S.F. 2305 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. a. “Insurer” means a person entering into arrangements 7 or contracts of insurance or reinsurance agreeing to perform 8 any of the following acts: 9 (1) Pay or indemnify another as to loss from certain 10 contingencies called risks, including through reinsurance. 11 (2) Pay or grant a specified amount or determinable benefit 12 to another in connection with ascertainable risk contingencies. 13 (3) Pay an annuity to another. 14 (4) Act as surety. 15 b. “Insurer” includes but is not limited to an insurance 16 company, a self-insured business, or a group or self-insured 17 plan as described in section 87.4. 18 3. “Statement” includes but is not limited to any notice, 19 statement, proof of loss, receipt for payment, invoice, 20 account, bill for services, diagnosis, prescription, hospital 21 or physician record, X ray, test result, or other evidence of 22 loss, injury, or expense. 23 Sec. 2. NEW SECTION . 507F.2 Purpose. 24 A workers’ compensation fraud unit is created within the 25 insurance fraud bureau within the insurance division. Upon a 26 reasonable determination by the workers’ compensation fraud 27 unit, by its own inquiries or as a result of complaints filed 28 with the insurance fraud bureau or the workers’ compensation 29 fraud unit, that a person has engaged in, is engaging in, 30 or may be engaging in an act or practice that violates this 31 chapter, the workers’ compensation fraud unit may administer 32 oaths and affirmations, issue and serve subpoenas ordering the 33 attendance of witnesses, collect evidence related to such act 34 or practice, commence a suit, and prosecute a violation of this 35 -1- LSB 5360SV (2) 87 asf/rj 1/ 16

S.F. 2305 chapter. 1 Sec. 3. NEW SECTION . 507F.3 Workers’ compensation attorney 2 fraud —— penalty. 3 1. An attorney or an attorney’s agent who acts unilaterally 4 without an attorney’s knowledge commits workers’ compensation 5 attorney fraud if the person, for the purpose of obtaining any 6 benefit under chapter 85, 85A, 85B, 86, or 87 for oneself or on 7 behalf of another person, knowingly does any of the following: 8 a. Presents or causes to be presented to an insurer any 9 oral or written statement, knowing the statement contains false 10 information concerning a material fact. 11 b. Employs any deception device, scheme, or artifice to 12 defraud. 13 c. Misrepresents, conceals, or suppresses any material fact 14 to defraud. 15 d. Makes a false entry in, fabricates, alters, conceals, or 16 destroys a document to defraud. 17 e. Assists, abets, solicits, or conspires with another in 18 committing a violation of this chapter. 19 2. An attorney or an attorney’s agent who commits workers’ 20 compensation attorney fraud is, upon conviction, guilty 21 of a class “D” felony. An attorney convicted of workers’ 22 compensation attorney fraud shall forfeit the ability to 23 collect any attorney fees not already collected and shall 24 refund attorney fees already collected from the client who was 25 the subject of the worker’s compensation attorney fraud, unless 26 the client commits workers’ compensation benefit fraud, in 27 which case the attorney fees shall be forfeited to the victim 28 compensation fund established in section 915.94. 29 3. Fifty percent of the criminal penalty collected under 30 this section shall be deposited in the workers’ compensation 31 fraud penalty fund created in section 507F.10. Fifty percent 32 of the criminal penalty collected under this section shall be 33 deposited pursuant to section 602.8108. 34 Sec. 4. NEW SECTION . 507F.4 Workers’ compensation benefit 35 -2- LSB 5360SV (2) 87 asf/rj 2/ 16

