Report Title:
Relating to worker's compensation.
Description:
Proposes reforms to the State's worker's compensation system.
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THE SENATE |
S.B. NO. |
808 |
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TWENTY-THIRD LEGISLATURE, 2005 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO WORKERS' COMPENSATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. This Act is aimed at reforming the Hawaii workers' compensation system. This Act shall be known as "Hawaii's Workers' Compensation Reform Act of 2005." The purpose of this Act is to create equity between the rights and benefits afforded to Hawaii's employees and the fiscal needs of Hawaii's employers. This bill seeks to ensure the stability of the State of Hawaii's workers' compensation system and to protect it from experiencing the same crippling hardships faced by other states.
Hawaii's workers' compensation system is broken. National organizations have graded Hawaii's workers' compensation system an "F", noting that Hawaii's system is moving from "bad to worse." Hawaii's businesses are paying entirely too much for workers' compensation insurance.
A recent national study ranked Hawaii third highest in the entire nation in premiums, with Hawaii's employers paying on average $3.48 for every $100 they pay in wages. California and Florida, which are ranked number one and two for having the highest premiums have saved their system by making necessary reforms. Hawaii's local employers have seen their workers' compensation insurance premiums doubled and tripled in the last five years. AM Best reported that premiums in Hawaii on an average, increased twenty-four percent in 2003. Hawaii's workers' compensation system has created a system where insurance carriers are forced to stop insuring a company as soon as the first workers' compensation claim is filed.
Workers' compensation reform remains the number one issue for Hawaii's local businesses.
SECTION 2. Chapter 386, Hawaii Revised Statutes, is amended by adding to Part III, four new sections to be appropriately designated and to read as follows:
"§386-A Workers' compensation insurance fraud in the first degree. (a) A person commits the offense of workers' compensation insurance fraud in the first degree if the person intentionally or knowingly violates section 386-98 and where the value of the coverage, benefits, recovery, or compensation obtained or attempted to be obtained or denied or attempted to be denied exceeds $20,000.
(b) Workers' compensation insurance fraud in the first degree is a class B felony.
(c) For the purpose of this section, "intentionally" and "knowingly" have the meanings given in section 702-206.
§386-B Workers' compensation insurance fraud in the second degree. (a) A person commits the offense of workers' compensation insurance fraud in the second degree if the person intentionally or knowingly violates section 386-98 and where the value of the coverage, benefits, recovery, or compensation obtained or attempted to be obtained or denied or attempted to be denied exceeds $300.
(b) Workers' compensation insurance fraud in the second degree is a class C felony.
(c) For the purpose of this section, "intentionally" and "knowingly" have the meanings given in section 702-206.
§386-C Workers' compensation insurance fraud in the third degree. (a) A person commits the offense of workers' compensation insurance fraud in the third degree if the person intentionally or knowingly violates section 386-98 and where the value of the coverage, benefits, recovery, or compensation obtained or attempted to be obtained or denied or attempted to be denied is $300 or less.
(b) Workers' compensation insurance fraud in the third degree is a misdemeanor.
(c) For the purpose of this section, "intentionally" and "knowingly" have the meanings given in section 702-206.
§386-D Workers' compensation insurance fraud; administrative penalties. (a) In lieu of or in addition to the criminal penalties set forth in sections 386-A, 386-B, or 386-C, a person who commits workers' compensation insurance fraud as defined under section 386-98 may be subject to the administrative penalties of restitution of the value of benefits or payments fraudulently received under this chapter, whether received from an employer, insurer, or the special compensation fund, to be made to the employer, insurer, or the special compensation fund from which the compensation was received, and one or more of the following:
(1) A fine of not more than $10,000 for each violation;
(2) Suspension or termination of benefits in whole or in part;
(3) Suspension or disqualification from providing medical care or services, vocational rehabilitation services, or any other service rendered for payment under this chapter;
(4) Suspension or termination of payments for medical, vocational rehabilitation, or any other service rendered under this chapter;
(5) Recoupment by the insurer, employer, or special compensation fund of all payments made for medical care, medical services, vocational rehabilitation services, and all other services rendered for payment under this chapter; or
(6) Reimbursement of attorney's fees and costs of the party or parties defrauded.
