Bill Text: OR HB2092 | 2011 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to workers' compensation.

Spectrum: Unknown

Status: (Enrolled - Dead) 2011-06-30 - In Conference Committee upon adjournment. [HB2092 Detail]

Download: Oregon-2011-HB2092-Introduced.html

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     76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 581

                         House Bill 2092

Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of Governor John A. Kitzhaber
  for Department of Consumer and Business Services)

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.

  Clarifies exclusive remedy provisions of workers' compensation
laws. Provides for administrative review of certain matters
arising under workers' compensation laws and rules.
  Modifies manner in which notice of compliance is made available
to subject employers.
  Eliminates requirement for consultation with certain
professional licensing boards when rules are adopted concerning
appropriateness of certain types of medical treatment. Allows
medical service providers to seek resolution of medical service
disputes through same process as workers, employers and insurers.
  Restores authority of Director of Department of Consumer and
Business Services to extend temporary disability compensation
paid to workers in vocational training.

                        A BILL FOR AN ACT
Relating to workers' compensation; creating new provisions; and
  amending ORS 656.018, 656.054, 656.056, 656.245, 656.247,
  656.260, 656.262, 656.327, 656.340 and 656.704.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 656.018 is amended to read:
  656.018. (1)(a) The liability of every employer who satisfies
the duty required by ORS 656.017 (1) is exclusive and in place of
all other liability arising out of injuries, diseases, symptom
complexes or similar conditions arising out of and in the course
of employment that are sustained by subject workers, the workers'
beneficiaries and anyone otherwise entitled to recover damages
from the employer on account of such conditions or claims
resulting therefrom, specifically including claims for
contribution or indemnity asserted by third persons from whom
damages are sought on account of such conditions, except as
specifically provided otherwise in this chapter.
  (b) This subsection shall not apply to claims for indemnity or
contribution asserted by a railroad, as defined in ORS 824.020,
or by a corporation, individual or association of individuals
which is subject to regulation pursuant to ORS chapter 757 or
759.
  (c) Except as provided in paragraph (b) of this subsection, all
agreements or warranties contrary to the provisions of paragraph

(a) of this subsection entered into after July 19, 1977, are
void.
  (2) The rights given to a subject worker and the beneficiaries
of the subject worker under this chapter for injuries, diseases,
symptom complexes or similar conditions arising out of and in the
course of employment are in lieu of any remedies they might
otherwise have for such injuries, diseases, symptom complexes or
similar conditions against the worker's employer under ORS
654.305 to 654.336 or other laws, common law or statute, except
to the extent the worker is expressly given the right under this
chapter to bring suit against the employer of the worker for an
injury, disease, symptom complex or similar condition.
  (3) The exemption from liability given an employer under this
section is also extended to the employer's insurer, the
self-insured employer's claims administrator, the Department of
Consumer and Business Services, and the contracted agents,
employees, officers and directors of the employer, the employer's
insurer, the self-insured employer's claims administrator and the
department, except that the exemption from liability shall not
apply:
  (a) Where the injury, disease, symptom complex or similar
condition is proximately caused by willful and unprovoked
aggression by the person otherwise exempt under this subsection;
  (b) Where the worker and the person otherwise exempt under this
subsection are not engaged in the furtherance of a common
enterprise or the accomplishment of the same or related
objectives; or
  (c) Where the injury, disease, symptom complex or similar
condition is proximately caused by failure of the employer to
comply with the notice posted pursuant to ORS 654.082.
  (4) The exemption from liability given an employer under this
section applies to a worker leasing company and the client to
whom workers are provided when the worker leasing company and the
client comply with ORS 656.850 (3).
  (5)(a) The exemption from liability given an employer under
this section applies to a temporary service provider, as that
term is used in ORS 656.850, and also extends to the client to
whom workers are provided when the temporary service provider
complies with ORS 656.017.
