Senate File 2305 S-5047 Amend Senate File 2305 as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < Section 1. NEW SECTION . 507F.1 Definitions. 4 As used in this chapter, unless the context otherwise 5 requires, “workers’ compensation insurer” includes any insurer 6 as defined in section 507A.3 that issues a policy of workers’ 7 compensation liability insurance and any group or self-insured 8 plan as described in section 87.4. 9 Sec. 2. NEW SECTION . 507F.2 Purpose of workers’ 10 compensation fraud unit. 11 A workers’ compensation fraud unit is created within the 12 insurance fraud bureau within the insurance division. Upon a 13 reasonable determination by the workers’ compensation fraud 14 unit, by its own inquiries or as a result of complaints filed 15 with the insurance fraud bureau or the workers’ compensation 16 fraud unit, that a person has engaged in, is engaging in, 17 or may be engaging in an act or practice that violates this 18 chapter, the workers’ compensation fraud unit may administer 19 oaths and affirmations, issue and serve subpoenas ordering the 20 attendance of witnesses, collect evidence related to such act 21 or practice, commence a suit, and prosecute a violation of this 22 chapter. 23 Sec. 3. NEW SECTION . 507F.3 Workers’ compensation 24 fraudulent practice —— penalties. 25 1. A person commits the offense of workers’ compensation 26 fraudulent practice if the person, with the intent to defraud 27 a workers’ compensation insurer does any act that constitutes 28 a violation of section 507E.3. 29 2. A person who commits an offense under this section that 30 results in a loss to a workers’ compensation insurer of ten 31 thousand dollars or less is, upon conviction, guilty of a class 32 “D” felony. 33 3. A person who commits an offense under this section that 34 results in a loss to a workers’ compensation insurer of more 35 -1- SF2305.4147 (1) 87 asf/rj 1/ 8 #1.

than ten thousand dollars is, upon conviction, guilty of a 1 class “C” felony. 2 4. Fifty percent of the criminal penalty collected under 3 this section shall be deposited in the workers’ compensation 4 fraud penalty fund created in section 507F.5. The remaining 5 fifty percent of the criminal penalty collected under this 6 section shall be deposited pursuant to section 602.8108. 7 Sec. 4. NEW SECTION . 507F.4 Restitution. 8 In addition to the criminal penalties established in this 9 chapter, the court shall order a person who commits an offense 10 under this chapter to pay restitution to persons aggrieved by 11 the violation. Restitution shall be ordered in addition to a 12 fine and the possibility of imprisonment, but not in lieu of a 13 fine and the possibility of imprisonment. 14 Sec. 5. NEW SECTION . 507F.5 Fund created. 15 A workers’ compensation fraud penalty fund is created in 16 the state treasury as a separate fund under the control of 17 the commissioner of insurance for purposes of this chapter. 18 Notwithstanding section 8.33, any balance in the fund on June 19 30 of each fiscal year shall not revert to the general fund of 20 the state, but shall be available for purposes of this chapter 21 in subsequent fiscal years. The commissioner of insurance may 22 request additional full time equivalent positions as needed and 23 the request shall be granted so long as sufficient funds are 24 within the workers’ compensation fraud penalty fund. 25 Sec. 6. NEW SECTION . 507F.6 Examination of information 26 outside the state. 27 As a unit within the insurance fraud bureau, the workers’ 28 compensation fraud unit, pursuant to section 507E.4, may obtain 29 and examine any information that is related to enforcement of 30 this chapter in possession of a person located outside the 31 state. 32 Sec. 7. NEW SECTION . 507F.7 Confidentiality. 33 As a unit within the insurance fraud bureau, all of the 34 provisions of section 507E.5 shall apply to the workers’ 35 -2- SF2305.4147 (1) 87 asf/rj 2/ 8

compensation fraud unit. 1 Sec. 8. NEW SECTION . 507F.8 Immunity from liability. 2 A person is immune from civil liability for acts under this 3 chapter if the person meets the requirements set forth in 4 section 507E.7. 5 Sec. 9. NEW SECTION . 507F.9 Election of prosecution. 6 If a person commits an offense under this chapter, the 7 prosecuting attorney may elect to proceed under this chapter 8 or any other law of this state. 9 Sec. 10. NEW SECTION . 507F.10 Prosecuting attorney status. 10 1. The workers’ compensation fraud unit shall employ at 11 least one full-time prosecuting attorney. The prosecuting 12 attorney, having specialized knowledge and training, shall 13 in all counties in this state prosecute all criminal actions 14 which may be brought under this chapter in which the workers’ 15 compensation fraud unit may be interested, when, in the 16 prosecuting attorney’s judgment, the interest of the unit 17 requires such action. 18 2. The prosecuting attorney may request a county attorney 19 to assist with or handle the prosecution of a criminal action 20 which may be brought under this chapter. 21 3. The prosecuting attorney shall report to the 22 commissioner of insurance. 23 Sec. 11. NEW SECTION . 507F.11 Law enforcement officer 24 status. 25 As a unit within the insurance fraud bureau, all of the 26 provisions of section 507E.8 shall apply to the workers’ 27 compensation fraud unit. 28 Sec. 12. NEW SECTION . 507F.12 Suspension of benefits. 29 If a person is currently receiving or has a pending 30 application for workers’ compensation benefits under chapter 31 85, 85A, or 85B and the workers’ compensation fraud unit makes 32 a determination to file charges in district court alleging a 33 violation of this chapter by a person receiving benefits under 34 chapter 85, 85A, or 85B, the workers’ compensation fraud unit 35 -3- SF2305.4147 (1) 87 asf/rj 3/ 8