(b) With respect to the administrative penalties set forth in subsection (a), no penalty shall be imposed except upon issuance of a written complaint that specifically alleges a violation of this section occurring within two years of the date of that complaint. A copy of the complaint specifying the alleged violation shall be served upon the person charged. The director or board shall issue, where an administrative penalty is ordered, a written decision stating all findings following a hearing held not fewer than twenty days after the service of a written complaint on the person charged. Any person aggrieved by the decision may appeal the decision under sections 386-87 and 386-88.
(c) For the purpose of this section, "knowingly" means that a person has actual knowledge of the facts; and
(1) Acts in deliberate ignorance of the truth or falsity of the facts; or
(2) Acts in reckless disregard of the truth or falsity of the facts.
No proof of specific intent to defraud is required to prove that a person acted "knowingly" with respect to the facts."
Section 3. Section 386-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:
""Attending physician" means a doctor or physician who is licensed to practice medicine pursuant to chapters 453-4 and osteopathy pursuant to chapter 460, or dentistry pursuant to chapter 448, or podiatry pursuant to chapter 463e, who is primarily responsible for the treatment of a work related injury."
SECTION 4. Section 386-1, Hawaii Revised Statutes, is amended by amending the definitions of "employment" and "physician" to read as follows:
""Employment" means any service performed by an individual for another person under any contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully entered into. It includes service of public officials, whether elected or under any appointment or contract of hire express or implied.
"Employment" does not include the following service:
(1) Service for a religious, charitable, educational, or nonprofit organization if performed in a voluntary or unpaid capacity;
(2) Service for a religious, charitable, educational, or nonprofit organization if performed by a recipient of aid therefrom and the service is incidental to or in return for the aid received;
(3) Service for a school, college, university, college club, fraternity, or sorority if performed by a student who is enrolled and regularly attending classes and in return for board, lodging, or tuition furnished, in whole or in part;
(4) Service performed by a duly ordained, commissioned, or licensed minister, priest, or rabbi of a church in the exercise of the minister's, priest's, or rabbi's ministry or by a member of a religious order in the exercise of nonsecular duties required by the order;
(5) Service performed by an individual for another person solely for personal, family, or household purposes if the cash remuneration received is less than $225 during the current calendar quarter and during each completed calendar quarter of the preceding twelve-month period;
(6) Domestic, which includes attendant care, and day care services authorized by the department of human services under the Social Security Act, as amended, performed by an individual in the employ of a recipient of social service payments;
(7) Service performed without wages for a corporation without employees by a corporate officer in which the officer is at least a twenty-five per cent stockholder;
(8) Service performed by an individual for a corporation if the individual owns at least fifty per cent of the corporation; provided that no employer shall require an employee to incorporate as a condition of employment; [and]
(9) Service performed by an individual for another person as a real estate salesperson or as a real estate broker, if all the service performed by the individual for the other person is performed for remuneration solely by way of commission[.];
(10) Service performed by a member of a limited liability company if the member is an individual and has a distributional interest, as defined in chapter 428, of at least fifty per cent in the company; provided that no employer shall require an employee to form a limited liability company as a condition of employment;
(11) Service performed by a partner of a partnership, as defined in chapter 425, if the partner is an individual; provided that no employer shall require an employee to become a partner as a condition of employment;
(12) Service performed by a partner of a limited liability partnership, if the partner is an individual and has a transferable interest, as defined in section 425-127 in the partnership of at least fifty per cent; provided that no employer shall require an employee to form a limited liability partnership as a condition of employment; and
(13) Service performed by a sole proprietor.
As used in this [paragraph] definition, "religious, charitable, educational, or nonprofit organization" means a corporation, unincorporated association, community chest, fund, or foundation organized and operated exclusively for religious, charitable, or educational purposes, no part of the net earnings of which inure to the benefit of any private shareholder or individual.
"Physician" includes a doctor of medicine, a dentist, [a chiropractor,] an osteopath,[a naturopath, a psychologist, an optometrist,] and a podiatrist. There shall be no more than one physician who acts as the attending physician. Treatment by other physicians or health care providers may be allowed and referred by the attending physician, if the attending physician determines the employee's injury or illness involves more than one body system and requires multidisciplinary care or is so severe or complex that the services of more than one qualified health care provider are required, provided that the attending physician does not have a financial interest in the qualified health care provider providing services. "Financial interest" means an ownership or investment interest through debt, equity, or any other means.
