Senate Bill No. 105-Committee on Commerce and Labor
(On Behalf of the Office of the Attorney General)
February 3, 1997
____________
Referred to Committee on Commerce and Labor
SUMMARY--Makes various changes relating to industrial insurance. (BDR 53-630)
FISCAL NOTE: Effect on Local Government: Yes.
Effect on the State or on Industrial Insurance: Yes.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to industrial insurance; requiring insurers to issue certificates of insurance to employers for whom the insurers provide industrial insurance; requiring employers to post those certificates at their places of business; authorizing the fraud control unit for industrial insurance established within the office of the attorney general to review the index of claims established by the administrator of the division of industrial relations of the department of business and industry; clarifying the penalty that may be imposed if an insurer fails to provide information for the index of claims; revising the provisions relating to fraudulent practices; providing penalties; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
~^
Section 1 Chapter 616B of NRS is hereby amended by adding thereto the provisions set forth as sections 2 and 3 of this act:
Sec. 2 1. An insurer, other than a self-insured employer or an association of self-insured public or private employers, shall provide to each employer to whom the insurer provides industrial insurance a certificate of insurance which indicates that the employer has obtained a policy of industrial insurance.
2. A certificate of insurance provided by an insurer pursuant to subsection 1 must include, without limitation:
(a) The name of the insurer;
(b) The name of the insured;
(c) The number of the policy; and
(d) The period for which the policy is effective.
Sec. 3 1. Each employer shall ensure that:
(a) A certificate of insurance provided pursuant to section 2 of this act;
(b) A certificate issued by the commissioner pursuant to NRS 616B.312; or
(c) A certificate issued to an association of self-insured public or private employers by the commissioner pursuant to NRS 616B.359 and a certificate or letter issued by such an association verifying that the employer is a member in good standing of the association,
is posted in a conspicuous location at each of the employer's places of business, including, without limitation, each location at which the employer has directed one or more employees to perform work.
2. An employer who violates the provisions of subsection 1 is guilty of a misdemeanor.
Sec. 4 NRS 616B.018 is hereby amended to read as follows:
616B.018 1. The administrator shall establish a method of indexing claims for compensation that will make information concerning the claimants of [one] an insurer available to other insurers [.] and the fraud control unit for industrial insurance established pursuant to NRS 228.420.
2. Every [self-insured employer, association of self-insured public or private employers and the system] insurer shall provide information as required by the administrator for establishing and maintaining the index of claims.
3. If an employee files a claim with an insurer, the insurer is entitled to receive from the administrator a list of the prior claims of the employee. If the insurer desires to inspect the files related to the prior claims, he must obtain the written consent of the employee.
4. Any information obtained from the index of claims must be admitted into evidence in any hearing before an appeals officer, a hearing officer or the administrator.
5. The division may assess and collect a reasonable fee for its services provided pursuant to this section. The fee must be payable monthly or at such other intervals as determined by the administrator.
6. If the administrator determines that an insurer has intentionally failed to provide the information required by this section, the administrator shall impose an administrative fine of $1,000 for each initial violation, or a fine of $10,000 for a second or subsequent violation.
Sec. 5 NRS 616B.236 is hereby amended to read as follows:
616B.236 [1.] Except as otherwise provided in [subsection 2,] NRS 616D.200, when any premium of an employer insured by the system as provided in chapters 616A to 616D, inclusive, of NRS remains unpaid on the date on which it becomes due, as prescribed by NRS 616B.224, it bears interest at the rate of 1 percent for each month or portion of a month thereafter until payment of the premium, plus accrued interest, is received by the manager.
[2. The amount of a determination of a deficiency made pursuant to NRS 616D.200 bears interest at the rate of 1 percent for each month or portion of a month from the date on which the determination becomes final until payment of the amount, plus accrued interest, is received by the manager.]
Sec. 6 NRS 616B.312 is hereby amended to read as follows:
616B.312 1. Upon determining that an employer is qualified as a self-insured employer, the commissioner shall issue a certificate to that effect to the employer and the administrator. No certificate may be issued to any employer who, within the 2 years immediately preceding his application, has had his certification as a self-insured employer involuntarily withdrawn by the commissioner.
