2015 -- S 0874 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO LABOR AND LABOR RELATIONS -- WORKERS' COMPENSATION

     

     Introduced By: Senators P Fogarty, and Ruggerio

     Date Introduced: April 30, 2015

     Referred To: Senate Labor

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 28-30-22 of the General Laws in Chapter 28-30 entitled "Workers'

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Compensation Court" is hereby amended to read as follows:

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     28-30-22. Medical advisory board. -- (a) The chief judge of the workers' compensation

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court, in consultation with the appropriate medical or professional association, shall appoint a

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medical advisory board which shall serve at the chief judge's pleasure and consist of eleven (11)

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members in the following specialties: one orthopedic surgeon; one neurologist; one

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neurosurgeon; one physiatrist; one chiropractor; one physical therapist; one internist; one

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psychiatrist or psychologist; and three (3) four (4) ad hoc physician members appointed at the

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discretion of the chief judge. Members of the board shall be reimbursed three hundred dollars

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($300) per day served in the discharge of the board's duties, not to exceed six thousand dollars

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($6,000) per member in any year. The chief judge shall designate the chairperson of the board.

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      (b) The chief judge is authorized, with the advice of the medical advisory board, to do

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the following:

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      (1) (i) Adopt and review protocols and standards of treatment for compensable injury,

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which shall address types, frequency, modality, duration, and termination of treatment, and types

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and frequency of diagnostic procedures.

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      (ii) Within thirty (30) days of its establishment, the medical advisory board shall prepare

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a recommended standard for the consideration and weighing by the court of medical evidence,

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including, but not limited to, medical test results, objective clinical findings, subjective

 

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complaints supported by tests for inconsistency, and purely subjective complaints, with the

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purposes of assuring treatment and compensation for legitimate compensable injuries, reducing

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litigation, inefficiency, and delay in court proceedings, and deterring false or exaggerated claims

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of injury. The standards shall be applicable to proceedings before the workers' compensation

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court, including specifically those to determine the nature and extent of injury and the

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achievement of maximum medical improvement, and shall be effective in all proceedings when

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adopted by the court.

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      (2) Approve and promulgate rules, regulations, and procedures concerning the

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appointment and qualifications of comprehensive independent health care review teams which

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would be composed of any combination of one or more health care provider(s), rehabilitation

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expert(s), physical therapist(s), occupational therapist(s), psychologist(s), and vocational

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rehabilitation counselor(s).

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      (3) Approve and administer procedures to disqualify or disapprove medical service

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providers and maintain the approved provider list.

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      (4) Appoint an administrator of the medical advisory board.

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      (5) Approve and promulgate rules, regulations, and procedures concerning the

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appointment and qualifications of impartial medical examiners.

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      (6) Annually review the performance of each comprehensive independent health care

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review team and impartial medical examiner.

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      (c) The administrator of the medical advisory board is authorized and directed to

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establish terms and conditions for comprehensive independent health care review teams and

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impartial medical examiners to apply for approval by the medical advisory board and to perform

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any other duties as directed by the board.

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      (d) Any reference to an impartial medical examiner in chapters 29 -- 38 of this title shall

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be deemed to include the impartial medical examiners and comprehensive independent health

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care review teams referred to in subsection (b) of this section.

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      (e) (1) Disqualification of medical care providers. - Every health care provider licensed

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in the state of Rhode Island shall be presumed to be qualified to provide health care services for

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injuries compensable under this title, and may recover costs of treatment consistent with

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established fee and cost schedules. The administrator of the medical advisory board is thereafter

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authorized to disqualify and/or suspend any qualified provider based upon one or more of the

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following:

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      (i) The violation of the protocols and standards of care established by the medical

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advisory board;

 

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      (ii) The filing of affidavits that are untimely, inadequate, incomplete, or untruthful;

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      (iii) The provision of unnecessary and/or inappropriate treatment;

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      (iv) A pattern of violation and/or evasion of an approved fee schedule;

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      (v) The censure or discipline of the provider by the licensing body of the provider's

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profession;

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      (vi) The billing of, or pursuing collection efforts against, the employee for treatment or

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diagnostic tests causally related to an injury not deemed non-compensable by the workers'

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compensation court.

