BEFORE THE WORKERS' COMPENSATION BOARD OF
THE STATE OF OREGON

In the Matter of the Adoption of
Permanent Amendments to the
Rules of Practice and Procedure
for Contested Cases Under the
Workers’ Compensation Law,
Relating to Division 005 (Adoption;
Definitions; Construction; Notices
Required) and Division 012
(Board’s Own Motion Jurisdiction).

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               WCB ADMIN. ORDER 3-2005



               ORDER OF ADOPTION

            1. On August 25, 2005, the Workers’ Compensation Board filed a Notice of Proposed Rulemaking hearing with the Secretary of State, giving notice of its intent to adopt permanent rules concerning the practice and procedure for contested cases under the Workers’ Compensation Law, relating to filing requirements and notices (Division 005) and the Board’s Own Motion Jurisdiction (Division 012).  Copies of the notice were distributed to the Oregonian, the Associated Press, and the Capital Press in the Capitol Press Room on August 29, 2005.  The notice was published in the Secretary of State’s October 2005 Administrative Rule Bulletin.

            On August 31, 2005, notice of this hearing was posted on the Board’s website at:  http://www.wcb.oregon.gov/wcbrule/rules.htm.  On September 6, 2005, copies of the notice, as well as the proposed rules, were mailed to all interested parties whose names appear on the Board’s mailing list.  Notice of the hearing was published in the August 2005 and September 2005 issues of the Board’s News and Case Notes, which were posted on the Board’s website on September 13, 2005, and October 5, 2005, respectively.

            Thereafter, in accordance with the notice, a public hearing was conducted by Roger C. Pearson, Managing Attorney, on October 28, 2005 at Salem, Oregon.  The record of the public hearing was closed at 5:00 p.m. on October 28, 2005.

            2. One individual offered testimony at the scheduled hearing.  Two written comments were submitted, one by the Board’s rules coordinator and the other by a carrier.  Copies of the transcript of the public hearing and of all written comments received are available for public inspection and copying at the offices of the Board, 2601 25th St. SE, Suite 150, Salem, Oregon 97302-1280, during normal working hours from 8:00 a.m. to 5:00 p.m., Monday through Friday.

            3. Order of Adoption for Rules.  The Board has thoroughly reviewed and considered all comments pertaining to its proposed permanent rules.  A written summary of the comments is also included in the record.

            As explained in the Board’s August 25, 2005 Statement of Need (incorporated by this reference), the Board proposed to amend Division 005 rules to correct:  (1) references to renumbered statutes; and (2) the Board’s zip code listed in “notices.”  These proposed changes are contained in Exhibit A, attached and incorporated by this reference.  In addition, the Board proposed to amend Division 012 rules to incorporate changes made by House Bill 2294 (2005) (HB 2294) that affect the Board’s Own Motion jurisdiction under ORS 656.267(1) and ORS 656.278.  These proposed changes are contained in Exhibit B, attached and incorporated by this reference. 

            The amendments to ORS 656.267(2)(b) and (3) changed:  (1) the statutory scheme for determining compensability of new medical or omitted medical condition claims related to initially accepted claims that are initiated after the expiration of aggravation rights under ORS 656.273 (“post-aggravation rights” new/omitted medical condition claims); and (2) the time at which such claims become requests for relief under the Board’s Own Motion jurisdiction.

            Regarding the first change, under amended ORS 656.267(2) and (3), whether or not the claimant’s aggravation rights have expired, new or omitted medical condition claims are processed under ORS 656.262, including issuance of an acceptance or denial of such a claim.  Further, if a denial is issued, the claimant may request a hearing under ORS 656.283 and compensability is determined by the Hearings Division in the first instance, with appeal to the Board in its “regular” jurisdiction and to the courts.(2) ORS 656.295; ORS 656.298.  However, new or omitted medical condition claims that “have been determined to be compensable and
that were initiated after the rights under ORS 656.273 expired shall be processed as requests for relief under the Workers’ Compensation Board’s own motion jurisdiction pursuant to ORS 656.278(1)(b).”  ORS 656.267(3).

            As for the second change, under amended ORS 656.267(3), Own Motion claim processing is triggered when a “post-aggravation rights” new/omitted medical condition claim is “determined to be compensable.”  Because there are no additional requirements for reopening such a claim, Own Motion claim processing would consist of the carrier either voluntarily reopening the claim for Own Motion relief or submitting a “Carrier’s Own Motion Recommendation” for or against(3) reopening the claim for Own Motion relief.(4)   If the claim is never determined to be compensable, the carrier’s responsibility for the processing of the Own Motion claim does not materialize.

            To make Own Motion claim processing as consistent as possible between “post-aggravation rights” new/omitted medical condition claims and “worsened condition” claims, the Board proposed to include the determination of compensability in the definition of an “Own Motion claim” for a “worsened condition.”  In other words, like a “post-aggravation rights” new/omitted medical condition claim under HB 2294, a “worsened condition” claim would become a request for relief under the Board’s Own Motion jurisdiction when it “has been determined to be compensable.”(5)  It is at that point that the processing of a “worsened condition” claim would become subject to the Board’s rules regarding Own Motion claims.

            As explained in the Statement of Need, “worsened condition” claims have other requirements for reopening in addition to the claim being determined compensable; i.e., the worsening must result in the partial or total inability of the worker to work, require hospitalization, surgery (either inpatient or outpatient), or other curative treatment prescribed in lieu of hospitalization that is necessary to enable the worker to return to work, and the worker must be in the work force at the time of disability as defined under the criteria in Dawkins v. Pacific Motor Trucking, 308 Or 254 (1989).  In addition, the requisite medical treatment must not be de facto denied or otherwise challenged by the carrier under ORS 656.245, ORS 656.260, or ORS 656.327.

