72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 2510
 
                         Senate Bill 414
 
Sponsored by Senator NELSON (at the request of Liberty Northwest)
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Requires objective findings to be observed at time of treatment
by medical provider. Prohibits payments of benefits to certain
beneficiaries while incarcerated. Limits scope of claim
acceptance in certain claims to conditions stated in notice of
acceptance. Allows reduction of rate of temporary disability
benefits under certain circumstances to workers terminated for
reasons unrelated to compensable injury.
 
                        A BILL FOR AN ACT
Relating to workers' compensation claims; amending ORS 656.005,
  656.160, 656.262 and 656.325.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 656.005 is amended to read:
  656.005. (1) 'Average weekly wage' means the Oregon average
weekly wage in covered employment, as determined by the
Employment Department, for the last quarter of the calendar year
preceding the fiscal year in which the injury occurred.
  (2) 'Beneficiary' means an injured worker, and the husband,
wife, child or dependent of a worker, who is entitled to receive
payments under this chapter. 'Beneficiary' does not include:
  (a) A spouse of an injured worker living in a state of
abandonment for more than one year at the time of the injury or
subsequently. A spouse who has lived separate and apart from the
worker for a period of two years and who has not during that time
received or attempted by process of law to collect funds for
support or maintenance is considered living in a state of
abandonment.
  (b) A person who intentionally causes the compensable injury to
or death of an injured worker.
  (3) 'Board' means the Workers' Compensation Board.
  (4) 'Carrier-insured employer' means an employer who provides
workers' compensation coverage with a guaranty contract insurer.
  (5) 'Child' includes a posthumous child, a child legally
adopted prior to the injury, a child toward whom the worker
stands in loco parentis, an illegitimate child and a stepchild,
if such stepchild was, at the time of the injury, a member of the
worker's family and substantially dependent upon the worker for
support. An invalid dependent child is a child, for purposes of
benefits, regardless of age, so long as the child was an invalid
at the time of the accident and thereafter remains an invalid
substantially dependent on the worker for support. For purposes
of this chapter, an invalid dependent child is considered to be a
child under 18 years of age.
  (6) 'Claim' means a written request for compensation from a
subject worker or someone on the worker's behalf, or any
compensable injury of which a subject employer has notice or
knowledge.
  (7)(a) A 'compensable injury' is an accidental injury, or
accidental injury to prosthetic appliances, arising out of and in
the course of employment requiring medical services or resulting
in disability or death; an injury is accidental if the result is
an accident, whether or not due to accidental means, if it is
established by medical evidence supported by objective findings,
subject to the following limitations:
  (A) No injury or disease is compensable as a consequence of a
compensable injury unless the compensable injury is the major
contributing cause of the consequential condition.
  (B) If an otherwise compensable injury combines at any time
with a preexisting condition to cause or prolong disability or a
need for treatment, the combined condition is compensable only
if, so long as and to the extent that the otherwise compensable
injury is the major contributing cause of the disability of the
combined condition or the major contributing cause of the need
for treatment of the combined condition.
  (b) 'Compensable injury' does not include:
  (A) Injury to any active participant in assaults or combats
which are not connected to the job assignment and which amount to
a deviation from customary duties;
  (B) Injury incurred while engaging in or performing, or as the
result of engaging in or performing, any recreational or social
activities primarily for the worker's personal pleasure; or
  (C) Injury the major contributing cause of which is
demonstrated to be by a preponderance of the evidence the injured
worker's consumption of alcoholic beverages or the unlawful
consumption of any controlled substance, unless the employer
permitted, encouraged or had actual knowledge of such
consumption.
  (c) A 'disabling compensable injury' is an injury which
entitles the worker to compensation for disability or death. An
injury is not disabling if no temporary benefits are due and
payable, unless there is a reasonable expectation that permanent
disability will result from the injury.
  (d) A 'nondisabling compensable injury' is any injury which
requires medical services only.
  (8) 'Compensation' includes all benefits, including medical
services, provided for a compensable injury to a subject worker
or the worker's beneficiaries by an insurer or self-insured
employer pursuant to this chapter.
  (9) 'Department' means the Department of Consumer and Business
Services.
