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 2871
A-Engrossed
Senate Bill 563
Ordered by the Senate April 30
Including Senate Amendments dated April 30
Sponsored by Senator WALKER
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.
{ - Eliminates ability of insurer or self-insured employer to
make written clarification in response to worker's objection to
notice of acceptance of omitted condition. - } Modifies basis
for award of attorney fee to worker's attorney in certain
circumstances. { - Includes certain initial claims for
compensation in meaning of denied claims. - }
{ + Requires Director of Department of Consumer and Business
Services to adopt rules relating to attorney fees. + }
A BILL FOR AN ACT
Relating to workers' compensation claims; creating new
provisions; and amending ORS 656.262 and 656.385.
Be It Enacted by the People of the State of Oregon:
SECTION 1. 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. 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 { + plus any attorney
fees assessed under this section. The fees assessed by the
director, an Administrative Law Judge, the board or the court
under this section shall be proportionate to the benefit to the
injured worker. The board shall adopt rules for establishing the
amount of the attorney fee, giving primary consideration to the
results achieved and to the time devoted to the case. An attorney
fee awarded pursuant to this subsection may not exceed $2,000
absent a showing of extraordinary circumstances + }.
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 - } { + penalties and attorney
fees described in this subsection. 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 - } { + penalties and attorney fees + }
described in this subsection, the provision for { + penalties
and + } 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 2. ORS 656.385 is amended to read:
656.385. (1) In all cases involving a dispute over compensation
benefits pursuant to ORS 656.245, 656.260, 656.327 or 656.340,
where a claimant finally prevails { + after a proceeding has
commenced before + } { - in a contested case order by - } the
Director of the Department of Consumer and Business Services, the
director shall require the insurer or self-insured employer to
pay a reasonable attorney fee to the claimant's attorney. In such
cases,
{ - after a contested case hearing request by the claimant, - }
where an attorney is instrumental in obtaining a settlement of
the dispute prior to a decision by the director, the director
{ - may - } { + shall + } require the insurer or self-insured
employer to pay a reasonable attorney fee to the claimant or
claimant's attorney. { + The attorney fee must be based on all
work the claimant's attorney has done relative to the proceeding
at all levels before the department. The attorney fee assessed
by the director, or on appeal from an order of the director,
under this section must be proportionate to the benefit to the
injured worker. The director shall adopt rules for establishing
the amount of the attorney fee, giving primary consideration to
the results achieved and to the time devoted to the case. An
attorney fee awarded pursuant to this subsection may not exceed
$2,000 absent a showing of extraordinary circumstances. + }
(2) If an insurer or self-insured employer refuses to pay
compensation due under ORS 656.245, 656.260, 656.327 or 656.340
pursuant to a final contested case order of the director, order
of the court or otherwise unreasonably resists the payment of
such compensation, the insurer or self-insured employer shall pay
to the claimant or the attorney of the claimant a reasonable
attorney fee as provided in subsection (3) of this section. To
the extent an employer has caused the insurer to be charged such
fees, such employer may be charged with those fees.
(3) If a request for a contested case hearing, review on appeal
or cross-appeal to the Court of Appeals or petition for review to
the Supreme Court is initiated by an insurer or self-insured
employer, and the director or court finds that the compensation
awarded under ORS 656.245, 656.260, 656.327 or 656.340 to a
claimant should not be disallowed or reduced, the insurer or
self-insured employer shall be required to pay to the claimant or
the attorney of the claimant a reasonable attorney fee in an
amount set by the director or the court for legal representation
by an attorney for the claimant at the contested case hearing,
review on appeal or cross-appeal.
(4) If upon reaching a final contested case decision where such
contested case was initiated by an insurer or self-insured
employer it is found by the director that the insurer or
self-insured employer initiated the contested case hearing for
the purpose of delay or other vexatious reason or without
reasonable ground, the director may order the insurer or
self-insured employer to pay to the claimant such penalty not
exceeding $750 and not less than $100 as may be reasonable in the
circumstances.
(5) Notwithstanding any other provision in ORS 656.382 or
656.386, an Administrative Law Judge or the Workers' Compensation
Board may not award penalties or attorney fees for matters
arising under the review jurisdiction of the director. Penalties
and attorney fees awarded pursuant to this section by the
director or the courts shall be paid for by the employer or
insurer in addition to compensation found to be due to the
claimant.
SECTION 3. { + The amendments to ORS 656.262 and 656.385 by
sections 1 and 2 of this 2003 Act apply to all claims for which
an order relating to the issue on which attorney fees are sought
has not become final on or before the effective date of this 2003
Act, regardless of the date of injury. + }
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