SB1407 - 531R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 23-901, Arizona Revised Statutes, is amended to read:

START_STATUTE23-901. Definitions

In this chapter, unless the context otherwise requires:

1. "Award" means the finding or decision of an administrative law judge or the commission as to the amount of compensation or benefit due an injured employee or the dependents of a deceased employee.

2. "Client" means an individual, association, company, firm, partnership, corporation or any other legally recognized entity that is subject to this chapter and that enters into a professional employer agreement with a professional employer organization.

3. "Co‑employee" means every person employed by an injured employee's employer.

4. "Commission" means the industrial commission of Arizona.

5. "Compensation" means the compensation and benefits provided by this chapter.

6. "Employee", "workman", "worker" and "operative" means:

(a) Every person in the service of the state or a county, city, town, municipal corporation or school district, including regular members of lawfully constituted police and fire departments of cities and towns, whether by election, appointment or contract of hire.

(b) Every person in the service of any employer subject to this chapter, including aliens and minors legally or illegally permitted to work for hire, but not including a person whose employment is both:

(i) Casual.

(ii) Not in the usual course of the trade, business or occupation of the employer.

(c) Lessees of mining property and their the lessees' employees and contractors engaged in the performance of work that is a part of the business conducted by the lessor and over which the lessor retains supervision or control are within the meaning of this paragraph employees of the lessor, and are deemed to be drawing wages as are usually paid employees for similar work. The lessor may deduct from the proceeds of ores mined by the lessees the premium required by this chapter to be paid for such employees.

(d) Regular members of volunteer fire departments organized pursuant to title 48, chapter 5, article 1, regular firemen of any volunteer fire department, including private fire protection service organizations, organized pursuant to title 10, chapters 24 through 40, volunteer firemen serving as members of a fire department of any incorporated city or town or an unincorporated area without pay or without full pay and on a part‑time basis, and voluntary policemen and volunteer firemen serving in any incorporated city, town or unincorporated area without pay or without full pay and on a part‑time basis, are deemed to be employees, but for the purposes of this chapter, the basis for computing wages for premium payments and compensation benefits for regular members of volunteer fire departments organized pursuant to title 48, chapter 5, article 1, or organized pursuant to title 10, chapters 24 through 40, regular members of any private fire protection service organization, volunteer firemen and volunteer policemen of these departments or organizations shall be the salary equal to the beginning salary of the same rank or grade in the full‑time service with the city, town, volunteer fire department or private fire protection service organization, provided if there is no full‑time equivalent then the salary equivalent shall be as determined by resolution of the governing body of the city, town or volunteer fire department or corporation.

(e) Members of the department of public safety reserve, organized pursuant to section 41‑1715, are deemed to be employees. For the purposes of this chapter, the basis for computing wages for premium payments and compensation benefits for a member of the department of public safety reserve who is a peace officer shall be the salary received by officers of the department of public safety for their first month of regular duty as an officer. For members of the department of public safety reserve who are not peace officers, the basis for computing premiums and compensation benefits is four hundred dollars a month.

(f) Any person placed in on‑the‑job evaluation or in on‑the‑job training under the department of economic security's temporary assistance for needy families program or vocational rehabilitation program shall be deemed to be an employee of the department for the purpose of coverage under the state workers' compensation laws only. The basis for computing premium payments and compensation benefits shall be two hundred dollars per month. Any person receiving vocational rehabilitation services under the department of economic security's vocational rehabilitation program whose major evaluation or training activity is academic, whether as an enrolled attending student or by correspondence, or who is confined to a hospital or penal institution, shall not be deemed to be an employee of the department for any purpose.

(g) Regular members of a volunteer sheriff's reserve, which may be established by resolution of the county board of supervisors, to assist the sheriff in the performance of the sheriff's official duties. A roster of the current members shall monthly be certified to the clerk of the board of supervisors by the sheriff and shall not exceed the maximum number authorized by the board of supervisors. Certified members of an authorized volunteer sheriff's reserve shall be deemed to be employees of the county for the purpose of coverage under the Arizona workers' compensation laws and occupational disease disability laws and shall be entitled to receive the benefits of these laws for any compensable injuries or disabling conditions that arise out of and occur in the course of the performance of duties authorized and directed by the sheriff. Compensation benefits and premium payments shall be based upon on the salary received by a regular full‑time deputy sheriff of the county involved for the first month of regular patrol duty as an officer for each certified member of a volunteer sheriff's reserve. This subdivision shall not be construed to does not provide compensation coverage for any member of a sheriff's posse who is not a certified member of an authorized volunteer sheriff's reserve except as a participant in a search and rescue mission or a search and rescue training mission.