SECTION 5. Section 386-3, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) [A claim for mental stress resulting solely from disciplinary action taken in good faith by the employer shall not be allowed; provided that if a collective bargaining agreement or other employment agreement specifies a different standard than good faith for disciplinary actions, the standards set in the collective bargaining agreement or other employment agreement shall be applied in lieu of the good faith standard. For purposes of this subsection, the standards set in the collective bargaining agreement or other employment agreement shall be applied in any proceeding before the department, the appellate board, and the appellate courts.] No compensation shall be allowed for mental injury or illness, or the physical manifestation brought on by mental injury or illness proximately caused by personnel actions taken in good faith, including disciplinary action, counseling, work evaluation or criticism, job transfer, layoff, demotion, suspension, termination, retirement."
SECTION 5. Section 386-21, Hawaii Revised Statutes, is amended by amending subsection (b) and (c) to read as follows:
"(b) Whenever medical care is needed, the employer, or its insurance carrier, may mandate the injured employee to select from an employer designated healthcare provider network, to provide medical services for the first one-hundred and twenty days of medical treatment, unless the employee provides the employer, or its insurance carrier, with the name and address of the employee's family physician, who must be qualified as an attending physician authorized to treat injuries covered by this chapter, from whom, they will receive healthcare treatment in the event of a workers' compensation injury. Further:
(1) In the absence of any employer designated health care provider network or employee designated qualified family physician, which shall be furnished upon date of employment or twelve months prior to date of injury, the injured employee may select any attending physician [or surgeon] who is practicing on the island where the injury was incurred to render such care. If the services of a specialist are indicated, the employee may select any such attending physician [or surgeon] practicing in the State. The director may authorize the selection of a specialist practicing outside the State where no comparable medical attendance within the State is available. Upon procuring the services of such attending physician [or surgeon], the injured employee shall give proper notice of the employee's selection to the employer within a reasonable time after the beginning of the treatment. If for any reason during the period when medical care is needed, the employee wishes to change to another attending physician [or surgeon], the employee may do so in accordance with rules prescribed by the director. If the employee is unable to select [a] an attending physician [or surgeon] and the emergency nature of the injury requires immediate medical attendance, or if the employee does not desire to select [a] an attending physician [or surgeon] and so advises the employer, the employer shall select the attending physician [or surgeon]. Such selection, however, shall not deprive the employee of the employee's right of subsequently selecting [a] an attending physician [or surgeon] for continuance of needed medical care[.];
(2) Only after one hundred twenty days of treatment for a work injury, may an employee utilizing an employer designated healthcare network opt to change attending physicians for any reason;
(3) Fifty per cent of the employer designated healthcare provider network must contain qualified healthcare providers who reside on the island where the injured employee resides; and
(4) The network shall contain qualified healthcare providers whm are primarily engaged in the treatment of occupational injuries and healthcare providers primarily engaged in the treatment of nonoccupational injuries. The goal shall be at least twenty-five per cent of physicians primarily engaged in the treatment of nonoccupational injuries. The director shall encourage the integration of occupational and nonoccupational providers. The number of physicians in the healthcare provider network shall be sufficient to enable treatment for injuries or conditions to be provided in a timely manner. The healthcare provider network shall include an adequate number and type of physicians, or other providers, to treat common injuries experienced by injured employees based on the type of occupation or industry in which the employee is engaged, and the geographic area where the employees are employed.
(5) Medical treatment for injuries shall be readily available at reasonable times to all employees. To the extent feasible, all medical treatment for injuries shall be readily accessible to all employees. With respect to availability and accessibility of treatment, the director shall consider the needs of rural areas, specifically those in which health facilities are located at least thirty miles apart.
(6) The employer, or its insurance carrier, shall submit a plan for the healthcare provider network to the director for approval. The director shall approve the plan if the director determines that the plan meets the requirements of this section.
(7) If the employer, or its insurance carrier, meets the requirements of this section, the director may not withhold approval or disapprove an employer's, or its insurance carrier, healthcare provider network based solely on the selection of providers.
