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12  AN ACT relating to [the] workers compensation pools; concerning rating
13    organizations [act]; amending K.S.A. 1996 Supp. 12-2621, 44-532 and
14    44-585 [44-505, 44-510b, 44-523, 44-534, 44-536, 44-550b, 44-
15    557a, 44-567, 44-5,120, 44-5,121 and 74-713 and K.S.A. 1996
16    Supp. 44-508, 44-510, 44-532, 44-534a, 44-551, 44-555c, 44-
17    566a and 44-5,125] and repealing the existing sections[; also re-
18    pealing K.S.A. 1996 Supp. 44-532b].
19
20  Be it enacted by the Legislature of the State of Kansas:
21    Section 1.  K.S.A. 1996 Supp. 12-2621 is hereby amended to read as
22  follows: 12-2621. (a) With respect to the categories of coverage described
23  in subparagraphs (d)(1) through (4) of K.S.A. 12-2618, and amendments
24  thereto, premium contributions to the pool shall be based upon appro-
25  priate manual classification and rates, plus or minus applicable experience
26  credits or debits, and minus any advance discount approved by the trus-
27  tees, not to exceed 25% of manual premium. The pool shall use rules,
28  classifications and rates as promulgated by the national council on com-
29  pensation insurance an approved rating organization for workers com-
30  pensation if the pool has been in operation for less than five years. Such
31  rates shall either be the rates effective June 1, 1994, or the prospective
32  loss costs, as defined in K.S.A. 40-1113c, and amendments thereto, plus
33  expenses necessary to administer the pool. For purposes of subsection
34    (b), the prospective loss costs shall be presumed to be the 70% required
35  to be deposited in the claims fund. If the pool has been in operation for
36  more than five years, the board of trustees may determine such rates and
37  discounts as approved by the commissioner. Premium contributions to
38  the pool for all other lines of insurance shall be based on rates filed by a
39  licensed rating organization or on rates of certain companies filing rates
40  with the commissioner and approved by the commissioner for the pool.
41  In lieu of the foregoing, the board of trustees may determine such clas-
42  sification, rates and discounts as approved by the commissioner.
43    Premium contributions to any pool providing life insurance or any pool
HB 2011--Am. by SCW
                                     

 1  providing group sickness and accident insurance as described in K.S.A.
 2  12-2617, and amendments thereto, shall be based on sound actuarial prin-
 3  ciples.
 4    (b)  An amount equal to at least 70% of the annual premium shall be
 5  maintained in a designated depository for the purpose of paying claims
 6  in a claims fund account. The remaining annual premium shall be placed
 7  into a designated depository for the payment of taxes, fees and adminis-
 8  trative and other operational costs in an administrative fund account.
 9    (c)  Any moneys for a fund year in excess of the amount necessary to
10  fulfill all obligations of the pool for that fund year, including any obligation
11  to retain adequate surplus funds, as defined by subsection (h) of K.S.A.
12  12-2618, and amendments thereto, in lieu of specific and aggregate excess
13  insurance, may be declared to be refundable by the trustees not less than
14  12 months after the end of the fund year. Any such refund shall be paid
15  only to those members who remained participants in the pool for an entire
16  year. Payment of previously earned refunds shall not be contingent on
17  continued membership in the pool.
18    [Sec. 2.  K.S.A. 44-505 is hereby amended to read as follows: 44-
19  505. (a) Subject to the provisions of K.S.A. 44-506 and amendments
20  thereto, the workers compensation act shall apply to all employ-
21  ments wherein employers employ employees within this state except
22  that such act shall not apply to:
23    [(1)  Agricultural pursuits and employments incident thereto,
24  other than those employments in which the employer is the state,
25  or any department, agency or authority of the state;
26    [(2)  any employment, other than those employments in which
27  the employer is the state, or any department, agency or authority
28  of the state, wherein the employer had a total gross annual payroll
29  for the preceding calendar year of not more than $20,000 for all
30  employees and wherein the employer reasonably estimates that
31  such employer will not have a total gross annual payroll for the
32  current calendar year of more than $20,000 for all employees, ex-
33  cept that no wages paid to an employee who is a member of the
34  employer's family by marriage or consanguinity shall be included
35  as part of the total gross annual payroll of such employer for pur-
36  poses of this subsection, except where the employer is a self-employed
37  subcontractor under circumstances wherein K.S.A. 44-503, and amend-
38  ments thereto, would otherwise apply;
39    [(3)  any employment, other than those employments in which
40  the employer is the state, or any department, agency or authority
41  of the state, wherein the employer has not had a payroll for a cal-
42  endar year and wherein the employer reasonably estimates that
43  such employer will not have a total gross annual payroll for the
HB 2011--Am. by SCW
                                     

 1  current calendar year of more than $20,000 for all employees, ex-
 2  cept that no wages paid to an employee who is a member of the
 3  employer's family by marriage or consanguinity shall be included
 4  as a part of the total gross annual payroll of such employer for
 5  purposes of this subsection;
 6    [(4)  the employment of any firefighters who are members of a
 7  firemen's relief association for whom a valid statement of election
 8  to except such members from the provisions of the workers compen-
 9  sation act has been filed with the director by the governing body of
10  such firemen's relief association as provided in K.S.A. 44-505d and
11  amendments thereto; or
12    [(5)  services performed by a qualified real estate agent as an
13  independent contractor. For the purposes of this act a qualified real
14  estate agent shall be deemed to be an independent contractor if such
15  qualified real estate agent is licensed by the Kansas real estate com-
16  mission as a salesperson under the real estate brokers' and sales-
17  persons' license act and for whom: (A) Substantially all of the re-
18  muneration, whether or not paid in cash, for the services performed
19  by such individual as a real estate salesperson is directly related to
20  sales or other output, including the performance of services, rather
21  than to the number of hours worked; and (B) the services performed
22  by the individual are performed pursuant to a written contract be-
23  tween such individual and the person for whom the services are
24  performed and such contract provides that the individual will not
25  be treated as an employee with respect to such services for state tax
26  purposes.
27    [(b)  Each employer who employs employees in employments
28  which are excepted from the provisions of the workers compensation
29  act as provided in subsection (a) of this section, shall be entitled to
30  come within the provisions of such act by: (1) Becoming a member
31  in and by maintaining a membership in a qualified group-funded
32  workers' compensation pool, as provided by K.S.A. 44-581 to 44-
33  591, inclusive, and amendments thereto; or (2) filing with the di-
34  rector a written statement of election to accept thereunder. Such
35  written statement of election shall be effective from the date of filing
36  until such time as the employer files a written statement withdraw-
37  ing such election with the director. All written statements of election
38  or of withdrawal of election filed pursuant to this subsection shall
39  be in such form as may be required by the director by rules and
40  regulations.
41    [(c)  This act shall not apply in any case where the accident oc-
42  curred prior to the effective date of this act. All rights which accrued
43  by reason of any such accident shall be governed by the laws in
HB 2011--Am. by SCW
                                     

 1  effect at that time.
 2    [Sec. 3.  K.S.A. 1996 Supp. 44-508 is hereby amended to read
 3  as follows: 44-508. As used in the workers compensation act:
 4    [(a)  ``Employer'' includes: (1) Any person or body of persons,
 5  corporate or unincorporate, and the legal representative of a de-
 6  ceased employer or the receiver or trustee of a person, corporation,
 7  association or partnership; (2) the state or any department, agency
 8  or authority of the state, any city, county, school district or other
 9  political subdivision or municipality or public corporation and any
10  instrumentality thereof; and (3) for the purposes of community serv-
11  ice work, the entity for which the community service work is being
12  performed and the governmental agency which assigned the com-
13  munity service work, if any, if either such entity or such govern-
14  mental agency has filed a written statement of election with the
15  director to accept the provisions under the workers compensation
16  act for persons performing community service work and in such case
17  such entity and such governmental agency shall be deemed to be
18  the joint employer of the person performing the community service
19  work and both shall have the rights, liabilities and immunities pro-
20  vided under the workers compensation act for an employer with
21  regard to the community service work, except that the liability for
22  providing benefits shall be imposed only on the party which filed
23  such election with the director, or on both if both parties have filed
24  such election with the director; for purposes of community service
25  work, ``governmental agency'' shall not include any court or any
26  officer or employee thereof and any case where there is deemed to
27  be a ``joint employer'' shall not be construed to be a case of dual or
28  multiple employment.
29    [(b)  ``Workman'' or ``employee'' or ``worker'' means any person
30  who has entered into the employment of or works under any con-
31  tract of service or apprenticeship with an employer. Such terms
32  shall include but not be limited to: Executive officers of corpora-
33  tions; professional athletes; persons serving on a volunteer basis as
34  duly authorized law enforcement officers, ambulance attendants,
35  mobile intensive care technicians, firefighters, but only to the extent
36  and during such periods as they are so serving in such capacities;
37  persons employed by educational, religious and charitable organi-
38  zations, but only to the extent and during the periods that they are
39  paid wages by such organizations; persons in the service of the state,
40  or any department, agency or authority of the state, any city, school
41  district, or other political subdivision or municipality or public cor-
42  poration and any instrumentality thereof, under any contract of
43  service, express or implied, and every official or officer thereof,
HB 2011--Am. by SCW
                                     

 1  whether elected or appointed, while performing official duties; per-
 2  sons in the service of the state as volunteer members of the Kansas
 3  department of civil air patrol, but only to the extent and during
 4  such periods as they are officially engaged in the performance of
 5  functions specified in K.S.A. 48-3302 and amendments thereto; vol-
 6  unteers in any employment, if the employer has filed an election to
 7  extend coverage to such volunteers; minors, whether such minors
 8  are legally or illegally employed; and persons performing commu-
 9  nity service work, but only to the extent and during such periods as
10  they are performing community service work and if an election has
11  been filed an election to extend coverage to such persons. Any ref-
12  erence to an employee who has been injured shall, where the em-
13  ployee is dead, include a reference to the employee's dependents, to
14  the employee's legal representatives, or, if the employee is a minor
15  or an incapacitated person, to the employee's guardian or conser-
16  vator. Unless there is a valid election in effect which has been filed
17  as provided in K.S.A. 44-542a and amendments thereto, such terms
18  shall not include individual employers, limited or general partners
19  or self-employed persons, except a self-employed subcontractor per-
20  forming work for a contractor.
21    [(c) (1)  ``Dependents'' means such members of the employee's
22  family as were wholly or in part dependent upon the employee at
23  the time of the accident.
24    [(2)  ``Members of a family'' means only surviving legal spouse
25  and children; or if no surviving legal spouse or children, then par-
26  ents or grandparents; or if no parents or grandparents, then grand-
27  children; or if no grandchildren, then brothers and sisters. In the
28  meaning of this section, parents include stepparents, children in-
29  clude stepchildren, grandchildren include stepgrandchildren,
30  brothers and sisters include stepbrothers and stepsisters, and chil-
31  dren and parents include that relation by legal adoption. In the
32  meaning of this section, a surviving spouse shall not be regarded as
33  a dependent of a deceased employee or as a member of the family,
34  if the surviving spouse shall have for more than six months willfully
35  or voluntarily deserted or abandoned the employee prior to the date
36  of the employee's death.
37    [(3)  ``Wholly dependent child or children'' means:
38    [(A)  A birth child or adopted child of the employee except such
39  a child whose relationship to the employee has been severed by
40  adoption;
41    [(B)  a stepchild of the employee who lives in the employee's
42  household;
43    [(C)  any other child who is actually dependent in whole or in
HB 2011--Am. by SCW
                                     

 1  part on the employee and who is related to the employee by mar-
 2  riage or consanguinity; or
 3    [(D)  any child as defined in subsections (3)(A), (3)(B) or (3)(C)
 4  who is less than 23 years of age and who is not physically or men-
 5  tally capable of earning wages in any type of substantial and gainful
 6  employment or who is a full-time student attending an accredited
 7  institution of higher education or vocational education.
 8    [(d)  ``Accident'' means an undesigned, sudden and unexpected
 9  event or events, usually of an afflictive or unfortunate nature and
10  often, but not necessarily, accompanied by a manifestation of force.
11  The elements of an accident, as stated herein, are not to be con-
12  strued in a strict and literal sense, but in a manner designed to
13  effectuate the purpose of the workers compensation act that the
14  employer bear the expense of accidental injury to a worker caused
15  by the employment.
16    [(e)  ``Personal injury'' and ``injury'' mean any lesion or change
17  in the physical structure of the body, causing damage or harm
18  thereto, so that it gives way under the stress of the worker's usual
19  labor. It is not essential that such lesion or change be of such char-
20  acter as to present external or visible signs of its existence.  An injury
21  shall not be deemed to have been directly caused by the employment
22  where it is shown that the employee suffers disability as a result of
23  the natural aging process or by the normal activities of day-to-day
24  living.
25    [(f)  The words ``arising out of and in the course of employment''
26  as used in the workers compensation act shall not be construed to
27  include injuries to the employee occurring while the employee is on
28  the way to assume the duties of employment or after leaving such
29  duties, the proximate cause of which injury is not the employer's
30  negligence. An employee shall not be construed as being on the way
31  to assume the duties of employment or having left such duties at a
32  time when the worker is on the premises of the employer or on the
33  only available route to or from work which is a route involving a
34  special risk or hazard and which is a route not used by the public
35  except in dealings with the employer. An employee shall not be con-
36  strued as being on the way to assume the duties of employment, if
37  the employee is a provider of emergency services responding to an
38  emergency.
39    [The words, ``arising out of and in the course of employment'' as
40  used in the workers compensation act shall not be construed to in-
41  clude injuries to employees while engaged in recreational or social
42  events under circumstances where the employee was under no duty
43  to attend and where the injury did not result from the performance
HB 2011--Am. by SCW
                                     

