Penalty and Interest Due - Treatment and Services

When late payment remitted by a claims administrator fails to include penalty and accrued interest, we strongly recommend that you file an Audit Complaint. Doing so could improve California workers’ comp billing for the entire community.

Frequently Asked Questions

Q: How can I tell that penalty and interest is due?

A: Claims administrators incur a 15% penalty and 10% accrued interest per annum if they remit untimely payment for medical treatment bills and services. For nongovernment employers, payment is untimely if a provider receives payment after 45 days from the claims administrator receiving the bill. For government employers, payment is untimely if a provider receives payment after 60 from the claims administrator receiving the bill.

Q: What’s an Audit Complaint?

A: Audit Complaints are designed to alert the DWC to non-compliant behavior on the part of a claims administrator. Using your Audit Complaints, the DWC can intervene and correct a claims administrator’s improper bill processes.

Q: Will a claims administrator know if I file an Audit Complaint against them?

A: Not if you don’t want them to. The DWC allows you to file Audit Complaints confidentially, so reporting improper behavior poses no risk to your relationship with the claims administrator.

Reason for Audit Complaint

Use this section to help fill out the DWC Audit Referral form.

Bill Type:

Treatment and Services

Submission Type:

Original Bill

Complaint Category:

Penalty & Interest Due

Complaint Reason:

Failure to pay self-executing 15% penalty and accrued 10% per annum interest with untimely payment.

Additional Complaint Information - Non-electronic Submission (Fax):

Claims administrator failed to remit timely payment. Per Labor Code 4603.2, late payment did not include self-executing penalty and interest retroactive to the date of the receipt of Original Bill. The Bill History includes date Original Bill fax transmission was confirmed received by claims administrator and Compliance Dates. See Regulations and Rules cited below.

Additional Complaint Information - Electronic Submission:

Claims administrator failed to remit timely payment. Late payment did not include self-executing penalty and interest retroactive to the date of the receipt of the Original Bill as required by Labor Code 4603.2. The Bill History documents the claims administrator returned an accepted acknowledgement verifying the date of receipt of the electronic transmission and Compliance Dates. See Regulations and Rules cited below.

How to file an Audit Complaint

When a claims administrator does not remit penalty and interest with an untimely payment for your Original Bill you should:

Contact Claims Administrator (Optional)

Inform claims administrator that your Original Bill was complete and compliant, and included the required supporting documents.
Explain to the claims administrator that you have verifiable proof the claims administrator received the Original Bill with supporting documents.

File Audit Complaint

Create Audit Complaint:

DaisyBillers:

From Bill History, choose Audit Complaint Type: Penalty & Interest: Failure to pay self-executing 15% penalty and 10% per annum interest with untimely payment.
Additional Complaint Information noted above automatically populates the DWC Audit Referral Form.

Non DaisyBillers:

Link to DWC’s Audit Referral Form (link to Form Directions).
Additional Comments: Provide details of conversations and emails with claims administrator, if any.
Additional Audit Complaint Document(s): Provide explanation of review (EOR) received from claims administrator as documenting untimely payment. It is not necessary to include the bill or medical reports.

Submit a request for Second Review (Required for additional payment)

Within 90 days of receipt of the original EOR file a request for Second Review to dispute the incorrect reimbursement.

Regulations and Rules

Non-electronic Submission

Per the Division of Workers’ Comp Billing and Payment Guide, if the non-electronic bill or a portion of the bill is contested, denied, or considered incomplete, the claims administrator shall so notify the health care provider, health care facility, or billing agent/assignee in the explanation of review. The explanation of review must be issued within 30 days of receipt of the bill and must provide notification of the items being contested, the reason for contesting those items and the remedies open to the health care provider, health care facility or billing agent/assignee.

Per Labor Code 4603.2 and the Division of Workers’ Comp Billing and Payment Guide, any properly documented list of services provided and not paid within the 45-day period (60 days if employer is a governmental entity) after receipt of the original bill shall be paid at the rates then in effect and increased by 15 percent, together with interest at the same rate as judgments in civil actions retroactive to the date of receipt of the itemization (10% per annum).

The penalty and interest are self-executing and shall apply to the portion of the bill that is neither timely paid nor objected to.

Per Section 6.4(a) of the DWC Medical Billing and Payment Guide, any non-electronically submitted bill determined to be complete, not paid within 45 days (60 days for a governmental entity) or objected to within 30 days, shall be subject to audit penalties per Title 8, California Code of Regulations section 10111.2 (b) (10), (11).

Electronic Submission

Per the DWC Medical Billing and Payment Guide, Section 7.1 for electronically submitted bills the electronic explanation of review must be transmitted within 15 working days of receipt of the electronic bill.

Per Labor Code 4603.2 and the Division of Workers’ Comp Billing and Payment Guide, any properly documented list of services provided and not paid within the 45-day period (60 days if employer is a governmental entity) after receipt of the original bill shall be paid at the rates then in effect and increased by 15 percent, together with interest at the same rate as judgments in civil actions retroactive to the date of receipt of the itemization (10% per annum).

The penalty and interest are self-executing and shall apply to the portion of the bill that is neither timely paid nor objected to.

Per Section 7.2 (a) Any electronically submitted bill determined to be complete, not paid or objected to within the 15 working day period, shall be subject to audit penalties per Title 8, California Code of Regulations section 10111.2 (b) (10), (11).