In this EDG Webinar, Thu and Kiana present on the importance of timely benefit notices in California, covering legal requirements, compliance pitfalls, and consequences. They discuss the 14-day delay notice, the 90-day claim acceptance or denial, and various benefit notices, emphasizing the need for accuracy and timeliness to avoid penalties. Kiana shares a case example where untimely notices lead to a 10% penalty, highlighting the potential costs of non-compliance. The presentation also covers common compliance pitfalls, such as missing delay notices and overpayments, and the legal consequences of not issuing timely notices, including potential penalties and audit issues.

Transcript:

Thu Do
So my name is Thu Do, I’m a partner at Employer Defense Group, and this is Kiana, and I’ll let her introduce herself.

Kiana Ebrahimi
Hi, my name is Kiana Ibrahimi, I’m an associate attorney with Employer Defense Group.

Thu Do
And today, we’re going to be going over the issue of benefit notices and the legal consequences when notices are not timely sent. So, we’re going to be presenting on right notice, right time, and right reason.

Kiana Ebrahimi
And just before we begin, I just wanted to add that what triggered this presentation was that order suspending action that we received due to an untimely notice and untimely benefit payment that were issued to the applicant by a CCMSI adjuster that is no longer working with the company, and caused us to impose a self-penalty
So the judges, specifically in appropriate cases, will ask for benefit printout and benefit notices as a part of walkthrough process.
And in this case scenario, I advised on imposing 10% penalty, because that would be better than, getting ordered for up to 25% penalty. So yeah, just wanted to give a little background of…
Why we are doing this in the first place, and how issuing a timely benefit can cause a delay and much more costs.