S.F. 2305 fraud —— penalty. 1 1. A person commits the offense of workers’ compensation 2 benefit 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 that such statement contains 7 false information concerning a material fact. 8 b. Misrepresents, conceals, or suppresses any material fact 9 to defraud. 10 c. Makes a false entry in, fabricates, alters, conceals, or 11 destroys a document to defraud. 12 d. Assists, abets, solicits, or conspires with another in 13 committing a violation of this chapter. 14 2. A person who commits workers’ compensation benefit 15 fraud is, upon conviction, guilty of a class “D” felony. Upon 16 conviction of this offense, a person shall forfeit all right to 17 compensation under chapters 85, 85A, and 85B for the alleged 18 injury which is the subject matter of the conviction. 19 3. Fifty percent of the criminal penalty collected under 20 this section shall be deposited in the workers’ compensation 21 fraud penalty fund created in section 507F.10. Fifty percent 22 of the criminal penalty collected under this section shall be 23 deposited pursuant to section 602.8108. 24 Sec. 5. NEW SECTION . 507F.5 Workers’ compensation health 25 service provider fraud —— penalty. 26 1. A health service provider or a health service provider’s 27 agent who acts unilaterally without a health service 28 providers’s knowledge commits workers’ compensation health 29 service provider fraud if the person, for the purpose of 30 obtaining any benefit or payment under chapter 85, 85A, 85B, 31 86, or 87 for oneself or on behalf of another person, knowingly 32 does any of the following: 33 a. Presents or causes to be presented to an insurer any 34 oral or written statement, knowing that such statement contains 35 -3- LSB 5360SV (2) 87 asf/rj 3/ 16

S.F. 2305 false information concerning a material fact. 1 b. Misrepresents, conceals, or suppresses any material fact 2 to defraud. 3 c. Makes a false entry in, fabricates, alters, conceals, or 4 destroys a document to defraud. 5 d. Bills for services not rendered, services rendered for 6 a person other than the person identified on the bill, or 7 services rendered for an injury or person not covered by the 8 workers’ compensation laws. 9 e. Assists, abets, solicits, or conspires with another in 10 committing a violation of this chapter. 11 2. A health service provider or health service provider’s 12 agent who commits workers’ compensation health service provider 13 fraud is, upon conviction, guilty of a class “D” felony. 14 3. Fifty percent of the criminal penalty collected under 15 this section shall be deposited in the workers’ compensation 16 fraud penalty fund created in section 507F.10. Fifty percent 17 of the criminal penalty collected under this section shall be 18 deposited pursuant to section 602.8108. 19 Sec. 6. NEW SECTION . 507F.6 Workers’ compensation insurance 20 carrier fraud —— penalty. 21 1. An employee, agent, or contractor of an insurer commits 22 workers’ compensation insurance carrier fraud if the person, 23 for the purpose of obtaining any benefit or payment under 24 chapter 85, 85A, 85B, 86, or 87 for oneself or on behalf of 25 another person, knowingly does any of the following in the 26 course of processing an insurance claim: 27 a. Creates fraudulent claims and authorizes the payment of 28 such claims to defraud the insurer. 29 b. Authorizes the payment of claims known by the employee, 30 agent, or contractor to be fraudulent to assist, abet, solicit, 31 or conspire with another to defraud the insurer. 32 2. An employee, agent, or contractor of an insurer who 33 commits workers’ compensation insurance carrier fraud is, upon 34 conviction, guilty of a class “D” felony. 35 -4- LSB 5360SV (2) 87 asf/rj 4/ 16

S.F. 2305 3. Fifty percent of the criminal penalty collected under 1 this section shall be deposited in the workers’ compensation 2 fraud penalty fund created in section 507F.10. Fifty percent 3 of the criminal penalty collected under this section shall be 4 deposited pursuant to section 602.8108. 5 Sec. 7. NEW SECTION . 507F.7 Workers’ compensation insurance 6 coverage fraud —— penalty. 7 1. A person commits the offense of workers’ compensation 8 insurance coverage fraud if the person, in connection with 9 any application or renewal of an insurance policy providing 10 workers’ compensation insurance coverage or to avoid payment 11 of or reduce premiums due for that coverage, for oneself or 12 another, knowingly does any of the following: 13 a. Presents or causes to be presented to an insurer, any 14 oral or written statement, knowing that such statement contains 15 false information concerning a material fact to defraud. 16 b. Misrepresents, conceals, or suppresses any material fact 17 to defraud. 18 c. Makes a false entry in, fabricates, alters, conceals, or 19 destroys a document to defraud. 20 2. A person who commits workers’ compensation insurance 21 coverage fraud is, upon conviction, guilty of a class “D” 22 felony. 23 3. Fifty percent of the criminal penalty collected under 24 this section shall be deposited in the workers’ compensation 25 fraud penalty fund created in section 507F.10. Fifty percent 26 of the criminal penalty collected under this section shall be 27 deposited pursuant to section 602.8108. 28 Sec. 8. NEW SECTION . 507F.8 Workers’ compensation employer 29 fraud —— penalty. 30 1. A person commits the offense of workers’ compensation 31 employer fraud if the person, for the purpose of obstructing an 32 employee’s workers’ compensation claim under chapter 85, 85A, 33 85B, 86, or 87, knowingly does any of the following: 34 a. Presents or causes to be presented to an insurer any 35 -5- LSB 5360SV (2) 87 asf/rj 5/ 16