2. A certificate issued pursuant to this section must include, without limitation:
(a) The name of the self-insured employer;
(b) An identification number assigned to the self-insured employer by the commissioner; and
(c) The date on which the certificate was issued.
3. Except as otherwise provided in NRS 616B.315 and 616B.318, certificates issued pursuant to this section remain in effect until withdrawn by the commissioner or canceled by the employer. Coverage for employers qualifying under NRS 616B.615 becomes effective on the date of certification or the date specified in the certificate.
Sec. 7 NRS 616B.359 is hereby amended to read as follows:
616B.359 1. The commissioner shall grant or deny an application for certification as an association of self-insured public or private employers within 60 days after receiving the application. If the application is materially incomplete or does not comply with the applicable provisions of the law, the commissioner shall notify the applicant of the additional information or changes required. Under such circumstances, if the commissioner is unable to act upon the application within this 60-day period, he may extend the period for granting or denying the application, but for not longer than an additional 90 days.
2. Upon determining that an association is qualified as an association of self-insured public or private employers, the commissioner shall issue a certificate to that effect to the association and the administrator. No certificate may be issued to an association that, within the 2 years immediately preceding its application, has had its certification as an association of self-insured public or private employers involuntarily withdrawn by the commissioner.
3. A certificate issued pursuant to this section must include, without limitation:
(a) The name of the association;
(b) The name of each employer who the commissioner determines is a member of the association at the time of the issuance of the certificate;
(c) An identification number assigned to the association by the commissioner; and
(d) The date on which the certificate was issued.
4. A certificate issued pursuant to this section remains in effect until withdrawn by the commissioner or canceled at the request of the association. Coverage for an association granted a certificate becomes effective on the date of certification or the date specified in the certificate.
[4.] 5. The commissioner shall not grant a request to cancel a certificate unless the association has insured or reinsured all incurred obligations with an insurer authorized to do business in this state pursuant to an agreement filed with and approved by the commissioner. The agreement must include coverage for actual claims and claims filed with the association but not reported, and the expenses associated with those claims.
Sec. 8 Chapter 616D of NRS is hereby amended by adding thereto a new section to read as follows:
1. An insurer, organization for managed care, health care provider, employer, third-party administrator or public officer who believes, or has reason to believe, that:
(a) A fraudulent claim for benefits under a policy of insurance has been made, or is about to be made;
(b) An employer within the provisions of NRS 616B.633 has:
(1) Made a false statement or representation concerning the amount of payroll upon which a premium is based; or
(2) Failed to provide and secure compensation under the terms of chapters 616A to 616D, inclusive, of NRS or has failed to maintain that compensation;
(c) A provider of health care has submitted an invoice for payment for accident benefits that contains information which is false; or
(d) A person has committed any other fraudulent practice under this chapter or chapter 616A, 616B, 616C or 617 of NRS,
shall report that belief to the fraud control unit for industrial insurance established pursuant to NRS 228.420.
2. The fraud control unit for industrial insurance established pursuant to NRS 228.420 may require a person who submits a report pursuant to subsection 1 to submit that report on a form prescribed by the unit.
Sec. 9 NRS 616D.120 is hereby amended to read as follows:
616D.120 1. Except as otherwise provided in this section, if the administrator determines that an insurer, organization for managed care, health care provider, third-party administrator or employer has:
(a) Through fraud, coercion, duress or undue influence:
(1) Induced a claimant to fail to report an accidental injury or occupational disease;
(2) Persuaded a claimant to settle for an amount which is less than reasonable;
(3) Persuaded a claimant to settle for an amount which is less than reasonable while a hearing or an appeal is pending; or
(4) Persuaded a claimant to accept less than the compensation found to be due him by a hearing officer, appeals officer, court of competent jurisdiction, written settlement agreement, written stipulation or the division when carrying out its duties pursuant to chapters 616A to 617, inclusive, of NRS;
(b) Refused to pay or unreasonably delayed payment to a claimant of compensation found to be due him by a hearing officer, appeals officer, court of competent jurisdiction, written settlement agreement, written stipulation or the division when carrying out its duties pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS, if the refusal or delay occurs:
(1) Later than 10 days after the date of the settlement agreement or stipulation;
(2) Later than 30 days after the date of the decision of a court, hearing officer, appeals officer or division, unless a stay has been granted; or
(3) Later than 10 days after a stay of the decision of a court, hearing officer, appeals officer or division has been lifted;
(c) Refused to process a claim for compensation pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS;
(d) Made it necessary for a claimant to initiate proceedings pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS for compensation found to be due him by a hearing officer, appeals officer, court of competent jurisdiction, written settlement agreement, written stipulation or the division when carrying out its duties pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS;
(e) Failed to comply with the division's regulations covering the payment of an assessment relating to the funding of costs of administration of chapters 616A to 617, inclusive, of NRS; [or]
(f) Failed to provide or unreasonably delayed payment to an injured employee or reimbursement to an insurer pursuant to NRS 616C.165; or
(g) Intentionally failed to comply with any provision of, or regulation adopted pursuant to, this chapter or chapter 616A, 616B, 616C or 617 of NRS,
the administrator shall impose an administrative fine of $1,000 for each initial violation, or a fine of $10,000 for a second or subsequent violation.
