HOUSE BILL NO. 592
INTRODUCED BY C. HIBBARD, S. BARTLETT, S. ANDERSON, D. GRIMES, T. KEATING, W. MCNUTT, D. MOOD, S. ROSE, P. SLITER, F. THOMAS, B. WILSON
AN ACT IMPLEMENTING HOUSE JOINT RESOLUTION NO. 10 TO REVISE THE PROCESSES FOR RESOLVING EMPLOYMENT-RELATED DISPUTES; ELIMINATING THE APPELLATE ROLE OF THE BOARD OF PERSONNEL APPEALS IN REVIEWING WAGE CLAIM DISPUTES; PROVIDING FOR THE APPEAL OF DEPARTMENT HEARINGS EXAMINERS' DECISIONS IN WAGE CLAIMS CASES TO THE DISTRICT COURT; ESTABLISHING A TIMEFRAME FOR RECOVERY OF IMPROPERLY PAID WAGES; TRANSFERRING FROM THE DEPARTMENT OF LABOR AND INDUSTRY TO THE WORKERS' COMPENSATION COURT EXCLUSIVE JURISDICTION OVER COMPENSATION AND BENEFIT ISSUES ARISING UNDER THE OCCUPATIONAL DISEASE ACT, THE WORKERS' COMPENSATION ACT, AND THE APPLICATION OF INDEPENDENT CONTRACTOR STATUS; AUTHORIZING THE WORKERS' COMPENSATION COURT TO COLLECT A PENALTY FOR WORKERS' COMPENSATION BENEFIT THEFT; REQUIRING THAT CASES INVOLVING WAGE AND HOUR, THE UNINSURED EMPLOYER FUND, AND INDEPENDENT CONTRACTOR ISSUES INCLUDE MEDIATION PRIOR TO CONTESTED CASE PROCEEDINGS; PROVIDING A COLLATERAL ESTOPPEL PROVISION TO PROHIBIT DECISIONS PERTAINING TO UNEMPLOYMENT INSURANCE BENEFITS FROM BEING USED IN RELATED DISPUTES; AMENDING SECTIONS 15-30-248, 39-3-201, 39-3-207, 39-3-212, 39-3-216, 39-9-401, 39-51-310, 39-51-1109, 39-71-304, 39-71-315, 39-71-316, 39-71-317, 39-71-401, 39-71-415, 39-71-601, 39-71-610, 39-71-613, 39-71-704, 39-71-1032, 39-72-403, 39-72-601, 39-72-602, 39-72-607, AND 39-72-608, MCA; REPEALING SECTIONS 39-3-217, 39-72-609, 39-72-610, 39-72-611, 39-72-612, AND 39-72-613, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE AND AN APPLICABILITY DATE.
WHEREAS, Montana's current employment statutes constitute a complex and often confusing body of law requiring specialized skills and knowledge to interpret; and
WHEREAS, most employers in the private sector employ 10 or fewer employees and function without the assistance of personnel officers or in-house legal staff; and
WHEREAS, employment-related disputes are currently heard in many different forums, including the Board of Personnel Appeals for wage and hour issues, the Board of Labor Appeals for unemployment insurance issues, the Workers' Compensation Court for workers' compensation issues, the Commission for Human Rights for discrimination issues, and District Courts for the resolution of wrongful discharge conflicts; and
WHEREAS, the 1997 Legislature enacted House Joint Resolution No. 10, which directed the Department of Labor and Industry to convene a group of interested parties to explore, investigate, and report to the 1999 Legislature optional approaches to an integrated dispute resolution process for employment-related issues; and
WHEREAS, members of the Legislature and interest groups, including employers and employees from the private and public sectors, formed the House Joint Resolution No. 10 work group, which convened in September 1997 to begin studying the issues related to the employment dispute resolution process; and
WHEREAS, after approximately 10 meetings during the 1997 interim, the work group issued its report in November 1998, recommending that legislation be prepared for consideration by the 1999 Legislature to revise the dispute resolution process for employment-related issues.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 15-30-248, MCA, is amended to read:
"15-30-248. Determination of employer status. A final determination by either the department of labor and industry
or the board of labor appeals workers' compensation court that an employer-employee relationship existed between the
taxpayer and certain individuals subjecting the taxpayer to the requirements of chapter 30, part 2, which may be subject to
judicial review, as provided in 39-51-2404, at the discretion of the taxpayer, is not subject to any further administrative or
judicial challenge in any proceeding before or with the department of revenue concerning a determination of the proper
amount of state income tax withholding and old fund liability tax to be paid. A final decision of the workers' compensation
court may be appealed as provided in 39-71-2904."
Section 2. Section 39-3-201, MCA, is amended to read:
"39-3-201. Definitions. The following are the definitions used for the purpose of this part:
(1) "Board" means the board of personnel appeals provided for in 2-15-1705.
(2)(1) "Commissioner of labor" refers to the director, commissioner, or chief of the department of labor and industry, as
the department is defined by law, or any person or persons designated by the director, commissioner, or chief for the
purpose of this part.
(3)(2) "Department" means the department of labor and industry as provided for in 2-15-1701.
(4)(3) "Employ" means to permit or suffer to work.
(5)(4) "Employee" includes any person who works for another for hire.
