As Amended by Senate Committee
          
Session of 1999
         
SENATE BILL No. 219
         
By Committee on Commerce
          
2-3
          
10             AN  ACT concerning the workers compensation act; relating to the ad-
11             ministration thereof; amending K.S.A. 44-510c, 44-519, 44-527 and,
12             44-557 and 44-5,104 and K.S.A. 1998 Supp. 44-501, 44-503, 44-510,
13             44-557a and, 44-5,120, 44-5,122 and 44-5,125 and repealing the ex-
14             isting sections; also repealing K.S.A. 1998 Supp. 44-501a and 44-503b.
15      
16       Be it enacted by the Legislature of the State of Kansas:
17             New Section  1. (a) At any time after the entry of an award for com-
18       pensation, the employee may make application for a hearing, in such form
19       as the director may require for the furnishing of medical treatment. Such
20       post-award hearing shall be held by the assigned administrative law judge,
21       in any county designated by the administrative law judge, and the judge
22       shall conduct the hearing as provided in K.S.A. 44-523 and amendments
23       thereto. The administrative law judge can make an award for further
24       medical care if the administrative law judge finds that the care is necessary
25       to cure or relieve the effects of the accidental injury which was the subject
26       of the underlying award. No post-award benefits shall be ordered without
27       giving all parties to the award the opportunity to present evidence, in-
28       cluding taking testimony on any disputed matters. A finding with regard
29       to a disputed issue shall be subject to a full review by the board under
30       subsection (b) of K.S.A. 44-551 and amendments thereto. Any action of
31       the board pursuant to post-award orders shall be subject to review under
32       K.S.A. 44-556 and amendments thereto.
33             (b) Any application for hearing made pursuant to this section shall
34       receive priority setting by the administrative law judge, only superseded
35       by preliminary hearings pursuant to K.S.A. 44-534a and amendments
36       thereto. The parties shall meet and confer prior to the hearing pursuant
37       to this section, but a prehearing settlement conference shall not be nec-
38       essary. The administrative law judge shall have authority to award medical
39       treatment relating back to the entry of the underlying award, but in no
40       event shall such medical treatment relate back more than six months
41       following the filing of such application for post-award medical treatment.
42       Reviews taken under this section shall receive priority settings before the
43       board, only superseded by reviews for preliminary hearings. A decision

SB 219--Am.

2

  1       shall be rendered by the board within 30 days from the time the review
  2       hereunder is submitted.
  3             (c) The administrative law judge may award attorney fees and costs
  4       on the claimant's behalf consistent with subsection (g) of K.S.A. 44-536
  5       and amendments thereto.
  6             Sec.  2. K.S.A. 1998 Supp. 44-501 is hereby amended to read as fol-
  7       lows: 44-501. (a) If in any employment to which the workers compensa-
  8       tion act applies, personal injury by accident arising out of and in the
  9       course of employment is caused to an employee, the employer shall be
10       liable to pay compensation to the employee in accordance with the pro-
11       visions of the workers compensation act. In proceedings under the work-
12       ers compensation act, the burden of proof shall be on the claimant to
13       establish the claimant's right to an award of compensation and to prove
14       the various conditions on which the claimant's right depends. In deter-
15       mining whether the claimant has satisfied this burden of proof, the trier
16       of fact shall consider the whole record.
17             (b) Except as provided in the workers compensation act, no em-
18       ployer, or other employee of such employer, shall be liable for any injury
19       for which compensation is recoverable under the workers compensation
20       act nor shall an employer be liable to any third party for any injury or
21       death of an employee which was caused under circumstances creating a
22       legal liability against a third party and for which workers compensation is
23       payable by such employer.
24             (c) The employee shall not be entitled to recover for the aggravation
25       of a preexisting condition, except to the extent that the work-related injury
26       causes increased disability. Any award of compensation shall be reduced
27       by the amount of functional impairment determined to be preexisting.
28             (d)  (1) If the injury to the employee results from the employee's
29       deliberate intention to cause such injury; or from the employee's willful
30       failure to use a guard or protection against accident required pursuant to
31       any statute and provided for the employee, or a reasonable and proper
32       guard and protection voluntarily furnished the employee by the employer,
33       any compensation in respect to that injury shall be disallowed.
34             (2) The employer shall not be liable under the workers compensation
35       act where the injury, disability or death was contributed to by the em-
36       ployee's use or consumption of alcohol or any drugs, chemicals or any
37       other compounds or substances, including but not limited to, any drugs
38       or medications which are available to the public without a prescription
39       from a health care provider, prescription drugs or medications, any form
40       or type of narcotic drugs, marijuana, stimulants, depressants or hallucin-
41       ogens. In the case of drugs or medications which are available to the
42       public without a prescription from a health care provider and prescription
43       drugs or medications, compensation shall not be denied if the employee

SB 219--Am.

3

  1       can show that such drugs or medications were being taken or used in
  2       therapeutic doses and there have been no prior incidences of the em-
  3       ployee's impairment on the job as the result of the use of such drugs or
  4       medications within the previous 24 months. It shall be conclusively pre-
  5       sumed that the employee was impaired due to alcohol or drugs if it is
  6       shown that at the time of the injury that the employee had an alcohol
  7       concentration of .04 or more., or a GCMS confirmatory test by quanti-
  8       tative analysis showing a concentration at or above the levels shown on
  9       the following chart for the drugs of abuse listed:
10      
Confirmatory test cutoff levels (ng/ml)
11       Marijuana metabolite|1 15
12       Cocaine metabolite|2 150
13      
14		Opiates:
Morphine 		300
15       Codeine 300
16       Phencyclidine 25
17      
18		Amphetamines:
Amphetamine 		500
19       Methamphetamine 3 500
20       1 Delta-9-tetrahydrocannabinol-9-carboxylic acid.
21       2 Benzoylecgonine.
22       3 Specimen must also contain amphetamine at a concentration greater than or equal to 200
23                                                     ng/ml.
24       An employee's refusal to submit to a chemical test shall not be admissible
25       evidence to prove impairment unless there was probable cause to believe
26       that the employee used, possessed or was impaired by a drug or alcohol
27       while working. The results of a chemical test shall not be admissible ev-
28       idence to prove impairment unless the following conditions were met:
29             (A) There was probable cause to believe that the employee used, had
30       possession of, or was impaired by the drug or alcohol while working;
31             (B) the test sample was collected at a time contemporaneous with
32       the events establishing probable cause;
33             (C) the collecting and labeling of the test sample was performed by
34       a licensed health care professional;
35             (D) the test was performed by a laboratory approved by the United
36       States department of health and human services or licensed by the de-
37       partment of health and environment, except that a blood sample may be
38       tested for alcohol content by a laboratory commonly used for that purpose
39       by state law enforcement agencies;
40             (E) the test was confirmed by gas chromatography, gas chromatog-
41       raphy-mass spectroscopy or other comparably reliable analytical method,
42       except that no such confirmation is required for a blood alcohol sample;
43       and

SB 219--Am.