2. Except as otherwise provided in chapters 616A to 616D, inclusive, or chapter 617 of NRS, if the administrator determines that an insurer, organization for managed care, health care provider, third-party administrator or employer has failed to comply with any provision of this chapter or chapter 616A, 616B, 616C or 617 of NRS, or any regulation adopted pursuant thereto, the administrator may take any of the following actions:
(a) Issue a notice of correction for:
(1) A minor violation, as defined by regulations adopted by the division; or
(2) A violation involving the payment of compensation in an amount which is greater than that required by any provision of this chapter or chapter 616A, 616B, 616C or 617 of NRS, or any regulation adopted pursuant thereto.
The notice of correction must set forth with particularity the violation committed and the manner in which the violation may be corrected. Nothing in this section authorizes the administrator to modify or negate in any manner a determination or any portion of a determination made by a hearing officer, appeals officer or court of competent jurisdiction or a provision contained in a written settlement agreement or written stipulation.
(b) Impose an administrative fine for:
(1) A second or subsequent violation for which a notice of correction has been issued pursuant to paragraph (a); or
(2) Any other violation of this chapter or chapter 616A, 616B, 616C or 617 of NRS, or any regulation adopted pursuant thereto, for which a notice of correction may not be issued pursuant to paragraph (a).
The fine imposed may not be greater than $250 for an initial violation, or more than $1,000 for any second or subsequent violation.
(c) Order a plan of corrective action to be submitted to the administrator within 30 days after the date of the order.
3. If the administrator determines that a violation of any of the provisions of paragraphs (a) to (d), inclusive, of subsection 1 has occurred, the administrator shall order the insurer, organization for managed care, health care provider, third-party administrator or employer to pay to the claimant a benefit penalty in an amount equal to 50 percent of the compensation due or $10,000, whichever is less. In no event may a benefit penalty be less than $500. The benefit penalty is for the benefit of the claimant and must be paid directly to him within 10 days after the date of the administrator's determination. Proof of the payment of the benefit penalty must be submitted to the administrator within 10 days after the date of his determination unless an appeal is filed pursuant to NRS 616D.140. Any compensation to which the claimant may otherwise be entitled pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS must not be reduced by the amount of any benefit penalty received pursuant to this subsection.
4. In addition to any fine or benefit penalty imposed pursuant to this section, the administrator may assess against an insurer who violates any regulation concerning the reporting of claims expenditures used to calculate an assessment an administrative penalty of up to twice the amount of any underpaid assessment.
5. If [the] :
(a) The administrator determines that a person has violated any of the provisions of NRS 616D.200, 616D.220, 616D.240, 616D.300, 616D.310 or 616D.350 to 616D.440, inclusive [,] ; and
(b) The fraud control unit for industrial insurance established pursuant to NRS 228.420 notifies the administrator that the unit will not prosecute the person for that violation,
the administrator shall impose an administrative fine of not more than $10,000.
6. Two or more fines of $1,000 or more imposed in 1 year for acts enumerated in subsection 1 must be considered by the commissioner as evidence for the withdrawal of:
(a) A certificate to act as a self-insured employer.
(b) A certificate to act as an association of self-insured public or private employers.
(c) A certificate of registration as a third-party administrator.