(h) A working member of a partnership may be deemed to be an employee entitled to the benefits provided by this chapter upon on written acceptance, by endorsement, at the discretion of the insurance carrier for the partnership of an application for coverage by the working partner. The basis for computing premium payments and compensation benefits for the working partner shall be an assumed average monthly wage of not less than six hundred dollars nor more than the maximum wage provided in section 23‑1041 and is subject to the discretionary approval of the insurance carrier. Any compensation for permanent partial or permanent total disability payable to the partner shall be computed on the lesser of the assumed monthly wage agreed to by the insurance carrier on the acceptance of the application for coverage or the actual average monthly wage received by the partner at the time of injury.

(i) The sole proprietor of a business subject to this chapter may be deemed to be an employee entitled to the benefits provided by this chapter on written acceptance, by endorsement, at the discretion of the insurance carrier of an application for coverage by the sole proprietor. The basis for computing premium payments and compensation benefits for the sole proprietor shall be an assumed average monthly wage of not less than six hundred dollars nor more than the maximum wage provided by section 23‑1041 and is subject to the discretionary approval of the insurance carrier. Any compensation for permanent partial or permanent total disability payable to the sole proprietor shall be computed on the lesser of the assumed monthly wage agreed to by the insurance carrier on the acceptance of the application for coverage or the actual average monthly wage received by the sole proprietor at the time of injury.

(j) A member of the Arizona national guard, Arizona state guard or unorganized militia shall be deemed a state employee and entitled to coverage under the Arizona workers' compensation law at all times while the member is receiving the payment of the member's military salary from the this state of Arizona under competent military orders or upon on order of the governor. Compensation benefits shall be based upon on the monthly military pay rate to which the member is entitled at the time of injury, but not less than a salary of four hundred dollars per month, nor more than the maximum provided by the workers' compensation law. No Arizona compensation benefits shall not inure to a member compensable under federal law.

(k) Certified ambulance drivers and attendants who serve without pay or without full pay on a part‑time basis are deemed to be employees and entitled to the benefits provided by this chapter and the basis for computing wages for premium payments and compensation benefits for certified ambulance personnel shall be four hundred dollars per month.

(l) Volunteer workers of a licensed health care institution may be deemed to be employees and entitled to the benefits provided by this chapter upon on written acceptance by the insurance carrier of an application by the health care institution for coverage of such volunteers. The basis for computing wages for premium payments and compensation benefits for volunteers shall be four hundred dollars per month.

(m) Personnel who participate in a search or rescue operation or a search or rescue training operation that carries a mission identifier assigned by the division of emergency management as provided in section 35‑192.01 and who serve without compensation as volunteer state employees. The basis for computation of wages for premium purposes and compensation benefits is the total volunteer man‑hours recorded by the division of emergency management in a given quarter multiplied by the amount determined by the appropriate risk management formula.

(n) Personnel who participate in emergency management training, exercises or drills that are duly enrolled or registered with the division of emergency management or any political subdivision as provided in section 26‑314, subsection C and who serve without compensation as volunteer state employees. The basis for computation of wages for premium purposes and compensation benefits is the total volunteer man‑hours recorded by the division of emergency management or political subdivision during a given training session, exercise or drill multiplied by the amount determined by the appropriate risk management formula.

(o) Regular members of the Arizona game and fish department reserve, organized pursuant to section 17‑214. The basis for computing wages for premium payments and compensation benefits for a member of the reserve is the salary received by game rangers and wildlife managers of the Arizona game and fish department for their first month of regular duty.

(p) Every person employed pursuant to a professional employer agreement.

(q) A working member of a limited liability company who owns less than twenty‑five percent of the membership interest in the limited liability company may be deemed to be an employee entitled to benefits provided by this chapter on written acceptance, by endorsement, of an application for coverage by the working member at the discretion of the insurance carrier for the limited liability company. The basis for computing wages for premium payments and compensation benefits for the working member is an assumed average monthly wage of six hundred dollars or more but not more than the maximum wage provided in section 23‑1041 and is subject to the discretionary approval of the insurance carrier. Any compensation for permanent partial or permanent total disability payable to the working member is computed on the lessor of the assumed monthly wage agreed to by the insurance carrier on the acceptance of the application for coverage or the actual average monthly wage received by the working member at the time of injury.

