TITLE 28
Labor and Labor Relations
CHAPTER 28-33
Workers' Compensation Benefits
SECTION 28-33-17.3
§ 28-33-17.3 Fraud and abuse.
(a)(1) The workers' compensation court is authorized and directed to impose
sanctions and penalties necessary to maintain the integrity of, and to maintain
the high standards of, professional conduct in the workers' compensation
system. All pleadings related to proceedings under chapters 29 38 of
this title shall be considered an attestation by counsel that valid grounds
exist for the position taken and that the pleading is not interposed for delay.
(2) If any judge determines that any proceedings have been
brought, prosecuted, or defended by an employer, insurer, or their counsel
without reasonable grounds, then:
(i) The whole cost of the proceedings shall be assessed upon
the employer, insurer, or counsel, whoever is responsible; and
(ii) If a subsequent order requires that additional
compensation be paid, a penalty of double the amount of retroactive benefits
ordered shall be paid to the employee and the penalty shall not be included in
any formula utilized to establish premium rates for workers' compensation
insurance.
(3) If any judge determines that any proceedings have been
brought or defended by an employee or his or her counsel without reasonable
grounds, the whole cost of the proceedings shall be assessed against the
employee or counsel, whoever is responsible.
(4) The court shall determine whether an action or defense is
frivolous or conduct giving rise to the action or defense was unreasonable.
Where the amount at issue is less than the actual attorneys' fees of the
parties combined, the court shall exercise particular vigilance. Nothing in
this subsection, however, is intended to discourage prompt payment in full of
all amounts required to be paid.
(5) The appropriate body with professional disciplinary
authority over the attorney shall be notified of the action.
(b)(1) It is unlawful to do any of the following:
(i) Make, or cause to be made, any knowingly false or
fraudulent material statement or material representation for the purpose of
obtaining or denying any compensation;
(ii) Present, or cause to be presented, any knowingly false
or fraudulent written or oral material statement in support of, or in
opposition to, any claim for compensation or petition regarding the
continuation, termination, or modification of benefits;
(iii) Knowingly assist, aid and abet, solicit, or conspire
with any person who engages in an unlawful act under this section;
(iv) Make, or cause to be made, any knowingly false or
fraudulent statements with regard to entitlement to benefits with the intent to
discourage an injured worker from claiming benefits or pursuing a claim;
(v) Willfully misrepresent or fail to disclose any material
fact in order to obtain workers' compensation insurance at less than the proper
rate for the insurance including, but not limited to, intentionally misleading
or failing to disclose information to an insurer regarding the appropriate rate
classification of an employee;
(vi) Willfully fail to provide a lower rate adjustment
favorable to an employer as required by an approved experience rating plan or
regulations promulgated by the insurance commissioners;
(vii) Willfully fail to report or provide false or misleading
information regarding ownership changes as required by an approved experience
rating plan or regulations promulgated by the insurance commissioner; or
(viii) Knowingly assist, aid and abet, solicit, or conspire
to coerce an employee to willfully misrepresent an employee's status as a
shareholder, director or officer of a corporation, or as a member or manager of
a limited-liability company, or as a partner, in a general or, limited
partnership, registered limited-liability partnership or a registered
limited-liability limited partnership, or as an independent contractor for the
purpose of avoiding the inclusion of that or other employees in a workers'
compensation insurance application, renewal or both.
(2) For the purposes of this section, "statement" includes,
but is not limited to, any endorsement of a benefit check; signature on an
agreement for electronic fund transfer of compensation benefits or issuance of
an electronic access device; application for insurance coverage; oral or
written statement; proof of injury; bill for services; diagnosis, prescription,
hospital or provider records; x-rays; test results; or other documentation
offered as proof of, or in the absence of, a loss, injury, or expense.
(3) If it is determined that any person concealed or
knowingly failed to disclose that which is required by law to be revealed;
knowingly gave or used perjured testimony or false evidence; knowingly made a
false statement of fact; participated in the creation or presentation of
evidence which he or she knows to be false; or otherwise engaged in conduct in
violation of subdivision (1) of this subsection, that person shall be subject
in criminal proceedings to a fine and/or penalty not exceeding fifty thousand
dollars ($50,000), or double the value of the fraud, whichever is greater, or
by imprisonment up to five (5) years in state prison or both.
(4) There shall be a general amnesty until July 1, 1992, for
any person receiving compensation under chapters 29 38 of this title, to
the extent compensation has been voluntarily reduced or relinquished by the
employee prior to that date.
(c) The director of labor and training shall establish a
form, in consultation with the attorney general, to be sent to all workers who
are presently receiving benefits, and those for whom first reports of injury
are filed in the future, that shall give the employee notice that the
endorsement of a benefit check sent pursuant to § 28-35-39 is the
employee's affirmation that he or she is qualified to receive benefits under
the Workers' Compensation Act. The insurers and self-insured employers are
directed to send the form to all workers receiving benefits.
(d) Any employer, or in any case where the employer is a
corporation, the president, vice president, secretary, treasurer, and other
officers of the corporation; or in any case where the employer is a
limited-liability company, the managers, and the managing members; or in any
case where the employer is a general partnership or a registered,
limited-liability partnership; or in the case where the employer is a limited
partnership or a registered, limited-liability limited partnership; the
partners, who are found to have violated this section or § 28-36-15, shall
be guilty of a felony for failure to secure and maintain compensation, and upon
conviction, shall be subject to imprisonment of up to two (2) years, a fine not
exceeding ten thousand dollars ($10,000), or both. In any case where the
employer is a corporation, the president, vice president, secretary, treasurer,
and other officers of the corporation, shall be severally liable for the fine
or subject to imprisonment, or both. In any case where the employer is a
limited-liability company, the managers and managing members shall be severally
liable for the fine or subject to imprisonment, or both. In any case where the
employer is a partnership or a registered, limited-liability partnership, the
partners shall be severally liable for the fine or subject to imprisonment, or
both. In any case where the employer is a limited partnership or a registered,
limited-liability limited partnership, the general partners shall be severally
liable for the fine or subject to imprisonment, or both.
History of Section.
(P.L. 1992, ch. 31, § 7; P.L. 1994, ch. 101, § 4; P.L. 1994, ch. 401,
§ 5; P.L. 1998, ch. 105, § 2; P.L. 1998, ch. 404, § 2; P.L.
2000, ch. 109, § 34; P.L. 2000, ch. 491, § 4; P.L. 2003, ch. 388,
§ 3; P.L. 2003, ch. 395, § 3; P.L. 2004, ch. 273, § 3; P.L.
2004, ch. 293, § 3; P.L. 2005, ch. 342, § 2; P.L. 2005, ch. 403,
§ 2; P.L. 2015, ch. 104, § 2; P.L. 2015, ch. 116, § 2.)