7. The commissioner may, without complying with the provisions of NRS 616B.327 or 616B.431, withdraw the certification of a self-insured employer, association of self-insured public or private employers or third-party administrator if, after a hearing, it is shown that the self-insured employer, association of self-insured public or private employers or third-party administrator violated any provision of subsection 1.
Sec. 10 NRS 616D.200 is hereby amended to read as follows:
616D.200 1. If the manager finds that an employer within the provisions of NRS 616B.633 [:
(a) Has] has failed to provide and secure compensation as required by the terms of chapters 616A to 616D, inclusive, of NRS [; or
(b) Has] or that the employer has provided and secured [such] that compensation but has failed to maintain [that compensation,] it, he shall make a determination thereon and may charge the employer an amount [of not more than three times the] equal to the sum of:
(a) The premiums that would otherwise have been owed to the system pursuant to the terms of chapters 616A to 616D, inclusive, of NRS for the period that the employer was doing business in this state without providing, securing or maintaining that compensation, but not to exceed 6 years [.] ;
(b) The actual costs incurred by the system in reinstating the policy, but not to exceed 10 percent of the premiums owed by the employer; and
(c) Interest at a rate determined pursuant to NRS 17.130 computed from the time that the premiums should have been paid.
2. The manager shall mail a copy of his determination to the employer. An employer who is aggrieved by the manager's determination may appeal from the determination pursuant to subsection 2 of NRS 616D.220.
3. Any employer within the provisions of NRS 616B.633 who fails to provide, secure or maintain compensation as required by the terms of chapters 616A to 616D, inclusive, of NRS, is:
(a) For the first offense, guilty of a [gross] misdemeanor.
(b) For a second or subsequent offense committed within 7 years after the previous offense, guilty of a felony, punishable by imprisonment in the state prison for a definite term of not less than 1 year nor more than 5 years or by a fine of not more than $10,000, or by both fine and imprisonment. A person who is sentenced to imprisonment becomes eligible for parole when he has served one-third of the definite term for which he has been sentenced, less any credit earned to reduce his sentence pursuant to chapter 209 of NRS.
Any criminal penalty imposed must be in addition to the amount charged pursuant to subsection 1.
Sec. 11 NRS 616D.390 is hereby amended to read as follows:
616D.390 1. Except as otherwise provided in subsection 2, a person shall not:
(a) While acting on behalf of a provider of health care, purchase or lease goods, services, materials or supplies for which payment may be made, in whole or in part, pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS, and solicit or accept anything of additional value in return for or in connection with the purchase or lease;
(b) Sell or lease to or for the use of a provider of health care goods, services, materials or supplies for which payment may be made, in whole or in part, pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS, and offer, transfer or pay anything of additional value in connection with or in return for the sale or lease; or
(c) Refer a person to a provider of health care for accident benefits for which payment may be made, in whole or in part, pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS, and solicit or accept anything of value in connection with the referral.
2. Paragraphs (a) and (b) of subsection 1 do not apply if the additional value transferred is:
(a) A refund or discount made in the ordinary course of business;
(b) Reflected by the books and records of the person transferring or receiving it; and
(c) Reflected in the charges submitted to the insurer.
3. A provider of health care shall not offer, transfer or pay anything of value in connection with or in return for the referral to the provider of a patient for whom payment of accident benefits may be made, in whole or in part, pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS.
4. A person shall not, while acting on behalf of a provider of health care pursuant to chapters 616A to 616D, inclusive, or chapter 617 of NRS, charge, solicit, accept or receive anything of value in addition to the amount legally payable pursuant to any of those chapters in connection with the provision of the accident benefits.
[4.] 5. A person who violates any provision of this section, if the value of the thing or any combination of things unlawfully solicited, accepted, offered, transferred, paid, charged or received:
(a) Is less than $250, is guilty of a gross misdemeanor.
(b) Is $250 or more, is guilty of a category D felony and shall be punished as provided in NRS 193.130.
Sec. 12 NRS 616D.410 is hereby amended to read as follows:
616D.410 Any person who conspires with any other person to violate [any] :
1. Any of the provisions of NRS 616D.200 is guilty of a misdemeanor.
2. Any of the provisions of NRS [616D.200,] 616D.220, 616D.240, 616D.300, 616D.310 or 616D.350 to 616D.440, inclusive, is guilty of a gross misdemeanor.