 1  of tasks related to the employee's normal job duties or as specifi-
 2  cally instructed to be performed by the employer.
 3    [(g)  ``Burden of proof'' means the burden of a party to persuade
 4  the trier of facts by a preponderance of the credible evidence that
 5  such party's position on an issue is more probably true than not
 6  true on the basis of the whole record.
 7    [(h)  ``Director'' means the director of workers compensation as
 8  provided for in K.S.A. 75-5708 and amendments thereto.
 9    [(i)  ``Health care provider'' means any person licensed, by the
10  proper licensing authority of this state, another state or the District
11  of Columbia, to practice medicine and surgery, osteopathy, chiro-
12  practic, dentistry, optometry, podiatry or psychology.
13    [(j)  ``Secretary'' means the secretary of human resources.
14    [(k)  ``Construction design professional'' means any person who
15  is an architect, professional engineer, landscape architect or land
16  surveyor who has been issued a license by the state board of tech-
17  nical professions to practice such technical profession in Kansas or
18  any corporation organized to render professional services through
19  the practice of one or more of such technical professions in Kansas
20  under the professional corporation law of Kansas or any corpora-
21  tion issued a certificate of authorization under K.S.A. 74-7036 and
22  amendments thereto to practice one or more of such technical pro-
23  fessions in Kansas.
24    [(l)  ``Community service work'' means: (1) Public or community
25  service performed as a result of a contract of diversion or of assign-
26  ment to a community corrections program or conservation camp or
27  suspension of sentence or as a condition of probation or in lieu of
28  a fine imposed by court order; or (2) public or community service
29  or other work performed as a requirement for receipt of any kind
30  of public assistance in accordance with any program administered
31  by the secretary of social and rehabilitation services.
32    [(m)  ``Utilization review'' means the initial evaluation of appro-
33  priateness in terms of both the level and the quality of health care
34  and health services provided a patient, based on accepted standards
35  of the health care profession involved. Such evaluation is accom-
36  plished by means of a system which identifies the utilization of
37  health care services above the usual range of utilization for such
38  services, which is based on accepted standards of the health care
39  profession involved, and which refers instances of possible inappro-
40  priate utilization to the director for referral to a peer review com-
41  mittee.
42    [(n)  ``Peer review'' means an evaluation by a peer review com-
43  mittee of the appropriateness, quality and cost of health care and
HB 2011--Am. by SCW
                                     

 1  health services provided a patient, which is based on accepted stan-
 2  dards of the health care profession involved and which is conducted
 3  in conjunction with utilization review.
 4    [(o)  ``Peer review committee'' means a committee composed of
 5  health care providers licensed to practice the same health care pro-
 6  fession as the health care provider who rendered the health care
 7  services being reviewed.
 8    [(p)  ``Group-funded self-insurance plan'' includes each group-
 9  funded workers compensation pool, which is authorized to operate
10  in this state under K.S.A. 44-581 through 44-592 and amendments
11  thereto, each municipal group-funded pool under the Kansas mu-
12  nicipal group-funded pool act which is covering liabilities under
13  the workers compensation act, and any other similar group-funded
14  or pooled plan or arrangement that provides coverage for employer
15  liabilities under the workers compensation act and is authorized by
16  law.
17    [(q)  On and after the effective date of this act, ``workers com-
18  pensation board'' or ``board'' means the workers compensation
19  board established under K.S.A. 1996 Supp. 44-555c and amend-
20  ments thereto.
21    [Sec. 4.  K.S.A. 1996 Supp. 44-510 is hereby amended to read
22  as follows: 44-510. Except as otherwise provided therein, medical
23  compensation under the workers compensation act shall be as fol-
24  lows:
25    [(a)  It shall be the duty of the employer to provide the services
26  of a health care provider, and such medical, surgical and hospital
27  treatment, including nursing, medicines, medical and surgical sup-
28  plies, ambulance, crutches, and apparatus, and transportation to
29  and from the home of the injured employee to a place outside the
30  community in which such employee resides, and within such com-
31  munity if the director in the director's discretion so orders, includ-
32  ing transportation expenses computed in accordance with subsec-
33  tion (a) of K.S.A. 44-515 and amendments thereto, as may be
34  reasonably necessary to cure and relieve the employee from the
35  effects of the injury.
36    [(1)  The director shall appoint, subject to the approval of the
37  secretary, a specialist in health services delivery, who shall be re-
38  ferred to as the medical administrator. The medical administrator
39  shall be a person licensed to practice medicine and surgery in this
40  state and shall be in the unclassified service under the Kansas civil
41  service act. The medical administrator, subject to the direction of
42  the director, shall have the duty of overseeing the providing of
43  health care services to employees in accordance with the provisions
HB 2011--Am. by SCW
                                     

 1  of the workers compensation act, including but not limited to:
 2    [(A)  Preparing, with the assistance of the advisory panel, the fee
 3  schedule for health care services as set forth in this section;
 4    [(B)  developing, with the assistance of the advisory panel, the
 5  utilization review program for health care services as set forth in
 6  this section;
 7    [(C)  developing procedures for appeals and review of disputed
 8  charges or services rendered by health care providers under this
 9  section;
10    [(D)  developing a system for collecting and analyzing data on
11  expenditures for health care services by each type of provider under
12  the workers compensation act; and
13    [(E)  carrying out such other duties as may be delegated or di-
14  rected by the director or secretary.
15    [(2)  The director shall prepare and adopt rules and regulations,
16  which shall be in effect on or before July 1, 1993, and which establish
17  a schedule of maximum fees for medical, surgical, hospital, dental,
18  nursing, vocational rehabilitation or any other treatment or serv-
19  ices provided or ordered by health care providers and rendered to
20  employees under the workers compensation act. The schedule shall
21  include provisions and review procedures for exceptional cases in-
22  volving extraordinary medical procedures or circumstances and
23  shall include costs and charges for medical records and testimony.
24    [(3)  The schedule of maximum fees shall be reasonable, shall
25  promote health care cost containment and efficiency with respect
26  to the workers compensation health care delivery system, and shall
27  be sufficient to ensure availability of such reasonably necessary
28  treatment, care and attendance to each injured employee to cure
29  and relieve the employee from the effects of the injury.
30    [(4) (A)  In every case, all fees, transportation costs, charges un-
31  der this section and all costs and charges for medical records and
32  testimony shall be subject to approval by the director and shall be
33  limited to such as are fair, reasonable and necessary. The schedule
34  of maximum fees shall be reviewed annually revised as necessary at least
35  every two years by the director to assure that the schedule is current,
36  reasonable and fair.
37    [(B)  There is hereby created an advisory panel to assist the di-
38  rector in establishing a schedule of maximum fees as required by
39  this section. The panel shall consist of the commissioner of insur-
40  ance and seven members appointed as follows:  (i) One person shall
41  be appointed by the Kansas medical society, (ii) one member shall
42  be appointed by the Kansas association of osteopathic medicine, (iii)
43  one member shall be appointed by the Kansas hospital association,
HB 2011--Am. by SCW
                                     

 1  (iv) one member shall be appointed by the Kansas chiropractic as-
 2  sociation, and (v) three members appointed by the secretary. One
 3  member appointed by the secretary shall be a representative of em-
 4  ployers recommended to the secretary by the Kansas chamber of
 5  commerce and industry. One member appointed by the secretary
 6  shall be a representative of employees recommended to the secre-
 7  tary by the Kansas AFL-CIO. One member appointed by the sec-
 8  retary shall be a representative of entities providing vocational re-
 9  habilitation services pursuant to K.S.A. 44-510g and amendments
10  thereto. Each appointed member shall be appointed for a term of
11  office of two years which shall commence on July 1 of the year of
12  appointment.
13    [(C)  All fees and other charges paid for such treatment, care
14  and attendance, including treatment, care and attendance provided
15  by any health care provider, hospital or other entity providing
16  health care services, shall not exceed the amounts prescribed by the
17  schedule of maximum fees established under this section or the
18  amounts authorized pursuant to the provisions and review proce-
19  dures prescribed by the schedule for exceptional cases. A health
20  care provider, hospital or other entity providing health care serv-
21  ices shall be paid either such health care provider, hospital or other
22  entity's usual charge for the treatment, care and attendance or the
23  maximum fees as set forth in the schedule, whichever is less. In
24  reviewing and approving the schedule of maximum fees, the director
25  shall consider the following:
26    [(i)  The levels of fees for similar treatment, care and attendance
27  imposed by other health care programs or third-party payors in the
28  locality in which such treatment or services are rendered;
29    [(ii)  the impact upon cost to employers for providing a level of
30  fees for treatment, care and attendance which will ensure the avail-
31  ability of treatment, care and attendance required for injured em-
32  ployees;
33    [(iii)  the potential change in workers compensation insurance
34  premiums or costs attributable to the level of treatment, care and
35  attendance provided; and
36    [(iv)  the financial impact of the schedule of maximum fees upon
37  health care providers and health care facilities and its effect upon
38  their ability to make available to employees such reasonably nec-
39  essary treatment, care and attendance to each injured employee to
40  cure and relieve the employee from the effects of the injury.
41    [(D)  Members of the advisory panel attending meetings of the
42  advisory panel, or attending a subcommittee of the advisory panel
43  authorized by the advisory panel, shall be paid subsistence allow-
HB 2011--Am. by SCW
                                     

 1  ances, mileage and other expenses as provided in K.S.A. 75-3223
 2  and amendments thereto.
 3    [(5)  Any contract or any billing or charge which any health care
 4  provider, vocational rehabilitation service provider, hospital, per-
 5  son, or institution enters into with or makes to any patient for serv-
 6  ices rendered in connection with injuries covered by the workers
 7  compensation act or the fee schedule adopted under this section,
 8  which is or may be in excess of or not in accordance with such act
 9  or fee schedule, is unlawful, void and unenforceable as a debt.
10    [(6)  The director shall have jurisdiction to hear and determine
11  all disputes as to such charges and interest due thereon and shall
12  prescribe procedural rules to be followed by the parties to such
13  disputes. In the event of any controversy arising under this section,
14  payments shall not be delayed for any amounts not in dispute or
15  controversy. Acceptance by any provider of services of a payment
16  amount under this section which is less than the full amount charged
17  for the services, shall not affect the right to have a review of the
18  claim for the outstanding or remaining amounts. In the event of a
19  dispute as to such charges, the health care provider, hospital, insti-
20  tution, person or other provider under this section may appear and
21  be represented in the action under the workers compensation act.
22    [(7)  If the director finds, after utilization review and peer re-
23  view, that a provider or facility has made excessive charges or pro-
24  vided or ordered unjustified treatment, services, hospitalization or
25  visits, the provider or facility shall not receive payment pursuant
26  to this section from an insurance carrier, employer or employee for
27  the excessive fees or unjustified treatment, services, hospitalization
28  or visits and such provider or facility shall repay any fees or charges
29  collected therefor.
30    [(8)  Not later than December 31, 1993, the director shall de-
31  velop and implement, or contract with a qualified entity to develop
32  and implement, utilization review and peer review procedures re-
33  lating to the services rendered by providers and facilities, which
34  services are paid for in whole or in part pursuant to the workers
35  compensation act. The director may contract with one or more pri-
36  vate foundations or organizations to provide utilization review, as
37  appropriate, of entities providing health care services or vocational
38  rehabilitation services, or both, pursuant to the workers compen-
39  sation act.
40    [(9)  By accepting payment pursuant to this section for treat-
41  ment or services rendered to an injured employee, a health care
42  provider or health care facility shall be deemed to consent to sub-
43  mitting all necessary records to substantiate the nature and neces-
HB 2011--Am. by SCW
                                     

 1  sity of the service or charge and other information concerning such
 2  treatment to utilization review and peer review under this section.
 3  Such health care provider shall comply with any decision of the
 4  director pursuant to subsection (a)(10).
 5    [(10)  If it is determined by a peer review committee that a pro-
 6  vider improperly overutilized or otherwise rendered or ordered un-
 7  justified treatment or services or that the fees for such treatment or
 8  services were excessive, the director may order the provider to show
 9  cause why the provider should not be required to repay the amount
10  which was paid for rendering or ordering such treatment or services
11  and shall provide the provider a hearing thereon if requested. If a
12  hearing is not requested within 30 days of receipt of the order and
13  the director decides to proceed with the matter, a hearing shall be
14  conducted and if a prima facie case is established a final order shall
15  be issued by the director. If the final order is adverse to a health
16  care provider, the director shall provide a report to the licensing
17  board of the health care provider with full documentation of any
18  such determination, except that no such report shall be provided
19  until after judicial review if the order is appealed. Any order of the
20  director under this section shall be subject to review by the board.
21    [(11)  Except as provided by K.S.A. 60-437 and amendments
22  thereto or this section, all reports, information, statements, memo-
23  randa, proceedings, findings and records which relate to utilization
24  review or peer review conducted pursuant to this section, including
25  any records of peer review committees, shall be privileged and shall
26  not be subject to discovery, subpoena, or other means of legal com-
27  pulsion for release to any person or entity and shall not be admis-
28  sible in evidence in any judicial or administrative proceeding, ex-
29  cept those proceedings authorized pursuant to this section.
30    [(12)  A provider or facility may not improperly charge or over-
31  charge a workers compensation insurer or charge for services which
32  were not provided, for the purpose of obtaining additional payment.
33    [(13)  Any violation of the provisions of this section which is will-
34  ful or which demonstrates a pattern of improperly charging or over-
35  charging workers compensation insurers constitutes grounds for the
36  director to impose a civil fine not to exceed $5,000. Any civil fine
37  imposed under this section shall be subject to review in accordance
38  with the act for judicial review and civil enforcement of agency
39  actions in the district court for Shawnee county. All moneys re-
40  ceived for civil fines imposed under this section shall be deposited
41  in the state treasury to the credit of the workers compensation fund.
42    [(14)  As used in this subsection (a), unless the context or the
43  specific provisions require otherwise, ``provider'' means any health
HB 2011--Am. by SCW
                                     

