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