Session of 1998
                   
SENATE BILL No. 555
         
By Committee on Commerce
         
2-2
            9             AN ACT concerning the workers compensation act; providing for certain
10             procedural changes thereto; amending K.S.A. 44-513a, 44-520a, 44-
11             532a and 44-557 and K.S.A. 1997 Supp. 44-510, 44-534, 44-551, 44-
12             556, 44-5,117, 44-5,120 and 44-5,125 and repealing the existing
13             sections.
14            
15       Be it enacted by the Legislature of the State of Kansas:
16           New Section 1. (a) At any time after the entry of an award for com-
17       pensation, the employee may make application for a hearing, in such form
18       as the director may require for the furnishing of medical treatment. Such
19       post-award hearing shall be held by the assigned administrative law judge,
20       in any county designated by the administrative law judge, and the judge
21       shall exercise such powers as are provided for the conducting of full hear-
22       ings on claims under the workers compensation act. The administrative
23       law judge can make an award for further medical care if the administrative
24       law judge finds that the care is necessary to cure or relieve the effects of
25       the accidental injury which was the subject of the underlying award. No
26       post-award benefits shall be ordered without giving all parties to the
27       award the opportunity to present evidence, including taking testimony on
28       any disputed matters. A finding with regard to a disputed issue shall be
29       subject to a full review by the board under subsection (b) of K.S.A. 44-
30       551 and amendments thereto. Any action of the board pursuant to
31       post-award orders shall be subject to review under K.S.A. 44-556 and
32       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34       receive priority setting by the administrative law judge, only superseded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 back dated to the entry of the underlying award, but in no
40       event shall such medical treatment be back dated more than six months.
41       Reviews taken under this section shall receive priority settings before the
42       board, only superseded by reviews for preliminary hearings. A decision
43       shall be rendered by the board within 30 days from the time the review

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  1       hereunder is submitted.
  2           (c) The administrative law judge may award attorney fees and ex-
  3       penses on the claimant's behalf consistent with subsection (g) of K.S.A.
  4       44-536 and amendments thereto.
  5           Sec. 2. K.S.A. 1997 Supp. 44-510 is hereby amended to read as fol-
  6       lows: 44-510. Except as otherwise provided therein, medical compensa-
  7       tion under the workers compensation act shall be as follows:
  8           (a) It shall be the duty of the employer to provide the services of a
  9       health care provider, and such medical, surgical and hospital treatment,
10       including nursing, medicines, medical and surgical supplies, ambulance,
11       crutches, and apparatus, and transportation to and from the home of the
12       injured employee to a place outside the community in which such em-
13       ployee resides, and within such community if the director in the director's
14       discretion so orders, including transportation expenses computed in ac-
15       cordance with subsection (a) of K.S.A. 44-515 and amendments thereto,
16       as may be reasonably necessary to cure and relieve the employee from
17       the effects of the injury.
18           (1) The director shall appoint, subject to the approval of the secretary,
19       a specialist in health services delivery, who shall be referred to as the
20       medical administrator. The medical administrator shall be a person li-
21       censed to practice medicine and surgery in this state and shall be in the
22       unclassified service under the Kansas civil service act. The medical ad-
23       ministrator, subject to the direction of the director, shall have the duty
24       of overseeing the providing of health care services to employees in ac-
25       cordance with the provisions of the workers compensation act, including
26       but not limited to:
27           (A) Preparing, with the assistance of the advisory panel, the fee
28       schedule for health care services as set forth in this section;
29           (B) developing, with the assistance of the advisory panel, the utili-
30       zation review program for health care services as set forth in this section;
31           (C) developing procedures for appeals and review of disputed
32       charges or services rendered by health care providers under this section;
33           (D) developing a system for collecting and analyzing data on expend-
34       itures for health care services by each type of provider under the workers
35       compensation act; and
36           (E) carrying out such other duties as may be delegated or directed
37       by the director or secretary.
38           (2) The director shall prepare and adopt rules and regulations, which
39       establish a schedule of maximum fees for medical, surgical, hospital, den-
40       tal, nursing, vocational rehabilitation or any other treatment or services
41       provided or ordered by health care providers and rendered to employees
42       under the workers compensation act. The schedule shall include provi-
43       sions and review procedures for exceptional cases involving extraordinary

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  1       medical procedures or circumstances and shall include costs and charges
  2       for medical records and testimony.
  3           (3) The schedule of maximum fees shall be reasonable, shall promote
  4       health care cost containment and efficiency with respect to the workers
  5       compensation health care delivery system, and shall be sufficient to en-
  6       sure availability of such reasonably necessary treatment, care and at-
  7       tendance to each injured employee to cure and relieve the employee from
  8       the effects of the injury.
  9           (4) (A) In every case, all fees, transportation costs, charges under this
10       section and all costs and charges for medical records and testimony shall
11       be subject to approval by the director and shall be limited to such as are
12       fair, reasonable and necessary. The schedule of maximum fees shall be
13       revised as necessary at least every two years by the director to assure that
14       the schedule is current, reasonable and fair.
15           (B) There is hereby created an advisory panel to assist the director
16       in establishing a schedule of maximum fees as required by this section.
17       The panel shall consist of the commissioner of insurance and seven mem-
18       bers appointed as follows: (i) One person shall be appointed by the Kansas
19       medical society, (ii) one member shall be appointed by the Kansas asso-
20       ciation of osteopathic medicine, (iii) one member shall be appointed by
21       the Kansas hospital association, (iv) one member shall be appointed by
22       the Kansas chiropractic association, and (v) three members appointed by
23       the secretary. One member appointed by the secretary shall be a repre-
24       sentative of employers recommended to the secretary by the Kansas
25       chamber of commerce and industry. One member appointed by the sec-
26       retary shall be a representative of employees recommended to the sec-
27       retary by the Kansas AFL-CIO. One member appointed by the secretary
28       shall be a representative of entities providing vocational rehabilitation
29       services pursuant to K.S.A. 44-510g and amendments thereto. Each ap-
30       pointed member shall be appointed for a term of office of two years which
31       shall commence on July 1 of the year of appointment.
32           (C) All fees and other charges paid for such treatment, care and at-
33       tendance, including treatment, care and attendance provided by any
34       health care provider, hospital or other entity providing health care serv-
35       ices, shall not exceed the amounts prescribed by the schedule of maxi-
36       mum fees established under this section or the amounts authorized pur-
37       suant to the provisions and review procedures prescribed by the schedule
38       for exceptional cases. A health care provider, hospital or other entity pro-
39       viding health care services shall be paid either such health care provider,
40       hospital or other entity's usual charge for the treatment, care and at-
41       tendance or the maximum fees as set forth in the schedule, whichever is
42       less. In reviewing and approving the schedule of maximum fees, the di-
43       rector shall consider the following:

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

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  1       pitalization or visits and such provider or facility shall repay any fees or
  2       charges collected therefor.
  3           (8) Not later than December 31, 1993, The director shall develop
  4       and implement, or contract with a qualified entity to develop and imple-
  5       ment, utilization review and peer review procedures relating to the serv-
  6       ices rendered by providers and facilities, which services are paid for in
  7       whole or in part pursuant to the workers compensation act. The director
  8       may contract with one or more private foundations or organizations to
  9       provide utilization review, as appropriate, of entities providing health care
10       services or vocational rehabilitation services, or both, pursuant to the
11       workers compensation act.
12           (9) By accepting payment pursuant to this section for treatment or
13       services rendered to an injured employee, a health care provider or health
14       care facility shall be deemed to consent to submitting all necessary records
15       to substantiate the nature and necessity of the service or charge and other
16       information concerning such treatment to utilization review and peer re-
17       view under this section. Such health care provider shall comply with any
18       decision of the director pursuant to subsection (a)(10).
19           (10) If it is determined by a peer review committee that a provider
20       improperly overutilized or otherwise rendered or ordered unjustified
21       treatment or services or that the fees for such treatment or services were
22       excessive, the director may order the provider to show cause why the
23       provider should not be required to repay the amount which was paid for
24       rendering or ordering such treatment or services and shall provide the
25       provider a hearing thereon if requested. If a hearing is not requested
26       within 30 days of receipt of the order and the director decides to proceed
27       with the matter, a hearing shall be conducted and if a prima facie case is
28       established a final order shall be issued by the director. If the final order
29       is adverse to a health care provider, the director shall provide a report to
30       the licensing board of the health care provider with full documentation
31       of any such determination, except that no such report shall be provided
32       until after judicial review if the order is appealed. Any order of the di-
33       rector under this section shall be subject to review by the board.
34           (11) Except as provided by K.S.A. 60-437 and amendments thereto
35       or this section, all reports, information, statements, memoranda, pro-
36       ceedings, findings and records which relate to utilization review or peer
37       review conducted pursuant to this section, including any records of peer
38       review committees, shall be privileged and shall not be subject to discov-
39       ery, subpoena, or other means of legal compulsion for release to any
40       person or entity and shall not be admissible in evidence in any judicial or
41       administrative proceeding, except those proceedings authorized pursuant
42       to this section. Notwithstanding any other provisions of this section, pro-
43       ceedings authorized pursuant to this section shall be deemed to include

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  1       the acts of the division when: (A) Providing the employee with a copy of
  2       any utilization report upon the receipt thereof and subsequently providing
  3       all other documents related to the utilization and peer review process
  4       including the findings and recommendations of the hearing officers of the
  5       medical services section; (B) providing to any employer, the workers com-
  6       pensation fund, or an insurance carrier who is a party to the utilization
  7       and peer review process a copy of any utilization report at the time a
  8       proceeding is noticed for hearing and subsequently providing all other
  9       documents related to the utilization and peer review process including
10       the findings and recommendations of the hearing officers of the medical
11       services section; and (C) upon application to and order of an administra-
12       tive law judge, providing to an employee, an employer, the workers com-
13       pensation fund or an insurance carrier who is a party to a proceeding
14       before an administrative law judge, when an application pursuant to sub-
15       section (a)(15) or (16) of K.S.A. 44-510, and amendments thereto, for the
16       change or continuation of medical benefits to be provided to an employee
17       is pending subsequent to a utilization review, a copy of any utilization
18       report and all other documents related to the utilization review process
19       including the findings and recommendations of the hearing officers of the
20       medical services section.
21           (12) A provider or facility may not improperly charge or overcharge
22       a workers compensation insurer or charge for services which were not
23       provided, for the purpose of obtaining additional payment.
24           (13) Any violation of the provisions of this section which is willful or
25       which demonstrates a pattern of improperly charging or overcharging
26       workers compensation insurers constitutes grounds for the director to
27       impose a civil fine not to exceed $5,000. Any civil fine imposed under
28       this section shall be subject to review in accordance with the act for
29       judicial review and civil enforcement of agency actions in the district court
30       for Shawnee county. All moneys received for civil fines imposed under
31       this section shall be deposited in the state treasury to the credit of the
32       workers compensation fund.
33           (14) As used in this subsection (a), unless the context or the specific
34       provisions require otherwise, ``provider'' means any health care provider
35       or vocational rehabilitation service provider, and ``facility'' means any fa-
36       cility providing health care services or vocational rehabilitation services,
37       or both, including any hospital.
38           (15) Any employee who is entitled to medical benefits under subsec-
39       tion (a) of K.S.A. 44-510 and amendments thereto, may at any time after
40       a utilization review as provided by subsection (a)(8) of K.S.A. 44-510 and
41       amendments thereto, apply in writing to the director for a hearing before
42       an administrative law judge as to the medical benefits which shall be
43       provided when the employee is unable to agree with the employer, insur-