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      (2) Upon disqualification or during suspension, the provider shall not be permitted to

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recover any costs or fees for treatment provided under this title. The appropriate body with

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professional disciplinary authority over the provider shall be notified of any such action. Appeal

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of disqualification or suspension shall be to the medical advisory board, with final review by the

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workers' compensation court.

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      (3) If unnecessary or inappropriate treatment is provided by an entity affiliated with the

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treating physician, the administrator of the medical advisory board may increase the penalty for a

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violation.

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      (4) This section shall not prevent the recovery of reasonable costs for immediate

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emergency care rendered by a provider.

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      (f) As a guide to the interpretation and application of this section, the policy and intent of

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this legislature is declared to be that every person who suffers a compensable injury with

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resulting disability should be provided with high quality medical care and the opportunity to

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return to gainful employment as soon as possible with minimal dependence on compensation

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awards.

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     SECTION 2. Sections 28-33-17.2, 28-33-17.3 and 28-33-18.3 of the General Laws in

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Chapter 28-33 entitled "Workers' Compensation - Benefits" are hereby amended to read as

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follows:

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     28-33-17.2. Employee's affirmative duty to report earnings -- Penalties for failure to

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provide earnings report -- Civil and criminal liability. -- (a) It is the intent of the legislature

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that the costs resulting from fraud and abuse in the workers' compensation system be arrested. In

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order to discourage potential abusers, employees must be aware of the affirmative duty to report

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earnings and the penalties for any fraud or abuse must be severe and certain.

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      (b) Any employee entitled to receive weekly workers' compensation benefits shall have

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an affirmative duty to report those earnings, including wages or salary remuneration paid for

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personal services, commissions, and bonuses, including the cash value of all remuneration

 

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payable in any medium other than cash, earned from self-employment or from any employer

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other than the employer in whose employ he or she was injured, so that compensation benefits

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may be properly computed.

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      (c) (1) The department of labor and training, employer, or insurer shall notify any

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employee receiving weekly workers' compensation benefits, on forms prescribed by the

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department, of that employee's affirmative duty to report earnings and shall specifically notify the

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employee that a failure to report earnings may subject him or her to civil or criminal liability.

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      (2) The notice by the employer or insurer may be satisfied by printing the notice on the

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employee payee statement (check stub) portion of indemnity checks sent to the employee, or by

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incorporating said notice in an agreement for electronic fund transfer or use or issuance of an

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electronic access device, signed by both the employee and the employer or its insurer.

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      (d) Any employee entitled to weekly workers' compensation benefits for any period of

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time shall, upon written request of the employer or insurer, provide at reasonable intervals to the

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employer or insurer an earnings report, on forms prescribed by the department, advising the

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employer or insurer of the exact amount of earnings for each week of his or her entitlement to

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benefits or advising that no earnings were received for particular weeks, so that the employer or

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insurer may properly compute the amount of benefits due to the employee.

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      (e) If any employee refuses to submit an earnings report upon request by the employer or

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insurer his or her rights to compensation may be suspended and his or her compensation during

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that period of suspension may be forfeited.

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      (f) Where any employee is found to be entitled to benefits in excess of fifty-two (52)

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weeks pursuant to a decision resulting in the entry of an order or decree, he or she shall submit an

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earnings report as described in subsection (d) of this section. In these cases, the employer or

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insurer must pay benefits within seven (7) days of receipt of the earnings report; provided, that no

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petition to enforce shall be allowed nor any penalty for late payment awarded unless payments

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were not made within seven (7) days after the earnings report has been provided.

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      (g) The employer or insurer shall be entitled to recover overpayments made to any

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employee as a result of a violation of the employee's duty to report earnings by any of the

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following means:

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      (1) Upon petition and order of the workers' compensation court to suspend the

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employer's obligation to pay weekly benefits.

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      (2) By civil action in the district or superior court. Costs and counsel fees for the action

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may be awarded to the employer or insurer.