4

  1             (F) the foundation evidence must establish, beyond a reasonable
  2       doubt, that the test results were from the sample taken from the
  3       employee.
  4             (e) Compensation shall not be paid in case of coronary or coronary
  5       artery disease or cerebrovascular injury unless it is shown that the exertion
  6       of the work necessary to precipitate the disability was more than the
  7       employee's usual work in the course of the employee's regular
  8       employment.
  9             (f) Except as provided in the workers compensation act, no construc-
10       tion design professional who is retained to perform professional services
11       on a construction project or any employee of a construction design pro-
12       fessional who is assisting or representing the construction design profes-
13       sional in the performance of professional services on the site of the con-
14       struction project, shall be liable for any injury resulting from the
15       employer's failure to comply with safety standards on the construction
16       project for which compensation is recoverable under the workers com-
17       pensation act, unless responsibility for safety practices is specifically as-
18       sumed by contract. The immunity provided by this subsection to any
19       construction design professional shall not apply to the negligent prepa-
20       ration of design plans or specifications.
21             (g) It is the intent of the legislature that the workers compensation
22       act shall be liberally construed for the purpose of bringing employers and
23       employees within the provisions of the act to provide the protections of
24       the workers compensation act to both. The provisions of the workers
25       compensation act shall be applied impartially to both employers and em-
26       ployees in cases arising thereunder.
27             (h) If the employee is receiving retirement benefits under the federal
28       social security act or retirement benefits from any other retirement sys-
29       tem, program or plan which is provided by the employer against which
30       the claim is being made, any compensation benefit payments which the
31       employee is eligible to receive under the workers compensation act for
32       such claim shall be reduced by the weekly equivalent amount of the total
33       amount of all such retirement benefits, less any portion of any such re-
34       tirement benefit, other than retirement benefits under the federal social
35       security act, that is attributable to payments or contributions made by the
36       employee, but in no event shall the workers compensation benefit be less
37       than the workers compensation benefit payable for the employee's per-
38       centage of functional impairment.
39             Sec.  3. K.S.A. 1998 Supp. 44-503 is hereby amended to read as fol-
40       lows: 44-503. (a) Where any person (in this section referred to as prin-
41       cipal) undertakes to execute any work which is a part of the principal's
42       trade or business or which the principal has contracted to perform and
43       contracts with any other person (in this section referred to as the con-

SB 219--Am.

5

  1       tractor) for the execution by or under the contractor of the whole or any
  2       part of the work undertaken by the principal, the principal shall be liable
  3       to pay to any worker employed in the execution of the work any com-
  4       pensation under the workers compensation act which the principal would
  5       have been liable to pay if that worker had been immediately employed
  6       by the principal; and where compensation is claimed from or proceedings
  7       are taken against the principal, then in the application of the workers
  8       compensation act, references to the principal shall be substituted for ref-
  9       erences to the employer, except that the amount of compensation shall
10       be calculated with reference to the earnings of the worker under the
11       employer by whom the worker is immediately employed. For the pur-
12       poses of this subsection, a worker shall not include an individual who is
13       a self-employed subcontractor.
14             (b) Where the principal is liable to pay compensation under this sec-
15       tion, the principal shall be entitled to indemnity from any person who
16       would have been liable to pay compensation to the worker independently
17       of this section, and shall have a cause of action under the workers com-
18       pensation act for indemnification.
19             (c) Nothing in this section shall be construed as preventing a worker
20       from recovering compensation under the workers compensation act from
21       the contractor instead of the principal.
22             (d) This section shall not apply to any case where the accident oc-
23       curred elsewhere than on, in or about the premises on which the principal
24       has undertaken to execute work or which are otherwise under the prin-
25       cipal's control or management, or on, in or about the execution of such
26       work under the principal's control or management.
27             (e) A principal contractor, when sued by a worker of a subcontractor,
28       shall have the right to implead the subcontractor.
29             (f) The principal contractor who pays compensation to a worker of a
30       subcontractor shall have the right to recover over against the subcontrac-
31       tor in the action under the workers compensation act if the subcontractor
32       has been impleaded.
33             (g) Notwithstanding any other provision of this section, in any case
34       where the contractor (1) is an employer who employs employees in an
35       employment to which the act is applicable, or has filed a written statement
36       of election with the director to accept the provisions of the workers com-
37       pensation act pursuant to subsection (b) of K.S.A. 44-505, and amend-
38       ments thereto, to the extent of such election, and (2) has secured the
39       payment of compensation as required by K.S.A. 44-532, and amendments
40       thereto, for all persons for whom the contractor is required to or elects
41       to secure such compensation, as evidenced by a current certificate of
42       workers compensation insurance, by a certification from the director that
43       the contractor is currently qualified as a self-insurer under that statute,

SB 219--Am.

6

  1       or by a certification from the commissioner of insurance that the con-
  2       tractor is maintaining a membership in a qualified group-funded workers
  3       compensation pool, then, the principal shall not be liable for any com-
  4       pensation under this or any other section of the workers compensation
  5       act for any person for which the contractor has secured the payment of
  6       compensation which the principal would otherwise be liable for under
  7       this section and such person shall have no right to file a claim against or
  8       otherwise proceed against the principal for compensation under this or
  9       any other section of the workers compensation act. In the event that the
10       payment of compensation is not secured or is otherwise unavailable or in
11       effect, then the principal shall be liable for the payment of compensation.
12       No insurance company shall charge a principal a premium for workers
13       compensation insurance for any liability for which the contractor has se-
14       cured the payment of compensation.
15             Sec.  4. K.S.A. 1998 Supp. 44-510 is hereby amended to read as fol-
16       lows: 44-510. Except as otherwise provided therein, medical compensa-
17       tion under the workers compensation act shall be as follows:
18             (a) It shall be the duty of the employer to provide the services of a
19       health care provider, and such medical, surgical and hospital treatment,
20       including nursing, medicines, medical and surgical supplies, ambulance,
21       crutches, and apparatus, and transportation to and from the home of the
22       injured employee to a place outside the community in which such em-
23       ployee resides, and within such community if the director in the director's
24       discretion so orders, including transportation expenses computed in ac-
25       cordance with subsection (a) of K.S.A. 44-515 and amendments thereto,
26       as may be reasonably necessary to cure and relieve the employee from
27       the effects of the injury.
28             (1) The director shall appoint, subject to the approval of the secretary,
29       a specialist in health services delivery, who shall be referred to as the
30       medical administrator. The medical administrator shall be a person li-
31       censed to practice medicine and surgery in this state and shall be in the
32       unclassified service under the Kansas civil service act. The medical ad-
33       ministrator, subject to the direction of the director, shall have the duty
34       of overseeing the providing of health care services to employees in ac-
35       cordance with the provisions of the workers compensation act, including
36       but not limited to:
37             (A) Preparing, with the assistance of the advisory panel, the fee
38       schedule for health care services as set forth in this section;
39             (B) developing, with the assistance of the advisory panel, the utili-
40       zation review program for health care services as set forth in this section;
41             (C) developing procedures for appeals and review of disputed
42       charges or services rendered by health care providers under this section;
43             (D) developing a system for collecting and analyzing data on expend-

SB 219--Am.

7

  1       itures for health care services by each type of provider under the workers
  2       compensation act; and
  3             (E) carrying out such other duties as may be delegated or directed
  4       by the director or secretary.
  5             (2) The director shall prepare and adopt rules and regulations, which
  6       establish a schedule of maximum fees for medical, surgical, hospital, den-
  7       tal, nursing, vocational rehabilitation or any other treatment or services
  8       provided or ordered by health care providers and rendered to employees
  9       under the workers compensation act. The schedule shall include provi-
10       sions and review procedures for exceptional cases involving extraordinary
11       medical procedures or circumstances and shall include costs and charges
12       for medical records and testimony.
13             (3) The schedule of maximum fees shall be reasonable, shall promote
14       health care cost containment and efficiency with respect to the workers
15       compensation health care delivery system, and shall be sufficient to en-
16       sure availability of such reasonably necessary treatment, care and attend-
17       ance to each injured employee to cure and relieve the employee from
18       the effects of the injury.
19             (4)  (A) In every case, all fees, transportation costs, charges under this
20       section and all costs and charges for medical records and testimony shall
21       be subject to approval by the director and shall be limited to such as are
22       fair, reasonable and necessary. The schedule of maximum fees shall be
23       revised as necessary at least every two years by the director to assure that
24       the schedule is current, reasonable and fair.
25             (B) There is hereby created an advisory panel to assist the director
26       in establishing a schedule of maximum fees as required by this section.
27       The panel shall consist of the commissioner of insurance and seven mem-
28       bers appointed as follows: (i) One person shall be appointed by the Kansas
29       medical society, (ii) one member shall be appointed by the Kansas asso-
30       ciation of osteopathic medicine, (iii) one member shall be appointed by
31       the Kansas hospital association, (iv) one member shall be appointed by
32       the Kansas chiropractic association, and (v) three members appointed by
33       the secretary. One member appointed by the secretary shall be a repre-
34       sentative of employers recommended to the secretary by the Kansas
35       chamber of commerce and industry. One member appointed by the sec-
36       retary shall be a representative of employees recommended to the sec-
37       retary by the Kansas AFL-CIO. One member appointed by the secretary
38       shall be a representative of entities providing vocational rehabilitation
39       services pursuant to K.S.A. 44-510g and amendments thereto. Each ap-
40       pointed member shall be appointed for a term of office of two years which
41       shall commence on July 1 of the year of appointment.
42             (C) All fees and other charges paid for such treatment, care and at-
43       tendance, including treatment, care and attendance provided by any

SB 219--Am.