7. "General order" means an order applied generally throughout the this state to all persons under jurisdiction of the commission.

8. "Heart‑related or perivascular injury, illness or death" means myocardial infarction, coronary thrombosis or any other similar sudden, violent or acute process involving the heart or perivascular system, or any death resulting therefrom, and any weakness, disease or other condition of the heart or perivascular system, or any death resulting therefrom.

9. "Insurance carrier" means every insurance carrier duly authorized by the director of insurance to write workers' compensation or occupational disease compensation insurance in the this state of Arizona.

10. "Interested party" means the employer, the employee, or if the employee is deceased, the employee's estate, the surviving spouse or dependents, the commission, the insurance carrier or their representative.

11. "Mental injury, illness or condition" means any mental, emotional, psychotic or neurotic injury, illness or condition.

12. "Order" means and includes any rule, direction, requirement, standard, determination or decision other than an award or a directive by the commission or an administrative law judge relative to any entitlement to compensation benefits, or to the amount thereof, and any procedural ruling relative to the processing or adjudicating of a compensation matter.

13. "Personal injury by accident arising out of and in the course of employment" means any of the following:

(a) Personal injury by accident arising out of and in the course of employment.

(b) An injury caused by the wilful act of a third person directed against an employee because of the employee's employment, but does not include a disease unless resulting from the injury.

(c) An occupational disease that is due to causes and conditions characteristic of and peculiar to a particular trade, occupation, process or employment, and not the ordinary diseases to which the general public is exposed, and subject to section 23‑901.01.

14. "Professional employer agreement" means a written contract between a client and a professional employer organization:

(a) In which the professional employer organization expressly agrees to co‑employ all or a majority of the employees providing services for the client. In determining whether the professional employer organization employs all or a majority of the employees of a client, any person employed pursuant to the terms of the professional employer agreement after the initial placement of client employees on the payroll of the professional employer organization shall be included.

(b) That is intended to be ongoing rather than temporary in nature.

(c) In which employer responsibilities for worksite employees, including hiring, firing and disciplining, are expressly allocated between the professional employer organization and the client in the agreement.

15. "Professional employer organization" means any person engaged in the business of providing professional employer services. Professional employer organization does not include a temporary help firm or an employment agency.

16. "Professional employer services" means the service of entering into co‑employment relationships under this chapter to which all or a majority of the employees providing services to a client or to a division or work unit of a client are covered employees.

17. "Special order" means an order other than a general order.

18. "Weakness, disease or other condition of the heart or perivascular system" means arteriosclerotic heart disease, cerebral vascular disease, peripheral vascular disease, cardiovascular disease, angina pectoris, congestive heart trouble, coronary insufficiency, ischemia and all other similar weaknesses, diseases and conditions, and also previous episodes or instances of myocardial infarction, coronary thrombosis or any similar sudden, violent or acute process involving the heart or perivascular system.

19. "Workers' compensation" means workmen's compensation as used in article XVIII, section 8, Constitution of Arizona. END_STATUTE

Sec. 2. Section 23-947, Arizona Revised Statutes, is amended to read:

START_STATUTE23-947. Time within which hearing must be requested; definition

A. A hearing on any question relating to a claim shall not be granted unless the employee has previously filed an application for compensation within the time and in the manner prescribed by section 23‑1061 and the request for a hearing is filed within ninety days after the notice sent under section 23‑1061, subsection F E or within ninety days of after notice of a determination by the commission, insurance carrier or self‑insuring employer under section 23‑1047 or 23‑1061, except that an employer who that is subject to and fails to comply with section 23‑961 or 23‑962 must file a request for a hearing within thirty days of after notice of a determination by the commission, or within ten days of after all other awards issued by the commission.

B. As used in For the purposes of this section, "filed" means that the request for a hearing is in the possession of the commission. Failure to file with the commission within the required time by a party means that the determination by the commission, insurance carrier or self‑insuring employer is final and res judicata to all parties. The industrial commission or any court shall not excuse a late filing unless any of the following applies:

1. The person to whom the notice is sent does not request a hearing because of justifiable reliance on a representation by the commission, employer or carrier. In For the purposes of this paragraph, "justifiable reliance" means that the person to whom the notice is sent has made reasonably diligent efforts to verify the representation, regardless of whether the representation is made pursuant to statutory or other legal authority.