  (b) The exemption from liability given a client under paragraph
(a) of this subsection is also extended to the client's insurer,
the self-insured client's claims administrator, the department,
and the contracted agents, employees, officers and directors of
the client, the client's insurer, the self-insured client's
claims administrator and the department, except that the
exemption from liability shall not apply:
  (A) When the injury, disease, symptom complex or similar
condition is proximately caused by willful and unprovoked
aggression by the person otherwise exempt under this subsection;
  (B) When the worker and the person otherwise exempt under this
subsection are not engaged in the furtherance of a common
enterprise or the accomplishment of the same or related
objectives; or
  (C) When the injury, disease, symptom complex or similar
condition is proximately caused by failure of the client to
comply with the notice posted pursuant to ORS 654.082.
  (6) Nothing in this chapter shall prohibit payment, voluntarily
or otherwise, to injured workers or their beneficiaries in excess
of the compensation required to be paid under this chapter.
  (7) The exclusive remedy provisions and limitation on liability
provisions of this chapter apply to all injuries and to diseases,
symptom complexes or similar conditions of subject workers
arising out of and in the course of employment whether or not
they are determined to be compensable under this chapter.
   { +  (8) Except as otherwise provided in this chapter, this
chapter provides the exclusive remedy for resolution of disputes
arising under the workers' compensation laws and rules of this
state. + }
  SECTION 2. ORS 656.056 is amended to read:
  656.056. (1) All subject employers shall display in a
conspicuous manner about their works, and in a sufficient number
of places reasonably to inform their workers of the fact,
 { - printed notices furnished by the Director of the Department
of Consumer and Business Services - }   { + a notice + } stating
that they are subject to this chapter and the manner of their
compliance with this chapter.
  (2)   { - No - }   { + An + } employer who is not currently a
subject employer
  { - shall - }   { + may not + } post { + , + } or permit to
remain on or about the place of business or premises of the
employer { + , + } any notice that the employer is subject to,
and complying with, this chapter.
   { +  (3) The Director of the Department of Consumer and
Business Services shall prescribe by rule the manner by which the
notice required under subsection (1) of this section shall be
provided to subject employers. + }
  SECTION 3. ORS 656.245 is amended to read:
  656.245. (1)(a) For every compensable injury, the insurer or
the self-insured employer shall cause to be provided medical
services for conditions caused in material part by the injury for
such period as the nature of the injury or the process of the
recovery requires, subject to the limitations in ORS 656.225,
including such medical services as may be required after a
determination of permanent disability. In addition, for
consequential and combined conditions described in ORS 656.005
(7), the insurer or the self-insured employer shall cause to be
provided only those medical services directed to medical
conditions caused in major part by the injury.
  (b) Compensable medical services shall include medical,
surgical, hospital, nursing, ambulances and other related
services, and drugs, medicine, crutches and prosthetic
appliances, braces and supports and where necessary, physical
restorative services. A pharmacist or dispensing physician shall
dispense generic drugs to the worker in accordance with ORS
689.515. The duty to provide such medical services continues for
the life of the worker.
  (c) Notwithstanding any other provision of this chapter,
medical services after the worker's condition is medically
stationary are not compensable except for the following:
  (A) Services provided to a worker who has been determined to be
permanently and totally disabled.
  (B) Prescription medications.
  (C) Services necessary to administer prescription medication or
monitor the administration of prescription medication.
  (D) Prosthetic devices, braces and supports.
  (E) Services necessary to monitor the status, replacement or
repair of prosthetic devices, braces and supports.
  (F) Services provided pursuant to an accepted claim for
aggravation under ORS 656.273.
  (G) Services provided pursuant to an order issued under ORS
656.278.
  (H) Services that are necessary to diagnose the worker's
condition.
  (I) Life-preserving modalities similar to insulin therapy,
dialysis and transfusions.
  (J) With the approval of the insurer or self-insured employer,
palliative care that the worker's attending physician referred to
in ORS 656.005 (12)(b)(A) prescribes and that is necessary to
enable the worker to continue current employment or a vocational
training program. If the insurer or self-insured employer does
not approve, the attending physician or the worker may request
approval from the Director of the Department of Consumer and
Business Services for such treatment. The director may order a
medical review by a physician or panel of physicians pursuant to
ORS 656.327 (3) to aid in the review of such treatment. The
decision of the director is subject to review under ORS 656.704.
