Scope and Methodology
The Joint Legislative Audit Committee (Audit Committee) directed the California State Auditor to examine the oversight and regulation of the QME process by DWC. The table below lists the objectives that the Audit Committee approved and the methods we used to address them.
|Review and evaluate the laws, rules, and regulations significant to the audit objectives.
|Researched and reviewed relevant laws, rules, regulations, and policies.
|Identify the number of QMEs and the number of requests for their services during the last five fiscal years. To the extent possible, determine whether the current number of QMEs can meet the demand for the program’s services. Determine what efforts, if any, DWC has made to increase the number of QMEs participating in the program.
|Review DWC’s policies and procedures for appointing and reappointing QMEs and determine whether they comply with state laws and regulations. Review a selection of QME appointments and reappointments to determine whether DWC is following its processes and complying with statutory requirements.
|Review DWC’s policies and procedures for QMEs to appeal denial of appointments and reappointments and determine whether they comply with state laws and regulations. Review a selection of appeals by QMEs to determine whether DWC is following its processes and complying with statutory requirements.
|Assess the process used by DWC to establish its existing fee schedules for the program and determine whether the process complies with state laws and regulations. In addition, evaluate the process, if any, DWC uses to update or modify program fee schedules. To the extent possible, assess the reasonableness and fairness of the fee schedules.
|Review DWC’s process for investigating and resolving complaints filed by QMEs when insurance carriers deny or reduce their payments for services. Review a selection of complaints filed by QMEs to determine whether DWC followed its process and complied with statutory requirements.
|Assess how DWC allocates its audit resources and prioritizes reviews of QMEs and insurance carriers.
|Compared the roles, responsibilities, and staffing for DWC’s audit unit—which audits insurance carriers—and investigations section—which reviews QMEs. Based on the separate organizational structure, staff, and roles and responsibilities, we concluded that the audit unit and the investigations section are separate. The evidence did not indicate that DWC prioritized its investigations section or its audit unit over the other.
|Evaluate the relationship between DWC, the insurance industry, and the independent bill review process. To the extent that specific concerns are identified, review communications between DWC and the various parties.
|Determine whether DWC collected funds on behalf of the insurance industry from QMEs and distributed those funds to insurance carriers or other parties. To the extent it occurred, determine whether DWC’s collection and payment of those funds complied with state laws and regulations.
|Review and assess any other issues that are significant to the audit.
|Reviewed 24 billing-related complaints (19 selected from Objective 9 and five additional items) to determine whether DWC followed its disciplinary and reappointment processes.
Source: Analysis of Audit Committee’s audit request number 2019‑102, state law, and information and documentation identified in the column titled Method.
Assessment of Data Reliability
The Government Accountability Office, whose standards we are statutorily required to follow, requires us to assess the sufficiency and appropriateness of the computer‑processed information that we use to support our findings, conclusions, and recommendations. In performing this audit, we relied on the department’s QME database to determine the number of available QMEs and requests for QMEs. To evaluate these data, we reviewed existing information about the data, interviewed agency officials knowledgeable about the data, and performed data set verification procedures and electronic testing of key data elements. In addition, we performed accuracy and completeness testing related to available QMEs. As a result, we found the data to be sufficiently reliable for our purposes.