DWC announces 2027 profile audit review and full compliance audit performance standards

NEWSLINE

The Division of Workers' Compensation's (DWC) Audit and Enforcement Unit conducts a profile audit review (PAR) of every location that handles California workers' compensation claims at least once every five years, as required by Labor Code sections 129 and 129.5.

The performance of each claims-adjusting location is evaluated in five key areas of claims administration:

• Payment of accrued and undisputed indemnity
• Timeliness of the first temporary disability or first notice of salary continuation
• Timeliness of the first permanent disability or death benefit payment
• Timeliness of subsequent indemnity payments
• Provision of notices with Qualified Medical Evaluator/Agreed Medical Evaluator advice.

DWC establishes standards annually for PARs and full compliance audits (FCAs), as required by Labor Code sections 129(b)(1) and (2) and California Code of Regulations, title 8, section 10107.1. The 2027 standards are based on audit results from calendar years 2023 through 2025.

Performance standards for 2027

The PAR performance standard for 2027 audits is 1.67327. Audit subjects with ratings at or below this threshold must pay any outstanding compensation but will not be subject to administrative penalties. Those with ratings of 1.67328 or higher will undergo an expanded FCA that includes a review of additional indemnity claims.

The FCA performance standard for 2027 audits is 2.14192. Audit subjects with ratings at or below this threshold must pay any outstanding compensation and will face administrative penalties for violations involving unpaid or late-paid compensation. Those with ratings of 2.14193 or higher will undergo an expanded audit that includes additional samples of denied indemnity claims. Penalties will be assessed for allapplicableviolations in accordance with California Code of Regulations, title 8, sections 10111 through 10111.2.

Severity rate standard for 2027

The severity rate standard for 2027 is $165.60.

More information about the performance standards for PARs and FCAs during calendar year 2027 will be posted on the DWC Audit and Enforcement Unit web page.

The California Department of Industrial Relations' Division of Workers' Compensation monitors the administration of workers' compensation claims and provides administrative and judicial services to help resolve disputes related to claims for workers' compensation benefits.