BEFORE THE WORKERS' COMPENSATION BOARD OF
THE STATE OF OREGON

In the Matter of the Adoption of
Rules and Permanent Amendments to
the Rules of Practice and Procedure
for Contested Cases Under the Workers’
Compensation Law, Relating to OAR 438
Divisions 012 and 015 (Own Motion and
Attorney Fees) .
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WCB ADMIN. ORDER 2-2003


ORDER OF ADOPTION

          1. On March 12, 2003, 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 of practice and procedure relating to the Board’s "Own Motion" authority under OAR 438, Division 012, and OAR 438-015-0080 (Attorney Fees in Own Motion Cases). Copies of the notice were distributed to the Oregonian, the Associated Press, and to the Capitol Press Room on March 14, 2003. The notice was published in the Secretary of State’s April 2003 Administrative Rule Bulletin.

          On April 7, 2003, copies of the notice, as well as the proposed rules, were also mailed to all interested parties whose names appear on the Board’s mailing list. Notice of the hearing was published in the March/April issue of the Board’s News and Case Notes, which was posted on the Board’s web-site on May 14, 2003. This notice was also published in the March 2003, April 2003, and May 2003 issues of the Workers’ Compensation Section Newsletter, which were distributed to all Section members of the Oregon State Bar in early April, May, and June 2003. On March 31, 2003, notice of this hearing was also posted on the Board’s website at: http://www.cbs.state.or.us/external/wcb/wcbrule/rules.htm.

          Thereafter, in accordance with the notice, a public hearing was conducted by Roger C. Pearson, Managing Attorney, on June 13, 2003 at Salem, Oregon. The record of the public hearing was closed at 5:00 p.m. on June 13, 2003.

          2. Two individuals offered testimony at the scheduled hearing. In addition, seven written comments were received from practitioners, insurers, Board staff, and the Workers’ Compensation Division (WCD). 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 97302-1282, 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 and B). 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 March 11, 2003 Statement of Need (incorporated by this reference), the Board proposed the adoption of these amended administrative rules to, among other objectives, simplify the claim processing and dispute resolution system for new or omitted medical condition claims initiated after expiration of aggravation rights ("post-aggravation rights" new or omitted medical condition claims). These procedural amendments were designed to address the jurisdictional, claim processing, and dispute resolution issues identified and discussed in Andrew B. Speck, 55 Van Natta 103 (2003), Pamela Martin, D’cd, 54 Van Natta 1852 (2002), and James J. Kemp, 54 Van Natta 491 (2002).

          In an effort to simplify the claim processing and dispute resolution system for "post-aggravation rights" new or omitted medical conditions, the Board proposed adopting and amending several administrative rules. These proposed rules require that, within a prescribed period after receiving a "post-aggravation rights" new or omitted medical condition claim, the carrier either: (1) accept the claim by specifying the condition(s) accepted in a formal written Modified Notice of Acceptance; (2) deny compensability and/or responsibility of the claim by specifying the factual and legal reasons for denying the condition(s) in a formal written denial that provides appeal rights to the Hearings Division; (3) issue a "Notice of Clarification" if the carrier contends that the previously issued Notice(s) of Acceptance reasonably apprises the claimant and the medical providers of the nature of the compensable injury, with appeal rights to the Hearings Division; or (4) issue a "Notice of Incomplete Claim" if the carrier contends that the document received from the claimant does not clearly request formal written acceptance of a new or omitted medical condition, with appeal rights to the Own Motion Board.(1)

          As explained in the Board’s Statement of Need, the proposed rules also provided for hearing procedures regarding compensability/ responsibility denials and "Notices of Clarification" of "post-aggravation rights" new or omitted medical condition claims, including the authorization to an ALJ to issue a "Proposed and Final Own Motion Order," with appeal rights to the Own Motion Board. The proposed rules further provide for de novo Board review of an appealed ALJ’s "Proposed and Final Own Motion Order" based on the entire record developed at the Hearings Division, including a hearing transcript and briefing schedule. The proposed amended rules also provide for assessed attorney fees if the claimant finally prevails over a denial of a "post-aggravation rights" new or omitted medical condition claim at the hearing level and/or before the Own Motion Board.

          As discussed in its Statement of Need, the Board believes that these procedures provide an efficient, effective, and expeditious method for the processing and resolution of "post-aggravation rights" new or omitted medical condition claims. The Board further considers these proposed rules consistent with its statutory rulemaking authority under ORS 656.726(2) and ORS 656.726(5).

          The Board also proposes amending OAR 438-012-0035(4) and (6) (rules regarding payment of temporary disability compensation and suspension of temporary disability compensation, respectively) to comply with ORS 656.278(1)(a) and (b), which require payment of temporary disability compensation in accordance with ORS 656.210, 656.212(2), and 656.262(4). In addition, the Board proposes amending OAR 438-012-0060(3) and (4) (rules regarding Board review of insurer closure) to make the deadlines in those rules consistent with those in the rule regarding Board review of voluntary reopening. Finally, the Board proposes amending OAR 438-012-0060(6) and 438-012-0061(4) (rules regarding referral for evidentiary hearing) to make them consistent with other rules regarding referral for evidentiary hearing by eliminating the requirement that the referral must be made prior to the Board issuing its order.

          To address these statutory changes and based on the above reasoning, the Board has proposed to adopt amendments to its administrative rules that pertain to Own Motion matters, including attorney fees related to Own Motion matters. The proposed amendments and rules (which are contained in Exhibits A and B, attached and incorporated by this reference), are designed to provide an efficient, effective, and expeditious method for the processing and resolution of "post-aggravation rights" new or omitted medical condition claims, as well as resolve inconsistencies within the rules. After completing its review and consideration of the comments presented in response to the proposed rules, the Board has reached the following conclusions.