8

  1       health care provider, hospital or other entity providing health care serv-
  2       ices, shall not exceed the amounts prescribed by the schedule of maxi-
  3       mum fees established under this section or the amounts authorized pur-
  4       suant to the provisions and review procedures prescribed by the schedule
  5       for exceptional cases. A health care provider, hospital or other entity pro-
  6       viding health care services shall be paid either such health care provider,
  7       hospital or other entity's usual charge for the treatment, care and attend-
  8       ance or the maximum fees as set forth in the schedule, whichever is less.
  9       In reviewing and approving the schedule of maximum fees, the director
10       shall consider the following:
11             (i) The levels of fees for similar treatment, care and attendance im-
12       posed by other health care programs or third-party payors in the locality
13       in which such treatment or services are rendered;
14             (ii) the impact upon cost to employers for providing a level of fees
15       for treatment, care and attendance which will ensure the availability of
16       treatment, care and attendance required for injured employees;
17             (iii) the potential change in workers compensation insurance premi-
18       ums or costs attributable to the level of treatment, care and attendance
19       provided; and
20             (iv) the financial impact of the schedule of maximum fees upon health
21       care providers and health care facilities and its effect upon their ability
22       to make available to employees such reasonably necessary treatment, care
23       and attendance to each injured employee to cure and relieve the em-
24       ployee from the effects of the injury.
25             (D) Members of the advisory panel attending meetings of the advi-
26       sory panel, or attending a subcommittee of the advisory panel authorized
27       by the advisory panel, shall be paid subsistence allowances, mileage and
28       other expenses as provided in K.S.A. 75-3223 and amendments thereto.
29             (5) Any contract or any billing or charge which any health care pro-
30       vider, vocational rehabilitation service provider, hospital, person, or in-
31       stitution enters into with or makes to any patient for services rendered in
32       connection with injuries covered by the workers compensation act or the
33       fee schedule adopted under this section, which is or may be in excess of
34       or not in accordance with such act or fee schedule, is unlawful, void and
35       unenforceable as a debt.
36             (6) The director shall have jurisdiction to hear and determine all dis-
37       putes as to such charges and interest due thereon and shall prescribe
38       procedural rules to be followed by the parties to such disputes. In the
39       event of any controversy arising under this section, payments shall not be
40       delayed for any amounts not in dispute or controversy. Acceptance by
41       any provider of services of a payment amount under this section which is
42       less than the full amount charged for the services, shall not affect the
43       right to have a review of the claim for the outstanding or remaining

SB 219--Am.

9

  1       amounts. In the event of a dispute as to such charges, the health care
  2       provider, hospital, institution, person or other provider under this section
  3       may appear and be represented in the action under the workers com-
  4       pensation act.
  5             (7) If the director finds, after utilization review, that a provider or
  6       facility has made excessive charges or provided or ordered unjustified
  7       treatment, services, hospitalization or visits, the provider or facility shall
  8       not receive payment pursuant to this section from an insurance carrier,
  9       employer or employee for the excessive fees or unjustified treatment,
10       services, hospitalization or visits and such provider or facility shall repay
11       any fees or charges collected therefor.
12             (8) Not later than December 31, 1993, the director shall develop and
13       implement, or contract with a qualified entity to develop and implement,
14       utilization review and peer review procedures relating to the services
15       rendered by providers and facilities, which services are paid for in whole
16       or in part pursuant to the workers compensation act. The director may
17       contract with one or more private foundations or organizations to provide
18       utilization review, as appropriate, of entities providing health care services
19       or vocational rehabilitation services, or both, pursuant to the workers
20       compensation act.
21             (9) By accepting payment pursuant to this section for treatment or
22       services rendered to an injured employee, a health care provider or health
23       care facility shall be deemed to consent to submitting all necessary records
24       to substantiate the nature and necessity of the service or charge and other
25       information concerning such treatment to utilization review and peer re-
26       view under this section. Such health care provider shall comply with any
27       decision of the director pursuant to subsection (a)(10).
28             (10) If it is determined by a utilization peer review committee that a
29       provider improperly overutilized or otherwise rendered or ordered un-
30       justified treatment or services or that the fees for such treatment or serv-
31       ices were excessive, the director may order the provider to show cause
32       why the provider should not be required to repay the amount which was
33       paid for rendering or ordering such treatment or services and shall pro-
34       vide the provider a hearing thereon if requested. If a hearing is not re-
35       quested within 30 days of receipt of the order and the director decides
36       to proceed with the matter, a hearing shall be conducted and if a prima
37       facie case is established a final order shall be issued by the director. If
38       the final order is adverse to a health care provider, the director shall
39       provide a report to the licensing board of the health care provider with
40       full documentation of any such determination, except that no such report
41       shall be provided until after judicial review if the order is appealed. Any
42       order of the director under this section shall be subject to review by the
43       board.

SB 219--Am.

10

  1             (11) Except as provided by K.S.A. 60-437 and amendments thereto
  2       or this section, all reports, information, statements, memoranda, pro-
  3       ceedings, findings and records which relate to peer review conducted
  4       pursuant to this section, including any records of peer review committees,
  5       shall be privileged and shall not be subject to discovery, subpoena, or
  6       other means of legal compulsion for release to any person or entity and
  7       shall not be admissible in evidence in any judicial or administrative pro-
  8       ceeding, except those proceedings authorized pursuant to this section. In
  9       any proceedings where there is an application by an employee, employer,
10       insurance carrier or workers compensation fund for a hearing pursuant
11       to K.S.A. 44-534a, and amendments thereto, for a change of medical
12       benefits which has been filed after a health care provider, employer, in-
13       surance carrier or the workers compensation fund has made application
14       to the medical services section of the division for the resolution of a
15       dispute or matter pursuant to the provisions of K.S.A. 44-510, and amend-
16       ments thereto, all reports, information, statements, memoranda, pro-
17       ceedings, findings and records which relate to utilization review including
18       the records of contract reviewers, records of utilization review commit-
19       tees and findings and records of the medical services section of the di-
20       vision shall be admissible at the hearing before the administrative law
21       judge on the issue of the medical benefits to which an employee is
22       entitled.
23             (12) A provider or facility may not improperly charge or overcharge
24       a workers compensation insurer or charge for services which were not
25       provided, for the purpose of obtaining additional payment.
26             (13) Any violation of the provisions of this section which is willful or
27       which demonstrates a pattern of improperly charging or overcharging
28       workers compensation insurers constitutes grounds for the director to
29       impose a civil fine not to exceed $5,000. Any civil fine imposed under
30       this section shall be subject to review in accordance with the act for
31       judicial review and civil enforcement of agency actions in the district court
32       for Shawnee county. All moneys received for civil fines imposed under
33       this section shall be deposited in the state treasury to the credit of the
34       workers compensation fund.
35             (14) As used in this subsection (a), unless the context or the specific
36       provisions require otherwise, "provider" means any health care provider
37       or vocational rehabilitation service provider, and "facility" means any fa-
38       cility providing health care services or vocational rehabilitation services,
39       or both, including any hospital.
40             (b) Any health care provider, nurse, physical therapist, any entity pro-
41       viding medical, physical or vocational rehabilitation services or providing
42       reeducation or training pursuant to K.S.A. 44-510g and amendments
43       thereto, medical supply establishment, surgical supply establishment, am-

SB 219--Am.

