Commission on Health and Safety and Workers' Compensation
Information Bulletin

December 1998 Christine Baker
(415) 557-1304

Commission Issues Recommendations To Improce the Workers' Compensation Audit Function

SAN FRANCISCO--The California Commission on Health and Safety and Workers' Compensation has issued recommendations to improve the audit function within the state's administration of the workers' compensation system.

The Senate Industrial Relations Committee and the Assembly Insurance committee jointly requested that the Commission undertake an evaluation of the effectiveness of the audit function of the Division of Workers' Compensation (DWC). This function was established by the 1989 Workers' Compensation reform legislation to monitor the performance of insurers and administrators to ensure that industrially injured workers receive proper benefits in a timely manner.

The study determined that although much time and effort was being expended by the DWC Audit Unit in performing audits of workers' compensation insurers, a redirection of these activities would produce more effective outcomes. The research team found that the current audit procedure did not include all insurers within a reasonable period of time, did not focus on the worst performers and concentrated penalties on relatively inconsequential violations.

The Commission is recommending revisions to the workers' compensation audit function, in order to:

- Bad Business practives by claims administrators meant that injured workers are not receiving proper indemnity payments and appropriate medical services in a timely manner.

- Excessive audit penalties and regulation mean employers are paying higher costs to deliver the same benefits.

The Commission commends the project advisory committee and the project team for their dedicated efforts and determination to improve this important audit function for the benefit of all the workers and employers in California.

The Commission, created by the workers' compensation reform legislation of 1993, is charged with overseeing the health and safety and workers' compensation systems in California and recommending administrative or legislative modifications to improve their operation. The Commission was established to conduct a continuing examination of the workers' compensation system and of the state's activities to prevent industrial injuries and occupational diseases and to examine those programs in other states.

Information about the Commission can be obtained by writing to Christine Baker, Executive Officer, Commission on Health and Safety and Workers' Compensation, 30 Van Ness Avenue, Suite 2122, San Francisco, CA 94102, by calling (415) 557-1304, or by faxing a request to (415) 557-1385. Information is also available on the internet at - the Department of Industrial Relation's home page.