Bill Text: AZ HB2334 | 2015 | Fifty-second Legislature 1st Regular | Introduced
Bill Title: Unfair claim processing; procedure; penalties
Spectrum: Partisan Bill (Republican 5-0)
Status: (Failed) 2015-02-18 - House INS Committee action: Held [HB2334 Detail]
Download: Arizona-2015-HB2334-Introduced.html
|
REFERENCE TITLE: unfair claim processing; procedure; penalties |
|
State of Arizona House of Representatives Fifty-second Legislature First Regular Session 2015
|
|
HB 2334 |
|
|
|
Introduced by Representative Fann, Senator Yee: Representatives Leach, Livingston, Petersen
|
AN ACT
Amending section 23‑930, Arizona Revised Statutes; relating to workers' compensation.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 23-930, Arizona Revised Statutes, is amended to read:
23-930. Unfair claim processing practices; bad faith; benefit penalties; civil penalty; hearing; enforcement; definitions
A. The commission has exclusive primary jurisdiction as prescribed in this section over complaints involving alleged unfair claim processing practices or bad faith by an employer, self‑insured employer, insurance carrier or claims processing representative relating to any aspect of this chapter the administration of a workers' compensation claim. The commission shall investigate allegations of unfair claim processing or bad faith either on receiving a complaint or on its own motion.
B. A complaint of unfair claim processing or bad faith must be filed with the commission within sixty days after the action or omission alleged as the basis of the complaint occurred. A complaint that is not filed as provided by this subsection is dismissed with prejudice.
B. C. If the commission finds that unfair claim processing or bad faith has occurred in the handling of a particular claim and caused harm to the employee, it shall award the claimant employee, in addition to any benefits it finds are due and owing, a benefit penalty of twenty‑five per cent of the benefit amount ordered to be paid or five hundred dollars, whichever is more. as follows:
1. For a finding that an initial claim for benefits under this chapter was denied without any reasonable basis, a benefit penalty of not more than five thousand dollars may be awarded on an approved claim that does not result in initial temporary disability or a period of disability of not more than fourteen days. A benefit penalty of not more than ten thousand dollars or one hundred percent of the disability benefits owed, which ever is greater, may be awarded for an approved claim that results in a period of disability of more than fourteen days.
2. For a finding of unfair claim processing on an accepted claim, a benefit penalty of not more than one thousand dollars.
3. For a finding of bad faith that results from a delay or failure to pay temporary or permanent compensation disability benefits on an accepted claim, a benefit penalty of not more than five thousand dollars.
4. For a finding of bad faith that results in a denial or delay of medical treatment or payment of medical benefits on an accepted claim, a benefit penalty of not more than five thousand dollars for each occurrence of denied or delayed treatment. If the commission determines, based on competent medical evidence, that the delay of medical treatment permanently aggravated the employee's medical condition or resulted in greater permanent disability, an additional ten thousand dollars may be awarded to the employee.
D. In determining the amount of the benefit penalty, the commission shall consider the extent of the proven harm to the employee, the seriousness of the violation, the history and extent of previous violations, any action taken to rectify or minimize the consequences of the violation and the penalty necessary to deter future violations.
E. The benefit penalty provided by this section is the employee's exclusive remedy for unfair claim processing or bad faith committed by the employer, self-insured employer, insurance carrier or claim processing representative, except that after a commission order and award becomes final, the employee may file a civil action to recover compensatory damages for injuries that are separate and independent of the workers' compensation injury and that arise out of the wilful misconduct of the employer, self‑insured employer, insurance carrier or claim processing representative that resulted in the unfair claim processing or bad faith handling of the claim. A court does not have jurisdiction over a complaint alleging wilful misconduct pursuant to this subsection until the commission issues a final order and award on the complaint. The civil action shall be filed in a court of competent jurisdiction within sixty days after the date that the order and award becomes final. Punitive damages are not recoverable in any civil action brought pursuant to this subsection. Any claim for compensatory damages not filed as provided by this subsection is dismissed with prejudice.
C. F. If the commission finds that an employer, self‑insured employer, insurance carrier or claim processing representative has a history or pattern of repeated unfair claim processing practices or bad faith, it may impose a civil penalty of up to one not more than five thousand dollars for each violation found. The civil penalty shall be deposited, pursuant to sections 35‑146 and 35‑147, in the state general fund.
D. G. Any party aggrieved by an order of the commission under this section may request a hearing pursuant to section 23‑947. A hearing shall be scheduled at least sixty days after the request for a hearing is filed. The hearing and decision shall be conducted pursuant to the provisions of section 23‑941, except that the administrative law judge shall issue findings and an award within thirty days after the submission of the case for decision.
H. No later than twenty days after the date of the initial hearing, the defendant may move to dismiss the complaint on any of the following grounds:
1. The alleged acts, if assumed to be true, do not support a finding of unfair claim processing or bad faith as a matter of law.
2. The alleged acts were adjudicated in a previous commission proceeding.
3. The complaint was untimely filed as provided by subsection B of this section.
4. The complaint relates to a claim for workers' compensation benefits that has not been accepted or adjudicated.
I. A motion to dismiss made pursuant to subsection H of this section may be supported by affidavits of prospective witness testimony or exhibits that will be submitted at the hearing. The administrative law judge shall rule on the motion within ten days after the motion is filed.
J. An employer, self-insured employer, insurance carrier or claim processing representative that is ordered to pay a benefit penalty pursuant to this section shall pay the benefit penalty as follows:
1. If the employee files a written waiver of the right to file a civil action pursuant to subsection E of this section, within twenty business days after the award becomes final.
2. If the employee does not waive the right to file a civil action pursuant to subsection E of this section, within twenty business days after the expiration of the sixty-day period in which the employee may file the civil action.
3. If the employee files a civil action pursuant to subsection E of this section, on the date that the final judgment is entered on the civil action.
K. If the benefit penalty is not paid within the time period provided by subsection J of this section, an additional penalty of one hundred dollars per day is added to the total amount owed until the benefit penalty is paid in full.
L. A final award for unfair claim processing or bad faith may be enforced under the provisions of title 12, chapter 9, article 3.
E. M. The commission shall adopt by rule a definition of unfair claim processing practices and bad faith. In adopting a rule under this subsection, the commission shall consider, among other factors, recognized and approved claim processing practices within the insurance industry, the commission's own experience in processing workers' compensation claims and the workers' compensation and insurance laws of this state.
F. N. This section shall does not be construed as limiting limit or interfering interfere with the authority of the department of insurance as provided by law to regulate any insurance carriers, including the jurisdiction of the department of insurance over unfair claim settlement practices as provided in section 20‑461.
O. For the purposes of this section:
1. "Occurrence" means a specific recommended surgical procedure, medication, consultation, diagnostic study or medical apparatus or a recommended treatment plan that may involve more than one visit to a provider, including a course of physical therapy.
2. "Wilful misconduct" means that the denial, delay or termination of benefits was committed with knowledge that the act lacked any reasonable basis in law or fact and that the act was committed with intent to inflict harm on the employee.
