Under Oregon workers compensation
law, injured workers, insurers, and medical providers may request
resolution of medical disputes by the director of the Department
of Consumer & Business Services (the department). Parties
may request review of disputes involving medical services and
treatments, palliative care, fees, changes of attending physician,
and requests for additional insurer medical exams (IMEs). Statutory
authority to resolve medical disputes is given to the director
under Oregon Revised Statutes (ORS) 656.245, 656.248, 656.260,
656.325, and 656.327. Oregon Administrative Rules (OAR) Chapter
436, Divisions 9 and 10, provide the guidelines for administering
the delivery of and payment for medical services and for resolving
The WCD Medical Review and Abuse
Section was created in February 1990 to handle medical disputes.
In 1992, during a WCD reorganization, the section was reorganized
and renamed the Medical Review Unit (MRU). At that time, the
WCD Benefits Section assumed responsibility for resolving two
issues: changes of attending physician and requests for additional
IMEs. Effective October 23, 1999, Senate Bill 728 transferred
responsibility for disputes when compensability of the underlying
medical condition is at issue to the Workers Compensation
Board Hearings Division. (The results of this change are outside
the time frame of this report.)
This report presents information
about medical dispute activity for fiscal year 1999. The data
include disputes received and resolved, disputes involving managed
care organizations, the time required to process requests, and
appeals of the orders. Additional information is available from
the departments Research & Analysis Section.
Highlights of the Report
In FY99, the department received
862 medical dispute requests. Of these, 62 percent were medical
service disputes, 24 percent were treatment disputes, and 5 percent
were palliative care disputes.
In FY99, 825 medical disputes
were resolved. Of these disputes, 54 percent were approved, 23
percent were disapproved, and 6 percent were partially approved.
Two percent of the resolutions were stipulations. Fourteen percent
of the disputes were dismissed or withdrawn.
Nineteen percent of the FY99
orders resolved disputes that involved managed care organizations.
Forty-seven percent were medical service disputes, 47 percent
were treatment disputes, and 6 percent were palliative care disputes.
In FY99, the average number of
calendar days from the receipt of a dispute to its resolution
was 105 days. There is great variability in the resolution time
of different issues. Treatment disputes averaged 160 days to
resolve, while IME disputes averaged 37 days. Nearly 80 percent
of the treatment disputes that were resolved required the use
of outside physician reviewers. This review added an average
of 24 days to the processing time.
Fourteen percent of the FY99
orders were appealed to contested case hearings.
Most legislative sessions since
1987 have produced changes in the medical dispute resolution
process. In 1987, House Bill 2900 allowed the director to establish
a medical review panel to review, upon request of any of the
parties, the medical treatment of an injured worker. This review
process was seldom used. HB 2900 also limited IMEs to three per
each opening of the claim, unless authorized by the director.
The administrative dispute resolution
process became mandatory for medical disputes when Senate Bill
1197 took effect July 1, 1990. In part, the intent of SB 1197
was to reduce litigation by placing the responsibility for medical
decisions on the departments medical personnel. SB 1197
also eliminated most palliative care after the worker becomes
medically stationary; this eliminated many potential disputes.
Following the Court of Appeals
decision in Meyers v. Darigold in October 1993, the director
lost jurisdiction over disputes involving proposed medical treatment.
SB 369, effective June 7, 1995, restored this jurisdiction to
the director. SB 369 also allowed a worker (not just the workers
attending physician) to request approval for palliative care
when the insurer denies the care. Also, SB 369 took jurisdiction
for appeals of medical dispute orders, other than orders concerning
additional IMEs, from the Workers Compensation Board Hearings
Division. These disputes are now heard as contested cases.
The 1999 legislative session
produced two changes. HB 2525, effective August 1, 1999, moved
the contested cases hearings officers (who hear most appeals
of medical dispute orders) from the department to the Oregon
Employment Department. Effective October 23, 1999, SB 728 transferred
responsibility to the Hearings Division for disputes when compensability
of the underlying medical condition is at issue or when the causal
relationship between the accepted condition and the medical service
is at issue.
Medical disputes received
In fiscal year 1999, the department
received 862 requests for medical dispute resolution (see Table
1). This was a 3 percent increase from the number in FY98. Sixty
percent of the requests were from workers or their attorneys,
28 percent were from medical providers, and 10 percent were from
The most common type of medical
dispute is over medical services. These disputes are about the
services, other than palliative care, to which a worker is entitled.
In FY99, 62 percent of the disputes fell into this category.
This category was created in December 1996 when the coding system
was revised to better match the medical service sections of the
statute. (Compensable medical services are defined in ORS 656.245.)
Many issues formerly defined as palliative care or fee disputes
are now classified as medical service disputes. Palliative care
disputes arise when a worker or the workers attending physician
requests that the insurer approve palliative care to enable the
worker to continue current employment after the worker has become
medically stationary. Claimants and providers bring these disputes
to the department. Fee disputes are disputes between an insurer
and medical provider regarding the amount of a fee for a medical
service. Often, the medical provider requests reimbursement on
a reduced bill. These two types of disputes accounted for 9 percent
of the disputes.
Treatment disputes are the other
common category of dispute. Treatment disputes are those in which
a worker or an insurer claims that the medical providers
treatment is inappropriate, excessive, ineffectual, or in violation
of the administrative rules. Nearly a quarter of the disputes
received in FY99 were treatment disputes. Over three-quarters
of the insurer requests involved treatment issues. As will be
shown later, treatment disputes are the most contentious and
difficult to resolve.
