Report Title:

Workers' Compensation

 

Description:

Entitles parties that successfully investigates fraud to be entitled to 50 percent of a fine of not more than $10,000 for each violation upon a determination that fraud was committed. Authorizes the Insurance Fraud Investigations Branch, Department of Commerce and Consumer Affairs to initiate investigations, prosecutions, and disciplinary actions relating to workers' compensation. (HB1374 HD2)

 

HOUSE OF REPRESENTATIVES

H.B. NO.

1374

TWENTY-SECOND LEGISLATURE, 2004

H.D. 2

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to workers' compensation.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Section 386-98, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

"(e) In lieu of the criminal penalties set forth in subsection (d), any person who violates subsections (a) and (b) may be subject to the administrative penalties of restitution of benefits or payments fraudulently received under this chapter, whether received from an employer, insurer, or the special compensation fund, to be made to the source from which the compensation was received, and one or more of the following:

(1) A fine of not more than $10,000 for each violation;

(2) Suspension or termination of benefits in whole or in part;

(3) Suspension or disqualification from providing medical care or services, vocational rehabilitation services, and all other services rendered for payment under this chapter;

(4) Suspension or termination of payments for medical, vocational rehabilitation and all other services rendered under this chapter;

(5) Recoupment by the insurer of all payments made for medical care, medical services, vocational rehabilitation services, and all other services rendered for payment under this chapter; [or] and

(6) Reimbursement of attorney's fees and costs of the party or parties defrauded.

In cases where any party successfully investigates and a determination is made that fraud has occurred under this chapter, the successful party shall be entitled to the administrative penalties specified under paragraphs (5) and (6), and fifty per cent of the administrative penalty award determined under paragraph (1) of this subsection. Where a person is charged with fraud under this section and a determination is made that fraud has not occurred, the person charged shall be entitled to reimbursement of attorney's fees and costs payable by the person or persons who initiated the charge and prosecuted the action.

SECTION 2. Section 431:10C-307.8, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:

"(b) The unit shall employ attorneys, investigators, investigator assistants, and other support staff as necessary to promote the effective and efficient conduct of the unit's activities. Notwithstanding any other law to the contrary, the attorneys may represent the State in any judicial or administrative proceeding to enforce all applicable state laws relating to insurance fraud[,] and workers' compensation fraud, including but not limited to criminal prosecutions and actions for declaratory and injunctive relief. Investigators may serve process and apply for and execute search warrants pursuant to chapter 803 and the rules of court but shall not otherwise have the powers of a police officer or deputy sheriff. The commissioner may hire such employees not subject to chapter 76. The unit may also investigate and prosecute actions on workers' compensation fraud relating to self-insured employers.

(c) The purpose of the insurance fraud investigations unit shall be to conduct a statewide program for the prevention, investigation, and prosecution of insurance fraud cases, workers' compensation fraud as provided in section 386-98, and violations of all applicable state laws relating to insurance fraud. The insurance fraud investigations unit may also review and take appropriate action on complaints relating to insurance fraud[.] and workers' compensation fraud, including workers' compensation fraud related to self-insured employers."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.