OAR 438-012-0001.

To implement the legislative changes discussed in the Statement of Need, the definition of "Own Motion Claim" in subsection (1)(b) is amended to comply with the requirements in ORS 656.267(1) and (3) (2001), which provide that initiation of a new or omitted medical condition claim requires the worker to clearly request formal written acceptance of a new or omitted medical condition from the carrier and provide that such claims initiated after the expiration of aggravation rights are in the Board’s Own Motion jurisdiction. In addition, subsection (1)(a) is amended to include a request for "claim reopening regarding a worsened condition claim."

This rule also adds a definition of the term "Own Motion Board" and "Board" to provide that such terms mean the Workers’ Compensation Board acting under is authority pursuant to ORS 656.278 and these rules. Addition of this definition in alphabetical order results in renumbering current sections (1) and (2) as (2) and (3), respectively.

Finally, section (4) is added to define the types of Own Motion orders available under the dispute resolution system for Own Motion cases in general and "post-aggravation rights" new and omitted medical condition claims in particular: "Own Motion Order," "Proposed and Final Own Motion Order," and "Final Own Motion Order."

A comment was received regarding the proposed language in OAR 438-012-0001(2)(b), which defines a "post-aggravation rights" new or omitted medical condition. Specifically, the comment noted that, as proposed, subsection (2)(b) requires that a claimant make a "written request" that "clearly requests formal written acceptance . . . . " However, ORS 656.267(1), which states the requirements to initiate new or omitted medical condition claims and applies to "post-aggravation rights" new/omitted medical conditions, only requires that "the worker must clearly request formal written acceptance . . . ." ORS 656.267(1) does not require the worker to make a "written request." Therefore, the comment noted that it could be argued that the rule exceeds the statute, which is not permitted. To avoid this, the comment suggested deleting the word "written" from OAR 438-012-0001(2)(b).

After considering this comment, the Board finds that it is reasonable, necessary, and proper to amend the proposed rule by deleting the word "written" from OAR 438-012-0001(2)(B).

Accordingly, for the reasons expressed in its previous Statement of Need, as well as those expressed above, the Board adopts the proposed rule, as modified above, as a permanent rule, contained in Exhibit A and incorporated by this reference.

OAR 438-012-0018.

This rule states the applicability and the effective date of the Board’s rules. The existing language regarding applicability is numbered as section (1). As proposed, section (2) was added to provide that the rules in Division 012 are effective September 1, 2003 " and shall apply to all cases pending before the Hearings Division and the Board under Division 012 on and after that date."

A comment was received suggesting that it was more appropriate to simply provide that the rules become effective September 1, 2003. The comment suggested that, by means of its Order of Adoption, the Board could specify the manner in which particular rule amendments will become effective. In this way, the applicability dates will vary according to the subject of the amended rules, which will avoid potential unintended consequences from the more generic applicability language that was proposed. Therefore, the comment suggested deleting the above quoted language.

After considering this comment, the Board finds that it is reasonable, necessary, and proper to amend the proposed rule as suggested.

Accordingly, for the reasons expressed in its previous Statement of Need, as well as those expressed above, the Board adopts the proposed rule, as modified above, as a permanent rule, contained in Exhibit A and incorporated by this reference.

OAR 438-012-0020.

As explained in the Statement of Need, pursuant to ORS 656.278(1)(a) through (c), there are three types of Own Motion claims. To clearly distinguish when an insurer is deemed to have notice of each of the three types of Own Motion claims, this rule is amended to include each type of Own Motion claim in a separate section of the rule. Section (3) is amended to refer only to circumstances under which a carrier is deemed to have notice
of claims "for a worsened condition."

Section (4) is added to provide that a carrier is deemed to have notice of a "post-aggravation rights" new or omitted medical condition claim when the carrier receives from the claimant any document that clearly requests formal written acceptance of a new or omitted medical condition initiated after expiration of aggravation rights under ORS 656.273 as required by ORS 656.267(1) and (3). This language comports with the requirements of ORS 656.267(1) and (3). These changes result in renumbering existing sections (4) and (5), which deal with pre-1966 injury claims, as (5) and (6), respectively.

To emphasize that "post-aggravation rights" new or omitted medical condition claims are to be processed like all other Own Motion claims by the carrier in the first instance, section (1) is amended to add the phrase "including ‘post-aggravation rights’ new medical condition or omitted medical condition claims."

Having received no objection to the proposed rule, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, 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.

OAR 438-012-0024.

As explained in the Statement of Need, this new rule lists the carrier’s processing duties regarding "post-aggravation rights" new or omitted medical condition claims. Specifically, the carrier has four options when initially processing such claims: (1) accept the claim with a written Modified Notice of Acceptance that specifies the condition(s) accepted, with copies mailed to the claimant and the claimant’s attorney, if any; or (2) deny the claim in a written denial that specifies the factual and legal basis for the denial, including appeal rights and with copies mailed to the claimant and the claimant’s attorney, if any; or (3) issue a Notice of Clarification, if the carrier contends that no acceptance is required because the previously issued Notice(s) of Acceptance reasonably apprises the claimant and the medical providers of the nature of the compensable injuries, with appeal rights and copies mailed to the claimant and the claimant’s attorney, if any; or (4) issue a Notice of Incomplete Claim, if the carrier contends that no acceptance is required because the document received by the carrier from the claimant does not clearly request formal written acceptance of a new or omitted medical condition, with appeal rights and copies mailed to the claimant and the claimant’s attorney, if any.

