Chapter 4.5. Division of Workers' Compensation
Subchapter 1. Administrative Director--Administrative Rules
Article 5.5.1. Utilization Review Standards

§ 9792.11. Investigation Procedures: Labor Code § 4610 Utilization Review Violations.

(a) To carry out the responsibilities mandated by Labor Code Section 4610(i), notwithstanding Labor Code section 129(a) through (d) and section 129.5 subdivisions (a) through (d), the Administrative Director, or his or her designee, shall investigate the utilization review process of any employer, insurer or other entity subject to the provisions of section 4610. The investigation shall include, but not be limited to, review and inspection of the practices, files, documents and other records, whether electronic or paper, of the claims administrator, and any other person responsible for utilization review processes, whether in full or in part, for an employer. As used in sections 9792.11 through 9792.15, the phrase 'utilization review organization' includes any person or entity with which the employer, an insurer, or third party administrator contracts to fulfill part or all of the employer's utilization review responsibilities under Labor Code section 4610 and Title 8 of the California Code of Regulations, sections 9792.6 through 9792.15.

(b) Administrative penalties, where applicable, may be assessed for any failure to comply with Labor Code section 4610, or sections 9792.6 through 9792.12 of Title 8, California Code of Regulations.

(c) Reserved.

(d) The Administrative Director, or his or her designee, may also utilize the provisions of Government Code sections 11180 through 11191 to determine whether any violations of the requirements in Labor Code section 4610 or sections 9792.6 through 9792.12 of Title 8, California Code of Regulations, have occurred.

(e) In the event an investigation of utilization review processes of a claims administrator occurs concurrently with a profile audit review under Labor Code section 129 or 129.5, the administrative penalty amounts for each violation of Labor Code section 4610 or sections 9792.6.1 through 9792.12 of Title 8, California Code of Regulations, shall be governed by sections 9792.11 through 9792.15. Any such administrative penalty for utilization review process violations shall apply in lieu of the administrative penalty amount allowed under the audit regulations at section 10111.2(b)(8)[F] of Title 8, California Code of Regulations. In addition, any report of findings from the investigation and any Order to Show Cause re: Assessment of Administrative Penalties prepared by the Administrative Director, or his or her designee, based on violations of Labor Code section 4610 or sections 9792.6.1 through 9792.12 of Title 8, California Code of Regulations, shall be prepared separately from any audit report or assessment of administrative penalties made pursuant to Labor Code section 129 and 129.5. The Order to Show Cause re: Assessment of Administrative Penalties for violations of the regulations contained in Article 5.5.1 of subchapter 1 of chapter 4.5 of Title 8 of the California Code of Regulations shall be governed by sections 9792.11 through 9792.15.

(f) Complaints concerning utilization review procedures may be submitted with any supporting documentation to the Division of Workers' Compensation using the sample complaint form that is posted on the Division's website at:

http://www.dir.ca.gov/dwc/FORMS/UtilizationReviewcomplaintform.pdf

Complaints should be mailed to DWC Medical Unit-UR, P.O. Box 71010, Oakland, CA 94612, attention UR Complaints or emailed to [e-mail]. Complaints received by the Division of Workers' Compensation will be reviewed and investigated, if necessary, to determine if the complaints are credible and indicate the possible existence of a violation of Labor Code section 4610 or sections 9792.6.1 through 9792.12.

(g) The Administrative Director, or his or her designee, may conduct a utilization review investigation, including but not limited to an on-site investigation at any location where Labor Code Section 4610 utilization review processes occur, as follows:

(1) A Routine Investigation shall be initiated for each known claims adjusting location or utilization review organization at least, but not limited to, once every five (5) years and, where applicable, shall run concurrently with the profile audit review executed pursuant to Labor Code sections 129 and 129.5. The investigation shall include a review of a random sample of requests for authorization, as defined by section 9792.6.1(u), received by the utilization review organization or claims administrator during the three most recent full calendar months preceding the date of the issuance of the Notice of Utilization Review Investigation. The investigation may also include a review of any credible complaints received by the Administrative Director since the time of the previous investigation or may include or combine the results of a Target Investigation. If there has not been a previous investigation, the investigation may include a review of any credible complaints received by the Administrative Director since the effective date of sections 9792.11 through 9792.15.

(2) Target Investigations:

(A) A Target Investigation may be conducted at any time based on credible information indicating the possible existence of a violation of Labor Code section 4610 or sections 9792.6 through 9792.12.