 1  care provider or vocational rehabilitation service provider, and ``fa-
 2  cility'' means any facility providing health care services or voca-
 3  tional rehabilitation services, or both, including any hospital.
 4    [(b)  Any health care provider, nurse, physical therapist, any
 5  entity providing medical, physical or vocational rehabilitation serv-
 6  ices or providing reeducation or training pursuant to K.S.A. 44-
 7  510g and amendments thereto, medical supply establishment, sur-
 8  gical supply establishment, ambulance service or hospital who
 9  accept the terms of the workers compensation act by providing serv-
10  ices or material thereunder shall be bound by the fees approved by
11  the director and no injured employee or dependent of a deceased
12  employee shall be liable for any charges above the amounts ap-
13  proved by the director. If the employer has knowledge of the injury
14  and refuses or neglects to reasonably provide the services of a health
15  care provider required by this section, the employee may provide
16  the same for such employee, and the employer shall be liable for
17  such expenses subject to the regulations adopted by the director.
18  No action shall be filed in any court by a health care provider or
19  other provider of services under this section for the payment of an
20  amount for medical services or materials provided under the work-
21  ers compensation act and no other action to obtain or attempt to
22  obtain or collect such payment shall be taken by a health care pro-
23  vider or other provider of services under this section, including em-
24  ploying any collection service, until after final adjudication of any
25  claim for compensation for which an application for hearing is filed
26  with the director under K.S.A. 44-534 and amendments thereto. In
27  the case of any such action filed in a court prior to the date an
28  application is filed under K.S.A. 44-534 and amendments thereto,
29  no judgment may be entered in any such cause and the action shall
30  be stayed until after the final adjudication of the claim. In the case
31  of an action stayed hereunder, any award of compensation shall
32  require any amounts payable for medical services or materials to
33  be paid directly to the provider thereof plus an amount of interest
34  at the rate provided by statute for judgments. No period of time
35  under any statute of limitation, which applies to a cause of action
36  barred under this subsection, shall commence or continue to run
37  until final adjudication of the claim under the workers compensa-
38  tion act.
39    [(c) (1)  If the director finds, upon application of an injured em-
40  ployee, that the services of the health care provider furnished as
41  provided in subsection (a) and rendered on behalf of the injured
42  employee are not satisfactory, the director may authorize the ap-
43  pointment of some other health care provider. In any such case, the
HB 2011--Am. by SCW
                                     

 1  employer shall submit the names of three health care providers that
 2  are not associated in practice together. The injured employee may
 3  select one from the list who shall be the authorized treating health
 4  care provider. If the injured employee is unable to obtain satisfac-
 5  tory services from any of the health care providers submitted by
 6  the employer under this subsection (c)(1), either party or both par-
 7  ties may request the director to select a treating health care pro-
 8  vider.
 9    [(2)  Without application or approval, an employee may consult
10  a health care provider of the employee's choice for the purpose of
11  examination, diagnosis or treatment, but the employer shall only be
12  liable for the fees and charges of such health care provider up to a
13  total amount of $500. The amount allowed for such examination,
14  diagnosis or treatment shall not be used to obtain a functional im-
15  pairment rating. Any medical opinion obtained in violation of this
16  prohibition shall not be admissible in any claim proceedings under
17  the workers compensation act.
18    [(d)  An injured employee whose injury or disability has been
19  established under the workers compensation act may rely, if done
20  in good faith, solely or partially on treatment by prayer or spiritual
21  means in accordance with the tenets of practice of a church or re-
22  ligious denomination without suffering a loss of benefits subject to
23  the following conditions:
24    [(1)  The employer or the employer's insurance carrier agrees
25  thereto in writing either before or after the injury;
26    [(2)  the employee submits to all physical examinations required
27  by the workers compensation act;
28    [(3)  the cost of such treatment shall be paid by the employee
29  unless the employer or insurance carrier agrees to make such pay-
30  ment;
31    [(4)  the injured employee shall be entitled only to benefits that
32  would reasonably have been expected had such employee under-
33  gone medical or surgical treatment; and
34    [(5)  the employer or insurance carrier that made an agreement
35  under paragraph (1) or (3) of this subsection may withdraw from
36  the agreement on 10 days' written notice.
37    [(e)  In any employment to which the workers compensation act
38  applies, the employer shall be liable to each employee who is em-
39  ployed as a duly authorized law enforcement officer, ambulance
40  attendant, mobile intensive care technician or firefighter, including
41  any person who is serving on a volunteer basis in such capacity, for
42  all reasonable and necessary preventive medical care and treatment
43  for hepatitis to which such employee is exposed under circum-
HB 2011--Am. by SCW
                                     

 1  stances arising out of and in the course of employment.
 2    [(f)  No person shall be subject to civil liability for libel, slander
 3  or any other relevant tort cause of action by virtue of performing
 4  utilization review or peer review under contract with the director
 5  pursuant to subsection (a)(7).
 6    [Sec. 5.  K.S.A. 44-510b is hereby amended to read as follows:
 7  44-510b. Where death results from injury, compensation shall be
 8  paid as provided in K.S.A. 44-510 and amendments thereto, and as
 9  follows:
10    [(a)  If an employee leaves any dependents wholly dependent
11  upon the employee's earnings at the time of the accident, all com-
12  pensation benefits under this section shall be paid to such depend-
13  ent persons. Such dependents shall be paid weekly compensation,
14  except as otherwise provided in this section, in a total sum to all
15  such dependents, equal to 66 2/3% of the average gross weekly wage
16  of the employee at the time of the accident, computed as provided
17  in K.S.A. 44-511 and amendments thereto, but in no event shall such
18  weekly benefits exceed, nor be less than, the maximum and mini-
19  mum weekly benefits provided in K.S.A. 44-510c and amendments
20  thereto, subject to the following:
21    [(1)  If the employee leaves a surviving legal spouse or a wholly
22  dependent child or children, or both, who are eligible for benefits
23  under this section, then all death benefits shall be paid to such sur-
24  viving spouse or children, or both, and no benefits shall be paid to
25  any other wholly or partially dependent persons.
26    [(2)  A surviving legal spouse shall be paid compensation bene-
27  fits for life or until remarriage, except as otherwise provided in this
28  section.
29    [(3)  Any wholly dependent child of the employee shall be paid
30  compensation, except as otherwise provided in this section, until
31  such dependent child becomes 18 years of age, except that any such
32  dependent child who is not physically or mentally capable of earn-
33  ing wages in any type of substantial and gainful employment, or
34  who is enrolled as a full-time student in an accredited institution of
35  higher education or vocational education shall be paid compensa-
36  tion until such dependent child becomes 23 years of age.
37    [(4)  If the employee leaves no legal spouse or dependent chil-
38  dren eligible for benefits under this section but leaves other de-
39  pendents wholly dependent upon the employee's earnings, such
40  other dependents shall receive weekly compensation benefits as pro-
41  vided in this subsection until death, remarriage or so long as such
42  other dependents do not receive more than 50% of their support
43  from any other earnings or income or from any other source, except
HB 2011--Am. by SCW
                                     

 1  that the maximum benefits payable to all such other dependents,
 2  regardless of the number of such other dependents, shall not exceed
 3  a maximum amount of $18,500.
 4    [(b)  Upon the remarriage of a surviving legal spouse receiving
 5  compensation under this section, the benefits being paid to such
 6  spouse shall terminate, except that upon such remarriage 100 weeks
 7  of benefits at the highest rate paid to such spouse under this section
 8  shall be paid to such spouse in one lump sum, except that such lump-
 9  sum payment shall be subject to the maximum amount of compen-
10  sation payable under this section as prescribed by subsection (h).
11    [(c)  Where the employee leaves a surviving legal spouse and
12  dependent children who were wholly dependent upon the employ-
13  ee's earnings and are eligible for benefits under this section 1/2 of
14  the maximum weekly benefits payable shall be apportioned to such
15  spouse and 1/2 to such dependent children.
16    [(d)  If an employee does not leave any dependents who were
17  wholly dependent upon the employee's earnings at the time of the
18  accident but leaves dependents, other than a spouse or children, in
19  part dependent on the employee's earnings, such percentage of a
20  sum equal to three times the employee's average yearly earnings
21  but not exceeding $18,500 but not less than $2,500, as such em-
22  ployee's average annual contributions which the employee made to
23  the support of such dependents during the two years preceding the
24  date of the accident, bears to the employee's average yearly earn-
25  ings during the contemporaneous two-year period, shall be paid in
26  compensation to such dependents, in weekly payments as provided
27  in subsection (a), not to exceed $18,500 to all such dependents.
28    [(e)  The administrative law judge, except as otherwise provided
29  in this section, shall have the power and authority to apportion and
30  reapportion the compensation allowed under this section, either to
31  wholly dependent persons or partially dependent persons, in accor-
32  dance with the degree of dependency as of the date of the accident,
33  except that the weekly payment of compensation to any and all de-
34  pendents shall not exceed the maximum weekly benefits provided in
35  subsection (a).
36    [(f)  In all cases of death compensable under this section, the
37  employer shall pay the reasonable expense of burial not exceeding
38  $3,300 $4,300.
39    [(g)  The marriage or death of any dependent shall terminate all
40  compensation, under this section, to such dependent, but shall not
41  increase or decrease the compensation allowed to any other de-
42  pendents except that, upon the marriage or death of the surviving
43  legal spouse or a dependent child, the compensation payable to such
HB 2011--Am. by SCW
                                     

 1  spouse or child shall be reapportioned to those, among the surviving
 2  legal spouse and dependent children, who remain eligible to receive
 3  compensation under this section.
 4    [(h)  Notwithstanding any other provision in this section to the
 5  contrary, the maximum amount of compensation benefits payable
 6  under this section to any and all dependents by the employer shall
 7  not exceed a total amount of $200,000 and when such total amount
 8  has been paid the liability of the employer for any further compen-
 9  sation under this section to dependents, other than minor children
10  of the employee, shall cease except that the payment of compensa-
11  tion under this section to any minor child of the employee shall
12  continue for the period of the child's minority at the weekly rate in
13  effect when the employer's liability is otherwise terminated under
14  this subsection and shall not be subject to termination under this
15  subsection until such child becomes 18 years of age.
16    [(i)  A surviving spouse shall submit an annual statement to the
17  employer and to the director, in such form and containing such
18  information relating to eligibility for compensation under this sec-
19  tion as may be required by rules and regulations of the director. If
20  such spouse fails to submit such an annual statement, the employer
21  may notify the director of such failure and the director shall notify
22  such spouse of such failure by certified mail with return receipt. If
23  such spouse fails to submit the annual statement or fails to reason-
24  ably provide the required information within 30 days after receipt
25  of the notice from the director, all compensation benefits paid under
26  this section to such spouse shall be suspended until such statement
27  is submitted in proper form to the employer and the director.
28    [Sec. 6.  K.S.A. 44-523 is hereby amended to read as follows: 44-
29  523. (a) The director, administrative law judge or board shall not
30  be bound by technical rules of procedure, but shall give the parties
31  reasonable opportunity to be heard and to present evidence, insure
32  the employee and the employer an expeditious hearing and act rea-
33  sonably without partiality.
34    [(b)  Whenever a party files an application for hearing pursuant
35  to K.S.A. 44-534 and amendments thereto, the matter shall be as-
36  signed to an administrative law judge for hearing and the admin-
37  istrative law judge shall set a terminal date to require the claimant
38  to submit all evidence in support of the claimant's claim no later
39  than 30 days after the first full hearing before the administrative
40  law judge and to require the respondent to submit all evidence in
41  support of the respondent's position no later than 30 days thereaf-
42  ter. An extension of the foregoing time limits shall be granted if all parties
43  agree. An extension of the foregoing time limits may also be granted:
HB 2011--Am. by SCW
                                     