(6)(5) "Employer" includes any individual, partnership, association, corporation, business trust, legal representative, or
organized group of persons acting directly or indirectly in the interest of an employer in relation to an employee but does
not include the United States.
(7)(6) (a) "Wages" includes any money due an employee from the employer or employers, whether to be paid by the
hour, day, week, semimonthly, monthly, or yearly, and includes bonus, piecework, and all tips and gratuities that are
covered by section 3402(k) and service charges that are covered by section 3401 of the Internal Revenue Code of 1954, as
amended and applicable on January 1, 1983, received by employees for services rendered by them to patrons of premises or
businesses licensed to provide food, beverage, or lodging.
(b) For the purposes of this subsection (7) (6), "service charge" means an arbitrary fixed charge added to the customer's
bill by an employer in lieu of a tip. It is collected by the employer and must be distributed directly to the nonmanagement
employee preparing or serving the food or beverage or to any other employee involved in related services, pursuant to a tip
pool agreement."
Section 3. Section 39-3-207, MCA, is amended to read:
"39-3-207. Period within which employee may recover wages and penalties. Any (1) An employee may recover all
such wages and penalties as are provided for the violation of 39-3-206 which have accrued to him at any time within 18
months succeeding such default or delay in the payment of such wages by filing a complaint within 180 days of default or
delay in the payment of wages.
(2) Except as provided in subsection (3), an employee may recover wages and penalties for a period of 2 years prior to the date on which the claim is filed if the employee is still employed by the employer or for a period of 2 years prior to the date of the employee's last date of employment.
(3) If an employer has engaged in repeated violations, an employee may recover wages and penalties for a period of 3 years from the date on which a claim is filed if the employee is still employed by the employer or for a period of 3 years prior to the date of the employee's last date of employment."
Section 4. Section 39-3-212, MCA, is amended to read:
"39-3-212. Court enforcement of administrative decision. (1) A department default order, or a decision of the
hearings officer, if the decision is not appealed to the board, or a decision of the board, if judicial review is not sought, may
be enforced by application by the commissioner to a district court for an order or judgment enforcing the decision. The
commissioner shall apply to the district court where the employer has its principal place of business or in the first judicial
district of the state. A proceeding under this section is not a review of the validity of the administrative decision.
(2) If judicial review is sought, the district court may issue an order or a judgment enforcing the decision of the board
department or the hearings officer in a wage claim proceeding. In a case involving failure to pay the standard prevailing rate
of wages provided for in Title 18, chapter 2, part 4, the district court may issue an order or a judgment enforcing the
decision of the hearings officer."
Section 5. Section 39-3-216, MCA, is amended to read:
"39-3-216. Hearing Mediation -- hearing. (1) If the department determines that a wage claim is valid and the
employer does not appeal the determination, the department may enter a default order against the employer for the amount
of wages due and for any penalty assessed pursuant to 39-3-206. The department may enforce the default order pursuant to
39-3-212.
(2) If a party disputes the determination of the department prior to a contested case, the department shall conduct mediation of the dispute in accordance with guidelines to be established by department rule.
(2)(3) When the department determines that a wage claim is valid, the department shall mail the determination to the
parties at the last-known address of each party. If a party appeals the department's determination within 15 days after the
determination is mailed by the department, a hearing must be conducted according to contested case procedures under Title
2, chapter 4, part 6, except that service need not be made as prescribed for civil actions in the district court and the hearings
officer is not bound by statutory or common-law rules of evidence. The hearing may be conducted by telephone or by
videoconference. The department shall by rule provide relief for a person who does not receive the determination by mail.
(3)(4) The decision of the hearings officer is final unless further review is initiated pursuant to 39-3-217 within 15 days
after the decision is mailed to each party's last-known address. The period may be extended by the board for good cause an
aggrieved party requests a rehearing or initiates judicial review, pursuant to Title 2, chapter 4, part 7, by filing a petition in
district court within 30 days of the date of mailing of the hearings officer's decision."
Section 6. Section 39-9-401, MCA, is amended to read:
"39-9-401. Violation -- infraction -- penalty -- disposition. (1) It is a violation of this chapter and an infraction for any construction contractor to:
(a) perform work as a construction contractor without being registered as required by this chapter;
(b) perform work as a construction contractor when the construction contractor's registration is suspended; or
(c) transfer a valid registration to an unregistered construction contractor or allow an unregistered construction contractor to work under a registration issued to another construction contractor.
(2) (a) A determination by the department of a violation of this section subjects the person who commits the violation to
a penalty of up to $500, as determined by the department. A person who has been determined to have violated this section
may request that a hearing be held in accordance with the Montana Administrative Procedure Act. The hearing may be held
by telephone or video conference. An appeal of the hearing decision must be made in the same manner as prescribed in
39-51-2403 and 39-51-2404.
(b) A penalty under this section does not apply to a violation that is determined to be an inadvertent error.
(c) A penalty collected under this section must be deposited in the uninsured employers' fund established in 39-71-502."
Section 7. Collateral estoppel. A finding of fact or law, judgment, conclusion, or final order made with respect to a determination made under this chapter may not be conclusive or binding or used as evidence in any separate or subsequent action or proceeding in another forum except for proceedings under this chapter, regardless of whether the prior action was between the same or related parties or involved the same facts.