(B) The Target Investigation may include: (i) a review of the requests for authorization previously investigated which contained violations; (ii) a review of the file or files pertaining to the complaint or possible violation; (iii) a random sample of requests for authorization received by the utilization review organization during the three most recent full calendar months preceding the date of the issuance of the Notice of Utilization Review Investigation; (iv) a sample of a specific type of request for authorization; and (v) any credible complaints received by the Administrative Director since the time of any prior investigation. If there has not been a previous investigation, the investigation may include a review of any credible complaints received by the Administrative Director since the effective date of sections 9792.11 through 9792.15.

(h) Upon initiating a Target Investigation, the Administrative Director, or his or her designee, shall provide to the claims administrator or the utilization review organization a written description of the factual information or of the complaint containing factual information or a copy of the complaint that triggered the utilization review investigation, unless the Administrative Director or his or her designee determines that providing the information would make the investigation less useful. The claims administrator or utilization review organization shall have ten (10) business days upon receipt of the written description or copy of the complaint to provide a written response to the Administrative Director or his or her designee. A written response which asserts a defense against the complaint shall include any and all documentation necessary to substantiate the defense. After reviewing the written response, the Administrative Director, or his or her designee, shall either close the investigation without the assessment of administrative penalties or conduct further investigation to determine whether a violation exists and whether to impose penalty assessments.

(i) The number of requests for authorization randomly selected for investigation shall be determined based on the following table:

Population of requests for authorization received during a three month calendar period	Sample Size
5 or less	all
6-10	1 less than total
11-13	2 less than total
14-16	3 less than total
17-18	4 less than total
19-20	5 less than total
21-23	6 less than total
24	17
25-26	18
27-29	19
30-31	20
32-33	21
34-36	22
37-39	23
40-41	24
42-44	25
45-48	26
49-51	27
52-55	28
56-58	29
59-62	30
63-67	31
68-72	32
73-77	33
78-82	34
83-88	35
89-95	36
96-102	37
103-110	38
111-119	39
120-128	40
129-139	41
140-151	42
152-164	43
165-179	44
180-197	45
198-217	46
218-241	47
242-269	50
270-304	55
305-346	55
347-399	55
400-468	55
469-562	60
563-696	60
697-905	60
906-1,272	65
1,273-2,091	65
2,092-5,530	70
5,531 or more	70

(j) The Administrative Director may request additional files where the files initially selected are incomplete or otherwise invalid.

(k) Unless the Administrative Director in his or her discretion determines that advance notice will render an investigation less useful, the Administrative Director shall initiate an investigation under this section by issuing a Notice of Utilization Review Investigation to the investigation subject. The Notice of Utilization Review Investigation shall require the investigation subject to provide the following:

(1) A description of the system used to identify each request for authorization (if applicable). To the extent the system identifies any of the following information in an electronic format, the claims administrator or utilization review organization shall provide in an electronic format a list of each and every request for authorization received by the investigation subject during a three month calendar period specified by the Administrative Director, or his or her designee, and the following data elements: i) a unique identifying number for each request for authorization if one has been assigned; ii) the name of the injured worker; iii) the claim number used by the claims adjuster; iv) the initial date of receipt of the request for authorization; v) the type of review (expedited prospective, prospective, expedited concurrent, concurrent, retrospective, appeal); vi) the disposition (approve; deny; and if denial, whether the denial was based on medical necessity or was the result of requiring additional information, tests, or consultation as set forth at subdivision (a) of section 9792.9.6; modify; or withdrawal); and, vii) if applicable, the type of person who withdrew the request (requesting physician, claims adjuster, injured employee or his or her attorney, or other person). In the event the claims administrator or utilization review organization is not able to provide the list in an electronic format, the list shall be provided in such a form that the listed requests for authorization are sorted in the following order: by type of utilization review, type of disposition, and date of receipt of the initial request. Files must be complete and orderly, to the extent possible, by reflecting all documents in the utilization review process that fall under a request for authorization in chronological order.

(2) A description of all media used to transmit, share, record or store information received and transmitted in reference to each request, whether printed copy, electronic, fax, diskette, computer drive or other media;

(3) A legend of any and all numbers, letters and other symbols used to identify the disposition (e.g. approve, deny, modify, or withdraw), type of review (expedited prospective, prospective, expedited concurrent, concurrent, retrospective, appeal), and other abbreviations used to document individual requests for authorization and a data dictionary for all data elements provided;

(4) A description of the methods by which the medical director for utilization review ensures that the process by which requests for authorization are reviewed and approved, modified, or denied is in compliance with Labor Code section 4610 and sections 9792.6 through 9792.10.1; and

(5) If applicable, a copy of the most recent accreditation document issued by URAC as approved by the Administrative Director under Labor Code section 4610(g)(4) which verifies that the utilization review plan organization meets the Labor Code section 4610(g)(4) accreditation requirement.