Sec. 13 Section 104 of chapter 580, Statutes of Nevada 1995, at page 2032, is hereby amended to read as follows:
Sec. 104. NRS 616D.200 is hereby amended to read as follows:
616D.200 1. If the [manager] administrator finds that an employer within the provisions of NRS 616B.633 has failed to provide and secure compensation as required by the terms of chapters 616A to 616D, inclusive, of NRS or that the employer has provided and secured that compensation but has failed to maintain it, he shall make a determination thereon based on any information that is within his possession or that may come within his possession and may charge the employer an amount equal to the sum of:
(a) The premiums that would otherwise have been owed to the system if he had been insured by the system pursuant to the terms of chapters 616A to 616D, inclusive, of NRS for the period that the employer was doing business in this state without providing, securing or maintaining that compensation, but not to exceed 6 years;
(b) The actual costs incurred by the system in reinstating the policy, but not to exceed 10 percent of the premiums owed by the employer; and
(c) Interest at a rate determined pursuant to NRS 17.130 computed from the time that the premiums should have been paid.
Any money collected by the administrator pursuant to this subsection must be deposited into the uninsured employers' claim fund.
2. [The manager shall mail a copy of his determination to the employer.] If the manager is not satisfied with the amount of a premium required to be paid to the system by any person, he may compute and determine the amount required to be paid on the basis of any information within his possession or which may come into his possession. One or more determinations of a deficiency may be made of the amount due for one or more periods.
3. Except for a determination made pursuant to subsection 1, a notice of a determination of a deficiency issued by the manager must be served personally or mailed within 3 years after the last day of the calendar month following the period for which the amount that is proposed to be determined is due. An employer who is aggrieved by [the manager's] a determination made pursuant to this section or NRS 360.300 may appeal from the determination pursuant to subsection 2 of NRS 616D.220.
[3.] 4. Any employer within the provisions of NRS 616B.633 who fails to provide, secure or maintain compensation as required by the terms of chapters 616A to 616D, inclusive, of NRS, is:
(a) For the first offense, guilty of a misdemeanor.
(b) For a second or subsequent offense committed within 7 years after the previous offense, guilty of a felony, punishable by imprisonment in the state prison for a definite term of not less than 1 year nor more than 5 years or by a fine of not more than $10,000, or by both fine and imprisonment. A person who is sentenced to imprisonment becomes eligible for parole when he has served one-third of the definite term for which he has been sentenced, less any credit earned to reduce his sentence pursuant to chapter 209 of
NRS.
Any criminal penalty imposed must be in addition to the amount charged pursuant to subsection 1.
Sec. 14 1. NRS 616B.200 is hereby repealed.
2. Section 55 of chapter 580, Statutes of Nevada 1995, at page 2012, is hereby repealed.
Sec. 15 The amendatory provisions of this act do not apply to offenses that are committed before July 1, 1997.
Sec. 16 The provisions of subsection 1 of NRS 354.599 do not apply to any additional expenses of a local government that are related to the provisions of this act.
Sec. 17 This act becomes effective on July 1, 1997.
TEXT OF REPEALED SECTIONS
616B.200 Issuance of certificate to person insured by system.
1. Any person may request the system to provide him with a statement certifying whether he is insured by the system. If the person is insured by the system, the system shall issue a certificate, upon a standard form established by the system for that purpose, which states that the person is insured by the system.
2. The manager may adopt regulations to carry out the provisions of this section.
Section 55 of chapter 580, Statutes of Nevada 1995:
Sec. 55. NRS 616.1925 is hereby amended to read as follows:
616.1925 1. The administrator shall establish a method of indexing claims for compensation that will make information concerning the claimants of one insurer available to other insurers.
2. Every [self-insured employer, association of self-insured public or private employers and the system] insurer shall provide information as required by the administrator for establishing and maintaining the index of claims.
3. If an employee files a claim with an insurer, the insurer is entitled to receive from the administrator a list of the prior claims of the employee. If the insurer desires to inspect the files related to the prior claims, he must obtain the written consent of the employee.
4. Any information obtained from the index of claims must be admitted into evidence in any hearing before an appeals officer, a hearing officer or the administrator.
5. The division may assess and collect a reasonable fee for its services provided pursuant to this section. The fee must be payable monthly or at such other intervals as determined by the administrator.