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      (h) Any employee who by any fraudulent means obtains or attempts to obtain workers'

 

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compensation benefits, whether by failure to report earnings, falsification of the earnings report

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document, or intentional misrepresentation, may forfeit the right to any future weekly workers'

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compensation benefits as determined by the workers' compensation court.

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      (i) Any employee who by any fraudulent means obtains or attempts to obtain workers'

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compensation benefits to which he or she was not entitled, whether by failure to report earnings,

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falsification of the earnings report, or intentional misrepresentation, shall be deemed guilty of

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larceny pursuant to § 11-41-4 or other pertinent criminal statutes of the state of Rhode Island.

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Each occurrence shall constitute a separate and distinct offense.

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      (j) The administrator of the workers' compensation court, any workers' compensation

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judge, or any representative of an employer may be the party complainant to any complaint and

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warrant brought to invoke the criminal penalties provided for in this section, and the party

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complainant shall, except for the representative of the employer, be exempt from giving surety for

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costs in the action.

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      (k) All criminal actions for any violation of this section shall be prosecuted by the

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attorney general.

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      (l) Where any employer or insurer intentionally and unreasonably utilizes the earnings

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report required by subsection (d) of this section in order to harass an employee or delay payment

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of benefits to an employee, a penalty of twenty percent (20%) shall be added to all amounts of

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weekly compensation benefits due and owing.

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     28-33-17.3. Fraud and abuse. -- (a) (1) The workers' compensation court is authorized

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and directed to impose sanctions and penalties necessary to maintain the integrity of and to

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maintain the high standards of professional conduct in the workers' compensation system. All

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pleadings related to proceedings under chapters 29 -- 38 of this title shall be considered an

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attestation by counsel that valid grounds exist for the position taken and that the pleading is not

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interposed for delay.

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      (2) If any judge determines that any proceedings have been brought, prosecuted, or

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defended by an employer, insurer, or their counsel without reasonable grounds, then:

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      (i) The whole cost of the proceedings shall be assessed upon the employer, insurer, or

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counsel, whoever is responsible; and

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      (ii) If a subsequent order requires that additional compensation be paid, a penalty of

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double the amount of retroactive benefits ordered shall be paid to the employee and the penalty

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shall not be included in any formula utilized to establish premium rates for workers'

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compensation insurance.

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      (3) If any judge determines that any proceedings have been brought or defended by an

 

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employee or his or her counsel without reasonable grounds, the whole cost of the proceedings

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shall be assessed against the employee or counsel, whoever is responsible.

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      (4) The court shall determine whether an action or defense is frivolous or conduct giving

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rise to the action or defense was unreasonable. Where the amount at issue is less than the actual

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attorneys' fees of the parties combined, the court shall exercise particular vigilance. Nothing in

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this subsection, however, is intended to discourage prompt payment in full of all amounts

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required to be paid.

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      (5) The appropriate body with professional disciplinary authority over the attorney shall

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be notified of the action.

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      (b) (1) It is unlawful to do any of the following:

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      (i) Make or cause to be made any knowingly false or fraudulent material statement or

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material representation for the purpose of obtaining or denying any compensation;

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      (ii) Present or cause to be presented any knowingly false or fraudulent written or oral

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material statement in support of, or in opposition to, any claim for compensation or petition

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regarding the continuation, termination, or modification of benefits;

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      (iii) Knowingly assist, aid and abet, solicit, or conspire with any person who engages in

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an unlawful act under this section;

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      (iv) Make or cause to be made any knowingly false or fraudulent statements with regard

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to entitlement to benefits with the intent to discourage an injured worker from claiming benefits

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or pursuing a claim;

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      (v) Willfully misrepresent or fail to disclose any material fact in order to obtain workers'

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compensation insurance at less than the proper rate for the insurance including, but not limited to,

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intentionally misleading or failing to disclose information to an insurer regarding the appropriate

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rate classification of an employee;

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      (vi) Willfully fail to provide a lower rate adjustment favorable to an employer as

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required by an approved experience rating plan or regulations promulgated by the insurance

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commissioners;

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      (vii) Willfully fail to report or provide false or misleading information regarding

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ownership changes as required by an approved experience rating plan or regulations promulgated

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by the insurance commissioner; or

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      (viii) Knowingly assist, aid and abet, solicit or conspire to coerce an employee to

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willfully misrepresent an employee's status as a shareholder, director or officer of a corporation,

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or as a member or manager of a limited liability company, or as a partner, in a general or, limited

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partnership, registered limited liability partnership or a registered limited liability limited

 

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partnership, or as an independent contractor for the purpose of avoiding the inclusion of that or

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other employees in a workers' compensation insurance application, renewal or both.