(8) All treatment provided shall be provided in accordance with the medical treatment utilization guidelines established by the director.
(9) No person other than a qualified healthcare provider under this chapter, who is competent to evaluate the specific clinical issues involved in the medical treatment services, when these services are within the scope of the healthcare providers practice, may modify, delay, or deny requests for authorization of medical treatment.
(c) The liability of the employer for medical care, services, and supplies shall be limited to the charges computed as set forth in this section. The director shall make determinations of the charges and adopt fee schedules based upon those determinations. Effective January 1, 1997, and for each succeeding calendar year thereafter, the charges shall not exceed one hundred ten per cent of fees prescribed in the Medicare Resource Based Relative Value Scale system applicable to Hawaii as prepared by the United States Department of Health and Human Services, except as provided in this subsection. The rates or fees provided for in this section shall be adequate to ensure at all times the standard of services and care intended by this chapter to injured employees.
If the director determines that an allowance under the medicare program is not reasonable, or if a medical treatment, accommodation, product, or service existing as of June 29, 1995, is not covered under the medicare program, the director may, at any time, establish an additional fee schedule or schedules not exceeding the prevalent charge for fees for services actually received by providers of health care services to cover charges for that treatment, accommodation, product, or service. If no prevalent charge for a fee for service has been established for a given service or procedure, the director shall adopt a reasonable rate that shall be the same for all providers of health care services to be paid for that service or procedure.
The director shall update the schedules required by this section every three years or annually, as required. The updates shall be based upon:
(1) Future charges or additions prescribed in the Medicare Resource Based Relative Value Scale system applicable to Hawaii as prepared by the United States Department of Health and Human Services; or
(2) A statistically valid survey by or submitted to the director of prevalent charges for fees for services actually received by providers of health care services or based upon the information provided to the director by the appropriate state agency having access to prevalent charges for medical fee information.
When a dispute exists between an insurer or self-insured employer and a medical service provider regarding the amount of a fee for medical services, the director may resolve the dispute in a summary manner as the director may prescribe; provided that a provider shall not charge more than the provider's private patient charge for the service rendered."
SECTION 6. Section 386-22, Hawaii Revised Statutes, is amended to read as follows:
"§386-22 Artificial member and other aids. Where an injury results in the amputation of an arm, hand, leg, or foot, or the enucleation of an eye, or the loss of natural or artificial teeth, or the loss of vision which may be partially or wholly corrected by the use of lenses, the employer shall furnish an artificial member to take the place of each member lost and, in the case of correctible loss of vision, a set of suitable glasses. Where it is certified to be necessary by [a licensed] the attending physician [or surgeon] chosen by agreement of the employer and the employee, the employer shall furnish such other aids, appliances, apparatus, and supplies as are required to cure or relieve the effects of the injury. When [a licensed] the attending physician [or surgeon], chosen as above, certifies that it is necessitated by ordinary wear, the employer shall repair or replace such artificial members, aids, appliances, or apparatus.
Where an employee suffers the loss of or damage to any artificial member, aid, appliance, or apparatus by accident arising out of and in the course of the employee's employment, the employer shall repair or replace the member, aid, appliance, or apparatus whether or not the same was furnished initially by the employer.
The liability of the employer for artificial members, aids, appliances, apparatus, or supplies as is imposed by this section shall be limited to such charges as prevail in the same community for similar equipment of a person of a like standard of living when the equipment is paid for by that person and shall be subject to the deductible under section 386-100."
SECTION 7. Section 386-25, Hawaii Revised Statutes, is amended to read as follows:
"§386-25 Vocational rehabilitation. (a) The purposes of vocational rehabilitation are to restore an injured worker's earning capacity as nearly as possible to that level which the worker was earning at the time of injury and to return the injured worker to suitable work in the active labor force as quickly as possible in a cost-effective manner.
(b) The director may refer employees who may have or have suffered permanent disability as a result of work injuries and who in the director's opinion can be vocationally rehabilitated to the department of human services or to private providers of rehabilitation services for vocational rehabilitation services that are feasible. A referral shall be made upon recommendation of the rehabilitation unit established under section 386-71.5 and after the employee has been deemed physically able to participate in rehabilitation by the employee's attending physician.