2. At the time the notice is sent the person to whom it the notice is sent is suffering from insanity or legal incompetence or incapacity, including minority.

3. The person to whom the notice is sent shows by clear and convincing evidence that the notice was not received.

C. The late filing shall not be excused under subsection B of this section if the person to whom the notice is sent or the person's legal counsel knew or, with the exercise of reasonable care and diligence, should have known of the fact of the notice at any time during the filing period. END_STATUTE

Sec. 3. Section 23-961.01, Arizona Revised Statutes, is amended to read:

START_STATUTE23-961.01. Self‑insurance pools

A. Two or more employers, each of whom are engaged in similar industries, may enter into contracts to establish a workers' compensation pool to provide for the payment and administration of workers' compensation claims pursuant to this chapter. The members of each workers' compensation pool shall elect a board of trustees to manage the workers' compensation pool established pursuant to this section. Each member employer shall have been in business for at least five consecutive years before entering into a contract to establish a workers' compensation pool. The total amount of gross workers' compensation insurance premiums paid by the members of the pool in the year preceding the execution of the contract must equal at least seven hundred fifty thousand dollars. The group of employers that makes up a workers' compensation pool shall have been formed for a specific purpose, other than to engage in self‑insurance, before the formation of a workers' compensation pool. Employers may establish workers' compensation pools pursuant to this section by one of the following means:

1. On a cooperative or contract basis.

2. Through the joint formation of a nonprofit corporation.

3. By the execution of a trust agreement to carry out the provisions of this chapter directly by the employers or by contracting with a third party.

B. A workers' compensation pool established pursuant to this section is subject to approval as a self‑insurer by the industrial commission pursuant to section 23‑961, subsection A, paragraph 2. The commission shall adopt rules as necessary to carry out the purposes of this section.

C. Workers' compensation pools established pursuant to this section are exempt from taxation under title 43.

D. Each agreement or contract shall provide that the members of a workers' compensation pool are jointly and severally liable for the liabilities of the pool. If a member of a pool discontinues its membership in the pool, that party shall be liable only for liabilities accruing prior to the discontinuation of its membership in the pool.

E. As to self‑insurance pools established under this section, no pool, employer within a pool, or agent of any pool or employer within a pool may require an employee to be treated by or directed to any specific medical provider subsequent to the employee's initial visit to treat an industrial injury or illness, except as may be required as part of an independent medical examination for an employee making a workers' compensation claim.

F. E. The industrial commission shall adopt rules necessary for safeguarding the solvency of pools and guaranteeing that injured workers receive benefits as required under this chapter. These rules shall include, at a minimum, matters pertaining to classification and rating, loss reserves, investments, financial security including minimum and combined premiums, combined net worth and other indicia necessary for protection from insolvency, specific and aggregate excess insurance, group homogeneity and assessments necessary for participation in and administration of the workers' compensation system.END_STATUTE

Sec. 4. Section 23-1044, Arizona Revised Statutes, is amended to read:

START_STATUTE23-1044. Compensation for partial disability; computation

A. For temporary partial disability there shall be paid during the period thereof sixty‑six and two‑thirds percent of the difference between the wages earned before the injury and the wages that the injured person is able to earn thereafter. Unemployment benefits received during the period of temporary partial disability shall be considered wages able to be earned.

B. Disability shall be deemed permanent partial disability if caused by any of the following specified injuries, and compensation of fifty‑five percent of the average monthly wage of the injured employee, in addition to the compensation for temporary total disability, shall be paid for the period given in the following schedule:

1. For the loss of a thumb, fifteen months.

2. For the loss of a first finger, commonly called the index finger, nine months.

3. For the loss of a second finger, seven months.

4. For the loss of a third finger, five months.

5. For the loss of the fourth finger, commonly called the little finger, four months.

6. The loss of a distal or second phalange of the thumb or the distal or third phalange of the first, second, third or fourth finger, shall be considered equal to the loss of one‑half of the thumb or finger, and compensation shall be one‑half of the amount specified for the loss of the entire thumb or finger.

7. The loss of more than one phalange of the thumb or finger shall be considered as the loss of the entire finger or thumb, but in no event shall the amount received for more than one finger exceed the amount provided for the loss of a hand.

8. For the loss of a great toe, seven months.

9. For the loss of a toe other than the great toe, two and one‑half months.

10. The loss of the first phalange of any toe shall be considered equal to the loss of one‑half of the toe and compensation shall be one‑half of the amount for one toe.