            Under the proposed rule amendments (OAR 438-012-0001(2)(a), (3)) an “Own Motion claim” for a “worsened condition” is created when the “worsened condition” “has been determined compensable.”  At the point that any disputed “current condition” or medical services claim related to a “worsened condition” has “been determined compensable,” the carrier must timely process the Own Motion claim for the worsened condition by either voluntarily reopening the claim or submitting a “Carrier’s Own Motion Recommendation” for or against reopening. 

            Finally, because “Own Motion claims” for “worsened conditions” and “post-aggravation rights” new or omitted medical conditions become effective only after those conditions “have been determined to be compensable,” the Board proposed to change the claim processing deadlines for such claims to run 30 days from the date the condition “has been determined to be compensable,” as that phrase is defined under the proposed changes to OAR 438-012-0001(3) and (4).  This claim processing deadline coincides with the 30-day period to appeal a litigation order.  ORS 656.289(3); ORS 656.295(8).  In addition, it provides a reasonable period to process a “worsened condition” that “has been determined to be compensable,” including developing the record regarding any additional factors necessary for reopening a “worsened condition” claim (should such factors arise). 

            The comments received in response to the proposed rule amendments focused solely on the proposed definition of the phrase “determined to be compensable” regarding a “worsened condition” claim.  Specifically, the comments contended that the proposed language in OAR 438-012-0001(3)(6) too narrowly defined that phrase in the context of a “worsened condition” claim.  In this regard, the comments objected to the use of the term “current condition” and contended that there was no such thing as a “de facto” denial of a “current condition.”  The comments also noted that a “worsened condition” claim could involve disputes regarding compensability of or reasonableness and necessity of medical services.  In addition, the comments noted that a carrier could deny a worsened condition on the basis that the accepted condition had combined with a preexisting condition and the combined condition was no longer compensable under ORS 656.005(7)(a).  See ORS 656.005(7)(a)(B); ORS 656.245(1)(a); ORS 656.262(6)(c); ORS 656.266(2)(a).

            In defining the phrase “determined to be compensable” in the context of a “post-aggravation rights” “worsened condition” claim, it is the Board’s intent to specify the time at which causation issues (compensability and responsibility) initially have been resolved (if those issues are disputed) as the time at which the carrier’s obligation to timely process the “worsened condition” claim is triggered.  As such, the pivotal event is the resolution of the compensability/responsibility dispute (i.e., the carrier is not contesting the causal relationship between the claim and the previously accepted condition or the claim or condition is found compensable and the insurer’s responsibility by a litigation order).  That determination within the context of a “worsened condition” claim could potentially involve causation disputes involving a “current condition,” a “medical service,” a “combined condition,” or any other statutorily defined condition or claim.

            Once the aforementioned causation dispute is resolved regarding a “worsened condition” claim, the 30-day period for processing the Own Motion claim begins; i.e., either the carrier voluntarily reopens the claim or submits a completed “Carrier’s Own Motion Recommendation” form.  See OAR 438-012-0030.  This 30-day period does not necessarily commence when the statutory period for the issuance of a claim denial expires.  To the contrary, once there is no dispute regarding the causal relationship between the accepted condition and the claim, the 30-day period for processing the Own Motion claim for the “worsened condition” is triggered.  Thus, in some situations, the carrier’s 30-day period to process the Own Motion claim could be initiated within days of its receipt of the claim (provided that the carrier has determined that no causation dispute exists).

            To clarify this intent, the Board has decided to amend the language in OAR 438-012-0001(3) to read:

“(3) For a “post-aggravation rights” “worsened condition” claim, “determined to be compensable” means:
“(a) The insurer does not dispute compensability of or responsibility for the claim or condition; i.e., the insurer has not issued a denial within the time period prescribed under ORS 656.262 or ORS 656.308(2); or
“(b) An order from an Administrative Law Judge, the Board, or the court has found the claim or condition compensable and the responsibility of the insurer.”

            In OAR 438-012-0001(3)(a), the Board changed the reference from “current condition” to “claim and condition,” deleted the reference to a “de facto denial of the current condition,” and deleted the reference to section (6) of ORS 656.262.  In OAR 438-012-0001(3)(b), the Board changed the language to focus on the determination of compensability and responsibility by litigation order, without reference to de facto denials or denials under ORS 656.262(6) or ORS 656.308(2).  In sum the aforementioned changes:  (1) respond to the comments that the proposed rules too narrowly define the phrase “determined to be compensable” in the context
of a “worsened condition” claim; and (2) reflect the Board’s intent to specify that the “trigger date” from which the 30-day claim processing period begins to run is the date “compensability” is determined for the “worsened condition” claim, however the causation (compensability/responsibility) issue arose or was resolved.

            This definition is explicitly limited to “post-aggravation rights” “worsened condition” claims; therefore, it follows that the “claim or condition” referenced in subsections (a) and (b) relate to underlying “claims or conditions” related to the “worsened condition” claim, whether those underlying “claims or conditions” involve a “current condition,” a “medical service,”(7) a “combined condition,” or any other statutorily defined condition or claim.  Furthermore, the definition of “determined to be compensable” refers to the resolution of the dispute regarding the causal relationship between the previously accepted condition and the claim. 

            Therefore, by definition, this rule would not include medical services disputes that require “a determination of whether medical services are excessive, inappropriate, ineffectual or in violation of the rules regarding the performance of medical services, or a determination of whether medical services for an accepted condition qualify as compensable medical services among those listed in ORS 656.245(1)(c).”  ORS 656.704(3)(b)(B).  Such medical service disputes do not involve causation issues as described above and are in the Director’s jurisdiction.  Id.; ORS 656.260; ORS 656.327. 

