Bill Text: IA SSB3165 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to workers’ compensation and insurance fraud and other prohibited health service provider practices, providing appropriations and penalties, and including effective date and applicability provisions.
Spectrum: Committee Bill
Status: (N/A - Dead) 2018-02-08 - Subcommittee recommends passage. [SSB3165 Detail]
Download: Iowa-2017-SSB3165-Introduced.html
Senate
Study
Bill
3165
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
COMMERCE
BILL
BY
CHAIRPERSON
CHAPMAN)
A
BILL
FOR
An
Act
relating
to
workers’
compensation
and
insurance
fraud
1
and
other
prohibited
health
service
provider
practices,
2
providing
appropriations
and
penalties,
and
including
3
effective
date
and
applicability
provisions.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
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Section
1.
NEW
SECTION
.
507F.1
Definitions.
1
As
used
in
this
chapter,
unless
the
context
otherwise
2
requires:
3
1.
“Business
entity”
means
a
corporation,
association,
4
partnership,
limited
liability
company,
limited
liability
5
partnership,
or
other
legal
entity.
6
2.
“Insurer”
means
a
person
entering
into
arrangements
or
7
contracts
of
insurance
or
reinsurance
agreeing
to
perform
any
8
of
the
following
acts:
9
a.
Pay
or
indemnify
another
as
to
loss
from
certain
10
contingencies
called
risks,
including
through
reinsurance.
11
b.
Pay
or
grant
a
specified
amount
or
determinable
benefit
12
to
another
in
connection
with
ascertainable
risk
contingencies.
13
c.
Pay
an
annuity
to
another.
14
d.
Act
as
surety.
15
3.
“Statement”
includes
but
is
not
limited
to
any
notice,
16
statement,
proof
of
loss,
receipt
for
payment,
invoice,
17
account,
bill
for
services,
diagnosis,
prescription,
hospital
18
or
physician
record,
X
ray,
test
result,
or
other
evidence
of
19
loss,
injury,
or
expense.
20
Sec.
2.
NEW
SECTION
.
507F.2
Purpose.
21
A
workers’
compensation
fraud
unit
is
created
within
the
22
insurance
fraud
bureau
within
the
insurance
division.
Upon
a
23
reasonable
determination
by
the
workers’
compensation
fraud
24
unit,
by
its
own
inquiries
or
as
a
result
of
complaints
filed
25
with
the
insurance
fraud
bureau
or
the
workers’
compensation
26
fraud
unit,
that
a
person
has
engaged
in,
is
engaging
in,
27
or
may
be
engaging
in
an
act
or
practice
that
violates
this
28
chapter,
the
workers’
compensation
fraud
unit
may
administer
29
oaths
and
affirmations,
issue
and
serve
subpoenas
ordering
the
30
attendance
of
witnesses,
collect
evidence
related
to
such
act
31
or
practice,
commence
a
suit,
and
prosecute
a
violation
of
this
32
chapter.
33
Sec.
3.
NEW
SECTION
.
507F.3
Workers’
compensation
attorney
34
fraud
——
penalty.
35
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S.F.
_____
1.
An
attorney
or
an
attorney’s
agent
who
acts
unilaterally
1
without
an
attorney’s
knowledge
commits
workers’
compensation
2
attorney
fraud
if
the
person,
for
the
purpose
of
obtaining
any
3
benefit
under
chapter
85,
85A,
85B,
86,
or
87
for
oneself
or
on
4
behalf
of
another
person,
knowingly
does
any
of
the
following:
5
a.
Presents
or
causes
to
be
presented
to
an
insurer
any
6
oral
or
written
statement,
knowing
the
statement
contains
false
7
information
concerning
a
material
fact.
8
b.
Employs
any
deception
device,
scheme,
or
artifice
to
9
defraud.
10
c.
Misrepresents,
conceals,
or
suppresses
any
material
fact
11
to
defraud.
12
d.
Makes
a
false
entry
in,
fabricates,
alters,
conceals,
or
13
destroys
a
document
to
defraud.
14
e.
Assists,
abets,
solicits,
or
conspires
with
another
in
15
committing
a
violation
of
this
chapter.
16
2.
An
attorney
or
an
attorney’s
agent
who
commits
workers’
17
compensation
attorney
fraud
is,
upon
conviction,
guilty
18
of
a
class
“D”
felony.
An
attorney
convicted
of
workers’
19
compensation
attorney
fraud
shall
forfeit
the
ability
to
20
collect
any
attorney
fees
not
already
collected
and
shall
21
refund
attorney
fees
already
collected
from
the
client
who
was
22
the
subject
of
the
worker’s
compensation
attorney
fraud,
unless
23
the
client
commits
workers’
compensation
benefit
fraud,
in
24
which
case
the
attorney
fees
shall
be
forfeited
to
the
victim
25
compensation
fund
established
in
section
915.94.