Thu Do
Thank you, Kiana. Kat, next slide.
So, the importance of sending benefit notices in California obviously includes compliance to legal requirements, communication, and preserves the claim integrity.
Next slide.
Our training objectives this afternoon include understanding the legal requirements for benefit notices, recognizing when and why notices must be sent.
Learning how to timely… how timely notices protects against penalties.
Reviewing best practices and compliance tools, and case laws dealing with noncompliance and resulting penalties.
Next slide.
So, what are benefit notices? Benefit notices are formal letters sent to the injured workers, and they are required under the California Labor Code, as well as Title VII CCR 9810 through 9816.
These benefit notices inform the injured worker and their attorney about claims decisions as well as payments.
Next slide.
So the legal framework with,
that codifies all the different benefit notices are included in Labor Code 138.4, 4615, and 5814, as well as, I mentioned, CCR9810 through 9816, as well as a DWC Audit Unit Performance Standard.
And for those of you who are taking notes, we will be sharing the PowerPoint presentation at the end of the presentation, so you don’t have to take notes.
Next, I’m going to go over a sample claim timeline. So when a claim is reported by the insured.
On day one,
You have 14 days from when the claim is reported to issue a delay notice. We are seeing a lot of times that a claim sometimes is not timely reported by the employer, so sometimes delay notice is not issued within the 14-day time period.
However, what happens is, if we end up later not accepting a claim, and there is no delay notice, that actually could potentially trigger penalties, as well as, an audit.
So after the 14 days,
delay is issued. Within 90 days, defendants have 90 days to either issue a denial or acceptance of the claim.
After that happens, the discovery phase starts occurring, and that includes the depositions, COMEs, AMEs, and authorization of medical treatment. So during this time.
defendants will receive PTP requests for authorizations of MPN doctors, and those must be authorized within a reasonable time fashion.
So, unfortunately, the labor code and as well as case law, does not identify what is considered to be reasonable, but we would say no more than 10 to 14 days of when the request for PTP authorization is requested.
In terms of requesting treatment or, the…
Authorization of QME request for diagnostics.
When a QME or AME is asking for diagnostics as part of their report.
The descendant is required to actually authorize those diagnostics immediately. So this is… authorization should be without the request for,
should not be going through utilization review or any type of RFA.
There’s actually a case called Jessica Dutcher, where defendants did not timely authorize diagnostic treatment. I believe they actually took between 30 to 60 days, and at that point, the judge found the failure to authorize the diagnostics to be unreasonable, and actually issued penalties of 25%
per diagnostics requested. So, it’s for the entire class of benefits of diagnostics requested by the QME. So.
The authorization and timely authorization of QMA diagnostics is really important, especially given the fact that access attorneys will file for expedited hearing, and they… 99% of the time, they will be provided with, penalties and attorney’s costs if they are required to do that.
Once the applicant reaches MMI status, at that point of the TTD end, so within 14 days of receiving the permanent stationary report, TTD… a notice for TTD ending should be issued, as well as for PD to start.
So, in the case that Kiannet actually mentioned before we started this presentation, in that particular case.
Neither a TTD or a PD notice were actually issued in that particular case, and so…
When she did the in-pro walkthrough, the judge had requested copies of any and all benefit notices, just to ensure that, because the applicant was not being represented by an attorney, that all benefit notices were issued and the applicant was notified of their rights.
And so if there are benefit notices that are not issued timely, Kiana will discuss that when she discusses a different case law. There are different classes of benefits based on each type of benefit that’s owed, so that includes TTD, TD, and medical treatment.
Additionally, after receiving a permit and stationary report, within 60 days of receiving the impairment report, as well as a report addressing permanent work restrictions, defendants must issue the supplemental job displacement voucher.
So, obviously, there might be questions, okay, what happens if the claim is denied?
If the claim is denied and there is no reasonable basis to continue maintaining the denial, at that point, defendant should be, accepting the case and issuing the supplemental job displacement voucher within 60 days
Of issuance of the permanent stationary status report, especially if the employer cannot accommodate the work restrictions.
The other important thing, is if the permanent work restrictions can be accommodated by the employer, which means the position is for at least 85% of the applicant’s wages, as well as position that’s at least for a year, at that point, it is also important for us to be issuing a notice that no voucher is owed.
That will extinguish our, rights
Our obligations to issue a voucher at the time of settlement.
Next slide.
So just to summarize, delay notice, again, within 14 days of the claim being reported. Acceptance or denial within 90 days. If the claim is accepted, it’s also important to issue a notice indicating which body parts are accepted.
I know that a lot of times,
We’re getting questions from the adjusters indicating that the policy is not to issue an acceptance notice when the claim is accepted. However, I think that that actually opens the door for a lot of issues, especially if there are additional body parts that are not,
Going to be accepted, and there’s partial denials.
And I do see a couple questions, so we’ll take a little break once I’m done with my section to answer questions.
And then, as I indicated, within 14 days of receipt of a medical, you’d be either sending a notice regarding TTD or PD.
And then also in terms of TTD benefits. It’s important that
As defendants, we addressed all forms of wages in terms of calculating the average weekly wage. If we end up determining if there is any type of concurrent employment, and we do not pay at the correct rate, it’s important that we immediately, within 14 days of obtaining that additional information.
Send an amended notice and paying at the correct rate, as well as retro paying any type of underpayment that may have occurred.