S.F. 2305 oral or written statement, knowing that such statement contains 1 false information concerning a material fact. 2 b. Misrepresents, conceals, or suppresses any material fact 3 to defraud. 4 c. Makes a false entry in, fabricates, alters, conceals, or 5 destroys a document to defraud. 6 d. Assists, abets, solicits, or conspires with another in 7 committing a violation of this chapter. 8 2. A person who commits workers’ compensation employer 9 fraud is, upon conviction, guilty of a class “D” felony. 10 3. Fifty percent of the criminal penalty collected under 11 this section shall be deposited in the workers’ compensation 12 fraud penalty fund created in section 507F.10. Fifty percent 13 of the criminal penalty collected under this section shall be 14 deposited pursuant to section 602.8108. 15 Sec. 9. NEW SECTION . 507F.9 Restitution. 16 In addition to the criminal penalties established in this 17 chapter, the court shall order a person who commits an offense 18 under this chapter to pay restitution to persons aggrieved by 19 the violation. Restitution shall be ordered in addition to a 20 fine and the possibility of imprisonment, but not in lieu of a 21 fine and the possibility of imprisonment. 22 Sec. 10. NEW SECTION . 507F.10 Fund created. 23 A workers’ compensation fraud penalty fund is created in 24 the state treasury as a separate fund under the control of 25 the commissioner of insurance for purposes of this chapter. 26 All moneys deposited into the fund are appropriated to the 27 insurance division of the department of commerce for the 28 workers’ compensation fraud unit. Notwithstanding section 29 8.33, any balance in the fund on June 30 of each fiscal year 30 shall not revert to the general fund of the state, but shall 31 be available for purposes of this chapter in subsequent fiscal 32 years. The commissioner of insurance may request additional 33 full time equivalent positions as needed and the request shall 34 be granted so long as sufficient funds are within the workers’ 35 -6- LSB 5360SV (2) 87 asf/rj 6/ 16

S.F. 2305 compensation fraud penalty fund. 1 Sec. 11. NEW SECTION . 507F.11 Examination of information 2 outside the state. 3 As a unit within the insurance fraud bureau, the workers’ 4 compensation fraud unit, pursuant to section 507E.4, may obtain 5 and examine any information that is related to enforcement of 6 this chapter in possession of a person located outside the 7 state. 8 Sec. 12. NEW SECTION . 507F.12 Confidentiality. 9 As a unit within the insurance fraud bureau, all of the 10 provisions of section 507E.5 shall apply to the workers’ 11 compensation fraud unit. 12 Sec. 13. NEW SECTION . 507F.13 Immunity from liability. 13 A person is immune from civil liability for acts under this 14 chapter if the person meets the requirements set forth in 15 section 507E.7. 16 Sec. 14. NEW SECTION . 507F.14 Election of prosecution. 17 If a person commits an offense under this chapter, the 18 prosecuting attorney may elect to proceed under this chapter 19 or any other law of this state. 20 Sec. 15. NEW SECTION . 507F.15 Prosecuting attorney status. 21 1. The workers’ compensation fraud unit shall employ at 22 least one full-time prosecuting attorney. The prosecuting 23 attorney, having specialized knowledge and training, shall 24 in all counties in this state prosecute all criminal actions 25 which may be brought under this chapter in which the workers’ 26 compensation fraud unit may be interested, when, in the 27 prosecuting attorney’s judgment, the interest of the unit 28 requires such action. 29 2. The prosecuting attorney may request a county attorney 30 to assist with or handle the prosecution of a criminal action 31 which may be brought under this chapter. 32 3. The prosecuting attorney shall report to the 33 commissioner of insurance. 34 Sec. 16. NEW SECTION . 507F.16 Law enforcement officer 35 -7- LSB 5360SV (2) 87 asf/rj 7/ 16