  (K) With the approval of the director, curative care arising
from a generally recognized, nonexperimental advance in medical
science since the worker's claim was closed that is highly likely
to improve the worker's condition and that is otherwise justified
by the circumstances of the claim. The decision of the director
is subject to review under ORS 656.704.
  (L) Curative care provided to a worker to stabilize a temporary
and acute waxing and waning of symptoms of the worker's
condition.
  (d) When the medically stationary date in a disabling claim is
established by the insurer or self-insured employer and is not
based on the findings of the attending physician, the insurer or
self-insured employer is responsible for reimbursement to
affected medical service providers for otherwise compensable
services rendered until the insurer or self-insured employer
provides written notice to the attending physician of the
worker's medically stationary status.
  (e) Except for services provided under a managed care contract,
out-of-pocket expense reimbursement to receive care from the
attending physician or nurse practitioner authorized to provide
compensable medical services under this section shall not exceed
the amount required to seek care from an appropriate nurse
practitioner or attending physician of the same specialty who is
in a medical community geographically closer to the worker's
home.  For the purposes of this paragraph, all physicians and
nurse practitioners within a metropolitan area are considered to
be part of the same medical community.
  (2)(a) The worker may choose an attending doctor, physician or
nurse practitioner within the State of Oregon. The worker may
choose the initial attending physician or nurse practitioner and
may subsequently change attending physician or nurse practitioner
two times without approval from the director. If the worker
thereafter selects another attending physician or nurse
practitioner, the insurer or self-insured employer may require
the director's approval of the selection. The decision of the
director is subject to review under ORS 656.704. The worker also
may choose an attending doctor or physician in another country or
in any state or territory or possession of the United States with
the prior approval of the insurer or self-insured employer.
  (b) A medical service provider who is not a member of a managed
care organization is subject to the following provisions:
  (A) A medical service provider who is not qualified to be an
attending physician may provide compensable medical service to an
injured worker for a period of 30 days from the date of the first
visit on the initial claim or for 12 visits, whichever first
occurs, without the authorization of an attending physician.
Thereafter, medical service provided to an injured worker without
the written authorization of an attending physician is not
compensable.
  (B) A medical service provider who is not an attending
physician cannot authorize the payment of temporary disability
compensation. However, an emergency room physician who is not
authorized to serve as an attending physician under ORS 656.005
(12)(c) may authorize temporary disability benefits for a maximum
of 14 days. A medical service provider qualified to serve as an
attending physician under ORS 656.005 (12)(b)(B) may authorize
the payment of temporary disability compensation for a period not
to exceed 30 days from the date of the first visit on the initial
claim.
  (C) Except as otherwise provided in this chapter, only a
physician qualified to serve as an attending physician under ORS
656.005 (12)(b)(A) or (B)(i) who is serving as the attending
physician at the time of claim closure may make findings
regarding the worker's impairment for the purpose of evaluating
the worker's disability.
  (D) Notwithstanding subparagraphs (A) and (B) of this
paragraph, a nurse practitioner licensed under ORS 678.375 to
678.390:
  (i) May provide compensable medical services for 90 days from
the date of the first visit on the claim;
  (ii) May authorize the payment of temporary disability benefits
for a period not to exceed 60 days from the date of the first
visit on the initial claim; and
  (iii) When an injured worker treating with a nurse practitioner
authorized to provide compensable services under this section
becomes medically stationary within the 90-day period in which
the nurse practitioner is authorized to treat the injured worker,
shall refer the injured worker to a physician qualified to be an
attending physician as defined in ORS 656.005 for the purpose of
making findings regarding the worker's impairment for the purpose
of evaluating the worker's disability. If a worker returns to the
nurse practitioner after initial claim closure for evaluation of
a possible worsening of the worker's condition, the nurse
practitioner shall refer the worker to an attending physician and
the insurer shall compensate the nurse practitioner for the
examination performed.