26
3.
Fifty
percent
of
the
criminal
penalty
collected
under
27
this
section
shall
be
deposited
in
the
workers’
compensation
28
fraud
penalty
fund
created
in
section
507F.9.
Fifty
percent
29
of
the
criminal
penalty
collected
under
this
section
shall
be
30
deposited
pursuant
to
section
602.8108.
31
Sec.
4.
NEW
SECTION
.
507F.4
Workers’
compensation
benefit
32
fraud
——
penalty.
33
1.
A
person
commits
the
offense
of
workers’
compensation
34
benefit
fraud
if
the
person,
for
the
purpose
of
obtaining
any
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_____
benefit
under
chapter
85,
85A,
85B,
86,
or
87
for
oneself
or
on
1
behalf
of
another
person,
knowingly
does
any
of
the
following:
2
a.
Presents
or
causes
to
be
presented
to
an
insurer,
any
3
oral
or
written
statement,
knowing
that
such
statement
contains
4
false
information
concerning
a
material
fact.
5
b.
Misrepresents,
conceals,
or
suppresses
any
material
fact
6
to
defraud.
7
c.
Makes
a
false
entry
in,
fabricates,
alters,
conceals,
or
8
destroys
a
document
to
defraud.
9
d.
Assists,
abets,
solicits,
or
conspires
with
another
in
10
committing
a
violation
of
this
chapter.
11
2.
A
person
who
commits
workers’
compensation
benefit
12
fraud
is,
upon
conviction,
guilty
of
a
class
“D”
felony.
Upon
13
conviction
of
this
offense,
a
person
shall
forfeit
all
right
to
14
compensation
under
chapters
85,
85A,
and
85B
for
the
alleged
15
injury
which
is
the
subject
matter
of
the
conviction.
16
3.
Fifty
percent
of
the
criminal
penalty
collected
under
17
this
section
shall
be
deposited
in
the
workers’
compensation
18
fraud
penalty
fund
created
in
section
507F.9.
Fifty
percent
19
of
the
criminal
penalty
collected
under
this
section
shall
be
20
deposited
pursuant
to
section
602.8108.
21
Sec.
5.
NEW
SECTION
.
507F.5
Workers’
compensation
health
22
service
provider
fraud
——
penalty.
23
1.
A
health
service
provider
or
a
health
service
provider’s
24
agent
who
acts
unilaterally
without
a
health
service
25
providers’s
knowledge
commits
workers’
compensation
health
26
service
provider
fraud
if
the
person,
for
the
purpose
of
27
obtaining
any
benefit
or
payment
under
chapter
85,
85A,
85B,
28
86,
or
87
for
oneself
or
on
behalf
of
another
person,
knowingly
29
does
any
of
the
following:
30
a.
Presents
or
causes
to
be
presented
to
an
insurer
any
31
oral
or
written
statement,
knowing
that
such
statement
contains
32
false
information
concerning
a
material
fact.
33
b.
Misrepresents,
conceals,
or
suppresses
any
material
fact
34
to
defraud.
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c.
Makes
a
false
entry
in,
fabricates,
alters,
conceals,
or
1
destroys
a
document
to
defraud.
2
d.
Bills
for
services
not
rendered,
services
rendered
for
3
a
person
other
than
the
person
identified
on
the
bill,
or
4
services
rendered
for
an
injury
or
person
not
covered
by
the
5
workers’
compensation
laws.
6
e.
Assists,
abets,
solicits,
or
conspires
with
another
in
7
committing
a
violation
of
this
chapter.
8
2.
A
health
service
provider
or
health
service
provider’s
9
agent
who
commits
workers’
compensation
health
service
provider
10
fraud
is,
upon
conviction,
guilty
of
a
class
“D”
felony.
11
3.
Fifty
percent
of
the
criminal
penalty
collected
under
12
this
section
shall
be
deposited
in
the
workers’
compensation
13
fraud
penalty
fund
created
in
section
507F.9.
Fifty
percent
14
of
the
criminal
penalty
collected
under
this
section
shall
be
15
deposited
pursuant
to
section
602.8108.
16
Sec.
6.
NEW
SECTION
.
507F.6
Workers’
compensation
insurance
17
carrier
fraud
——
penalty.
18
1.