The unit shall include appropriate professional staff and shall have the following duties and responsibilities:
(1) To review and approve rehabilitation plans developed by certified providers of rehabilitation services, whether they be private or public;
(2) To adopt rules consistent with this section which shall expedite and facilitate the identification, notification, and referral of industrially injured employees to rehabilitation services, and establish minimum standards for providers providing rehabilitation services under this section;
(3) To certify private and public providers of rehabilitation services meeting the minimum standards established under paragraph (2); and
(4) To enforce the implementation of rehabilitation plans.
(c) The director shall approve a rehabilitation plan as meeting fully the employer's obligation under this section that includes a program modifying the employee's job through changes to the work process or function, providing alternative work within the employee's physical limitations, or locating reemployment with a new employer using the employee's existing job skills. Notwithstanding subsection (e), the employee's refusal to accept a plan under this subsection shall terminate compensation for temporary total disability.
[(c)] (d) Enrollment in a rehabilitation plan or program shall not be mandatory and the approval of a proposed rehabilitation plan or program by the injured employee shall be required. [The injured employee may select a certified provider of rehabilitation services. Both the certified provider and the injured employee, within a reasonable time after initiating rehabilitation services, shall give proper notice of selection to the employer.] All plans developed under this subsection by a certified provider of rehabilitation services, who shall be chosen and agreed upon by both the employee and employer, shall be subject to a performance review for effectiveness before implementation and twenty-six weeks after said implementation. No plan for rehabilitation shall extend, nor shall any extension be granted, beyond the initial twenty-six weeks without a written performance review. The attending physician, certified vocational rehabilitation counselor and employer, in consultation with the employee or employee's representative, if applicable, shall conduct the performance review to ensure that the plan is likely to result in return to suitable gainful employment. In instances where there is no agreement, the director shall make the final determination for implementation and any extension of an additional twenty-six weeks.
[(d)] (e) An injured employee's enrollment in a rehabilitation plan or program shall not affect the employee's entitlement to temporary total disability compensation if the employee earns no wages during the period of enrollment. If the employee receives wages for work performed under the plan or program, the employee shall be entitled to temporary total disability compensation in an amount equal to the difference between the employee's average weekly wages at the time of injury and the wages received under the plan or program, subject to the limitations on weekly benefit rates prescribed in section 386-31(a). The employee shall not be entitled to such compensation for any week during this period where the wages equal or exceed the average weekly wages at the time of injury.
[(e)] (f) The director shall adopt rules for additional living expenses necessitated by the rehabilitation program, together with all reasonable and necessary vocational training.
[(f)] (g) If the rehabilitation unit determines that vocational rehabilitation is not possible or feasible, it shall certify such determination to the director.
[(g)] (h) The eligibility of any injured employee to receive other benefits under this chapter shall in no way be affected by the employee's entrance upon a course of vocational rehabilitation as herein provided.
[(h)] (i) Vocational rehabilitation services for the purpose of developing a vocational rehabilitation plan may be approved by the director and the director may periodically review progress in each case."
SECTION 8. Section 386-26, Hawaii Revised Statutes, is amended to read as follows:
"§386-26 Guidelines on frequency of treatment and reasonable utilization of health care and services. The director shall issue guidelines for the frequency of treatment and for reasonable utilization of medical care and services by health care providers that are considered necessary and appropriate under this chapter.
The guidelines shall be adopted pursuant to chapter 91 and shall not interfere with the injured employee's rights to exercise free choice of physicians [under] as prescribed in section 386-21.
In addition, the director shall adopt updated medical fee schedules referred to in section 386-21 and where deemed appropriate shall establish separate fee schedules for services of health care providers as defined in section 386-1 to become effective no later than June 30, 1986, in accordance with chapter 91."
SECTION 9. Section 386-31, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) Temporary total disability. Where a work injury causes total disability not determined to be permanent in character, the employer, for the duration of the disability, but not including the first three calendar days thereof, shall pay the injured employee a weekly benefit at the rate of sixty-six and two-thirds per cent of the employee's average weekly wages, subject to the limitations on weekly benefit rates prescribed in subsection (a), or if the employee's average weekly wages are less than the minimum weekly benefit rate prescribed in subsection (a), at the rate of one hundred per cent of the employee's average weekly wages.
