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Chapter 4.5. Division of Workers' Compensation
Subchapter 1.5. Injuries on or After January 1, 1990
Article 5. Administrative Penalties

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§10111. Schedule of Administrative Penalties for injuries on or after January 1, 1990, but before January 1, 1994.

The administrative penalties set forth in subsections (a) through (d) of this section will be imposed for injuries occurring on or after January 1, 1990, but before January 1, 1994, subject to any applicable mitigation or exacerbation under subsection (e) of this section.

(a) A penalty of up to $100 for each violation shall be assessed when there is:

(1) Failure to make full payment of 10% self-imposed increase when temporary disability indemnity or permanent disability indemnity is overdue. The penalty for this violation is:

If the self-imposed increase was not paid or was only partially paid, the audit penalty is based on the amount of the underlying indemnity and is as follows:

$25 if the late-paid indemnity totals not more than 3 days;

$50 if the late-paid indemnity totals more than 3 but not more than 7 days;

$75 if the late-paid indemnity totals more than 7 but not more than 14 days;

$100 if the late paid indemnity totals more than 14 days.

(2) Failure to provide first permanent disability payment when due and/or within 14 days after temporary disability payments are terminated. The penalty for this violation is:

$25 if the first payment was made 1 to 2 days late;

$50 if the first payment was made 3 to 7 days late;

$75 if the first payment was made 8 to 14 days late;

$100 if the first payment was made more than 14 days late.

(3) Failure to respond to a written request for medical treatment of injured worker within 20 days of the date of request. The penalty for this violation is:

$25 for a response made from 1 to 7 days late;

$50 for a response made from 8 to 15 days late;

$75 for a response made from 16 to 34 days late;

$100 for failure to respond for more than 35 days.

(4) Failure to provide, upon request, any transportation costs when due to injured worker for medical care. The penalty for this violation is:

$25 for $10 or less in expense;

$50 for more than $10, to $20, in expense;

$75 for more than $20, to $40, in expense;

$100 for more than $40 in expense.

(5) Failure to document average weekly earnings if temporary disability indemnity is being paid at less than the maximum rate. The penalty for this violation is $100.

(6) Failure to make the first payment of temporary disability indemnity not later than 14 days after the date of the employer's knowledge of injury and disability pursuant to Labor Code Section 4650(a). The penalty for this violation is:

$25 if the first payment was made 1 to 2 days late;

$50 if the first payment was made 3 to 7 days late;

$75 if the first payment was made 8 to 14 days late, and/or if all indemnity then due was not paid but was paid with a subsequent payment;

$100 if the first payment was made more than 14 days late, and/or if all indemnity then due was not paid with the first payment and remains unpaid at the time of audit.

(7) Failure to follow the Rules and Regulations established by the Administrative Director for the purpose of carrying out the workers' compensation provisions in Labor Code Section 3200 through Section 6002. The penalty for this violation is:

[i] For each failure to include in a claim file a copy of the Employee's Claim for Worker's Compensation Benefits, DWC Form 1, showing the date the form was provided to and received from the employee, or documentation of the date the claim form was provided to the employee if the employee did not return the form, the penalty is:

$100 if there were any late indemnity payments, or if notice of acceptance of the claim was not issued within 90 days after the employer's date of knowledge of injury and disability, or if the claim was denied.

[ii] For each failure to issue a notice of benefits as required by Title 8, California Code of Regulations, Division 1, Chapter 4.5, Subchapter 1, Article 8, beginning with Section 9810, or by Title 8, California Code of Regulations, Division 1, Chapter 4.5, Subchapter 1.5, Article 7, beginning with Section 10122, unless penalties apply and are assessed under Section 10111(b)(2) of these regulations, the penalty is $100.

[iii] For each notice of benefits which was not issued timely as provided in Title 8, California Code of Regulations, Division 1, Chapter 4.5, Subchapter 1, Article 8, beginning with Section 9810, or as provided in Title 8, California Code of Regulations, Division 1, Chapter 4.5, Subchapter 1.5, Article 7, beginning with Section 10122, the penalty is:

$25 for each notice of first, resumed, changed or final payment of temporary disability indemnity, wage continuation, death benefits, permanent disability indemnity, or VRMA which was issued from 1 to 7 days late;

$50 for each notice of first, resumed, changed or final payment of temporary disability indemnity, wage continuation, death benefits, permanent disability indemnity, or VRMA which was issued more than 7 days late, and for each delay in decision notice or denial notice which was issued from 1 to 7 days late;

$75 for each delay in decision notice or denial notice which was issued more than 7 days late.

[iv] For each Notice of Benefits required by Title 8, California Code of Regulations, Division 1, Chapter 4.5, Subchapter 1, Article 8, beginning with Section 9810, or by Title 8, California Code of Regulations, Division 1, Chapter 4.5, Subchapter 1.5, Article 7, beginning with Section 10122, which was materially inaccurate or incomplete, except an inaccurate or incomplete denial notice, the penalty is $25. For a materially inaccurate or incomplete denial notice the penalty is $100.