OAR 438-012-0024(1)(a)-(d) provides the claim processing requirements for claims with a date of injury before January 1, 2002, requiring that the insurer shall, within 90 days after receiving a "post-aggravation rights" new or omitted medical condition claim, either accept the claim, deny the claim, issue a Notice of Clarification, or issue a Notice of Incomplete Claim. OAR 438-012-0024(2)(a)-(d) provides the claim processing requirements for claims with a date of injury on or after January 1, 2002, requiring that the insurer shall, within 60 days after receiving a "post-aggravation rights" new or omitted medical condition claim, either accept the claim, deny the claim, issue a Notice of Clarification, or issue a Notice of Incomplete Claim.

Comments were received suggesting several changes to the proposed language in OAR 438-012-0024. A comment was received that argued that "changing" the processing time requirements for a "post-aggravation rights" new or omitted medical condition claims to 90 days in all "pre-2001" claims runs counter to the statutory requirements and is unlawful. The Board addressed this issue in the context of changes to OAR 438-012-0030(1) and (2) (Insurer Recommendation of Reopening or Denial of Claim; Voluntary Reopening) in its Statement of Need and Order of Adoption (WCB Admin. Order 2-2001). These rules included the processing of "post-aggravation rights" new or omitted medical condition claims.

Under OAR 438-012-0030(1) and (2), for claims with a date of injury before January 1, 2002, the Own Motion insurer had 90 days to process the claim, whereas it has 60 days to process claims with a date of injury on or after January 1, 2002. Reasoning that ORS 656.267(3) placed the responsibility with the Board for establishing the Own Motion procedures for "post-aggravation rights" new or omitted medical conditions, the Board concluded that the most practical approach to implementing time restrictions was to maintain the same 90-day, 60-day requirements established in the "regular" claim processing statutory procedures. See Or Laws 2001, ch 865, § 7; WCB Admin. Order 2-2001, Statement of Need, pages 2-3, Order of Adoption, page 12. In other words, for claims with a "pre-January 1, 2002" injury date, the 90-day requirement applies and for claims with an injury date occurring on or after January 1, 2002, the 60-day requirement is applicable. Such reasoning is consistent with Section 22 of SB 485.

The same reasoning applies to the deadlines for the new processing requirements for "post-aggravation rights" new or omitted medical conditions created by OAR 438-012-0024; i.e., the requirement to issue an acceptance, denial, Notice of Clarification, or Notice of Incomplete Claim. Maintaining the 90-day requirement for "post-aggravation rights" new or omitted medical conditions with a date of injury before January 1, 2002 and the 60-day requirement for such conditions with a date of injury on or after January 1, 2002, results in consistency with OAR 438-012-0030(1) and (2) and with "regular" claim processing statutory procedures.

After further considering this matter, the Board has decided to leave unchanged the proposed language in OAR 438-012-0024(1) that provides 90-days for the Own Motion insurer to process a "post-aggravation rights" new or omitted medical condition claim with a date of injury before January 1, 2002.

Another comment was received suggesting that the proposed rules include a provision addressing the consequences to the worker if a claimant fails to timely appeal the denials and notices required by the Own Motion insurer under OAR 438-012-0024.

After considering this comment, the Board has decided not to add such consequences to OAR 438-012-0024. The proposed rules that set forth the required notices to be contained in the denials / notices already set forth the consequences to a worker for failing to timely appeal denials / notices. See OAR 438-012-0070(3); OAR 438-012-0075(1); OAR 438-012-0080(3). The inclusion of separate rule provisions setting forth the same information in OAR 438-012-0024 would be redundant and unnecessary.

WCD submitted a comment that recommended removing the reference to a "form prescribed by the Workers’ Compensation Division" from OAR 438-012-0024(1)(a) and (2)(a). Instead, WCD suggests that the rule be modified to refer to ORS 656.262(6) and OAR 436-060-0140, which pertain to Notices of Acceptance. In addition, WCD recommends that all references to the "Benefits Section" and the "Benefits and Policy Services Section" be deleted because WCD has reorganized its internal structure and those sections no longer exist. Instead, reference to "Workers’ Compensation Division" is sufficient.

After considering these comments, the Board finds that it is reasonable, necessary, and proper to amend the proposed rule in the following manner. As amended, OAR 438-012-0024(1)(a) and (2)(a) shall read:

"Accept the claim by specifying the condition(s) that have been accepted by issuing a Modified Notice of Acceptance under ORS 656.262(6) and OAR 436-060-0140 to the claimant with a copy to the claimant’s attorney, if any, and the Workers’ Compensation Division;"

Accordingly for the reasons expressed in its previous Statement of Need, as well as those expressed above, the Board adopts the proposed rule, as modified above, as a permanent rule, contained in Exhibit A and incorporated by this reference.

OAR 438-012-0030.

This rule is amended to make it clear that a carrier is required to either voluntarily reopen the Own Motion claim or submit an Own Motion Recommendation for all Own Motion claims, including any "post-aggravation rights" new and omitted medical condition claims. The changes regarding claim processing for "post-aggravation rights" new and omitted medical conditions do not eliminate that requirement.