11

  1       bulance service or hospital who accept the terms of the workers compen-
  2       sation act by providing services or material thereunder shall be bound by
  3       the fees approved by the director and no injured employee or dependent
  4       of a deceased employee shall be liable for any charges above the amounts
  5       approved by the director. If the employer has knowledge of the injury
  6       and refuses or neglects to reasonably provide the services of a health care
  7       provider required by this section, the employee may provide the same
  8       for such employee, and the employer shall be liable for such expenses
  9       subject to the regulations adopted by the director. No action shall be filed
10       in any court by a health care provider or other provider of services under
11       this section for the payment of an amount for medical services or materials
12       provided under the workers compensation act and no other action to
13       obtain or attempt to obtain or collect such payment shall be taken by a
14       health care provider or other provider of services under this section, in-
15       cluding employing any collection service, until after final adjudication of
16       any claim for compensation for which an application for hearing is filed
17       with the director under K.S.A. 44-534 and amendments thereto. In the
18       case of any such action filed in a court prior to the date an application is
19       filed under K.S.A. 44-534 and amendments thereto, no judgment may be
20       entered in any such cause and the action shall be stayed until after the
21       final adjudication of the claim. In the case of an action stayed hereunder,
22       any award of compensation shall require any amounts payable for medical
23       services or materials to be paid directly to the provider thereof plus an
24       amount of interest at the rate provided by statute for judgments. No
25       period of time under any statute of limitation, which applies to a cause
26       of action barred under this subsection, shall commence or continue to
27       run until final adjudication of the claim under the workers compensation
28       act.
29             (c)  (1) If the director finds, upon application of an injured employee,
30       that the services of the health care provider furnished as provided in
31       subsection (a) and rendered on behalf of the injured employee are not
32       satisfactory, the director may authorize the appointment of some other
33       health care provider. In any such case, the employer shall submit the
34       names of three health care providers that are not associated in practice
35       together. The injured employee may select one from the list who shall
36       be the authorized treating health care provider. If the injured employee
37       is unable to obtain satisfactory services from any of the health care pro-
38       viders submitted by the employer under this subsection (c)(1), either
39       party or both parties may request the director to select a treating health
40       care provider.
41             (2) Without application or approval, an employee may consult a
42       health care provider of the employee's choice for the purpose of exami-
43       nation, diagnosis or treatment, but the employer shall only be liable for

SB 219--Am.

12

  1       the fees and charges of such health care provider up to a total amount of
  2       $500. The amount allowed for such examination, diagnosis or treatment
  3       shall not be used to obtain a functional impairment rating. Any medical
  4       opinion obtained in violation of this prohibition shall not be admissible
  5       in any claim proceedings under the workers compensation act.
  6             (d) An injured employee whose injury or disability has been estab-
  7       lished under the workers compensation act may rely, if done in good faith,
  8       solely or partially on treatment by prayer or spiritual means in accordance
  9       with the tenets of practice of a church or religious denomination without
10       suffering a loss of benefits subject to the following conditions:
11             (1) The employer or the employer's insurance carrier agrees thereto
12       in writing either before or after the injury;
13             (2) the employee submits to all physical examinations required by the
14       workers compensation act;
15             (3) the cost of such treatment shall be paid by the employee unless
16       the employer or insurance carrier agrees to make such payment;
17             (4) the injured employee shall be entitled only to benefits that would
18       reasonably have been expected had such employee undergone medical
19       or surgical treatment; and
20             (5) the employer or insurance carrier that made an agreement under
21       paragraph (1) or (3) of this subsection may withdraw from the agreement
22       on 10 days' written notice.
23             (e) In any employment to which the workers compensation act ap-
24       plies, the employer shall be liable to each employee who is employed as
25       a duly authorized law enforcement officer, ambulance attendant, mobile
26       intensive care technician or firefighter, including any person who is serv-
27       ing on a volunteer basis in such capacity, for all reasonable and necessary
28       preventive medical care and treatment for hepatitis to which such em-
29       ployee is exposed under circumstances arising out of and in the course
30       of employment.
31             (f) No person shall be subject to civil liability for libel, slander or any
32       other relevant tort cause of action by virtue of performing utilization
33       review or peer review under contract with the director pursuant to sub-
34       section (a)(7).
35             Sec.  5. K.S.A. 44-510c is hereby amended to read as follows: 44-
36       510c. Where death does not result from the injury, compensation shall
37       be paid as provided in K.S.A. 44-510 and amendments thereto and as
38       follows:
39             (a)  (1) Where permanent total disability results from the injury,
40       weekly payments shall be made during the period of permanent total
41       disability in a sum equal to 662/3% of the average gross weekly wage of
42       the injured employee, computed as provided in K.S.A. 44-511 and
43       amendments thereto, but in no case less than $25 per week nor more

SB 219--Am.

13

  1       than the dollar amount nearest to 75% of the state's average weekly wage,
  2       determined as provided in K.S.A. 44-511 and amendments thereto, per
  3       week. The payment of compensation for permanent total disability shall
  4       continue for the duration of such disability, subject to review and modi-
  5       fication as provided in K.S.A. 44-528 and amendments thereto.
  6             (2) Permanent total disability exists when the employee, on account
  7       of the injury, has been rendered completely and permanently incapable
  8       of engaging in any type of substantial and gainful employment. Loss of
  9       both eyes, both hands, both arms, both feet, or both legs, or any combi-
10       nation thereof, in the absence of proof to the contrary, shall constitute a
11       permanent total disability. Substantially total paralysis, or incurable im-
12       becility or insanity, resulting from injury independent of all other causes,
13       shall constitute permanent total disability. In all other cases permanent
14       total disability shall be determined in accordance with the facts.
15             (b)  (1) Where temporary total disability results from the injury, no
16       compensation shall be paid during the first week of disability, except that
17       provided in K.S.A. 44-510 and amendments thereto, unless the temporary
18       total disability exists for three consecutive weeks, in which case compen-
19       sation shall be paid for the first week of such disability. Thereafter weekly
20       payments shall be made during such temporary total disability, in a sum
21       equal to 662/3% of the average gross weekly wage of the injured employee,
22       computed as provided in K.S.A. 44-511 and amendments thereto, but in
23       no case less than $25 per week nor more than the dollar amount nearest
24       to 75% of the state's average weekly wage, determined as provided in
25       K.S.A. 44-511 and amendments thereto, per week. The payment of com-
26       pensation for temporary total disability shall continue for the duration of
27       any such disability, subject to review and modification as provided in
28       K.S.A. 44-528 and amendments thereto.
29             (2) Temporary total disability exists when the employee, on account
30       of the injury, has been rendered completely and temporarily incapable of
31       engaging in any type of substantial and gainful employment. A release
32       issued by a health care provider with temporary medical limitations for
33       an employee may or may not be determinative of the employee's actual
34       ability to be engaged in any type of substantial and gainful employment,
35       except that temporary total disability compensation shall not be awarded
36       unless the opinion of the authorized treating health care provider is shown
37       to be based on an assessment of the employee's actual job duties with the
38       employer, with or without accommodation.
39             (3) Where no award has been entered, a return by the employee to
40       any type of substantial and gainful employment or, subject to the provi-
41       sions of subsection (b)(2), a release by a treating health care provider or
42       examining health care provider, who is not regularly employed or retained
43       by the employer, to return to any type of substantial and gainful employ-

SB 219--Am.