S.F. 2305 status. 1 As a unit within the insurance fraud bureau, all of the 2 provisions of section 507E.8 shall apply to the workers’ 3 compensation fraud unit. 4 Sec. 17. NEW SECTION . 507F.17 Limitation of actions. 5 An information or indictment asserting a violation of this 6 chapter shall be commenced within five years after the last 7 date of its commission. 8 Sec. 18. NEW SECTION . 507F.18 Suspension of benefits. 9 If a person is currently receiving or has a pending 10 application for workers’ compensation benefits under chapter 11 85, 85A, or 85B and the workers’ compensation fraud unit makes 12 a determination to file charges in district court alleging a 13 violation of this chapter by a person receiving benefits under 14 chapter 85, 85A, or 85B, the workers’ compensation fraud unit 15 shall notify the workers’ compensation commissioner, who shall 16 suspend benefits or suspend any pending application. 17 A person convicted of workers’ compensation fraud shall be 18 prohibited from receiving benefits under chapters 85, 85A, 19 and 85B for the particular claim or injury giving rise to the 20 criminal action. If the person is acquitted or the charges 21 are dismissed, the workers’ compensation fraud unit shall 22 notify the workers’ compensation commissioner of such action 23 and the commissioner shall resume the payment of any benefits 24 previously suspended or resume any suspended application. A 25 person whose benefits have been suspended and the payment of 26 benefits resumed has the option to receive a back payment in a 27 lump sum upon resumption of payment of benefits. 28 Sec. 19. NEW SECTION . 507F.19 Rulemaking authority. 29 The commissioner of insurance may adopt rules pursuant to 30 chapter 17A to administer this chapter. 31 Sec. 20. Section 85.27, subsections 3 and 4, Code 2018, are 32 amended to read as follows: 33 3. A medical service provided under this chapter or chapter 34 85A or 85B shall not be billed at a rate higher than a health 35 -8- LSB 5360SV (2) 87 asf/rj 8/ 16

S.F. 2305 service provider’s standard retail rate for the medical 1 service. A health service provider who bills and receives 2 payment in excess of the health service provider’s standard 3 rate for a medical service provided to treat a workers’ 4 compensation injury shall reimburse the employer or insurance 5 carrier which paid for the medical service for the excess 6 payments received by the health service provider. 7 Notwithstanding section 85.26, subsection 4 , charges believed 8 to be excessive or unnecessary may be referred by the 9 employer, insurance carrier, or health service provider to the 10 workers’ compensation commissioner for determination, and the 11 commissioner may utilize the procedures provided in sections 12 86.38 and 86.39 , or set by rule, and conduct such inquiry as 13 the commissioner deems necessary. Any health service provider 14 charges not in dispute shall be paid directly to the health 15 service provider prior to utilization of procedures provided 16 in sections 86.38 and 86.39 or set by rule. A health service 17 provider rendering treatment to an employee whose injury is 18 compensable under this section agrees to be bound by such 19 charges as allowed by the workers’ compensation commissioner 20 and shall not recover in law or equity any amount in excess of 21 charges set by the commissioner. When a dispute under this 22 chapter , chapter 85A , or chapter 85B regarding reasonableness 23 of a fee for medical services arises between a health service 24 provider and an employer or insurance carrier, the health 25 service provider, employer, or insurance carrier shall not seek 26 payment from the injured employee. A health service provider 27 shall not seek payment for fees in dispute from the insurance 28 carrier or employer until the commissioner finds, pursuant to 29 informal dispute resolution procedures established by rule by 30 the commissioner, that the disputed amount is reasonable. This 31 section does not affect the responsibility of an insurance 32 carrier or an employer to pay amounts not in dispute or a 33 health service provider’s right to receive payment from an 34 employee’s nonoccupational plan as provided in section 85.38, 35 -9- LSB 5360SV (2) 87 asf/rj 9/ 16