And also, and lastly, the supplemental Job Displacement voucher, which I previously indicated, within 60 days. And all this is codified in CCR9812.
Next slide.
So, some common compliance pitfalls that we have been seeing is, obviously, the majority is missing the 14-day delay notice, or payment window.
And I think this… it’s really important with the employers that you are working with that you remind them the importance of
Timely reporting a claim. The penalty for not issuing a delay notice within,
14 days of the claim being reported is actually up to a $400 penalty by the audit unit. And so that can pretty much add up extensively, especially if there are a number of claims with the same employer.
Forgetting to send out termination notices for benefits, as I indicated earlier. A lot of times, if…
What’s happening is if we don’t calendar the different benefits that are being paid, and stop paying benefits, you know, upon receipt of an MMI report, a report that’s no longer finding the applicant TTD, you could potentially be waiving your rights for credit.
So, any type of TTD or PD overpayment, that is at the discretion of the judge. However, there is case law as well as,
Labor Code 10555, which actually indicates that as long as it is not a defendant clerical error in terms of benefits continuing, that defendants should be entitled to the benefits.
So I’ll repeat that, and it’s also in the PowerPoint, but it’s Labor Code 10555. So as long as there is no clerical error on our part, we should be entitled to our,
Temporary disability overpayments.
The other thing that we are also seeing is a failure to include a proof of service. We’re seeing notices that indicate that… I’ll see the mailing address to the applicant. However, there’s no CC to
defense counsel, there’s no CC to the applicant’s attorney, so it’s actually hard to determine whether or not that document has actually been mailed. So we’d highly recommend that you either include a proof of service or a CC on the bottom of your benefit notices, indicating those individuals that that benefit notice is being sent to.
Next slide.
So what are the legal consequences of not issuing the benefit notices, or not authorizing
treatment, not authorizing diagnostics, that’s all the penalties pursuant to Labor Code 5814.
As I indicated, not issuing a delay letter up to $400 of penalties by the audit unit.
Failure to authorize treatment. Keep in mind that until a claim is denied, treatment must be authorized up to $10,000 within the first 90 days.
Late denials, so if a claim is not delayed within the first 90 days, that will result in the claim being presumed compensable. And a lot of times, we get questions from our clients saying, okay, well, the claim is presumed compensable, however.
I failed to issue a timely denial, but upon investigation, discussion with the employer witnesses, upon receipt of medical evidence that was obtained within the first 90 days, the claim is actually non-industrial.
However, 5402, as well as case law, indicates that
The only evidence that you can use to rebut a presumed compensable is evidence that you could not have obtained within the first 90 days.
So, if the evidence was obtained within the first 90 days, and you did not timely deny the claim.
That evidence will actually be barred and excluded at the time of trial. You cannot use that to rebut the presumed compensability.
And then, as I indicated before, failure to issue any type of notice regarding any type of TTD benefits.
Will result in your waiver to seek any type of credit.
I mean, we’ve gotten some questions previously from our clients regarding whether or not you could recode TTD to PD if there’s any type of overpayment.
Any type of recoding,
cannot be done, because we cannot, as defendants, unilaterally take credit for any type of overpayment. This is not allowed. Any type of overpayment must be… we must seek an order from the court in order to do that.
Next slide.
So why does timely notices matter? Obviously, as I indicated, compliances, which is required by the California state law.
Penalty prevention, which could be pretty significant under Labor Code 5814, since it’s for the entire class of benefits.
And Kiana will be addressing that further as part of her presentation.
as well as, audit performances. We know that
CARS audits occur at least once every 5 years, pursuant to Labor Code 129 and 129.5, and there’s 5 different areas of claim administrations that the audit unit actually reviews. And those include the payment of accrued and undisputed indemnity.
The late first payment of TD, or first notice of salary continuation.
The first payment of PD and death benefits
the late subsequent indemnity payments, as well as the provisional notices with respect to the applicant’s rights to an AME or QME.
And so, just to reiterate.
Timely notices matter because it obviously builds transparency within the claims management, as well as reduce disputes within litigation.
And then I’ll actually use this time to answer some questions before Kiana Addresses the case law.
Okay, so the first question is, we’re having issues with requesting QME diagnostics from completed reports without RFAs attached.
We send referrals, and they reject QMRI reports to schedule the services.
So just to clarify, Do you mean you need a script, or do you need an actual RFA?
Okay.
So, in our cover letter that we actually issued to the doctors, we actually asked for a prescription from the doctor. If a prescription is not provided.
At that point, you should ask your defense attorney, or you can reach out to the QME yourself in order to obtain those prescriptions. However, it is important that the request for the prescription be included in the cover letter. We’ve worked with some of our clients, and if,
And it looks like…
you guys use OneCall, so if you’re okay with us including that within our cover letters, we’ll just specifically direct the doctor to issue a diagnostic script, and go ahead and contact our preferred vendor, which would be OneCall to complete the diagnostics.
A lot of times there might be delays in getting that from the QME. The other option would be to send the QME report over to the PTP, and that could be in either an accepted or denied claim. To send the report and say, hey, PTP, can you go ahead and request,
or provide us with a script or an RFA requesting completion of the diagnostics completed by the QME.
And I do want to remind you that if the PTP ends up doing a request for authorization for the diagnostics requested by the QME, that actually should not be sent over to utilization review, as diagnostics requested by QMEs are not subject to UR.
Any other questions before we continue?