Section 8. Section 39-51-310, MCA, is amended to read:
"39-51-310. Function of board. The board shall act in a quasi-judicial capacity for the hearing of disputes concerning
the administration of Montana's unemployment insurance laws and disputes arising under Title 39, chapter 71, not
concerning benefits, regarding whether an individual is an employee or an independent contractor as defined in that
chapter."
Section 9. Section 39-51-1109, MCA, is amended to read:
"39-51-1109. Tax appeals -- procedure. (1) A decision, determination, or redetermination of the department involving
an employer-employee relationship or the charging of benefit payments to employers is final unless an interested party
entitled to notification submits a written appeal of the decision, determination, or redetermination. The appeal must be
made in the same manner as provided in 39-51-2402 for the appeal of a decision relating to a claim for unemployment
insurance benefits. Statutory rules of evidence and civil procedure do not apply to a hearing on the appeal. A hearing may
be conducted by telephone or by videoconference. The decision of the appeals referee and any subsequent appeal must be
made in the same manner as prescribed in 39-51-2403 through 39-51-2410 39-71-415.
(2) A decision, determination, or redetermination involving contribution liability, contribution rate, application for refund, subject wages, or other tax-related issues must be issued by the department of revenue as provided in Title 15, chapter 1, part 2, and 15-30-257, if applicable. The decision is final unless an interested party entitled to notification follows the uniform tax review procedures as prescribed in 15-1-211 and 15-30-257, if applicable."
Section 10. Section 39-71-304, MCA, is amended to read:
"39-71-304. Books, records, and payrolls to be open to inspection -- penalty for refusal -- subpoenas. (1) The
books, records, and payrolls of an employer pertinent to the administration of this chapter must always be open to
inspection by the department or any duly authorized employee thereof of the department for the purpose of ascertaining the
correctness of the payroll, the number of workers employed, and such other information as that may be necessary for the
department and its management under this chapter. Refusal on the part of an employer to submit the books, records, and
payrolls for such inspection shall will subject the offending employer to a penalty not exceeding $500 for each offense, to
be collected through a civil workers' compensation court action in the name of the state and paid into the state treasury.
(2) In addition to the remedy provided in subsection (1), the department may issue subpoenas and compel testimony for
the production of evidence, including books, records, papers, documents, and other objects as may be necessary and proper
in regard to any investigation or proceeding under this chapter. In the case of disobedience of a subpoena issued and served
or the refusal of a witness to testify as to any matter for which the witness may be interrogated in a proceeding before the
department, the department may apply to a district the workers' compensation court for an order to compel compliance with
the subpoena or testimony. Disobedience of the court's order constitutes contempt of court."
Section 11. Section 39-71-315, MCA, is amended to read:
"39-71-315. Prohibited actions -- penalty. (1) The following actions by a medical provider constitute violations and are subject to the penalty in subsection (2):
(a) failing to document, under oath, the provision of the services or treatment for which compensation is claimed under chapter 72 or this chapter; or
(b) referring a worker for treatment or diagnosis of an injury or illness that is compensable under chapter 72 or this chapter to a facility owned wholly or in part by the provider, unless the provider informs the worker of the ownership interest and provides the name and address of alternate facilities, if any exist.
(2) A person who violates this section may be assessed a penalty of not less than $200 or more than $500 for each offense. The department shall assess and collect the penalty. Penalties collected pursuant to this section must be paid into the state general fund. The workers' compensation court has jurisdiction over actions brought to collect the penalty and over disputes concerning the penalty assessment. Disputes brought pursuant to this section are not subject to mediation.
(3) Subsection (1)(b) does not apply to medical services provided to an injured worker by a treating physician with an ownership interest in a managed care organization that has been certified by the department."
Section 12. Section 39-71-316, MCA, is amended to read:
"39-71-316. Filing true claim -- obtaining benefits through deception or other fraudulent means. (1) A person
filing a claim under this chapter or chapter 72 or this chapter of this title, by signing the claim, affirms the information filed
is true and correct to the best of that person's knowledge.
(2) (a) A person who obtains or assists in obtaining benefits to which the person is not entitled or who obtains or assists
another person in obtaining benefits to which the other person is not entitled under this chapter or chapter 72 or this chapter
of this title is guilty of theft and may be prosecuted under 45-6-301. A county attorney or the attorney general may initiate
criminal proceedings against the person. This subsection includes but is not limited to a person who is receiving temporary
total disability benefits, permanent total disability benefits, or rehabilitation benefits while working without the knowledge
and concurrence of the insurer.
(b) As used in subsection (2)(a), "person" includes but is not limited to an employee, employer, insurer, or medical service provider.
(3) (a) The department may require a person convicted of theft under 45-6-301(5) to pay to the department an amount
equal to 10 times the amount paid by an insurer on the false claim, provided that the amount does not exceed $50,000. If
upon demand of the department the person refuses to pay the fine, the department may institute suit petition the workers'
compensation court to collect the money owed.
(b) The department shall:
(i) use the money collected pursuant to subsection (3)(a) to administer and enforce the provisions of this section; and
(ii) forward any surplus money to the department of justice. The forwarded money must be used exclusively for the staffing and operation of the workers' compensation fraud investigation and prosecution office established in 2-15-2015.