In addition, because the changes regarding claim processing for "post-aggravation rights" new and omitted medical conditions include the option of issuing a formal written denial of such claims, the language in subsections (1)(b) and (2)(b) is changed. Under those current subsections, if the carrier does not voluntarily reopen an Own Motion claim, it must submit an Own Motion Recommendation as to whether the claim "should be reopened or denied." To avoid confusion with the changes allowing for a formal written denial of "post-aggravation rights" new and omitted medical conditions, the term "denied" is changed to "not reopened" in subsections (1)(b) and (2)(b), which refer to an Own Motion Recommendation.

One comment was received regarding this rule. WCD recommended deletion of the reference to the "Benefits and Policy Services Section" from OAR 438-012-0030(4) because WCD has reorganized its internal structure and that section no longer exists. However, because no change was previously proposed regarding OAR 438-012-0030(4), the Board determined that it would not be appropriate to make that change at this time. See ORS 183.335(7). Therefore, the Board determined that this proposal should be considered for future rulemaking.

Accordingly, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, 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.

OAR 438-012-0032

One comment was received regarding this rule. WCD recommended deletion of the reference to the "Benefits Section" from OAR 438-012-0032(1) and (2) because WCD has reorganized its internal structure and that section no longer exists. However, because no change was previously proposed regarding OAR 438-012-0032, the Board determined that it would not be appropriate to make this change at this time. See ORS 183.335(7). Therefore, the Board determined that this proposal should be considered for future rulemaking and declined to change the rule at this time.

OAR 438-012-0035.

OAR 438-012-0035(4) is amended to comply with the statutory requirements that payment of temporary disability compensation must be in accordance with ORS 656.210, 656.212(2) and 656.262(4). In this regard, pursuant to ORS 656.278(1)(a) and (2)(a) (2001), "the payment of temporary disability compensation in accordance with ORS 656.210, 656.212(2) and 656.262(4) may be provided from the time the attending physician authorizes temporary disability compensation for the hospitalization, surgery or other curative treatment[.]" However, section (4) currently provides that the first payment of temporary disability compensation is due 14 days from the date of a Board order reopening the claim or the date the insurer voluntarily reopens the claim, without reference to ORS 656.210, ORS 656.212(2) and ORS 656.262(4).

OAR 438-012-0035(6) is amended to comply with ORS 656.262(4)(e), (4)(h), and (4)(i), which apply to payment of temporary disability compensation for Own Motion claims and provide that a carrier may unilaterally suspend compensation under certain circumstances. See ORS 656.278(1)(a) and (2)(a) (2001). OAR 438-012-0035(6) currently does not reference ORS 656.262(4)(e), (4)(h), and (4)(i) and provides that: (1) if a carrier believes that temporary disability compensation should be suspended for any reason, the insurer may make a written request for suspension; and (2) the insurer shall not suspend compensation without prior written authorization from the Board. Thus, the current restrictions in OAR 438-012-0035(6) do not comply with the statutory directives contained in ORS 656.262(4)(e), (4)(h), and (4)(i).

OAR 438-012-0035(6) is also amended to make it clear that the insurer must make a written request to the Board for suspension of benefits for any reason other than those provided in ORS 656.262(4)(e), (4)(h), and (4)(i). Finally, OAR 438-012-0035(6) is amended to require that a request for suspension of benefits: (1) state the reasons the insurer is requesting suspension of temporary disability compensation; and (2) include copies of supporting documentation. For clarification, section (6) is reorganized to include subsection numbers.

A comment was received regarding OAR 438-012-0035(5), suggesting that the grounds for terminating temporary disability compensation be expanded to include when "the claimant is medically stationary." Because no proposed amendments were previously made to this subsection, the Board determines that it would be inadvisable to adopt such a substantive change at this time. Nonetheless, this proposal should be considered for future rulemaking. Finally, ORS 656.278(1)(a) and (2)(a) provide the requirements for payment of temporary disability benefits for claims in Own Motion status and include termination of such benefits when "the worker’s condition becomes medically stationary." Thus, even if the rule does not list the "medically stationary" ground as a basis for the termination of temporary disability compensation, the statutory authorization would control.

Accordingly, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, 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.

OAR 438-012-0050.

Section (1) of this rule provides that the Board will act promptly upon a request for relief under the provisions of ORS 656.278 and these rules unless other remedies are available or the claimant’s condition is the subject of another dispute resolution process. Subsections (1)(a) through (c) specifically list these other available remedies and dispute resolution processes. Section (2) provides that the Board may postpone its review of the merits of the claimant’s request for relief if the available remedies set forth in section (1) could affect the Board’s authority to award compensation under the provisions of ORS 656.278.

Subsection (1)(d) is added to cover the contingency of litigation regarding an appeal of a denial or Notice of Clarification of a "post-aggravation rights" new or omitted medical condition claim pursuant to the addition of OAR 438-012-0090 or OAR 438-012-0095. Until a decision is reached regarding such litigation, the Board would not be able to render a decision on a request for Own Motion relief for the related "post-aggravation rights" new or omitted medical condition claim. Therefore, the option of postponing action on the request for Own Motion relief needs to be available.

Having received no objection to the proposed rule, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, 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.

OAR 438-012-0055

No proposed changes were made to this rule, which pertains to closure of claims reopened under ORS 656.278. However, a comment was received that suggested that the grounds for closure be expanded to include "the claim is subject to closure for the reasons set forth in ORS 656.268(1)(b) or (c)." The comment explained that a carrier may wish to close a claim for a worker’s failure to seek treatment or following the issuance of a "combined condition" denial.

