California Code of Regulations › Title 8 - Industrial Relations › Division 1 - Department of Industrial Relations › Chapter 4.5 - Division of Workers' Compensation › Subchapter 1.5 - Injuries on or After January 1, 1990 › Article 3 - Auditing › Section 10107 - Notice of Audit; Claim File Selection; Production of Claim Files; Auditing Procedure

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Once a subject has been selected for an
					 audit, the Audit Unit shall serve a Notice of Audit on the claims
					 administrator. The Notice shall inform the administrator of its selection for
					 audit, and shall include a request to provide the Audit Unit with a claim log
					 or logs. The audit subject shall provide two copies of the specified claim
					 log(s) within fourteen days of the date of the receipt of the Notice. The Audit
					 Unit may select any or all claim files for audit.
(b) The Audit Unit shall send the audit
					 subject a Notice of Audit Commencement identifying the files to be audited,
					 except that no notice need be given to audit claim files which are the subject
					 of inquiries or complaints. The audit shall commence no less than fourteen days
					 from the date the Notice was sent, unless the audit subject agrees to earlier
					 commencement.
(c) The Audit Unit
					 shall randomly select separate samples of indemnity, denied, and medical-only
					 files from two years' of the audit subject's claim logs, except that if the
					 earliest of the last two completed years has already been the subject of an
					 audit, claims will be randomly selected from only the last completed year.
(1) The total number of indemnity files
					 randomly selected for audit will be determined based on the following table:
Population
Sample
								Size
8 or less
all
9-15 1
less than total
16-19 2
less than total
20-23 3
less than total
24-27 4
less than total
28-30 5
less than total
31-33 6
less than total
34-36 7
less than total
37-38 8
less than total
39-41 9
less than total
42
32
43-44
33
45
34
46-47
35
48-49
36
50-51
37
52-53
38
54-55
39
56-57
40
58-59
41
60-61
42
62-63
43
64-65
44
66-67
45
68-70
46
71-72
47
73-74
48
75-77
49
78-79
50
80-82
51
83-84
52
85-87
53
88-89
54
90-92
55
93-95
56
96-98
57
99-101
58
102-104
59
105-107
60
108-110
61
111-114
62
115-117
63
118-120
64
121-124
65
125-128
66
129-131
67
132-135
68
136-139
69
140-143
70
144-148
71
149-152
72
153-156
73
157-161
74
162-166
75
167-171
76
172-176
77
177-181
78
182-187
79
188-192
80
193-198
81
199-204
82
205-210
83
211-217
84
218-223
85
224-230
86
231-238
87
239-245
88
246-253
89
254-261
90
262-270
91
271-279
92
280-288
93
289-298
94
299-308
95
309-319
96
320-330
97
331-342
98
343-354
99
355-367
100
368-381
101
382-396
102
397-411
103
412-427
104
428-444
105
445-463
106
464-482
107
483-503
108
504-525
109
526-549
110
550-575
111
576-603
112
604-633
113
634-665
114
666-700
115
701-739
116
740-781
117
782-827
118
828-879
119
880-936
120
937-1,000
121
1,001-1,072
122
1,073-1,154
123
1,155-1,248
124
1,249-1,356
125
1,357-1,483
126
1,484-1,633
127
1,634-1,814
128
1,815-2,036
129
2,037-2,315
130
2,316-2,677
131
2,678-3,163
132
3,164-3,852
133
3,853-4,904
134
4,905-6,710
135
6,711-10,530
136
10,531-23,993
137
23,994 +
138
(2) In conducting the audit, the Audit Unit
					 shall calculate the frequency of files with violations as percentages of the
					 files with exposure for violations after the following number of randomly
					 selected indemnity files are audited:
Population
Sample
								Size
5 or
less all
6-10
1 less than total
11-13
2 less than total
14-16
3 less than total
17-18
4 less than total
19-20
5 less than total
21-23
6 less than total
24
17
25-26
18
27-29
19
30-31
20
32-33
21
34-36
22
37-39
23
40-41
24
42-44
25
45-48
26
49-51
27
52-55
28
56-58
29
59-62
30
63-67
31
68-72
32
73-77
33
78-82
34
83-88
35
89-95
36
96-102
37
103-110
38
111-119
39
120-128
40
129-139
41
140-151
42
152-164
43
165-179
44
180-197
45
198-217
46
218-241
47
242-269
48
270-304
49
305-346
50
347-399
51
400-468
52
469-562
53
563-696
54
697-905
55
906-1,272
56
1,273-2,091
57
2.092-5,530
58
5,531 +
59
If any of the following criteria are met after auditing
						the sample size as set forth in this subsection (c)(2), the Audit Unit will
						proceed to audit the remaining number of randomly selected indemnity files
						selected for audit pursuant to subsection (c)(1):
(i) The number of randomly selected audited
					 files with violations involving the failure to pay indemnity exceeds 20% of
					 those files in which indemnity is accrued and payable and the average amount of
					 unpaid indemnity exceeds $200.00 per file in which indemnity is accrued and
					 payable;
(ii) The numbers of
					 randomly selected files with violations involving the late first payments of
					 temporary disability indemnity, permanent disability indemnity, vocational
					 rehabilitation maintenance allowance, late subsequent indemnity payments, and
					 late payments of death benefits, as mitigated for frequency under Section
					 10111.1(e)(3)(i) through
					 (v), exceeds 30% of the files in which those
					 indemnity payments have been made;
(iii) The number of randomly selected audited
					 files with violations involving the failure to issue benefit notices, as
					 assessed under Section
					 10111.1(a)(7)(ii)
					 of these regulations, exceeds 30% of those files in which there is a
					 requirement to issue those notices.
The determination of whether or not to audit the number
						of files selected pursuant to subsection (c)(1) of this section shall not be
						the subject of appeal, and no preliminary report of findings will be issued to
						the audit subject before the determination is
						made.