  (10) 'Dependent' means any of the following-named relatives of
a worker whose death results from any injury: Father, mother,
grandfather, grandmother, stepfather, stepmother, grandson,
granddaughter, brother, sister, half sister, half brother, niece
or nephew, who at the time of the accident, are dependent in
whole or in part for their support upon the earnings of the
worker.  Unless otherwise provided by treaty, aliens not residing
within the United States at the time of the accident other than
father, mother, husband, wife or children are not included within
the term ' dependent.  '
  (11) 'Director' means the Director of the Department of
Consumer and Business Services.
  (12)(a) 'Doctor' or 'physician' means a person duly licensed to
practice one or more of the healing arts in any country or in any
state, territory or possession of the United States within the
limits of the license of the licentiate.
 
  (b) Except as otherwise provided for workers subject to a
managed care contract, 'attending physician' means a doctor or
physician who is primarily responsible for the treatment of a
worker's compensable injury and who is:
  (A) A medical doctor or doctor of osteopathy licensed under ORS
677.100 to 677.228 by the Board of Medical Examiners for the
State of Oregon or an oral and maxillofacial surgeon licensed by
the Oregon Board of Dentistry or a similarly licensed doctor in
any country or in any state, territory or possession of the
United States; or
  (B) For a period of 30 days from the date of first visit on the
initial claim or for 12 visits, whichever first occurs, a doctor
or physician licensed by the State Board of Chiropractic
Examiners for the State of Oregon or a similarly licensed doctor
or physician in any country or in any state, territory or
possession of the United States.
  (c) 'Consulting physician' means a doctor or physician who
examines a worker or the worker's medical record to advise the
attending physician regarding treatment of a worker's compensable
injury.
  (13)(a) 'Employer' means any person, including receiver,
administrator, executor or trustee, and the state, state
agencies, counties, municipal corporations, school districts and
other public corporations or political subdivisions, who
contracts to pay a remuneration for and secures the right to
direct and control the services of any person.
  (b) Notwithstanding paragraph (a) of this subsection, for
purposes of this chapter, the client of a temporary service
provider is not the employer of temporary workers provided by the
temporary service provider.
  (c) As used in paragraph (b) of this subsection, 'temporary
service provider' has the meaning for that term provided in ORS
656.850.
  (14) 'Guaranty contract insurer' and 'insurer' mean the State
Accident Insurance Fund Corporation or an insurer authorized
under ORS chapter 731 to transact workers' compensation insurance
in this state or an assigned claims agent selected by the
director under ORS 656.054.
  (15) 'Consumer and Business Services Fund' means the fund
created by ORS 705.145.
  (16) 'Invalid' means one who is physically or mentally
incapacitated from earning a livelihood.
  (17) 'Medically stationary' means that no further material
improvement would reasonably be expected from medical treatment,
or the passage of time.
  (18) 'Noncomplying employer' means a subject employer who has
failed to comply with ORS 656.017.
  (19) 'Objective findings' in support of medical evidence are
verifiable indications of injury or disease that may include, but
are not limited to, range of motion, atrophy, muscle strength and
palpable muscle spasm. 'Objective findings' does not include
physical findings or subjective responses to physical
examinations that are not reproducible, measurable or
observable { +  by a medical provider at the time treatment is
sought + }.
  (20) 'Palliative care' means medical service rendered to reduce
or moderate temporarily the intensity of an otherwise stable
medical condition, but does not include those medical services
rendered to diagnose, heal or permanently alleviate or eliminate
a medical condition.
  (21) 'Party' means a claimant for compensation, the employer of
the injured worker at the time of injury and the insurer, if any,
of such employer.
  (22) 'Payroll' means a record of wages payable to workers for
their services and includes commissions, value of exchange labor
and the reasonable value of board, rent, housing, lodging or
similar advantage received from the employer. However, 'payroll '
does not include overtime pay, vacation pay, bonus pay, tips,
amounts payable under profit-sharing agreements or bonus payments
to reward workers for safe working practices. Bonus pay is
limited to payments which are not anticipated under the contract
of employment and which are paid at the sole discretion of the
employer. The exclusion from payroll of bonus payments to reward
workers for safe working practices is only for the purpose of
calculations based on payroll to determine premium for workers'
compensation insurance, and does not affect any other calculation
or determination based on payroll for the purposes of this
chapter.
  (23) 'Person' includes partnership, joint venture, association,
limited liability company and corporation.