 1    [(1)  If all parties agree;
 2    [(2) (1)  If the employee is being paid temporary or permanent
 3  total disability compensation;
 4    [(3) (2)  for medical examination of the claimant if the party re-
 5  questing the extension explains in writing to the administrative law
 6  judge facts showing that the party made a diligent effort but was
 7  unable to have a medical examination conducted prior to the sub-
 8  mission of the case by the claimant but then only if the examination
 9  appointment was set and notice of the appointment sent prior to
10  submission by the claimant; or
11    [(4) (3)  on application for good cause shown.
12    [(c)  When all parties have submitted the case to an administra-
13  tive law judge for an award, the administrative law judge shall issue
14  an award within 30 days. The administrative law judge shall not stay
15  a decision due to the absence of a submission letter. When the award is
16  not entered in 30 days, any party to the action may notify the di-
17  rector that an award is not entered and the director shall assign the
18  matter to an assistant director or to a special administrative law
19  judge who shall enter an award forthwith based on the evidence in
20  the record, or the director, on the director's own motion, may re-
21  move the case from the administrative law judge who has not en-
22  tered an award within 30 days following submission by the party
23  and assign it to an assistant director or to a special administrative
24  law judge for immediate decision based on the evidence in the rec-
25  ord.
26    [(d)  Not less than 10 days prior to the first full hearing before
27  an administrative law judge, the administrative law judge shall con-
28  duct a prehearing settlement conference for the purpose of obtain-
29  ing stipulations from the parties, determining the issues and ex-
30  ploring the possibility that the parties may resolve those issues and
31  reach a settlement prior to the first full hearing.]
32    Sec. 2. [7.]  K.S.A. 1996 Supp. 44-532 is hereby amended to
33  read as follows: 44-532. (a) Where the payment of compensation of
34  the employee or the employee's dependents is insured by a policy
35  or policies, at the expense of the employer, or the employer is a
36  member of a qualified group-funded workers compensation pool,
37  the insurer or the qualified group-funded workers compensation
38  pool shall be subrogated to the rights and duties under the workers
39  compensation act of the employer so far as appropriate, including
40  the immunities provided by K.S.A. 44-501 and amendments thereto.
41    (b)  Every employer shall secure the payment of compensation
42  to the employer's employees by insuring in one of the following
43  ways: (1) By insuring and keeping insured the payment of such com-
HB 2011--Am. by SCW
                                     

 1  pensation with an insurance carrier authorized to transact the busi-
 2  ness of workers compensation insurance in the state of Kansas; (2)
 3  by showing to the director that the employer carries such employ-
 4  er's own risk and is what is known as a self-insurer and by furnish-
 5  ing proof to the director of the employer's financial ability to pay
 6  such compensation for the employer's self; (3) by maintaining a
 7  membership in a qualified group-funded workers compensation
 8  pool. The cost of carrying such insurance or risk shall be paid by
 9  the employer and not the employee.
10    (c)  The knowing and intentional failure of an employer to se-
11  cure the payment of workers compensation to the employer's em-
12  ployees as required in subsection (b) of this section is a class A
13  misdemeanor.
14    (d)  In addition, whenever the director has reason to believe that
15  any employer has engaged or is engaging in the knowing and inten-
16  tional failure to secure the payment of workers compensation to the
17  employer's employees as required in subsection (b) of this section,
18  the director shall issue and serve upon such employer a statement
19  of the charges with respect thereto and shall conduct a hearing in
20  accordance with the Kansas administrative procedure act, wherein
21  the employer may be liable to the state for a civil penalty in an
22  amount equal to twice the annual premium the employer would
23  have paid had such employer been insured or $25,000, whichever
24  amount is greater.
25    (e)  Any civil penalty imposed or final action taken under this
26  section shall be subject to review in accordance with the act for
27  judicial review of agency actions in the district court of Shawnee
28  county.
29    (f)  All moneys received under this section for costs assessed or
30  monetary penalties imposed shall be deposited in the state treasury
31  and credited to the workers compensation fund.
32    (g) (1)  Every insurance carrier writing workers' compensation
33  insurance for any employment covered under the workers compen-
34  sation act shall file, with the director or the director's designee, writ-
35  ten notice of the issuance, nonrenewal or cancellation of a policy
36  or contract of insurance, or any endorsement, providing workers
37  compensation coverage, within 10 days after such issuance, non-
38  renewal or cancellation. Every such insurance carrier shall file,
39  with the director, written notice of all such policies, contracts and
40  endorsements in force on the effective date of this act.
41    (2)  Every employer covered by the workers compensation act
42  who is a qualified self-insurer shall give written notice to the direc-
43  tor or the director's designee, if such employer changes from a self-
HB 2011--Am. by SCW
                                     

 1  insurer status to insuring through an insurance carrier or by main-
 2  taining a membership in a qualified group-funded workers
 3  compensation pool, such notice to be given within 10 days after the
 4  effective date of such change. Every self-insurer shall file with the
 5  director annually a report verifying the employer's continuing abil-
 6  ity to pay compensation to the employer's employees.
 7    (3)  Every employer covered by the workers compensation act
 8  who is a member of a qualified group-funded workers compensation
 9  pool shall give written notice to the director or the director's designee,
10  if such employer changes from a group-funded workers compensa-
11  tion pool to insuring through an insurance carrier or becoming a
12  self-insurer, such notice to be given within 10 days after the effec-
13  tive date of such change.
14    (4)  The mailing of any written notice or report required by this
15  subsection (d) in a stamped envelope within the prescribed time
16  shall comply with the requirements of this subsection.
17    (5)  The director shall provide by regulation for the forms of
18  written notices and reports required by this subsection (d).
19    (h)  As used in this section, ``qualified group-funded workers
20  compensation pool'' means any qualified group-funded workers
21  compensation pool under K.S.A. 44-581 through 44-591 and amend-
22  ments thereto or any group-funded pool under the Kansas municipal
23  group-funded pool act which includes workers compensation and
24  employers' liability under the workers compensation act.
25    (i)  A private firm shall not be eligible to apply to become a self-
26  insurer unless it has been in continuous operation for at least five
27  years or is purchasing an existing self-insured Kansas firm, plant or
28  facility and the operation of the purchased firm, plant or facility:
29    (1) Has been in continuous operation in Kansas for at least 10 years;
30    (2) has generated an after-tax profit of at least $1,000,000 annually
31  for the preceding three consecutive years; and (3) has a ratio of
32  debt to equity of not greater than 3.5 to 1. As used in this subsection,
33  ``debt'' means the sum of long-term borrowing maturing in excess
34  of one year plus the current portion of long-term borrowing plus
35  short-term financial institution borrowing plus commercial paper
36  borrowing, and ``equity'' means the sum of the book value of stock
37  plus paid-in capital plus retained earnings. [The method for cal-
38  culating the amount of security required of self-insureds shall be
39  reviewed by an actuary every five years, beginning in fiscal year
40  1997. The costs for these actuarial studies shall be paid from the
41  workers compensation fee fund.
42    [(j)  A corporation or other entity whose current identity is at-
43  tributable to a merger or other transformation whereby the whole
HB 2011--Am. by SCW
                                     

 1  or a substantial part of a previous entity's assets and income have
 2  been transferred to it, and its liabilities have not increased beyond
 3  the financial review requirements of the director, which qualified
 4  under its previous identity as a self-insurer under other provisions
 5  of this statute, and amendments thereto, may apply for renewal as
 6  a self-insurer under its new name. The director may grant the ap-
 7  plication for renewal if satisfied that the new entity meets all nec-
 8  essary financial criteria for renewal that would have been applied
 9  to the previous self-insured entity. An application under these pro-
10  visions shall be limited to an entity seeking renewal based upon the
11  prior self-insured status of another entity or entities.]
12    [Sec. 8.  K.S.A. 44-534 is hereby amended to read as follows: 44-
13  534. (a) Whenever the employer, worker, Kansas workers compensa-
14  tion fund or insurance carrier cannot agree upon the worker's right
15  to compensation under the workers compensation act or upon any
16  issue in regard to workers compensation benefits due the injured
17  worker thereunder, the employer, worker or insurance carrier may
18  apply in writing to the director for a determination of the benefits
19  or compensation due or claimed to be due. The application shall be
20  in the form prescribed by the rules and regulations of the director
21  and shall set forth the substantial and material facts in relation to
22  the claim. Whenever an application is filed under this section, the
23  matter shall be assigned to an administrative law judge. The direc-
24  tor shall forthwith mail a certified copy of the application to the
25  adverse party. The administrative law judge shall proceed, upon
26  due and reasonable notice to the parties, which shall not be less
27  than 20 days, to hear all evidence in relation thereto and to make
28  findings concerning the amount of compensation, if any due to the
29  worker.
30    [(b)  No proceeding for compensation shall be maintained under
31  the workers compensation act unless an application for a hearing
32  is on file in the office of the director within three years of the date
33  of the accident or within two years of the date of the last payment
34  of compensation, whichever is later.
35    [Sec. 9.  K.S.A. 1996 Supp. 44-534a is hereby amended to read
36  as follows: 44-534a. (a) (1) After an application for a hearing has
37  been filed pursuant to K.S.A. 44-534 and amendments thereto, the
38  employee or the employer may make application for a preliminary
39  hearing, in such form as the director may require, on the issues of
40  the furnishing of medical treatment and the payment of temporary
41  total disability compensation. At least seven days prior to filing an
42  application for a preliminary hearing, the applicant shall give writ-
43  ten notice to the adverse party of the intent to file such an appli-
HB 2011--Am. by SCW
                                     

 1  cation. Such notice of intent shall contain a specific statement of
 2  the benefit change being sought that is to be the subject of the re-
 3  quested preliminary hearing. If the parties do not agree to the
 4  change of benefits within the seven-day period, the party seeking a
 5  change in benefits may file an application for preliminary hearing
 6  which shall be accompanied by a copy of the notice of intent and
 7  the applicant's certification that the notice of intent was served on
 8  the adverse party or that party's attorney and that the request for
 9  a benefit change has either been denied or was not answered within
10  seven days after service. Copies of medical reports or other evidence
11  which the party intends to produce as exhibits supporting the
12  change of benefits shall be included with the application. The di-
13  rector shall assign the application to an administrative law judge
14  who shall set the matter for a preliminary hearing and shall give at
15  least seven days' written notice by mail to the parties of the date
16  set for such hearing.
17    [(2)  Such preliminary hearing shall be summary in nature and
18  shall be held by an administrative law judge in any county desig-
19  nated by the administrative law judge, and the administrative law
20  judge shall exercise such powers as are provided for the conduct of
21  full hearings on claims under the workers compensation act. Upon
22  a preliminary finding that the injury to the employee is compen-
23  sable and in accordance with the facts presented at such prelimi-
24  nary hearing, the administrative law judge may make a preliminary
25  award of medical compensation and temporary total disability com-
26  pensation to be in effect pending the conclusion of a full hearing on
27  the claim, except that if the employee's entitlement to medical com-
28  pensation or temporary total disability compensation is disputed or
29  there is a dispute as to the compensability of the claim, no prelim-
30  inary award of benefits shall be entered without giving the em-
31  ployer the opportunity to present evidence, including testimony, on
32  the disputed issues. A finding with regard to a disputed issue of
33  whether the employee suffered an accidental injury, whether the
34  injury arose out of and in the course of the employee's employment,
35  whether notice is given or claim timely made, or whether certain
36  defenses apply, shall be considered jurisdictional, and subject to
37  review by the board. Such review by the board shall not be subject
38  to judicial review. If an appeal from a preliminary order is per-
39  fected under this section, such appeal shall not stay the payment of
40  medical compensation and temporary total disability compensation
41  from the date of the preliminary award. If temporary total compen-
42  sation is awarded, such compensation may be ordered paid from the
43  date of filing the application, except that if the administrative law
HB 2011--Am. by SCW
                                     

 1  judge finds from the evidence presented that there were one or more
 2  periods of temporary total disability prior to such filing date, tem-
 3  porary total compensation may be ordered paid for all periods of
 4  temporary total disability prior to such date of filing. The decision
 5  in such preliminary hearing shall be rendered within five days of
 6  the conclusion of such hearing. Except as provided in this section,
 7  no such preliminary findings or preliminary awards shall be ap-
 8  pealable by any party to the proceedings, and the same shall not be
 9  binding in a full hearing on the claim, but shall be subject to a full
10  presentation of the facts.
11    [(b)  If compensation in the form of medical benefits or tempo-
12  rary total disability benefits has been paid by the employer or the
13  employer's insurance carrier either voluntarily or pursuant to an
14  award entered under this section and, upon a full hearing on the
15  claim, the amount of compensation to which the employee is entitled
16  is found to be less than the amount of compensation paid or is totally
17  disallowed, the employer and the employer's insurance carrier shall
18  be reimbursed from the workers compensation fund established in
19  K.S.A. 44-566a and amendments thereto, for all amounts of com-
20  pensation so paid which are in excess of the amount of compensation
21  the employee is entitled to less any amount deducted from addi-
22  tional disability benefits due the employee pursuant to subsection
23    (c) of K.S.A. 44-525, and amendments thereto, as determined in the
24  full hearing on the claim. The director shall determine the amount
25  of compensation paid by the employer or insurance carrier which
26  is to be reimbursed under this subsection, and the director shall
27  certify to the commissioner of insurance the amount so determined.
28  Upon receipt of such certification, the commissioner of insurance
29  shall cause payment to be made to the employer or the employer's
30  insurance carrier in accordance therewith. No reimbursement shall
31  be certified unless the request is made by the employer or employer's
32  insurance carrier within one year of the final award.
33    [Sec. 10.  K.S.A. 44-536 is hereby amended to read as follows:
34  44-536. (a) With respect to any and all proceedings in connection
35  with any initial or original claim for compensation, no claim of any
36  attorney for services rendered in connection with the securing of
37  compensation for an employee or the employee's dependents,
38  whether secured by agreement, order, award or a judgment in any
39  court shall exceed (1) a reasonable amount for such services or (2)
40  the amount equal to the total of 25% of that portion of total compensation
41  recovered and paid which is less than $10,001, 20% of that portion of
42  total compensation recovered and paid which is greater than $10,000 and
43  less than $20,001, and 15% of that portion of the total amount of the
HB 2011--Am. by SCW
                                     