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  1       ance carrier or the workers compensation fund as to the medical benefits
  2       which should be furnished the employee following a determination that a
  3       provider or facility is presently charging or is proposing to make excessive
  4       charges or is providing or ordering, or proposing to provide or order
  5       unjustified treatment or services and which will affect the employee's right
  6       to continue to receive the same medical benefits which have been provided
  7       either voluntarily or pursuant to an award entered by an administrative
  8       law judge pursuant to K.S.A. 44-534a and amendments thereto. Any ap-
  9       plication filed hereunder shall receive the same expedited treatment ac-
10       corded to applications for preliminary hearings as provided by subsection
11       (a)(2) of K.S.A. 44-534a and amendments thereto. The administrative law
12       judge shall employ the same procedures as those available for processing
13       applications for preliminary hearings as provided by K.S.A. 44-534a and
14       amendments thereto, in processing applications filed pursuant to this par-
15       agraph. The appeal provisions of subsection (a)(2) of K.S.A. 44-534a and
16       amendments thereto, shall govern any appeal from orders entered pur-
17       suant to this paragraph.
18           (16) An employer, an insurance carrier or the workers compensation
19       fund who has provided medical benefits to an employee under K.S.A.
20       44-510 and amendments thereto, upon being furnished the results of a
21       utilization review as provided by subsection (a)(8) of K.S.A. 44-510 and
22       amendments thereto, may apply in writing to the director for a hearing
23       before an administrative law judge as to the medical benefits which shall
24       be provided when the employer, insurance carrier or the workers com-
25       pensation fund is unable to agree with the employee as to the medical
26       benefits which should be furnished the employee following a determina-
27       tion that a provider or facility is presently charging or is proposing to
28       make excessive charges or is providing or ordering or proposing to provide
29       or order unjustified treatment or services and which will affect the em-
30       ployee's right to continue to receive the same medical benefits which have
31       been provided either voluntarily or pursuant to an award entered by an
32       administrative law judge pursuant to subsection (a) of K.S.A. 44-534a and
33       amendments thereto. Any application filed hereunder shall receive the
34       same expedited treatment accorded to applications for preliminary hear-
35       ings as provided by subsection (a)(2) of K.S.A. 44-534a and amendments
36       thereto. If an employer, insurance carrier or the workers compensation
37       fund is required by the terms of an earlier order or award to provide
38       medical benefits, the employer, insurance carrier or the workers compen-
39       sation fund shall continue to provide those benefits, until there is a further
40       order of the administrative law judge entered pursuant to this paragraph
41       and K.S.A. 44-534a and amendments thereto. The administrative law
42       judge shall employ the same procedures as those available for processing
43       applications for preliminary hearings as provided by K.S.A. 44-534a and

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  1       amendments thereto, in processing applications filed pursuant to this par-
  2       agraph. The appeal provisions of subsection (a)(2) of K.S.A. 44-534a and
  3       amendments thereto, shall govern any appeal from orders entered pur-
  4       suant to this paragraph.
  5           (17) In any proceeding where there is an application by an employee,
  6       employer, insurance carrier or workers compensation fund for a hearing
  7       pursuant to K.S.A. 44-534 or 44-534a and amendments thereto, or this
  8       section, for a change of medical benefits which has been filed after a health
  9       care provider, employer, insurance carrier or the workers compensation
10       fund has made application to the medical services section of the division
11       for the resolution of a dispute or matter pursuant to the provisions of this
12       section, all reports, information, statements, memoranda, proceedings,
13       findings and records which relate to utilization review and peer review
14       including the records of contract reviewers, records of peer review com-
15       mittees and findings and records of the medical services section of the
16       division shall be admissible at the hearing before the administrative law
17       judge on the issue of the medical benefits to which an employee is entitled.
18       Any determination resulting from utilization or peer review or findings
19       and recommendations of hearing officers of the medical services section
20       pursuant to the provisions of K.S.A. 44-510 and amendments thereto, and
21       the implementing regulations thereof shall be deemed to be prima facie
22       evidence of the medical benefits to which an employee is entitled, provided
23       no award or order modifying the medical benefits to which an employee
24       is entitled shall be entered without giving any party the opportunity to
25       present evidence, including testimony to rebut or contradict the deter-
26       minations, findings and recommendations of the proceedings established
27       under this section. Upon application being filed under this paragraph,
28       any party to the proceedings under K.S.A. 44-534 or 44-534a and amend-
29       ments thereto, may apply to the administrative law judge for an order
30       permitting the inspection and copying of the records of the medical serv-
31       ices section. The administrative law judge may order the inspection and
32       copying of such records, subject to the continuing requirements of para-
33       graph 11 of this subsection.
34           (b) Any health care provider, nurse, physical therapist, any entity pro-
35       viding medical, physical or vocational rehabilitation services or providing
36       reeducation or training pursuant to K.S.A. 44-510g and amendments
37       thereto, medical supply establishment, surgical supply establishment, am-
38       bulance service or hospital who accept the terms of the workers compen-
39       sation act by providing services or material thereunder shall be bound by
40       the fees approved by the director and no injured employee or dependent
41       of a deceased employee shall be liable for any charges above the amounts
42       approved by the director. If the employer has knowledge of the injury
43       and refuses or neglects to reasonably provide the services of a health care

