Arizona - InsuranceFraud.org

AZ HB 2874 provides that if a health insurer notices a trend in the number of health care insurance claims that are filed by a health care provider for services provided to patients on any given workday exceeds the number of patients that the health care provider could reasonably be expected to treat on that given workday, the health insurer shall notify the department and the board that licenses, registers or certifies the health care provider. Also requires a property & casualty insurer to notify the department if insurance fraud or health care fraud is suspected.

Date introduced: 2/10/2025

Key Sponsor: Sarah Liguori

Committee: House Third Reading

AZ SB 1127 relates to vehicle towing rates; relates to regulation. On monitor only, relates to private property tows.

Date introduced: 01/15/2025

Key Sponsor: Kevin Payne

Committee: Government Committee

AZ HB 2283 relates to towing price regulations and unlawful practices during emergencies.

Date introduced: 01/15/2025

Key Sponsor: Cesar Aguilar

Committee: Commerce Committee

The claims forms provided by an insurer to an insured or any other person for filing a notice or making a claim in connection with a policy or contract issued by the insurer shall include in substance the following statement in at least twelve point type: “For your protection Arizona law requires the following statement to appear on this form, any person who knowingly presents a false or fraudulent claim for payment of a loss is subject to criminal and civil penalties.” For the purposes of this section, “claims form” means any document supplied by an insurer to an insured, claimant or other person that the insured, claimant or other person is required to complete and submit in support of a claim for benefits.

Fraud unit; peace officer status; powers; information sharing duty of insurers A. A fraud unit is established in the department of insurance. B. The fraud unit shall work in conjunction with the department of public safety. C. The director may investigate any act or practice of fraud prohibited by section 20-466.01 and any other act or practice of fraud against an insurer or entity licensed under this title. The director shall administer the fraud unit. D. The director may employ investigators for the fraud unit. A fraud unit investigator has and shall exercise the law enforcement powers of a peace officer of this state but only while acting in the course and scope of employment for the department. The director shall adopt guidelines for the conduct of investigations that are substantially similar to the investigative policy and procedural guidelines of the department of public safety for peace officers. Fraud unit investigators shall not preempt the authority and jurisdiction of other law enforcement agencies of this state or its political subdivisions. Fraud unit investigators: 1. Shall have at least the qualifications prescribed by the Arizona peace officer standards and training board pursuant to section 41-1822. 2. Are not eligible to participate in the public safety personnel retirement system established by title 38, chapter 5, article 4 due solely to employment as fraud unit investigators. E. The director may request the submission of papers, documents, reports or other evidence relating to an investigation under this section. The director may issue subpoenas and take other actions pursuant to section 20-160. The materials are privileged and confidential until the director completes the investigation. Any documents, materials or other information that is provided to the director pursuant to this section is not subject to discovery or subpoena until opened for public inspection by the director or, after notice and a hearing, a court determines that the director would not be unduly burdened by compliance with the subpoena. The director shall keep the identity of an informant confidential, including any information that might identify the informant, unless the request for information is made by a law enforcement agency, the attorney general or a county attorney for purposes of a criminal investigation or prosecution. The director may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the director’s official duties. F. If the documents, materials or other information the director seeks to obtain by request is located outside this state, the person requested to provide the documents, materials or other information shall arrange for the fraud unit or a representative, including an official of the state in which the documents, materials or other information is located, to examine the documents, materials or other information where it is located. The director may respond to similar requests from other states. G. An insurer that believes a fraudulent claim has been or is being made shall send to the director, on a form prescribed by the director, information relative to the claim including the identity of parties claiming loss or damage as a result of an accident and any other information the fraud unit may require. The director shall review the report and determine if further investigation is necessary. If the director determines that further investigation is necessary, the director may conduct an independent investigation to determine if fraud, deceit or intentional misrepresentation in the submission of the claim exists. If the director is satisfied that fraud, deceit or intentional misrepresentation of any kind has been committed in the submission of a claim, the director may report the violations of the law to the reporting insurer, to the appropriate licensing agency as defined in section 20-466.04 and to the appropriate county attorney or the attorney general for prosecution. H. The director may: 1. Share nonpublic documents, materials or other information with other state, federal and international regulatory agencies, with the national association of insurance commissioners and its affiliates and subsidiaries and with state, federal and international law enforcement authorities if the recipient agrees and warrants that it has the authority to maintain the confidentiality and privileged status of the documents, materials or other information. 2. Receive documents, materials and other information from the national association of insurance commissioners and its affiliates and subsidiaries and from regulatory and law enforcement officials of other jurisdictions and shall maintain as confidential or privileged any document, material or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or other information. 3. Enter into agreements that govern the sharing and use of documents, materials and other information and that are consistent with this section. I. A disclosure to or by the director pursuant to this section or as a result of sharing information pursuant to subsection G of this section is not a waiver of any applicable privilege or claim of confidentiality in the documents, materials or other information disclosed or shared. J. The director shall annually assess each insurer as defined in section 20-441, subsection B authorized to transact business in this state up to one thousand fifty dollars, as annually adjusted pursuant to this subsection for the administration and operation of the fraud unit and the prosecution of fraud pursuant to this section. Monies collected shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund. The director shall annually revise the assessment amount in such a manner that the revenue derived from the assessment equals at least ninety-five per cent but not more than one hundred ten per cent of the appropriated budget of the fraud unit for the prior fiscal year. K. A person, or an officer, employee or agent of the person acting within the scope of employment or agency of that officer, employee or agent, who in good faith files a report or provides other information to the fraud unit pursuant to this section is not subject to civil or criminal liability for reporting that information to the fraud unit.