 1  compensation recovered and paid which is in excess of $20,000 25% of
 2  the amount of compensation recovered and paid, whichever is less, in
 3  addition to actual expenses incurred, and subject to the other pro-
 4  visions of this section. Except as hereinafter provided in this section,
 5  in death cases, total disability and partial disability cases, the
 6  amount of attorney fees shall not be based upon compensation exceed
 7  25% of the sum which would be due under the workers compensation
 8  act beyond 415 weeks of permanent total disability based upon the
 9  employee's average gross weekly wage prior to the date of the ac-
10  cident and subject to the maximum weekly benefits provided in
11  K.S.A. 44-510c and amendments thereto.
12    [(b)  All attorney fees in connection with the initial or original
13  claim for compensation shall be fixed pursuant to a written contract
14  between the attorney and the employee or the employee's depend-
15  ents, which shall be subject to approval by the director in accor-
16  dance with this section. Every attorney, whether the disposition of
17  the original claim is by agreement, settlement, award, judgment or
18  otherwise, shall file the attorney contract with the director for re-
19  view in accordance with this section. The director shall review each
20  such contract and the fees claimed thereunder as provided in this
21  section and shall approve such contract and fees only if both are in
22  accordance with all provisions of this section. Any claims for attor-
23  ney fees not in excess of the limits provided in this section and ap-
24  proved by the director shall be enforceable as a lien on the com-
25  pensation due or to become due. The director shall specifically and
26  individually review each claim of an attorney for services rendered
27  under the workers compensation act in each case of a settlement
28  agreement under K.S.A. 44-521 and amendments thereto or a lump-
29  sum payment under K.S.A. 44-531 and amendments thereto as to
30  the reasonableness thereof. In reviewing the reasonableness of such
31  claims for attorney fees, the director shall consider the other pro-
32  visions of this section and the following:
33    [(1)  The written offers of settlement made prior to representation
34  received by the employee prior to execution of a written contract between
35  the employee and the attorney; the employer shall attach to the settlement
36  worksheet copies of any written offers of settlement which were sent to
37  the employee before the employer was aware that the employee had hired
38  an attorney;
39    [(2)  the time and labor required, the novelty and difficulty of
40  the questions involved and the skill requisite to perform the legal
41  services properly;
42    [(3)  the likelihood, if apparent to the employee or the employ-
43  ee's dependents, that the acceptance of the particular case will pre-
HB 2011--Am. by SCW
                                     

 1  clude other employment by the attorney;
 2    [(4)  the fee customarily charged in the locality for similar legal
 3  services;
 4    [(5)  the amount of compensation involved and the results ob-
 5  tained;
 6    [(6)  the time limitations imposed by the employee, by the em-
 7  ployee's dependents or by the circumstances;
 8    [(7)  the nature and length of the professional relationship with
 9  the employee or the employee's dependents; and
10    [(8)  the experience, reputation and ability of the attorney or
11  attorneys performing the services.
12    [(c)  No attorney fees shall be charged with respect to compen-
13  sation for medical expenses, except where an allowance is made for
14  proposed or future treatment as a part of a compromise settlement.
15  No attorney fees shall be charged with respect to vocational reha-
16  bilitation benefits.
17    [(d)  No attorney fees shall be charged in connection with any
18  temporary total disability compensation unless the payment of such
19  compensation in the proper amount is refused, or unless such com-
20  pensation is terminated by the employer and the payment of such
21  compensation is obtained or reinstated by the efforts of the attor-
22  ney, whether by agreement, settlement, award or judgment.
23    [(e)  With regard to any claim where there is no dispute as to
24  any of the material issues prior to representation of the claimant or
25  claimants by an attorney, or where the amount to be paid for com-
26  pensation does not exceed the written offer made to the claimant or
27  claimants by the employer prior to representation by execution of a
28  written contract between the employee and an attorney, the fees to any
29  such attorney shall not exceed either the sum of $250 or a reason-
30  able fee for the time actually spent by the attorney, as determined
31  by the director, whichever is greater, exclusive of reasonable attor-
32  ney fees for any representation by such attorney in reference to any
33  necessary probate proceedings. With regard to any claim where the
34  amount to be paid for compensation does exceed the written offer
35  made prior to representation, fees for services rendered by an at-
36  torney shall not exceed the lesser of (1) a reasonable amount for
37  such services or; (2) the an amount equal to the total of 25% 50% of
38  that portion of the amount of compensation recovered and paid,
39  which is in excess of the amount of compensation offered to the
40  employee by the employer prior to the execution of a written contract
41  between the employee and the attorney; or attorney's entry of appearance
42  in the claim and which is less than $10,001, 20% of that portion of the
43  amount of compensation recovered and paid, which is in excess of the
HB 2011--Am. by SCW
                                     

 1  amount of compensation offered to the employee prior to the attorney's
 2  entry of appearance in the claim and which is more than $10,000 and less
 3  than $20,001 and 15% of that portion of the amount of compensation
 4  recovered and paid, which is in excess of the amount of compensation
 5  offered to the employee prior to the attorney's entry of appearance in the
 6  claim and which is in excess of $20,000, as specified in subsection (a). (3)
 7  25% of the total amount of compensation recovered and paid as described
 8  in subsection (a).
 9    [(f)  All attorney fees for representation of an employee or the
10  employee's dependents shall be only recoverable from compensa-
11  tion actually paid to such employee or dependents, except as spe-
12  cifically provided otherwise in subsection (g) and (h).
13    [(g)  In the event any attorney renders services to an employee
14  or the employee's dependents, subsequent to the ultimate disposi-
15  tion of the initial and original claim, and in connection with an
16  application for review and modification, a hearing for additional
17  medical benefits, an application for penalties or otherwise, such at-
18  torney shall be entitled to reasonable attorney fees for such services,
19  in addition to attorney fees received or which the attorney is enti-
20  tled to receive by contract in connection with the original claim,
21  and such attorney fees shall be awarded by the director on the basis
22  of the reasonable and customary charges in the locality for such
23  services and not on a contingent fee basis. If the services rendered
24  under this subsection by an attorney result in an additional award
25  of disability compensation, the attorney fees shall be paid from such
26  amounts of disability compensation. If such services involve no ad-
27  ditional award of disability compensation, but result in an additional
28  award of medical compensation, penalties, or other benefits, the director
29  shall fix the proper amount of such attorney's attorney fees in accor-
30  dance with this subsection and such fees shall be paid by the em-
31  ployer or the workers compensation fund, if the fund is liable for
32  compensation pursuant to K.S.A. 44-567 and amendments thereto,
33  to the extent of the liability of the fund. If the services rendered herein
34  result in a denial of additional compensation, the director may authorize
35  a fee to be paid by the respondent.
36    [(h)  Any and all disputes regarding attorney fees, whether such
37  disputes relate to which of one or more attorneys represents the
38  claimant or claimants or is entitled to the attorney fees, or a division
39  of attorney fees where the claimant or claimants are or have been
40  represented by more than one attorney, or any other disputes con-
41  cerning attorney fees or contracts for attorney fees, shall be heard
42  and determined by the administrative law judge, after reasonable
43  notice to all interested parties and attorneys.
HB 2011--Am. by SCW
                                     

 1    [(i)  After reasonable notice and hearing before the administra-
 2  tive law judge, any attorney found to be in violation of any provi-
 3  sion of this section shall be required to make restitution of any ex-
 4  cess fees charged.
 5    [Sec. 11.  K.S.A. 44-550b is hereby amended to read as follows:
 6  44-550b. (a) All records provided to be maintained under K.S.A. 44-
 7  550 and amendments thereto and not withstanding the provisions of
 8  K.S.A. 45-215, et seq., and amendments thereto, shall be open to public
 9  inspection, except that:
10    [(1)  Records relating to financial information submitted by an
11  employer to qualify as a self-insurer pursuant to K.S.A 44-532 and
12  amendments thereto and;
13    [(2)  records which relate to utilization review or peer review
14  conducted pursuant to K.S.A. 44-510 and amendments thereto shall
15  not be disclosed except to the health care provider and as otherwise
16  specifically provided by the workers compensation act.;
17    [(3)  records relating to private premises safety inspections;
18    [(4)  medical records, forms collected pursuant to K.S.A. 44-567(b)
19  and amendments thereto and accident reports maintained under K.S.A.
20  44-550 and amendments thereto pertaining to an individual shall not be
21  disclosed except:
22    [(A)  Upon order of a court of competent jurisdiction;
23    [(B)  to the employer, its insurance carrier or its representative, from
24  whom a worker seeks workers compensation benefits;
25    [(C)  to the division of workers compensation for its own records for
26  its purposes;
27    [(D)  to federal or state governmental agencies for purposes of fraud
28  and abuse investigations;
29    [(E)  to an employer in connection with any application for employ-
30  ment to an employer, its insurance carrier or representatives providing
31    (i) a conditional offer of employment has been made and (ii) the request
32  for records includes a signed release by the individual, identifies the job
33  conditionally offered by the employer and is submitted in writing, either
34  by mail or electronic means. Requests relating to an individual under this
35  subsection shall be considered a record to be maintained and open to
36  public inspection under K.S.A. 44-550 and amendments thereto;
37    [(F)  to the workers compensation fund for its own purposes; and
38    [(G)  to the worker upon written release by the worker.
39    [(b)  This section shall be part of and supplemental to the work-
40  ers compensation act.
41    [Sec. 12.  K.S.A. 1996 Supp. 44-551 is hereby amended to read
42  as follows: 44-551. (a) The duties of the assistant directors of work-
43  ers compensation shall include but not be limited to acting in the
HB 2011--Am. by SCW
                                     

 1  capacity of an administrative law judge.
 2    [(b) (1)  Administrative law judges shall have power to admin-
 3  ister oaths, certify official acts, take depositions, issue subpoenas,
 4  compel the attendance of witnesses and the production of books,
 5  accounts, papers, documents and records to the same extent as is
 6  conferred on the district courts of this state, and may conduct an
 7  investigation, inquiry or hearing on all matters before the admin-
 8  istrative law judges. All acts, findings final orders, awards, decisions,
 9  rulings or modifications of findings or awards, or preliminary awards
10  under K.S.A. 44-534a and amendments thereto made by an administra-
11  tive law judge shall be subject to review by the board upon written
12  request of any interested party within 10 days. Intermediate Satur-
13  days, Sundays and legal holidays shall be excluded in the time computa-
14  tion. Review by the board shall be a prerequisite to judicial review
15  as provided for in K.S.A. 44-556 and amendments thereto. On any
16  such review, the board shall have authority to grant or refuse com-
17  pensation, or to increase or diminish any award of compensation or
18  to remand any matter to the administrative law judge for further
19  proceedings. The orders of the board under this subsection shall be issued
20  within 30 days from the date arguments were presented by the parties.
21    [(2) (A)  If an administrative law judge has entered a prelimi-
22  nary award under K.S.A. 44-534a and amendments thereto, a re-
23  view by the board shall not be conducted under this section unless
24  it is alleged that the administrative law judge exceeded the admin-
25  istrative law judge's jurisdiction in granting or denying the relief
26  requested at the preliminary hearing. Such an appeal from a pre-
27  liminary award may be heard and decided by a single member of
28  the board. Members of the board shall hear such preliminary ap-
29  peals on a rotating basis and the individual board member who
30  decides the appeal shall sign each such decision. The orders of the
31  board on any acts, findings, awards, decisions, rulings or modifications
32  of findings or awards under this subsection shall be issued within 30
33  days from the date arguments were presented by the parties.
34    [(B)  If an order on review is not issued by the board within the
35  applicable time period prescribed by subsection (b)(2)(A) (1), med-
36  ical compensation and any disability compensation as provided in
37  the award of the administrative law judge shall be paid commencing
38  with the first day after such time period and shall continue to be
39  paid until the order of the board is issued, except that no payments
40  shall be made under this provision for any period before the first
41  day after such time period. Nothing in this section shall be con-
42  strued to limit or restrict any other remedies available to any party
43  to a claim under any other statute.
HB 2011--Am. by SCW
                                     

 1    [(C)  In any case in which the final award of an administrative
 2  law judge is appealed to the board for review under this section and
 3  in which the compensability is not an issue to be decided on review
 4  by the board, medical compensation shall be payable in accordance
 5  with the award of the administrative law judge and shall not be
 6  stayed pending such review. The employee may proceed under
 7  K.S.A. 44-534a and amendments thereto and may have a hearing in
 8  accordance with that statute to enforce the provisions of this sub-
 9  section.
10    [(c)  Each assistant director and each administrative law judge
11  or special administrative law judge shall be allowed all reasonable
12  and necessary expenses actually incurred while in the actual dis-
13  charge of official duties in administering the workers compensation
14  act, but such expenses shall be sworn to by the person incurring the
15  same and be approved by the secretary.
16    [(d)  In case of emergency the director may appoint special local
17  administrative law judges and assign to them the examination and
18  hearing of any designated case or cases. Such special local admin-
19  istrative law judges shall be attorneys and admitted to practice law
20  in the state of Kansas and shall, as to all cases assigned to them,
21  exercise the same powers as provided by this section for the regular
22  administrative law judges. Special local administrative law judges
23  shall receive a fee commensurate with the services rendered as fixed
24  by rules and regulations adopted by the director. The fees pre-
25  scribed by this section prior to the effective date of this act shall be
26  effective until different fees are fixed by such rules and regulations.
27    [(e)  All special local administrative law judge's fees and ex-
28  penses, with the exception of settlement hearings, shall be paid from the
29  workers compensation administration fee fund, as provided in K.S.A. 74-
30  712 and amendments thereto. Where there are no available funds or
31  where the special local administrative law judge conducted a settlement
32  hearing, the fees shall be taxed as cost costs in each case heard by
33  such special local administrative law judge and when collected shall
34  be paid directly to such special local administrative law judge by
35  the party charged with the payment of the same.
36    [(f)  Except as provided for judicial review under K.S.A. 44-556
37  and amendments thereto, the decisions and awards of the board
38  shall be final.
39    [Sec. 13.  K.S.A. 1996 Supp. 44-555c is hereby amended to read
40  as follows: 44-555c. (a) There is hereby established the workers
41  compensation board. The board shall have exclusive jurisdiction to
42  review all decisions, findings, orders and awards of compensation
43  of administrative law judges under the workers compensation act.
HB 2011--Am. by SCW
                                     

