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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.

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume VI, Number 91


About this Author

Steven L. Imber, Polsinelli PC, Insurance Regulatory Attorney, Enforcement Actions Lawyer,

Steve Imber chairs Polsinelli's Insurance Business and Regulatory group.  As a former General Counsel at a state insurance department, Steve Imber has the knowledge and experience to provide quality counsel to insurers, third party administrators, insurance agencies, medical discount plans and other insurance regulated entities. His practice includes representing and assisting clients on multi-state and national licensing projects, research projects, enforcement actions, market conduct examinations, audits and compliance programs and various other regulatory and...


Justin Liby has a talent for organizing and managing large national and multi-state licensure and research projects. This knack provides him with a solid foundation for crafting and implementing sound, efficient strategies that achieve success for his clients. Justin concentrates his efforts on helping the insurance industry navigate the formidable federal and state regulatory maze to achieve the industry’s business needs. He stays current in the insurance industry's evolution, as well as the legislation and regulatory activity impacting the industry.

Justin is a former regulator for the Kansas Insurance Department and in-house counsel for a national third-party administrator.


Jennifer Osborn Nix works diligently for insurance companies, third-party administrators, and other regulated entities to further their goals and help them remain compliant within the 50-state regulatory scheme. She focuses on insurance regulatory and compliance issues, with a primary emphasis on life and health insurance matters.

Jennifer works with many regulated entities, including many in the health care sector, who rely on her for research, advice, strategic counsel, and licensing.