  (3) Notwithstanding any other provision of this chapter, the
director, by rule, upon the advice of the committee created by
ORS 656.794 and   { - upon the advice of - }  { +  after
consideration of advice offered by + } the professional licensing
boards of practitioners affected by the rule, may exclude from
compensability any medical treatment the director finds to be
unscientific, unproven, outmoded or experimental. The decision of
the director is subject to review under ORS 656.704.
  (4) Notwithstanding subsection (2)(a) of this section, when a
self-insured employer or the insurer of an employer contracts
with a managed care organization certified pursuant to ORS
656.260 for medical services required by this chapter to be
provided to injured workers:
  (a) Those workers who are subject to the contract shall receive
medical services in the manner prescribed in the contract.
Workers subject to the contract include those who are receiving
medical treatment for an accepted compensable injury or
occupational disease, regardless of the date of injury or
medically stationary status, on or after the effective date of
the contract. If the managed care organization determines that
the change in provider would be medically detrimental to the
worker, the worker shall not become subject to the contract until
the worker is found to be medically stationary, the worker
changes physicians or nurse practitioners, or the managed care
organization determines that the change in provider is no longer
medically detrimental, whichever event first occurs. A worker
becomes subject to the contract upon the worker's receipt of
actual notice of the worker's enrollment in the managed care
organization, or upon the third day after the notice was sent by
regular mail by the insurer or self-insured employer, whichever
event first occurs. A worker shall not be subject to a contract
after it expires or terminates without renewal. A worker may
continue to treat with the attending physician or nurse
practitioner authorized to provide compensable medical services
under this section under an expired or terminated managed care
organization contract if the physician or nurse practitioner
agrees to comply with the rules, terms and conditions regarding
services performed under any subsequent managed care organization
contract to which the worker is subject. A worker shall not be
subject to a contract if the worker's primary residence is more
than 100 miles outside the managed care organization's certified
geographical area. Each such contract must comply with the
certification standards provided in ORS 656.260. However, a
worker may receive immediate emergency medical treatment that is
compensable from a medical service provider who is not a member
of the managed care organization. Insurers or self-insured
employers who contract with a managed care organization for
medical services shall give notice to the workers of eligible
medical service providers and such other information regarding
the contract and manner of receiving medical services as the
director may prescribe. Notwithstanding any provision of law or
rule to the contrary, a worker of a noncomplying employer is
considered to be subject to a contract between the State Accident
Insurance Fund Corporation as a processing agent or the assigned
claims agent and a managed care organization.
  (b)(A) For initial or aggravation claims filed after June 7,
1995, the insurer or self-insured employer may require an injured
worker, on a case-by-case basis, immediately to receive medical
services from the managed care organization.
  (B) If the insurer or self-insured employer gives notice that
the worker is required to receive treatment from the managed care
organization, the insurer or self-insured employer must guarantee
that any reasonable and necessary services so received, that are
not otherwise covered by health insurance, will be paid as
provided in ORS 656.248, even if the claim is denied, until the
worker receives actual notice of the denial or until three days
after the denial is mailed, whichever event first occurs. The
worker may elect to receive care from a primary care physician or
nurse practitioner authorized to provide compensable medical
services under this section who agrees to the conditions of ORS
656.260 (4)(g). However, guarantee of payment is not required by
the insurer or self-insured employer if this election is made.
  (C) If the insurer or self-insured employer does not give
notice that the worker is required to receive treatment from the
managed care organization, the insurer or self-insured employer
is under no obligation to pay for services received by the worker
unless the claim is later accepted.
  (D) If the claim is denied, the worker may receive medical
services after the date of denial from sources other than the
managed care organization until the denial is reversed.
Reasonable and necessary medical services received from sources
other than the managed care organization after the date of claim
denial must be paid as provided in ORS 656.248 by the insurer or
self-insured employer if the claim is finally determined to be
compensable.