            Thus, if a carrier does not dispute causation (compensability/responsibility) regarding a “worsened condition” claim, including any medical services claim, the 30-day claim processing period would begin from the date the carrier determines that no causation dispute exists, even if the carrier disputed the reasonableness and necessity of the medical services, or any other of the requirements for reopening the “worsened condition” claim; e.g., inability to work, requisite medical treatment, or work force status.  If, at the time the recommendation is due, a medical services dispute remains pending under ORS 656.260, or ORS 656.327(8) or the carrier disputes any of the remaining factors required to reopen the “worsened condition” claim, the carrier would likely recommend against reopening the claim on that basis.(9) 

            Finally, the proposed amendment to OAR 438-012-0001(3) does not automatically extend the processing time for all “worsened condition” claims to 120 days.(10)  As previously explained, if there is no dispute regarding the causal relationship between the accepted condition and the claim, the 30-day period for processing the Own Motion claim for the “worsened condition” is triggered on the date the carrier determines that no causation dispute exists.

            As proposed, OAR 438-012-0030(1)(11) provides that, within 30 days after the claimed condition has “been determined to be compensable” as defined under OAR 438-012-0001(3) (for “worsened condition” claims) or OAR 438-012-0030(4) (for new or omitted medical condition claims), the carrier must either:  (1) voluntarily reopen the claim; or (2) submit a written recommendation to the Board as to whether the Own Motion claim should be reopened.  As discussed above, if the carrier does not dispute the causal relationship between the previously accepted condition and the “worsened condition” claim, the 30-day period begins once the carrier determines that no causation dispute exists.(12)

            After completing its review and consideration of the comments presented in response
to the proposed rules, the Board has reached the following conclusions.

OAR 438-005-0005; OAR 438-005-0011; OAR 438-005-0050; OAR 438-005-0053; OAR 438-005-0055

OAR 438-0005 provides the statutory authority for the rules adopted under the Board’s general rulemaking authority and references “ORS 656.726(4),” which has been renumbered to “ORS 656.726(5).”  Thus, it is necessary to amend that citation.

OAR 438-005-0011  provides for the effective date and applicability of the rules in Division 005.  Changes to Division 005 rules include amending citations that have been renumbered and amending the Board’s zip code.  The Board proposed to provide that these rules are effective January 1, 2006.

OAR 438-005-0050 provides for notice of claim acceptance and hearings rights under ORS 656.262(6)(d).  The Board’s zip code has changed from “97302-1282” to “97302-1280.”  Accordingly, the zip code provided in the appeals rights notice in OAR 438-005-0050(2) must be amended.

OAR 438-005-0053 provides for notice of denial of responsibility.  OAR 438-005-0053(1) provides that, if a carrier intends to deny responsibility for a claim, it shall, “within 90 days allowed under ORS 656.262 for processing the claim,” issue a denial under ORS 656.262 and OAR 438-005-0055.

ORS 656.262(6)(a) has been amended to provide that “[w]ritten notice of acceptance or denial of the claim shall be furnished within 60 days after the employer has notice or knowledge of the claim.”  (Emphasis added).  However, that amendment applies to claims with a date of injury on or after January 1, 2002.  Or Laws 2001, ch 865, section 22(1).  Carriers have a 90-day processing period for injuries occurring before January 1, 2002.  In order to accommodate this change, the Board proposed to amend OAR 438-005-0053(1) to provide that, if a carrier intends to deny responsibility for a claim, it shall “within the period allowed under ORS 656.262 for processing the claim,” issue a denial under ORS 656.262 and OAR 438-005-0055.  (Emphasis added).

OAR 438-005-0055 provides for notice of claim denial and hearing rights.  ORS 656.262(15) has been renumbered to ORS 656.262(14).  This statute concerns a worker’s failure 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 and the consequences of such non-cooperation, including a non-cooperation denial.  OAR 438-005-0055(1) and (2) refer to this statute under its previous number; therefore, these references must be changed to “ORS 656.262(14).”

In addition, the appeals rights notices in OAR 438-005-0055(1) and (2) list an outdated zip code for the Board.  The Board’s zip code has changed to “97302-1280.”  Therefore, the zip code must be amended.

Having received no objection to these proposed amendments, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that it is reasonable, necessary, and proper to amend the rules in the manner proposed.  Accordingly, the Board adopts these proposed rules as permanent rules, contained in Exhibit A, attached and incorporated by this reference.

OAR 438-012-0001

This rule provides definitions used in the Board’s Own Motion rules.  As explained above and in the Statement of Need, the Board proposed to amend the definition of an “Own Motion Claim” for “worsened condition” and “post-aggravation rights” new or omitted medical condition claims to include determination of compensability, which means that such claims become requests for Own Motion relief when they have been determined to be compensable.  To make these definitions consistent, the Board proposed to include the phrase “that has been determined to be compensable and that was initiated after the rights under ORS 656.273 expired” in OAR 438-0001(2)(a) and (2)(b), which define “worsened condition” claims and “post-aggravation rights” new or omitted medical condition claims, respectively.  This language tracks the change made by HB 2294 to ORS 656.267(3) regarding “post-aggravation rights” new or omitted medical condition claims.  In addition, the Board proposed to change the phrase “and/or” between subsections (2)(b) and (2)(c) to “or,” which will clearly designate that any of the three listed definitions qualify as an “Own Motion Claim.”

The Board also proposed to define the phrase “determined to be compensable” in the context of “worsened condition” and “post-aggravation rights” new or omitted medical condition claims.  Because such claims become requests for Own Motion relief only when they have been determined to be compensable, with resulting claim processing duties required by the carrier, it is important to define when these claim processing duties are triggered.