shall notify the workers’ compensation commissioner, who shall 1 suspend benefits or suspend any pending application. 2 A person convicted of a workers’ compensation fraudulent 3 practice shall be prohibited from receiving benefits under 4 chapters 85, 85A, and 85B for the particular claim or injury 5 giving rise to the criminal action. If the person is acquitted 6 or the charges are dismissed, the workers’ compensation fraud 7 unit shall notify the workers’ compensation commissioner of 8 such action and the commissioner shall resume the payment of 9 any benefits previously suspended or resume any suspended 10 application. A person whose benefits have been suspended and 11 the payment of benefits resumed has the option to receive 12 a back payment in a lump sum upon resumption of payment of 13 benefits. 14 Sec. 13. NEW SECTION . 507F.13 Rulemaking authority. 15 The commissioner of insurance may adopt rules pursuant to 16 chapter 17A to administer this chapter. 17 Sec. 14. Section 85.27, subsections 3 and 4, Code 2018, are 18 amended to read as follows: 19 3. A medical service provided under this chapter or chapter 20 85A or 85B shall not be billed at a rate higher than a health 21 service provider’s standard retail rate for the medical 22 service. A health service provider who bills and receives 23 payment in excess of the health service provider’s standard 24 rate for a medical service provided to treat a workers’ 25 compensation injury shall reimburse the employer or insurance 26 carrier which paid for the medical service for the excess 27 payments received by the health service provider. 28 Notwithstanding section 85.26, subsection 4 , charges believed 29 to be excessive or unnecessary may be referred by the 30 employer, insurance carrier, or health service provider to the 31 workers’ compensation commissioner for determination, and the 32 commissioner may utilize the procedures provided in sections 33 86.38 and 86.39 , or set by rule, and conduct such inquiry as 34 the commissioner deems necessary. Any health service provider 35 -4- SF2305.4147 (1) 87 asf/rj 4/ 8

charges not in dispute shall be paid directly to the health 1 service provider prior to utilization of procedures provided 2 in sections 86.38 and 86.39 or set by rule. A health service 3 provider rendering treatment to an employee whose injury is 4 compensable under this section agrees to be bound by such 5 charges as allowed by the workers’ compensation commissioner 6 and shall not recover in law or equity any amount in excess of 7 charges set by the commissioner. When a dispute under this 8 chapter , chapter 85A , or chapter 85B regarding reasonableness 9 of a fee for medical services arises between a health service 10 provider and an employer or insurance carrier, the health 11 service provider, employer, or insurance carrier shall not seek 12 payment from the injured employee. A health service provider 13 shall not seek payment for fees in dispute from the insurance 14 carrier or employer until the commissioner finds, pursuant to 15 informal dispute resolution procedures established by rule by 16 the commissioner, that the disputed amount is reasonable. This 17 section does not affect the responsibility of an insurance 18 carrier or an employer to pay amounts not in dispute or a 19 health service provider’s right to receive payment from an 20 employee’s nonoccupational plan as provided in section 85.38, 21 subsection 2 . 22 4. For purposes of this section , the employer is obliged to 23 furnish reasonable services and supplies to treat an injured 24 employee, and has the right to choose the care. The employer 25 retains the right to choose the employee’s care for all 26 services throughout the course of treatment. If the employer 27 chooses the care, the employer shall hold the employee harmless 28 for the cost of care until the employer notifies the employee 29 that the employer is no longer authorizing all or any part of 30 the care and the reason for the change in authorization. An 31 employer is not liable for the cost of care that the employer 32 arranges in response to a sudden emergency if the employee’s 33 condition, for which care was arranged, is not related to 34 the employment. The treatment must be offered promptly 35 -5- SF2305.4147 (1) 87 asf/rj 5/ 8