 1  The review by the board shall be upon questions of law and fact as
 2  presented and shown by a transcript of the evidence and the pro-
 3  ceedings as presented, had and introduced before the administrative
 4  law judge. The board shall be within the division of workers com-
 5  pensation of the department of human resources and all budgeting,
 6  personnel, purchasing and related management functions of the
 7  board shall be administered under the supervision and direction of
 8  the secretary of human resources. The board shall consist of five
 9  members who shall be appointed by the secretary in accordance
10  with this section and who shall each serve for a term of four years,
11  except as provided for the first members appointed to the board
12  under subsection (f).
13    [(b)  Each board member shall be an attorney regularly admit-
14  ted to practice law in Kansas for a period of at least seven years
15  and shall have engaged in the active practice of law during such
16  period as a lawyer, judge of a court of record or any court in Kansas
17  or a full-time teacher of law in an accredited law school, or any
18  combination of such types of practice.
19    [(c)  Each board member shall receive an annual salary in an
20  amount equal to the salary prescribed by law for a district judge,
21  except that the member who is the chairperson of the workers com-
22  pensation board shall receive an annual salary in an amount equal
23  to the salary prescribed for a district judge designated as adminis-
24  trative judge of a district court of Kansas. The board members shall
25  devote full time to the duties of such office and shall not engage in
26  the private practice of law during their term of office. No board
27  member may receive additional compensation for official services
28  performed by the board member. Each board member shall be re-
29  imbursed for expenses incurred in the performance of such official
30  duties under the same circumstances and to the same extent as
31  judges of the district court are reimbursed for such expenses.
32    [(d)  Applications for membership on the board shall be submit-
33  ted to the director of workers compensation. The director shall de-
34  termine if an applicant meets the qualifications for membership on
35  the board prescribed in subsection (b). Qualified applicants for the
36  board will be submitted by the director to the workers compensa-
37  tion board nominating committee for consideration.
38    [(e)  There is hereby established the workers compensation
39  board nominating committee which shall be composed of two mem-
40  bers appointed as follows:   The Kansas AFL-CIO and the Kansas
41  chamber of commerce and industry shall each select one represen-
42  tative to serve on the workers compensation board nominating com-
43  mittee and shall give written notice of the selection to the secretary
HB 2011--Am. by SCW
                                     

 1  who shall appoint such representatives to the committee. In the
 2  event of a vacancy occurring for any reason on the nominating com-
 3  mittee, the respective member shall be replaced by the appointing
 4  organization with written notice of the appointment to the secretary
 5  of human resources within 30 days of such vacancy.
 6    [(f) (1)  Upon being notified of any vacancy on the board or of
 7  the need to appoint a member pro tem under subsection (i), the
 8  nominating committee shall consider all qualified applicants sub-
 9  mitted by the director for the vacant position on the board or the
10  member pro tem position and nominate a person qualified therefor.
11  The nominating committee shall be required to reach unanimous
12  agreement on any nomination to the board. With respect to each
13  person nominated, the secretary either shall accept and appoint the
14  person nominated by the nominating committee to the position on
15  the board for which the nomination was made or shall reject the
16  nomination and request the nominating committee to nominate an-
17  other person for that position. Upon receipt of any such request for
18  the nomination of another person, the nominating committee shall
19  nominate another person for that position in the same manner.
20    [(2)  The first members of the board established by this section
21  are hereby appointed as follows:  Each person who was a member
22  of the workers compensation board which was in existence on Jan-
23  uary 12, 1995, is hereby appointed, effective January 13, 1995, as
24  a member of the board established by this section. The term of office
25  of each person so appointed as a member of the board established
26  by this section is for the period equal to the remainder of the term
27  of office such person had as of January 12, 1995, as a member of
28  the workers compensation board which was in existence on January
29  12, 1995.
30    [(3)  Each member of the board shall hold office for the term of
31  the appointment and until the successor shall have been appointed.
32  Successors to such members shall be appointed for terms of four
33  years.
34    [(4)  If a vacancy should occur on the board during the term of
35  a member, the nominating committee shall nominate an individual
36  from the qualified applicants submitted by the director to complete
37  the remainder of the unexpired portion of the term. With respect to
38  each person so nominated, the secretary either shall accept and ap-
39  point the person nominated to the board or shall reject the nomi-
40  nation and request the nominating committee to nominate another
41  person for the position. Upon receipt of any such request for the
42  nomination of another person, the nominating committee shall nom-
43  inate another person for the position in the same manner.
HB 2011--Am. by SCW
                                     

 1    [(g)  Following the completion of a term, board members who
 2  wish to be considered for reappointment to the board shall be
 3  deemed to have met the qualification requirements for selection to
 4  the board and shall be considered for renomination by the workers
 5  compensation board nominating committee.
 6    [(h)  The members of the board shall annually elect one member
 7  to serve as chairperson.
 8    [(i)  If illness or other temporary disability of a member of the
 9  board will not permit the member to serve during a case or in any
10  case in which a member of the board must be excused from serving
11  because of a conflict or is otherwise disqualified with regard to such
12  case, the director shall notify the workers compensation nominating
13  committee of the need to appoint a member pro tem. Upon receipt
14  of such notice, the committee shall act as soon as possible and nom-
15  inate a qualified person to serve as member pro tem in such case in
16  accordance with subsection (f). Each member pro tem shall receive
17  compensation at the same rate as a member of the board receives,
18  prorated for the days hours of actual service as a member pro tem
19  and shall receive expenses under the same circumstances and to the
20  same extent as a member of the board receives. Each member pro
21  tem shall have all the powers, duties and functions of a member of
22  the board with regard to the case.
23    [(j)  The board shall maintain principal offices in Topeka, Kan-
24  sas, and the board may conduct hearings at a courthouse of any
25  county in Kansas or at another location specified by the board. The
26  secretary of human resources shall provide a courtroom and other
27  suitable quarters in Topeka, Kansas, for the use of the board and
28  its staff. When the board conducts hearings at any location other
29  than in Topeka, Kansas, the director shall make suitable arrange-
30  ments for such hearings. Subject to the provisions of appropriation
31  acts, the director shall provide such supplies and equipment and
32  shall appoint such support personnel as may be necessary for the
33  board to fulfill the duties imposed by this act, subject to approval
34  by the secretary.
35    [(k)  For purposes of hearing cases, the board may sit together
36  or in panels of two members or more, designated by the chairperson
37  of the board, except that an appeal from a preliminary award en-
38  tered under K.S.A. 44-534a and amendments thereto may be heard
39  by a panel of one member designated by the chairperson. All mem-
40  bers of the board shall determine each matter before the board. All
41  decisions, reviews and determinations by the board shall be ap-
42  proved in writing by at least three board members. Whenever the
43  board enters a final order in any proceeding, the board shall make
HB 2011--Am. by SCW
                                     

 1  written findings of fact and conclusions of law forming the basis of
 2  the board's determination and final order. The findings of fact and
 3  conclusions of law of the board shall be made a part of the final
 4  order. The board shall mail a copy of the final order of the board
 5  to all parties to the proceeding within three days following the is-
 6  suance of the final order.
 7    [Sec. 14.  K.S.A. 44-557a is hereby amended to read as follows:
 8  44-557a. (a) The director shall: (1) Compile and publish statistics
 9  to determine the causation of compensable disabilities in the state
10  of Kansas and (2) compile and maintain a database of information
11  on claim characteristics and costs related to open and closed claims,
12  in order to determine the effectiveness of the workers compensation
13  act to provide adequate indemnity, medical and vocational reha-
14  bilitation compensation to injured workers and to return injured
15  workers to remunerative employment. The commissioner of insur-
16  ance shall cooperate with the director and shall make available any
17  information which will assist the director in compiling such infor-
18  mation and statistics and may contract with the director and the sec-
19  retary of the department of health and environment to collect such infor-
20  mation as the director deems necessary.
21    [(b)  A primary source of such information and statistics shall be the
22  compliance of employers, group-funded workers compensation pools and
23  insurance carriers in reporting of all accidents which are required to be
24  reported under the workers compensation act. Each self-insured em-
25  ployer, group-funded workers compensation pool, insurance carrier
26  and vocational rehabilitation provider shall submit to the director
27  the disposition of a statistically significant sample of open and
28  closed claims under the act and, in connection with the closing of
29  each claim in which payments were made, the following: (1) The
30  dates, time intervals, amounts and types of weekly disability pay-
31  ments made, (2) the dates and gross amounts of payments made to
32  each type of medical compensation provider, (3) the dates and type
33  of service for which payment was made and the gross amounts paid
34  to each vocational rehabilitation provider, and (4) the dates and
35  types of fees paid as claim costs. The director shall prescribe by rules
36  and regulations such formats, computer media and methods as may be
37  necessary to provide information to the director on a periodic basis. Each
38  self-insured employer, group-funded workers compensation pool, insur-
39  ance carrier, vocational rehabilitation provider, health care provider or
40  health care facility shall submit medical information, by procedure,
41  charge and zip code of the provider in order to set the maximum medical
42  fee schedule. The director of workers compensation may adopt and prom-
43  ulgate such rules and regulations as the director deems necessary for the
HB 2011--Am. by SCW
                                     

 1  purposes of administering and enforcing the provisions of this section.
 2    [(c)  The director may contract for professional actuarial or sta-
 3  tistical services to provide assistance in determining the types of
 4  information and the methods of selecting and analyzing information
 5  as may be necessary for the director to conduct studies of open and
 6  closed claims under the workers compensation act and to enable the
 7  director to make valid statistical conclusions as to the distribution
 8  of costs of workers compensation benefits.
 9    [(d)  The director shall obtain such office and computer equip-
10  ment and employ such additional clerical help as the director deems
11  necessary to gather such information and prepare such statistics.
12    [Sec. 15.  K.S.A. 1996 Supp. 44-566a is hereby amended to read
13  as follows: 44-566a. (a) There is hereby created in the state treasury
14  the workers compensation fund. The commissioner of insurance
15  shall be responsible for administering the workers compensation
16  fund, and all payments from the workers compensation fund shall
17  be upon warrants of the director of accounts and reports issued
18  pursuant to vouchers approved by the commissioner of insurance
19  or a person or persons designated by the commissioner. The com-
20  missioner of insurance annually shall report to the governor and
21  the legislature the receipts and disbursements from the workers
22  compensation fund during the preceding fiscal year.
23    [(b) (1)  On June 1 of each year, the commissioner of insurance
24  shall impose an assessment against all insurance carriers, self-in-
25  surers and group-funded workers compensation pools insuring the
26  payment of compensation under the workers compensation act, and
27  the same shall be due and payable to the commissioner on the fol-
28  lowing July 1, the proceeds of which shall be credited to the workers
29  compensation fund. The total amount of each such assessment shall
30  be equal to an amount sufficient, in the opinion of the commissioner
31  of insurance, to pay all amounts, including attorney fees and costs,
32  which may be required to be paid from such fund during the current
33  fiscal year, less the amount of the estimated unencumbered balance
34  in the workers compensation fund as of the June 30 immediately
35  preceding the date the assessment is due and payable under this
36  section. The total amount of each such assessment shall be appor-
37  tioned among those upon whom it is imposed, such that each is
38  assessed an amount that bears the same relation to such total as-
39  sessment as the amount of money paid or payable in workers com-
40  pensation claims by such insurance carrier, self-insurer or group-
41  funded workers compensation pool in the immediately preceding
42  calendar year bears to all such claims paid or payable during such
43  calendar year. The commissioner of insurance may establish expe-
HB 2011--Am. by SCW
                                     