11. The loss of more than one phalange shall be considered as the loss of the entire toe.

12. For the loss of a major hand, fifty months, or of a minor hand, forty months.

13. For the loss of a major arm, sixty months, or of a minor arm, fifty months.

14. For the loss of a foot, forty months.

15. For the loss of a leg, fifty months.

16. For the loss of an eye by enucleation, thirty months.

17. For the permanent and complete loss of sight in one eye without enucleation, twenty‑five months.

18. For permanent and complete loss of hearing in one ear, twenty months.

19. For permanent and complete loss of hearing in both ears, sixty months.

20. The permanent and complete loss of the use of a finger, toe, arm, hand, foot or leg may be deemed the same as the loss of any such member by separation.

21. For the partial loss of use of a finger, toe, arm, hand, foot or leg, or partial loss of sight or hearing, fifty percent of the average monthly wage during that proportion of the number of months in the foregoing schedule provided for the complete loss of use of such member, or complete loss of sight or hearing, which the partial loss of use thereof bears to the total loss of use of such member or total loss of sight or hearing. For the purposes of this paragraph, "loss of use" means a loss of physical function of the affected member, sight or hearing. The effect on an employee's ability to return to the employee's occupation at the time of the injury shall not be considered in establishing the percentage of loss under this section, except that if the employee is unable to return to the work the employee was performing at the time the employee was injured due to the total or partial loss of use, compensation pursuant to this section shall be calculated based on seventy‑five percent of the average monthly wage.

22. For permanent disfigurement about the head or face, including injury to or loss of teeth, the commission pursuant to section 23‑1047, may allow such sum for compensation thereof as it deems just, in accordance with the proof submitted, for a period of not more than eighteen months.

C. In cases not enumerated in subsection B of this section, if the injury causes permanent partial disability for work, the employee shall receive during such disability compensation equal to fifty‑five percent of the difference between the employee's average monthly wages before the accident and the amount that represents the employee's reduced monthly earning capacity resulting from the disability, but the payment shall not continue after the disability ends, or the death of the injured employee, and in case the partial disability begins after a period of total disability, the period of total disability shall be deducted from the total period of compensation.

D. In determining the amount that represents the reduced monthly earning capacity for the purposes of subsections A and C of this section, consideration shall be given, among other things, to any previous disability, the occupational history of the injured employee, the nature and extent of the physical disability, the type of work the injured employee is able to perform after the injury, any wages received for work performed after the injury and the age of the employee at the time of injury. If the employee is unable to return to work or continue working in any employment after the injury due to the employee's termination from employment for reasons that are unrelated to the industrial injury, the commission may consider the wages that the employee could have earned from that employment as representative of the employee's earning capacity. A determination of earning capacity that is based on wages that could have been earned from previously terminated employment is subject to change under subsection F of this section and an employee retains the right to later establish that the employee's reduced earning capacity is related in whole or in part to the industrial injury.

E. In case there is a previous disability, as the loss of one eye, one hand, one foot or otherwise, the percentage of disability for a subsequent injury shall be determined by computing the percentage of the entire disability and deducting therefrom the percentage of the previous disability as it existed at the time of the subsequent injury.

F. For the purposes of subsection C of this section, the commission, in accordance with the provisions of section 23‑1047 when the physical condition of the injured employee becomes stationary, shall determine the amount that represents the reduced monthly earning capacity and on such determination make an award of compensation that is subject to change in any of the following events:

1. On a showing of a change in the physical condition of the employee after such findings and award arising out of the injury resulting in the reduction or increase of the employee's earning capacity.

2. On a showing of a reduction in the earning capacity of the employee arising out of such injury where there is no change in the employee's physical condition, after the findings and award.

3. On a showing that the employee's earning capacity has increased after such findings and award.

G. The commission may adopt a schedule for rating loss of earning capacity and reasonable and proper rules to carry out this section. In all cases involving this section, except for cases under subsection B of this section, or in cases involving a request pursuant to section 23‑1061, subsection J I for disability compensation, if any issue is raised regarding whether the injured employee has suffered a loss of earning capacity because of an inability to obtain or retain suitable work, the following apply:

1. The employer or carrier may present evidence showing that the inability to obtain suitable work is due, in whole or in part, to economic or business conditions, or other factors unrelated to the industrial injury. The injured employee may present evidence showing that the inability to obtain suitable work is due, in whole or in part, to the industrial injury or limitations resulting from the injury. The administrative law judge shall consider all such evidence in determining whether and to what extent the injured employee has sustained any loss of earning capacity.