(c) This section does not limit an insurer's civil remedies to collect for money paid to a person convicted under 45-6-301(5).
(4) A person licensed under the provisions of Title 37 is subject to suspension, revocation, or denial of a license if the person knowingly claims or assists in the claiming of benefits in violation of the provisions of chapter 72 or this chapter."
Section 13. Section 39-71-317, MCA, is amended to read:
"39-71-317. Employer not to terminate worker for filing claim -- preference -- jurisdiction over dispute. (1) An
employer may not use as grounds for terminating a worker the filing of a claim under this chapter or chapter 72 of this title
or this chapter. The district court has exclusive jurisdiction over disputes concerning the grounds for termination under this
section.
(2) When an injured worker is capable of returning to work within 2 years from the date of injury and has received a medical release to return to work, the worker must be given a preference over other applicants for a comparable position that becomes vacant if the position is consistent with the worker's physical condition and vocational abilities.
(3) This preference applies only to employment with the employer for whom the employee was working at the time the injury occurred.
(4) The department and workers' compensation court do not have has exclusive jurisdiction to administer or resolve a
dispute concerning the reemployment preference under this section. Exclusive jurisdiction is with the district court A
dispute concerning the reemployment preference is not subject to mediation or a contested case hearing."
Section 14. Section 39-71-401, MCA, is amended to read:
"39-71-401. Employments covered and employments exempted. (1) Except as provided in subsection (2), the Workers' Compensation Act applies to all employers, as defined in 39-71-117, and to all employees, as defined in 39-71-118. An employer who has any employee in service under any appointment or contract of hire, expressed or implied, oral or written, shall elect to be bound by the provisions of compensation plan No. 1, 2, or 3. Each employee whose employer is bound by the Workers' Compensation Act is subject to and bound by the compensation plan that has been elected by the employer.
(2) Unless the employer elects coverage for these employments under this chapter and an insurer allows an election, the Workers' Compensation Act does not apply to any of the following employments:
(a) household and domestic employment;
(b) casual employment as defined in 39-71-116;
(c) employment of a dependent member of an employer's family for whom an exemption may be claimed by the employer under the federal Internal Revenue Code;
(d) employment of sole proprietors, working members of a partnership, working members of a limited liability partnership, or working members of a member-managed limited liability company, except as provided in subsection (3);
(e) employment of a broker or salesperson performing under a license issued by the board of realty regulation;
(f) employment as a direct seller as defined by 26 U.S.C. 3508;
(g) employment for which a rule of liability for injury, occupational disease, or death is provided under the laws of the United States;
(h) employment of a person performing services in return for aid or sustenance only, except employment of a volunteer under 67-2-105;
(i) employment with a railroad engaged in interstate commerce, except that railroad construction work is included in and subject to the provisions of this chapter;
(j) employment as an official, including a timer, referee, or judge, at a school amateur athletic event, unless the person is otherwise employed by a school district;
(k) employment of a person performing services as a newspaper carrier or freelance correspondent if the person performing the services or a parent or guardian of the person performing the services in the case of a minor has acknowledged in writing that the person performing the services and the services are not covered. As used in this subsection, "freelance correspondent" is a person who submits articles or photographs for publication and is paid by the article or by the photograph. As used in this subsection, "newspaper carrier":
(i) is a person who provides a newspaper with the service of delivering newspapers singly or in bundles; but
(ii) does not include an employee of the paper who, incidentally to the employee's main duties, carries or delivers papers.
(l) cosmetologist's services and barber's services as defined in 39-51-204(1)(e);
(m) a person who is employed by an enrolled tribal member or an association, business, corporation, or other entity that is at least 51% owned by an enrolled tribal member or members, whose business is conducted solely within the exterior boundaries of an Indian reservation;
(n) employment of a jockey who is performing under a license issued by the board of horseracing from the time that the jockey reports to the scale room prior to a race through the time that the jockey is weighed out after a race if the jockey has acknowledged in writing, as a condition of licensing by the board of horseracing, that the jockey is not covered under the Workers' Compensation Act while performing services as a jockey;
(o) employment of an employer's spouse for whom an exemption based on marital status may be claimed by the employer under 26 U.S.C. 7703;
(p) a person who performs services as a petroleum land professional. As used in this subsection, a "petroleum land professional" is a person who:
(i) is engaged primarily in negotiating for the acquisition or divestiture of mineral rights or in negotiating a business agreement for the exploration or development of minerals;
(ii) is paid for services that are directly related to the completion of a contracted specific task rather than on an hourly wage basis; and
(iii) performs all services as an independent contractor pursuant to a written contract.
(q) an officer of a quasi-public or a private corporation or manager of a manager-managed limited liability company who qualifies under one or more of the following provisions:
(i) the officer or manager is not engaged in the ordinary duties of a worker for the corporation or the limited liability company and does not receive any pay from the corporation or the limited liability company for performance of the duties;
(ii) the officer or manager is engaged primarily in household employment for the corporation or the limited liability company;
(iii) the officer or manager either:
(A) owns 20% or more of the number of shares of stock in the corporation or owns 20% or more of the limited liability company; or
(B) owns less than 20% of the number of shares of stock in the corporation or limited liability company if the officer's or manager's shares when aggregated with the shares owned by a person or persons listed in subsection (2)(q)(iv) total 20% or more of the number of shares in the corporation or limited liability company; or
(iv) the officer or manager is the spouse, child, adopted child, stepchild, mother, father, son-in-law, daughter-in-law, nephew, niece, brother, or sister of a corporate officer who meets the requirements of subsection (2)(q)(iii)(A) or (2)(q)(iii)(B).