  (24)(a) 'Preexisting condition' means, for all industrial
injury claims, any injury, disease, congenital abnormality,
personality disorder or similar condition that contributes to
disability or need for treatment, provided that:
  (A) Except for claims in which a preexisting condition is
arthritis or an arthritic condition, the worker has been
diagnosed with such condition, or has obtained medical services
for the symptoms of the condition regardless of diagnosis; and
  (B)(i) In claims for an initial injury or omitted condition,
the diagnosis or treatment precedes the initial injury;
  (ii) In claims for a new medical condition, the diagnosis or
treatment precedes the onset of the new medical condition; or
  (iii) In claims for a worsening pursuant to ORS 656.273 or
656.278, the diagnosis or treatment precedes the onset of the
worsened condition.
  (b) 'Preexisting condition' means, for all occupational disease
claims, any injury, disease, congenital abnormality, personality
disorder or similar condition that contributes to disability or
need for treatment and that precedes the onset of the claimed
occupational disease, or precedes a claim for worsening in such
claims pursuant to ORS 656.273 or 656.278.
  (c) For the purposes of industrial injury claims, a condition
does not contribute to disability or need for treatment if the
condition merely renders the worker more susceptible to the
injury.
  (25) 'Self-insured employer' means an employer or group of
employers certified under ORS 656.430 as meeting the
qualifications set out by ORS 656.407.
  (26) 'State Accident Insurance Fund Corporation' and '
corporation' mean the State Accident Insurance Fund Corporation
created under ORS 656.752.
  (27) 'Subject employer' means an employer who is subject to
this chapter as provided by ORS 656.023.
  (28) 'Subject worker' means a worker who is subject to this
chapter as provided by ORS 656.027.
  (29) 'Wages' means the money rate at which the service rendered
is recompensed under the contract of hiring in force at the time
of the accident, including reasonable value of board, rent,
housing, lodging or similar advantage received from the employer,
and includes the amount of tips required to be reported by the
employer pursuant to section 6053 of the Internal Revenue Code of
1954, as amended, and the regulations promulgated pursuant
thereto, or the amount of actual tips reported, whichever amount
is greater. The State Accident Insurance Fund Corporation may
establish assumed minimum and maximum wages, in conformity with
recognized insurance principles, at which any worker shall be
carried upon the payroll of the employer for the purpose of
determining the premium of the employer.
  (30) 'Worker' means any person, including a minor whether
lawfully or unlawfully employed, who engages to furnish services
for a remuneration, subject to the direction and control of an
employer and includes salaried, elected and appointed officials
of the state, state agencies, counties, cities, school districts
and other public corporations, but does not include any person
whose services are performed as an inmate or ward of a state
institution or as part of the eligibility requirements for a
general or public assistance grant. For the purpose of
determining entitlement to temporary disability benefits or
permanent total disability benefits under this chapter, 'worker'
does not include a person who has withdrawn from the workforce
during the period for which such benefits are sought.
  (31) 'Independent contractor' has the meaning for that term
provided in ORS 670.600.
  SECTION 2. ORS 656.160 is amended to read:
  656.160. (1) Notwithstanding any other provision of this
chapter, an injured worker is not eligible to receive
compensation under ORS 656.210 or 656.212  { + and a person is
not eligible to receive benefits under ORS 656.204  + }for
periods of time during which the worker  { + or the person
otherwise eligible to receive benefits under ORS 656.204 + } is
incarcerated for the commission of a crime.
  (2) As used in this section, an individual is not '
incarcerated' if the individual is on parole or work release
status.
  SECTION 3. ORS 656.262 is amended to read:
  656.262. (1) Processing of claims and providing compensation
for a worker shall be the responsibility of the insurer or
self-insured employer. All employers shall assist their insurers
in processing claims as required in this chapter.
  (2) The compensation due under this chapter shall be paid
periodically, promptly and directly to the person entitled
thereto upon the employer's receiving notice or knowledge of a
claim, except where the right to compensation is denied by the
insurer or self-insured employer.
  (3)(a) Employers shall, immediately and not later than five
days after notice or knowledge of any claims or accidents which
may result in a compensable injury claim, report the same to
their insurer. The report shall include:
  (A) The date, time, cause and nature of the accident and
injuries.
  (B) Whether the accident arose out of and in the course of
employment.
  (C) Whether the employer recommends or opposes acceptance of
the claim, and the reasons therefor.
  (D) The name and address of any health insurance provider for
the injured worker.
  (E) Any other details the insurer may require.