Because no proposed amendments were previously made to this subsection, the Board determines that it would be inadvisable to adopt such a substantive change at this time. Nonetheless, this proposal should be considered for future rulemaking. Also, because the Board’s rules already include a "suspension" procedure (OAR 438-012-0035(6)), it is possible that the circumstances expressed by the proposal can be effectively addressed through other measures. In other words, it may be premature to propose amendments to
a rule based on circumstances that may not materialize or can be addressed through existing procedures.

A comment was also received from WCD, recommending deletion of the reference to the "Benefits Section" from OAR 438-012-0055 because WCD has reorganized its internal structure and that section no longer exists. However, because no change was previously proposed regarding OAR 438-012-0055, the Board determined that it would not be appropriate to make that change at this time. See ORS 183.335(7). Therefore, the Board determined that this proposal should be considered for future rulemaking.

Based on the above reasoning, the Board declines to amend OAR 438-012-0055 at this time.

OAR 438-012-0060.

This rule provides the requirements for Board review of a carrier’s closure of an Own Motion claim. Section (1) provides the information to be included in the claimant’s request for Board review, with subsection (1)(b) providing the requirement of a statement that Board review is requested, and the reason(s) for the request for review. Subsection (1)(b) is amended to add a list of possible reasons for the request for review, including, but not limited to: (1) disagreement with the medically stationary determination; (2) disagreement with the temporary disability compensation awarded; and/or (3) disagreement with permanent disability compensation awarded, if the claim was reopened for a "post-aggravation rights" new or omitted medical condition claim; if the claimant disagrees with the impairment used in rating the claimant’s permanent disability for such a claim, the claimant may request appointment of a medical arbiter. ORS 656.287(1)(b), (2)(d); Edward A. Miranda, 55 Van Natta 784 (2003) (medical arbiter evaluation available for "post-aggravation rights" new or omitted medical condition claim where the claimant disputed impairment findings used in rating permanent disability and requested a medical arbiter); Jimmy O. Dougan, 54 Van Natta 1213, aff’d on recon 54 Van Natta 1552 (2002) (permanent disability compensation is available for "post-aggravation rights" new or omitted medical condition claims).

Section (3) currently provides that, within 15 days after notification from the Board that a review has been requested, the insurer shall submit copies of all evidence pertaining to the claimant’s compensable condition at the time of closure. Section (4) currently gives the claimant 15 days to respond. Similar provisions in OAR 438-012-0061, which address Board review of a carrier’s voluntary reopening of an Own Motion claim, give the insurer 14 days to submit its evidence and the claimant 21 days to respond. In the interests of uniformity and consistency, the proposed amendments to OAR 438-012-0060(3) and (4) provide "14" and "21" days, respectively.

Section (6) currently provides "[t]he Board may, prior to issuing its order, refer a matter to the Hearings Division for an evidentiary hearing and recommended findings of fact and conclusions." Yet, OAR 438-012-0040(3) permits referral to the Hearings Division for an evidentiary hearing after a carrier’s recommendation without the limitation that the Board must make such referral "prior to issuing its order." In the interests of uniformity and consistency, the language "prior to issuing its order" is deleted from proposed OAR 438-012-0060(6).

Three comments were received regarding this rule. First, a comment noted that, although proposed amendments in OAR 436-012-0060(1)(b)(iii) provide for the claimant to request appointment of a medical arbiter, the rule does not provide a process for the appointment of a medical arbiter, nor a mechanism for submission of argument about the merits of the arbiter report once it has been submitted. The comment also noted that appointment of the arbiter is at the claimant’s option, rather than mandatory as is the case where the claimant raises an objection to impairment findings in the reconsideration process under ORS 656.268. The comment suggested renumbering existing subsections (6) and (7) as subsections (7) and (8), respectively, and adding a new rule at subsection (6) setting forth the process for appointment of a medical arbiter, including postponing review and implementing a supplemental briefing schedule after issuance of the arbiter’s report.

The procedures addressed in the above comment were not previously proposed; therefore, it would not be appropriate to address these procedures at this time. In any event, after considering this comment, the Board has decided that no further amendment is necessary. Future supplementation of rule may be advisable once the Board has some experience with the "arbiter /supplemental briefing" procedures developed by case law, which provides many of the concepts suggested in the above comment, including postponement of review of the Own Motion closure pending receipt of the medical arbiter’s report and a supplemental briefing schedule after receipt of the arbiter’s report. See Edward A. Miranda, 55 Van Natta at 794-96; Michael P. Hannen, 55 Van Natta 1508, 1518 (2003). For now, however, the Board determines that the best course is to follow these procedures developed by case law. Once that approach is established, the Board may consider formal rules at a later date.

A second comment expanded on the above comment, noting that current sections (3), (4), and (5) provide for submission of all evidence and written argument to the Board, and current section (6) provides that the Board may refer a matter to the Hearings Division for an evidentiary hearing. After renumbering and adding section (6) to address the medical arbiter provisions addressed above, the comment suggested adding a provision that evidence at an evidentiary hearing on a Notice of Closure be limited to the evidence submitted to the Board under subsections (3) through (6) and that issues not raised in the request for review may not be raised at hearing. In support of this suggestion, the comment relies on ORS 656.283(7), and contends that these suggested revisions will "streamline and minimize litigation in the closure process."

As with the first comment, the procedures addressed in the second comment were not previously proposed; therefore, it would not be appropriate to address these procedures at this time. Nevertheless, after considering this comment, the Board has decided that no further amendment is necessary. As discussed above, the Board declined to adopt the suggested addition/renumbering of section (6) to deal with the medical arbiter process.
In addition, the comment relies on ORS 656.283(7), which provides, in relevant part:

"Evidence on an issue regarding a notice of closure that was not submitted at the reconsideration required by ORS 656.268 is not admissible at hearing, and issues that were not raised by a party to the reconsideration may not be raised at hearing unless the issue arises out of the reconsideration order itself."

