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Workers' Compenstation

A review of the 2021 DIR Audit findings

By February 21, 2023March 17th, 2023No Comments

The 2021 audit regarding claims handling practices has been released and is available for public review.  

A copy of the report can be found here: 

For a link to the general DIR website for the Audit and Enforcement Unit which has the report and other information can be found here.

The purpose of the audit report is to ensure insurers, self-insureds and third part administrators are properly addressing indemnity and medical benefits management.  The audit results point out issues in these areas and administrative penalties are assigned.  For most of the general population, I’ll wager you did not do a deep dive into the report.  For us Work Comp nerds, it was a Godsend for those cold nights when we want nothing else other than to cuddle up by a roaring fire in our PJ’s with a cup of hot chocolate and a good read, namely, audit reports!  Rest assured, there are some great nuggets of information any examiner can use in their daily case management.  


The largest number of violations surround indemnity benefits.  Notably, untimely first payment of TTD and PD benefits and/or subsequent payments.  There were also multiple violations for inaccurate benefit notices or failure to provide any notice at all.  Other notice violations include failure to serve notice of a QME or AME evaluation.  This one was a bit of a surprise as defense counsel would normally be the one to handle that notice on represented cases.  I assume this would primarily apply to unrepresented matters.   Other violations include failure to document (properly) claim log entries.  There were also a sizeable number of violations regarding timely payment or objection to medical treatment expenses.

So why is this important?  I think this demonstrates the need to return to basics when it comes to claims and adjusting of your caseload.  When I was a claims examiner, I often found myself delving into caselaw, complex legal arguments and spending a lot of time addressing what I called the “minutiae” items.  Which are important.  But I tried my best to not lose sight of the basics: timely payment of benefits, timely medical care approval, good documentation of claims notes, and addressing disputes and denials.  In the end, these are the items that claims examiners would spend most of their time on.  As technology has improved, it is easier than ever to make sure things are set to automatic payment, easier form and templates for correspondence, and easier note taking options.  

But as this audit demonstrates, no one is perfect.  Examiners have a tough job of complying with timelines, codes, statutes, and caselaw.  They make hundreds of decisions a day.  And after their tasks and requirements are met, they also must ensure their support staff also are accurately documenting files, sending correspondence, and serving documents to dozens of parties per day.  And lets be honest; applicant attorneys are good at addressing errors and do demand costs and sanctions in the process.  The final lessons are simple:  return to the basics and use all the tools you have in the process.  Spend the time to ensure each file has properly paid and scheduled indemnity benefits.  Make sure file and serves are completed timely, and routinely.  Stay on top of your mail and email.  And, make sure you address errors timely and promptly to keep small issues from turning into larger ones.  And for defense attorneys like me?  We need to make it a priority to assist in these duties and make sure we are timely litigating all issues.  We need to ensure regular contact with our clients.  And we need to be better about putting out those small fires on the corner of our desk before the entire office is consumed in a bonfire.

May the 2022 audit bring about fewer violations and less audit penalties!