  (5) A nurse practitioner licensed under ORS 678.375 to 678.390
who is not a member of the managed care organization, is
authorized to provide the same level of services as a primary
care physician as established by ORS 656.260 (4), if at the time
the worker is enrolled in the managed care organization, the
nurse practitioner maintains the worker's medical records and
with whom the worker has a documented history of treatment, if
that nurse practitioner agrees to refer the worker to the managed
care organization for any specialized treatment, including
physical therapy, to be furnished by another provider that the
worker may require and if that nurse practitioner agrees to
comply with all the rules, terms and conditions regarding
services performed by the managed care organization.
  (6) Subject to the provisions of ORS 656.704, if a claim for
medical services is disapproved, the injured worker,
insurer { + , + }   { - or - } self-insured employer  { + or
medical service provider + } may request administrative review by
the director pursuant to ORS 656.260 or 656.327.
  SECTION 4. ORS 656.704 is amended to read:
  656.704. (1) Actions and orders of the Director of the
Department of Consumer and Business Services regarding matters
concerning a claim under this chapter, and administrative and
judicial review of those matters, are subject to the procedural
provisions of this chapter and such procedural rules as the
Workers' Compensation Board may prescribe.
  (2)(a) A party  { + or person + } dissatisfied with an action
or order  { +  of the director + } regarding a matter  { + in
which the party or person has participated and that is a
matter + } other than a matter concerning a claim under this
chapter may request a hearing on the matter in writing to the
director. The director shall refer the request for hearing to the
Workers' Compensation Board for a hearing before an
Administrative Law Judge. Review of an order issued by the
Administrative Law Judge shall be by the director and the
director shall issue a final order that is subject to judicial
review as provided by ORS 183.480 to 183.497.
  (b) The director shall prescribe the classes of orders issued
under this subsection by Administrative Law Judges and other
personnel that are final, appealable orders and those orders that
are preliminary orders subject to revision by the director.
   { +  (3) If a process for review of a matter other than a
matter concerning a claim is not specifically provided for in
this chapter, administrative review of the matter shall rest
exclusively with the director. A party or person must request
administrative review in writing to the director. Review of the
administrative order shall be as provided in subsection (2) of
this section. + }
    { - (3)(a) - }  { +  (4)(a) + } For the purpose of
determining the respective authority of the director and the
board to conduct hearings, investigations and other proceedings
under this chapter, and for determining the procedure for the
conduct and review thereof, matters concerning a claim under this
chapter are those matters in which a worker's right to receive
compensation, or the amount thereof, are directly in issue.
However, subject to paragraph (b) of this subsection, such
matters do not include any disputes arising under ORS 656.245,
656.247, 656.248, 656.260 or 656.327, any other provisions
directly relating to the provision of medical services to workers
or any disputes arising under ORS 656.340 except as those
provisions may otherwise provide.
  (b) The respective authority of the board and the director to
resolve medical service disputes shall be determined according to
the following principles:
  (A) Any dispute that requires a determination of the
compensability of the medical condition for which medical
services are proposed is a matter concerning a claim.
  (B) Any dispute that requires 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), is not a matter concerning a
claim.
  (C) Any dispute that requires a determination of whether a
sufficient causal relationship exists between medical services
and an accepted claim to establish compensability is a matter
concerning a claim.
  (c) Notwithstanding ORS 656.283 (3), if parties to a hearing
scheduled before an Administrative Law Judge are involved in a
dispute regarding both matters concerning a claim and matters not
concerning a claim, the Administrative Law Judge may defer any
action on the matter concerning a claim until the director has
completed an administrative review of the matters other than
those concerning a claim. The director shall mail a copy of the
administrative order to the parties and to the Administrative Law
Judge. A party may request a hearing on the order of the
director.  At the request of a party or by the own motion of the
Administrative Law Judge, the hearings on the separate matters
may be consolidated. The Administrative Law Judge shall issue an
order for those matters concerning a claim and a separate order
for matters other than those concerning a claim.
    { - (4) - }  { +  (5) + } Hearings under ORS 656.740 shall be
conducted by an Administrative Law Judge from the board's
Hearings Division.