2. In cases involving loss of employment, the employer or carrier may present evidence showing that the injured employee was terminated from employment or has not obtained suitable work, or both, due, in whole or in part, to economic or business conditions, or other factors unrelated to the injury. The injured employee may present evidence showing that such termination or inability to obtain suitable work is due, in whole or in part, to the industrial injury or limitations resulting from the injury. The administrative law judge shall consider all such evidence in determining whether and to what extent the injured employee has sustained any loss or additional loss of earning capacity.

H. Any single injury or disability that is listed in subsection B of this section and that is not converted into an injury or disability compensated under subsection C of this section by operation of this section shall be treated as scheduled under subsection B of this section regardless of its actual effect on the injured employee's earning capacity. END_STATUTE

Sec. 5. Section 23-1061, Arizona Revised Statutes, is amended to read:

START_STATUTE23-1061. Notice of accident; form of notice; claim for compensation; reopening; payment of compensation

A. Notwithstanding section 23‑908, subsection E, no A claim for compensation shall be is not valid or enforceable unless the claim is filed with the commission by the employee, or if resulting in death by the parties entitled to compensation, or someone on their behalf, in writing within one year after the injury occurred or the right thereto accrued. The time for filing a compensation claim begins to run when the injury becomes manifest or when the claimant knows or in the exercise of reasonable diligence should know that the claimant has sustained a compensable injury. Except as provided in subsection B of this section, neither the commission nor any court shall have jurisdiction to consider a claim which that is not timely filed under this subsection, except if the employee or other party entitled to file the claim has delayed in doing so because of justifiable reliance on a material representation by the commission, employer or insurance carrier or if the employee or other party entitled to file the claim is insane or legally incompetent or incapacitated at the time the injury occurs or the right to compensation accrues or during the one‑year period thereafter. If the insanity or legal incompetence or incapacity occurs after the one‑year period has commenced, the running of the remainder of the one‑year period shall be suspended during the period of insanity or legal incompetence or incapacity. If the employee or other party is insane or legally incompetent or incapacitated when the injury occurs or the right to compensation accrues, the one‑year period commences to run immediately upon on the termination of insanity or legal incompetence or incapacity. The commission upon on receiving a claim shall give notice to the carrier.

B. Failure of an employee or any other party entitled to compensation to file a claim with the commission within one year or to comply with section 23‑908 shall not bar a claim if the insurance carrier or employer has commenced payment of compensation benefits under section 23‑1044, 23‑1045 or 23‑1046, except that the payments provided for by section 23‑1046, subsection A, paragraph 1 and section 23‑1065, subsection A shall not be considered compensation benefits for the purposes of this section.

C. If the commission receives a notification of the injury, the commission shall send a claim form to the employee.

D. C. The issue of failure to file a claim must be raised at the first hearing on a claim for compensation in respect to the injury or death.

E. D. Within ten days after receiving notice of an accident, the employer shall inform his the employer's insurance carrier and the commission on such forms as may be prescribed by the commission.

F. E. Each insurance carrier and self‑insuring employer shall report to the commission a notice of the first payment of compensation and shall promptly report to the commission and to the employee by mail at his the employee's last known address any denial of a claim, any change in the amount of compensation and the termination thereof, except that claims for medical, surgical and hospital benefits which that are not denied shall be reported to the commission in the form and manner determined by the commission. In all cases where compensation is payable, the carrier or self‑insuring employer shall promptly determine the average monthly wage pursuant to section 23‑1041. Within thirty days of after the payment of the first installment of compensation, the carrier or self‑insuring employer shall notify the employee and commission of the average monthly wage of the claimant as calculated, and the basis for such determination. The commission shall then make its own independent determination of the average monthly wage pursuant to section 23‑1041. The commission shall within thirty days after receipt of such notice notify the employee, employer and carrier of such the commission's determination. The amount determined by the commission shall be payable retroactive to the first date of entitlement. The first payment of compensation shall be accompanied by a notice on a form prescribed by the commission stating the manner in which the amount of compensation was determined.

G. F. Except as otherwise provided by law, the insurance carrier or self‑insuring employer shall process and pay compensation and provide medical, surgical and hospital benefits, without the necessity for the making of an award or determination by the commission.