  (b) Failure to so report subjects the offending employer to a
charge for reimbursing the insurer for any penalty the insurer is
required to pay under subsection (11) of this section because of
such failure. As used in this subsection, 'health insurance' has
the meaning for that term provided in ORS 731.162.
  (4)(a) The first installment of temporary disability
compensation shall be paid no later than the 14th day after the
subject employer has notice or knowledge of the claim, if the
attending physician authorizes the payment of temporary
disability compensation. Thereafter, temporary disability
compensation shall be paid at least once each two weeks, except
where the Director of the Department of Consumer and Business
Services determines that payment in installments should be made
at some other interval. The director may by rule convert monthly
benefit schedules to weekly or other periodic schedules.
  (b) Notwithstanding any other provision of this chapter, if a
self-insured employer pays to an injured worker who becomes
disabled the same wage at the same pay interval that the worker
received at the time of injury, such payment shall be deemed
timely payment of temporary disability payments pursuant to ORS
656.210 and 656.212 during the time the wage payments are made.
  (c) Notwithstanding any other provision of this chapter, when
the holder of a public office is injured in the course and scope
of that public office, full official salary paid to the holder of
that public office shall be deemed timely payment of temporary
disability payments pursuant to ORS 656.210 and 656.212 during
the time the wage payments are made. As used in this subsection,
' public office' has the meaning for that term provided in ORS
260.005.
  (d) Temporary disability compensation is not due and payable
for any period of time for which the insurer or self-insured
employer has requested from the worker's attending physician
verification of the worker's inability to work resulting from the
claimed injury or disease and the physician cannot verify the
worker's inability to work, unless the worker has been unable to
receive treatment for reasons beyond the worker's control.
  (e) If a worker fails to appear at an appointment with the
worker's attending physician, the insurer or self-insured
employer shall notify the worker by certified mail that temporary
disability benefits may be suspended after the worker fails to
appear at a rescheduled appointment. If the worker fails to
appear at a rescheduled appointment, the insurer or self-insured
employer may suspend payment of temporary disability benefits to
the worker until the worker appears at a subsequent rescheduled
appointment.
  (f) If the insurer or self-insured employer has requested and
failed to receive from the worker's attending physician
verification of the worker's inability to work resulting from the
claimed injury or disease, medical services provided by the
attending physician are not compensable until the attending
physician submits such verification.
  (g) Temporary disability compensation is not due and payable
pursuant to ORS 656.268 after the worker's attending physician
ceases to authorize temporary disability or for any period of
time not authorized by the attending physician. No authorization
of temporary disability compensation by the attending physician
under ORS 656.268 shall be effective to retroactively authorize
the payment of temporary disability more than 14 days prior to
its issuance.
  (h) The worker's disability may be authorized only by a person
described in ORS 656.005 (12)(b)(B) or 656.245 (5) for the period
of time permitted by those sections. The insurer or self-insured
employer may unilaterally suspend payment of temporary disability
benefits to the worker at the expiration of the period until
temporary disability is reauthorized by an attending physician.
  (i) The insurer or self-insured employer may unilaterally
suspend payment of all compensation to a worker enrolled in a
managed care organization if the worker continues to seek care
from an attending physician not authorized by the managed care
organization more than seven days after the mailing of notice by
the insurer or self-insured employer.
  (5) Payment of compensation under subsection (4) of this
section or payment, in amounts not to exceed $500 per claim, for
medical services for nondisabling claims, may be made by the
subject employer if the employer so chooses. The making of such
payments does not constitute a waiver or transfer of the
insurer's duty to determine entitlement to benefits. If the
employer chooses to make such payment, the employer shall report
the injury to the insurer in the same manner that other injuries
are reported.  However, an insurer shall not modify an employer's
experience rating or otherwise make charges against the employer
for any medical expenses paid by the employer pursuant to this
subsection.
  (6)(a) Written notice of acceptance or denial of the claim
shall be furnished to the claimant by the insurer or self-insured
employer within 60 days after the employer has notice or
knowledge of the claim.  { + If the insurer or self-insured
employer has issued a written notice of acceptance for a claim,
the accepted conditions for the accepted claim are limited to
those conditions expressly stated in the written notice of
acceptance. + } Once the claim is accepted, the insurer or
self-insured employer shall not revoke acceptance except as
provided in this section. The insurer or self-insured employer
may revoke acceptance and issue a denial at any time when the
denial is for fraud, misrepresentation or other illegal activity
by the worker. If the worker requests a hearing on any revocation
of acceptance and denial alleging fraud, misrepresentation or
other illegal activity, the insurer or self-insured employer has
the burden of proving, by a preponderance of the evidence, such
fraud, misrepresentation or other illegal activity. Upon such
proof, the worker then has the burden of proving, by a
preponderance of the evidence, the compensability of the claim.