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

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  1       lished under the workers compensation act may rely, if done in good faith,
  2       solely or partially on treatment by prayer or spiritual means in accordance
  3       with the tenets of practice of a church or religious denomination without
  4       suffering a loss of benefits subject to the following conditions:
  5           (1) The employer or the employer's insurance carrier agrees thereto
  6       in writing either before or after the injury;
  7           (2) the employee submits to all physical examinations required by the
  8       workers compensation act;
  9           (3) the cost of such treatment shall be paid by the employee unless
10       the employer or insurance carrier agrees to make such payment;
11           (4) the injured employee shall be entitled only to benefits that would
12       reasonably have been expected had such employee undergone medical
13       or surgical treatment; and
14           (5) the employer or insurance carrier that made an agreement under
15       paragraph (1) or (3) of this subsection may withdraw from the agreement
16       on 10 days' written notice.
17           (e) In any employment to which the workers compensation act ap-
18       plies, the employer shall be liable to each employee who is employed as
19       a duly authorized law enforcement officer, ambulance attendant, mobile
20       intensive care technician or firefighter, including any person who is serv-
21       ing on a volunteer basis in such capacity, for all reasonable and necessary
22       preventive medical care and treatment for hepatitis to which such em-
23       ployee is exposed under circumstances arising out of and in the course
24       of employment.
25           (f) No person shall be subject to civil liability for libel, slander or any
26       other relevant tort cause of action by virtue of performing utilization
27       review or peer review under contract with the director pursuant to sub-
28       section (a)(7).
29           Sec. 3. K.S.A. 44-513a is hereby amended to read as follows: 44-
30       513a. (a) Whenever a minor person shall be entitled to compensation
31       under the provisions of the workmen's workers compensation act, ;n an
32       amount not to exceed two thousand dollars ($2,000), the director admin-
33       istrative law judge is authorized to direct such compensation to be paid
34       ;ø the natural guardian of such minor person, or to the minor himself,
35       provided that if a conservator shall have been appointed for such minor
36       person the payment shall be directed to such conservator. Before ordering
37       such a payment, the director shall inquire into the advisability thereof,
38       and if he finds that there is no manifest disadvantage to the minor person
39       therefrom, he shall order such payment to be made to the natural guard-
40       ian, or to the minor himself.
41           (b) In the event the director is of the opinion that payment of such
42       compensation should not be made to the natural guardian, or to such
43       minor, he shall direct to whom payment shall be made. The payment of

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  1       compensation pursuant to an order or directive made by the director
  2       under authority of the workmen's compensation act shall exclude and
  3       satisfy all other claims and causes of action of such minor person for the
  4       injury or death for which the compensation award is made in accordance
  5       with K.S.A. 59-3001 et seq., and amendments thereto.
  6           Sec. 4. K.S.A. 44-520a is hereby amended to read as follows: 44-
  7       520a. (a) No proceedings for compensation shall be maintainable under
  8       the workmen's compensation act unless a written claim for compensation
  9       shall be served upon the employer by delivering such written claim to
10       him or his duly authorized agent, or by delivering such written claim to
11       him by registered or certified mail within two hundred (200) days after
12       the date of the accident, or in cases where compensation payments have
13       been suspended within two hundred (200) days after the date of the last
14       payment of compensation; or within one (1) year after the death of the
15       injured employee if death results from the injury within five (5) years
16       after the date of such accident.
17           (b) Where recovery is denied to any person in a suit brought at law
18       or in admiralty or under the federal employers' liability acts to recover
19       damages in respect of bodily injury or death on the ground that such
20       person was an employee and the defendant was an employer subject to
21       and within the meaning of the workmen's workers compensation act, or
22       when recovery is denied to any person in an action brought under the
23       provisions of the workmen's workers compensation law of any other state
24       or jurisdiction on the ground that such person was an employee under
25       and subject to the provisions of the workmen's workers compensation act
26       of this state, the limitation of time prescribed in subsection (a) (b) of ;(tri-stars)is
27       section K.S.A. 44-534, and amendments thereto shall begin to run only
28       from the date of termination or abandonment of such suit or compen-
29       sation proceeding, when such suit or compensation proceeding is filed
30       within two hundred (200) days after the date of the injury or death com-
31       plained of the applicable statute of limitations for the proceeding.
32           Sec. 5. K.S.A. 44-532a is hereby amended to read as follows: 44-
33       532a. (a) If an employer has no insurance to secure the payment of com-
34       pensation, as provided in subsection (b) (1) of K.S.A. 44-532 and amend-
35       ments thereto, and such employer is financially unable to pay
36       compensation to an injured worker as required by the workers compen-
37       sation act, or such employer cannot be located and required to pay such
38       compensation, the injured worker may apply to the director for an award
39       of the compensation benefits, including medical compensation, to which
40       such injured worker is entitled, to be paid from the workers compensation
41       fund. Whenever a worker files an application under this section, the mat-
42       ter shall be assigned to an administrative law judge for hearing. If the
43       administrative law judge is satisfied as to the existence of the conditions

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  1       prescribed by this section, the administrative law judge may make an
  2       award, or modify an existing award, and prescribe the payments to be
  3       made from the workers compensation fund as provided in K.S.A. 44-569
  4       and amendments thereto. The award shall be certified to the commis-
  5       sioner of insurance, and upon receipt thereof, the commissioner of in-
  6       surance shall cause payment to be made to the worker in accordance
  7       therewith. In any case in which the workers compensation fund is re-
  8       quired to make payments pursuant to this section and in which the com-
  9       pensability is not an issue to be decided on review by the board, medical
10       and temporary total disability compensation shall be payable in ac-
11       cordance with the award of the administrative law judge and shall not be
12       stayed pending such review.
13           (b) The commissioner of insurance, acting as administrator of the
14       workers compensation fund, shall have a cause of action against the em-
15       ployer for recovery of any amounts paid from the workers compensation
16       fund pursuant to this section. Such action shall be filed in the district
17       court of the county in which the accident occurred or where the contract
18       of employment was entered into.
19           Sec. 6. K.S.A. 1997 Supp. 44-534 is hereby amended to read as fol-
20       lows: 44-534. (a) Whenever the employer, worker, the Kansas workers
21       compensation fund or insurance carrier cannot agree upon the worker's
22       right to compensation under the workers compensation act or upon any
23       issue in regard to workers compensation benefits due the injured worker
24       thereunder, the employer, worker, the workers compensation fund or
25       insurance carrier may apply in writing to the director for a determination
26       of the benefits or compensation due or claimed to be due. The application
27       shall be in the form prescribed by the rules and regulations of the director
28       and shall set forth the substantial and material facts in relation to the
29       claim. Whenever an application is filed under this section, the matter
30       shall be assigned to an administrative law judge. The director shall forth-
31       with mail a certified copy of the application to the adverse party. The
32       administrative law judge shall proceed, upon due and reasonable notice
33       to the parties, which shall not be less than 20 days, to hear all evidence
34       in relation thereto and to make findings concerning the amount of com-
35       pensation, if any due to the worker.
36           (b) No proceeding for compensation shall be maintained under the
37       workers compensation act unless an application for a hearing is on file in
38       the office of the director within ;(tri-stars)ree two years of the date of the accident
39       or within two years of the date of the last payment of compensation,
40       whichever is later. If the employer has not filed an accident report within
41       the parameters of K.S.A. 44-557, and amendments thereto, no proceeding
42       for compensation shall be maintained under the workers compensation
43       act unless an application for hearing is on file in the office of the director