An
employee,
agent,
or
contractor
of
an
insurer
commits
19
workers’
compensation
insurance
carrier
fraud
if
the
person,
20
for
the
purpose
of
obtaining
any
benefit
or
payment
under
21
chapter
85,
85A,
85B,
86,
or
87
for
oneself
or
on
behalf
of
22
another
person,
knowingly
does
any
of
the
following
in
the
23
course
of
processing
an
insurance
claim:
24
a.
Creates
fraudulent
claims
and
authorizes
the
payment
of
25
such
claims
to
defraud
the
insurer.
26
b.
Authorizes
the
payment
of
claims
known
by
the
employee,
27
agent,
or
contractor
to
be
fraudulent
to
assist,
abet,
solicit,
28
or
conspire
with
another
to
defraud
the
insurer.
29
2.
An
employee,
agent,
or
contractor
of
an
insurer
who
30
commits
workers’
compensation
insurance
carrier
fraud
is,
upon
31
conviction,
guilty
of
a
class
“D”
felony.
32
3.
Fifty
percent
of
the
criminal
penalty
collected
under
33
this
section
shall
be
deposited
in
the
workers’
compensation
34
fraud
penalty
fund
created
in
section
507F.9.
Fifty
percent
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of
the
criminal
penalty
collected
under
this
section
shall
be
1
deposited
pursuant
to
section
602.8108.
2
Sec.
7.
NEW
SECTION
.
507F.7
Workers’
compensation
insurance
3
coverage
fraud
——
penalty.
4
1.
A
person
commits
the
offense
of
workers’
compensation
5
insurance
coverage
fraud
if
the
person,
in
connection
with
6
any
application
or
renewal
of
an
insurance
policy
providing
7
workers’
compensation
insurance
coverage
or
to
avoid
payment
8
of
or
reduce
premiums
due
for
that
coverage,
for
oneself
or
9
another,
knowingly
does
any
of
the
following:
10
a.
Presents
or
causes
to
be
presented
to
an
insurer,
any
11
oral
or
written
statement,
knowing
that
such
statement
contains
12
false
information
concerning
a
material
fact
to
defraud.
13
b.
Misrepresents,
conceals,
or
suppresses
any
material
fact
14
to
defraud.
15
c.
Makes
a
false
entry
in,
fabricates,
alters,
conceals,
or
16
destroys
a
document
to
defraud.
17
2.
A
person
who
commits
workers’
compensation
insurance
18
coverage
fraud
is,
upon
conviction,
guilty
of
a
class
“D”
19
felony.
20
3.
Fifty
percent
of
the
criminal
penalty
collected
under
21
this
section
shall
be
deposited
in
the
workers’
compensation
22
fraud
penalty
fund
created
in
section
507F.9.
Fifty
percent
23
of
the
criminal
penalty
collected
under
this
section
shall
be
24
deposited
pursuant
to
section
602.8108.
25
Sec.
8.
NEW
SECTION
.
507F.8
Restitution.
26
In
addition
to
the
criminal
penalties
established
in
this
27
chapter,
the
court
shall
order
a
person
who
commits
an
offense
28
under
this
chapter
to
pay
restitution
to
persons
aggrieved
by
29
the
violation.
Restitution
shall
be
ordered
in
addition
to
a
30
fine
and
the
possibility
of
imprisonment,
but
not
in
lieu
of
a
31
fine
and
the
possibility
of
imprisonment.
32
Sec.
9.
NEW
SECTION
.
507F.9
Fund
created.
33
A
workers’
compensation
fraud
penalty
fund
is
created
in
34
the
state
treasury
as
a
separate
fund
under
the
control
of
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the
commissioner
of
insurance
for
purposes
of
this
chapter.
1
All
moneys
deposited
into
the
fund
are
appropriated
to
the
2
insurance
division
of
the
department
of
commerce
for
the
3
workers’
compensation
fraud
unit.
Notwithstanding
section
4
8.33,
any
balance
in
the
fund
on
June
30
of
each
fiscal
year
5
shall
not
revert
to
the
general
fund
of
the
state,
but
shall
6
be
available
for
purposes
of
this
chapter
in
subsequent
fiscal
7
years.
The
commissioner
of
insurance
may
request
additional
8
full
time
equivalent
positions
as
needed
and
the
request
shall
9
be
granted
so
long
as
sufficient
funds
are
within
the
workers’
10
compensation
fraud
penalty
fund.
11
Sec.
10.
NEW
SECTION
.
507F.10
Examination
of
information
12
outside
the
state.
13
As
a
unit
within
the
insurance
fraud
bureau,
the
workers’
14
compensation
fraud
unit,
pursuant
to
section
507E.4,
may
obtain
15
and
examine
any
information
that
is
related
to
enforcement
of
16
this
chapter
in
possession
of
a
person
located
outside
the
17
state.