If the insurer or self-insured employer accepts a claim in good
faith, in a case not involving fraud, misrepresentation or other
illegal activity by the worker, and later obtains evidence that
the claim is not compensable or evidence that the insurer or
self-insured employer is not responsible for the claim, the
insurer or self-insured employer may revoke the claim acceptance
and issue a formal notice of claim denial, if such revocation of
acceptance and denial is issued no later than two years after the
date of the initial acceptance. If the worker requests a hearing
on such revocation of acceptance and denial, the insurer or
self-insured employer must prove, by a preponderance of the
evidence, that the claim is not compensable or that the insurer
or self-insured employer is not responsible for the claim.
Notwithstanding any other provision of this chapter, if a denial
of a previously accepted claim is set aside by an Administrative
Law Judge, the Workers' Compensation Board or the court,
temporary total disability benefits are payable from the date any
such benefits were terminated under the denial.  Except as
provided in ORS 656.247, pending acceptance or denial of a claim,
compensation payable to a claimant does not include the costs of
medical benefits or burial expenses. The insurer shall also
furnish the employer a copy of the notice of acceptance.
  (b) The notice of acceptance shall:
  (A) Specify what conditions are compensable.
  (B) Advise the claimant whether the claim is considered
disabling or nondisabling.
  (C) Inform the claimant of the Expedited Claim Service and of
the hearing and aggravation rights concerning nondisabling
injuries, including the right to object to a decision that the
injury of the claimant is nondisabling by requesting
reclassification pursuant to ORS 656.277.
  (D) Inform the claimant of employment reinstatement rights and
responsibilities under ORS chapter 659A.
  (E) Inform the claimant of assistance available to employers
from the Reemployment Assistance Program under ORS 656.622.
  (F) Be modified by the insurer or self-insured employer from
time to time as medical or other information changes a previously
issued notice of acceptance.
  (c) An insurer's or self-insured employer's acceptance of a
combined or consequential condition under ORS 656.005 (7),
whether voluntary or as a result of a judgment or order, shall
not preclude the insurer or self-insured employer from later
denying the combined or consequential condition if the otherwise
compensable injury ceases to be the major contributing cause of
the combined or consequential condition.
  (d) An injured worker who believes that a condition has been
incorrectly omitted from a notice of acceptance, or that the
notice is otherwise deficient, first must communicate in writing
to the insurer or self-insured employer the worker's objections
to the notice pursuant to ORS 656.267. The insurer or
self-insured employer has 60 days from receipt of the
communication from the worker to revise the notice or to make
other written clarification in response. A worker who fails to
comply with the communication requirements of this paragraph or
ORS 656.267 may not allege at any hearing or other proceeding on
the claim a de facto denial of a condition based on information
in the notice of acceptance from the insurer or self-insured
employer. Notwithstanding any other provision of this chapter,
the worker may initiate objection to the notice of acceptance at
any time.
  (7)(a) After claim acceptance, written notice of acceptance or
denial of claims for aggravation or new medical or omitted
condition claims properly initiated pursuant to ORS 656.267 shall
be furnished to the claimant by the insurer or self-insured
employer within 60 days after the insurer or self-insured
employer receives written notice of such claims. A worker who
fails to comply with the communication requirements of subsection
(6) of this section or ORS 656.267 may not allege at any hearing
or other proceeding on the claim a de facto denial of a condition
based on information in the notice of acceptance from the insurer
or self-insured employer.
  (b) Once a worker's claim has been accepted, the insurer or
self-insured employer must issue a written denial to the worker
when the accepted injury is no longer the major contributing
cause of the worker's combined condition before the claim may be
closed.
  (c) When an insurer or self-insured employer determines that
the claim qualifies for claim closure, the insurer or
self-insured employer shall issue at claim closure an updated
notice of acceptance that specifies which conditions are
compensable. The procedures specified in subsection (6)(d) of
this section apply to this notice. Any objection to the updated
notice or appeal of denied conditions shall not delay claim
closure pursuant to ORS 656.268. If a condition is found
compensable after claim closure, the insurer or self-insured
employer shall reopen the claim for processing regarding that
condition.