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  1       within three years of the date of the accident or within three years of the
  2       date of the last payment of compensation, whichever is later.
  3           Sec. 7. K.S.A. 1997 Supp. 44-551 is hereby amended to read as fol-
  4       lows: 44-551. (a) The duties of the assistant directors of workers com-
  5       pensation shall include but not be limited to acting in the capacity of an
  6       administrative law judge.
  7           (b) (1) Administrative law judges shall have power to administer
  8       oaths, certify official acts, take depositions, issue subpoenas, compel the
  9       attendance of witnesses and the production of books, accounts, papers,
10       documents and records to the same extent as is conferred on the district
11       courts of this state, and may conduct an investigation, inquiry or hearing
12       on all matters before the administrative law judges. All final orders,
13       awards, modifications of awards, or preliminary awards under K.S.A.
14       44-534a and amendments thereto made by an administrative law judge
15       shall be subject to review by the board upon written request of any in-
16       terested party within 10 days. Intermediate Saturdays, Sundays and legal
17       holidays shall be excluded in the time computation. Review by the board
18       shall be a prerequisite to judicial review as provided for in K.S.A. 44-556
19       and amendments thereto. On any such review, the board shall have au-
20       thority to grant or refuse compensation, or to increase or diminish any
21       award of compensation or to remand any matter to the administrative law
22       judge for further proceedings. The orders of the board under this sub-
23       section shall be issued within 30 days from the date arguments were
24       presented by the parties.
25           (2) (A) If an administrative law judge has entered a preliminary
26       award under K.S.A. 44-534a and amendments thereto, a review by the
27       board shall not be conducted under this section unless it is alleged that
28       the administrative law judge exceeded the administrative law judge's ju-
29       risdiction in granting or denying the relief requested at the preliminary
30       hearing. Such an appeal from a preliminary award may be heard and
31       decided by a single member of the board. Members of the board shall
32       hear such preliminary appeals on a rotating basis and the individual board
33       member who decides the appeal shall sign each such decision. The orders
34       of the board under this subsection shall be issued within 30 days from
35       the date arguments were presented by the parties.
36           (B) If an order on review is not issued by the board within the ap-
37       plicable time period prescribed by subsection (b) (1), medical compen-
38       sation and any disability compensation as provided in the award of the
39       administrative law judge shall be paid commencing with the first day after
40       such time period and shall continue to be paid until the order of the
41       board is issued, except that no payments shall be made under this pro-
42       vision for any period before the first day after such time period. Nothing
43       in this section shall be construed to limit or restrict any other remedies

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  1       available to any party to a claim under any other statute.
  2           (C) In any case in which the final award of an administrative law judge
  3       is appealed to the board for review under this section and in which the
  4       compensability is not an issue to be decided on review by the board,
  5       medical compensation shall be payable in accordance with the award of
  6       the administrative law judge and shall not be stayed pending such review.
  7       In any case in which the workers compensation fund is required to make
  8       payments pursuant to K.S.A. 44-532a and amendments thereto and in
  9       which the compensability is not an issue to be decided on review by the
10       board, medical and temporary total disability compensation shall be pay-
11       able in accordance with the award of the administrative law judge and
12       shall not be stayed pending such review. The employee may proceed
13       under K.S.A. 44-534a and amendments thereto and may have a hearing
14       in accordance with that statute to enforce the provisions of this subsec-
15       tion.
16           (c) Each assistant director and each administrative law judge or spe-
17       cial administrative law judge shall be allowed all reasonable and necessary
18       expenses actually incurred while in the actual discharge of official duties
19       in administering the workers compensation act, but such expenses shall
20       be sworn to by the person incurring the same and be approved by the
21       secretary.
22           (d) In case of emergency the director may appoint special local ad-
23       ministrative law judges and assign to them the examination and hearing
24       of any designated case or cases. Such special local administrative law
25       judges shall be attorneys and admitted to practice law in the state of
26       Kansas and shall, as to all cases assigned to them, exercise the same pow-
27       ers as provided by this section for the regular administrative law judges.
28       Special local administrative law judges shall receive a fee commensurate
29       with the services rendered as fixed by rules and regulations adopted by
30       the director. The fees prescribed by this section prior to the effective date
31       of this act shall be effective until different fees are fixed by such rules
32       and regulations.
33           (e) All special local administrative law judge's fees and expenses, with
34       the exception of settlement hearings, shall be paid from the workers com-
35       pensation administration fee fund, as provided in K.S.A. 74-712 and
36       amendments thereto. Where there are no available funds or where the
37       special local administrative law judge conducted a settlement hearing, the
38       fees shall be taxed as costs in each case heard by such special local ad-
39       ministrative law judge and when collected shall be paid directly to such
40       special local administrative law judge by the party charged with the pay-
41       ment of the same.
42           (f) Except as provided for judicial review under K.S.A. 44-556 and
43       amendments thereto, the decisions and awards of the board shall be final.