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      (2) For the purposes of this section, "Statement" includes, but is not limited to, any

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endorsement of a benefit check, signature on an agreement for electronic fund transfer of

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compensation benefits or issuance of an electronic access device, application for insurance

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coverage, oral or written statement, proof of injury, bill for services, diagnosis, prescription,

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hospital or provider records, x-rays, test results, or other documentation offered as proof of, or in

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the absence of, a loss, injury, or expense.

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      (3) If it is determined that any person concealed or knowingly failed to disclose that

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which is required by law to be revealed, knowingly gave or used perjured testimony or false

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evidence, knowingly made a false statement of fact, participated in the creation or presentation of

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evidence which he or she knows to be false, or otherwise engaged in conduct in violation of

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subdivision (1) of this subsection, that person shall be subject in criminal proceedings to a fine

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and/or penalty not exceeding fifty thousand dollars ($50,000), or double the value of the fraud,

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whichever is greater, or by imprisonment up to five (5) years in state prison or both.

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      (4) There shall be a general amnesty until July 1, 1992 for any person receiving

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compensation under chapters 29 -- 38 of this title, to the extent compensation has been voluntarily

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reduced or relinquished by the employee prior to that date.

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      (c) The director of labor and training shall establish a form, in consultation with the

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attorney general, to be sent to all workers who are presently receiving benefits and those for

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whom first reports of injury are filed in the future which shall give the employee notice that the

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endorsement of a benefit check sent pursuant to § 28-35-39 is the employee's affirmation that he

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or she is qualified to receive benefits under the Workers' Compensation Act. The insurers and

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self-insured employers are directed to send the form to all workers receiving benefits.

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      (d) Any employer, or in any case where the employer is a corporation, the president, vice

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president, secretary, treasurer, and other officers of the corporation, or in any case where the

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employer is a limited liability company, the managers, and the managing members or in any case

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where the employer is a general partnership or a registered limited liability partnership, or in the

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case where the employer is a limited partnership or a registered limited liability limited

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partnership, the partners, that are found to have violated this section or § 28-36-15, shall be guilty

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of a felony for failure to secure and maintain compensation, and upon conviction, shall be subject

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to imprisonment of up to two (2) years, a fine not exceeding ten thousand dollars ($10,000), or

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both. In any case where the employer is a corporation, the president, vice president, secretary,

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treasurer, and other officers of the corporation, shall be severally liable for the fine or subject to

 

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imprisonment, or both. In any case where the employer is a limited liability company, the

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managers and managing members shall be severally liable for the fine or subject to imprisonment,

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or both. In any case where the employer is a partnership or a registered limited liability

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partnership, the partners shall be severally liable for the fine or subject to imprisonment, or both.

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In any case where the employer is a limited partnership or a registered limited liability limited

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partnership, the general partners shall be severally liable for the fine or subject to imprisonment,

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or both.

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     28-33-18.3. Continuation of benefits -- Partial incapacity. -- (a)(1) For all injuries

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occurring on or after September 1, 1990, in those cases where the employee has received a notice

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of intention to terminate partial incapacity benefits pursuant to § 28-33-18, the employee, or his

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or her duly authorized representative, may file with the workers' compensation court a petition for

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continuation of benefits on forms prescribed by the workers' compensation court. In any

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proceeding before the workers' compensation court on a petition for continuation of partial

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incapacity benefits, where the employee demonstrates by a fair preponderance of the evidence

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that his or her partial incapacity poses a material hindrance to obtaining employment suitable to

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his or her limitation, partial incapacity benefits shall continue. For injuries on and after July 1,

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2018 2021, "material hindrance" is defined to include only compensable injuries causing a greater

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than sixty-five percent (65%) degree of functional impairment and/or disability. Any period of

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time for which the employee has received benefits for total incapacity shall not be included in the

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calculation of the three hundred and twelve-week (312) period.