S.F. 2305 subsection 2 . 1 4. For purposes of this section , the employer is obliged to 2 furnish reasonable services and supplies to treat an injured 3 employee, and has the right to choose the care. The employer 4 retains the right to choose the employee’s care throughout the 5 course of treatment for all services identified in subsection 6 1. The employer is not obliged to authorize a referral for 7 care to a specific provider of services by an authorized 8 treating medical provider and the employer has the right to 9 choose any provider for the care. If the employer chooses the 10 care, the employer shall hold the employee harmless for the 11 cost of care until the employer notifies the employee that the 12 employer is no longer authorizing all or any part of the care 13 and the reason for the change in authorization. An employer 14 is not liable for the cost of care that the employer arranges 15 in response to a sudden emergency if the employee’s condition, 16 for which care was arranged, is not related to the employment. 17 The treatment must be offered promptly and be reasonably 18 suited to treat the injury without undue inconvenience to the 19 employee. If the employee has reason to be dissatisfied with 20 the care offered, the employee should communicate the basis of 21 such dissatisfaction to the employer, in writing if requested, 22 following which the employer and the employee may agree to 23 alternate care reasonably suited to treat the injury. If the 24 employer and employee cannot agree on such alternate care, 25 the commissioner may, upon application and reasonable proofs 26 of the necessity therefor, allow and order other care. In an 27 emergency, the employee may choose the employee’s care at the 28 employer’s expense, provided the employer or the employer’s 29 agent cannot be reached immediately. An application made under 30 this subsection shall be considered an original proceeding 31 for purposes of commencement and contested case proceedings 32 under section 85.26 . The hearing shall be conducted pursuant 33 to chapter 17A . Before a hearing is scheduled, the parties 34 may choose a telephone hearing or an in-person hearing. A 35 -10- LSB 5360SV (2) 87 asf/rj 10/ 16

S.F. 2305 request for an in-person hearing shall be approved unless the 1 in-person hearing would be impractical because of the distance 2 between the parties to the hearing. The workers’ compensation 3 commissioner shall issue a decision within ten working days of 4 receipt of an application for alternate care made pursuant to a 5 telephone hearing or within fourteen working days of receipt of 6 an application for alternate care made pursuant to an in-person 7 hearing. The employer shall notify an injured employee of the 8 employee’s ability to contest the employer’s choice of care 9 pursuant to this subsection . 10 Sec. 21. NEW SECTION . 85.37A Suspension of benefits for 11 workers’ compensation fraud. 12 Section 507F.18 requires the workers’ compensation 13 commissioner to suspend a person’s benefits if the workers’ 14 compensation fraud unit has probable cause to believe that the 15 person has violated chapter 507F. 16 Sec. 22. NEW SECTION . 86.39A Criminal penalty for workers’ 17 compensation attorney fraud. 18 Chapter 507F sets forth criminal penalties for engaging in 19 workers’ compensation fraud, including but not limited to fraud 20 committed by an attorney. 21 Sec. 23. NEW SECTION . 507E.2A Definition of insurer. 22 As used in this chapter, unless the context otherwise 23 requires: 24 a. “Insurer” means a person entering into arrangements or 25 contracts of insurance or reinsurance agreeing to perform any 26 of the following acts: 27 (1) Pay or indemnify another as to loss from certain 28 contingencies called risks, including through reinsurance. 29 (2) Pay or grant a specified amount or determinable benefit 30 to another in connection with ascertainable risk contingencies. 31 (3) Pay an annuity to another. 32 (4) Act as surety. 33 b. “Insurer” includes but is not limited to an insurance 34 company, a self-insured business, or a group or self-insured 35 -11- LSB 5360SV (2) 87 asf/rj 11/ 16