(r) a person who is an officer or a manager of a ditch company as defined in 27-1-731;
(s) service performed by an ordained, commissioned, or licensed minister of a church in the exercise of the church's ministry or by a member of a religious order in the exercise of duties required by the order.
(3) (a) A sole proprietor, a working member of a partnership, a working member of a limited liability partnership, or a working member of a member-managed limited liability company who represents to the public that the person is an independent contractor shall elect to be bound personally and individually by the provisions of compensation plan No. 1, 2, or 3 but may apply to the department for an exemption from the Workers' Compensation Act.
(b) The application must be made in accordance with the rules adopted by the department. There is a $25 fee for the initial application. Any subsequent application renewal must be accompanied by a $25 application fee. The application fee must be deposited in the administration fund established in 39-71-201 to offset the costs of administering the program.
(c) When an application is approved by the department, it is conclusive as to the status of an independent contractor and precludes the applicant from obtaining benefits under this chapter.
(d) The exemption, if approved, remains in effect for 3 years following the date of the department's approval. To maintain the independent contractor status, an independent contractor shall every 3 years submit a renewal application. A renewal application must be submitted for all independent contractor exemptions approved on or after July 1, 1995. The renewal application and the $25 renewal application fee must be received by the department at least 30 days before the anniversary date of the previously approved exemption.
(e) A person who makes a false statement or misrepresentation concerning that person's status as an exempt independent contractor is subject to a civil penalty of $1,000. The department may impose the penalty for each false statement or misrepresentation. The penalty must be paid to the uninsured employers' fund. The lien provisions of 39-71-506 apply to the penalty imposed by this section.
(f) If the department denies the application for exemption, the applicant may, after mediation pursuant to department
rules, contest the denial by petitioning for review of the decision by an appeals referee in the manner provided for in
39-51-1109 the workers' compensation court. An applicant dissatisfied with the decision of the appeals referee may appeal
the decision in accordance with the procedure established in 39-51-2403 and 39-51-2404.
(4) (a) A corporation or a manager-managed limited liability company shall provide coverage for its employees under the provisions of compensation plan No. 1, 2, or 3. A quasi-public corporation, a private corporation, or a manager-managed limited liability company may elect coverage for its corporate officers or managers, who are otherwise exempt under subsection (2), by giving a written notice in the following manner:
(i) if the employer has elected to be bound by the provisions of compensation plan No. 1, by delivering the notice to the board of directors of the corporation or to the management organization of the manager-managed limited liability company; or
(ii) if the employer has elected to be bound by the provisions of compensation plan No. 2 or 3, by delivering the notice to the board of directors of the corporation or to the management organization of the manager-managed limited liability company and to the insurer.
(b) If the employer changes plans or insurers, the employer's previous election is not effective and the employer shall again serve notice to its insurer and to its board of directors or the management organization of the manager-managed limited liability company if the employer elects to be bound.
(5) The appointment or election of an employee as an officer of a corporation, a partner in a partnership, a partner in a limited liability partnership, or a member in or a manager of a limited liability company for the purpose of exempting the employee from coverage under this chapter does not entitle the officer, partner, member, or manager to exemption from coverage.
(6) Each employer shall post a sign in the workplace at the locations where notices to employees are normally posted, informing employees about the employer's current provision of workers' compensation insurance. A workplace is any location where an employee performs any work-related act in the course of employment, regardless of whether the location is temporary or permanent, and includes the place of business or property of a third person while the employer has access to or control over the place of business or property for the purpose of carrying on the employer's usual trade, business, or occupation. The sign must be provided by the department, distributed through insurers or directly by the department, and posted by employers in accordance with rules adopted by the department. An employer who purposely or knowingly fails to post a sign as provided in this subsection is subject to a $50 fine for each citation."
Section 15. Section 39-71-415, MCA, is amended to read:
"39-71-415. Procedure for resolving disputes regarding independent contractor status. (1) If an individual,
employer, or insurer has a dispute as to whether an individual is an independent contractor or an employee as defined in this
chapter, any party may, after mediation pursuant to department rules, petition a department of labor and industry appeals
referee for resolution of the dispute in accordance with 39-51-1109 and may appeal from a decision of the appeals referee in
the same manner as prescribed in 39-51-2403 and 39-51-2404 the workers' compensation court for resolution of the
dispute.
(2) If a claimant and insurer have a dispute over benefits and the dispute involves an issue of whether the claimant is an independent contractor or employee as defined in this chapter, and after mediating pursuant to department rule, either party may petition the workers' compensation judge for resolution of the dispute in accordance with 39-71-2905.
(3) Notwithstanding the provisions of subsection (1), an individual may apply to the department for an exemption from the Workers' Compensation Act in accordance with 39-71-401."