H. G. On a claim that has been previously accepted, an employee may reopen the claim to secure an increase or rearrangement of compensation or additional benefits by filing with the commission a petition requesting the reopening of the employee's claim upon on the basis of a new, additional or previously undiscovered temporary or permanent condition. , which the petition shall be accompanied by a statement from a physician setting forth the physical condition of the employee relating to the claim. A claim shall not be reopened if the initial claim for compensation was previously denied by a notice of claim status or determination by the commission and the notice or determination was allowed to become final and no exception applies under section 23-947 excusing a late filing to request a hearing. A claim shall not be reopened because of increased subjective pain if the pain is not accompanied by a change in objective physical findings. A claim shall not be reopened solely for additional diagnostic or investigative medical tests, but expenses for any reasonable and necessary diagnostic or investigative tests that are causally related to the injury shall be paid by the employer or the employer's insurance carrier. Expenses for reasonable and necessary medical and hospital care and laboratory work shall be paid by the employer or the employer's insurance carrier if the claim is reopened as provided by law and if these expenses are incurred within fifteen days of the date that the petition to reopen is filed. The payment for such reasonable and necessary medical, hospital and laboratory work expense shall be paid for by the employer or the employer's insurance carrier if the claim is reopened as provided by law and if such expenses are incurred within fifteen days of the filing of the petition to reopen. Surgical benefits are not payable for any period prior to before the date of filing a petition to reopen, except that surgical benefits are payable for a period prior to before the date of filing the petition to reopen not to exceed seven days if a bona fide medical emergency precludes the employee from filing a petition to reopen prior to before the surgery. No Monetary compensation is not payable for any period prior to before the date of filing the petition to reopen.

I. H. Upon On the filing of a petition to reopen a claim the commission shall in writing notify the employer's insurance carrier or the self‑insuring employer, which shall in writing notify the commission and the employee within twenty‑one days after the date of such notice of its acceptance or denial of the petition. The reopened claim shall be processed thereafter in like manner as a new claim.

J. I. The commission shall investigate and review any claim in which it appears to the commission that the claimant has not been granted the benefits to which such claimant is entitled. If the commission determines that payment or denial of compensation is improper in any way, it shall hold a hearing pursuant to section 23‑941 within sixty days after receiving notice of such impropriety. Any claim for temporary partial disability benefits under this subsection must be filed with the commission within two years after the date the claimed entitlement to compensation accrued or within two years after the date on which an award for benefits encompassing the entitlement period becomes final. A claim for temporary partial disability compensation shall be deemed to accrue when the employee knew or with the exercise of reasonable diligence should have known that the carrier, self‑insured employer or special fund denied or improperly paid compensation. A claim for temporary partial disability benefits shall not be deemed to have accrued any earlier than the effective date of this amendment to this subsection September 26, 2008.

K. J. When there is a dispute as to which employer, or insurance carrier, is liable for the payment of a compensable claim, the commission, by order, may designate the employer or insurance carrier which that shall pay the claim. Payment shall begin within fourteen days after the employer or insurance carrier has been ordered by the commission to commence payment. When a final determination has been made as to which employer or insurance carrier is actually liable, the commission shall direct any necessary monetary adjustment or reimbursement among the parties or carriers involved.

L. K. Upon On application to the commission, and for good cause shown, the commission may direct that a document filed as a claim for compensation benefits be designated as a petition to reopen, effective as of the original date of filing. In like manner upon on application and good cause shown, the commission may direct that a document filed as a petition to reopen be designated a claim for compensation benefits, effective as of the original date of filing.

M. L. If the insurance carrier or self‑insurer does not issue a notice of claim status accepting or denying the claim within twenty‑one days from after the date the carrier is notified by the commission of a claim or of a petition to reopen, the carrier shall pay immediately compensation as if the claim were accepted, from the date the carrier is notified by the commission of a claim or petition to reopen until the date upon on which the carrier issues a notice of claim status accepting or denying such claim. Compensation includes medical, surgical and hospital benefits. This section shall not apply to cases involving seven days or less of time lost from work. END_STATUTE

Sec. 6. Section 23-1068, Arizona Revised Statutes, is amended to read:

START_STATUTE23-1068. Assignment of compensation; exemption from attachment or execution; payment to nonresident

A. Compensation, whether determined or not, is not, prior to before the delivery of the warrant therefor, assignable.

B. Except as provided in subsection D of this section, compensation is exempt from attachment, garnishment and execution and does not pass to another person by operation of law, except that:

1. The amount of compensation payable to a person at the time of death, whether payable in periodic payments or converted to a lump sum, and whether or not the warrant therefor has been issued or delivered after that person's death, shall be paid to that person's personal representative.