 1  rience-based rates of assessments under this subsection and make
 2  adjustments in the assessments imposed under this subsection based
 3  on the success of accident prevention programs under K.S.A. 44-
 4  5,104 and amendments thereto and other employer safety programs.
 5    [(2)  The commissioner of insurance shall remit all moneys re-
 6  ceived by or for such commissioner under this subsection to the
 7  state treasurer. Upon receipt of any such remittance the state treas-
 8  urer shall deposit the entire amount thereof in the state treasury to
 9  the credit of the workers compensation fund.
10    [(c) (1)  Whenever the workers compensation fund may be made
11  liable for the payment of any amounts in proceedings under the
12  workers compensation act, the commissioner of insurance, in the
13  capacity of administrator of such fund, shall be impleaded in such
14  proceedings and shall represent and defend the workers compen-
15  sation fund. The commissioner of insurance shall be deemed im-
16  pleaded in any such proceedings whenever written notice of the
17  proceedings setting forth the nature of the liability asserted against
18  the workers compensation fund, is given to the commissioner of in-
19  surance. The commissioner of insurance may be made a party in
20  this manner by any party to the proceedings. A copy of the written
21  notice shall be given to the director and to all other parties to the
22  proceedings.
23    [(2)  The administrative law judge shall dismiss the workers
24  compensation fund from any proceeding where the administrative
25  law judge has determined that there is insufficient evidence to in-
26  dicate involvement by the workers compensation fund.
27    [(3)  In any case in which the workers compensation fund has
28  been impleaded, if the liability of the fund has not been established
29  within five years of the date of the employee filing a written notice of
30  claim, the commissioner of insurance may cause to be filed with an ad-
31  ministrative law judge a motion to dismiss the fund from the case. The
32  administrative law judge shall notify counsel of record not less than 10
33  days prior to issuing any order dismissing the fund from a case. The
34  administrative law judge shall dismiss the fund from any such case absent
35  a showing by one of the parties that the case should be left open due to
36  medical necessity or other just cause by the employer or insurance carrier
37  and where an award has been entered deciding all of the issues in the
38  employee's claim against the employer, but not deciding the issues be-
39  tween the employer and the fund, the fund may file an application with
40  the administrative law judge requesting that the fund be dismissed from
41  the case with prejudice. The employer shall have a period of six months
42  from the filing of the application in which to complete the employer's
43  evidence on the fund issues and submit the case to the administrative law
HB 2011--Am. by SCW
                                     

 1  judge for decision. The fund shall then have a period of 60 days after the
 2  submission of the employer's evidence to submit its own evidence con-
 3  cerning the fund issues in the case. If the employer fails to do so, the
 4  administrative law judge shall dismiss the fund from the case with prej-
 5  udice on the judge's own motion.
 6    [(d)  The commissioner of insurance, in the capacity of admin-
 7  istrator of the workers compensation fund, may make settlements
 8  of any amounts which may be payable from the workers compen-
 9  sation fund with regard to any claim under the workers compen-
10  sation act, subject to the approval of the director.
11    [(e)  The workers compensation fund shall be liable for:
12    [(1)  Payment of awards to handicapped employees in accor-
13  dance with the provisions of K.S.A. 44-569 and amendments thereto
14  for claims arising prior to July 1, 1994;
15    [(2)  payment of workers compensation benefits to an employee
16  who is unable to receive such benefits from such employee's em-
17  ployer under the conditions prescribed by K.S.A. 44-532a and
18  amendments thereto;
19    [(3)  reimbursement of an employer or insurance carrier pur-
20  suant to the provisions of K.S.A. 44-534a and amendments thereto,
21  subsection (d) of K.S.A. 44-556 and amendments thereto, subsection
22    (c) of K.S.A. 44-569 and amendments thereto and K.S.A. 44-569a
23  and amendments thereto;
24    [(4)  payment of the actual expenses of the commissioner of in-
25  surance which are incurred for administering the workers compen-
26  sation fund, subject to the provisions of appropriations acts; and
27    [(5)  any other payments or disbursements provided by law.
28    [(f)  If it is determined that the workers compensation fund is
29  not liable as described in subsection (e), attorney fees incurred by
30  the workers compensation fund may be assessed against the party
31  who has impleaded the workers compensation fund other than im-
32  pleadings pursuant to K.S.A. 44-532a and amendments thereto.
33    [(g)  The commissioner of insurance shall provide for the imple-
34  mentation of the workers compensation fund as provided in this
35  section and shall be responsible for ensuring the fund's adequacy
36  to meet and pay claims awarded against it.
37    [Sec. 16.  K.S.A. 44-567 is hereby amended to read as follows:
38  44-567. (a) An employer who operates within the provisions of the
39  workers compensation act and who knowingly employs or retains a
40  handicapped employee, as defined in K.S.A. 44-566 and amend-
41  ments thereto shall be relieved of liability for compensation
42  awarded or be entitled to an apportionment of the costs thereof as
43  follows:
HB 2011--Am. by SCW
                                     

 1    [(1)  Whenever a handicapped employee is injured or is disabled
 2  or dies as a result of an injury which occurs prior to July 1, 1994,
 3  and the administrative law judge awards compensation therefor and
 4  finds the injury, disability or the death resulting therefrom proba-
 5  bly or most likely would not have occurred but for the preexisting
 6  physical or mental impairment of the handicapped employee, all
 7  compensation and benefits payable because of the injury, disability
 8  or death shall be paid from the workers compensation fund; and
 9    [(2)  subject to the other provisions of the workers compensation
10  act, whenever a handicapped employee is injured or is disabled or
11  dies as a result of an injury and the administrative law judge finds
12  the injury probably or most likely would have been sustained or
13  suffered without regard to the employee's preexisting physical or
14  mental impairment but the resulting disability or death was con-
15  tributed to by the preexisting impairment, the administrative law
16  judge shall determine in a manner which is equitable and reason-
17  able the amount of disability and proportion of the cost of award
18  which is attributable to the employee's preexisting physical or men-
19  tal impairment, and the amount so found shall be paid from the
20  workers compensation fund.
21    [(b)  In order to be relieved of liability under this section, the
22  employer must prove either the employer had knowledge of the pre-
23  existing impairment at the time the employer employed the handi-
24  capped employee or the employer retained the handicapped em-
25  ployee in employment after acquiring such knowledge. The
26  employer's knowledge of the preexisting impairment may be estab-
27  lished by any evidence sufficient to maintain the employer's burden
28  of proof with regard thereto. If the employer, prior to the occur-
29  rence of a subsequent injury to a handicapped employee, files with
30  the director a notice of the employment or retention of such em-
31  ployee, together with a description of the handicap claimed, such
32  notice and description of handicap shall create a presumption that
33  the employer had knowledge of the preexisting impairment. If the
34  employer files a written notice of an employee's preexisting impair-
35  ment with the director in a form approved by the director therefor,
36  such notice establishes the existence of a reservation in the mind of
37  the employer when deciding whether to hire or retain the employee.
38    [(c)  Knowledge of the employee's preexisting impairment or
39  handicap at the time the employer employs or retains the employee
40  in employment shall be presumed conclusively if the employee, in
41  connection with an application for employment or an employment
42  medical examination or otherwise in connection with obtaining or
43  retaining employment with the employer, knowingly: (1) Misrep-
HB 2011--Am. by SCW
                                     

 1  resents that such employee does not have such an impairment or
 2  handicap; (2) misrepresents that such employee has not had any
 3  previous accidents; (3) misrepresents that such employee has not
 4  previously been disabled or compensated in damages or otherwise
 5  because of any prior accident, injury or disease; (4) misrepresents
 6  that such employee has not had any employment terminated or sus-
 7  pended because of any prior accident, injury or disease; (5) mis-
 8  represents that such employee does not have any mental, emotional
 9  or physical impairment, disability, condition, disease or infirmity;
10  or (6) misrepresents or conceals any facts or information which are
11  reasonably related to the employee's claim for compensation.
12    [(d)  An employer shall not be relieved of liability for compen-
13  sation awarded nor shall an employer be entitled to an apportion-
14  ment of the costs thereof as provided in this section, unless the em-
15  ployer shall cause the commissioner of insurance, in the capacity
16  of administrator of the workers compensation fund, to be im-
17  pleaded, as provided in K.S.A. 44-566a and amendments thereto, in
18  any proceedings to determine the compensation to be awarded a
19  handicapped employee who is injured or disabled or has died, by
20  giving written notice of the employee's claim to the commissioner
21  of insurance ten days prior to the first full hearing where any evi-
22  dence is presented on the claim.
23    [(e)  Amendments to this section shall apply only to cases where
24  a handicapped employee, or the employee's dependents, claims
25  compensation as a result of an injury occurring after the effective
26  date of such amendments.
27    [(f)  The total amount of compensation due the employee shall
28  be the amount for disability computed as provided in K.S.A. 44-
29  503a, 44-510 through 44-510g and 44-511, and amendments
30  thereto, and in no case shall the payments be less nor more than the
31  amounts provided in K.S.A. 44-510c and amendments thereto.]
32    Sec. 2 3 [17].  K.S.A. 1996 Supp. 44-585 is hereby amended to read
33  as follows: 44-585. (a) Premium contributions to the pool shall be based
34  upon appropriate manual classification and rates, plus or minus applicable
35  experience credits or debits, and minus any advance discount approved
36  by the trustees, not to exceed 15% of manual premium. The pool must
37  use rules, classifications and rates as promulgated by the national council
38  on compensation insurance an approved rating organization and must
39  report premium and loss data to a rating organization. Such rates shall
40  either be the rates effective June 1, 1994, or the prospective loss costs,
41  as defined in K.S.A. 40-1113, and amendments thereto, plus expenses
42  necessary to administer the pool. For purposes of subsection (b) the pro-
43  spective loss costs shall be presumed to be the 70% required to be de-
HB 2011--Am. by SCW
                                     

 1  posited in the claims fund. If the pool has been in operation for more
 2  than five years, the board of trustees may determine such rates as ap-
 3  proved by the commissioner.
 4    (b)  At least 70% of the annual premium shall be placed into a des-
 5  ignated depository for the sole purpose of paying claims. If so approved
 6  by the commissioner of insurance, the annual premium to be designated
 7  to such depository may be determined to be the net amount of premium
 8  after all or a portion of the specific and aggregate excess insurance pre-
 9  mium costs have been paid. This shall be called the claims fund account.
10  The remaining annual premium shall be placed into a designated depos-
11  itory for the payment of taxes, fees and administrative costs. This shall be
12  called the administrative fund account.
13    (c)  Any surplus moneys for a fund year in excess of the amount nec-
14  essary to fulfill all obligations under the workers compensation act for
15  that fund year may be declared to be refundable by the trustees not less
16  than 12 months after the end of the fund year, upon the approval of the
17  commissioner. Such approval can be obtained only upon satisfactory ev-
18  idence that sufficient funds remain on deposit for the payment of all
19  outstanding claims and expenses, including incurred but not reported
20  claims. Any such refund shall be paid only to those employers who re-
21  mained participants in the pool for an entire year. Payment of previously
22  earned refunds shall not be contingent on continued membership in the
23  pool.
24    [Sec. 18.  K.S.A. 44-5,120 is hereby amended to read as follows:
25  44-5,120. (a) The director of workers compensation is hereby au-
26  thorized and directed to establish a system for monitoring, report-
27  ing and investigating suspected fraud or abuse by any persons who
28  are not licensed or regulated by the commissioner of insurance in
29  connection with securing the liability of an employer under the
30  workers compensation act or in connection with claims or benefits
31  thereunder. The commissioner of insurance is hereby authorized
32  and directed to establish a system for monitoring, reporting and
33  investigating suspected fraud or abuse by any persons who are li-
34  censed or regulated by the commissioner of insurance in connection
35  with securing the liability of an employer under the workers com-
36  pensation act or in connection with claims thereunder.
37    [(b)  This section applies to:
38    [(1)  Persons claiming benefits under the workers compensation
39  act;
40    [(2)  employers subject to the requirements of the workers com-
41  pensation act;
42    [(3)  insurance companies including group-funded self-insur-
43  ance plans covering Kansas employers and employees;
HB 2011--Am. by SCW
                                     

 1    [(4)  any person, corporation, business, health care facility that
 2  is organized either for profit or not-for-profit and that renders med-
 3  ical care, treatment or services in accordance with the provisions
 4  of the workers compensation act to an injured employee who is cov-
 5  ered thereunder; and
 6    [(5)  attorneys and other representatives of employers, employ-
 7  ees, insurers or other entities that are subject to the workers com-
 8  pensation act.
 9    [(c)  The commissioner of insurance may examine the workers
10  compensation records of insurance companies or self-insurers as
11  necessary to ensure compliance with the workers compensation act.
12  Each insurance company providing workers compensation insur-
13  ance in Kansas, the company's agents, and those entities that the
14  company has contracted to provide review services or to monitor
15  services and practices under the workers compensation act shall
16  cooperate with the commissioner of insurance, and shall make avail-
17  able to the commissioner any records or other necessary informa-
18  tion requested by the commissioner. The commissioner of insurance
19  shall conduct an examination authorized by this subsection in ac-
20  cordance with the provisions of K.S.A. 40-222 and 40-223 and
21  amendments thereto.
22    [(d)  Fraudulent or abusive acts or practices for purposes of the
23  workers compensation act include, but are not limited to, willfully
24  or intentionally:
25    [(1)  Collecting from an employee, through a deduction from
26  wages or a subsequent fee, any premium or other fee paid by the
27  employer to obtain workers compensation insurance coverage;
28    [(2)  misrepresenting to an insurance company or the insurance
29  department, the classification of employees of an employer, or the
30  location, number of employees, or true identity of the employer with
31  the intent to lessen or reduce the premium otherwise chargeable for
32  workers compensation insurance coverage;
33    [(3)  lending money to the claimant during the pendency of the
34  workers compensation claim by an attorney representing the claim-
35  ant, but this provision shall not prohibit the attorney from assisting
36  the claimant in obtaining financial assistance from another source,
37  except that (A) the attorney shall not have a financial interest, di-
38  rectly or indirectly, in the source from which the loan or other fi-
39  nancial assistance is secured and (B) the attorney shall not be per-
40  sonally liable in any way for the credit extended to the claimant;
41    [(4)  obtaining, denying or attempting to obtain or deny pay-
42  ments of workers compensation benefits for any person by:
43    [(A)  Making a false or misleading statement;
HB 2011--Am. by SCW
                                     