Kiana Ebrahimi
Right.
Thank you, too.
So, I would like to, go over some real-world scenarios.
Let me start with one of the most important cases in California workers’ compensation penalty law, penalty law that called Gallimore from 1979, which is still a binding case. Every penalty case you’ll ever see cites Gallimore. If you understand this case, you’ll understand how penalties work.
So here’s what happened. The worker got injured, and the defendant paid temporary disability on time. So far, so good.
But when TD ended and the worker reached permanent and stationary, the defendant waited 6 weeks before starting permanent disability payments. That’s problem number one.
Problem number two, while waiting, the defendant took an unauthorized overpayment credit against the PD without getting board approval. Problem number three, the defendant also delayed paying the workers’ travel expense reimbursements for medical appointments.
So, the worker’s attorney filed a petition seeking 3 separate 10% penalties, One for each violation.
And the California Supreme Court had to decide two critical questions here. Question number one, how do you calculate penalties? Is it on just the amount that was late, or on something bigger?
The court said that penalties are calculated on the full amount of entire benefit class, not just what we delayed, the entire class. So if your PD award is $50K in total, and you delay the first payment, your penalty is calculated on the full 50K, even though you eventually pay all 50K.
Even though 99% of it was paid, on time.
So if any part of the benefit is delayed unreasonably, the penalty applies to all of it.
Also, think about that scenario. You mess up one payment, maybe it’s $100, but the claim has $100K in total benefits. The penalty is 25% of that $100K. That’s $25K and capped at $10K. So your $100 mistake can cost you up to 10K in penalties.
So, question number two that the court needed to decide was, can you have multiple penalties on one claim?
The court said yes, if you commit separate and distinct acts of delay or non-payment, separate and multiple penalties can apply on your claim.
So here in Gallimore, the court found three separate acts. One, delaying PD payment. Two, taking unauthorized overpayment credits.
Three, not paying travel expenses. So, as you can see, one small mistake of delaying payment of $100 can cause up to $10K in penalties, and that’s why we are doing this training. That’s why notice compliance is not optional.
Right, so now that Gallimore opened the door to multiple penalties, lots of defendants were worried. Does every late payment get a separate penalty? If I miss 10 bi-weekly TD checks, is that 10 separate penalties?
The Supreme Court actually answered that question back in 1997, in the Christian case, and in a true lawyer fashion…
Go ahead.