14

  1       ment, shall suspend the employee's right to the payment of temporary
  2       total disability compensation, but shall not affect any right the employee
  3       may have to compensation for partial disability in accordance with K.S.A.
  4       44-510d and 44-510e and amendments thereto.
  5             (c) When any permanent total disability or temporary total disability
  6       is followed by partial disability, compensation shall be paid as provided
  7       in K.S.A. 44-510d and 44-510e and amendments thereto.
  8             Sec.  6. K.S.A. 44-519 is hereby amended to read as follows: 44-519.
  9       Except in preliminary hearings conducted under K.S.A. 44-534a and
10       amendments thereto, no report of any examination of any employee by a
11       health care provider, as provided for in the workers compensation act and
12       no certificate issued or given by the health care provider making such
13       examination, shall be competent evidence in any proceeding for the de-
14       termining or collection of compensation unless supported by the testi-
15       mony of such health care provider, if this testimony is admissible, and
16       shall not be competent evidence in any case where testimony of such
17       health care provider is not admissible.
18             Sec.  7. K.S.A. 44-527 is hereby amended to read as follows: 44-527.
19       At the time of making any final payment of compensation, the employer
20       shall be entitled to a final receipt for compensation, executed and ac-
21       knowledged or verified by the workman worker, which final receipt may
22       be in form a release of liability under this act, and every such final receipt
23       for compensation or release of liability or a copy thereof shall be filed by
24       the employer in the office of the director within sixty (60) 60 days after
25       the date of execution of such final receipt or release of liability, and if the
26       employer shall fail or neglect to so file such final receipt or release of
27       liability, the same shall be void as against the workman worker.
28             The director shall accept, receipt for, and file every agreement, finding,
29       award, agreement modifying an award, final receipt for compensation or
30       release of liability or copy thereof, and record and index same, and every
31       such agreement, finding, award, agreement modifying an award, final
32       receipt or release, shall be considered as approved by the director and
33       shall stand as approved unless said director shall, within twenty (20) 20
34       days of the date of the receipt thereof, disapprove same in writing and
35       notify each of the parties of his disapproval, giving his reasons therefor,
36       sending a copy of the same to each of the parties by registered certified
37       mail, return receipt requested: Provided,. No proceedings shall be insti-
38       tuted by either party to set aside any such agreement, release of liability,
39       final receipt for compensation or agreement modifying an award, unless
40       such proceedings are commenced within one (1) year after the date any
41       such agreement, release of liability, final receipt for compensation or
42       agreement modifying an award has been so filed and approved by the
43       director.

SB 219--Am.

15

  1             Sec.  8. K.S.A. 44-557 is hereby amended to read as follows: 44-557.
  2       (a) It is hereby made the duty of every employer to make or cause to be
  3       made a report to the director of any accident, or claimed or alleged ac-
  4       cident, to any employee which occurs in the course of the employee's
  5       employment and of which the employer or the employer's supervisor has
  6       knowledge, which report shall be made upon a form to be prepared by
  7       the director, within 28 days, after the receipt of such knowledge, if the
  8       personal injuries which are sustained by such accidents, are sufficient
  9       wholly or partially to incapacitate the person injured from labor or service
10       for more than the remainder of the day, shift or turn on which such
11       injuries were sustained.
12             (b) When such accident has been reported and subsequently such
13       person has died, a supplemental report shall be filed with the director
14       within 28 days after receipt of knowledge of such death, stating such fact
15       and any other facts in connection with such death or as to the dependents
16       of such deceased employee which the director may require. Such report
17       or reports shall not be used nor considered as evidence before the direc-
18       tor, any administrative law judge, the board or in any court in this state.
19             (c) No limitation of time in the workers compensation act shall begin
20       to run unless a report of the accident as provided in this section has been
21       filed at the office of the director if the injured employee has given notice
22       of accident as provided by K.S.A. 44-520 and amendments thereto, except
23       that any proceeding for compensation for any such injury or death, where
24       report of the accident has not been filed, must be commenced by filing
25       an application with the director serving upon the employer a written claim
26       pursuant to K.S.A. 44-520a and amendments thereto within one year from
27       the date of the accident, suspension of payment of disability compensa-
28       tion, the date of the last medical treatment authorized by the employer,
29       or the death of such employee referred to in K.S.A. 44-520a and amend-
30       ments thereto.
31             (d) The knowing repeated failure of any employer or workers com-
32       pensation insurance carrier to file or cause to be filed any report required
33       by this section shall be subject to a civil penalty for each violation of not
34       to exceed $250.
35             (e) Any civil penalty imposed by this section shall be recovered in an
36       action in the district court of Shawnee county instituted and prosecuted,
37       by the assistant attorney general upon information received from the
38       director, by issuing and serving upon such employer a summary order or
39       statement of the charges with respect thereto and a hearing shall be con-
40       ducted thereon in accordance with the provisions of the Kansas admin-
41       istrative procedure act, except that, at the discretion of the director, such
42       civil penalties may be assessed as costs in a workers compensation pro-
43       ceeding by an administrative law judge upon a showing by the director

SB 219--Am.

16

  1       assistant attorney general that a required report was not filed which per-
  2       tains to a claim pending before the administrative law judge.
  3             Sec.  9. K.S.A. 1998 Supp. 44-557a is hereby amended to read as
  4       follows: 44-557a. (a) The director shall: (1) Compile and publish statistics
  5       to determine the causation of compensable disabilities in the state of
  6       Kansas and (2) compile and maintain a database of information on claim
  7       characteristics and costs related to open and closed claims, in order to
  8       determine the effectiveness of the workers compensation act to provide
  9       adequate indemnity, medical and vocational rehabilitation compensation
10       to injured workers and to return injured workers to remunerative em-
11       ployment. The commissioner of insurance shall cooperate with the direc-
12       tor and shall make available any information which will assist the director
13       in compiling such information and statistics and may contract with the
14       director and the secretary of the department of health and environment
15       to collect such information as the director deems necessary.
16             (b) Each self-insured employer, group-funded workers compensation
17       pool, insurance carrier and vocational rehabilitation provider shall submit
18       to the director the disposition of a statistically significant sample of open
19       and closed claims under the act and, in connection with the closing of
20       each claim in which payments were made, the following: (1) The dates,
21       time intervals, amounts and types of weekly disability payments made, (2)
22       the dates and gross amounts of payments made to each type of medical
23       compensation provider, (3) the dates and type of service for which pay-
24       ment was made and the gross amounts paid to each vocational rehabili-
25       tation provider, and (4) the dates and types of fees paid as claim costs.
26       Each self-insured employer, group-funded workers compensation pool,
27       insurance carrier, vocational rehabilitation provider, health care provider
28       or health care facility shall submit medical information, by procedure,
29       charge and zip code of the provider, or by hospital charge and related
30       diagnostic and procedure codes in order to set the maximum medical fee
31       schedule. The director of workers compensation may adopt and prom-
32       ulgate such rules and regulations as the director deems necessary for the
33       purposes of administering and enforcing the provisions of this section.
34             (c) The director may contract for professional actuarial or statistical
35       services to provide assistance in determining the types of information and
36       the methods of selecting and analyzing information as may be necessary
37       for the director to conduct studies of open and closed claims under the
38       workers compensation act and to enable the director to make valid sta-
39       tistical conclusions as to the distribution of costs of workers compensation
40       benefits.
41             (d) The director shall obtain such office and computer equipment
42       and employ such additional clerical help as the director deems necessary
43       to gather such information and prepare such statistics.

SB 219--Am.