S.F. 2305 plan as described in section 87.4. 1 Sec. 24. Section 507E.6, Code 2018, is amended to read as 2 follows: 3 507E.6 Duties of insurer and fraud bureau . 4 1. An insurer which believes that a claim or application 5 for insurance coverage is being made which is a violation of 6 section 507E.3 or believes that a violation of 507E.3A has 7 occurred, shall provide, within sixty days of the receipt 8 of such claim or application becoming aware of a possible 9 violation , written notification to the bureau of the claim or 10 application suspected violation on a form prescribed by the 11 bureau , including any additional information requested by the 12 bureau related to the claim or application or the party making 13 the claim or application . 14 2. The fraud bureau shall review each notification and 15 determine whether further investigation is warranted. 16 3. If the bureau determines that further investigation 17 is warranted, the bureau shall conduct an independent 18 investigation of the facts surrounding the claim or application 19 for insurance coverage notification to determine the extent, 20 if any, to which fraud occurred in the submission of the claim 21 or application . If the notification pertains to workers’ 22 compensation insurance fraud, the bureau shall deliver the 23 notice to the workers’ compensation fraud unit, which shall 24 determine if an investigation and prosecution are warranted. 25 Upon formal request made by the bureau, the insurer shall 26 provide all additional information related to the notification 27 within ten business days or a time period specifically 28 identified by the bureau. 29 4. The bureau shall report any alleged violation of law 30 disclosed by the investigation to the appropriate licensing 31 agency or prosecuting authority having jurisdiction with 32 respect to such violation. 33 Sec. 25. Section 507E.8, Code 2018, is amended to read as 34 follows: 35 -12- LSB 5360SV (2) 87 asf/rj 12/ 16

S.F. 2305 507E.8 Law enforcement officer status. 1 1. Bureau investigators shall have the power and status 2 of law enforcement officers who by the nature of their duties 3 may be required to perform the duties of a peace officer when 4 making arrests for criminal violations established as a result 5 of their investigations pursuant to this chapter or chapter 6 507F . 7 2. The general laws applicable to arrests by law enforcement 8 officers of the state also apply to bureau investigators. 9 Bureau investigators shall have the power to execute arrest 10 warrants and search warrants for the same criminal violations, 11 serve subpoenas issued for the examination, investigation, and 12 trial of all offenses identified through their investigations, 13 and arrest upon probable cause without warrant a person found 14 in the act of committing a violation of the provisions of this 15 chapter or chapter 507F . 16 Sec. 26. EFFECTIVE DATE. This Act, being deemed of 17 immediate importance, takes effect upon enactment. 18 Sec. 27. APPLICABILITY. This Act applies on the effective 19 date of this Act to acts of fraud or prohibited health service 20 providers’ practices committed on or after the effective date 21 of this Act. 22 EXPLANATION 23 The inclusion of this explanation does not constitute agreement with 24 the explanation’s substance by the members of the general assembly. 25 This bill relates to workers’ compensation and insurance 26 fraud and other prohibited health service provider practices. 27 The bill creates new Code chapter 507F dedicated to workers’ 28 compensation fraud, codified following the existing insurance 29 fraud Code chapter 507E. 30 The bill establishes a workers’ compensation fraud unit 31 (unit) within the insurance fraud bureau within the insurance 32 division. The purpose of the unit is to investigate and 33 prosecute workers’ compensation fraud. Unit investigators have 34 the power and status of law enforcement officers. The bill 35 -13- LSB 5360SV (2) 87 asf/rj 13/ 16

S.F. 2305 requires the unit to employ at least one full-time prosecuting 1 attorney to prosecute all criminal actions which may be brought 2 under this Code chapter in which the unit may be interested, 3 when, in the prosecuting attorney’s judgment, the interest of 4 the unit requires such action. 5 The bill provides an election of prosecution. If a person 6 commits an offense under this Code chapter, the prosecuting 7 attorney may elect to proceed under this Code chapter or any 8 other law of this state. The prosecuting attorney may be the 9 unit prosecuting attorney or a county attorney. 10 The bill sets forth criminal penalties for engaging in 11 workers’ compensation fraud, including fraud committed by 12 employers, workers, insurers, health service providers, 13 employees of insurers, and attorneys. Specifically, the bill 14 penalizes as a class “D” felony the following forms of workers’ 15 compensation fraud: benefit fraud, insurance coverage fraud, 16 employer fraud, health service provider fraud, insurance 17 carrier fraud, and attorney fraud. The elements for each crime 18 are enumerated in the bill. A class “D” felony is punishable 19 by confinement for no more than five years and a fine of at 20 least $750 but not more than $7,500. The bill provides that 21 in addition to any other applicable penalties, a court shall 22 order a person to pay restitution to persons aggrieved by the 23 violation, if a person commits an offense under this Code 24 chapter. The bill requires 50 percent of the criminal penalty 25 collected under this Code chapter to be deposited in a fund 26 created in the bill. Moneys in the fund are appropriated to 27 the insurance division of the department of commerce to the 28 unit for the benefit of the workers’ compensation fraud unit. 29 The new workers’ compensation fraud Code chapter 30 incorporates by reference the following provisions from the 31 insurance fraud Code chapter 507E: 507E.4 (examination of 32 information outside the state), 507E.5 (confidentiality), and 33 507E.7 (immunity from liability). 34 The new Code chapter also defines insurer. “Insurer” means 35 -14- LSB 5360SV (2) 87 asf/rj 14/ 16

