The Division of Workers’ Compensation has posted the 2015 DWC Audit and Enforcement Unit annual report on its website. The annual report provides information on how claims administrators audited by the DWC performed and includes the Administrative Director’s ranking report for audits conducted in calendar year 2014.
The 2015 Audit and Enforcement Unit annual report details the results of audits conducted in 2014 and provides the name and location of each insurer, self-insured employer and third-party administrator audited during that time. This report to the Legislature summarizes audits conducted in accordance with Labor Code §§129 & 129.5 to assure that injured workers, and their dependents in the event of their death, are provided with all benefits due them in an expeditious manner. The audit findings, by law, must detail the number of files audited, the number and type of violations cited and the amount of an undisputed compensation found due and unpaid to the injured worker.
Performance of insurers, self-insured employers, and third party administrators subject to profile audit review and full compliance audit is rated in accordance with the performance standards set annually by the Administrative Director. The DWC Administrative Director’s 2015 Audit Ranking Report lists, in ascending order by performance rating, the administrators audited in calendar year 2014.
The DWC Audit Unit completed a total of 47 profile audit reviews (PAR audits). Of the PAR audits, 46 were routinely selected, and 1 was a target audit, which was conducted based upon failure of a prior audit. Forty audit subjects (85%) met or exceeded the PAR 2014 performance standard and therefore had no penalty citations assessed. Seven audit subjects (15%) failed to meet or exceed the PAR standard, and their audits expanded into a full compliance audit of indemnity claims (FCA stage 1). Three of these audit subjects (43% of those failing to meet or exceed the PAR standard) met or exceeded the FCA 2014 performance standard. The remaining four of the seven audit subjects (57% of those failing to meet or exceed the PAR standard) failed to meet or exceed the FCA 2014 performance standard, and their audits expanded into a full compliance audit of indemnity claims (FCA stage 2) and added a sample of denied claims to be audited.
The DWC Administrative Director’s 2014 Audit Ranking Report (Statewide Exhibit 4) is part of this annual report. The Ranking Report provides the performance ratings for the 47 audit subjects listed in order, from the best to worst performer.