For a “worsened condition” claim, the Board proposed to add section (3) and define “determined to be compensable” to mean either:  (a) the insurer does not dispute compensability of or responsibility for the current condition; i.e., the insurer has not issued a denial under ORS 656.262(6) or ORS 656.308(2) and there is not a de facto denial of the current condition; or (b) the insurer’s denial under ORS 656.262(6) or ORS 656.308(2) or de facto denial of the current condition has been set aside by an order from an Administrative Law Judge (ALJ), the Board, or the court.  If the carrier does not dispute compensability/ responsibility regarding a “current condition,” there is no reason to delay processing of the “worsened condition” claim.  On the other hand, if the carrier denies or de facto denies compensability/responsibility of a current condition, the “worsened condition” claim has not been “determined to be compensable” until that “denial” has been set aside.

For a “post-aggravation rights” new or omitted condition claim, the Board proposed to add section (4) and define “determined to be compensable” to mean either:  (a) the insurer has issued a notice of acceptance under ORS 656.262(7)(a); or (b) the insurer’s denial under ORS 656.262(7) or ORS 656.308(2) or de facto denial has been set aside by an order from an ALJ, the Board, or the court.  Under HB 2294, a carrier is required
to issue a notice of acceptance or denial for a new or omitted condition claim under ORS 656.262, whether or not the aggravation rights have expired on the initial claim.  ORS 656.262(7) provides the requirements for issuing an acceptance or denial of new or omitted medical condition claims.  If the carrier denies or de facto denies(13) compensability/responsibility of a “post-aggravation rights” new or omitted medical condition, that claim has not been “determined to be compensable” until that “denial” has been set aside.

Under these proposed changes, if a “post-aggravation rights” new or omitted medical condition claim or “worsened condition” claim has not been “determined to be compensable,” it does not become an “Own Motion claim” subject to processing under the Board’s Own Motion rules.

On the other hand, a claim that is found compensable by litigation order must be processed by the carrier pursuant to ORS 656.278, even if the carrier appeals the litigation order.  Such ongoing processing responsibility is consistent with procedures for “regular” claims where a carrier appeals an ALJ or Board compensability decision.  In other words, the carrier is responsible for the further processing of the claim in accordance with the law, notwithstanding its appeal.

If compensability for “post-aggravation rights” new or omitted medical condition claims and “worsened condition” claims is determined by a litigation order, the date of the initial litigation order that finds the claim compensable is the date from which the carrier’s claim processing responsibilities under the Own Motion rules begin to run.  If the carrier does not appeal that litigation order, it must either timely voluntarily reopen the claim or submit a “Carrier’s Own Motion Recommendation.”  If the carrier appeals that litigation order, it still must timely submit a “Carrier’s Own Motion Recommendation.”

The above additions require renumbering the existing sections (3) and (4) as (5) and (6), respectively.  Also, the Board proposed to amend OAR 438-012-0001(6) to define an “Own Motion Order” as “an order of the Own Motion Board” and delete the remaining definitions of an “Own Motion Order,” which dealt with orders following an appeal pursuant to OAR 438-012-0090, a rule that will be repealed as a result of HB 2294.

Finally, the Board proposed to correct a clerical error in section (1) by changing the word “is” to “its” in the phrase “acting under is authority.”

Comments addressed the proposed amendments to OAR 438-012-0001(3), which defines “determined to be compensable” in the context of a “worsened condition” claim.  The comments contended that the proposed language in that section too narrowly defined the phrase “determined to be compensable” in the context of a “worsened condition” claim.  The comments also objected to the reference to “current condition” and “de facto denial of the current condition.”  In addition, the comments asserted that “worsened condition” claims where causation was undisputed could result in a 120-day claim processing period.

For the reasons explained above, after considering these comments, the Board decided to amend the language in OAR 438-012-0001(3) to read:

“(3) For a “post-aggravation rights” “worsened condition” claim, “determined to be compensable” means:
“(a) The insurer does not dispute compensability of or responsibility for the claim or condition; i.e., the insurer has not issued a denial within the time period prescribed under ORS 656.262 or ORS 656.308(2); or
“(b) An order from an Administrative Law Judge, the Board, or
the court has found the claim or condition compensable and the responsibility of the insurer.”

These changes:  (1) respond to the comments that the proposed rules too narrowly define the phrase “determined to be compensable” in the context of a “worsened condition” claim; and (2) reflect the Board’s intent to specify that the “trigger date” from which the 30-day claim processing period begins to run is the date “compensability” is determined for the “worsened condition” claim, however the causation (compensability/responsibility) issue arose or was resolved.  As explained above, the proposed amendment to OAR 438-012-0001(3) does not automatically extend the processing time for all “worsened condition” claims to 120 days.  If there is no dispute regarding the causal relationship (compensability/responsibility) between the accepted condition and the claim, the 30-day period for processing the Own Motion claim for the “worsened condition” is triggered on the date the carrier determines that no causation dispute exists.

The Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that it is reasonable, necessary, and proper to amend the rule in the manner proposed.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B, attached and incorporated by this reference.

OAR 438-012-0018

This rule provides for applicability of and effective date for these rules.  The Board’s proposed rule changes are driven by HB 2294, which is effective January 1, 2006.  Therefore, the Board proposed to provide that these rules are effective “January 1, 2006,” and delete the phrase “to be applied in the manner prescribed in the Board’s Order of Adoption.”

Having received no objection to the proposed amendment, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that it is reasonable, necessary, and proper to amend the rule in the manner proposed.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained
in Exhibit B, attached and incorporated by this reference.

OAR 438-012-0020

This rule provides for notice and contents of “worsened condition” claims, new or omitted medical condition claims, and pre-1966 injury claims.

As explained in OAR 438-012-0001, the Board proposed to amend the definition of an “Own Motion Claim” for “worsened condition” and “post-aggravation rights” new or omitted medical condition claims to include determination of compensability, which means that such claims become requests for Own Motion relief when they have been determined to be compensable.  To be consistent with that change, the Board proposed to amend the provisions that define when a carrier is deemed to have notice of an “Own Motion claim” to incorporate the definitions of the phrase “has been determined to be compensable” in OAR 438-012-0001(3) (for “worsened condition” claims) and OAR 438-012-0001(4) (for “post-aggravation rights” new or omitted medical condition claims).