By its terms, ORS 656.283(7) applies to a hearing regarding closures that are subject to the reconsideration process required by ORS 656.268. However, closures of claims in Own Motion status are processed under ORS 656.278. Specifically, ORS 656.278(6) provides:

"Any claim reopened under this section shall be closed by the insurer or self-insured employer in a manner prescribed by the board, including, when appropriate, an award of permanent disability benefits as determined under subsections (1)(b) and (2)(d) of this section. The board shall also prescribe a process to be followed if the worker objects to the claim closure."

Therefore, the reconsideration process under ORS 656.268 does not apply to claims in Own Motion status. Thus, the reconsideration process is not available as a means to develop the record following closure of claims in Own Motion status. Furthermore, the primary reason for referral of an Own Motion matter to the Hearings Division for an evidentiary hearing is to allow for development of a record that is insufficient to decide the issues before the Own Motion Board. By restricting the evidentiary hearing to the evidence developed before the matter is referred for an evidentiary hearing, the comment defeats the purpose of such a referral. Therefore, the Board declines to adopt the suggested change.

Finally, a comment suggests modifying the proposed "14-21" day periods for the carrier’s submission of the record and written argument and the claimant’s submission of evidence and written argument to "21-21" day periods. The comment objects to giving a claimant more time to submit evidence/argument than the insurer has.

After considering this comment, the Board has decided that no further amendment is necessary. The "14-21" day periods were proposed to modify the existing "15-15" day periods contained in OAR 438-012-0060(3) and (4). The proposed rule amendment is designed to move the due dates into 7-day increments, which are more readily manageable. The "14-21" split is intended to recognize that, because it presumably developed and organized the closure record before issuing its Notice of Closure, the insurer already has the record that will be forwarded to the Board, the claimant, and the claimant’s attorney, if any, after notification from the Board that review of the closure has been requested. Furthermore, particularly for those workers who are represented, the insurer will likely have already received a copy of the worker’s request for Board review before the Board sends its notification. In contrast, the worker most likely would not be aware of materials used to close his or her claim until copies of those materials are received from the insurer. Thus, the 14-day period recognizes these practical realities, while allowing a worker an additional 7 days for reviewing the record and preparing an argument.

Accordingly, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, 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.

OAR 438-012-0061.

Section (4) currently provides "[t]he Board may, prior to issuing its order, refer a matter to the Hearings Division for an evidentiary hearing and recommended findings of fact and conclusions." As discussed above regarding OAR 438-012-0060, the language "prior to issuing its order" is inconsistent with OAR 438-012-0040(3). In the interests of uniformity and consistency, the Board has proposed deleting the language "prior to issuing its order" from OAR 438-012-0061(4).

Having received no objection to the proposed rule, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, 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.

OAR 438-012-0062.

As discussed above, OAR 438-012-0035(6) provides that an insurer may make a written request to the Board for suspension of temporary disability compensation if it believes that such compensation should be suspended for any reason other than those provided in ORS 656.262(4)(e), (4)(h), and (4)(i). Proposed section (2) to OAR 438-012-0062 is designed to specifically allow the Board to refer a request for suspension of temporary disability compensation under OAR 438-012-0035(6) to the Hearings Division for an evidentiary hearing and recommended findings of fact and conclusions. This proposed change results in renumbering current section (2) as section (3).

Having received no objection to the proposed rule, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, 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.

OAR 438-012-0070.

To implement the legislative changes previously discussed in the Statement of Need, the Board proposes a new rule that provides for a notice of denial of a "post-aggravation rights" new or omitted medical condition claim. This rule is patterned after OAR 438-005-0055.

WCD submitted a comment that recommended that all references to the "Benefits Section" and the "Benefits and Policy Services Section" be deleted because WCD has reorganized its internal structure and those sections no longer exist. Instead, reference to "Workers’ Compensation Division" is sufficient.

After considering this comment, the Board finds that it is reasonable, necessary, and proper to amend the proposed rule in the manner suggested by WCD’s comment and replace the term "Benefits Section" with "Workers’ Compensation Division" in OAR 438-012-0070(3).

Accordingly, for the reasons expressed in its previous Statement of Need, as well as
those expressed above, the Board adopts the proposed rule, as modified, as a permanent rule, contained in Exhibit A and incorporated by this reference.

OAR 438-012-0075.

To implement the legislative changes previously discussed in the Statement of Need, the Board proposes a new rule that provides for a notice of denial of responsibility for a "post-aggravation rights" new or omitted medical condition claim. This rule is patterned after OAR 438-005-0053.

Having received no objection to the proposed rule, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, 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.

OAR 438-012-0080.

To implement the legislative changes previously discussed in the Statement of Need, the Board proposes a new rule that provides for a notice of clarification in response to a "post-aggravation rights" new or omitted medical condition claim. Such a notice can be issued when the insurer believes that no acceptance of the "claimed" condition is required; e.g., the prior acceptance(s) reasonably apprises the claimant and the medical service providers of the nature of the compensable conditions. See ORS 656.267(1). The notice also advises the claimant of the manner in which to request a hearing should he or she disagree with the insurer’s decision.