The employer shall pay temporary total disability benefits promptly as they accrue to the person entitled thereto without waiting for a decision from the director, unless such right is controverted by the employer in the employer's initial report of industrial injury. The first payment of benefits shall become due and shall be paid no later than on the tenth day after the employer has been notified of the occurrence of the total disability, and thereafter the benefits due shall be paid weekly except as otherwise authorized pursuant to section 386-53.
The payment of such benefits shall only be terminated upon order of the director or if the employee is able to resume work[.], if maximum medical improvement has been reached, if the employee has filed a false claim, or upon payment of one-hundred-four weeks of benefits, whichever comes first. In the event that temporary total disability benefits are paid for one-hundred and four weeks, the director may order a continuation of benefits after a hearing in which by preponderance of evidence supports a finding that maximum medical improvement has not been achieved or the employee is enrolled in a vocational rehabilitation plan, or that the injury is deteriorating. Sixty days prior to the termination of benefits, the employee can request a hearing to petition that benefits not be terminated.
An employer or insurance carrier who fails to comply with this section shall pay not more than $2,500 into the special compensation fund upon the order of the director, in addition to other penalties prescribed in section 386-92.
(1) In any case where the director determines based upon a review of medical records and reports and other relevant documentary evidence that an injured [employee's medical condition may be stabilized] employee has reached maximum medical improvement and the employee is unable to return to the employee's regular job, the director shall issue a preliminary decision regarding the claimant's entitlement and limitation to benefits and rights under Hawaii's workers' compensation laws. The preliminary decision shall be sent to the affected employee and the employee's designated representative and the employer and the employer's designated representative and shall state that any party disagreeing with the director's preliminary findings of [medical stabilization] maximum medical improvement and work limitations may request a hearing within twenty days of the date of the decision. The director shall be available to answer any questions during the twenty-day period from the injured employee and affected employer. If neither party requests a hearing challenging the director's finding the determination shall be deemed accepted and binding upon the parties. In any case where a hearing is held on the preliminary findings, any person aggrieved by the director's decision and order may appeal under section 386-87.
A preliminary decision of the director shall inform the injured employee and the employer of the following responsibilities, benefits, and limitations on vocational rehabilitation benefits which are designed to facilitate the injured employee's early return to suitable gainful employment:
(A) That the injured employee may invoke the employee's rights under section 378-2, 378-32, or 386-142, or all of them, in the event of unlawful discrimination or other unlawful employment practice by the employer.
(B) That after termination of temporary total disability benefits an injured employee who resumes work may be entitled to permanent partial disability benefits, which if awarded, shall be paid regardless of the earnings or employment status of the disabled employee at the time.
(2) In any case in which the rehabilitation unit determines that an injured employee is not a feasible candidate for rehabilitation and that the employee is unable to resume the employee's regular job, it shall promptly certify the same to the director. Soon thereafter, the director shall conduct a hearing to determine whether the injured employee remains temporarily totally disabled, or whether the employee is permanently partially disabled, or permanently totally disabled."
SECTION 10. Section 386-98, Hawaii Revised Statutes, is amended to read as follows:
"§386-98 [Fraud violations and penalties.] Workers' compensation insurance fraud. (a) [A fraudulent insurance act, under this chapter, shall include acts or omissions committed by any person who intentionally or] A person commits the offense of workers' compensation insurance fraud if the person knowingly [acts or omits to act so as] misrepresents or conceals a material fact, opinion, or intention in order to obtain [benefits, deny benefits, obtain benefits compensation for services provided, or provides legal assistance or counsel to obtain benefits or recovery through fraud or deceit by doing] or attempts to obtain or to deny coverage, benefits, recovery, or compensation for services, or provides legal assistance or counsel to obtain benefits through fraud or deceit if the person does any of the following:
(1) Presenting or causing to be presented any false information on an application;
(2) Presenting or causing to be presented any false or fraudulent claim for the payment of a loss;
(3) Presenting multiple claims for the same loss or injury, including presenting multiple claims to more than one insurer, except when these multiple claims are appropriate and each insurer is notified immediately in writing of all other claims and insurers;
(4) Making or causing to be made any false or fraudulent claim for payment or denial of a health care benefit;
(5) Submitting a claim for a health care benefit that was not used by, or on behalf of, the claimant;
(6) Presenting multiple claims for payment of the same health care benefit;
(7) Presenting for payment any undercharges for health care benefits on behalf of a specific claimant unless any known overcharges for health care benefits for that claimant are presented for reconciliation at that same time;
(8) Misrepresenting or concealing a material fact;
(9) Fabricating, altering, concealing, making a false entry in, or destroying a document;
(10) Making or causing to be made any false or fraudulent statements with regard to entitlements or benefits, with the intent to discourage an injured employee from claiming benefits or pursuing a workers' compensation claim; or
(11) Making or causing to be made any false or fraudulent statements or claims by, or on behalf of, a client with regard to obtaining legal recovery or benefits.