(l) The Administrative Director, or his or her designee, as applicable to the type of entity investigated, at any time during the investigation process, may request additional information including but not limited to the following: i) whether utilization review services are provided externally; ii) the name(s) of the utilization review organization(s); iii) the name and address of the employer; iv) the name and address of the insurer; and (v) documents relevant to the utilization review plan's accreditation including but not limited to copies of audit or investigation reports, files, or documents issued or generated by the plan or accrediting organization.

(m) The utilization review organization or claims administrator shall provide the requested information listed in subdivision (k) within fourteen (14) calendar days of receipt of the Notice of Utilization Review Investigation. Additional documentation as required under subdivision (l) shall be provided within 5 business days unless an extension is granted in writing.

(n) Where the investigation is of a utilization review plan organization that performs modifications and/or denials of requests for authorization, at least 40%, or as close to 40% as possible, of the files ultimately selected for review shall be comprised of files which modified or denied complete or accepted requests for authorization. In order to meet this requirement, the Administrative Director may expand the scope of files subject to review to go beyond the 3-month calendar period, as referenced at section 9792.11(g), up to a total of 6 months.

(o) Based on the information provided, the Administrative Director, or his or her designee, shall provide the claims administrator or utilization review organization with a Notice of Investigation Commencement, which shall include a list of the selected requests for authorization designated by the Administrative Director and complaint files (if applicable) for investigation.

(p) Within fourteen (14) calendar days of receipt from the Administrative Director, or his or her designee, of the Notice of Investigation Commencement, the investigation subject shall deliver to the Administrative Director, or his or her designee, a true and complete copy of all records, whether electronic or paper, for each request for authorization listed. Copies of the records shall be delivered with a statement signed under penalty of perjury by the custodian of records of the investigation subject, attesting that all of the records produced are true, correct, and complete copies of the originals in his or her possession. After reviewing the records, the Administrative Director, or his or her designee, shall determine if an onsite investigation is required. If an onsite investigation is required, fourteen (14) calendar days' notice shall be provided to the investigation subject.

(q) Where the Administrative Director has opted to conduct an onsite investigation, the Notice of Investigation Commencement shall be provided to the investigation subject at least fourteen (14) calendar days prior to the commencement of the onsite investigation unless the Administrative Director determines, in his or her discretion, that doing so would render the investigation less useful. The investigation subject shall produce for the Administrative Director, or his or her designee, on the first day of commencement of the onsite investigation, the true, correct and complete copies, whether electronic or paper, whether located onsite or offsite, of each request for authorization identified by the Administrative Director or his or her designee, together with a statement signed under penalty of perjury by the custodian of records for the location at which the records are held, attesting that all of the records produced are true, correct and complete copies of the originals.

(r) In the event the Administrative Director, or his or her designee, determines additional records or files are needed for review the investigation subject shall produce the requested records in the manner described by subdivision 9792.11(m), within five (5) business days, or, when records are located at the site of an on-site investigation, one (1) business day. Any such request by the Administrative Director or his or her designee may also include records or files pertaining to any complaint alleging violations of Labor Code sections 4610 or sections 9792.6 through 9792.12 of Title 8 of the California Code of Regulations. The Administrative Director or his or her designee may extend the time for production of the requested records for good cause.

(s) Upon receipt of a notice of Routine or Target Investigation or any other request from the Administrative Director, or his or her designee, to review all files and other records pertaining to the employer's utilization review process, whether electronic or paper, that are created or held outside of California, the claims administrator or utilization review organization shall either deliver all such requested files and other records to an address in California specified by the Administrative Director, or his or her designee, or reimburse the Administrative Director for the actual expenses of each investigator who travels outside of California to the place where the records are held, including the per diem expenses, travel expenses and compensated overtime of the investigators.

(t) For the purposes of assessing penalties, the requirement to perform any act related to utilization review practices shall be calculated based on timelines outlined under section 9792.9.3.

(u) If the claims administrator or utilization review organization does not record the date a document is received, it shall be deemed received by using the method set out in section 9792.9.1, except that:

(1) where the request for authorization is made by mail through the U.S. postal service and no proof of service by mail exists, the request shall be deemed to have been received by the claims administrator, or utilization review organization on whichever date is earlier, either the receipt date stamped by the addressee, or within five (5) calendar days of the date stated in the request for authorization; or, where the addressee can show a delay in mailing by the postmark date on the mailing envelope, then: (A) within five (5) calendar days of the postmark date, if the place of mailing and place of address are both within California; (B) within ten (10) calendar days if the place of address is within the United States but outside of California; or (C) within twenty (20) calendar days if the place of address is outside of the United States; and

(2) where the request for authorization is made by express mail, overnight mail or courier without any proof of service, the request shall be deemed received by the addressee on the date specified in any written confirmation of delivery.