 1    [(B)  misrepresenting or concealing a material fact;
 2    [(C)  fabricating, altering, concealing or destroying a document;
 3  or
 4    [(D)  conspiring to commit an act specified by clauses (A), (B)
 5  or (C) of this subsection (d)(4);
 6    [(5)  bringing, prosecuting or defending an action for compen-
 7  sation under the workers compensation act or requesting initiation
 8  of an administrative violation proceeding that, in either case, has
 9  no basis in fact or is not warranted by existing law or a good faith
10  argument for the extension, modification or reversal of existing law;
11    [(6)  breaching a provision of an agreement approved by the di-
12  rector;
13    [(7)  withholding amounts not authorized by the director from
14  the employee's or legal beneficiary's weekly compensation payment
15  or from advances from any such payment;
16    [(8)  entering into a settlement or agreement without the knowl-
17  edge and consent of the employee or legal beneficiary;
18    [(9)  taking a fee or withholding expenses in excess of the
19  amounts authorized by the director;
20    [(10)  refusing or failing to make prompt delivery to the em-
21  ployee or legal beneficiary of funds belonging to the employee or
22  legal beneficiary as a result of a settlement, agreement, order or
23  award;
24    [(11)  misrepresenting the provisions of the workers compensa-
25  tion act to an employee, an employer, a health care provider or a
26  legal beneficiary;
27    [(12)  instructing employers not to file required documents with
28  the director;
29    [(13)  instructing or encouraging employers to violate the em-
30  ployee's right to medical benefits under the workers compensation
31  act;
32    [(14)  failing to tender promptly full death benefits if a clear and
33  legitimate dispute does not exist as to the liability of the insurance
34  company, self-insured employer or group-funded self-insurance
35  plan;
36    [(15)  failing to confirm medical compensation benefits coverage
37  to any person or facility providing medical treatment to a claimant
38  if a clear and legitimate dispute does not exist as to the liability of
39  the insurance carrier, self-insured employer or group-funded self-
40  insurance plan;
41    [(16)  failing to initiate or reinstate compensation when due if a
42  clear and legitimate dispute does not exist as to the liability of the
43  insurance company, self-insured employer or group-funded self-in-
HB 2011--Am. by SCW
                                     

 1  surance plan;
 2    [(17)  misrepresenting the reason for not paying compensation
 3  or terminating or reducing the payment of compensation;
 4    [(18)  refusing to pay compensation as and when the compen-
 5  sation is due;
 6    [(19)  refusing to pay any order awarding compensation; and
 7    [(20)  refusing to timely file required reports or records under
 8  the workers compensation act.
 9    [(e)  Whenever the director or the commissioner of insurance has
10  reason to believe that any person has engaged or is engaging in any
11  fraudulent or abusive act or practice in connection with the conduct
12  of Kansas workers compensation insurance, claims, benefits or serv-
13  ices in this state, that such fraudulent or abusive act or practice is
14  not subject to possible proceedings under K.S.A. 40-2401 through
15  40-2421 and amendments thereto by the commissioner of insurance,
16  and that a proceeding by the director or the commissioner of insur-
17  ance, in the case of any person licensed or regulated by the com-
18  missioner, with respect thereto would be in the interest of the pub-
19  lic, the director or the commissioner of insurance, in the case of any
20  person licensed or regulated by the commissioner, shall issue and
21  serve upon such person a statement of the charges with respect
22  thereto and shall conduct a hearing thereon in accordance with the
23  provisions of the Kansas administrative procedure act. Complaints
24  filed with the director or the commissioner of insurance may be dismissed
25  by the director or the commissioner of insurance on their own initiative,
26  and shall be dismissed upon the written request of the complainant, if the
27  director or commissioner of insurance has not conducted a hearing or
28  taken other administrative action dismissing the complaint within 180
29  days of the filing of the complaint. Any such dismissal of a complaint in
30  accordance with this section shall constitute final action by the director
31  or commissioner of insurance which shall be deemed to exhaust all ad-
32  ministrative remedies under K.S.A. 44-5,120 and amendments thereto for
33  the purpose of allowing subsequent filing of the matter in court by the
34  complainant. Dismissal of a complaint in accordance with this section
35  shall not be subject to appeal or judicial review.
36    [(f)  If, after such hearing, the director or the commissioner of
37  insurance, in the case of any person licensed or regulated by the
38  commissioner, determines that the person charged has engaged in
39  any fraudulent or abusive act or practice, any costs incurred as a
40  result of conducting any administrative hearing authorized under
41  the provisions of this section may be assessed against the person or
42  persons found to have engaged in such acts. In an appropriate case
43  to reimburse costs incurred, such costs may be awarded to a com-
HB 2011--Am. by SCW
                                     

 1  plainant. As used in this subsection, ``costs'' include witness fees,
 2  mileage allowances, any costs associated with reproduction of doc-
 3  uments which become a part of the hearing record and the expense
 4  of making a record of the hearing.
 5    [(g)  If, after such hearing, the director or the commissioner of
 6  insurance, in the case of any person licensed or regulated by the
 7  commissioner, determines that the person or persons charged have
 8  engaged in a fraudulent or abusive act or practice the director or
 9  the commissioner of insurance, in the case of any person licensed
10  or regulated by the commissioner, shall issue an order requiring
11  such person to cease and desist from engaging in such act or practice
12  and, in the exercise of discretion, may order any one or more of the
13  following:
14    [(1)  Payment of a monetary penalty of not more than $1,000 for
15  each and every act constituting the fraudulent or abusive act or
16  practice, but not exceeding an aggregate penalty of $2,500 for any
17  six-month period;
18    [(2)  redress of the injury by requiring the refund of any pre-
19  miums paid by and requiring the payment of any moneys withheld
20  from, any employee, employer, insurance company or other person
21  or entity adversely affected by the act constituting a fraudulent or
22  abusive act or practice;
23    [(3)  repayment of an amount equal to the total amount that the
24  person received as benefits or any other payment under the workers
25  compensation act and any amount that the person otherwise bene-
26  fited as a result of an act constituting a fraudulent or abusive act
27  or practice, with interest thereon determined so that such total
28  amount, plus any accrued interest thereon, bears interest, from the
29  date of the payment of benefits or other such payment or the date
30  the person was benefited, at the current rate of interest prescribed
31  by law for judgments under subsection (e)(1) of K.S.A. 16-204 and
32  amendments thereto per month or fraction of a month until repay-
33  ment.
34    [(h)  After the expiration of the time allowed for filing a petition
35  for review of an order issued under this section, if no such petition
36  has been duly filed within such time, the director at any time, after
37  notice and opportunity for hearing in accordance with the provi-
38  sions of the Kansas administrative procedure act, may reopen and
39  alter, modify or set aside, in whole or in part, any order issued
40  under this section, whenever in the director's opinion conditions of
41  fact or of law have so changed as to require such action or if the
42  public interest so requires.
43    [(i)  Upon the order of the director or the commissioner of in-
HB 2011--Am. by SCW
                                     

 1  surance, in the case of any person licensed or regulated by the com-
 2  missioner, after notice and hearing in accordance with the provi-
 3  sions of the Kansas administrative procedure act, any person who
 4  violates a cease and desist order of the director or the commissioner
 5  of insurance, in the case of any person licensed or regulated by the
 6  commissioner, issued under this section may be subject, at the dis-
 7  cretion of the director or the commissioner of insurance, in the case
 8  of any person licensed or regulated by the commissioner, to a mon-
 9  etary penalty of not more than $10,000 for each and every act or
10  violation, but not exceeding an aggregate penalty of $50,000 for any
11  six-month period in addition to any penalty imposed pursuant to
12  subsection (g).
13    [(j)  Any civil fine imposed under this section shall be subject to
14  review in accordance with the act for judicial review and civil en-
15  forcement of agency actions in the district court in Shawnee county.
16    [(k)  All moneys received under this section for costs assessed,
17  which are not awarded to a complainant, or monetary penalties
18  imposed shall be deposited in the state treasury and credited to the
19  workmen's compensation fee fund.
20    [Sec. 19.  K.S.A. 44-5,121 is hereby amended to read as follows:
21  44-5,121. (a) Any person who has suffered economic loss by a fraud-
22  ulent or abusive act or practice shall have a cause of action against
23  any other person to recover such loss which was paid as benefits or
24  other amounts of money which were paid under the workers com-
25  pensation act and to seek relief for other monetary damages from
26  such other person based on a fraudulent or abusive act or practice,
27  except that such other monetary damages shall not include damages
28  for nonpecuniary loss. Relief under this section is to be predicated upon
29  exhaustion of administrative remedies available in K.S.A. 44-1,520 and
30  amendments thereto.
31    [(b)  Nothing in this section or K.S.A. 44-5,120 and amendments
32  thereto shall prohibit an employer from exercising a right to reim-
33  bursement under K.S.A. 44-534a, 44-556 or 44-569a and amend-
34  ments thereto.
35    [Sec. 20.  K.S.A. 1996 Supp. 44-5,125 is hereby amended to read
36  as follows: 44-5,125. (a) (1) Any person who obtains or attempts to
37  obtain any payment of compensation under the workers compen-
38  sation act for such person or who denies or attempts to deny the
39  obligation to make any payment of workers compensation benefits;
40  who obtains or attempts to obtain a more favorable workers com-
41  pensation benefit rate or insurance premium rate than that to which
42  such person is otherwise entitled; who prevents, reduces, avoids or
43  attempts to prevent, reduce or avoid the payment of any compen-
HB 2011--Am. by SCW
                                     

 1  sation under the workers compensation act; or who fails to com-
 2  municate a settlement offer or similar information to a claimant
 3  under the workers compensation act, by, in any such case, know-
 4  ingly or intentionally: (A) Making a false or misleading statement,
 5  (B) misrepresenting or concealing a material fact, or (C) fabricat-
 6  ing, altering, concealing or destroying a document; and (2) any per-
 7  son who conspires with another person to commit any act described
 8  by clause (1) of this subsection (a), shall be guilty of:
 9    [(A)  A class A nonperson misdemeanor, if the amount received
10  as a benefit or other payment under the workers compensation act
11  as a result of such act or the amount that the person otherwise
12  benefited monetarily as a result of a violation of this subsection (a)
13  is $500 or less; or
14    [(B)  a severity level 9, nonperson felony, if such amount is more
15  than $500.
16    [(b)  Any person who has received any amount of money as a
17  benefit or other payment under the workers compensation act as a
18  result of a violation of subsection (a) and any person who has oth-
19  erwise benefited monetarily as a result of a violation of subsection
20    (a) shall be liable to repay an amount equal to the amount so re-
21  ceived by such person or the amount by which such person has
22  benefited monetarily, with interest thereon. Any such amount, plus
23  any accrued interest thereon, shall bear interest at the current rate
24  of interest prescribed by law for judgments under subsection (e)(1)
25  of K.S.A. 16-204 and amendments thereto per month or fraction of
26  a month until repayment of such amount, plus any accrued interest
27  thereon. The interest shall accrue from the date of overpayment or
28  erroneous payment of any such amount or the date such person
29  benefited monetarily.
30    [(c)  Any person aggrieved by a violation of subsection (a) shall
31  have a cause of action against any other person to recover any
32  amounts of money erroneously paid as benefits or any other
33  amounts of money paid under the workers compensation act, and
34  to seek relief for other monetary damages, for which liability has
35  accrued under this section against such other person. Relief under
36  this subsection is to be predicated upon exhaustion of administrative rem-
37  edies available in K.S.A. 44-5,120 and amendments thereto.
38    [(d)  Nothing in this section shall prohibit an employer from ex-
39  ercising a right to reimbursement under K.S.A. 44-534a, 44-556 or
40  44-569a and amendments thereto.
41    [Sec. 21.  K.S.A. 74-713 is hereby amended to read as follows:
42  74-713. The director shall provide by regulation for the collection
43  of each carrier's, self-insurer's and group-funded workers' compen-
HB 2011--Am. by SCW
                                     

 1  sation pools' proportionate amount of the carrier's share of expense.
 2  The maximum amount which shall be collected from any carrier,
 3  self-insurer or group-funded workers' compensation pool shall be
 4  3% of the workers' compensation benefits paid by such carrier, self-
 5  insurer or group-funded workers' compensation pool as listed by
 6  the director. Such amounts shall be paid within 30 days from the
 7  date that notice is served upon such carrier, self-insurer or group-
 8  funded workers' compensation pool. If such amounts are not paid
 9  within such period, the director may assess a civil penalty equal to
10  10% of the amount so unpaid for each 30 days the liability remains
11  due and unpaid, and such civil penalty shall be collected at the same
12  time and as a part of the original amount as determined by the
13  director under the terms of this act. Upon assessment, if the total dollar
14  amount due is $10 or less, the amount due is waived.]
15    Sec. 3 4 [22].  K.S.A. 1996 Supp. 12-2621, 44-532 and 44-585 are
16  hereby [44-505, 44-510b, 44-523, 44-534, 44-536, 44-550b, 44-
17  557a, 44-567, 44-5,120, 44-5,121 and 74-713 and K.S.A. 1996 Supp.
18  44-508, 44-510, 44-532, 44-532b, 44-534a, 44-551, 44-555c, 44-
19  566a and 44-5,125 are hereby] repealed.
20    Sec. 4 5 [23].  This act shall take effect and be in force from and
21  after its publication in the statute book.