  (8) The assigned claims agent in processing claims under ORS
656.054 shall send notice of acceptance or denial to the
noncomplying employer.
  (9) If an insurer or any other duly authorized agent of the
employer for such purpose, on record with the Director of the
Department of Consumer and Business Services denies a claim for
compensation, written notice of such denial, stating the reason
for the denial, and informing the worker of the Expedited Claim
Service and of hearing rights under ORS 656.283, shall be given
to the claimant. A copy of the notice of denial shall be mailed
to the director and to the employer by the insurer. The worker
may request a hearing pursuant to ORS 656.319.
  (10) Merely paying or providing compensation shall not be
considered acceptance of a claim or an admission of liability,
nor shall mere acceptance of such compensation be considered a
waiver of the right to question the amount thereof. Payment of
permanent disability benefits pursuant to a notice of closure,
reconsideration order or litigation order, or the failure to
appeal or seek review of such an order or notice of closure,
shall not preclude an insurer or self-insured employer from
subsequently contesting the compensability of the condition rated
therein, unless the condition has been formally accepted.
  (11)(a) If the insurer or self-insured employer unreasonably
delays or unreasonably refuses to pay compensation, or
unreasonably delays acceptance or denial of a claim, the insurer
or self-insured employer shall be liable for an additional amount
up to 25 percent of the amounts then due. Notwithstanding any
other provision of this chapter, the director shall have
exclusive jurisdiction over proceedings regarding solely the
assessment and payment of the additional amount described in this
subsection. The entire additional amount shall be paid to the
worker if the worker is not represented by an attorney. If the
worker is represented by an attorney, the worker shall be paid
one-half the additional amount and the worker's attorney shall
receive one-half the additional amount, in lieu of an attorney
fee. The director's action and review thereof shall be subject to
ORS 183.310 to 183.550 and such other procedural rules as the
director may prescribe.
  (b) When the director does not have exclusive jurisdiction over
proceedings regarding the assessment and payment of the
additional amount described in this subsection, the provision for
attorney fees provided in this subsection shall apply in the
other proceeding.
  (12) The insurer may authorize an employer to pay compensation
to injured workers and shall reimburse employers for compensation
so paid.
  (13) Insurers and self-insured employers shall report every
claim for disabling injury to the director within 21 days after
the date the employer has notice or knowledge of such injury.
  (14) Injured workers have the duty to cooperate and assist the
insurer or self-insured employer in the investigation of claims
for compensation. Injured workers shall submit to and shall fully
cooperate with personal and telephonic interviews and other
formal or informal information gathering techniques. Injured
workers who are represented by an attorney shall have the right
to have the attorney present during any personal or telephonic
interview or deposition. However, if the attorney is not willing
or available to participate in an interview at a time reasonably
chosen by the insurer or self-insured employer within 14 days of
the request for interview and the insurer or self-insured
employer has cause to believe that the attorney's unwillingness
or unavailability is unreasonable and is preventing the worker
from complying within 14 days of the request for interview, the
insurer or self-insured employer shall notify the director. If
the director determines that the attorney's unwillingness or
unavailability is unreasonable, the director shall assess a civil
penalty against the attorney of not more than $1,000.
  (15) If the director finds that a worker fails to reasonably
cooperate with an investigation involving an initial claim to
establish a compensable injury or an aggravation claim to reopen
the claim for a worsened condition, the director shall suspend
all or part of the payment of compensation after notice to the
worker.  If the worker does not cooperate for an additional 30
days after the notice, the insurer or self-insured employer may
deny the claim because of the worker's failure to cooperate. The
obligation of the insurer or self-insured employer to accept or
deny the claim within 60 days is suspended during the time of the
worker's noncooperation. After such a denial, the worker shall
not be granted a hearing or other proceeding under this chapter
on the merits of the claim unless the worker first requests and
establishes at an expedited hearing under ORS 656.291 that the
worker fully and completely cooperated with the investigation,
that the worker failed to cooperate for reasons beyond the
worker's control or that the investigative demands were
unreasonable. If the Administrative Law Judge finds that the
worker has not fully cooperated, the Administrative Law Judge
shall affirm the denial, and the worker's claim for injury shall
remain denied. If the Administrative Law Judge finds that the
worker has cooperated, or that the investigative demands were
unreasonable, the Administrative Law Judge shall set aside the
denial, order the reinstatement of interim compensation if
appropriate and remand the claim to the insurer or self-insured
employer to accept or deny the claim.