    { - (5) - }   { + (6) + } If a request for hearing or
administrative review is filed with either the director or the
board and it is determined that the request should have been
filed with the other, the dispute shall be transferred. Filing a
request will be timely filed if the original filing was completed
within the prescribed time.
  SECTION 5. ORS 656.054 is amended to read:
  656.054. (1) A compensable injury to a subject worker while in
the employ of a noncomplying employer is compensable to the same
extent as if the employer had complied with this chapter. The
Director of the Department of Consumer and Business Services
shall refer the claim for such an injury to an assigned claims
agent within 60 days of the date the director has notice of the
claim.  At the time of referral of the claim, the director shall
notify the employer in writing regarding the referral of the
claim and the employer's right to object to the claim. A claim
for compensation made by such a worker shall be processed by the
assigned claims agent in the same manner as a claim made by a
worker employed by a carrier-insured employer, except that the
time within which the first installment of compensation is to be
paid, pursuant to ORS 656.262 (4), shall not begin to run until
the director has referred the claim to the assigned claims agent.
At any time within which the claim may be accepted or denied as
provided in ORS 656.262, the employer may request a hearing to
object to the claim. If an order becomes final holding the claim
to be compensable, the employer is liable for all costs imposed
by this chapter, including reasonable attorney fees to be paid to
the worker's attorney for services rendered in connection with
the employer's objection to the claim.
  (2) In addition to, and not in lieu of, any civil penalties
assessed pursuant to ORS 656.735, all costs to the Workers'
Benefit Fund incurred under subsection (1) of this section shall
be a liability of the noncomplying employer. Such costs include
compensation, disputed claim settlements pursuant to ORS 656.289
and claim disposition agreements pursuant to ORS 656.236, whether
or not the noncomplying employer agrees and executes such
documents, reasonable administrative costs and claims processing
costs provided by contract, attorney fees related to
compensability issues and any attorney fees awarded to the
claimant, but do not include assessments for reserves in the
Workers' Benefit Fund. The director shall recover such costs from
the employer. The director periodically shall pay the assigned
claims agent from the Workers' Benefit Fund for any costs the
assigned claims agent incurs under this section in accordance
with the terms of the contract. When the director prevails in any
action brought pursuant to this subsection, the director is
entitled to recover from the noncomplying employer court costs
and attorney fees incurred by the director.
  (3) Periodically, or upon the request of a noncomplying
employer in a particular claim, the director shall audit the
files of the State Accident Insurance Fund Corporation and any
assigned claims agents to validate the amount reimbursed pursuant
to subsection (2) of this section. The conditions for granting or
denying of reimbursement shall be specified in the contract with
the assigned claims agent. The contract at least shall provide
for denial of reimbursement if, upon such audit, any of the
following are found to apply:
  (a) Compensation has been paid as a result of untimely,
inaccurate, or improper claims processing;
  (b) Compensation has been paid negligently for treatment of any
condition unrelated to the compensable condition;
  (c) The compensability of an accepted claim is questionable and
the rationale for acceptance has not been reasonably documented
in accordance with generally accepted claims management
procedures;
  (d) The separate payments of compensation have not been
documented in accordance with generally accepted accounting
procedures; or
  (e) The payments were made pursuant to a disposition agreement
as provided by ORS 656.236 without the prior approval of the
director.
  (4) The State Accident Insurance Fund Corporation and any
assigned claims agent may request   { - review - }  { +  a
hearing + } under ORS 656.704 of any disapproval of reimbursement
made by the director under this section.
  (5) Claims of injured workers of noncomplying employers may be
assigned and reassigned by the director for claims processing
regardless of the date of the worker's injury.
  (6) In selecting an assigned claims agent, the director must
consider the assigned claims agent's ability to deliver timely
and appropriate benefits to injured workers, the ability to
control both claims cost and administrative cost and such other
factors as the director considers appropriate.
  (7) If no qualified entity agrees to be an assigned claims
agent, the director may require one or more of the three highest
premium producing insurers to be assigned claims agents.
Notwithstanding any other provision of law, the director's
selection of assigned claims agents shall be made at the sole
discretion of the director. Such selections shall not be subject
to review by any court or other administrative body.
