The Division of Workers’ Compensation (DWC) has posted the 2022 DWC Audit and Enforcement Unit annual report on its web page. The Audit Unit 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 2022.
The 2022 Audit Unit annual report details the results of audits conducted in 2022 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 sections 129 and 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. The audit findings presented in this report are statistical and do not identify any individual injured worker. The Labor Code provides that contents of the claim files and the Audit Unit working papers are confidential.
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 2022 Audit Ranking Report lists, in ascending order by performance rating, the administrators audited in calendar year 2022.
The DWC Audit & Enforcement Unit completed 48 audits. Forty-six audit subjects (96%) met or exceeded the PAR 2022 performance standard and therefore had no penalty citations assessed in accordance with Labor Code section 129.5(c) and CCR, Title 8, section 10107.1(c)(4). However, these audit subjects were ordered to pay all unpaid compensation.
Congratulations to the top 10 ranking carriers or third party administrators as follows:
1. Sutter Health / Sacramento
2. Workers’ Compensation Administrators, LLC / Santa Maria
3. Tristar Risk Management / Fresno
4. Loma Linda University Health / San Bernardino
5. Sedgwick Claims Management Services / Rancho Cordova
6. Insurance Company of the West / Woodland Hills, CA
7. County of Kern / Bakersfield
8. Tokio Marine America Insurance Company / Pasadena
9. Self Insured Schools of CA / Bakersfield
10. State Compensation Insurance Fund – State Contract Claims / Riverside
Two audit subjects (4%) failed to meet or exceed the PAR standard, and their audits expanded into full compliance audits of indemnity claims (FCA stage 1). One of the two audit subjects met or exceeded the FCA 2022 performance standard and therefore had penalty citations assessed for unpaid and late payment of indemnity pursuant to Labor Code section 129.5(c)(2) and CCR, Title 8, section 10107.1(d).
The other one audit subject failed to meet or exceed the FCA 2022 performance standard, and their audit expanded into full compliance audits of indemnity claims (FCA stage 2), and samples of denied claims to be audited were added. This audit subject was assessed administrative penalties for all penalty citations in accordance with Labor Code section 129.5(c) and CCR, Title 8, sections 10107.1(d) and (e).
The Annual Audit Unit report is posted to the DWC Audit and Enforcement Unit web page.