[v] For each failure to include in a claim file, or document attempts to obtain, any of the required contents specified in Section 10101, the penalty is $100.

[vi] For each failure to comply with any regulation of the Administrative Director, not otherwise assessed in these Regulations, the penalty is $100.

(8) Failure to pay or object to all documented Medical-Legal expenses within 60 days of receipt of billing and any required reports as provided for in Labor Code 4622. The penalty for this violation is:

$50 for each bill which was paid more than 60 days from receipt with interest and a 10% increase;

$75 for each bill which was paid more than 60 days from receipt where either interest or a 10% increase was not included;

$100 for each bill which was paid more than 60 days from receipt where neither interest nor a 10% increase was paid;

$100 for each bill which was not paid where no timely objection was sent.

(9) Failure to pay or object to expenses for medical treatment within 60 days of receipt of the bill and any required reports. The penalty for this violation is:

$25 for each bill of $100 or less, excluding interest and penalty;

$50 for each bill of more than $100, but no more than $200, excluding interest and penalty;

$75 for each bill of more than $200, but no more than $300, excluding interest and penalty;

$100 for each bill of more than $300, excluding interest and penalty.

(10) Failure to pay within ten days any indemnity due, which is not specified in subsections (a)(1) through (a)(9). The penalty for this violation is:

$25 for late payment of 3 days of indemnity or less;

$50 for late payment of more than 3 but no more than 7 days of indemnity;

$75 for late payment of more than 7 days of indemnity, or failure to pay 3 days of indemnity or less;

$100 for failure to pay more than 3 days of indemnity.

(b) A penalty of up to $500 for each violation shall be assessed when there is:

(1) Failure to maintain and provide a written claim log as defined in Section 10100(g) to the audit unit commencing July 1, 1990, and thereafter. The claim log shall contain all claims received, whether liability has been accepted, and distinguish between Indemnity and Medical-only claims. The penalty for this violation is:

$25 for each failure to list on a claim log one or more of the following: employee's name; claim number; date of injury;

$25 for each misdesignation of an indemnity file as a medical-only file on the claim log;

$100 for each failure to identify subsidiary self-insured employers on the log;

$100 for each failure to identify the underwriting insurance company of an insurance group;

$100 for each failure to designate a denied claim on the log;

$100 for each claim not listed on the log;

$250 for each failure to provide the claim log to the Audit Unit within 14 days of receipt of a written request if the claim log was provided more than 14 but no more than 30 days from receipt of the request;

$500 for each failure for more than 30 days from receipt of a written request, to provide the claim log to the Audit Unit.

(2) Failure to comply with Labor Code Sections 4636, 4637 and 4644. The penalty for this violation is:

[i] The penalty for each failure to assign a qualified rehabilitation representative immediately after 90 days of aggregate temporary disability indemnity is $100 if the assignment was made or the employee returned to his or her usual and customary occupation more than 10 but not more than 20 days after 90 days of aggregate total disability, and an additional $100 for each additional delay of not more than 10 days, to a maximum penalty of $500.

[ii] The penalty for each failure to issue notice of medical eligibility for vocational rehabilitation services (if not previously issued) within 10 days after knowledge of a physician's opinion that the employee is medically eligible, or for failure to issue notice within 10 days after 366 days of aggregate total temporary disability, is $100 if the notice was issued not more than 10 days late, and an additional $100 for each additional delay of not more than 10 days, to a maximum penalty of $500.

[iii] The penalty for each failure to notify an injured employee of the reasons he or she is not entitled to any, or to any further, vocational rehabilitation services, and the procedure for contesting the determination of non-eligibility, is $100 if notification was issued more than 10 but not more than 20 days after the determination, and an additional $100 for each additional delay of not more than 10 days, to a maximum penalty of $500.

(c) A penalty of up to $1,000 for each violation shall be assessed when there is:

(1) Failure to pay or appeal penalties provided for in the Notice of Compensation Due within 15 days of the date of receipt of the Notice. The penalty for this violation is:

$250 for each assessment paid more than 15 but not more than 30 days after receipt;

$500 for each assessment paid more than 30 but not more than 45 days after receipt;

$1,000 for each assessment not paid within 45 days after receipt.

(2) Failure to comply with or appeal any final order of the Workers' Compensation Appeals Board within 30 days of service. The penalty for this violation is:

$250 for full compliance in more than 30 but not more than 45 days from the date of service, or for any late payment or failure to pay interest due;

$500 for full compliance (other than a late interest payment) in more than 45 but not more than 60 days from the date of service;

$750 for full compliance (other than a late interest payment) in more than 60 but not more than 75 days from the date of service;

$1,000 if there was not full compliance (other than failure to pay interest) within 75 days of the date of service.

(d) A penalty of up to $5,000 for each violation shall be assessed when there is:

(1) Failure to produce, on a second request, a legible paper copy of a claim files within 5 days of written notice by the Administrative Director or his representatives. The penalty for this violation is:

$100 if the file was produced not more than 3 days late;

$250 if the file was produced more than 3 but not more than 14 days late;

$500 if the file was produced more than 14 but not more than 29 days late;

$1,000 if the file was produced more than 29 but not more than 40 days late;

$2500 if the file was produced more than 40 days late but not more than 90 days late.