S.F. 2305 a person entering into arrangements or contracts of insurance 1 or reinsurance agreeing to perform any of the following acts: 2 pay or indemnify another as to loss from certain contingencies 3 called risks, including through reinsurance; pay or grant 4 a specified amount or determinable benefit to another in 5 connection with ascertainable risk contingencies; pay an 6 annuity to another; or act as surety. Insurer includes but is 7 not limited to an insurance company, a self-insured business, 8 or a group or self-insured plan as described in Code section 9 87.4. 10 The new Code chapter limits commencement of actions 11 for violations of the Code chapter to within five years of 12 commission of workers’ compensation fraud. 13 The bill provides that if a person is currently receiving 14 or has a pending application for workers’ compensation 15 benefits under Code chapter 85, 85A, or 85B and the workers’ 16 compensation fraud unit makes a determination to file charges 17 in district court alleging a violation of the new Code chapter 18 by a person receiving benefits under Code chapter 85, 85A, or 19 85B, the workers’ compensation fraud unit shall notify the 20 workers’ compensation commissioner, who shall suspend benefits 21 or suspend any pending application. The bill provides that 22 a person convicted of workers’ compensation fraud shall be 23 prohibited from receiving benefits under Code chapters 85, 24 85A, and 85B for the particular claim or injury giving rise to 25 the criminal action. The bill provides that if the person is 26 acquitted or the charges are dismissed, a person’s benefits 27 or application will be resumed. The bill provides that a 28 person has an option to receive a lump sum for back payment of 29 benefits upon resumption of benefits. 30 The new Code chapter grants the commissioner of insurance 31 rulemaking authority. 32 The bill amends Code chapter 507E to provide a definition of 33 insurer. Insurer, for the purposes of that Code chapter, means 34 the same as defined in new Code chapter 507F. 35 -15- LSB 5360SV (2) 87 asf/rj 15/ 16

S.F. 2305 The bill also amends Code section 507E.6 (duties of insurer) 1 to provide for a process when an insurer alerts the insurance 2 fraud bureau of workers’ compensation fraud. The bill provides 3 that if the notification pertains to workers’ compensation 4 insurance fraud, the insurance fraud bureau shall deliver the 5 notice to the workers’ compensation fraud unit. 6 The bill amends Code chapter 85 to provide that the employer 7 retains the right to choose the employee’s physician throughout 8 the course of treatment, including the choice of specialists. 9 The employer is not obliged to authorize a referral for care 10 with a specific provider of services. 11 The bill amends Code chapter 85 to reference suspension of 12 benefits under new Code chapter 507F. 13 The bill amends Code chapter 86 to reference the criminal 14 penalty for fraudulent attorney fees under new Code chapter 15 507F. 16 The bill also amends Code chapter 85 to provide that 17 medical services provided under Code chapter 85, 85A, or 85B 18 shall not be billed at a rate higher than the health service 19 provider’s standard retail rate for that medical service. The 20 bill provides that a health service provider who bills and 21 receives payment in excess of the health service provider’s 22 standard retail rate for medical services to treat a workers’ 23 compensation-covered injury shall reimburse the company which 24 paid for the medical services for the excess payments. 25 The bill takes effect upon enactment and applies to acts 26 of fraud or prohibited health service providers’ practices 27 committed on or after enactment. 28 -16- LSB 5360SV (2) 87 asf/rj 16/ 16