S-5047

   Amend Senate File 2305 as follows:
   1.  By striking everything after the enacting clause and inserting: 
   Section 1.  NEW SECTION.  507F.1  Definitions.
   As used in this chapter, unless the context otherwise requires, “workers’ compensation insurer” includes any insurer as defined in section 507A.3 that issues a policy of workers’ compensation liability insurance and any group or self-insured plan as described in section 87.4.
   Sec. 2.  NEW SECTION.  507F.2  Purpose of workers’ compensation fraud unit.
   A workers’ compensation fraud unit is created within the insurance fraud bureau within the insurance division. Upon a reasonable determination by the workers’ compensation fraud unit, by its own inquiries or as a result of complaints filed with the insurance fraud bureau or the workers’ compensation fraud unit, that a person has engaged in, is engaging in, or may be engaging in an act or practice that violates this chapter, the workers’ compensation fraud unit may administer oaths and affirmations, issue and serve subpoenas ordering the attendance of witnesses, collect evidence related to such act or practice, commence a suit, and prosecute a violation of this chapter.
   Sec. 3.  NEW SECTION.  507F.3  Workers’ compensation fraudulent practice —— penalties.
   1.  A person commits the offense of workers’ compensation fraudulent practice if the person, with the intent to defraud a workers’ compensation insurer does any act that constitutes a violation of section 507E.3.
   2.  A person who commits an offense under this section that results in a loss to a workers’ compensation insurer of ten thousand dollars or less is, upon conviction, guilty of a class “D” felony.
   3.  A person who commits an offense under this section that results in a loss to a workers’ compensation insurer of more than ten thousand dollars is, upon conviction, guilty of a class “C” felony. 
   4.  Fifty percent of the criminal penalty collected under this section shall be deposited in the workers’ compensation fraud penalty fund created in section 507F.5. The remaining fifty percent of the criminal penalty collected under this section shall be deposited pursuant to section 602.8108.
   Sec. 4.  NEW SECTION.  507F.4  Restitution.
   In addition to the criminal penalties established in this chapter, the court shall order a person who commits an offense under this chapter to pay restitution to persons aggrieved by the violation. Restitution shall be ordered in addition to a fine and the possibility of imprisonment, but not in lieu of a fine and the possibility of imprisonment. 
   Sec. 5.  NEW SECTION.  507F.5  Fund created.
   A workers’ compensation fraud penalty fund is created in the state treasury as a separate fund under the control of the commissioner of insurance for purposes of this chapter. Notwithstanding section 8.33, any balance in the fund on June 30 of each fiscal year shall not revert to the general fund of the state, but shall be available for purposes of this chapter in subsequent fiscal years. The commissioner of insurance may request additional full time equivalent positions as needed and the request shall be granted so long as sufficient funds are within the workers’ compensation fraud penalty fund.
   Sec. 6.  NEW SECTION.  507F.6  Examination of information outside the state. 
   As a unit within the insurance fraud bureau, the workers’ compensation fraud unit, pursuant to section 507E.4, may obtain and examine any information that is related to enforcement of this chapter in possession of a person located outside the state.
   Sec. 7.  NEW SECTION.  507F.7  Confidentiality.
   As a unit within the insurance fraud bureau, all of the provisions of section 507E.5 shall apply to the workers’ compensation fraud unit.
   Sec. 8.  NEW SECTION.  507F.8  Immunity from liability.
   A person is immune from civil liability for acts under this chapter if the person meets the requirements set forth in section 507E.7.
   Sec. 9.  NEW SECTION.  507F.9  Election of prosecution.
   If a person commits an offense under this chapter, the prosecuting attorney may elect to proceed under this chapter or any other law of this state.
   Sec. 10.  NEW SECTION.  507F.10  Prosecuting attorney status.
   1.  The workers’ compensation fraud unit shall employ at least one full-time prosecuting attorney. The prosecuting attorney, having specialized knowledge and training, shall in all counties in this state prosecute all criminal actions which may be brought under this chapter in which the workers’ compensation fraud unit may be interested, when, in the prosecuting attorney’s judgment, the interest of the unit requires such action. 