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      (2) The provisions of this subsection apply to all injuries from Sept. 1, 1990, to July 1,

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2018 2021.

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      (b) (1) Where any employee's incapacity is partial and has extended for more than three

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hundred and twelve (312) weeks and the employee has proved an entitlement to continued

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benefits under subsection (a) of this section, payments made to these incapacitated employees

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shall be increased annually on the tenth (10th) day of May thereafter so long as the employee

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remains incapacitated. The increase shall be by an amount equal to the total percentage increase

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in the annual Consumer Price Index, United States City Average for Urban Wage Earners and

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Clerical Workers, as formulated and computed by the Bureau of Labor Statistics of the United

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States Department of Labor for the period of March 1 to February 28 each year.

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      (2) "Index" as used in this section refers to the Consumer Price Index, United States City

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Average for Urban Wage Earners and Clerical Workers, as that index was formulated and

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computed by the Bureau of Labor Statistics of the United States Department of Labor.

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      (3) The annual increase shall be based upon the percentage increase, if any, in the

 

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Consumer Price Index for the month of a given year, over the index for February, the previous

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year. Thereafter, increases shall be made on May 10 annually, based upon the percentage

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increase, if any, in the Consumer Price Index for the period of March 1 to February 28.

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      (4) The computations in this section shall be made by the director of labor and training

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and promulgated to insurers and employers making payments required by this section. Increases

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shall be paid by insurers and employers without further order of the court. If payment payable

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under this section is not mailed within fourteen (14) days after the employer or insurer has been

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notified by publication in a newspaper of general circulation in the state it becomes due, there

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shall be added to the unpaid payment an amount equal to twenty percent (20%) of it, to be paid at

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the same time as, but in addition to, the payment.

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      (5) This section applies only to payment of weekly indemnity benefits to employees as

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described in subdivision (1) of this subsection, and does not apply to specific compensation

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payments for loss of use or disfigurement or payment of dependency benefits or any other

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benefits payable under the workers' compensation act.

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      (c) No petitions for commutation shall be allowed or entertained in those cases where an

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employee is receiving benefits pursuant to this section.

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     SECTION 3. Sections 28-35-39 and 28-35-40 of the General Laws in Chapter 28-35

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entitled "Workers' Compensation - Procedure" are hereby amended to read as follows:

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     28-35-39. Payment of compensation. -- Compensation under chapters 29 -- 38 of this

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title shall be paid by check as defined in § 6A-3-104(f) and not by draft, or if mutually agreed

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upon by both the employee and the employer or its insurer in accordance with § 28-35-40, by

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electronic fund transfer, or by electronic access device, at no cost to the employee, with the

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exception of any third-party transactional fees incurred by the employee and shall be paid

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promptly and directly to the person entitled to it. The check shall contain the following language:

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"I understand that endorsement hereon or deposit to my accounts constitutes my affirmation that I

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am receiving these workers' compensation benefits pursuant to law, that I have made no false

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claims or statements or concealed any material fact, in order to receive these benefits and that

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doing so would make me liable for civil and criminal penalties, including jail". If paid by

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electronic fund transfer or by electronic access device said notice shall be satisfied in accordance

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with § 28-33-17.2(c)(2). The insurer/employer and/or its third-party administrator shall not have

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or be entitled to gain access to the details of electronic transactions, without the express written

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consent of the employee or court order from a court of competent jurisdiction.

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     28-35-40. Mailing of weekly compensation Delivery of weekly compensation. --

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Whenever the employee is entitled to weekly compensation under chapters 29 -- 38 of this title,

 

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the employer, and/or insurance carrier, until further order of the workers' compensation court,

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shall cause to be paid by electronic fund transfer or, issued as an electronic access device, or

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mailed first class mail to the employee, addressed to his or her last known residence, each week

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the amount of compensation payable to the employee as it may be due. Electronic fund transfer

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payments or issuance of an electronic access device shall be permitted if mutually agreed upon by

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the employee and the employer or its insurer on forms provided by the department of labor and

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training, which may be rescinded at will by either party on forms provided by the department of

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labor and training and filed with the department.