Furthermore, as discussed above, HB 2294 amends ORS 656.267(2) and (3) to provide that new or omitted medical condition claims are processed under ORS 656.262, whether or not the aggravation rights have expired.  Thus, all three sections of ORS 656.267 effect “post-aggravation rights” new or omitted medical condition claims.  Therefore, the Board proposed to cite “ORS 656.267” without indication of section numbers in OAR 438-012-0020(4) and (6).

Having received no objection to the proposed amendment, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that it is reasonable, necessary, and proper to amend the rule in the manner proposed.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B, attached and incorporated by this reference.

OAR 438-012-0024

This rule provides for processing of “post-aggravation rights” new or omitted medical condition claims under the system created by the Board, which included issuing Notices of Acceptance, Notices of Denial, Notices of Clarification, and Notices of Incomplete Claim.  As discussed above, HB 2294 requires repeal of the system created by the Board to process “post-aggravation rights” new or omitted medical condition claims.  Instead, such claims are processed under ORS 656.262.  Therefore, the Board proposes to repeal OAR 438-012-0024 in its entirety.

Having received no objection to the proposed amendment, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that it is reasonable, necessary, and proper to amend the rule in the manner proposed.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B, attached and incorporated by this reference.

OAR 438-012-0030

This rule provides for insurer recommendation of reopening or denial of claim and voluntarily reopening.

As explained in OAR 438-012-0001, the Board proposes to amend the definition of an “Own Motion Claim” for “worsened condition” and “post-aggravation rights” new or omitted medical condition claims to include determination of compensability, which means that such claims become requests for Own Motion relief when they have been determined to be compensable.  In addition, if compensability for “post-aggravation rights” new or omitted medical condition claims and “worsened condition” claims is determined by a litigation order, the date of the initial litigation order that finds the claim compensable is the date from which the carrier’s claim processing responsibilities under the Own Motion rules begin to run.  If the carrier does not appeal that litigation order,
it must either timely voluntarily reopen the claim or submit a “Carrier’s Own Motion Recommendation.”  If the carrier appeals that litigation order, it still must timely submit a “Carrier’s Own Motion Recommendation.”

To be consistent with these changes, the Board proposes to amend the provisions that initiate the time to process the “Own Motion Claim.”

As discussed above, once compensability of a “post-aggravation rights” new or omitted medical condition claim has been determined, there are no other requirements for reopening the claim for Own Motion relief under ORS 656.278(1)(b).  See William E. Hartzog, 54 Van Natta 593 (2002); James J. Kemp, 54 Van Natta 491, 507-08 (2002).  In addition, even if the carrier appeals a litigation order finding the condition compensable, it is responsible for the further processing of the claim in accordance with the law, notwithstanding its appeal.  Own Motion processing following determination of compensability would consist of the carrier either voluntarily reopening the claim for Own Motion relief or submitting a “Carrier’s Own Motion Recommendation” for or against(14) reopening the claim for Own Motion relief.  The Board proposed to require such claim processing within 30 days after the claimed condition has been determined to be compensable as defined under OAR 438-012-0001(4).  This 30-day claim processing deadline coincides with the 30-day period to appeal a litigation order.  ORS 656.289(3); ORS 656.295(8). 

For “worsened condition” claims, the Board proposes to institute the same 30-day claim processing deadline after the claimed condition has been determined to be compensable as defined under OAR 438-012-0001(3).  “Worsened condition” claims must satisfy several well-established requirements in addition to being compensable in order to be entitled to be reopened for Own Motion relief under ORS 656.278(1)(a).  Thus, while the “causation” determination is progressing, whether that determination is made by the carrier or through litigation, the parties should also be developing the record regarding these additional requirements, which may require separate litigation if, for example, “non-causation” medical services issues are involved.  See ORS 656.245(1)(c); ORS 656.260; ORS 656.327; ORS 656.704(3)(b)(B); Mark Evoniuk, 57 Van Natta 1245 (2005); Lee Ann Harris, 57 Van Natta 1242 (2005); Andrew J. Duby, 57 Van Natta 833 (2005).  Therefore, once compensability is determined (i.e., there is no dispute regarding the causal relationship between the claim and the previously accepted condition or a litigation order finds the claim or condition compensable and the insurer’s responsibility), the Board proposed a 30-day claim processing deadline for the carrier to either voluntarily reopen the claim or submit a “Carrier’s Own Motion Recommendation”  as reasonable.  Moreover, as addressed above, this 30-day claim processing deadline coincides with the 30-day period to appeal a litigation order.  ORS 656.289(3); ORS 656.295(8).

In the current rules, claim processing responsibilities for medical benefits claims related injuries occurring before January 1, 1966 are included in sections (1) and (2), sections that also concern processing of “worsened condition” and “post-aggravation rights” new or omitted medical condition claims.  Due to the above changes in processing deadlines, the Board proposes to add section (2), a separate section regarding processing of “pre-1966” medical benefits claims.  Such processing will not change under the Board’s proposed changes.  Thus, the carrier will have 60 days after receiving the “pre-1966” medical benefits claim to either voluntarily reopen the claim or submit a “Carrier’s Own Motion Recommendation” for or against reopening the claim.

These proposed changes would result in repealing section (2), which duplicates section (1) except it provides a 60-day processing limit for Own Motion claims with a date of injury on or after January 1, 2002.

The Board also proposed repealing section (3), which states that, for “post-aggravation rights” new or omitted medical condition claims, in addition to processing requirements in OAR 438-012-0024 (a provision the Board proposes to repeal), the carrier must also comply with sections (1) and (2).  As noted above, the Board proposes to repeal section (2) and section (1) explicitly includes “post-aggravation rights” new or omitted medical condition claims in its claim processing requirements.  Thus, section (3) is not necessary.