   2.  The prosecuting attorney may request a county attorney to assist with or handle the prosecution of a criminal action which may be brought under this chapter.
   3.  The prosecuting attorney shall report to the commissioner of insurance.
   Sec. 11.  NEW SECTION.  507F.11  Law enforcement officer status.
   As a unit within the insurance fraud bureau, all of the provisions of section 507E.8 shall apply to the workers’ compensation fraud unit.
   Sec. 12.  NEW SECTION.  507F.12  Suspension of benefits.
   If a person is currently receiving or has a pending application for workers’ compensation benefits under chapter 85, 85A, or 85B and the workers’ compensation fraud unit makes a determination to file charges in district court alleging a violation of this chapter by a person receiving benefits under chapter 85, 85A, or 85B, the workers’ compensation fraud unit shall notify the workers’ compensation commissioner, who shall suspend benefits or suspend any pending application.
   A person convicted of a workers’ compensation fraudulent practice shall be prohibited from receiving benefits under chapters 85, 85A, and 85B for the particular claim or injury giving rise to the criminal action. If the person is acquitted or the charges are dismissed, the workers’ compensation fraud unit shall notify the workers’ compensation commissioner of such action and the commissioner shall resume the payment of any benefits previously suspended or resume any suspended application. A person whose benefits have been suspended and the payment of benefits resumed has the option to receive a back payment in a lump sum upon resumption of payment of benefits.
   Sec. 13.  NEW SECTION.  507F.13  Rulemaking authority.
   The commissioner of insurance may adopt rules pursuant to chapter 17A to administer this chapter.
   Sec. 14.  Section 85.27, subsections 3 and 4, Code 2018, are amended to read as follows:
   3.  A medical service provided under this chapter or chapter 85A or 85B shall not be billed at a rate higher than a health service provider’s standard retail rate for the medical service. A health service provider who bills and receives payment in excess of the health service provider’s standard rate for a medical service provided to treat a workers’ compensation injury shall reimburse the employer or insurance carrier which paid for the medical service for the excess payments received by the health service provider.

Notwithstanding section 85.26, subsection 4, charges believed to be excessive or unnecessary may be referred by the employer, insurance carrier, or health service provider to the workers’ compensation commissioner for determination, and the commissioner may utilize the procedures provided in sections 86.38 and 86.39, or set by rule, and conduct such inquiry as the commissioner deems necessary. Any health service provider charges not in dispute shall be paid directly to the health service provider prior to utilization of procedures provided in sections 86.38 and 86.39 or set by rule. A health service provider rendering treatment to an employee whose injury is compensable under this section agrees to be bound by such charges as allowed by the workers’ compensation commissioner and shall not recover in law or equity any amount in excess of charges set by the commissioner. When a dispute under this chapter, chapter 85A, or chapter 85B regarding reasonableness of a fee for medical services arises between a health service provider and an employer or insurance carrier, the health service provider, employer, or insurance carrier shall not seek payment from the injured employee. A health service provider shall not seek payment for fees in dispute from the insurance carrier or employer until the commissioner finds, pursuant to informal dispute resolution procedures established by rule by the commissioner, that the disputed amount is reasonable. This section does not affect the responsibility of an insurance carrier or an employer to pay amounts not in dispute or a health service provider’s right to receive payment from an employee’s nonoccupational plan as provided in section 85.38, subsection 2.