17

  1             (e) If a self-insured employer, group-funded workers compen-
  2       sation pool, insurance carrier or vocational rehabilitation provider
  3       fails to supply the information required by this section, the director
  4       shall issue and serve upon such person a summary order or state-
  5       ment of the charges with respect thereto and a hearing shall be
  6       conducted thereon in accordance with the provisions of the Kansas
  7       administrative procedure act. An administrative penalty of up to
  8       $500 for each violation or act, along with an additional penalty of
  9       up to $100 for each week thereafter that such report or other in-
10       formation is not provided to the director shall be imposed.
11             Sec.  10. K.S.A. 44-5,104 is hereby amended to read as follows:
12       44-5,104. (a) Each insurance company or group-funded self-insur-
13       ance plan providing workers compensation insurance coverage in
14       Kansas shall maintain and may offer to shall provide accident pre-
15       vention programs upon request of the covered employer as a prereq-
16       uisite for authority to provide such insurance or coverage. The ac-
17       cident prevention programs shall be adequate to furnish accident
18       prevention services required by the nature of the operations of the
19       policyholders or other covered entities and the accident prevention
20       services shall include surveys, recommendations, training pro-
21       grams, consultations, analyses of accident causes, industrial hy-
22       giene and industrial health services to implement the program of
23       accident prevention services. The accident prevention programs
24       shall be staffed with field safety representatives. Each field safety
25       representative shall be a person who is (1) a college graduate who
26       has a bachelor's degree in science, business industrial hygiene, safety
27       or loss control, or engineering, (2) a registered professional engi-
28       neer, (3) a certified safety professional, who has attained the desig-
29       nation from the board of certified safety professionals, (4) a certified
30       industrial hygienist, who has attained the designation from the Amer-
31       ican board of industrial hygiene (5) an individual with 10 five years of
32       experience in occupational safety and health, (6) a person who is
33       working under direct supervision of a person who meets the quali-
34       fication requirements of this section (7) a person who has attained
35       the designation of associate in loss control management or associate
36       in risk management from the insurance institute of America, who
37       has attained the designation of occupational safety and health tech-
38       nologist from the board of certified safety professionals, or who has
39       attained any other comparable designation or certification by a rec-
40       ognized organization as determined by the secretary of human re-
41       sources, or (8) an individual who has completed a certified training
42       program in accident prevention services approved by the secretary
43       of human resources. The insurance company or group-funded self-

SB 219--Am.

18

  1       insurance plan may employ qualified personnel, retain qualified
  2       independent contractors, contract with the policyholder to provide
  3       qualified accident prevention personnel and services, or use a com-
  4       bination of such methods to fulfill the obligations imposed by this
  5       section. Accident prevention personnel shall have the qualifications
  6       required for field safety representatives.
  7             (b) The secretary of human resources may conduct such in-
  8       spections as the secretary deems necessary to determine the ade-
  9       quacy of the accident prevention services required by subsection
10       (a) for each insurance company and group-funded self-insurance
11       plan providing workers compensation insurance coverage in Kan-
12       sas, including, but not limited to, random inspections and those based
13       upon employer complaints. Documented employer complaints shall be
14       appropriately investigated and the results shall be reported to the com-
15       missioner of insurance. The secretary shall not be required by this section
16       to inspect each insurance company or group-funded self-insurance plan.
17             (c) A notice that accident prevention services are available to
18       the policyholder from the insurance company shall appear in no
19       less than ten-point boldface type on the front page of each workers
20       compensation insurance policy delivered or issued for delivery in
21       this state.
22             (d) At least once each year, each insurance company or group-
23       funded self-insurance plan providing workers compensation insur-
24       ance in Kansas shall submit to the director of workers compensation
25       detailed information on the type of accident prevention programs
26       offered to the policyholders by the insurance company or to the
27       covered entities by the group-funded self-insurance plan, as the case
28       may be. The information shall include:
29             (1) The amount of money spent by the insurance company or
30       group-funded self-insured plan on accident prevention services;
31             (2) the names, number and qualifications of field safety repre-
32       sentatives employed;
33             (3) the number of site inspections performed;
34             (4) any accident prevention services made available under a
35       contractual arrangement;
36             (5) a specification and listing of the premium size of the risks to
37       which accident prevention services were actually provided;
38             (6) evidence of the effectiveness of and accomplishments in ac-
39       cident prevention; and
40             (7) any additional information required by the director of work-
41       ers compensation.
42             (e) If the insurance company or group-funded self-insurance
43       plan does not maintain or provide the accident prevention services

SB 219--Am.

19

  1       required by this section, the director of workers compensation shall
  2       notify the commissioner of insurance. Upon receiving such notifi-
  3       cation, the commissioner of insurance shall presume the insurance
  4       company or group-funded self-insurance plan knew or reasonably
  5       should have known of the violation and shall assess the penalty
  6       prescribed therefore pursuant to K.S.A. 40-2,125 and amendments
  7       thereto. The secretary shall send the information and results obtained
  8       pursuant to subsection (d) to the insurance commissioner who shall widely
  9       disseminate information about the program.
10             (f) The secretary of human resources shall employ the personnel
11       necessary to enforce the provisions of this section and shall employ
12       sufficient safety inspectors to perform inspections at job sites or
13       other work places and at the locations of the and may audit accident
14       prevention programs of each insurance company or group-funded
15       self-insurance plan which is subject to this section to determine the
16       adequacy of the accident prevention services provided. The safety
17       inspectors shall have the qualifications required for field safety rep-
18       resentatives by subsection (a).
19             (g) The insurance company or group-funded self-insurance
20       plan, and any agent, servant, or employee thereof, shall have no
21       liability with respect to any accident based on the allegation that
22       such accident was caused or could have been prevented by a pro-
23       gram, inspection or other activity or by a service undertaken or not
24       undertaken by the insurance company or group-funded self-insur-
25       ance plan for the prevention of accidents in connection with oper-
26       ations of the employer. This immunity shall not affect the liability
27       of the insurance company or group-funded self-insurance plan for
28       compensation or as otherwise provided in this act.
29             Sec.  10 11. K.S.A. 1998 Supp. 44-5,120 is hereby amended to read
30       as follows: 44-5,120. (a) The director of workers compensation is hereby
31       authorized and directed to establish a system for monitoring, reporting
32       and investigating suspected fraud or abuse by any persons who are not
33       licensed or regulated by the commissioner of insurance in connection
34       with securing the liability of an employer under the workers compensa-
35       tion act or in connection with claims or benefits thereunder. The com-
36       missioner of insurance is hereby authorized and directed to establish a
37       system for monitoring, reporting and investigating suspected fraud or
38       abuse by any persons who are licensed or regulated by the commissioner
39       of insurance in connection with securing the liability of an employer un-
40       der the workers compensation act or in connection with claims
41       thereunder.
42             (b) This section applies to:
43             (1) Persons claiming benefits under the workers compensation act;

SB 219--Am.

20

  1             (2) employers subject to the requirements of the workers compen-
  2       sation act;
  3             (3) insurance companies including group-funded self-insurance plans
  4       covering Kansas employers and employees;
  5             (4) any person, corporation, business, health care facility that is or-
  6       ganized either for profit or not-for-profit and that renders medical care,
  7       treatment or services in accordance with the provisions of the workers
  8       compensation act to an injured employee who is covered thereunder; and
  9             (5) attorneys and other representatives of employers, employees, in-
10       surers or other entities that are subject to the workers compensation act.
11             (c) The commissioner of insurance may examine the workers com-
12       pensation records of insurance companies or self-insurers as necessary to
13       ensure compliance with the workers compensation act. Each insurance
14       company providing workers compensation insurance in Kansas, the com-
15       pany's agents, and those entities that the company has contracted to pro-
16       vide review services or to monitor services and practices under the work-
17       ers compensation act shall cooperate with the commissioner of insurance,
18       and shall make available to the commissioner any records or other nec-
19       essary information requested by the commissioner. The commissioner of
20       insurance shall conduct an examination authorized by this subsection in
21       accordance with the provisions of K.S.A. 40-222 and 40-223 and amend-
22       ments thereto.
23             (d) Fraudulent or abusive acts or practices for purposes of the work-
24       ers compensation act include, willfully, knowingly or intentionally:
25             (1) Collecting from an employee, through a deduction from wages or
26       a subsequent fee, any premium or other fee paid by the employer to
27       obtain workers compensation insurance coverage;
28             (2) misrepresenting to an insurance company or the insurance de-
29       partment, the classification of employees of an employer, or the location,
30       number of employees, or true identity of the employer with the intent to
31       lessen or reduce the premium otherwise chargeable for workers com-
32       pensation insurance coverage;
33             (3) lending money to the claimant during the pendency of the work-
34       ers compensation claim by an attorney representing the claimant, but this
35       provision shall not prohibit the attorney from assisting the claimant in
36       obtaining financial assistance from another source, except that (A) the
37       attorney shall not have a financial interest, directly or indirectly, in the
38       source from which the loan or other financial assistance is secured and
39       (B) the attorney shall not be personally liable in any way for the credit
40       extended to the claimant;
41             (4) obtaining, denying or attempting to obtain or deny payments of
42       workers compensation benefits for any person by:
43             (A) Making a false or misleading statement;

SB 219--Am.