$5000 if the was produced more than 90 days late or was not produced.

(2) Denial of liability for a claim without supporting documentation.

The total penalty shall be determined by applying the penalty assessment amount listed in [i] for gravity, subtracting the amount listed in [ii] for good faith if applicable, and increasing or decreasing the penalty as applicable for history and frequency as set forth in [iii] and [iv]:

[i] For a claim involving potential for medical treatment only the penalty is $3,500;

For a claim involving potential for medical treatment and either temporary or permanent disability the penalty is $4,000;

For a claim involving potential for medical treatment and both temporary and permanent disability the penalty is $4,500;

For a claim involving potential for medical treatment, temporary disability, permanent disability and vocational rehabilitation the penalty is $5,000;

For a claim involving potential for death benefits the penalty is $5,000.

[ii] The penalty will be reduced by $1,000 for good faith if there was a reasonable attempt to investigate the claim.

[iii] Reduction or increase of the penalty for history shall be based on the following:

An audit subject having no prior Audit Unit history will receive a $500 reduction;

An audit subject having a prior Audit Unit history of no more than one audited unsupported denial will receive a $500 reduction;

An audit subject having a prior Audit Unit history of more than one audited unsupported denial but no more than 5% of audited denials as unsupported will receive no reduction or increase for history;

An audit subject having a prior Audit Unit history of more than one audited unsupported denial and more than 5% of audited denials as unsupported will receive a $500 increase.

[iv] Reduction or increase of the penalty for frequency shall be based on the following:

An audit subject having no more than one audited unsupported denial will receive a $500 reduction;

An audit subject having more than one audited unsupported denial but no more than 5% of audited denials which are unsupported will receive no reduction or increase for frequency;

An audit subject having more than one audited unsupported denial and more than 5% of audited denials which are unsupported will receive an increase of $500.

[v] The total amount assessed for a denial shall be reduced by 50% if the claim was accepted after the denial without evidence that the acceptance was the result of litigation or of the claim's selection for audit.

(3) Except as provided in subsection (d)(1) of this section, failure to comply with or appeal any lawful written request or order of the Administrative Director regarding a claim filed within 30 days. The penalty for this violation is:

$500 if there was compliance in more than 30 but not more than 40 days from receipt or order;

$1,000 if there was compliance in more than 40 but not more than 60 days from receipt of the request or order;

$2,500 if there was compliance in more than 60 but not more than 90 days of receipt fo the request or order;

$5,000 for failure to comply within 90 days of receipt of the request or order.

(4) Failure by a claims administrator to provide a claim form within 24 hours upon request of an injured worker or his/her agent. The penalty for this violation is:

$500 if the claim form was provided in more than 1 but not more than 5 working days from receipt of the request, if benefits were being provided to the employee at the time of the request;

$1,000 if the claim form was not provided within 5 working days of receipt of the request, if benefits were being provided to the employee at the time of the request;

$3,000 if the claim form was provided in more than 1 but not more than 5 working days from receipt of the request, if benefits were not being provided to the employee at the time of the request;

$5,000 if the claim form was not provided within 5 working days of receipt of the request, if benefits were not being provided to the employee at the time of the request.

(e) The penalties otherwise applicable under subsections (a) through (d) of this section shall be modified, if warranted, for good faith, history, and frequency in the same manner as penalties are modified for acts or omissions occurring on or after January 1, 1994 by Section 10111.1(e) of this Article.

NOTE: Authority cited: Sections 59, 129.5, 133, 138.3, 138.4, 139.5, 4603.5, 4627 and 5307.3, Labor Code. Reference: Sections 124, 129, 129.5, 4061, 4453, 4454, 4550, 4600, 4603.2, 4621, 4622, 4625, 4636 through 4638, 4639, 4641, 4642, 4650, 4651, 4701 through 4703.5, 4706, 4706.5, 5401, 5401.6, 5402, 5800 and 5814, Labor Code; and Section 2629.1(e), (f), Unemployment Insurance Code.

HISTORY

1. New section filed 1-18-90; operative 1-18-90 (Register 90, No. 4). New section is exempt from review by OAL pursuant to Government Code Section 11351.

2. Relocation and amendment of article heading, renumbering of former section 10111 to section 10114 subsections (g)-(h) and renumbering and amendment of former section 10108 to section 10111 filed 1-28-94; operative 1-28-94. Submitted to OAL for printing only pursuant to Government Code section 11351 (Register 94, No. 4).

3. Editorial correction of subsection (a)(2) (Register 95, No. 32).

4. Amendment of subsections (a), (a)(6), (a)(7)[ii], (a)(7)[iv] and (b)(1) filed 2-14-96; operative 2-14-96. Submitted to OAL for printing only pursuant to Government Code section 11351 (Register 96, No. 7).

5. Amendment of subsection (b)(1) filed 7-30-96; operative 7-30-96 pursuant to Government Code section 11343.4(d) (Register 96, No. 31).

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