Finally, the above changes require renumbering sections (4) and (5) as (3) and (4), respectively.

Having received no objection to the proposed amendment, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that it is reasonable, necessary, and proper to amend the rule in the manner proposed.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained
in Exhibit B, attached and incorporated by this reference.

OAR 438-012-0035

This rule provides for temporary disability compensation.  As explained in OAR 438-012-0001, the Board proposes to amend the definition of an “Own Motion Claim” for “worsened condition” and “post-aggravation rights” new or omitted medical condition claims to include determination of compensability, which means that such claims become requests for Own Motion relief when they have been determined to be compensable.  To be consistent with that change, the Board proposed to amend the rules regarding the requirements for payment of temporary disability benefits.

A claimant is not entitled to temporary disability benefits on a “worsened condition” claim unless that claim meets the requirements for reopening.  Subsection (1)(a) provides one of those requirements – the claim for temporary disability benefits is filed after aggravation rights expired.  The Board proposed to add a citation to “ORS 656.273” in subsection (1)(a).  Subsection (1)(b) provides other requirements for reopening a “worsened condition” claim, including compensability.  The Board proposed to change the phrase “worsening of a compensable injury” in subsection (1)(b) to “worsened condition that has been determined to be compensable as defined under OAR 438-012-0001(3).”

Likewise, a claimant is not entitled to temporary disability benefits on a “post-aggravation rights” new or omitted medical condition claim unless that claim meets the requirements for reopening.  Subsection (2)(a) provides the requirements for such reopening, including compensability.  The Board proposes to change subsection (2)(a) to read:  “A new medical condition or an omitted medical condition claim has been determined to be compensable as defined under OAR 438-012-0001(4) and was initiated after the aggravation rights under ORS 656.273 expired.”

Having received no objection to the proposed amendment, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that it is reasonable, necessary, and proper to amend the rule in the manner proposed.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B, attached and incorporated by this reference.

OAR 438-012-0036

This rule provides for permanent disability compensation.  As explained in OAR 438-012-0001, the Board proposes to amend the definition of an “Own Motion Claim” for “post-aggravation rights” new or omitted medical condition claims to include determination of compensability, which means that such claims become requests for Own Motion relief when they have been determined to be compensable.  To be consistent with that change, the Board proposed to amend the rules regarding the requirements for payment of permanent disability benefits.

A claimant is not entitled to permanent disability benefits on a “post-aggravation rights” new or omitted medical condition claim at claim closure unless that claim meets the requirements for reopening.  Section (1) provides the requirements for such reopening, including compensability.  The Board proposed to change section (1) to read:

“Where a new medical condition or an omitted medical condition claim has been determined to be compensable as defined under OAR 438-012-0001(4) and the claim was initiated after the aggravation rights under ORS 656.273 expired, the insurer may provide any permanent disability benefits to which the claimant is entitled under application of the Standards adopted by the Director under ORS 656.726 when the insurer closes the claim pursuant to OAR 438-012-0055.”

Having received no objection to the proposed amendment, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that it is reasonable, necessary, and proper to amend the rule in the manner proposed.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B, attached and incorporated by this reference.

OAR 438-012-0037

This rule provides for payment of medical benefits.  OAR 438-012-0020(5) was renumbered to OAR 438-012-0020(7).  The reference to OAR 438-012-0020(5) in OAR 438-012-0037 should be to OAR 438-012-0020(7).  The Board proposed to make that correction.

Having received no objection to the proposed amendment, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that it is reasonable, necessary, and proper to amend the rule in the manner proposed.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B, attached and incorporated by this reference.

OAR 438-012-0050

This rule provides that the Board will act unless claimant has not exhausted other available remedies.  As discussed above, HB 2294 requires repeal of the system created by the Board to process “post-aggravation rights” new or omitted medical condition claims.  Instead, such claims are processed under ORS 656.262.  Therefore, the Board proposed to repeal section (1)(d), which refers to “litigation under OAR 438-012-0090
or 438-012-0095,” rules that the Board proposed to repeal.

Having received no objection to the proposed amendment, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that it is reasonable, necessary, and proper to amend the rule in the manner proposed.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B, attached and incorporated by this reference.

OAR 438-012-0055

This rule provides for closure of claims reopened under ORS 656.278.  The appeals rights notice in OAR 438-012-0055 lists an outdated zip code for the Board.  The Board’s zip code has changed to “97302-1280.”  Therefore, the zip code must be amended.

Having received no objection to the proposed amendment, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that it is reasonable, necessary, and proper to amend the rule in the manner proposed.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B, attached and incorporated by this reference.

OAR 438-012-0060

This rule provides for Board review of insurer closure.  Section (1) references “OAR 438-012-0055(1).”  That rule does not contain any section numbers.  Therefore, the Board proposed removing the section number reference.

Although section (7) provides that the Board may refer a disagreement regarding the rating of permanent disability for a “post-aggravation rights” new or omitted medical condition to the Workers’ Compensation Division for an evaluation and recommendation, section (8) does not reference any such recommendation from the Division.  The Board proposed to include such reference in section (8).

Having received no objection to the proposed amendment, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that it is reasonable, necessary, and proper to amend the rule in the manner proposed.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B, attached and incorporated by this reference.

OAR 438-012-0070; OAR 438-012-0075; OAR 438-012-0080; OAR 438-012-0085; OAR 438-012-0090; OAR 438-012-0095; OAR 438-012-0100

These rules created the current claim processing system for “post-aggravation rights” new or omitted medical condition claims.  As discussed above and in the Statement of Need, HB 2294 requires repeal of the current system created by the Board to process “post-aggravation rights” new or omitted medical condition claims.  Instead, such claims are processed under ORS 656.262.  Therefore, the Board proposed to repeal OAR 438-012-0070, OAR 438-012-0075, OAR 438-012-0080, OAR 438-012-0085, OAR 438-012-0090, OAR 438-012-0095, and OAR 438-012-0100 in their entirety.