21

  1             (B) misrepresenting or concealing a material fact;
  2             (C) fabricating, altering, concealing or destroying a document; or
  3             (D) conspiring to commit an act specified by clauses (A), (B) or (C)
  4       of this subsection (d)(4);
  5             (5) bringing, prosecuting or defending an action for compensation
  6       under the workers compensation act or requesting initiation of an ad-
  7       ministrative violation proceeding that, in either case, has no basis in fact
  8       or is not warranted by existing law or a good faith argument for the ex-
  9       tension, modification or reversal of existing law;
10             (6) breaching a provision of an agreement approved by the director;
11             (7) withholding amounts not authorized by the director from the em-
12       ployee's or legal beneficiary's weekly compensation payment or from ad-
13       vances from any such payment;
14             (8) entering into a settlement or agreement without the knowledge
15       and consent of the employee or legal beneficiary;
16             (9) taking a fee or withholding expenses in excess of the amounts
17       authorized by the director;
18             (10) refusing or failing to make prompt delivery to the employee or
19       legal beneficiary of funds belonging to the employee or legal beneficiary
20       as a result of a settlement, agreement, order or award;
21             (11) misrepresenting the provisions of the workers compensation act
22       to an employee, an employer, a health care provider or a legal beneficiary;
23             (12) instructing employers not to file required documents with the
24       director;
25             (13) instructing or encouraging employers to violate the employee's
26       right to medical benefits under the workers compensation act;
27             (14) failing to tender promptly full death benefits if a clear and le-
28       gitimate dispute does not exist as to the liability of the insurance company,
29       self-insured employer or group-funded self-insurance plan;
30             (15) failing to confirm medical compensation benefits coverage to any
31       person or facility providing medical treatment to a claimant if a clear and
32       legitimate dispute does not exist as to the liability of the insurance carrier,
33       self-insured employer or group-funded self-insurance plan;
34             (16) failing to initiate or reinstate compensation when due if a clear
35       and legitimate dispute does not exist as to the liability of the insurance
36       company, self-insured employer or group-funded self-insurance plan;
37             (17) misrepresenting the reason for not paying compensation or ter-
38       minating or reducing the payment of compensation;
39             (18) refusing to pay compensation as and when the compensation is
40       due;
41             (19) refusing to pay any order awarding compensation;
42             (20) refusing to timely file required reports or records under the
43       workers compensation act, except as provided in K.S.A. 44-557 and

SB 219--Am.

22

  1       amendments thereto; and
  2             (21) for a health care provider to submit a charge for health care that
  3       was not furnished.
  4             (e) Whenever the director or the commissioner of insurance has rea-
  5       son to believe that any person has engaged or is engaging in any fraud-
  6       ulent or abusive act or practice in connection with the conduct of Kansas
  7       workers compensation insurance, claims, benefits or services in this state,
  8       that such fraudulent or abusive act or practice is not subject to possible
  9       proceedings under K.S.A. 40-2401 through 40-2421 and amendments
10       thereto by the commissioner of insurance, and that a proceeding by the
11       director or the commissioner of insurance, in the case of any person
12       licensed or regulated by the commissioner, with respect thereto would
13       be in the interest of the public, the director or the commissioner of in-
14       surance, in the case of any person licensed or regulated by the commis-
15       sioner, shall issue and serve upon such person a summary order or state-
16       ment of the charges with respect thereto and shall conduct a hearing
17       thereon in accordance with the provisions of the Kansas administrative
18       procedure act. Complaints filed with the director or the commissioner of
19       insurance may be dismissed by the director or the commissioner of in-
20       surance on their own initiative, and shall be dismissed upon the written
21       request of the complainant, if the director or commissioner of insurance
22       has not conducted a hearing or taken other administrative action dis-
23       missing the complaint within 180 days of the filing of the complaint. Any
24       such dismissal of a complaint in accordance with this section shall con-
25       stitute final action by the director or commissioner of insurance which
26       shall be deemed to exhaust all administrative remedies under K.S.A. 44-
27       5,120 and amendments thereto for the purpose of allowing subsequent
28       filing of the matter in court by the complainant. Dismissal of a complaint
29       in accordance with this section shall not be subject to appeal or judicial
30       review.
31             (f) If, after such hearing, the director or the commissioner of insur-
32       ance, in the case of any person licensed or regulated by the commissioner,
33       determines that the person charged has engaged in any fraudulent or
34       abusive act or practice, any costs incurred as a result of conducting any
35       administrative hearing authorized under the provisions of this section may
36       be assessed against the person or persons found to have engaged in such
37       acts. In an appropriate case to reimburse costs incurred, such costs may
38       be awarded to a complainant. As used in this subsection, "costs" include
39       witness fees, mileage allowances, any costs associated with reproduction
40       of documents which become a part of the hearing record and the expense
41       of making a record of the hearing.
42             (g) If, after such hearing, the director or the commissioner of insur-
43       ance, in the case of any person licensed or regulated by the commissioner,

SB 219--Am.

23

  1       determines that the person or persons charged have engaged in a fraud-
  2       ulent or abusive act or practice the director or the commissioner of in-
  3       surance, in the case of any person licensed or regulated by the commis-
  4       sioner, shall issue an order or summary order requiring such person to
  5       cease and desist from engaging in such act or practice and, in the exercise
  6       of discretion, may order any one or more of the following:
  7             (1) Payment of a monetary penalty of not more than $2,000 for each
  8       and every act constituting the fraudulent or abusive act or practice, but
  9       not exceeding an aggregate penalty of $20,000 in a one-year period;
10             (2) redress of the injury by requiring the refund of any premiums
11       paid by and requiring the payment of any moneys withheld from, any
12       employee, employer, insurance company or other person or entity ad-
13       versely affected by the act constituting a fraudulent or abusive act or
14       practice;
15             (3) repayment of an amount equal to the total amount that the person
16       received as benefits or any other payment under the workers compen-
17       sation act and any amount that the person otherwise benefited as a result
18       of an act constituting a fraudulent or abusive act or practice, with interest
19       thereon determined so that such total amount, plus any accrued interest
20       thereon, bears interest, from the date of the payment of benefits or other
21       such payment or the date the person was benefited, at the current rate
22       of interest prescribed by law for judgments under subsection (e)(1) of
23       K.S.A. 16-204 and amendments thereto per month or fraction of a month
24       until repayment.
25             (h) After the expiration of the time allowed for filing a petition for
26       review of an order issued under this section, if no such petition has been
27       duly filed within such time, the director at any time, after notice and
28       opportunity for hearing in accordance with the provisions of the Kansas
29       administrative procedure act, may reopen and alter, modify or set aside,
30       in whole or in part, any order issued under this section, whenever in the
31       director's opinion conditions of fact or of law have so changed as to re-
32       quire such action or if the public interest so requires.
33             (i) Upon the order of the director or the commissioner of insurance,
34       in the case of any person licensed or regulated by the commissioner, after
35       notice and hearing in accordance with the provisions of the Kansas ad-
36       ministrative procedure act, any person who violates a cease and desist
37       order of the director or the commissioner of insurance, in the case of any
38       person licensed or regulated by the commissioner, issued under this sec-
39       tion may be subject, at the discretion of the director or the commissioner
40       of insurance, in the case of any person licensed or regulated by the com-
41       missioner, to a monetary penalty of not more than $10,000 for each and
42       every act or violation, but not exceeding an aggregate penalty of $50,000
43       for any six-month period in addition to any penalty imposed pursuant to

SB 219--Am.