Section 16. Section 39-71-601, MCA, is amended to read:
"39-71-601. Statute of limitation on presentment of claim -- waiver. (1) In case of personal injury or death, all claims must be forever barred unless signed by the claimant or the claimant's representative and presented in writing to the employer, the insurer, or the department, as the case may be, within 12 months from the date of the happening of the accident, either by the claimant or someone legally authorized to act on the claimant's behalf.
(2) The department insurer may waive the time requirement up to an additional 24 months upon a reasonable showing
by the claimant of:
(a) lack of knowledge of disability;
(b) latent injury; or
(c) equitable estoppel.
(3) Any dispute regarding the statute of limitations for filing time is considered a dispute that, after mediation pursuant to department rules, is subject to jurisdiction of the workers' compensation court."
Section 17. Section 39-71-610, MCA, is amended to read:
"39-71-610. Termination of benefits by insurer -- department order to pay disputed benefits prior to hearing or
mediation -- limitation on order -- right of reimbursement. If an insurer terminates biweekly compensation benefits and
the termination of compensation benefits is disputed by the claimant, the department may, upon written request, order an
insurer to pay additional biweekly compensation benefits prior to a hearing before the workers' compensation court or prior
to mediation, but in no event may the biweekly compensation benefits be ordered to be paid under this section for a period
exceeding 49 days or for any period subsequent to the date of a the hearing or mediation. A party may appeal this order to
the workers' compensation court. If after a hearing before the workers' compensation court it is held that the insurer was
not liable for the compensation payments ordered by the department, the insurer has the right to be reimbursed for such the
payments by the claimant."
Section 18. Section 39-71-613, MCA, is amended to read:
"39-71-613. Regulation of attorney fees -- forfeiture of fee for noncompliance -- return of fee when claimant received benefits through fraud or deception. (1) When an attorney represents or acts on behalf of a claimant or any other party on any workers' compensation claim, the attorney shall submit to the department a contract of employment, on a form provided by the department, stating specifically the terms of the fee arrangement between the attorney and the claimant.
(2) The department may regulate the amount of the attorney fees in any workers' compensation case. In regulating the
amount of the fee fees, the department shall consider:
(a) the benefits the claimant gained due to the efforts of the attorney;
(b) the time the attorney was required to spend on the case;
(c) the complexity of the case; and
(d) any other relevant matter the department may consider appropriate.
(3) An attorney who violates a provision of this section, a rule adopted under this section, or an order fixing attorney
fees under this section forfeits the right to any fee fees that the attorney collected or was entitled to collect.
(4) If, after an attorney receives attorney fees and costs assessed against an insurer, the claimant is convicted of having obtained benefits through fraud or deception, the attorney fees and costs for obtaining the benefits must be returned to the insurer by the attorney.
(5) A dispute concerning the forfeiture or return of attorney fees is considered a dispute for which the workers' compensation court has original jurisdiction and is not subject to mediation or a contested case hearing."
Section 19. Section 39-71-704, MCA, is amended to read:
"39-71-704. Payment of medical, hospital, and related services -- fee schedules and hospital rates -- fee limitation. (1) In addition to the compensation provided under this chapter and as an additional benefit separate and apart from compensation benefits actually provided, the following must be furnished:
(a) After the happening of a compensable injury and subject to other provisions of this chapter, the insurer shall furnish reasonable primary medical services for conditions resulting from the injury for those periods as the nature of the injury or the process of recovery requires.
(b) The insurer shall furnish secondary medical services only upon a clear demonstration of cost-effectiveness of the services in returning the injured worker to actual employment.
(c) The insurer shall replace or repair prescription eyeglasses, prescription contact lenses, prescription hearing aids, and dentures that are damaged or lost as a result of an injury, as defined in 39-71-119, arising out of and in the course of employment.
(d) The insurer shall reimburse a worker for reasonable travel expenses incurred in travel to a medical provider for treatment of an injury only if the travel is incurred at the request of the insurer. Reimbursement must be at the rates allowed for reimbursement of travel by state employees.
(e) Except for the repair or replacement of a prosthesis furnished as a result of an industrial injury, the benefits provided for in this section terminate when they are not used for a period of 60 consecutive months.
(f) Notwithstanding subsection (1)(a), the insurer may not be required to furnish, after the worker has achieved medical stability, palliative or maintenance care except:
(i) when provided to a worker who has been determined to be permanently totally disabled and for whom it is medically
necessary to monitor administration of prescription medication to maintain the worker in a medically stationary condition;
or
(ii) when necessary to monitor the status of a prosthetic device.; or
(g)(iii) If when the worker's treating physician believes that palliative or maintenance the care that would otherwise not
be compensable under subsection (1)(f) is appropriate to enable the worker to continue current employment or that there is
a clear probability of returning the worker to employment, the treating physician shall first request approval from the
insurer for the treatment. If approval is not granted, the treating physician may request approval from the department for the
treatment. The department shall appoint a panel of physicians, including at least one treating physician from the area of
specialty in which the injured worker is being treated, pursuant to rules that the department may adopt, to review the
proposed treatment and determine its appropriateness. A dispute regarding the compensability of palliative or maintenance
care is considered a dispute over which, after mediation pursuant to department rule, the workers' compensation court has
jurisdiction.