18
Sec.
11.
NEW
SECTION
.
507F.11
Confidentiality.
19
As
a
unit
within
the
insurance
fraud
bureau,
all
of
the
20
provisions
of
section
507E.5
shall
apply
to
the
workers’
21
compensation
fraud
unit.
22
Sec.
12.
NEW
SECTION
.
507F.12
Immunity
from
liability.
23
A
person
is
immune
from
civil
liability
for
acts
under
this
24
chapter
if
the
person
meets
the
requirements
set
forth
in
25
section
507E.7.
26
Sec.
13.
NEW
SECTION
.
507F.13
Election
of
prosecution.
27
If
a
person
commits
an
offense
under
this
chapter,
the
28
prosecuting
attorney
may
elect
to
proceed
under
this
chapter
29
or
any
other
law
of
this
state.
30
Sec.
14.
NEW
SECTION
.
507F.14
Prosecuting
attorney
status.
31
1.
The
workers’
compensation
fraud
unit
shall
employ
at
32
least
one
full-time
prosecuting
attorney.
The
prosecuting
33
attorney,
having
specialized
knowledge
and
training,
shall
34
in
all
counties
in
this
state
prosecute
all
criminal
actions
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S.F.
_____
which
may
be
brought
under
this
chapter
in
which
the
workers’
1
compensation
fraud
unit
may
be
interested,
when,
in
the
2
prosecuting
attorney’s
judgment,
the
interest
of
the
unit
3
requires
such
action.
4
2.
The
prosecuting
attorney
may
request
a
county
attorney
5
to
assist
with
or
handle
the
prosecution
of
a
criminal
action
6
which
may
be
brought
under
this
chapter.
7
3.
The
prosecuting
attorney
shall
report
to
the
8
commissioner
of
insurance.
9
Sec.
15.
NEW
SECTION
.
507F.15
Law
enforcement
officer
10
status.
11
As
a
unit
within
the
insurance
fraud
bureau,
all
of
the
12
provisions
of
section
507E.8
shall
apply
to
the
workers’
13
compensation
fraud
unit.
14
Sec.
16.
NEW
SECTION
.
507F.16
Limitation
of
actions.
15
An
information
or
indictment
asserting
a
violation
of
this
16
chapter
shall
be
commenced
within
five
years
after
the
last
17
date
of
its
commission.
18
Sec.
17.
NEW
SECTION
.
507F.17
Suspension
of
benefits.
19
If
a
person
is
currently
receiving
or
has
a
pending
20
application
for
workers’
compensation
benefits
under
chapter
21
85,
85A,
or
85B
and
the
workers’
compensation
fraud
unit,
22
after
providing
the
person
notice
and
opportunity
to
be
heard,
23
determines
probable
cause
of
a
violation
of
this
chapter
by
a
24
person
receiving
benefits
under
chapter
85,
85A,
or
85B,
the
25
workers’
compensation
fraud
unit
shall
notify
the
workers’
26
compensation
commissioner,
who
shall
suspend
benefits
until
the
27
workers’
compensation
fraud
unit
makes
a
final
determination
28
whether
to
charge
a
person
with
a
violation
of
this
chapter
and
29
commence
prosecutorial
action.
If
the
workers’
compensation
30
fraud
unit’s
final
determination
is
to
not
prosecute,
the
31
workers’
compensation
commissioner
shall
resume
the
person’s
32
benefits.
If
the
workers’
compensation
fraud
unit’s
final
33
determination
is
to
prosecute,
the
person’s
benefits
shall
34
remain
suspended
until
the
conclusion
of
the
criminal
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proceedings
in
district
court.
1
A
person
convicted
of
workers’
compensation
fraud
shall
be
2
prohibited
from
receiving
benefits
under
chapters
85,
85A,
3
and
85B
for
the
particular
claim
or
injury
giving
rise
to
the
4
criminal
action.
If
the
person
is
acquitted
or
the
charges
5
are
dismissed,
the
workers’
compensation
fraud
unit
shall
6
notify
the
workers’
compensation
commissioner
of
such
action
7
and
the
commissioner
shall
resume
the
payment
of
any
benefits
8
previously
suspended.
A
person
whose
benefits
have
been
9
suspended
and
the
payment
of
benefits
resumed
has
the
option
to
10
receive
a
back
payment
in
a
lump
sum
upon
resumption
of
payment
11
of
benefits.
12
Sec.
18.
NEW
SECTION
.
507F.18
Rulemaking
authority.
13
The
commissioner
of
insurance
may
adopt
rules
pursuant
to
14
chapter
17A
to
administer
this
chapter.
15
Sec.
19.