   4.  For purposes of this section, the employer is obliged to furnish reasonable services and supplies to treat an injured employee, and has the right to choose the care.  The employer retains the right to choose the employee’s care for all services throughout the course of treatment. If the employer chooses the care, the employer shall hold the employee harmless for the cost of care until the employer notifies the employee that the employer is no longer authorizing all or any part of the care and the reason for the change in authorization. An employer is not liable for the cost of care that the employer arranges in response to a sudden emergency if the employee’s condition, for which care was arranged, is not related to the employment. The treatment must be offered promptly and be reasonably suited to treat the injury without undue inconvenience to the employee. If the employee has reason to be dissatisfied with the care offered, the employee should communicate the basis of such dissatisfaction to the employer, in writing if requested, following which the employer and the employee may agree to alternate care reasonably suited to treat the injury. If the employer and employee cannot agree on such alternate care, the commissioner may, upon application and reasonable proofs of the necessity therefor, allow and order other care. In an emergency, the employee may choose the employee’s care at the employer’s expense, provided the employer or the employer’s agent cannot be reached immediately. An application made under this subsection shall be considered an original proceeding for purposes of commencement and contested case proceedings under section 85.26. The hearing shall be conducted pursuant to chapter 17A. Before a hearing is scheduled, the parties may choose a telephone hearing or an in-person hearing. A request for an in-person hearing shall be approved unless the in-person hearing would be impractical because of the distance between the parties to the hearing. The workers’ compensation commissioner shall issue a decision within ten working days of receipt of an application for alternate care made pursuant to a telephone hearing or within fourteen working days of receipt of an application for alternate care made pursuant to an in-person hearing. The employer shall notify an injured employee of the employee’s ability to contest the employer’s choice of care pursuant to this subsection.
   Sec. 15.  NEW SECTION.  85.37A  Suspension of benefits for workers’ compensation fraud.
   Section 507F.12 requires the workers’ compensation commissioner to suspend a person’s benefits if the workers’ compensation fraud unit makes a determination to file charges in district court alleging the person has violated chapter 507F. 
   Sec. 16.  NEW SECTION.  86.39A  Criminal penalty for workers’ compensation fraud.
   Chapter 507F sets forth criminal penalties for committing a workers’ compensation fraudulent practice.
   Sec. 17.  Section 507E.6, Code 2018, is amended to read as follows:
   507E.6  Duties of insurer and fraud bureau.

   1.  An insurer which believes that a claim or application for insurance coverage is being made which is a violation of section 507E.3 or believes that a violation of section 507E.3A has occurred, shall provide, within sixty days of the receipt of such claim or application becoming aware of a possible violation, written notification to the bureau of the claim or application suspected violation on a form prescribed by the bureau, including any additional information requested by the bureau related to the claim or application or the party making the claim or application.
   2.  The fraud bureau shall review each notification and determine whether further investigation is warranted.
   3.  If the bureau determines that further investigation is warranted, the bureau shall conduct an independent investigation of the facts surrounding the claim or application for insurance coverage notification to determine the extent, if any, to which fraud occurred in the submission of the claim or application.  If the notification pertains to workers’ compensation insurance fraud, the bureau shall deliver the notice to the workers’ compensation fraud unit, which shall determine if an investigation and prosecution are warranted. Upon formal request made by the bureau, the insurer shall provide all additional information related to the notification within ten business days or a time period specifically identified by the bureau.
   4.  The bureau shall report any alleged violation of law disclosed by the investigation to the appropriate licensing agency or prosecuting authority having jurisdiction with respect to such violation.
   Sec. 18.  Section 507E.8, Code 2018, is amended to read as follows:
   507E.8  Law enforcement officer status.
   1.  Bureau investigators shall have the power and status of law enforcement officers who by the nature of their duties may be required to perform the duties of a peace officer when making arrests for criminal violations established as a result of their investigations pursuant to this chapter or chapter 507F.
   2.  The general laws applicable to arrests by law enforcement officers of the state also apply to bureau investigators. Bureau investigators shall have the power to execute arrest warrants and search warrants for the same criminal violations, serve subpoenas issued for the examination, investigation, and trial of all offenses identified through their investigations, and arrest upon probable cause without warrant a person found in the act of committing a violation of the provisions of this chapter or chapter 507F.
   Sec. 19.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
   Sec. 20.  APPLICABILITY.  This Act applies on and after the effective date of this Act to acts of workers’ compensation fraudulent practices or prohibited health service providers’ practices committed on or after the effective date of this Act.>
   2.  Title page, line 3, by striking <appropriations and>

______________________________
JAKE CHAPMAN