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REFERENCE TITLE: workers' compensation; fraud investigations; adjudications |
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State of Arizona Senate Fifty-sixth Legislature First Regular Session 2023
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SB 1164 |
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Introduced by Senator Kaiser
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An Act
amending title 23, chapter 6, article 2, Arizona Revised Statutes, by adding section 23-934; amending section 23-1047, Arizona Revised Statutes; relating to workers' compensation.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 23, chapter 6, article 2, Arizona Revised Statutes, is amended by adding section 23-934, to read:
23-934. Fraud; investigations; rules; adjudications
A. The commission may address fraudulent activities, statements or representations made in connection with workers' compensation claims. The commission shall investigate allegations of fraud either on receiving a complaint or on the commission's own motion.
B. The commission shall adopt rules to establish a process for receiving fraud complaints and conducting fraud investigations pursuant to this section. The rules:
1. Shall establish a process by which the commission ROUTINELY compares claimant annual earnings reported pursuant to section 23-1047 with the department of economic security unemployment insurance information for the purpose of identifying workers' compensation fraud.
2. Shall establish a process of timeliness for receiving and processing fraud complaints.
3. May provide for duties and authorities of fraud investigators, including issuing and serving subpoenas for witnesses and documentary evidence, taking depositions, administering oaths and examining witnesses under oath relevant to the fraud investigation.
C. If an investigation reveals credible evidence of fraudulent activities, statements or representations made in connection with a workers' compensation, benefits or payments claim for the purpose of obtaining compensation, benefits or payments, the commission shall refer the matter to the administrative law judge division for a hearing. The hearing shall be conducted as expeditiously as reasonable but not later than sixty days after the matter was referred.
D. If the administrative law judge concludes by a preponderance of the evidence that a person knowingly engaged in fraudulent activities, statements or representations for the purpose of obtaining compensation, benefits or payments, the administrative law judge shall grant relief at any time even if the prior notice or award granting benefits was final relief shall include forfeiture of the right to any future temporary or permanent disability compensation or any other benefits for the claim on which the fraudulent activities, statements or representations were made.
E. Any hearing and decision pursuant to this section shall be conducted in accordance with sections 23-941, 23-942 and 23-943. Any person aggrieved by a decision pursuant to this section may request a review of the decision pursuant to sections 23-943 and 23-951.
F. This section does not limit either of the following:
1. The authority of the commission, the department of insurance and financial institutions or any other entity to pursue any remedy pursuant to section 23-1028.
2. The right of an insurance carrier, a self-insured employer or the special fund established by section 23-1065 to issue a notice affecting the status of a workers' compensation claim at any time if a prior determination of compensability or entitlement to benefits was procured by fraud.
Sec. 2. Section 23-1047, Arizona Revised Statutes, is amended to read:
23-1047. Procedure for determining compensation for partial disability and permanent total disability in cases not enumerated; procedure for determining nonscheduled dependency and duration of compensation to partial dependents in death cases
A. In cases of permanent partial disability under section 23-1044, subsection B, paragraph 22 and subsections C and F, when the physical condition of the injured employee becomes stationary, or in the case of permanent total disability not enumerated in section 23-1045, and under section 23-1045, subsection D, or in death cases under section 23-1046, subsection B, the employer or insurance carrier within thirty days shall notify the commission and request that the claim be examined and further compensation, if any, be determined. A copy of all medical reports necessary to make such determination also shall be furnished to the commission. The employer or insurance carrier may commence payment of a permanent disability award without waiting for a determination under subsection B of this section.
B. Within thirty days after the commission receives the medical reports, the claims shall be examined and further compensation, including a permanent disability award, if any, shall be determined under the commission's supervision. If necessary, the commission may require additional medical or other information with respect to the claim and may postpone the determination for not more than sixty additional days. Any determination under this subsection may include necessary adjustments in any compensation paid or payable.
C. The commission shall serve a copy of the determination to all interested parties. Any such interested party may request a hearing under section 23-941 on the determination made under subsection B of this section within ninety days after copies of the determination are served.
D. Any person receiving permanent compensation benefits shall report annually on the anniversary date of the award to the self-insured employer or insurance carrier and to the commission all of the person's earnings for the prior twelve-month period. If the person fails to make such report, the self-insured employer or insurance carrier shall notify the person that such report has not been received and that payment of further benefits will be suspended unless such report of earnings is filed within thirty days. After thirty days have elapsed from the date of such notice, the self-insured employer or insurance carrier may issue a notice to the person suspending payment of further benefits and no further payments need be made until such report of earnings is filed.
E. Any person receiving permanent compensation benefits from the special fund established by section 23-1065 shall report annually on the anniversary date of the award to the commission all of the person's earnings for the prior twelve-month period. If the person fails to make such report, the commission shall notify the person that such report has not been received and that payment of further benefits will be suspended unless such report of earnings is filed within thirty days. After thirty days have elapsed from the date of such notice, the commission may issue a notice to the person suspending payment of further benefits and no further payments need be made until such report of earnings is filed.