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  1           Sec. 8. K.S.A. 1997 Supp. 44-556 is hereby amended to read as fol-
  2       lows: 44-556. (a) Any action of the board pursuant to the workers com-
  3       pensation act, other than the disposition of appeals of preliminary orders
  4       or awards under K.S.A. 44-534a and amendments thereto, shall be subject
  5       to review in accordance with the act for judicial review and civil enforce-
  6       ment of agency actions by appeal directly to the court of appeals. Any
  7       party may appeal from a final order of the board by filing an appeal with
  8       the court of appeals within 30 days of the date of the final order. Such
  9       review shall be upon questions of law.
10           (b) Commencement of an action for review by the court of appeals
11       shall not stay the payment of compensation due for the ten-week period
12       next preceding the board's decision and for the period of time after the
13       board's decision and prior to the decision of the court of appeals on
14       review.
15           (c) If review is sought on any order entered under the workers com-
16       pensation act prior to October 1, 1993, such review shall be in accordance
17       with the provisions of K.S.A. 44-551 and this section, and any other ap-
18       plicable procedural provisions of the workers compensation act, as all such
19       provisions existed prior to amendment by this act on July 1, 1993.
20           (d) (1) If compensation, including medical benefits, temporary total
21       disability benefits or vocational rehabilitation benefits, has been paid to
22       the worker by the employer or the employer's insurance carrier during
23       the pendency of review under this section and the amount of compen-
24       sation awarded by the board is reduced or totally disallowed by the de-
25       cision on the appeal or review, the employer and the employer's insurance
26       carrier, except as otherwise provided in this section, shall be reimbursed
27       from the workers compensation fund established in K.S.A. 44-566a and
28       amendments thereto for all amounts of compensation so paid which are
29       in excess of the amount of compensation that the worker is entitled to as
30       determined by the final decision on review. The director shall determine
31       the amount of compensation paid by the employer or insurance carrier
32       which is to be reimbursed under this subsection (d)(1), and the director
33       shall certify to the commissioner of insurance the amount so determined.
34       Upon receipt of such certification, the commissioner of insurance shall
35       cause payment to be made to the employer or the employer's insurance
36       carrier in accordance therewith.
37           (2) If any temporary or permanent partial disability or temporary or
38       permanent total disability benefits have been paid to the worker by the
39       employer or the employer's insurance carrier during the pendency of
40       review under this section and the amount of compensation awarded for
41       such benefits by the board is reduced by the decision on the appeal or
42       review and the balance of compensation due the worker exceeds the
43       amount of such reduction, the employer and the employer's insurance

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  1       carrier shall receive a credit which shall be applied as provided in this
  2       subsection (d)(2) for all amounts of such benefits which are in excess of
  3       the amount of such benefits that the worker is entitled to as determined
  4       by the final decision on review or appeal. If a lump-sum amount of com-
  5       pensation is due and owing as a result of the decision of the court of
  6       appeals, the credit under this subsection (d)(2) shall be applied first
  7       against such lump-sum amount. If there is no such lump-sum amount or
  8       if there is any remaining credit after a credit has been applied to a lump-
  9       sum amount due and owing, such credit shall be applied against the last
10       compensation payments which are payable for a period of time after the
11       final decision on review or appeal so that the worker continues to receive
12       compensation payments after such final decision until no further com-
13       pensation is payable after the credit has been satisfied. The credit allowed
14       under this subsection (d)(2) shall not be applied so as to stop or reduce
15       benefit payments after such final decision, but shall be used to reduce
16       the period of time over which benefit payments are payable after such
17       final decision. The provisions of this subsection (d)(2) shall be applicable
18       in all cases under the workers compensation act in which a final award is
19       issued by an administrative law judge on or after July 1, 1990.
20           (e) If compensation, including medical benefits, temporary total dis-
21       ability benefits or vocational rehabilitation benefits, has been paid to the
22       worker by the employer, the employer's insurance carrier or the workers
23       compensation fund during the pendency of review under this section,
24       and pursuant to K.S.A. 44-534a or K.S.A. 44-551, and amendments
25       thereto, and the employer, the employer's insurance carrier or the work-
26       ers compensation fund, which was held liable for and ordered to pay all
27       or part of the amount of compensation awarded by the administrative
28       law judge or board, is held not liable by the final decision on ;(tri-stars)e appeal
29       or review by either the board or an appellate court for the compensation
30       paid or is held liable on such appeal or review to pay an amount of com-
31       pensation which is less than the amount paid pursuant to the award, then
32       the employer, employer's insurance carrier or workers compensation fund
33       shall be reimbursed by the party or parties which were held liable on such
34       appeal or review to pay the amount of compensation to the worker that
35       was erroneously ordered paid. The director shall determine the amount
36       of compensation which is to be reimbursed to each party under this sub-
37       section, if any, in accordance with the final decision on the appeal or
38       review and shall certify each such amount to be reimbursed to the party
39       required to pay the amount or amounts of such reimbursement. Upon
40       receipt of such certification, the party required to make the reimburse-
41       ment shall pay the amount or amounts required to be paid in accordance
42       with such certification. No worker shall be required to make reimburse-
43       ment under this subsection or subsection (d).

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  1           (f) As used in subsections (d) and (e), ``employers' insurance carrier''
  2       includes any qualified group-funded workers compensation pool under
  3       K.S.A. 44-581 through 44-591 and amendments thereto or a group-
  4       funded pool under the Kansas municipal group-funded pool act which
  5       includes workers compensation and employers' liability under the workers
  6       compensation act.
  7           (g) In any case in which any review is sought under this section and
  8       in which the compensability is not an issue to be decided on review,
  9       medical compensation shall be payable and shall not be stayed pending
10       such review. The worker may proceed under K.S.A. 44-534a and amend-
11       ments thereto and may have a hearing in accordance with that statute to
12       enforce the provisions of this subsection.
13           Sec. 9. K.S.A. 44-557 is hereby amended to read as follows: 44-557.
14       (a) It is hereby made the duty of every employer to make or cause to be
15       made a report to the director of any accident, or claimed or alleged ac-
16       cident, to any employee which occurs in the course of the employee's
17       employment and of which the employer or the employer's supervisor has
18       knowledge, which report shall be made upon a form to be prepared by
19       the director, within 28 days, after the receipt of such knowledge, if the
20       personal injuries which are sustained by such accidents, are sufficient
21       wholly or partially to incapacitate the person injured from labor or service
22       for more than the remainder of the day, shift or turn on which such
23       injuries were sustained.
24           (b) When such accident has been reported and subsequently such
25       person has died, a supplemental report shall be filed with the director
26       within 28 days after receipt of knowledge of such death, stating such fact
27       and any other facts in connection with such death or as to the dependents
28       of such deceased employee which the director may require. Such report
29       or reports shall not be used nor considered as evidence before the direc-
30       tor, any administrative law judge, the board or in any court in this state.
31           (c) No limitation of time in the workers compensation act shall begin
32       to run unless a report of the accident as provided in this section has been
33       filed at the office of the director if the injured employee has given notice
34       of accident as provided by K.S.A. 44-520 and amendments thereto, except
35       that any proceeding for compensation for any such injury or death, where
36       report of the accident has not been filed, must be commenced by filing
37       an application with the director within one year from the date of the
38       accident, suspension of payment of disability compensation, the date of
39       the last medical treatment authorized by the employer, or the death of
40       such employee referred to in K.S.A. 44-520a and amendments thereto.
41           (d) (c) The knowing failure of any employer or workers compensation
42       insurance carrier to file or cause to be filed any report required by this
43       section shall be subject to a civil penalty for each violation of not to exceed