(h)(g) Notwithstanding any other provisions of this chapter, the department, by rule and upon the advice of the
professional licensing boards of practitioners affected by the rule, may exclude from compensability any medical treatment
that the department finds to be unscientific, unproved, outmoded, or experimental.
(2) The department shall annually establish a schedule of fees for medical services not provided at a hospital that are necessary for the treatment of injured workers. Charges submitted by providers must be the usual and customary charges for nonworkers' compensation patients. The department may require insurers to submit information to be used in establishing the schedule.
(3) (a) The department shall establish rates for hospital services necessary for the treatment of injured workers.
(b) Except as provided in subsection (3)(g), for the fiscal year beginning July 1, 1997, rates for services provided at a
hospital must be the greater of:
(i) 69% of the hospital's January 1, 1997, usual and customary charges; or
(ii) the discount factor established by the department that was in effect on June 30, 1997, for the hospital. The discount factor for a hospital formed by the merger of two or more existing hospitals is computed by using the weighted average of the discount factors in effect at the time of the merger.
(c) Except as provided in subsection (3)(g), beginning July 1, 1998, the department shall adjust hospital discount factors so that the rate of payment does not exceed the annual percentage increase in the state's average weekly wage, as defined in 39-71-116.
(d) The department may establish a fee schedule for hospital outpatient services rendered on or after July 1, 1998. The fee schedule must, in the aggregate, provide for fees that are equal to the statewide average discount factors paid to hospitals to provide the same or equivalent procedure to workers' compensation hospital outpatients.
(e) The discount factors established by the department pursuant to this subsection (3) may not be less than medicaid reimbursement rates.
(f) For services available in Montana, insurers are not required to pay facilities located outside Montana rates that are greater than those allowed for services delivered in Montana.
(g) For a hospital licensed as a medical assistance facility pursuant to Title 50, chapter 5, the rate for services is the hospital's usual and customary charge. Fees paid to a hospital licensed as a medical assistance facility are not subject to the limitation provided in subsection (4).
(4) The percentage increase in medical costs payable under this chapter may not exceed the annual percentage increase in the state's average weekly wage, as defined in 39-71-116.
(5) Payment pursuant to reimbursement agreements between managed care organizations or preferred provider organizations and insurers is not bound by the provisions of this section.
(6) Disputes between an insurer and a medical service provider regarding the amount of a fee for medical services must be resolved by a hearing before the department upon written application of a party to the dispute.
(7) (a) After the initial visit, the worker is responsible for 20%, but not to exceed $10, of the cost of each subsequent visit to a medical service provider for treatment relating to a compensable injury or occupational disease, unless the visit is to a medical service provider in a managed care organization as requested by the insurer or is a visit to a preferred provider as requested by the insurer.
(b) After the initial visit, the worker is responsible for $25 of the cost of each subsequent visit to a hospital emergency department for treatment relating to a compensable injury or occupational disease.
(c) "Visit", as used in subsections (7)(a) and (7)(b), means each time that the worker obtains services relating to a compensable injury or occupational disease from:
(i) a treating physician;
(ii) a physical therapist;
(iii) a psychologist; or
(iv) hospital outpatient services available in a nonhospital setting.
(d) A worker is not responsible for the cost of a subsequent visit pursuant to subsection (7)(a) if the visit is an examination requested by an insurer pursuant to 39-71-605."
Section 20. Section 39-71-1032, MCA, is amended to read:
"39-71-1032. Termination of benefits for noncooperation with rehabilitation provider -- department hearing and
appeal. (1) If an insurer believes that a worker is refusing unreasonably to cooperate with the rehabilitation provider, the
insurer, with 14 days' written notice to the worker and the department, may terminate any benefits, except medical benefits
and the impairment award, that the worker is receiving until the worker cooperates.
(2) The worker may contest the insurer's termination of benefits by filing a written exception to the department within
20 working days after the date of the 14-day notice. The worker or insurer may request a hearing before the department. The
department shall hold a hearing within 30 days of receipt of the request. The department shall issue an order within 15 days
of the hearing If the worker disputes the termination of benefits, the worker may, after mediation pursuant to department
rule, petition the workers' compensation court for resolution of the dispute.
(3) If the worker prevails at a hearing before the department, it may award attorney fees and costs to the worker under
39-71-612.
(4) Within 30 days after the department mails its order to the party's last-known address, a party may appeal to the
workers' compensation court."
Section 21. Section 39-72-403, MCA, is amended to read:
"39-72-403. Time when claims must be presented. (1) When a claimant seeks benefits under this chapter, the claimant's claims for benefits must be presented in writing to the employer, the employer's insurer, or the department within 1 year from the date the claimant knew or should have known that the claimant's condition resulted from an occupational disease. When a beneficiary seeks benefits under this chapter, claims for death benefits must be presented in writing to the employer, the employer's insurer, or the department within 1 year from the date the beneficiaries knew or should have known that the decedent's death was related to an occupational disease.
(2) The department insurer may, upon a reasonable showing by the claimant or a decedent's beneficiaries that the
claimant or the beneficiaries could not have known that the claimant's condition or the employee's death was related to an
occupational disease, waive the claim time requirement up to an additional 2 years.
(3) Any dispute regarding a claim filing time is considered a dispute that, after mediation pursuant to department rule, is subject to jurisdiction of the workers' compensation court."