24

  1       subsection (g).
  2             (j) Any civil fine imposed under this section shall be subject to review
  3       in accordance with the act for judicial review and civil enforcement of
  4       agency actions in the district court in Shawnee county.
  5             (k) All moneys received under this section for costs assessed, which
  6       are not awarded to a complainant, or monetary penalties imposed shall
  7       be deposited in the state treasury and credited to the workers compen-
  8       sation fee fund.
  9             (l) Any person who refers a possibly fraudulent or abusive practice to
10       any state or governmental investigative agency, shall be immune from
11       civil or criminal liability arising from the supply or release of such referral
12       as long as such referral is made in good faith with the belief that a fraud-
13       ulent or abusive practice has, is or will occur and said referral is not made
14       by the person or persons who are in violation of the workers compensation
15       act in order to avoid criminal prosecution or administrative hearings. 
16             Sec.  12. K.S.A. 1998 Supp. 44-5,122 is hereby amended to
17       read as follows: 44-5,122. (a) If the director or the assistant attorney
18       general assigned to the division of workers compensation has prob-
19       able cause to believe a fraudulent or abusive act or practice or any
20       other violation of the workers compensation act is of such signifi-
21       cance as to constitute a crime, a copy of any order, all investigative
22       reports and any evidence in the possession of the division of workers
23       compensation which relates to such act, practice or violation shall
24       may be forwarded to the prosecuting attorney of the county in which
25       the act or any of the acts were performed which constitute the fraud-
26       ulent or abusive act or practice or other violation. Any case which a
27       county attorney fails to prosecute within 90 days shall be returned
28       promptly to the director. The assistant attorney general assigned to the
29       division of workers compensation shall then prosecute the case if, in the
30       opinion of the assistant attorney general, the acts or practices involved
31       still warrant prosecution.
32             (b) Any person who believes a violation of the workers compen-
33       sation act has been or is being committed may notify the division
34       of workers compensation of the department of human resources im-
35       mediately after discovery of the alleged violation. The person shall
36       send to the division of workers compensation, in a manner pre-
37       scribed by the director, the information describing the facts of the
38       alleged violation and such additional information relating to the
39       alleged violation as the director may require. The director shall
40       cause an evaluation of the facts surrounding the alleged violation
41       to be made to determine the extent, if any, to which violations of
42       the workers compensation act exist, which shall include a review
43       and investigation by the assistant attorney general assigned to the

SB 219--Am.

25

  1       division to the extent as may be deemed necessary to determine
  2       whether there has been a violation of the workers compensation act.
  3             Sec.  13. K.S.A. 1998 Supp. 44-5,125 is hereby amended to read
  4       as follows: 44-5,125. (a) (1) Any person who obtains or attempts to
  5       obtain workers compensation benefits for such person or another,
  6       or who denies or attempts to deny the obligation to make any pay-
  7       ment of workers compensation benefits by knowingly or intention-
  8       ally: (A) Making a false or misleading statement, (B) misrepresent-
  9       ing or concealing a material fact, (C) fabricating, altering,
10       concealing or destroying a document; (D) receiving temporary total
11       disability benefits or permanent total disability benefits to which
12       they are not entitled, while employed, or (E) conspiring with an-
13       other person to commit any act described by paragraph (1) of this
14       subsection (a), shall be guilty of:
15             (i) A class A nonperson misdemeanor, if the amount received as
16       a benefit or other payment under the workers compensation act as
17       a result of such act or the amount that the person otherwise bene-
18       fited monetarily as a result of a violation of this subsection (a) is
19       $500 or less;
20             (ii) a severity level 9, nonperson felony, if such amount is more
21       than $500 but less than $25,000;
22             (iii) a severity level 7, nonperson felony, if the amount is more
23       than $25,000, but less than $50,000;
24             (iv) a severity level 6, nonperson felony if the amount is more
25       than $50,000, but less than $100,000; or
26             (v) a severity level 5, nonperson felony if the amount is more
27       than $100,000.
28             (b) Any person who knowingly and intentionally presents a false
29       certificate of insurance that purports that the presenter is insured
30       under the workers compensation act, shall be guilty of a level 8,
31       nonperson felony.
32             (c) A health care provider under the workers compensation act
33       who knowingly and intentionally submits a charge for health care
34       that was not furnished, shall be guilty of a level 9, nonperson felony.
35             (d) Any person who obtains or attempts to obtain a more favor-
36       able workers compensation insurance premium rate than that to
37       which the person is entitled, who prevents, reduces, avoids or at-
38       tempts to prevent, reduce or avoid the payment of any compensation
39       under the workers compensation act, or who fails to communicate
40       a settlement offer or similar information to a claimant under the
41       workers compensation act, by, in any such case knowingly or inten-
42       tionally: (1) Making a false or misleading statement; (2) misrepre-
43       senting or concealing a material fact; (3) fabricating, concealing or

SB 219--Am.

26

  1       destroying a document; or (4) conspiring with another person or
  2       persons to commit the acts described in clause (1), (2) or (3) of this
  3       subsection shall be guilty of a level 9, nonperson felony.
  4             (e) Any person who has received any amount of money as a ben-
  5       efit or other payment under the workers compensation act as a re-
  6       sult of a violation of subsection (a) or (c) and any person who has
  7       otherwise benefited monetarily as a result of a violation of subsec-
  8       tion (a) or (c) shall be liable to repay an amount equal to the amount
  9       so received by such person or the amount by which such person has
10       benefited monetarily, with interest thereon. Any such amount, plus
11       any accrued interest thereon, shall bear interest at the current rate
12       of interest prescribed by law for judgments under subsection (e)(1)
13       of K.S.A. 16-204 and amendments thereto per month or fraction of
14       a month until repayment of such amount, plus any accrued interest
15       thereon. The interest shall accrue from the date of overpayment or
16       erroneous payment of any such amount or the date such person
17       benefited monetarily.
18             (f) Any person aggrieved by a violation of subsection (a), (b),
19       (c) or (d) shall have a cause of action against any other person to
20       recover any amounts of money erroneously paid as benefits or any
21       other amounts of money paid under the workers compensation act,
22       and to seek relief for other monetary damages, for which liability
23       has accrued under this section against such other person. Relief
24       under this subsection is to be predicated upon exhaustion of admin-
25       istrative remedies available in K.S.A. 44-5,120 and amendments
26       thereto.
27             (g) Nothing in this section shall prohibit an employer from ex-
28       ercising a right to reimbursement under K.S.A. 44-534a, 44-556 or
29       44-569a and amendments thereto.
30             (h) Prosecution for any crime under this section shall be commenced
31       within five years after its discovery, which shall not include any time
32       period set forth in subsection (8) of K.S.A. 1998 Supp. 21-3106 and
33       amendments thereto.
34        Sec.  11 14. K.S.A. 44-510c, 44-519, 44-527 and, 44-557 and 44-
35       5,104 and K.S.A. 1998 Supp. 44-501, 44-501a, 44-503, 44-503b, 44-510,
36       44-557a and, 44-5,120, 44-5,122 and 44-5,125 are hereby repealed.
37        Sec.  12 15. This act shall take effect and be in force from and after
38       its publication in the statute book.