STAND. COM. REP. 3054
Honolulu, Hawaii
, 2004
RE: H.B. No. 1374
H.D. 2
S.D. 1
Honorable Robert Bunda
President of the Senate
Twenty-Second State Legislature
Regular Session of 2004
State of Hawaii
Sir:
Your Committee on Labor, to which was referred H.B. No. 1374, H.D. 2, entitled:
"A BILL FOR AN ACT RELATING TO WORKERS' COMPENSATION,"
begs leave to report as follows:
The purpose of this measure is to:
(1) Authorize the Insurance Fraud Investigations Unit of the Department of Commerce and Consumer Affairs to investigate and prosecute workers' compensation fraud related to self-insured employers; and
(2) Establish the right of a party that successfully investigates workers' compensation fraud to a portion of the administrative penalties imposed upon the wrongful party, and the right of a prosecuted party that has been cleared of fraud to reimbursement of the prosecuted party's attorney's fees and costs.
Testimony in support of this measure was submitted by the Department of Labor and Industrial Relations, the Department of Commerce and Consumer Affairs, the Chamber of Commerce of Hawaii, Hawaii Insurers Council, the National Federation of Independent Business—Hawaii, and the Hawaii Chapter of the American Physical Therapy Association.
Testimony in opposition to this measure was submitted by the Department of Human Resources Development, the Hawaii State AFL-CIO, and ILWU Local 142.
Your Committee finds that the expansion of the Insurance Fraud Investigations Unit to handle the investigation and prosecution of workers' compensation fraud relating to self-insured employers is appropriate. Your Committee further finds that the success of the structural shift to the Insurance Fraud Investigations Unit should be reevaluated after five years to determine whether the program has deterred fraud and investigated fraudulent activity in all areas —— claimants, insurers, health care providers, and employers.
Your Committee does not find a need for a bounty hunter provision for the recovery of fifty percent of any administrative fine as an incentive for investigations which in itself carries the risk of being misused.
Your Committee has also amended this bill to avoid duplication of proceedings.
Accordingly, your Committee has also amended this measure by:
(1) Clarifying that the Insurance Fraud Investigations Unit is authorized to investigate and prosecute workers' compensation fraud related to self-insured employers;
(2) Removing the provision that entitled a party who successfully investigates and obtains a determination that fraud has occurred to fifty percent of the administrative penalty award determined under section 386-98(e)(1), Hawaii Revised Statutes;
(3) Including language to avoid the duplication of proceedings; and
(4) Requiring that the Act be repealed on June 30, 2009.
As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1374, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1374, H.D. 2, S.D. 1, and be referred to the Committee on Commerce, Consumer Protection and Housing.
Respectfully submitted on behalf of the members of the Committee on Labor,
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____________________________ BRIAN KANNO, Chair |
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