and be reasonably suited to treat the injury without undue 1 inconvenience to the employee. If the employee has reason to 2 be dissatisfied with the care offered, the employee should 3 communicate the basis of such dissatisfaction to the employer, 4 in writing if requested, following which the employer and the 5 employee may agree to alternate care reasonably suited to 6 treat the injury. If the employer and employee cannot agree 7 on such alternate care, the commissioner may, upon application 8 and reasonable proofs of the necessity therefor, allow and 9 order other care. In an emergency, the employee may choose 10 the employee’s care at the employer’s expense, provided the 11 employer or the employer’s agent cannot be reached immediately. 12 An application made under this subsection shall be considered 13 an original proceeding for purposes of commencement and 14 contested case proceedings under section 85.26 . The hearing 15 shall be conducted pursuant to chapter 17A . Before a hearing 16 is scheduled, the parties may choose a telephone hearing or 17 an in-person hearing. A request for an in-person hearing 18 shall be approved unless the in-person hearing would be 19 impractical because of the distance between the parties to the 20 hearing. The workers’ compensation commissioner shall issue a 21 decision within ten working days of receipt of an application 22 for alternate care made pursuant to a telephone hearing or 23 within fourteen working days of receipt of an application for 24 alternate care made pursuant to an in-person hearing. The 25 employer shall notify an injured employee of the employee’s 26 ability to contest the employer’s choice of care pursuant to 27 this subsection . 28 Sec. 15. NEW SECTION . 85.37A Suspension of benefits for 29 workers’ compensation fraud. 30 Section 507F.12 requires the workers’ compensation 31 commissioner to suspend a person’s benefits if the workers’ 32 compensation fraud unit makes a determination to file charges 33 in district court alleging the person has violated chapter 34 507F. 35 -6- SF2305.4147 (1) 87 asf/rj 6/ 8

Sec. 16. NEW SECTION . 86.39A Criminal penalty for workers’ 1 compensation fraud. 2 Chapter 507F sets forth criminal penalties for committing a 3 workers’ compensation fraudulent practice. 4 Sec. 17. Section 507E.6, Code 2018, is amended to read as 5 follows: 6 507E.6 Duties of insurer and fraud bureau . 7 1. An insurer which believes that a claim or application 8 for insurance coverage is being made which is a violation of 9 section 507E.3 or believes that a violation of section 507E.3A 10 has occurred, shall provide, within sixty days of the receipt 11 of such claim or application becoming aware of a possible 12 violation , written notification to the bureau of the claim or 13 application suspected violation on a form prescribed by the 14 bureau , including any additional information requested by the 15 bureau related to the claim or application or the party making 16 the claim or application . 17 2. The fraud bureau shall review each notification and 18 determine whether further investigation is warranted. 19 3. If the bureau determines that further investigation 20 is warranted, the bureau shall conduct an independent 21 investigation of the facts surrounding the claim or application 22 for insurance coverage notification to determine the extent, 23 if any, to which fraud occurred in the submission of the claim 24 or application . If the notification pertains to workers’ 25 compensation insurance fraud, the bureau shall deliver the 26 notice to the workers’ compensation fraud unit, which shall 27 determine if an investigation and prosecution are warranted. 28 Upon formal request made by the bureau, the insurer shall 29 provide all additional information related to the notification 30 within ten business days or a time period specifically 31 identified by the bureau. 32 4. The bureau shall report any alleged violation of law 33 disclosed by the investigation to the appropriate licensing 34 agency or prosecuting authority having jurisdiction with 35 -7- SF2305.4147 (1) 87 asf/rj 7/ 8

respect to such violation. 1 Sec. 18. Section 507E.8, Code 2018, is amended to read as 2 follows: 3 507E.8 Law enforcement officer status. 4 1. Bureau investigators shall have the power and status 5 of law enforcement officers who by the nature of their duties 6 may be required to perform the duties of a peace officer when 7 making arrests for criminal violations established as a result 8 of their investigations pursuant to this chapter or chapter 9 507F . 10 2. The general laws applicable to arrests by law enforcement 11 officers of the state also apply to bureau investigators. 12 Bureau investigators shall have the power to execute arrest 13 warrants and search warrants for the same criminal violations, 14 serve subpoenas issued for the examination, investigation, and 15 trial of all offenses identified through their investigations, 16 and arrest upon probable cause without warrant a person found 17 in the act of committing a violation of the provisions of this 18 chapter or chapter 507F . 19 Sec. 19. EFFECTIVE DATE. This Act, being deemed of 20 immediate importance, takes effect upon enactment. 21 Sec. 20. APPLICABILITY. This Act applies on and after the 22 effective date of this Act to acts of workers’ compensation 23 fraudulent practices or prohibited health service providers’ 24 practices committed on or after the effective date of this 25 Act. > 26 2. Title page, line 3, by striking < appropriations and > 27 ______________________________ JAKE CHAPMAN -8- SF2305.4147 (1) 87 asf/rj 8/ 8 #2.