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     SECTION 4. Sections 28-53-2 and 28-53-7 of the General Laws in Chapter 28-53

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entitled "Rhode Island Uninsured Employers Fund" are hereby amended to read as follows:

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     28-53-2. Establishment -- Sources -- Administration. -- (a) There shall be established

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within the department of labor and training a special restricted receipt account to be known as the

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Rhode Island uninsured employers fund. The fund shall be capitalized from excise taxes assessed

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against uninsured employers pursuant to the provisions of § 28-53-9 of this chapter and from

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general revenues appropriated by the legislature. Beginning in state fiscal year ending June 30,

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2016 2017, the legislature may appropriate up to two million dollars ($2,000,000) in general

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revenue funds annually for deposit into the Rhode Island uninsured employers fund.

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      (b) All moneys in the fund shall be mingled and undivided. The fund shall be

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administered by the director of the department of labor and training or his or her designee, but in

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no case shall the director incur any liability beyond the amounts paid into and earned by the fund.

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      (c) All amounts owed to the uninsured employers fund from illegally uninsured

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employers are intended to be excise taxes and as such, all ambiguities and uncertainties are to be

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resolved in favor of a determination that such assessments are excise taxes.

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     28-53-7. Payments to employees of uninsured employers. -- (a) Where it is determined

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that the employee was injured in the course of employment while working for an employer who

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fails to maintain a policy of workers' compensation insurance as required by Rhode Island general

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laws § 28-36-1, et seq., the uninsured employers fund shall pay the benefits to which the injured

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employee would be entitled pursuant to chapters 29 to 38 of this title subject to the limitations set

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forth herein.

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      (b) The workers' compensation court shall hear all petitions for payment from the fund

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pursuant to Rhode Island general laws § 28-30-1, et seq., provided, however, that the uninsured

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employers fund and the employer shall be named as parties to any petition seeking payment of

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benefits from the fund.

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      (c) Where an employee is deemed to be entitled to benefits from the uninsured

 

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employers fund, the fund shall pay benefits for disability and medical expenses as provided

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pursuant to chapters 29 to 38 of this title except that the employee shall not be entitled to receive

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benefits for loss of function and disfigurement pursuant to the provisions of Rhode Island general

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laws § 28-33-19.

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      (d) The fund shall pay cost, counsel and witness fees as provided in Rhode Island

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general laws § 28-35-32 to any employee who successfully prosecutes any petitions for

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compensation, petitions for medical expenses, petitions to amend a pretrial order or memorandum

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of agreement and all other employee petitions and to employees who successfully defend, in

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whole or in part, proceedings seeking to reduce or terminate any and all workers' compensation

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benefits; provided, however, that the attorney's fees awarded to counsel who represent the

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employee in petitions for lump sum commutation filed pursuant to Rhode Island general laws §

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28-33-25 or in the settlement of disputed cases pursuant to Rhode Island general laws § 28-33-

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25.1 shall be limited to the maximum amount paid to counsel who serve as court appointed

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attorneys in workers' compensation proceedings as established by rule or order of the Rhode

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Island supreme court.

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      (e) In the event that the uninsured employer makes payment of any monies to the

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employee to compensate the employee for lost wages or medical expenses, the fund shall be

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entitled to a credit for all such monies received by or on behalf of the employee against any future

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benefits payable directly to the employee.

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      (f) This section shall apply to injuries that occur on or after January 1, 2016 2017.

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     SECTION 5. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO LABOR AND LABOR RELATIONS -- WORKERS' COMPENSATION

***

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     This act makes changes to the workers' compensation act concerning the workers'

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compensation court, medical advisory board, benefits, procedure and the uninsured employees'

3

fund. This act would also authorize the delivery of weekly compensation by electronic fund

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transfers.

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     This act would take effect upon passage.

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