Kiana Ebrahimi
Yeah.
Catherine, would you mind, too?

Thu Do
Kat, can you, thank you.

Kiana Ebrahimi
Thank you, sorry about that.
So, in the, in this case that you’re seeing in your screen, Christian, here’s what happened. A defendant was paying TD to an injured worker. At some point, the defendant mistakenly concluded the worker was no longer entitled to TD. Maybe they thought the worker could return to work, maybe they misread the medical report. Whatever the reason was, they stopped paying TD.
And they missed 11 biweekly payments over several months. Eventually, this got resolved, but by then, 11 payments had been missed.
The worker’s attorney filed a penalty petition seeking 11 separate penalties, one for each missed payment. The attorney argued that each payment date is a separate act, and Gallimore says separate acts get separate penalties, so here 11 acts equal to 11 penalties.
However, the Supreme Court looked at this case and said, we need to distinguish between two different scenarios.
Scenario number one, single course of misconduct. You make one mistake, and that mistake caused multiple problems. In Christian, the defendant made only one mistake, and they incorrectly concluded TD should stop.
All 11 missed payments followed that single wrong decision. They didn’t make 11 separate decisions. They made one bad decision that affected 11 payments. That’s a single course of conduct. 1 penalty. Still calculated on the full TD amount per gallon more, but it’s still one penalty.
However, there’s another scenario that you commit multiple different violations, and the court gave examples of when you do get multiple penalties. Look at your slides that says a late PD plus from authorized credit is equal to two penalties.
Why? Because these are two different things. Decision number one, don’t start PD on time. Decision number two, take credit without authorization. Two separate decision, two separate violation, and two separate penalties.
All right, Nation.
Alright, so now that we, talked about how to calculate penalties on the full benefit class, here is a question. What if the benefits are paid over many years in the future? Do future benefits also count? Reiner answered that question, and the answer shocked lots of defendants.
Here’s the scenario. A worker gets a permanent disability about, let’s say, $50K, payable bi-weekly, or 5 years. That’s the way PD works, right? It’s paid over, gradually.
So now, early on, let’s say in month two, the defendant delays one payment, just one. Eventually, they catch up and pay it.
Question for the court.
When we calculate the penalties, do we calculate it on just the payments that were late, or just the payments that have been made so far, or the entire 50K award, including payments that won’t be made for years? Defendant in this case argue that, obviously, just a late payment, how can we be penalized for future payments that aren’t even due yet?
It’s not fair.
However, the Supreme Court said the penalty applies to the full award.
all 50K, including every payment that will be made over the next 5 years. If you read the labor code 5814, it directly mentions the full value, and it is not vague. Lots of attorneys actually misinterprets this labor code, but if you read the statute, it says that penalty applies to the full amount of the order.
Decision or award. It doesn’t say the amount delay. It doesn’t say the amount due to the date. It says full amount of the award.
So, if the award is, for example, $50K, the penalty calculates on that full amount.
We can move to the next slide.
Thank you.
So now let’s switch from penalties to the 90-day rule. This is probably the most dangerous deadline in all the workers’ comp. Mrs. deadline and a deniable claim becomes compensable. The merits don’t matter anymore, it’s pure procedure.
So this case, that Colt Rodriguez clarified what the 90-day rule actually requires, and there’s been lots of confusion about this case. Here’s what happened.
A worker filed a claim on day zero. The defendant investigated. On day 89, one day before the deadline, the defendant prepared and dated a denial letter. The defendant mailed the letter on date 89,
But because of the mail delays, the workers didn’t receive it until day 96, so 6 days after the 90 days deadline.
Here the applicant attorney argued that labor code 5402 says if liability is not rejected within 90 days, the claim is pursuum compensable.
And my client didn’t receive the notice until day 96, therefore rejection occurred on day 96, and presumption should attach.
However, the Court of Appeal said, no, read the statute carefully. It says if liability is not rejected within 90 days. It doesn’t say if notice not received within 90 days. So here, the key code is on your screen.
It is the rejection which must occur within the 90 days, not the receipt of the notice of the rejection.
So here, court held that as long as you make the decision to reject within 90 days, you’re okay. The worker doesn’t have to receive the notice within 90 days.
But I see some questions, and I will address that after my slides. So…
Now, here’s what, where defendants, get in trouble. They read Rodriguez and think, okay, great, I can prepare the denial on day 89, mail it on day 95, and I’m fine as long as I can prove I decided to deny it on day 89, right?
That’s wrong. Look at the practice warning on your slide. If you can’t prove when the decision was made, mailing date becomes critical. Just don’t cut it close. Mail it by day 85.
Because here is a problem. How do you prove when you made that decision? You might say, okay, I decided on day 88, but how do you prove that?
We can say, okay, the letter is dated day 88,
But you can have backdated, right? You can show a note in your file, but you could have made that note later as well. Your supervisor signed it on date 88,
That’s the better evidence, but it’s still disputed. The only objective evidence that everyone agrees on is when was it mailed?
So, if you mail it day 91, the judge will probably find that the rejection occurred on day 91, if you don’t have any evidence to prove it, and the presumption will attach.
So here is my advice. Don’t rely on Rodriguez technicality, don’t play games with the deadline. Set your deadline as day 85, not date 90, and so that you have a buffer for unexpected delays.
And we can… okay, thank you.
Okay, so, actually, if you go back to SCIF, The previous slide.
Thank you.
So, Rodriguez told us that we need to deny within 90 days, but what happens if we don’t? What does this presumption of compensability actually mean?
Voucher is the case that explains the presumption, and I’m telling you, this case is a trap. If you don’t understand vulture, you will lose claims that you should have been.
Sciv is a state compensation insurance fund that had a claim. They investigated, they didn’t deny within 90 days. Day 91 passes, presumption attaches under label code 5402.
And eventually, the case goes to a trial. Skiff shows up with medical reports from doctors saying, this injury is not work-related.
And they got 4 different doctors, all saying non-industrial.
Here, the applicant attorney objects that you can’t really use this evidence, you miss the 90-day deadlines, and presumption attaches, so your evidence is excluded.
Here, Steve argues that, wait, these are the legitimate medical reports from qualified doctors, how can you exclude medical evidence? The worker is not industrially injured, look at the reports.
However, the workers’ compensation judge excludes all the skiff medical evidence, every single report, every doctor exclude that. Why? Because that’s how the presumption works.
So, Labor Code 5402 says that the presumption is rebuttable only by evidence discoverable subsequent to the 90-day period.
So the judge asks, when were the medical reports dated? If the answer is days 60, 70, 80, 85, they’re all within that 90 days.
And a judge says that, okay, you can’t use them because the statute said you only can rebut the presumption with the evidence discoverable after day 90.
Here, SCIF, appeals the case and go to the Court of Appeal, and they argue that, but these reports were written after day 90. The first report is dated 95.
However, court says, when were the medical examination? When were the record review? Answer was that during the first 90 days. So, the court says that you could have obtained these opinions during your investigation with a reasonable diligence. So, the evidence was obtainable during that 90 days, and you can use it because you failed to act within due diligence.
With obtaining those reports.
So, and the court also explains that the purpose of that 90-day rule is to force defendants to complete their investigation quickly. You have 90 days to investigate. If you can’t finish in 90 days, too bad, you lose.
So you can look at the quote on your screen. The presumption is rebuttable only by evidence discovered subsequent to the 90 days period.
And the court interpreted this covered subsequent very, very narrowly. It means that evidence that didn’t exist during that… the first 90 days, or evidence that existed, but you could not have obtained with reasonable due diligence.
So if the evidence was available, if you could have obtained it, but you just didn’t bother to do it, you cannot use it later on.
If you take one lesson from me today, let it be that never, ever miss the 90-day deadline. If you’re not going to finish your investigation in time, deny it anyway. You can always amend the denial later if new evidence comes in.
Better to deny early an amend than wait and lose the case entirely because of the procedure.
Like, Kat, if you can,
Go to the next one, Frank.
So I’m gonna, quickly discuss this case, that, talks about benefit classes. This case matters because, remember, Gallimore said penalties calculated on full benefit class.
So, what’s a class? Are medical bills one class, or is each type of medical expense a separate class?
So here, a worker got injured, gets loss of medical treatment, drives to medical appointments, submits mileage reimbursement requests, and defendant delays paying the mileage only worth $500.
And, applicant attorney files a petition, for penalty, and defendant argues that it’s only $500, so the penalty should be 25… max 25% on that $500, right?
That’s not correct. Workers here argue that the medical transportation is part of the medical benefit class.
This worker has $200K in total medical treatment, and penalty should be up to 25% of that $200K in medical treatment.
Supreme Court, unfortunately, sides with the workers, here and said that medical transportation is part of the medical benefits. It is not a separate class. Therefore, delay in paying mileage is equal to the penalty on the entire medical award.
So I just want you to look at the impact here. A delay that worth $500, for mileage reimbursement can potentially cost you 25% of $200K, capped at $10K.
So this is why we need to, pay every medical bill on time, even the small bills, because if you delay one 500 bill, the penalty isn’t on the 500. It’s on the, worker’s entire medical treatment. It could be hundreds, hundreds of thousands of dollars. So…
Key takeaway, there is no such a thing as an unimportant medical bill or a small violation exception.

