request for provision of a claim file for PAR audit
• Failure to pay or appeal a Notice of Compensation Due the Audit Unit has issued
• Failure to comply with the law and regulations for the requirements and timelines of the workers' compensation information system
• The assessment of or stipulation to a civil penalty pursuant to Labor Code section 129.5(e)

Audit Complaints and Instructions

Anyone may file a complaint with the Audit Unit. The unit...