WCD submitted a comment that recommended that all references to the "Benefits Section" and the "Benefits and Policy Services Section" be deleted because WCD has reorganized its internal structure and those sections no longer exist. Instead, reference to "Workers’ Compensation Division" is sufficient.

After considering this comment, the Board finds that it is reasonable, necessary, and proper to amend the proposed rule in the manner suggested by WCD’s comment and replace the term "Benefits Section" with "Workers’ Compensation Division" in OAR 438-012-0080(3).

Accordingly, for the reasons expressed in its previous Statement of Need, as well as those expressed above, the Board adopts the proposed rule, as modified, as a permanent rule, contained in Exhibit A and incorporated by this reference.

OAR 438-012-0085.

To implement the legislative changes previously discussed in the Statement of Need, the Board proposes a new rule that provides for a notice of incomplete claim in response to a "post-aggravation rights" new or omitted medical condition claim. Such a notice can be issued when the insurer believes that no acceptance or denial is required; e.g., the claimant has not clearly requested formal written acceptance of a "post-aggravation rights" new or omitted medical condition. See ORS 656.267(1). The notice also advises the claimant of the manner in which to request Own Motion Board review should he or she disagree with the insurer’s decision.

The "Notice of Incomplete Claim" is simply a notice from the insurer that it has not received a completed claim under ORS 656.267(1), which requires that "the worker must clearly request formal written acceptance of a new medical condition or an omitted medical condition from the insurer or the self-insured employer." If a claimant receiving such a notice intends on filing a claim for a "post-aggravation rights" new or omitted medical condition, and contends that he or she has satisfied the requirements of filing such a claim, he or she may request Own Motion Board review. However, if there is some question as to whether the claimant has satisfied the requirements of filing such a claim, the logical action for the claimant would be to clearly make such a claim to the insurer; i.e., submit to the insurer a letter that clearly requests formal written acceptance of the new or omitted medical condition from the insurer. Such action would negate the insurer’s contention that it had not received such a request. Once the claim is "completed" and the claimant clearly requests formal written acceptance of a new or omitted medical condition, the insurer would have the option of accepting, denying, or issuing a Notice of Clarification on that "completed" claim.

By definition, a "Notice of Incomplete Claim" is a document by which the insurer contends that the claimant has not "completed" a claim for a "post-aggravation rights" new or omitted medical condition. Because there is a question of whether the claimant filed a completed "claim" for a "post-aggravation rights" new or omitted medical condition, review of a "Notice of Incomplete Claim" is to the Own Motion Board. This differs from review of a denial of a "post-aggravation rights" new or omitted medical condition claim (OAR 438-012-0070 and/or OAR 438-012-0075) or a "Notice of Clarification" of such a claim (OAR 438-012-0080), both of which have appeal rights to the Hearings Division rather than to the Own Motion Board. Under those actions, there is no dispute as to whether the claimant has filed a "claim" for a "post-aggravation rights" new or omitted medical condition; instead, the issues potentially involve compensability, responsibility, or whether the insurer should be required to formally accept the claim. Such issues are best resolved by means of an evidentiary hearing. Therefore, appeal rights for a denial or a "Notice of Clarification" are to the Hearings Division rather than to the Own Motion Board.

A comment was received that suggested modifying this rule to provide consequences for a worker’s failure to request Board review within 60 days of the "Notice of Incomplete Claim." The comment proposed that the consequences should be that the worker "may not assert that a claim has been made."

After considering this comment, the Board has decided that no further amendment is necessary. The proposed rule did not include a "consequence" for failure to request Board review because of the statutory provision that a new or omitted medical condition may be initiated "at any time." See ORS 656.267(1). In light of the unlimited nature of that provision, any potential restriction on the initiation of such a claim was not considered advisable.

In addition, as addressed above and in the Statement of Need, the rule is intended to be an "informational aid" to a claimant in that the notification will hopefully explain to him/her why the claim is not being processed, which will ultimately enable him/her (either by means of the carrier or the Board) to satisfy the statute by clearly requesting formal written acceptance of the new or omitted medical condition. Such information would be provided regardless of whether the rule contains the suggested "preclusion or consequences" provision. Thus, the implementation of such a provision would have limited practical effect regarding the rule’s primary intention.

On the other hand, attaching preclusive effect to the time limitation for a claimant’s appeal from such a notice would prohibit him/her from asserting that a claim had been made through the date of the notice. Such a proposal would effectively provide an available defense for a carrier should a claimant at a later proceeding assert that the carrier has unreasonably delayed or refused to process a new or omitted medical condition. Nonetheless, because a defense under such circumstances would be available with or without a "consequences / preclusion" provision, it would appear that such a provision would also have limited substantive effect. Considering such circumstances, the Board determined that the better course was to adopt the rule as proposed. Should future processing issues arise regarding the rule, amendments can be proposed at a later date.

WCD submitted a comment that recommended that all references to the "Benefits Section" and the "Benefits and Policy Services Section" be deleted because WCD has reorganized its internal structure and those sections no longer exist. Instead, reference to "Workers’ Compensation Division" is sufficient.

After considering this comment, the Board finds that it is reasonable, necessary, and proper to amend the proposed rule in the manner suggested by WCD’s comment and replace the term "Benefits Section" with "Workers’ Compensation Division" in OAR 438-012-0085(3).

Accordingly for the reasons expressed in its previous Statement of Need, as well as those expressed above, the Board adopts the proposed rule, as modified, as a permanent rule, contained in Exhibit A and incorporated by this reference.

OAR 438-012-0090.