A. It is a fraudulent practice and unlawful for a person to knowingly: 1. Present, cause to be presented or prepare with the knowledge or belief that it will be presented an oral or written statement, including computer generated documents, to or by an insurer, reinsurer, purported insurer or reinsurer, insurance producer or agent of a reinsurer that contains untrue statements of material fact or that fails to state any material fact with respect to any of the following: (a) An application for the issuance or renewal of an insurance policy. (b) The rating of an insurance policy. (c) A claim for payment or benefit pursuant to an insurance policy. (d) Premiums paid on any insurance policy. (e) Payments made pursuant to the terms of any insurance policy. (f) An application for a certificate of authority. (g) The financial condition of an insurer, reinsurer or purported insurer or reinsurer. (h) The acquisition of an insurer or reinsurer or the concealing of any information concerning any fact material to the acquisition. 2. Solicit or accept new or renewal insurance risks by or for any insolvent insurer, reinsurer or other entity licensed to transact insurance business in this state. 3. Conceal or attempt to conceal from the department or remove or attempt to remove from the home office, place of safekeeping or other place of business of any insurer, reinsurer or other entity licensed to transact insurance business in this state part or all of the assets or records of the assets, transactions and affairs. 4. Divert or attempt or conspire to divert the monies of an insurer, reinsurer, entity licensed to transact insurance business in this state or other person in connection with: (a) The transaction of insurance or reinsurance. (b) The conduct of business activities by any insurer, reinsurer or other entity licensed to transact insurance business in this state. (c) The formation, acquisition or dissolution of any insurer, reinsurer or other entity licensed to transact insurance business in this state. 5. Assist, abet, solicit or conspire with another person to violate paragraph 1 of this subsection. 6. Employ, use or act as a runner, capper or steerer for the purposes of violating paragraph 1 of this subsection. B. A person who acts without malice, fraudulent intent or bad faith is not subject to liability for filing reports or furnishing orally or in writing other information concerning suspected, anticipated or completed fraudulent insurance acts if the reports or information is provided to or received from: 1. The director or the department. 2. Law enforcement officials and their agents and employees. 3. The national association of insurance commissioners, other state insurance departments, a federal or state agency or bureau established to detect and prevent fraudulent insurance acts, and the agency’s or bureau’s agents, employees or designees, or an organization established by insurers to assist in the detection and prevention of fraudulent insurance acts, and the organization’s agents, employees or designees. C. A person, or an officer, employee or agent of the person acting within the scope of employment or agency of that officer, employee or agent, identified under subsection B, paragraph 1, 2 or 3 when performing authorized activities without malice, fraudulent intent or bad faith is not subject to civil liability for libel, slander or another relevant tort. No civil cause of action may be brought against the person or entity. D. A person or entity under subsection B or C is entitled to an award of attorney fees and costs if the person or entity is a prevailing party in a civil cause of action for libel, slander or other relevant tort and the action is not substantially justified. For purposes of this subsection, “substantially justified” means a proceeding that has a reasonable basis in law or fact at the time that it is initiated. E. Nothing in this section limits any common law right of the person or entity. F. Nothing in this section is intended to prohibit contact or communication with clients or patients for any lawful purpose, including communication by and between insurers, the insurers’ policyholders and claimants under policies issued to the insurers’ policyholders regarding the investigation or settlement of any claim. G. For the purposes of this section: 1. “Runner”, “capper” or “steerer” means a person who procures clients at the direction of, or in cooperation with, a person who intends to perform or obtain services or benefits under a contract of insurance or who intends to assert a claim against an insured. 2. “Statement” includes any notice, proof of injury, bill for services, payment for services, hospital or doctor records, x-rays, test reports, medical or legal expenses, or other evidence of loss or injury, or other expense or payment.

