§ 28-33-17.3 - Fraud and abuse.
SECTION 28-33-17.3
§ 28-33-17.3 Fraud and abuse. – (a) The workers' compensation court is authorized and directed to imposesanctions and penalties necessary to maintain the integrity of and to maintainthe high standards of professional conduct in the workers' compensation system.All pleadings related to proceedings under chapters 29 – 38 of this titleshall be considered an attestation by counsel that valid grounds exist for theposition taken and that the pleading is not interposed for delay.
(2) If any judge determines that any proceedings have beenbrought, prosecuted, or defended by an employer, insurer, or their counselwithout reasonable grounds, then:
(i) The whole cost of the proceedings shall be assessed uponthe employer, insurer, or counsel, whoever is responsible; and
(ii) If a subsequent order requires that additionalcompensation be paid, a penalty of double the amount of retroactive benefitsordered shall be paid to the employee and the penalty shall not be included inany formula utilized to establish premium rates for workers' compensationinsurance.
(3) If any judge determines that any proceedings have beenbrought or defended by an employee or his or her counsel without reasonablegrounds, the whole cost of the proceedings shall be assessed against theemployee or counsel, whoever is responsible.
(4) The court shall determine whether an action or defense isfrivolous or conduct giving rise to the action or defense was unreasonable.Where the amount at issue is less than the actual attorneys' fees of theparties combined, the court shall exercise particular vigilance. Nothing inthis subsection, however, is intended to discourage prompt payment in full ofall amounts required to be paid.
(5) The appropriate body with professional disciplinaryauthority over the attorney shall be notified of the action.
(b) It is unlawful to do any of the following:
(i) Make or cause to be made any knowingly false orfraudulent material statement or material representation for the purpose ofobtaining or denying any compensation;
(ii) Present or cause to be presented any knowingly false orfraudulent written or oral material statement in support of, or in oppositionto, any claim for compensation or petition regarding the continuation,termination, or modification of benefits;
(iii) Knowingly assist, aid and abet, solicit, or conspirewith any person who engages in an unlawful act under this section;
(iv) Make or cause to be made any knowingly false orfraudulent statements with regard to entitlement to benefits with the intent todiscourage an injured worker from claiming benefits or pursuing a claim;
(v) Willfully misrepresent or fail to disclose any materialfact in order to obtain workers' compensation insurance at less than the properrate for the insurance including, but not limited to, intentionally misleadingor failing to disclose information to an insurer regarding the appropriate rateclassification of an employee;
(vi) Willfully fail to provide a lower rate adjustmentfavorable to an employer as required by an approved experience rating plan orregulations promulgated by the insurance commissioners;
(vii) Willfully fail to report or provide false or misleadinginformation regarding ownership changes as required by an approved experiencerating plan or regulations promulgated by the insurance commissioner; or
(viii) Knowingly assist, aid and abet, solicit or conspire tocoerce an employee to willfully misrepresent an employee's status as ashareholder, director or officer of a corporation, or as a member or manager ofa limited liability company, or as a partner, in a general or, limitedpartnership, registered limited liability partnership or a registered limitedliability limited partnership, or as an independent contractor for the purposeof avoiding the inclusion of that or other employees in a workers' compensationinsurance application, renewal or both.
(2) For the purposes of this section, "Statement" includes,but is not limited to, any endorsement of a benefit check, application forinsurance coverage, oral or written statement, proof of injury, bill forservices, diagnosis, prescription, hospital or provider records, x-rays, testresults, or other documentation offered as proof of, or in the absence of, aloss, injury, or expense.
(3) If it is determined that any person concealed orknowingly failed to disclose that which is required by law to be revealed,knowingly gave or used perjured testimony or false evidence, knowingly made afalse statement of fact, participated in the creation or presentation ofevidence which he or she knows to be false, or otherwise engaged in conduct inviolation of subdivision (1) of this subsection, that person shall be subjectin criminal proceedings to a fine and/or penalty not exceeding fifty thousanddollars ($50,000), or double the value of the fraud, whichever is greater, orby imprisonment up to five (5) years in state prison or both.
(4) There shall be a general amnesty until July 1, 1992 forany person receiving compensation under chapters 29 – 38 of this title, tothe extent compensation has been voluntarily reduced or relinquished by theemployee prior to that date.
(c) The director of labor and training shall establish aform, in consultation with the attorney general, to be sent to all workers whoare presently receiving benefits and those for whom first reports of injury arefiled in the future which shall give the employee notice that the endorsementof a benefit check sent pursuant to § 28-35-39 is the employee'saffirmation that he or she is qualified to receive benefits under the Workers'Compensation Act. The insurers and self-insured employers are directed to sendthe form to all workers receiving benefits.
(d) Any employer, or in any case where the employer is acorporation, the president, vice president, secretary, treasurer, and otherofficers of the corporation, or in any case where the employer is a limitedliability company, the managers, and the managing members or in any case wherethe employer is a general partnership or a registered limited liabilitypartnership, or in the case where the employer is a limited partnership or aregistered limited liability limited partnership, the partners, that are foundto have violated this section or § 28-36-15, shall be guilty of a felonyfor failure to secure and maintain compensation, and upon conviction, shall besubject to imprisonment of up to two (2) years, a fine not exceeding tenthousand dollars ($10,000), or both. In any case where the employer is acorporation, the president, vice president, secretary, treasurer, and otherofficers of the corporation, shall be severally liable for the fine or subjectto imprisonment, or both. In any case where the employer is a limited liabilitycompany, the managers and managing members shall be severally liable for thefine or subject to imprisonment, or both. In any case where the employer is apartnership or a registered limited liability partnership, the partners shallbe severally liable for the fine or subject to imprisonment, or both. In anycase where the employer is a limited partnership or a registered limitedliability limited partnership, the general partners shall be severally liablefor the fine or subject to imprisonment, or both.