  (8) Any assigned claims agent, except the State Accident
Insurance Fund Corporation, may employ legal counsel of its
choice for representation under this section.
  (9) As used in this section, 'assigned claims agent' means an
insurer, casualty adjuster or a third party administrator with
whom the director contracts to manage claims of injured workers
of noncomplying employers.
  SECTION 6. ORS 656.247 is amended to read:
  656.247. (1) Except for medical services provided to workers
subject to ORS 656.245 (4)(b)(B), payment for medical services
provided to a subject worker in response to an initial claim for
a work-related injury or occupational disease from the date of
the employer's notice or knowledge of the claim until the date
the claim is accepted or denied shall be payable in accordance
with subsection (4) of this section if the expenses are for:
  (a) Diagnostic services required to identify appropriate
treatment or to prevent disability;
  (b) Medication required to alleviate pain; or
  (c) Services required to stabilize the worker's claimed
condition and to prevent further disability.
  (2) Notwithstanding subsection (1) of this section, no payment
shall be due from the insurer or self-insured employer if the
insurer or self-insured employer denies the claim within 14 days
of the date of the employer's notice or knowledge of the claim.
  (3)(a) Disputes about whether the medical services provided to
treat the claimed work-related injury or occupational disease
under subsection (1) of this section are excessive, inappropriate
or ineffectual or are consistent with the criteria in subsection
(1) of this section shall be resolved by the Director of the
Department of Consumer and Business Services. The director may
order a medical review by a physician or panel of physicians
pursuant to ORS 656.327 (3) to aid in the review of such
services.  If a party is dissatisfied with the order of the
director, the dissatisfied party may request   { - review - }
 { +  a hearing + } under ORS 656.704 within 60 days of the date
of the director's order. The order of the director may be

modified only if it is not supported by substantial evidence in
the record or if it reflects an error of law.
  (b) Disputes about the amount of the fee or nonpayment of bills
for medical treatment and services pursuant to this section shall
be resolved pursuant to ORS 656.248.
  (c) Except as provided in subsection (2) of this section, when
a claim is settled pursuant to ORS 656.289 (4), all medical
services payable under subsection (1) of this section that are
provided on or before the date of denial shall be paid in
accordance with subsection (4) of this section. The insurer or
self-insured employer shall notify each affected service provider
of the results of the settlement.
  (4)(a) If the claim in which medical services are provided
under subsection (1) of this section is accepted, the insurer or
self-insured employer shall make payment for such medical
services subject to the limitations and conditions of this
chapter.
  (b) If the claim in which medical services are provided under
subsection (1) of this section is denied and a health benefit
plan provides benefits to the worker, the health benefit plan
shall be the first payer of the expenses for medical services
according to the terms, conditions and benefits of the plan.
Except as provided by subsection (2) of this section, after
payment by the health benefit plan, the workers' compensation
insurer or self-insured employer shall pay any balance remaining
for such services subject to the limitations and conditions of
this chapter.
  (c) As used in this subsection, 'health benefit plan' has the
meaning given that term in ORS 743.730.
  (5) An insurer or self-insured employer may recover expenses
for medical services paid under subsection (1) of this section as
an overpayment as provided by ORS 656.268 (13)(a).
  SECTION 7. ORS 656.260 is amended to read:
  656.260. (1) Any health care provider or group of medical
service providers may make written application to the Director of
the Department of Consumer and Business Services to become
certified to provide managed care to injured workers for injuries
and diseases compensable under this chapter. However, nothing in
this section authorizes an organization that is formed, owned or
operated by an insurer or employer other than a health care
provider to become certified to provide managed care.
  (2) Each application for certification shall be accompanied by
a reasonable fee prescribed by the director. A certificate is
valid for such period as the director may prescribe unless sooner
revoked or suspended.
  (3) Application for certification shall be made in such form
and manner and shall set forth such information regarding the
proposed plan for providing services as the director may
prescribe. The information shall include, but not be limited to:
  (a) A list of the names of all individuals who will provide
services under the managed care plan, together with appropriate
evidence of compliance with any licensing or certification
requirements for that individual to practice in this state.