A. It is a fraudulent practice and unlawful for a person to knowingly: 4. Divert or attempt or conspire to divert the monies of an insurer, reinsurer, entity licensed to transact insurance business in this state or other person in connection with: (a) The transaction of insurance or reinsurance. (b) The conduct of business activities by any insurer, reinsurer or other entity licensed to transact insurance business in this state. (c) The formation, acquisition or dissolution of any insurer, reinsurer or other entity licensed to transact insurance business in this state.

A. On request by the director, the attorney general may seek and obtain in an action in the superior court an injunction that prohibits a person from engaging in practices or doing any acts that violate ¤ 20-463, 20-463.01 or 23-1028. The court may enter any order or judgment that is necessary to: 2. Return any monies, interest or real or personal property that was acquired by an act or practice that is unlawful under ¤ 20-463, 20-463.01 or 23-1028. B. An order of restitution may also include expenses incurred and paid by an insurer in connection with any medical evaluation or treatment services. C. If the court finds that a person has violated ¤ 20-463, 20-463.01 or 23-1028, the attorney general on petition or complaint to the court may recover from that person on behalf of the state a civil penalty of not more than five thousand dollars for each violation. D. In any action pursuant to this section, the court may award the attorney general costs including reasonable attorney fees and investigative costs for the services rendered.

A. The director may after a hearing refuse to renew or may revoke or suspend an insurer’s certificate of authority, in addition to other grounds therefor in this title, if the insurer: 1. Violates any provision of this title other than a provision as to which refusal, suspension or revocation is mandatory. 2. Knowingly fails to comply with any lawful rule or order of the director. 3. Is found by the director to be in unsound condition or in such condition as to render its further transaction of insurance in this state hazardous to its policyholders or to the people of this state. 4. Usually compels claimants under its policies to accept less than the amount due them or to bring suit against it to secure full payment thereof. 5. Refuses to be examined or to produce its accounts, records and files for examination by the director when required. 6. Fails to pay any final judgment rendered against it in this state within thirty days after the judgment becomes final. 7. Is affiliated with and under the same general management or interlocking directorate or ownership as another insurer which transacts direct insurance in this state without having a certificate of authority therefor, except as permitted to a surplus lines insurer under article 5 of this chapter.1 B. If after a hearing the director finds grounds pursuant to subsection A to suspend or revoke an insurer’s certificate of authority, the director may impose, in lieu of or in addition to such suspension or revocation, the following civil penalties: 1. A penalty not to exceed one thousand dollars for each violation and not to exceed an aggregate of ten thousand dollars within any six-month period with respect to unintentional violations. 2. A penalty not to exceed five thousand dollars for each violation and not to exceed an aggregate of fifty thousand dollars within any six-month period with respect to intentional violations. The insurer shall pay the civil penalty to the director who shall deposit it, pursuant to ¤¤ 35-146 and 35-147, in the state general fund. The civil penalty is in addition to any other penalty imposed by law. C. The director may adopt rules to provide the criteria to be used for identifying insurers who are found to be in a condition that would render the continuance of their business hazardous to their policyholders or the people of this state.

Healthcare Fraud