(v) Following a review of the selected investigation files, a preliminary investigation report will be provided to the investigation subject. The preliminary investigation report shall consist of the preliminary notice of utilization review penalty assessments, and may include one or more requests for additional documentation or compliance. If the Administrative Director has determined that the investigation has uncovered the existence of a systemic problem in the operations, procedures, or policies of an approved utilization review plan organization, notice of his/her intent to place the utilization review plan on probation or withdraw approval of the plan, and the underlying reasons shall also be included in the preliminary investigation report. The investigation subject may request a conference within twenty-one (21) calendar days of the issuance of the preliminary report. Following the conference or, after twenty-one (21) calendar days in the case where no conference has been requested, the Administrative Director or his or her designee shall issue an Order to Show Cause Re: Assessment of Administrative Penalty (which shall include the final investigation report and any applicable notices), as set forth in section 9792.15.

(w) The claims administrator or utilization review organization may stipulate to the allegations and final report set forth in the Order to Show Cause.

(x) Within forty-five (45) calendar days of the service of the Order to Show Cause Re: Assessment of Administrative Penalties, if no answer has been filed, or within 15 calendar days after any and all appeals have become final, the claims administrator or utilization review organization shall provide the following:

(1)(A) For investigation subjects whose investigations did not result in probation or withdrawal of approval of its UR plan, a notice, which shall include a copy of the final investigation report, the measures actually implemented to correct such conditions, and the website address for the Division where the summary of violations is posted. If a hearing was conducted under section 9792.15, the notice shall include the Final Determination in lieu of the final investigation report.

(B) For investigation subjects whose investigations resulted in the UR plan being placed on probation, a notice, which shall include a copy of the final investigation report, a statement indicating that the Division has placed the utilization review plan on probation, and the website address for the Division where the summary of violations and probationary status is posted. If a hearing was conducted under section 9792.15, the notice shall include the Final Determination in lieu of the final investigation report.

(C) For investigation subjects whose investigations resulted in a withdrawal of approval of its utilization review plan, a notice, which shall include a copy of the final investigation report, a statement indicating that the Division's approval of its utilization review plan has been withdrawn, and the website address for the Division where the summary of violations and withdrawn status is posted. If a hearing was conducted under section 9792.15, the notice shall include the Final Determination in lieu of the final investigation report.

(2) For utilization review organizations: the notice must be served on any employer or third party claims administrator that contracted with the utilization review organization and whose utilization review process was assessed with a penalty pursuant to section 9792.12, and any insurer whose utilization review process was assessed with a penalty pursuant to section 9792.12.

(3) For claims administrators: the notice must be served on any self-insured employer and any insurer whose utilization review process was assessed with a penalty pursuant to section 9792.12.

(4) The notice shall be served by certified mail.

(5) Documentation of compliance with this section shall be served on the Administrative Director within thirty calendar days from the date the notice was served.

(y) After the time to file an answer to the Order to Show Cause Re: Assessment of Administrative Penalties has elapsed and no answer has been filed or after any and all appeals have become final, the Administrative Director, or his or her designee, shall post on the website for the Division of Workers' Compensation the summary of violations for each utilization review investigation.

(z) Where the Administrative Director has determined that an investigation subject is to be placed on probation, the Administrative Director shall commence a return investigation of the plan in 180 to 360 days from the date of the issuance of the final report or, if applicable, final determination. The return investigation shall follow the procedures set forth for a routine investigation under this section.

(aa) A probationary period following an investigation may only be granted once per investigation.

Credits

Note: Authority cited: Sections 11180-11191, Government Code; and Sections 133, 4610 and 5307.3, Labor Code. Reference: Sections 60, 129, 129.5, 4062, 4600, 4600.4, 4604.5, 4610 and 4614, Labor Code.

History

1. New section filed 6-7-2007; operative 6-7-2007 pursuant to Government Code section 11343.4 (Register 2007, No. 23). For prior history, see Register 2005, No. 38.

2. Amendment of subsections (c)(1)(A), (c)(2)(A), (j)(4) and (o)-(p) filed 2-12-2014; operative 2-12-2014 pursuant to Government Code section 11343.4(b)(3) (Register 2014, No. 7).

3. Amendment of section and Note 12-30-2025; operative 4-1-2026 (Register 2026, No. 1).