Commenters Urge DWC to Ban Outsourced Training, Tighten Voucher Rules

Monday, November 17, 2025 | 0

Schools and institutions helping retrain injured workers for new careers should be prohibited from outsourcing training to unvetted third parties, system observers said in response to rules proposed by the California Division of Workers' Compensation.

Commenters also suggested that the division clarify a proposal to require disclosure of financial interests when submitting bills, revise the rules to acknowledge the role support staff plays in vocational counseling, and eliminate the requirement that carriers send copies of the voucher to the state as well as the injured worker.

The DWC in October posted to its public forums proposed changes to the Supplemental Job Displacement Benefit rules that it said would make the voucher program more efficient, for a comment period that closed earlier in November.

Proposed regulations would require additional itemization of bills for vocational counseling; require that education programs be provided by California public schools or by schools approved by the Employment Development Department; require that claims administrators provide copies of vouchers to the Department of Industrial Relations; limit voucher payments to those on the list of approved counselors; require counselors to disclose certain financial interests; and create a discipline process similar to the one for criminally charged and convicted providers.

Kortney DeGraffenreid, a special agent with the National Insurance Crime Bureau, wrote that she supports efforts to prevent fraud relating to the vouchers but suggested that the rules should address schools contracting with outside organizations to provide training.

"These subcontractors do not have to have their courses/curriculum approved and do not employ trainers that meet any type of standards for teaching the subject matter," she wrote. "It is unfortunate that injured workers believe they are signing up for a reputable state university or other public educational program and instead they substitute in a subcontractor who is not qualified to teach and is often motivated by greed."

Karen Johnson, senior SIU investigator for ICW Group Insurance Cos., also said the rules need to address public schools that use third-party training programs that are not necessarily reviewed by the school, accrediting agencies or the state. She recommended that the rules clarify that SJDB funds can be used only for programs offered and taught by the public institutions. 

Johnson also recommended that the rules eliminate a referral to institutions approved by the Employment Development Department and instead require schools receiving vouchers to be approved by the Bureau for Private Postsecondary Education. She said EDD doesn’t help injured workers with voucher questions or complaints, but BPPE has processes, procedures and staff to answer questions and investigate complaints.

Although not related to the proposed rule, she also suggested a new evaluation of the return-to-work program, noting that the last analysis was in 2018.

David Chetcuti, a co-author of Sullivan on Comp and a longtime instructor for California work comp educational programs, said the proposed rules would require counselors to disclose their financial interest in entities receiving voucher proceeds but would not prohibit such arrangements.

"Also, note that disclosure is to be made 'after-the-fact,' i.e., at the time the claim for payment is made, which is after the services have already been provided," Chetcuti wrote. "It is now too late for the injured worker or the claims adjuster to object. There is nothing that can be done except to pay the bill since the [counselor] has done nothing inappropriate but simply complied with the regulations as written."

Chetcuti asked whether the proposed rules reflect what the division intended in light of the agency saying in a release that the new regulations would prohibit counselors from holding financial interests in entities receiving voucher proceeds.

Jasa Mohan, SIU manager at Midwest Insurance Co., asked whether there is a reason the rules don't propose to require disclosing a financial interest to the injured worker before services are provided.

"To prevent billing disputes and unnecessary adjudication over the issue, and to best serve the interests of the injured worker, it would seem proper to disclose financial interests prior to VRTWC services even commencing," he said.

Mohan also asked whether counselors are required to disclose financial information as part of the application process and whether that information is available to carriers. If not, he asked whether it would be wise for carriers to require completion of a financial interest waiver/disclosure form before processing a bill.

He also asked if the division plans to send out notices to carriers and other parties when it removes someone from its list of approved counselors.

Christian Cooper, senior corporate counsel at Gemini Legal, said that without a fee schedule, the rules could increase friction if they result in inconsistent payments from carriers and self-insured employers.

"Moreover, the proposed regulations do not specify any process or forum for resolving payment disputes related to these professional services," Cooper wrote. "In the absence of a fee schedule or a defined dispute resolution pathway, both providers and carriers will face uncertainty and inconsistent enforcement, which may ultimately discourage qualified professionals from offering these critical return-to-work services."

Cooper also said a proposal to limit payment to registered counselors is overly restrictive. He recommended that the rules include a provision stating that bills can include reasonable charges for administrative and support services that are directly related to developing or implementing a return-to-work strategy, including case intake, documentation collection, scheduling and report preparation.

Rebeca Brambila, director of Contempo Counseling Services, also warned that the rules appear to disregard the fact that vocational training firms rely on counselors and support staff.

"As currently drafted, the regulation appears to require that services and communications with injured workers be performed directly by the counselor," she wrote. "While accountability is essential, this approach would make it financially and operationally unfeasible for small, independent agencies to continue. The current $600 counselor fee cap does not allow for employing additional certified counselors, nor does it reflect the extensive time required to provide individualized assistance, coordinate with schools and follow up with insurers."

If the proposed rules are adopted without adjustment, she said, small agencies could be forced to close, unintentionally concentrating services among a few large entities.

The American Property Casualty Insurance Association sees no value in requiring vouchers to be sent to the Department of Industrial Relations as well as the employer, according to Steven A. Bennett, vice president of workers' compensation programs and counsel. He said the proposal is unnecessary and burdensome and should be dropped.

"The unnecessary costs and burdens of supplying details on every voucher submitted outweigh any possible benefit of the DIR receiving all such information," Bennett wrote. "Under current law, the department can obtain completed vouchers if they have specific concerns relating to a voucher. Also, there is already a process for insurers to submit completed voucher forms to the department if there is a reasonable suspicion of fraud."

The division closed the forum Nov. 3. The agency would need to start the formal rulemaking process, including another comment period and a public hearing, before adopting the changes.

The SJDB forum post is here.