Change of physician disputes
occur when a worker requests an additional change of attending
physician beyond the two changes allowed by statute. Insurer
medical exam disputes arise when an insurer requests that a worker
undergo an additional medical exam beyond the three allowed in
statute. These two categories accounted for 5 percent of the
In addition to these disputes,
there are also reconsiderations and general issues. Reconsiderations
are cases in which the department reconsiders its own order.
The parties may request reconsideration of an order within 30
days if they believe the order contains errors or misapplications
of the law or if they have new evidence that could not reasonably
have been discovered or produced during the review. There were
21 reconsideration requests in FY99. They were nearly evenly
split between medical service and treatment issues.
General information requests
are requests of a general nature. They are not considered disputes,
and they do not require a directors order to resolve. Rather,
informational letters are used to respond to these requests.
More than 160 of these general requests were received in FY99.
During FY99, 825 disputes were
resolved. Of these orders, 14 percent were orders of dismissal
(see Table 2a). A dismissal may occur for a variety of reasons,
such as the inappropriate, incomplete, or untimely submission
of the request or because the request was withdrawn. There were
far fewer dismissals in FY99 than in FY98, when 45 percent of
the requests were dismissed. The decline resulted from a change
in MRUs procedures. In the past, if the insurer agreed
to pay during the processing of a dispute, MRU issued a dismissal
order. In FY99, MRU issued approval orders in these situations.
Fifty-four percent of the FY99
orders were orders of approval, 23 percent were disapproval orders,
and 6 percent were partial approvals. Approval orders are those
that order payment to providers, approve palliative care, approve
all of the medical providers treatment, or approve the
additional change of attending physician or additional IME. Denial
orders deny these items. Partial approval orders are orders that
approve part, but not all, of the request for additional reimbursement,
palliative care, or treatment.
Two percent of the FY99 orders
were resolved by stipulation. Stipulations are written agreements
between the disputing parties that are reached through mediation.
There is one other possible outcome:
allowed. This outcome allows the change of physician
when the statutory limitation on the number of changes has not
been exceeded. There were no orders of this type in FY99.
Excluding the dismissed cases,
68 percent of the disputed medical services were approved, 23
percent were disapproved, and 9 percent were settled with a partial
acceptance or a stipulation. Again excluding the dismissed cases,
54 percent of the disputed treatments were approved, and 34 percent
were disapproved. Less than half of the requests for palliative
care were approved. Most of the requests for payment of disputed
billings were approved.
Medical providers were usually
successful when they requested dispute resolution. Excluding
the dismissals, over 80 percent of the medical services for which
providers requested approval were granted.
When it reconsidered its earlier
orders, MRU seldom changed its previous decision (see Table 2b).
In 14 of the 18 cases, the reconsideration was denied or the
earlier order was upheld.
Disputes involving managed
In FY99, 19 percent of the orders
resolving disputed issues involved managed care organizations.
MCOs must have internal dispute resolution processes, although
they may choose to have the department resolve certain types
of issues. Therefore, medical disputes come to the department
either because the MCO does not have a resolution process for
a particular type of dispute or because the MCOs decision
is being appealed. About 40 percent of the workers with accepted
disabling claims are enrolled in MCOs. The small number of MCO
disputes received by the department indicates that the MCOs resolved
many medical disputes.
The disputed issues involving
MCOs were nearly evenly split between medical service and treatment
disputes (see Table 3). Thirty-two percent of all orders resolving
treatment disputes involved MCOs. In comparison, 15 percent of
the medical service disputes involved MCOs. This difference may
indicate that MCOs had more difficulty resolving treatment disputes
internally than medical service disputes.
For the disputes involving MCOs,
the department issued approximately equal numbers of approval
orders and disapproval orders. This contrasts with the disputes
that did not involve MCOs; in this group, there were more than
three times as many approval orders as disapproval orders.
The average number of calendar
days from the initial receipt of a dispute to its resolution
was 105 days for FY99 orders (see Table 4). This compares to
101 days in FY98. Treatment disputes took the longest to resolve,
160 days. Palliative care disputes averaged 137 days. IME disputes
were resolved the most quickly, averaging 37 days.
A portion of this processing
time can be attributed to the involvement of outside physician
reviewers. These reviewers or panels of reviewers may be appointed
by the department to review the disputed treatments, medical
services, or palliative care. Sixty-five percent of the treatment
orders (nearly 80 percent of the treatment orders that were not
dismissed) utilized outside physician review. The length of time
from the date of the departments letter establishing the
outside review to the date that the physicians report was
received averaged 25 days.
Appeals of orders
Orders from disputed issues other
than IMEs can be appealed through the contested case hearings
process. (IME orders are appealed to the Hearings Division.)
Prior to August 1, 1999, these hearings officers were under the
directors jurisdiction. They have become a part of a centralized
hearings panel in the Oregon Employment Department. Parties have
30 days to appeal a medical dispute order.
Of the orders issued in FY99,
14 percent were appealed (see Table 5). Twenty-three percent
of the treatment dispute orders were appealed. As of January
2000, 77 percent of the appealed orders had been resolved. Nearly
half of the appeals were either withdrawn or dismissed. Most
of the decisions were affirmations of the earlier order.
If you have questions about the
information contained in this document please contact by e-mail
or phone: Gary Helmer,
Research Analyst, Research & Analysis Section, Information
Management Division (503) 947-7325.
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