Section
85.27,
subsections
3
and
4,
Code
2018,
are
16
amended
to
read
as
follows:
17
3.
A
medical
service
provided
under
this
chapter
or
18
chapter
85A
or
85B
shall
not
be
billed
at
a
rate
higher
than
19
a
health
service
provider’s
standard
retail
rate
for
the
20
medical
service.
A
health
service
provider
who
bills
and
21
receives
payment
in
excess
of
the
health
service
provider’s
22
standard
rate
for
a
medical
service
provided
to
treat
a
23
workers’
compensation
injury
shall
reimburse
the
employer
24
or
insurance
carrier
which
paid
for
the
medical
service
for
25
the
excess
payments
received
by
the
health
service
provider.
26
Notwithstanding
section
85.26,
subsection
4
,
charges
believed
27
to
be
excessive
or
unnecessary
may
be
referred
by
the
28
employer,
insurance
carrier,
or
health
service
provider
to
the
29
workers’
compensation
commissioner
for
determination,
and
the
30
commissioner
may
utilize
the
procedures
provided
in
sections
31
86.38
and
86.39
,
or
set
by
rule,
and
conduct
such
inquiry
as
32
the
commissioner
deems
necessary.
Any
health
service
provider
33
charges
not
in
dispute
shall
be
paid
directly
to
the
health
34
service
provider
prior
to
utilization
of
procedures
provided
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in
sections
86.38
and
86.39
or
set
by
rule.
A
health
service
1
provider
rendering
treatment
to
an
employee
whose
injury
is
2
compensable
under
this
section
agrees
to
be
bound
by
such
3
charges
as
allowed
by
the
workers’
compensation
commissioner
4
and
shall
not
recover
in
law
or
equity
any
amount
in
excess
of
5
charges
set
by
the
commissioner.
When
a
dispute
under
this
6
chapter
,
chapter
85A
,
or
chapter
85B
regarding
reasonableness
7
of
a
fee
for
medical
services
arises
between
a
health
service
8
provider
and
an
employer
or
insurance
carrier,
the
health
9
service
provider,
employer,
or
insurance
carrier
shall
not
seek
10
payment
from
the
injured
employee.
A
health
service
provider
11
shall
not
seek
payment
for
fees
in
dispute
from
the
insurance
12
carrier
or
employer
until
the
commissioner
finds,
pursuant
to
13
informal
dispute
resolution
procedures
established
by
rule
by
14
the
commissioner,
that
the
disputed
amount
is
reasonable.
This
15
section
does
not
affect
the
responsibility
of
an
insurance
16
carrier
or
an
employer
to
pay
amounts
not
in
dispute
or
a
17
health
service
provider’s
right
to
receive
payment
from
an
18
employee’s
nonoccupational
plan
as
provided
in
section
85.38,
19
subsection
2
.
20
4.
For
purposes
of
this
section
,
the
employer
is
obliged
to
21
furnish
reasonable
services
and
supplies
to
treat
an
injured
22
employee,
and
has
the
right
to
choose
the
care.
The
employer
23
retains
the
right
to
choose
the
employee’s
care
throughout
the
24
course
of
treatment
for
all
services
identified
in
subsection
25
1.
The
employer
is
not
obliged
to
authorize
a
referral
for
26
care
to
a
specific
provider
of
services
by
an
authorized
27
treating
medical
provider
and
the
employer
has
the
right
to
28
choose
any
provider
for
the
care.
If
the
employer
chooses
the
29
care,
the
employer
shall
hold
the
employee
harmless
for
the
30
cost
of
care
until
the
employer
notifies
the
employee
that
the
31
employer
is
no
longer
authorizing
all
or
any
part
of
the
care
32
and
the
reason
for
the
change
in
authorization.
An
employer
33
is
not
liable
for
the
cost
of
care
that
the
employer
arranges
34
in
response
to
a
sudden
emergency
if
the
employee’s
condition,
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for
which
care
was
arranged,
is
not
related
to
the
employment.
1
The
treatment
must
be
offered
promptly
and
be
reasonably
2
suited
to
treat
the
injury
without
undue
inconvenience
to
the
3
employee.
If
the
employee
has
reason
to
be
dissatisfied
with
4
the
care
offered,
the
employee
should
communicate
the
basis
of
5
such
dissatisfaction
to
the
employer,
in
writing
if
requested,
6
following
which
the
employer
and
the
employee
may
agree
to
7
alternate
care
reasonably
suited
to
treat
the
injury.
If
the
8
employer
and
employee
cannot
agree
on
such
alternate
care,
9
the
commissioner
may,
upon
application
and
reasonable
proofs
10
of
the
necessity
therefor,
allow
and
order
other
care.