Having received no objection to the proposed amendment, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that it is reasonable, necessary, and proper to amend the rule in the manner proposed.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B, attached and incorporated by this reference.

            After completing its deliberations, the Board has decided to adopt the amendments to Divisions 005 and 012, but in doing so, to change the language in OAR 438-012-0001(3), for the reasons explained above.  The adopted amendments to Division 005 are contained in Exhibit A, attached and incorporated by this reference.  The adopted amendments to Division 012 are contained in Exhibit B, attached and incorporated by this reference.  The Board finds these amended rules reasonable and proper because they are designed to:  (1) correct references to renumbered statutes; (2) correct the Board’s zip code; (3) incorporate changes made by HB 2294 that affect the Board’s Own Motion jurisdiction under ORS 656.267 and ORS 656.278; and (4) make Own Motion claim processing as consistent as possible between “post-aggravation rights” new/omitted medical condition claims and “worsened condition” claims. 

            Consequently, for the reasons expressed in its Statement of Need, and those discussed herein, the Board finds that the proposed rules, as amended, are reasonable, necessary, and proper.  Accordingly, the Board adopts these amended proposed rules as permanent rules, contained in Exhibits A and B and incorporated herein by this reference.

            4.  Under the authority granted by ORS 656.726(5), the Board finds that:

   a.   All applicable rulemaking procedures have been followed; and

   b.   The rules being adopted are reasonable, necessary and proper.

PURSUANT TO THE AMERICANS WITH DISABILITIES ACT GUIDELINES, ALTERNATIVE FORMAT COPIES OF THE RULES WILL BE MADE AVAILABLE TO QUALIFIED INDIVIDUALS UPON REQUEST TO THE BOARD.

            Consequently, in accordance with its Notice of Proposed Rulemaking, the Board adopts the attached rules, as set forth in Exhibits “A” and “B,” incorporated by this reference, as permanent rules of the Workers’ Compensation Board, to become effective January 1, 2006 and to apply in the following manner:

            (1) Amendments to OAR 438-005-0005 apply to any rules adopted on and after January 1, 2006.

            (2) Amendments to OAR 438-005-0011 apply in the manner prescribed in the rule, except as otherwise provided in this order.

            (3) Amendments to OAR 438-005-0050, OAR 438-005-0053, and OAR 438-005-0055 apply to any notices under those rules issued on and after January 1, 2006.

            (4) Amendments to Division 012 shall apply to all claims existing or arising on or after January 1, 2006, but not to any matter for which an order has become final before January 1, 2006.

            The Board further orders that notice of this Order of Adoption, along with a certified copy of the amended rules, be filed with the Secretary of State and that a copy of the aforementioned notice and amended rules be filed with the Legislative Counsel within 10 days after filing with the Secretary of State as required by ORS 183.715.



          1. Specifically, HB 2294 amended ORS 656.267(2) and (3) as follows:

“(2)(a) Claims properly initiated for new medical conditions and omitted medical conditions related to an initially accepted claim shall be processed pursuant to ORS 656.262.

(b) If an insurer or self-insured employer denies a claim for a new medical or omitted medical condition, the claimant may request a hearing on the denial pursuant to ORS 656.283.

“(3) Notwithstanding subsection (2) of this section, claims for new medical or omitted medical conditions related to an initially accepted claim that [are] have been determined to be compensable and that were initiated after the aggravation right under ORS 656.273 [have] expired shall be processed as requests for relief under the Workers’ Compensation Board’s own motion jurisdiction pursuant to ORS 656.278(1)(b).”  (Bracketed and italicized language was deleted by HB 2294 and bolded language was added).

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          2. The claim processing system for “post-aggravation rights” new or omitted medical condition claims created by the Board’s current Own Motion rules has been replaced by the changes in HB 2294, which provide that, whether or not the aggravation rights have expired, new or omitted medical condition claims are processed under ORS 656.262.  Therefore, the Board is repealing the Own Motion rules regarding the current processing system for “post-aggravation rights” new or omitted medical condition claims.  OAR 438-012-0001(4)(a), (b); OAR 438-012-0024; OAR 438-012-0050(1)(d); OAR 438-012-0070; OAR 438-012-0075; OAR 438-012-0080; OAR 438-012-0085; OAR 438-012-0090; OAR 438-012-0095; OAR 438-012-0100.

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          3. If the carrier appealed a litigation order that determined the “post-aggravation rights” new/omitted medical condition to be compensable, the carrier would still be responsible for timely processing the Own Motion claim.  Under such circumstances, the carrier would timely submit a “Carrier’s Own Motion Recommendation” against reopening the claim for Own Motion relief on the basis of its appeal of the compensability decision.  Consistent with its longstanding practice, the Board would consolidate review of the two issues, deciding the issue of compensability in its “regular” appellate jurisdiction by means of an Order on Review and the “claim reopening” issue in its “Own Motion” jurisdiction by means of an Own Motion Order.

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          4. Entitlement to benefits on an open Own Motion claim is a claim processing matter that is separate from the issue of whether the claim qualifies for reopening.  A claim may qualify for reopening but not qualify for payment of temporary or permanent disability benefits.  ORS 656.278(1), (2); Duane L. Leafdahl, 54 Van Natta 1796, 1799 (2002).