  SECTION 4. ORS 656.325 is amended to read:
  656.325. (1)(a) Any worker entitled to receive compensation
under this chapter is required, if requested by the Director of
the Department of Consumer and Business Services, the insurer or
self-insured employer, to submit to a medical examination at a
time reasonably convenient for the worker as may be provided by
the rules of the director. However, no more than three
examinations may be requested except after notification to and
authorization by the director. If the worker refuses to submit to
any such examination, or obstructs the same, the rights of the
worker to compensation shall be suspended with the consent of the
director until the examination has taken place, and no
compensation shall be payable during or for account of such
period. The provisions of this paragraph are subject to the
limitations on medical examinations provided in ORS 656.268.
  (b) If the worker has made a timely request for a hearing on a
denial of compensability as required by ORS 656.319 (1)(a) that
is based on one or more reports of examinations conducted
pursuant to paragraph (a) of this subsection and the worker's
attending physician does not concur with the report or reports,
the worker may request an examination to be conducted by a
physician selected by the director from the list described in ORS
656.268 (7)(d). The cost of the examination and the examination
report shall be paid by the insurer or self-insured employer.
  (c) The insurer or self-insured employer shall pay the costs of
the medical examination and related services which are reasonably
necessary to allow the worker to submit to any examination
requested under this section. As used in this subsection,
'related services' includes, but is not limited to, child care,
travel, meals, lodging and an amount equivalent to the worker's
net lost wages for the period during which the worker is absent
if the worker does not receive benefits pursuant to ORS 656.210
(4) during the period of absence. A claim for 'related services'
described in this section shall be made in the manner prescribed
by the director.
  (2) For any period of time during which any worker commits
insanitary or injurious practices which tend to either imperil or
retard recovery of the worker, or refuses to submit to such
medical or surgical treatment as is reasonably essential to
promote recovery, or fails to participate in a program of
physical rehabilitation, the right of the worker to compensation
shall be suspended with the consent of the director and no
payment shall be made for such period. The period during which
such worker would otherwise be entitled to compensation may be
reduced with the consent of the director to such an extent as the
disability has been increased by such refusal.
  (3) A worker who has received an award for unscheduled
permanent total or unscheduled partial disability should be
encouraged to make a reasonable effort to reduce the disability;
and the award shall be subject to periodic examination and
adjustment in conformity with ORS 656.268.
  (4) When the employer of an injured worker, or the employer's
insurer determines that the injured worker has failed to follow
medical advice from the attending physician or has failed to
participate in or complete physical restoration or vocational
rehabilitation programs prescribed for the worker pursuant to
this chapter, the employer or insurer may petition the director
for reduction of any benefits awarded the worker. Notwithstanding
any other provision of this chapter, if the director finds that
the worker has failed to accept treatment as provided in this
subsection, the director may reduce any benefits awarded the
worker by such amount as the director considers appropriate.
  (5)(a) Except as provided by ORS 656.268 (4)(c) and (10), an
insurer or self-insured employer shall cease making payments
pursuant to ORS 656.210 and shall commence making payment of such
amounts as are due pursuant to ORS 656.212 when an injured worker
refuses wage earning employment prior to claim determination and
the worker's attending physician, after being notified by the
employer of the specific duties to be performed by the injured
worker, agrees that the injured worker is capable of performing
the employment offered.
  (b) If the worker has been terminated for   { - violation of
work rules or other disciplinary reasons - }  { +  reasons
unrelated to the compensable injury + }, the insurer or
self-insured employer   { - shall - }  { + may + } cease payments
pursuant to ORS 656.210 and commence payments pursuant to ORS
656.212 when the attending physician approves employment in a
modified job that would have been offered to the worker if the
worker had remained employed, provided that the employer has a
written policy of offering modified work to injured workers.
  (c) If the worker is a person present in the United States in
violation of federal immigration laws, the insurer or
self-insured employer shall cease payments pursuant to ORS
656.210 and commence payments pursuant to ORS 656.212 when the
attending physician approves employment in a modified job whether
or not such a job is available.
  (6) Any party may request a hearing on any dispute under this
section pursuant to ORS 656.283.
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