Thu Do
And then just keep in mind that we are seeing more and more attorneys, specifically out in the LA area, including Long Beach, Maria Del Rey, and the Los Angeles court.
Where there’s a couple of attorneys where penalty petitions are becoming their bread and butter. So what they’ll do is they will send penalty petitions throughout the life of the claim every time they see a delay on the defendant’s part.
And so a lot… even though they are deferring the issue.
Once a case is settled and those penalty petitions are not resolved, those issues continue to be litigated, and those attorneys are taking full well, since they understand Gallimore, they understand Christian, they understand Reiner, about penalty upon penalty. That’s becoming more and more common. So, it is important to timely issue notices, as well as understanding
The timeframe of when reimbursements are owed.
Kia just talked about when mileage reimbursements are owed, especially on accepted claims. We’re constantly getting requests for mileage reimbursements.
for QME appointments, for PTP appointments that happen, those requests must be paid within 60 days of those requests being made. So every time those come in, it is important that they… that you just immediately issue payment.
We’ve gotten questions from our clients, well, what happens if
The medical mileage request includes mileage for non-MPN treatment. Well, you could… at that point, you could issue an objection for any type of non-MPN treatment, and not issue payment for those
Mild request, but still issue payment for those mileage that, is
you know, with an MPN provider, or a QME, or for diagnostics.

Kiana Ebrahimi
Yeah, there are two more cases that I included. Monte, which is on the pattern of late payment, and County of Sacramento, which discuss reasonable factors. I’m not gonna go through those cases, however, they are included in the slides for your information.

Thu Do
And so, just to reiterate everything that we’ve talked about, we did create a compliance checklist for you guys, which includes
You know, when the claim starts, always include the DWC1 form and the pamphlet that’s provided to the injured worker.
Timely issue the delays and denial payments, timely.
Communicate benefit changes within 14 days of receipt of any type of wages or recalculations.
Issuance of mileage reimbursements within 60 days of receipt.
And then annual and supplemental job displacement.
Notices being tracked.
And then also, it’s important to keep all benefit notices saved and logged within your system.
Next slide.
So the best practice, obviously, is to calendar all regulatory deadlines.
Use approved templates only.
Double-checked wages and rate data before sending out any type of benefits.
Keep proof of mailing for every notices that are sent, and audit your own files regularly. You don’t want to be,
on the receiving end of a penalty petition from the attorneys, out in LA, especially, those are going to be pretty, costly,
as Kiana had mentioned, it’s up to $10,000 per, Her occurrence and penalty.
Next slide.
So all the different labor codes and CCRs that we discussed this afternoon are included in the DRI website, Title 8 DCR9810 through 9816, the DWC Audit Unit Guidelines, and the DWC Form Library.
So, key takeaways. Timely notices results in compliance and trust within the injured workers and the workers’ compensation system. Documentation allows us to preserve our defenses.
And consistency will also result in audit successes for you guys.
And then at this time, we’ll take any questions.
That you guys have?