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          5. Under the current rules, Own Motion claim processing responsibilities for “worsened condition” claims begin with the initiation of such a claim, not with resolution of causation disputes involving “current conditions” or “medical services” related to a “worsened condition” claim, even though the initial compensability determination of such “current condition” disputes and “medical services” disputes related to injuries occurring on or after January 1, 1966 rests within the jurisdiction of the Hearings Division.  See ORS 656.245(1); ORS 656.704(3)(b)(A), (C); OAR 438-012-0020(7); Eva M. Tucker, 55 Van Natta 2577 (2003); compare ORS 656.278(1)(c) (medical services for dates of injury earlier than January 1, 1966 are within the Board’s Own Motion jurisdiction); OAR 438-012-0001(c).

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          6. As proposed, OAR 438-012-0001(3) provided:

“(3) For a “post-aggravation rights” “worsened condition” claim, “determined to be compensable” means:
“(a) The insurer does not dispute compensability of or responsibility for the current condition; i.e., the insurer has not issued a denial under ORS 656.262(6) or ORS 656.308(2) and there is not a de facto denial of the current condition; or
“(b) The insurer’s denial under ORS 656.262(6) or ORS 656.308(2) or de facto denial of the current condition has been set aside by an order from an Administrative Law Judge, the Board, or the court.

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          7. Although ORS 656.245 may form the basis for a medical services denial based on causation grounds, the denial itself would be issued pursuant to ORS 656.262(6) and (9).

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          8. Presumably, the carrier would request Director review regarding any medical services dispute pending under ORS 656.260, or ORS 656.327, but that would not delay its duty to timely process the request for Own Motion relief regarding the “worsened condition” claim.

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          9. If medical services are the subject of either a managed care dispute review process or a Director’s medical review under ORS 656.245, ORS 656.260, or ORS 656.327, the Board may postpone its review of the merits of the claimant’s request for Own Motion relief to await resolution of those proceedings.  OAR 438-012-0050(1)(c), (2).

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          10. The comments contended that the proposed rules would have the effect of extending to 120 days the processing time for “worsened condition” claims without causation issues.  In reaching this 120-day period, the comments apparently combined the 30-day claim processing period proposed in OAR 438-012-0030(1) with the 90-day period to accept or deny a claim under ORS 656.262(6)(a) (1995) for claims with a date of injury before January 1, 2002.  Or Laws 2001, ch 865, Section 22.

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          11. As proposed, OAR 438-012-0030(1) provides:

“(1)  Except as provided in section (3) of this rule, for “worsened condition” claims that have been determined to be compensable as defined under OAR 438-012-0001(3) and "post-aggravation rights" new medical condition or omitted medical condition claims that have been determined to be compensable as defined under OAR 438-012-0001(4), the Own Motion insurer shall, within 30 days after the claimed condition has been determined to be compensable as defined under OAR 438-012-0001(3) or OAR 438-012-0001(4), either:

“(a) Voluntarily reopen the Own Motion claim, including any "post-aggravation rights" new medical condition or omitted medical condition claim, under ORS 656.278(5) to provide benefits allowable under ORS 656.278; or

“(b) Submit to the Board a written recommendation as to whether the Own Motion claim, including any "post-aggravation rights" new medical condition or omitted medical condition claim, should be reopened or not reopened, on a form prescribed by the Board, accompanied by the required evidence supporting the recommendation. The Own Motion insurer shall supply all information and evidence required by the form, which should be marked as exhibits, arranged in chronological order, and accompanied by an exhibit list. Copies of the recommendation form and any supporting evidence shall be mailed to the claimant and the claimant's attorney, if any.”

            Section (3) provides that, “[i]n extraordinary circumstances, the Board may grant the insurer an extension for submission of its recommendation.”

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          12. A “post-aggravation rights” new or omitted medical condition claim requires that the carrier accept or deny the claim within 60 days from receipt of the claim.  ORS 656.262(6)(d); ORS 656.262(7).  There is no such statutory requirement for a written acceptance of the various types of claims that may be involved in a “worsened condition” claim (e.g., current condition, medical services).  Nevertheless, if a carrier does not dispute compensability of or responsibility for a “worsened condition” claim, its duty to process that claim begins at the time it decides not to contest compensability/responsibility.  If the carrier is investigating the compensability/responsibility of the claim, it would be reasonable to delay its Own Motion claim processing decision until that investigation is complete (provided that such a decision is made within the statutory time parameters).  However, as with any claim processing decision, a carrier’s actions can be challenged as unreasonable under prevailing statutory, administrative, and case authority.  Likewise, if a carrier’s inactions or claim processing decisions are found unreasonable, the consequences could include imposition of penalties and attorney fees under ORS 656.262(11)(a) and OAR 438-015-0110, exclusion of evidence, or referral for a fact-finding hearing.  OAR 438-012-0110.

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          13. ORS 656.262(7)(a) explicitly provides, in relevant part, that “written notice of acceptance or denial of  * * * new medical or omitted medical 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.”  (Emphasis added).  In light of this statutory requirement, if a carrier does not timely respond to a claimant's request to accept a new medical or omitted medical condition, a “de facto” denial of the claim is created and the claimant may request a hearing on that "de facto" denial.  Prevailing over such a de facto denial would result in a compensable new medical or omitted medical condition claim, at which point the carrier would be required to either timely voluntarily reopen the claim or submit a “Carrier’s Own Motion Recommendation” if the initial injury was in Own Motion status.

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          14. As discussed above, if the carrier appealed a litigation order that determined the “post-aggravation rights” new/omitted medical condition to be compensable, the carrier would still be responsible for timely processing the Own Motion claim.  Under such circumstances, the carrier would likely submit a “Carrier’s Own Motion Recommendation” against reopening the claim for Own Motion relief on the basis of its appeal of the compensability decision.  Consistent with its longstanding practice, the Board would consolidate review of the two issues, deciding the compensability issue in its “regular” appellate jurisdiction by means of an Order on Review and the “claim reopening” issue in its “Own Motion” jurisdiction by means of an Own Motion Order.

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