2. If medical, wage loss or disability benefits are paid or otherwise provided by an employer to or for the benefit of an employee for an injury or illness for which medical or compensation benefits payable pursuant to this article have been denied or for which a claim for compensation under this article has not been filed, and the injury or illness is subsequently determined to be compensable under this article, the employer or the person authorized by the employer to provide such benefits is entitled to a direct payment out of, or a direct credit against, the medical or compensation benefits payable under this article in the amount of the benefits previously paid or provided.

C. Any dispute as to the amount of the direct payment or credit against the medical or compensation benefits payable shall be resolved pursuant to section 23‑1061, subsection J I.

D. Compensation is subject to an assignment for the payment of support as defined in section 25‑500, spousal maintenance and the fee for handling child support and spousal maintenance payments authorized by section 25‑510.

E. Payment to the consular agent, or the consular agent's representative, of the nation of which a dependent is a resident or subject, of compensation due the dependent residing outside the United States, any power of attorney to receive or receipt for such compensation to the contrary notwithstanding, is a full discharge of the benefits or compensation as if made directly to the beneficiary. END_STATUTE

Sec. 7. Section 23-1070, Arizona Revised Statutes, is amended to read:

START_STATUTE23-1070. Medical, surgical and hospital benefits provided by employer

A. An employer, other than this state or a political subdivision of this state, who that secures compensation to his the employer's employees in the manner provided in section 23‑961, subsection A, paragraph 1 or 2, alone or jointly with other employers, in lieu of making premium payments for medical, surgical and hospital benefits, may provide such benefits to injured employees and may collect one‑half of the cost thereof from his the employer's employees, not to exceed one dollar per month from any employee, which may be deducted from the wages of the employee.

B. An employer electing to provide such benefits shall notify his the employer's insurance carrier and the commission of the election and render a detailed statement of the arrangements made therefor to the commission.

C. An employer who that maintains a hospital for his the employer's employees or who that contracts with a physician for the hospital care of injured employees, on or before January 30 each year, shall make a verified written report to the commission for the preceding year showing the total amount of hospital fees collected and showing separately the amount contributed by the employees and the amount contributed by the employers. The report shall also contain an itemized account of the expenditures, investments or other disposition of the fees, and a statement showing the balance remaining.

D. An employer who that fails to notify his the employer's insurance carrier and the commission of his the employer's election to provide such benefits, or who that maintains a hospital or contracts for hospital service as provided in subsection C of this section, and that fails to make the financial report required therein, is liable for such benefits as provided in section 23‑1062.

E. If the medical, surgical or hospital aid or treatment being furnished by an employer is such that there is reasonable ground to believe that the health, life or recovery of any employee is endangered or impaired thereby, the commission, upon on application of the employee or upon on its own motion, may order a change of physicians or other conditions. If the employer fails to comply with the order promptly, the injured employee may elect to have medical, surgical or hospital aid or treatment provided by or through the special fund established by section 23‑1065. In that event the claim of the injured employee against the employer shall be assigned to the special fund for the benefit thereof, and the special fund shall furnish to the insured employee medical, surgical or hospital aid or treatment as provided in this chapter.

F. Notwithstanding subsection A of this section, a pilot program is established to allow a city with a population of more than one hundred fifty thousand persons and a self-insured county insurance pool to provide medical, surgical and hospital benefits pursuant to this section. The purpose of the pilot program is to determine whether public sector entities that are self‑insured can, through a directed care and medical management program, contain costs and improve health care and return to work results for injured employees. The industrial commission shall select the qualified city. The entities participating in the pilot program shall consult with the industrial commission on the protocol for assessment and reporting and shall submit all baseline data to the commission before the pilot program can begin. No earlier than January 1, 2012 and not later than January 1, 2013, the pilot program participants may begin providing medical, surgical and hospital benefits pursuant to this section on approval by the industrial commission. This subsection does not exempt pilot program participants from any other requirements for procurement of a medical network to direct care. The pilot program participants shall report in accordance with the protocol for assessment and reporting, with a final report two years after the start of the pilot program. The pilot program ends and pilot program participants may not provide medical, surgical and hospital benefits pursuant to this section from and after December 31, 2014. END_STATUTE