Kiana Ebrahimi
Please see a question in the chat box.
Asking if they send a denial on day 19 day, is it still considered timely? Yes, as long as you make the denial decision before day 90, it is timely. However, because of the evidence and how you want to prove it.
you should make the decision and send it before, day 90. So, sending it on day 90 is still timely.

Thu Do
You guys have any more questions?
Okay.
So, for those who are paying attention, we’re actually going to do our own little questions, and…
I don’t know how we’re going to do this, so I’m going to have… if you have a response to the question on the screen, whoever answers first on the screen will actually receive a prize from us.
So I see Leanda just responded, how many days do you have to issue a delay notice?
That’s it. The response is.
14 days, which would be D.
And as we’ve indicated before, we’re actually seeing that to be the most common mistake, so that really results on you as the claims adjuster, when you’re doing your three-point contact, once a claim is reported, to remind your employers how important it is
to not only preserve their rights, but also our defenses, that the delay notice be issued within 14 days. And the consequences, as I mentioned before, in not issuing a timely delay, is if the claim is not accepted, that is when the penalty of $400 is actually attached.
Can you go back, Kat?
The tr… the next slide?
So, true or false? If a claim is not timely denied, can you use evidence that was discovered within the first 90 days to rebut the claim?
And it looks like Katria,
Sorry if I mispronounced your name, got the answer correct.
It’s false. You cannot use evidence that was… that could have been discovered within the first 90 days.
So a lot of times what happens is, if
Us as defendants, if within that first 90 days we don’t complete the applicant’s deposition, we don’t at least initiate the QME process, the courts could also exclude the QME if the QME layer ends up finding the claim to be non-industrial.
Therefore, it’s really important that if a claim becomes litigated, that either the deposition be scheduled immediately within the first 90 days, and or the QOME be requested within that time. I know a lot of times we have our clients who want us to, you know, set the matter for trial on any type of affirmative defenses.
Keep in mind that, there is a labor code, 6818I, that actually says that
you cannot file a declaration for readiness to proceed without any type of medical evidence. So, unless we’re trying to try the issue of a type of affirmative defense, such as lack of employment, we have to obtain a medical. So, unless a claim is
is being denied for lack of coverage, lack of employment, we should recommend either your defense attorney or the claims adjuster to immediately issue or initiate the QME process. Otherwise, if you end up not timely denying the claim.
Even your QME report, could be excluded, even if it was obtained within the first… after the 90 days, because you did not request the QME within the first 90 days. Does that make sense?
Okay.
Next question.
What percentage of compensation has been unreasonably delayed or refused, either prior to or subsequent to the issuance of an award? The amount of payment shall be increased up to what percent?
And the correct response is C, which is 25%. So, keep in mind that as we are auditing our own files, we’re going through the benefit notices.
We’re reviewing whether or not payments are timely. If we catch an error or any type of potential late payment, and we self-impose,
penalties at that point, we can… we just need a self-impose 10%. However, if the mistake is actually caught by
the applicant’s attorney or caught by the judge. At that point, we could be subject to up to 25% in penalties. So it’s always important, as we mentioned, to self,
You know, self-monitor your claims, calendar everything to ensure that you are not late on any type of payments, or notices.

Kiana Ebrahimi
So, before we actually finish this presentation, I have a question for you.
If no one else has. So let’s say that, we received a claim, the adjuster receives a claim, and they do not issue any delay, denial, or acceptance, within 14 days.
when they issue the denial, letter on day 38, so after day 14, but before 90 days, would that be any, consequences for that?

Thu Do
So there’s still a consequence, and so the claim would still be denied, since it was timely denied. As I indicated, if there is still a failure to issue any type of delay notice, the audit penalty of 400 is only triggered if the claim is not accepted.
So we’re seeing more and more, as I’ve indicated before, that a claim is reported by the employer, and we…
We realize as defendants, maybe we didn’t issue the delay notice, and we just immediately issue a denial. And that’s okay to do, but keep in mind that if the file is audited, you are opening the door for an audit penalty of up to $400 for not issuing the delay notice.
Any other questions for us?
It doesn’t have to be related to our presentation, so if there’s any type of legal questions that you guys have, we’re more than happy to respond to those questions, since we did schedule this for, to go to 1.30.
So I’ll just mention, for those who are handling complex claims,
There is a recent case that actually just came out,
recently that overturned the Patterson case. So, for those of you who handle complex claims, where there’s home health or arguments regarding continuity of treatment, and the lack of change of circumstances.
which then takes the request for treatment outside of utilization review. You can feel free to reach out to me, and I’d be happy to send over the most recent case, which overturned Patterson.
And then I did… oops, Kat, can you go back to that slide?
And so just for everyone that’s on this presentation, in front of us is the list of all CCMSI panel attorneys within Employer Defense Group.
And then on the next page is all their contact information.

