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  

Compensation Law, Relating to 

Disputed Claim Settlements 

(OAR 438-009-0010).

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WCB ADMIN. ORDER 1-2011
ORDER OF ADOPTION

 

 

            1.   On July 28, 2011, the Workers’ Compensation Board filed a Notice of Proposed Rulemaking hearing with the Secretary of State, giving notice of its intent to amend permanent rules of practice and procedure relating to:  Disputed Claim Settlements (OAR 438-009-0010).  Copies of the notice were distributed to the Oregonian, the Associated Press, and the Capitol Press in the Capitol Press Room on July 29, 2011.  The notice was published in the Secretary of State's September 2011 Administrative Rule Bulletin.

 

            On August 10, 2011, notice of this hearing was posted on the Board's website at:  http://www.cbs.state.or.us/external/wcb/wcbrule/rules.htm.  On August 19, 2011, copies of the notice, as well as the proposed rule, were also mailed to all interested parties whose names appear on the Board's mailing list.  On August 22, 2011, copies of the notice and the proposed rule were mailed to the appropriate legislators.  Notice of the hearing was published in the July 2011, August 2011, and September 2011 issues of the Board's News and Case Notes, which were posted on the Board's website on August 4, September 7, and October 5, 2011, respectively.  In addition, members of the Workers’ Compensation Section of the Oregon State Bar were notified by e-mail about the Board’s website posting regarding the aforementioned issues in its News and Case Notes in early August 2011, September 2011, and October 2011.

 

            Thereafter, in accordance with the notice, a public hearing was conducted by Debra L. Young, Staff Attorney, on October 7, 2011 at Salem, Oregon.  The record of the public hearing was closed at 5:00 p.m. on October 7, 2011.

 

            2.   No testimony was presented at the scheduled hearing.  Written comments were submitted by two individuals.  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 (Exhibit A).  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.

 

            Senate Bill 173 (SB 173) amends ORS 656.313(4)(d), which concerns reimbursement to medical service/health insurance providers from Disputed Claim Settlements (DCSs) and the ability of a provider to recover the balance of amounts owing for such services directly from the worker.  Specifically, ORS 656.313(4)(d) is amended to provide a limitation on the ability of medical service providers to seek such recovery if “the worker agrees to pay all medical service providers directly from the settlement proceeds the amount provided under ORS 656.248.”

 

            This amendment to ORS 656.313(4)(d) applies to DCSs entered into on or after January 1, 2012, the effective date of the Act.  SB 173, § 2; ORS 171.022.

 

            For the reasons explained in the Board's July 27, 2011 Statement of Need (incorporated by this reference), as well as those explained below, the Board has reached the following conclusions regarding the proposed amendment and rule, which is contained in Exhibit A (attached and incorporated by this reference).

 

            OAR 438-009-0010(5)(d)

 

As explained above, SB 173 amends ORS 656.313(4)(d) to provide a limitation on the ability of medical service providers to seek reimbursement for medical services from a DCS if “the worker agrees to pay all medical service providers directly from the settlement proceeds the amount provided under ORS 656.248.”  In light of that statutory amendment, the Board proposed to amend OAR 438-009-0010(5)(d) to make it consistent with the amendment to ORS 656.313(4)(d). 

 

Specifically, the Board proposed to amend OAR 438-009-0010(5)(d) to provide for the statutory limitation on the ability of medical service providers to seek recovery of the balance of amounts owing for medical services directly from the worker if “the worker agrees to pay all medical service providers directly from the settlement proceeds the amount provided under ORS 656.248.”

 

OAR 438-009-0010(5) provides, in part, that a DCS involving an unrepresented claimant must include a recitation that the unrepresented claimant has been orally advised of certain matters, including the right to an attorney, the existence of the Ombudsman office, and the limitation of a 40 percent reimbursement to medical providers from the proceeds of a DCS, except with the consent of the worker.  See OAR 438-009-0010(5)(a) - (c). 

 

As currently drafted, subsection (5)(d) advises the unrepresented claimant that “[r]eimbursement from the proceeds of a [DCS] made to medical service providers shall not prevent a medical service provider or health insurance provider from recovering the balance of amounts owing for such services directly from the worker.”  In adding the above-proposed language, the amendment is designed to alert an unrepresented worker of the express provisions of amended ORS 656.313(4)(d), which provide a limitation on a provider’s ability to recover the “post-DCS” balance owing for services directly from the worker.  The proposed amendment to subsection (5)(d) is not intended to provide advice or counsel to a medical service provider or other party.  Rather, taken in total, subsections (5)(a) through (d) are designed to provide an unrepresented worker with notice of the rights and implications regarding a DCS and medical reimbursement provisions, as well as where further assistance regarding such issues may be found.

 


In response to this proposal, the Board received a written comment expressing concern that inclusion of the word “all” in this language could create a situation where, if the DCS paid some but not all medical providers in full, a provider who was paid the full audited amount could potentially pursue the balance from the claimant.  In light of this concern, the commenter suggested changing the proposed language to the following:  “* * * unless the worker agrees to pay medical service providers the amount provided pursuant to
ORS 656.245 directly from the settlement proceeds.”

 

During their October 27, 2011 Board meeting, the members discussed this suggested change.  The members noted that their proposed language, including inclusion of the word “all,” was the language adopted by the legislature in enacting SB 173. 

 

After fully considering the suggested change, the members decided that, consistent with the purpose of rule, it was appropriate to incorporate the language of amended ORS 656.313(4)(d) into OAR 438-009-0010(5)(d) in order to make the rule comply with the statutory change.

 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit A and incorporated 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 rule, as set forth in Exhibit "A" incorporated herein by this reference, as permanent rules of the Workers’ Compensation Board, to become effective January 1, 2012.  The amendment to OAR 438-009-0010(5)(d) applies to DCSs entered into on or after January 1, 2012.[1]

 

            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] A question may arise regarding the application of this amended rule; i.e., the determination of whether a DCS is “entered into on or after January 1, 2012.”  To provide some clarification, we offer the following comments.

 

Among other requirements, a DCS must recite “[t]he terms of the settlement, including the specific date on which those terms were agreed.”  See OAR 438-009-0010(2)(h).  If that “specified date” is before January 1, 2012, the DCS would have been “entered into” before January 1, 2012, and the amended rule would not apply.  On the other hand, if that “specified date” is on or after January 1, 2012, the DCS would have been “entered into” on or after January 1, 2012, and the amended rule would apply (including the aforementioned provision).