(b) [No] A person, who is an employer [shall wilfully make] or employer’s representative, commits the offense of workers' compensation insurance fraud if the person knowingly makes a false statement or representation to avoid the impact of past adverse claims experience through change of ownership, control, management, or operation to directly obtain any workers' compensation insurance policy.
(c) It shall be [inappropriate] unlawful for any discussion on benefits, recovery, or settlement to include the threat or implication of criminal prosecution. Any threat or implication shall be immediately referred in writing to:
(1) The state bar if attorneys are in violation;
(2) The insurance commissioner if an insurer or insurance company personnel are in violation; or
(3) The regulated industries complaints office if health care providers are in violation, for investigation and, if appropriate, disciplinary action.
[(d) An offense under subsections (a) and (b) shall constitute a:
(1) Class C felony if the value of the moneys obtained or denied is not less than $2,000;
(2) Misdemeanor if the value of the moneys obtained or denied is less than $2,000; or
(3) Petty misdemeanor if the providing of false information did not cause any monetary loss.
Any person subject to a criminal penalty under this section shall be ordered by a court to make restitution to an insurer or any other person for any financial loss sustained by the insurer or other person caused by the fraudulent act.
(e) In lieu of the criminal penalties set forth in subsection (d), any person who violates subsections (a) and (b) may be subject to the administrative penalties of restitution of benefits or payments fraudulently received under this chapter, whether received from an employer, insurer, or the special compensation fund, to be made to the source from which the compensation was received, and one or more of the following:
(1) A fine of not more than $10,000 for each violation;
(2) Suspension or termination of benefits in whole or in part;
(3) Suspension or disqualification from providing medical care or services, vocational rehabilitation services, and all other services rendered for payment under this chapter;
(4) Suspension or termination of payments for medical, vocational rehabilitation and all other services rendered under this chapter;
(5) Recoupment by the insurer of all payments made for medical care, medical services, vocational rehabilitation services, and all other services rendered for payment under this chapter; or
(6) Reimbursement of attorney's fees and costs of the party or parties defrauded.
(f) With respect to the administrative penalties set forth in subsection (e), no penalty shall be imposed except upon consideration of a written complaint that specifically alleges a violation of this section occurring within two years of the date of said complaint. A copy of the complaint specifying the alleged violation shall be served promptly upon the person charged. The director or board shall issue, where a penalty is ordered, a written decision stating all findings following a hearing held not fewer than twenty days after written notice to the person charged. Any person aggrieved by the decision may appeal the decision under sections 386-87 and 386-88.]
(d) This section shall not supersede any other law relating to theft, fraud, or deception. Workers' compensation insurance fraud may be prosecuted under this chapter or any other applicable statute or common law and all penalties and remedies shall be cumulative.
(e) In prosecutions for workers' compensation insurance fraud or related offenses including theft in sections 708-830, 708-830.5, 708-831, and 708-833, the offense charged shall be considered an "offense an element of which is either fraud or breach of fiduciary obligation" for the purposes of extending, pursuant to section 701-108(3)(a), the time limitations for prosecutions set forth in section 701-108.
(f) The insurance fraud investigations branch of the department of commerce and consumer affairs shall investigate and initiate legal proceedings to enforce workers' compensation insurance fraud relating to both self-insured employers and fully insured employers."
SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 12. This Act shall take effect upon approval.
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