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  1       $250.
  2           (e) (d) Any civil penalty imposed by this section shall be recovered
  3       in an action in the district court of Shawnee county instituted and pros-
  4       ecuted by the attorney general upon information received from the di-
  5       rector, except that, at the discretion of the director, such civil penalties
  6       may be assessed as costs in a workers compensation proceeding by an
  7       administrative law judge upon a showing by the director that a required
  8       report was not filed which pertains to a claim pending before the admin-
  9       istrative law judge.
10           Sec. 10. K.S.A. 1997 Supp. 44-5,117 is hereby amended to read as
11       follows: 44-5,117. (a) Upon the request of any party to a workers com-
12       pensation claim and the acceptance of the other party, the director of
13       workers compensation shall schedule the parties for a mediation confer-
14       ence. The purpose of the mediation shall be to assist the parties in reach-
15       ing agreement on any disputed issues in a workers compensation claim.
16       If the director is advised that one party does not wish to participate in
17       the mediation, the director is authorized to encourage that party to par-
18       ticipate.
19           (b) Mediation conferences shall be conducted by mediators ap-
20       pointed by the director. Such mediators shall be qualified as mediators
21       pursuant to the dispute resolution act, K.S.A. 5-501 et seq., and amend-
22       ments thereto, and any relevant rules of the Kansas supreme court as
23       authorized pursuant to K.S.A. 5-510, and amendments thereto.
24           (c) Persons with final settlement authority for each party shall be
25       present, in person or by video conference, at the mediation conference.
26           (d) All mediation conferences shall be conducted by a mediator in
27       accordance with the dispute resolution act, K.S.A. 5-501, and amend-
28       ments thereto.
29           (e) The director shall widely disseminate information about the me-
30       diation conference procedure.
31           Sec. 11. K.S.A. 1997 Supp. 44-5,120 is hereby amended to read as
32       follows: 44-5,120. (a) The director of workers compensation is hereby
33       authorized and directed to establish a system for monitoring, reporting
34       and investigating suspected fraud or abuse by any persons who are not
35       licensed or regulated by the commissioner of insurance in connection
36       with securing the liability of an employer under the workers compensa-
37       tion act or in connection with claims or benefits thereunder. The com-
38       missioner of insurance is hereby authorized and directed to establish a
39       system for monitoring, reporting and investigating suspected fraud or
40       abuse by any persons who are licensed or regulated by the commissioner
41       of insurance in connection with securing the liability of an employer un-
42       der the workers compensation act or in connection with claims there-
43       under.

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

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

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

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  1           (g) If, after such hearing, the director or the commissioner of insur-
  2       ance, in the case of any person licensed or regulated by the commissioner,
  3       determines that the person or persons charged have engaged in a fraud-
  4       ulent or abusive act or practice the director or the commissioner of in-
  5       surance, in the case of any person licensed or regulated by the commis-
  6       sioner, shall issue an order or summary order requiring such person to
  7       cease and desist from engaging in such act or practice and, in the exercise
  8       of discretion, may order any one or more of the following:
  9           (1) Payment of a monetary penalty of not more than $1,000 $2,000
10       for each and every act constituting the fraudulent or abusive act or prac-
11       tice, but not exceeding an aggregate penalty of $2,500 for any six-month
12       $20,000 in a one-year period;
13           (2) redress of the injury by requiring the refund of any premiums
14       paid by and requiring the payment of any moneys withheld from, any
15       employee, employer, insurance company or other person or entity ad-
16       versely affected by the act constituting a fraudulent or abusive act or
17       practice;
18           (3) repayment of an amount equal to the total amount that the person
19       received as benefits or any other payment under the workers compen-
20       sation act and any amount that the person otherwise benefited as a result
21       of an act constituting a fraudulent or abusive act or practice, with interest
22       thereon determined so that such total amount, plus any accrued interest
23       thereon, bears interest, from the date of the payment of benefits or other
24       such payment or the date the person was benefited, at the current rate
25       of interest prescribed by law for judgments under subsection (e)(1) of
26       K.S.A. 16-204 and amendments thereto per month or fraction of a month
27       until repayment.
28           (h) After the expiration of the time allowed for filing a petition for
29       review of an order issued under this section, if no such petition has been
30       duly filed within such time, the director at any time, after notice and
31       opportunity for hearing in accordance with the provisions of the Kansas
32       administrative procedure act, may reopen and alter, modify or set aside,
33       in whole or in part, any order issued under this section, whenever in the
34       director's opinion conditions of fact or of law have so changed as to re-
35       quire such action or if the public interest so requires.
36           (i) Upon the order of the director or the commissioner of insurance,
37       in the case of any person licensed or regulated by the commissioner, after
38       notice and hearing in accordance with the provisions of the Kansas ad-
39       ministrative procedure act, any person who violates a cease and desist
40       order of the director or the commissioner of insurance, in the case of any
41       person licensed or regulated by the commissioner, issued under this sec-
42       tion may be subject, at the discretion of the director or the commissioner
43       of insurance, in the case of any person licensed or regulated by the com-