To implement the legislative changes previously discussed in the Statement of Need, the Board proposed a new rule that provides for hearing procedures regarding appeal of a denial or a clarification notice for a "post-aggravation rights" new or omitted medical condition claim. Such hearings shall be conducted by the Hearings Division pursuant to the procedures for ordinary cases prescribed in Divisions 006 and 007. Within 30 days of the closure of the hearing record, the ALJ shall issue a "Proposed and Final Own Motion Order" that decides the issues raised in the hearing request and provides appeal rights to the Own Motion Board. Failure to request Board review within 30 days from the mailing date of the "Proposed and Final Own Motion Order" will result in the ALJ’s decision constituting, as a matter of law, a "Final Own Motion Order" of the Board.

Having received no objection to the proposed rule, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, 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.

OAR 438-012-0095.

To implement the legislative changes previously discussed in the Statement of Need, the Board proposed a new rule that provides for Board review of an appealed ALJ’s Proposed and Final Own Motion Order regarding a "post-aggravation rights" new or omitted medical condition claim. If a party appeals the ALJ’s decision, the Own Motion Board will conduct a de novo review based on the entire record developed at the Hearings Division, including the hearing transcript and a briefing schedule. If the record is improperly, incompletely, or otherwise insufficiently developed, the Board may admit additional documentary evidence into the record or remand the case to the ALJ to take additional evidence and issue a "Proposed and Final Own Motion Order on Remand."

Having received no objection to the proposed rule, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, 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.

OAR 438-012-0100.

To implement the legislative changes previously discussed in the Statement of Need, the Board proposed a new rule that provides for Board review of an appealed "Notice of Incomplete Claim" regarding a "post-aggravation rights" new or omitted medical condition claim. In creating this rule, the Board provided that the carrier had 14 days after notification from the Board that review was requested to submit written argument and copies of evidence that pertains to the claimant’s compensable condition at the time of the carrier’s notice. The Board provided the claimant 21 days from the date of the carrier’s submittal to submit evidence and written argument.

A comment was received that suggested modifying the proposed "14-21" day periods for the parties’ submissions and arguments. The comment objected to the shorter time period for the carrier to submit the record and the longer period provided to the claimant to reply.

As with OAR 438-012-0060, the "14-21" day periods were designed to implement a briefing schedule in 7-day increments. In addition, the "14-21" split is intended to recognize that, because it presumably developed and organized the record before issuing its Notice of Incomplete Claim, the carrier already has the record that will be forwarded to the Board and the worker. In contrast, the carrier’s notice will likely be the claimant’s first indication that the carrier is contending the claimant has made an incomplete claim. Furthermore, for those claimants who are represented, the carrier will likely have already received a copy of the request for Board review. Thus, the 14-day period recognizes these practical realities, while allowing a claimant an additional 7 days for reviewing the record and preparing an argument.

The Board finds for the reasons expressed in its Statement of Need, and those discussed herein, 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.

OAR 438-015-0080.

For the reasons discussed in the Statement of Need, this rule is amended as follows. Section (2) is added to provide for out-of-compensation attorney fees to be awarded if an attorney is instrumental in obtaining a voluntary reopening of an Own Motion claim that results in increased temporary disability compensation. This addition results in the renumbering of sections (2) and (3) as (3) and (4), respectively. Sections (1) through (4) deal with out-of-compensation attorney fees, and section (4) is amended to make it clear that, on a finding that extraordinary services have been rendered, the Board may allow an out-of-compensation fee in excess of the amounts prescribed in sections (1) through (3).

As discussed in the Statement of Need, sections (5) through (8) are added to provide for reasonable assessed fees for services rendered in prevailing over denials (including "de facto denials" and denials rescinded prior to a decision by an ALJ) of "post-aggravation rights" new or omitted medical condition claims.

The Board of Governors of the Oregon State Bar was advised of and approved the changes to the Schedule of Attorney Fees proposed under the amendments to OAR 438-015-0080. Therefore, the consultation requirements of ORS 656.388(3) have been satisfied.

Having received no objection to the proposed rule, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, 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 rules, as set forth in Exhibits "A" and "B," incorporated by this reference, as permanent rules of the Workers’ Compensation Board, to become effective September 1, 2003 and to apply to the following cases in the following manner:

          (1) Amendments to OAR 438-012-0030, OAR 438-012-0035, OAR 438-012-0061, OAR 438-012-0062, and OAR 438-015-0080(2) through (4) shall apply to all Own Motion claims existing on or after September 1, 2003.

          (2) Amendments to OAR 438-012-0060 shall apply to all Own Motion claims closed on or after September 1, 2003.

          (3) Amendments to OAR 438-012-0001, OAR 438-012-0018, OAR 438-012-0020, OAR 438-012-0024, OAR 438-012-0050, 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, OAR 438-015-0080(5) through (8), and any other Division 012 rule not specifically identified in this Order of Adoption shall apply to all Own Motion claims filed or initiated on or after September 1, 2003.

          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.  In proposing these rules regarding claim processing of "post-aggravation rights" new or omitted medical conditions, the Board does not intend to eliminate the carrier's requirement to either submit an Own Motion Recommendation (Form 440-2806) or voluntarily reopen such claims pursuant to ORS 656.278(5). In other words, when presented with a claim for a "post-aggravation rights" new or omitted medical condition, a carrier must process the claim by: (1) issuing one of four notices (acceptance, denial, clarification, or incomplete claim), each of which results in formal written notice to the claimant regarding the current status of the claim; and (2) submitting an Own Motion Recommendation or voluntarily reopening the claim (by filing with WCD a form 3501).

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