Section 129 Of Chapter 5. Division Of Workers’ Compensation From California Labor Code >> Division 1. >> Chapter 5.
129
. (a) To make certain that injured workers, and their dependents
in the event of their death, receive promptly and accurately the
full measure of compensation to which they are entitled, the
administrative director shall audit insurers, self-insured employers,
and third-party administrators to determine if they have met their
obligations under this code. Each audit subject shall be audited at
least once every five years. The audit subjects shall be selected and
the audits conducted pursuant to subdivision (b). The results of
audits of insurers shall be provided to the Insurance Commissioner,
and the results of audits of self-insurers and third-party
administrators shall be provided to the Director of Industrial
Relations. Nothing in this section shall restrict the authority of
the Director of Industrial Relations or the Insurance Commissioner to
audit their licensees.
(b) The administrative director shall schedule and conduct audits
as follows:
(1) A profile audit review of every audit subject shall be
conducted once every five years and on additional occasions indicated
by target audit criteria. The administrative director shall annually
establish a profile audit review performance standard that will
identify the poorest performing audit subjects.
(2) A full compliance audit shall be conducted of each profile
audited subject failing to meet or exceed the profile audit review
performance standard. The full compliance audit shall be a
comprehensive and detailed evaluation of the audit subject's
performance. The administrative director shall annually establish a
full compliance audit performance standard that will identify the
audit subjects that are performing satisfactorily. Any full
compliance audit subject that fails to meet or exceed the full
compliance audit performance standard shall be audited again within
two years.
(3) A targeted profile audit review or a full compliance audit may
be conducted at any time in accordance with target audit criteria
adopted by the administrative director. The target audit criteria
shall be based on information obtained from benefit notices, from
information and assistance officers, and from other reliable sources
providing factual information that indicates an insurer, self-insured
employer, or third-party administrator is failing to meet its
obligations under this division or Division 4 (commencing with
Section 3200) or the regulations of the administrative director.
(c) If, as a result of a profile audit review or a full compliance
audit, the administrative director determines that any compensation,
interest, or penalty is due and unpaid to an employee or dependent,
the administrative director shall issue and cause to be served upon
the insurer, self-insured employer, or third-party administrator a
notice of assessment detailing the amounts due and unpaid in each
case, and shall order the amounts paid to the person entitled
thereto. The notice of assessment shall be served personally or by
registered mail in accordance with subdivision (c) of Section 11505
of the Government Code. A copy of the notice of assessment shall also
be sent to the affected employee or dependent.
If the amounts are not paid within 30 days after service of the
notice of assessment, the employer shall also be liable for
reasonable attorney's fees necessarily incurred by the employee or
dependent to obtain amounts due. The administrative director shall
advise each employee or dependent still owed compensation after this
30-day period of his or her rights with respect to the commencement
of proceedings to collect the compensation owed. Amounts unpaid
because the person entitled thereto cannot be located shall be paid
to the Workers' Compensation Administration Revolving Fund. The
Director of Industrial Relations shall promulgate rules and
regulations establishing standards and procedures for the payment of
compensation from moneys deposited in the Workers' Compensation
Administration Revolving Fund whenever the person entitled thereto
applies for compensation.
(d) A determination by the administrative director that an amount
is or is not due to an employee or dependent shall not in any manner
limit the jurisdiction or authority of the appeals board to determine
the issue.
(e) Annually, commencing on April 1, 1991, the administrative
director shall publish a report detailing the results of audits
conducted pursuant to this section during the preceding calendar
year. The report shall include the name of each insurer, self-insured
employer, and third-party administrator audited during that period.
For each insurer, self-insured employer, and third-party
administrator audited, the report shall specify the total number of
files audited, the number of violations found by type and amount of
compensation, interest and penalties payable, and the amount
collected for each violation. The administrative director shall also
publish and make available to the public on request a list ranking
all insurers, self-insured employers, and third-party administrators
audited during the period according to their performance measured by
the profile audit review and full compliance audit performance
standards.
These reports shall not identify the particular claim file that
resulted in a particular violation or penalty. Except as required by
this subdivision or other provisions of law, the contents of
individual claim files and auditor's working papers shall be
confidential. Disclosure of claim information to the administrative
director pursuant to an audit shall not waive the provisions of the
Evidence Code relating to privilege.
(f) A profile audit review of the adjustment of claims against the
Uninsured Employers Fund by the claims and collections unit of the
Division of Workers' Compensation shall be conducted at least every
five years. The results of this profile audit review shall be
included in the report required by subdivision (e).