Section 22. Section 39-72-601, MCA, is amended to read:
"39-72-601. Medical panel evaluators. (1) The department shall develop a list of physicians to serve on the as
occupational disease medical panel evaluators. The list may include physicians nominated by the board of medical
examiners. A physician on the panel An evaluator must be certified by the physician's specialty board or be eligible for
certification in the specialty area appropriate to the claimant's condition in relation to this chapter.
(2) The department shall select a panel physician an evaluator to examine a claimant, as required. The department shall
appoint, as required, a physician as the presiding officer."
Section 23. Section 39-72-602, MCA, is amended to read:
"39-72-602. Insurer may accept liability -- procedure for medical examination when insurer has not accepted liability. (1) An insurer may accept liability for a claim under this chapter based on information submitted to it by a claimant.
(2) In order to determine the compensability of claims under this chapter when an insurer has not accepted liability, the following procedure must be followed:
(a) The department shall direct the claimant to a member of the medical panel an evaluator on the list of physicians for
an examination. The panel member evaluator shall conduct an examination to determine whether the claimant is totally
disabled and is suffering from an occupational disease. In the case of a fatality, the evaluator shall examine the records to
determine if the death was caused by an occupational disease. The panel member evaluator shall submit a report of the
member's findings to the department.
(b) Either the claimant or the insurer may, within 20 days after the receipt of the report by the first panel member,
request that the claimant be examined by a second panel member. If a second examination is requested, the department
shall direct the claimant to a second panel member who shall conduct an examination to determine whether the claimant is
totally disabled and is suffering from an occupational disease. The panel member shall submit a report of the member's
findings to the department. The medical panel member may, in order to reach a conclusion, consult with the claimant's
attending physician. The reports from the two examining physicians must be sent by the department to the presiding officer
of the panel. The presiding officer shall issue a report concerning the claimant's physical condition and whether the
claimant is suffering from an occupational disease Within 7 working days of receipt, the department shall mail the report of
the evaluator's findings to the insurer and claimant.
(c) (i) If a second examination is not requested, the department shall issue its order determining whether the claimant is
entitled to occupational disease benefits based on the report of the first examining physician.
(ii) If a second examination is requested, the department shall issue its order based on the report of the presiding officer.
If the panel presiding officer has examined the claimant, the department shall appoint another presiding officer Upon
receipt of the report, if a dispute exists over initial compensability of an occupational disease, it is considered a dispute that,
after mediation pursuant to department rule, is subject to the jurisdiction of the workers' compensation court."
Section 24. Section 39-72-607, MCA, is amended to read:
"39-72-607. Periodic medical examinations. (1) Upon the request of the department or the insurer, each employee
entitled to compensation shall submit to a medical examination from time to time by a physician designated by the
department who is a member of the appropriate medical panel an evaluator on the department's list of physicians. The
examination shall must be at a place reasonably convenient for the employee.
(2) The order directing the examination shall must fix a time and place having regard to the convenience of the
employee, his the employee's physical condition, and his the employee's ability to attend. The employee and any other party
in interest may have a physician present at the examination if the physician is provided and paid for by the employee or
other party.
(3) If the employee refuses to submit to the examination or obstructs the examination, his the employee's right to
compensation is suspended until the examination has been made, and no compensation is not payable during or for the
period of suspension.
(4) A physician who makes or is present at the examination may be required to testify as to the result thereof of the
examination."
Section 25. Section 39-72-608, MCA, is amended to read:
"39-72-608. Payment of medical examination, report, and autopsy expenses. The expense of the first medical
examination and report, as provided in 39-72-602, must be borne paid by the insurer. The expense of a reexamination and
panel report must be borne by the dissatisfied party requesting the reexamination. The expense of the periodic medical
examinations and reports, as provided in 39-72-607, must be borne paid by the party requesting the periodic medical
examination. The expense of the autopsy, as provided for in 39-72-606, must be borne paid by the party requesting the
autopsy. When the occupational disease causes death, the expense of any examinations and reports, as provided in
39-72-605, must be borne paid by the party requesting the examination."
Section 26. Repealer. Sections 39-3-217, 39-72-609, 39-72-610, 39-72-611, 39-72-612, and 39-72-613, MCA, are repealed.
Section 27. Codification instruction. [Section 7] is intended to be codified as an integral part of Title 39, chapter 51, part 1, and the provisions of Title 39, chapter 51, part 1, apply to [section 7].
Section 28. Severability. If a part of [this act] is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of [this act] is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.
Section 29. Effective date. [This act] is effective on passage and approval.
Section 30. Applicability. [Sections 3 and 5] apply to claims accruing on or after [the effective date of this act].
Section 31. Retroactive applicability. (1) [Sections 14 through 20] apply retroactively, within the meaning of 1-2-109, to claims for injuries occurring before [the effective date of this act] unless a party elects, after notification by the department of labor and industry, to remain in the contested case process.
(2) [Sections 21 through 25] apply retroactively, within the meaning of 1-2-109, to occupational diseases occurring before [the effective date of this act] unless a party elects, after notification by the department of labor and industry, to remain in the contested case process.
- END -
Latest Version of HB 592 (HB0592.ENR)
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