In
an
11
emergency,
the
employee
may
choose
the
employee’s
care
at
the
12
employer’s
expense,
provided
the
employer
or
the
employer’s
13
agent
cannot
be
reached
immediately.
An
application
made
under
14
this
subsection
shall
be
considered
an
original
proceeding
15
for
purposes
of
commencement
and
contested
case
proceedings
16
under
section
85.26
.
The
hearing
shall
be
conducted
pursuant
17
to
chapter
17A
.
Before
a
hearing
is
scheduled,
the
parties
18
may
choose
a
telephone
hearing
or
an
in-person
hearing.
A
19
request
for
an
in-person
hearing
shall
be
approved
unless
the
20
in-person
hearing
would
be
impractical
because
of
the
distance
21
between
the
parties
to
the
hearing.
The
workers’
compensation
22
commissioner
shall
issue
a
decision
within
ten
working
days
of
23
receipt
of
an
application
for
alternate
care
made
pursuant
to
a
24
telephone
hearing
or
within
fourteen
working
days
of
receipt
of
25
an
application
for
alternate
care
made
pursuant
to
an
in-person
26
hearing.
The
employer
shall
notify
an
injured
employee
of
the
27
employee’s
ability
to
contest
the
employer’s
choice
of
care
28
pursuant
to
this
subsection
.
29
Sec.
20.
NEW
SECTION
.
85.37A
Suspension
of
benefits
for
30
workers’
compensation
fraud.
31
Section
507F.17
requires
the
workers’
compensation
32
commissioner
to
suspend
a
person’s
benefits
if
the
workers’
33
compensation
fraud
unit
has
probable
cause
to
believe
that
the
34
person
has
violated
chapter
507F.
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Sec.
21.
NEW
SECTION
.
86.39A
Criminal
penalty
for
workers’
1
compensation
attorney
fraud.
2
Chapter
507F
sets
forth
criminal
penalties
for
engaging
in
3
workers’
compensation
fraud,
including
but
not
limited
to
fraud
4
committed
by
an
attorney.
5
Sec.
22.
NEW
SECTION
.
507E.2A
Definition
of
insurer.
6
As
used
in
this
chapter,
unless
the
context
otherwise
7
requires,
“insurer”
means
a
person
entering
into
arrangements
or
8
contracts
of
insurance
or
reinsurance
agreeing
to
perform
any
9
of
the
following
acts:
10
a.
Pay
or
indemnify
another
as
to
loss
from
certain
11
contingencies
called
risks,
including
through
reinsurance.
12
b.
Pay
or
grant
a
specified
amount
or
determinable
benefit
13
to
another
in
connection
with
ascertainable
risk
contingencies.
14
c.
Pay
an
annuity
to
another.
15
d.
Act
as
surety.
16
Sec.
23.
Section
507E.6,
Code
2018,
is
amended
to
read
as
17
follows:
18
507E.6
Duties
of
insurer
and
fraud
bureau
.
19
1.
An
insurer
which
believes
that
a
claim
or
application
20
for
insurance
coverage
is
being
made
which
is
a
violation
of
21
section
507E.3
or
believes
that
a
violation
of
507E.3A
has
22
occurred,
shall
provide,
within
sixty
days
of
the
receipt
23
of
such
claim
or
application
becoming
aware
of
a
possible
24
violation
,
written
notification
to
the
bureau
of
the
claim
or
25
application
suspected
violation
on
a
form
prescribed
by
the
26
bureau
,
including
any
additional
information
requested
by
the
27
bureau
related
to
the
claim
or
application
or
the
party
making
28
the
claim
or
application
.
29
2.
The
fraud
bureau
shall
review
each
notification
and
30
determine
whether
further
investigation
is
warranted.
31
3.
If
the
bureau
determines
that
further
investigation
32
is
warranted,
the
bureau
shall
conduct
an
independent
33
investigation
of
the
facts
surrounding
the
claim
or
application
34
for
insurance
coverage
notification
to
determine
the
extent,
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if
any,
to
which
fraud
occurred
in
the
submission
of
the
claim
1
or
application
.
If
the
notification
pertains
to
workers’
2
compensation
insurance
fraud,
the
bureau
shall
deliver
the
3
notice
to
the
workers’
compensation
fraud
unit,
which
shall
4
determine
if
an
investigation
and
prosecution
are
warranted.
5
Upon
formal
request
made
by
the
bureau,
the
insurer
shall
6
provide
all
additional
information
related
to
the
notification
7
within
ten
business
days
or
a
time
period
specifically
8
identified
by
the
bureau.
9
4.
