California Regulations 10108

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§ 10108 Audit Violations--General Rules

The following general rules apply to audits and audit processes under Labor Code 129,� 129.5:

�(a) If the date or deadline (including any applicable extension) to perform any act falls on a�weekend or holiday, the act may be performed on the last business day before or the first�business day after the weekend or holiday. A payment date which is changed under this�provision shall not change the normal dates for later payments in an existing two-week�payment schedule.

�(b) For the purpose of imposing audit penalties, if the claims administrator does not record the�date it received a document, it shall be deemed received five days after the latest date the�sender wrote on the document.

�(c) Unless these regulations specifically provide otherwise, the penalty for an unlawful delay of�more than 30 days in performing an act is the same as the penalty for not performing the act.�However, the penalty may be mitigated for good faith because the act, though late, was�eventually performed. There will be no mitigation for good faith, however, if the act was�performed after notification to the audit subject that the claim was selected for audit. In such�cases where there is an unlawful delay of more than 30 days in performing an act and the act�was performed only after the audit subject was notified that the claim was selected for audit,�violations will be calculated for frequency under Section 10111.1(e)(3) as though there was a�failure to perform the act rather than late performance of the act. For example, if unpaid�indemnity was paid more than 30 days late only after the audit subject was notified that the�claim was selected for audit, violations will be classified as failure to pay indemnity under�Section 10111.1(e)(3)(xviii) of these regulations rather than late paid indemnity, and will be�modified for frequency accordingly. A lawful delay is a delay permitted by law or regulation,�and for which the claims administrator has given a proper and timely notice of delay when�such a notice is required. Any other delay is an unlawful delay.

�(d) Penalties will not be assessed during the period a claims administrator is actively�investigating its liability for provision of benefits or payment of compensation, provided that a�Notice of Delay has been timely and properly issued in accordance with 9812 or 9813.�However, penalties shall still be issued for violations during the period of delay for: failure to�object to medical treatment bills in accordance with 9792.5, or failure to object to or pay bills�for medical legal expense in accordance with 9794.

�(e) Penalties will not be assessed for an act or omission where an injured worker's�unreasonable refusal to cooperate in the investigation has prevented the claims administrator�from determining its legal obligation to perform the act.

�(f) Where a penalty is provided for failure to pay mileage fees related to medical treatment or�evaluation, a penalty will be imposed if payment is not made at a rate that is at least the greater�of the following: (i) twenty one cents per mile, or (ii) the minimum rate adopted by the�Director of the Department of Personnel Administration pursuant to Section 1 9820 of the�Government Code for non-represented (excluded) employees at Title 2, CCR 599.631(a).

�(g) Failure, delay, or refusal to pay compensation benefits or expenses shall be subject to the�applicable penalties under 10111 or 10111.1 unless the legal, factual, or medical basis for�the failure, refusal, or delay is documented in the claim file.