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  1       missioner, to a monetary penalty of not more than $10,000 for each and
  2       every act or violation, but not exceeding an aggregate penalty of $50,000
  3       for any six-month period in addition to any penalty imposed pursuant to
  4       subsection (g).
  5           (j) Any civil fine imposed under this section shall be subject to review
  6       in accordance with the act for judicial review and civil enforcement of
  7       agency actions in the district court in Shawnee county.
  8           (k) All moneys received under this section for costs assessed, which
  9       are not awarded to a complainant, or monetary penalties imposed shall
10       be deposited in the state treasury and credited to the workmen's workers
11       compensation fee fund.
12           (l) Any person who refers a possibly fraudulent or abusive practice
13       to any state or governmental investigative agency, shall be immune from
14       civil or criminal liability arising from the supply or release of such referral
15       as long as such referral is made in good faith with the belief that a fraud-
16       ulent or abusive practice has, is or will occur and said referral is not made
17       by the person or persons who are in violation of the workers compensation
18       act in order to avoid criminal prosecution or administrative hearings.
19           (m) The remedies and penalties provided in this section are not ex-
20       clusive remedies and penalties and do not preclude the use of any other
21       criminal or civil remedy or penalty for any act that is in violation of this
22       section.
23           Sec. 12. K.S.A. 1997 Supp. 44-5,125 is hereby amended to read as
24       follows: 44-5,125. (a) (1) Any person who obtains or attempts to obtain
25       any payment of compensation under the workers compensation act for
26       such person or who denies or attempts to deny the obligation to make
27       any payment of workers compensation benefits; who obtains or attempts
28       to obtain a more favorable workers compensation benefit rate or insur-
29       ance premium rate than that to which such person is otherwise entitled;
30       who prevents, reduces, avoids or attempts to prevent, reduce or avoid the
31       payment of any compensation under the workers compensation act; or
32       who fails to communicate a settlement offer or similar information to a
33       claimant under the workers compensation act, by, in any such case, know-
34       ingly or intentionally: (A) Making a false or misleading statement, (B)
35       misrepresenting or concealing a material fact, or (C) fabricating, altering,
36       concealing or destroying a document; (D) is employed while receiving
37       temporary total disability benefits or permanent total disability benefits
38       to which they are not entitled; and
39           (2) any person who conspires with another person to commit any act
40       described by clause paragraph (1) of this subsection (a), shall be guilty
41       of:
42           (A) A class A C nonperson misdemeanor, if the amount received as
43       a benefit or other payment under the workers compensation act as a result

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  1       of such act or the amount that the person otherwise benefited monetarily
  2       as a result of a violation of this subsection (a) is $500 or less; or
  3           (B) a severity level 9, nonperson felony, if such amount is more than
  4       $500. but less than $25,000;
  5           (C) a severity level 7, nonperson felony, if the amount is more than
  6       $25,000, but less than $50,000;
  7           (D) a severity level 6, nonperson felony if the amount is more than
  8       $50,000, but less than $100,000; or
  9           (E) a severity level 5, nonperson felony if the amount is more than
10       $100,000.
11           (b) Any person who knowingly and intentionally presents a false cer-
12       tificate of insurance that purports that the presenter is insured under the
13       workers compensation act, shall be guilty of a level 8, nonperson felony.
14           (c) A health care provider under the workers compensation act who
15       knowingly and intentionally submits a charge for health care that was not
16       furnished, shall be guilty of a level 9, nonperson felony.
17           (d) Any person who obtains or attempts to obtain a more favorable
18       workers compensation insurance premium rate than that to which the
19       person is entitled, who prevents, reduces, avoids or attempts to prevent,
20       reduce or avoid the payment of any compensation under the workers
21       compensation act, or who fails to communicate a settlement offer or sim-
22       ilar information to a claimant under the workers compensation act, by,
23       in any such case knowingly or intentionally: (1) Making a false or mis-
24       leading statement; (2) misrepresenting, concealing or failing to disclose a
25       material fact; (3) fabricating, concealing or destroying a document; or (4)
26       conspiring with another person or persons to commit the acts described
27       in paragraph (1) or (2) shall be guilty of a level 9, nonperson felony.
28           (b) (e) Any person who has received any amount of money as a benefit
29       or other payment under the workers compensation act as a result of a
30       violation of subsection (a) or (c) and any person who has otherwise ben-
31       efited monetarily as a result of a violation of subsection (a) or (c) shall be
32       liable to repay an amount equal to the amount so received by such person
33       or the amount by which such person has benefited monetarily, with in-
34       terest thereon. Any such amount, plus any accrued interest thereon, shall
35       bear interest at the current rate of interest prescribed by law for judg-
36       ments under subsection (e)(1) of K.S.A. 16-204 and amendments thereto
37       per month or fraction of a month until repayment of such amount, plus
38       any accrued interest thereon. The interest shall accrue from the date of
39       overpayment or erroneous payment of any such amount or the date such
40       person benefited monetarily.
41           (c) (f) Any person aggrieved by a violation of subsection (a), (b), (c)
42       or (d) shall have a cause of action against any other person to recover any
43       amounts of money erroneously paid as benefits or any other amounts of

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  1       money paid under the workers compensation act, and to seek relief for
  2       other monetary damages, for which liability has accrued under this section
  3       against such other person. Relief under this subsection is to be predicated
  4       upon exhaustion of administrative remedies available in K.S.A. 44-5,120
  5       and amendments thereto.
  6           (d) (g) Nothing in this section shall prohibit an employer from exer-
  7       cising a right to reimbursement under K.S.A. 44-534a, 44-556 or 44-569a
  8       and amendments thereto.
  9           Sec. 13. K.S.A. 44-513a, 44-520a, 44-532a and 44-557 and K.S.A.
10       1997 Supp. 44-510, 44-534, 44-551, 44-556, 44-5,117, 44-5,120 and 44-
11       5,125 are hereby repealed.
12           Sec. 14. This act shall take effect and be in force from and after its
13       publication in the Kansas register.
14