The
bureau
shall
report
any
alleged
violation
of
law
10
disclosed
by
the
investigation
to
the
appropriate
licensing
11
agency
or
prosecuting
authority
having
jurisdiction
with
12
respect
to
such
violation.
13
Sec.
24.
Section
507E.8,
Code
2018,
is
amended
to
read
as
14
follows:
15
507E.8
Law
enforcement
officer
status.
16
1.
Bureau
investigators
shall
have
the
power
and
status
17
of
law
enforcement
officers
who
by
the
nature
of
their
duties
18
may
be
required
to
perform
the
duties
of
a
peace
officer
when
19
making
arrests
for
criminal
violations
established
as
a
result
20
of
their
investigations
pursuant
to
this
chapter
or
chapter
21
507F
.
22
2.
The
general
laws
applicable
to
arrests
by
law
enforcement
23
officers
of
the
state
also
apply
to
bureau
investigators.
24
Bureau
investigators
shall
have
the
power
to
execute
arrest
25
warrants
and
search
warrants
for
the
same
criminal
violations,
26
serve
subpoenas
issued
for
the
examination,
investigation,
and
27
trial
of
all
offenses
identified
through
their
investigations,
28
and
arrest
upon
probable
cause
without
warrant
a
person
found
29
in
the
act
of
committing
a
violation
of
the
provisions
of
this
30
chapter
or
chapter
507F
.
31
Sec.
25.
EFFECTIVE
DATE.
This
Act,
being
deemed
of
32
immediate
importance,
takes
effect
upon
enactment.
33
Sec.
26.
APPLICABILITY.
This
Act
applies
on
the
effective
34
date
of
this
Act
to
acts
of
fraud
or
prohibited
health
service
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providers’
practices
committed
on
or
after
the
effective
date
1
of
this
Act.
2
EXPLANATION
3
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
4
the
explanation’s
substance
by
the
members
of
the
general
assembly.
5
This
bill
relates
to
workers’
compensation
and
insurance
6
fraud
and
other
prohibited
health
service
provider
practices.
7
The
bill
creates
new
Code
chapter
507F
dedicated
to
workers’
8
compensation
fraud,
codified
following
the
existing
insurance
9
fraud
Code
chapter
507E.
10
The
bill
establishes
a
workers’
compensation
fraud
unit
11
(unit)
within
the
insurance
fraud
bureau
within
the
insurance
12
division.
The
purpose
of
the
unit
is
to
investigate
and
13
prosecute
workers’
compensation
fraud.
Unit
investigators
have
14
the
power
and
status
of
law
enforcement
officers.
The
bill
15
requires
the
unit
to
employ
at
least
one
full-time
prosecuting
16
attorney
to
prosecute
all
criminal
actions
which
may
be
brought
17
under
this
Code
chapter
in
which
the
unit
may
be
interested,
18
when,
in
the
prosecuting
attorney’s
judgment,
the
interest
of
19
the
unit
requires
such
action.
20
The
bill
provides
an
election
of
prosecution.
If
a
person
21
commits
an
offense
under
this
Code
chapter,
the
prosecuting
22
attorney
may
elect
to
proceed
under
this
Code
chapter
or
any
23
other
law
of
this
state.
The
prosecuting
attorney
may
be
the
24
unit
prosecuting
attorney
or
a
county
attorney.
25
The
bill
sets
forth
criminal
penalties
for
engaging
in
26
workers’
compensation
fraud,
including
fraud
committed
by
27
employers,
workers,
insurers,
health
service
providers,
28
employees
of
insurers,
and
attorneys.
Specifically,
the
bill
29
penalizes
as
a
class
“D”
felony
the
following
forms
of
workers’
30
compensation
fraud:
benefit
fraud,
insurance
coverage
fraud,
31
health
service
provider
fraud,
insurance
carrier
fraud,
and
32
attorney
fraud.
The
elements
for
each
crime
are
enumerated
in
33
the
bill.
A
class
“D”
felony
is
punishable
by
confinement
for
34
no
more
than
five
years
and
a
fine
of
at
least
$750
but
not
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more
than
$7,500.
The
bill
provides
that
in
addition
to
any
1
other
applicable
penalties,
a
court
shall
order
a
person
to
pay
2
restitution
to
persons
aggrieved
by
the
violation,
if
a
person
3
commits
an
offense
under
this
Code
chapter.
The
bill
requires
4
50
percent
of
the
criminal
penalty
collected
under
this
Code
5
chapter
to
be
deposited
in
a
fund
created
in
the
bill.
Moneys
6
in
the
fund
are
appropriated
to
the
insurance
division
of
the
7
department
of
commerce
to
the
unit
for
the
benefit
of
the
8
workers’
compensation
fraud
unit.