User Question:
Yeah, I’m working on that list. So, too, I do have a question. Let’s say we… the adjuster got the claim, they estimated the wage based on the 50-20, and then we’re, like, 6 months down the road, or, you know, close to a year down the road, we pay
a substantial amount of TTD, and we’re just barely requesting the wage statement. We get it within 14 days.
Is there a penalty on the wage, or what’s the minimum requirement of requesting that wage statement that we’re not gonna…
Get that penalty, review for penalty, yeah.

Thu Do
So, if the claim is not litigated, I understand that it… a lot of times, you’re not able to obtain all that wage information. However, the courts are… know that a lot of defendants, upon a claim being reported, they do do that three-point contact, and that 3-point contact includes
you know, a discussion with the employer, a discussion with any witnesses, and a discussion with the injured worker. It is our burden, defendant’s burden, to show that we did our due diligence in order to obtain the wage statement.
And so, if you’re not… the claim’s not litigated, and you’re not sure whether or not there’s any type of concurrent or other wages, I would actually include that request.
within the opening documents for a claim to ask for any and all wages and employment, so that TTD can be accurately calculated. And if you request that information and they still do not respond, at that point, penalties would not attach.
The courts would look whether or not we made our due diligence in order to obtain that information.
So I know that a lot of times, we’re seeing claims,
And obviously, Venture is one of our huge clients through CCMSI, is they’re…
they don’t have consistent wages, or they’re seasonal employees, so that means that they have wages from multiple sources, or they’re short-term employees. At that point, it is
Our burden to request the additional wages, especially if they are not provided by the employer.
So, I mean, also, we hate to subpoena the records from our employer, but we also do need cooperation from them so that
penalties actually attach and impact their insurance mods, so I think that those are things that need to be emphasized to not only the brokers and the employers that you guys work with, and how important it is for the wage information to be sent to us.
So that we could accurately calculate average weekly wages.
So the…
So the question is, isn’t it true we pay full TT rate if the employer does not send us a wage statement? And that is correct. We would essentially pay the full amount TTD if we are not aware of what the wages are. And so that’s… we can always use
Any type of recalculation once we obtain those records to issue a benefits notice with the amended amount.
So, just because we start paying TTD, our requirements to continue ensuring that we’re paying at the correct rate does not end just because we’ve picked up benefits. It actually continues, to ensure… until we have all the information that we have, you know, whether
The subpoena of employment records, the wage statements, the completion of the applicant’s deposition. Once discovery is complete, that’s when our burden to calculate wages ends.
Any other questions?

User Question:
This is just a refresher question for some of the people on the floor. Sometimes I get a penalty form.
And, just when I was starting out, I, in workers’ comp, we get a DWC1. It’s signed on, let’s say, 11-1 of 2025.
The protection, if we got it on 11-1, it would be protected from 11-1 to 11-14, so that period, if we paid it at a later date, that will be protected, if you can confirm if that’s true or false, and if you can elaborate on that.

And TTD is due on the 14 day, which is 11-14-25, considering if TTD, first picked up was 11-1 to 11-14.
We didn’t pay TD, but we got that signed DWC one later… at a later time on December 1-25, which we went back and retroactively picked up 1-1 to 114, but now it’s late.

Thu Do
Actually, a lot of times, we get claims, or we get applications for adjudication of claims that are filed by an applicant, and then on the defense side, we’re not sending them the DWC1 form.
At that point, it’s never going to trigger when the penalties would attach or not.
So, when a claim is reported, we do highly recommend that the entire package be sent within that delay period, and that does include the DWC1, the applicant’s rights.
Regarding the QME AME process and any additional,
legal requirements, which includes, you know, the Reynolds notice about the statute of limitations. A lot of times we’re…
Just a reminder, on improper cases, or even cases that are litigated, we are not seeing, any type of notice within… or language within your benefit notices that actually mention the statute of limitations.
And if we do not provide the injured worker that a claim must be filed within a year of the date of injury, or the last date of benefits, we cannot later on assert the statute of limitations.
The statute would actually be told.
So the question is, if it is not our fault that we did not get the deeds that we want on a timely manner, and have made attempts to obtain it, are we held harmless from that penalty? We would also make that argument that we should be held harmless, but it is up to the judge on whether or not the penalty still attaches.
And on cases that we have seen, more likely than not, the penalty is still attaching.