California Division of Workers’ Compensation Takes Action Against TPAs and Will Increase Audits of TPAs in 2016
The Audit and Enforcement Unit of the California Division of Workers’ Compensation (DWC) issued a press release recently indicating it will be conducting more target audits in 2016 to address utilization review (UR) complaints.
Under California law, all claims administrators are required to have a UR program governed by written policies and procedures, must utilize a medical director, and medical decisions that modify or deny a request for treatment must be made by a reviewing physician.
The DWC reminded claims administrators in its recent press release that the penalty for not responding to a request for authorization is $1,000 for each prospective review, and if a non-physician delays, denies or modifies a treatment request, there is a $25,000 penalty. The DWC advised claims administrators to review UR timeframes with their staff and utilization review organizations to ensure proper UR timeframes are met.
According to a recent article published by Business Insurance, the DWC also recently sought to assess large monetary penalties against several TPAs for allegedly failing to provide medical records in a timely manner for independent medical reviews. Specifically, the DWC recently issued orders to show cause against several TPAs, and the details of these orders are summarized below.
One TPA was assessed penalties of $3.53 million for allegedly failing to provide medical records for 705 independent medical reviews within 15 calendar days of receiving notice from a company that conducts independent medical reviews.
Another TPA was issued penalties of $1.21 million for 242 alleged violations.
A third TPA was assessed $940,000 for 188 alleged violations.