9
The
new
workers’
compensation
fraud
Code
chapter
10
incorporates
by
reference
the
following
provisions
from
the
11
insurance
fraud
Code
chapter
507E:
507E.4
(examination
of
12
information
outside
the
state),
507E.5
(confidentiality),
and
13
507E.7
(immunity
from
liability).
14
The
new
Code
chapter
also
defines
insurer.
“Insurer”
means
15
a
person
entering
into
arrangements
or
contracts
of
insurance
16
or
reinsurance
agreeing
to
perform
any
of
the
following
acts:
17
pay
or
indemnify
another
as
to
loss
from
certain
contingencies
18
called
risks,
including
through
reinsurance;
pay
or
grant
19
a
specified
amount
or
determinable
benefit
to
another
in
20
connection
with
ascertainable
risk
contingencies;
pay
an
21
annuity
to
another;
or
act
as
surety.
22
The
new
Code
chapter
limits
commencement
of
actions
23
for
violations
of
the
Code
chapter
to
within
five
years
of
24
commission
of
workers’
compensation
fraud.
25
The
new
Code
chapter
provides
for
suspension
of
benefits
26
if
the
workers’
compensation
fraud
unit
determines
there
is
27
probable
cause,
after
providing
a
person
notice
and
opportunity
28
to
be
heard,
that
a
violation
of
the
new
Code
chapter
has
29
occurred
by
a
person
receiving
benefits
under
Code
chapter
30
85,
85A,
or
85B.
The
chapter
provides
for
the
suspension
31
of
benefits
until
a
determination
of
no
prosecution
occurs
32
or
where
a
determination
to
prosecute
is
reached,
until
the
33
conclusion
of
the
criminal
proceedings
in
district
court.
The
34
bill
provides
that
a
person
convicted
of
workers’
compensation
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fraud
shall
be
prohibited
from
receiving
benefits
under
Code
1
chapters
85,
85A,
and
85B
for
the
particular
claim
or
injury
2
giving
rise
to
the
criminal
action.
The
bill
provides
that
3
if
the
person
is
acquitted
or
the
charges
are
dismissed,
a
4
person’s
benefits
will
be
resumed.
The
bill
provides
that
a
5
person
has
an
option
to
receive
a
lump
sum
for
back
payment
of
6
benefits
upon
resumption
of
benefits.
7
The
new
Code
chapter
grants
the
commissioner
of
insurance
8
rulemaking
authority.
9
The
bill
amends
Code
chapter
507E
to
provide
a
definition
of
10
insurer.
Insurer,
for
the
purposes
of
that
Code
chapter,
means
11
the
same
as
defined
in
new
Code
chapter
507F.
12
The
bill
also
amends
Code
section
507E.6
(duties
of
insurer)
13
to
provide
for
a
process
when
an
insurer
alerts
the
insurance
14
fraud
bureau
of
workers’
compensation
fraud.
The
bill
provides
15
that
if
the
notification
pertains
to
workers’
compensation
16
insurance
fraud,
the
insurance
fraud
bureau
shall
deliver
the
17
notice
to
the
workers’
compensation
fraud
unit.
18
The
bill
amends
Code
chapter
85
to
provide
that
the
employer
19
retains
the
right
to
choose
the
employee’s
physician
throughout
20
the
course
of
treatment,
including
the
choice
of
specialists.
21
The
employer
is
not
obliged
to
authorize
a
referral
for
care
22
with
a
specific
provider
of
services.
23
The
bill
amends
Code
chapter
85
to
reference
suspension
of
24
benefits
under
new
Code
chapter
507F.
25
The
bill
amends
Code
chapter
86
to
reference
the
criminal
26
penalty
for
fraudulent
attorney
fees
under
new
Code
chapter
27
507F.
28
The
bill
also
amends
Code
chapter
85
to
provide
that
29
medical
services
provided
under
Code
chapter
85,
85A,
or
85B
30
shall
not
be
billed
at
a
rate
higher
than
the
health
service
31
provider’s
standard
retail
rate
for
that
medical
service.
The
32
bill
provides
that
a
health
service
provider
who
bills
and
33
receives
payment
in
excess
of
the
health
service
provider’s
34
standard
retail
rate
for
medical
services
to
treat
a
workers’
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compensation-covered
injury
shall
reimburse
the
company
which
1
paid
for
the
medical
services
for
the
excess
payments.
2
The
bill
takes
effect
upon
enactment
and
applies
to
acts
3
of
fraud
or
prohibited
health
service
providers’
practices
4
committed
on
or
after
enactment.
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