  (b) A description of the times, places and manner of providing
services under the plan.
  (c) A description of the times, places and manner of providing
other related optional services the applicants wish to provide.
  (d) Satisfactory evidence of ability to comply with any
financial requirements to insure delivery of service in
accordance with the plan which the director may prescribe.
  (4) The director shall certify a health care provider or group
of medical service providers to provide managed care under a plan
if the director finds that the plan:
  (a) Proposes to provide medical and health care services
required by this chapter in a manner that:

  (A) Meets quality, continuity and other treatment standards
adopted by the health care provider or group of medical service
providers in accordance with processes approved by the director;
and
  (B) Is timely, effective and convenient for the worker.
  (b) Subject to any other provision of law, does not
discriminate against or exclude from participation in the plan
any category of medical service providers and includes an
adequate number of each category of medical service providers to
give workers adequate flexibility to choose medical service
providers from among those individuals who provide services under
the plan.  However, nothing in the requirements of this paragraph
shall affect the provisions of ORS 441.055 relating to the
granting of medical staff privileges.
  (c) Provides appropriate financial incentives to reduce service
costs and utilization without sacrificing the quality of service.
  (d) Provides adequate methods of peer review, service
utilization review, quality assurance, contract review and
dispute resolution to ensure appropriate treatment or to prevent
inappropriate or excessive treatment, to exclude from
participation in the plan those individuals who violate these
treatment standards and to provide for the resolution of such
medical disputes as the director considers appropriate. A
majority of the members of each peer review, quality assurance,
service utilization and contract review committee shall be
physicians licensed to practice medicine by the Oregon Medical
Board. As used in this paragraph:
  (A) 'Peer review' means evaluation or review of the performance
of colleagues by a panel with similar types and degrees of
expertise. Peer review requires participation of at least three
physicians prior to final determination.
  (B) 'Service utilization review' means evaluation and
determination of the reasonableness, necessity and
appropriateness of a worker's use of medical care resources and
the provision of any needed assistance to clinician or member, or
both, to ensure appropriate use of resources. 'Service
utilization review ' includes prior authorization, concurrent
review, retrospective review, discharge planning and case
management activities.
  (C) 'Quality assurance' means activities to safeguard or
improve the quality of medical care by assessing the quality of
care or service and taking action to improve it.
  (D) 'Dispute resolution' includes the resolution of disputes
arising under peer review, service utilization review and quality
assurance activities between insurers, self-insured employers,
workers and medical and health care service providers, as
required under the certified plan.
  (E) 'Contract review' means the methods and processes whereby
the managed care organization monitors and enforces its contracts
with participating providers for matters other than matters
enumerated in subparagraphs (A), (B) and (C) of this paragraph.
  (e) Provides a program involving cooperative efforts by the
workers, the employer and the managed care organizations to
promote workplace health and safety consultative and other
services and early return to work for injured workers.
  (f) Provides a timely and accurate method of reporting to the
director necessary information regarding medical and health care
service cost and utilization to enable the director to determine
the effectiveness of the plan.
  (g) Authorizes workers to receive compensable medical treatment
from a primary care physician who is not a member of the managed
care organization, but who maintains the worker's medical records
and with whom the worker has a documented history of treatment,
if that primary care physician agrees to refer the worker to the
managed care organization for any specialized treatment,
including physical therapy, to be furnished by another provider
that the worker may require and if that primary care physician
agrees to comply with all the rules, terms and conditions
regarding services performed by the managed care organization.
Nothing in this paragraph is intended to limit the worker's right
to change primary care physicians prior to the filing of a
workers' compensation claim. As used in this paragraph, 'primary
care physician' means a physician who is qualified to be an
attending physician referred to in ORS 656.005 (12)(b)(A) and who
is a family practitioner, a general practitioner or an internal
medicine practitioner.
  (h) Provides a written explanation for denial of participation
in the managed care organization plan to any licensed health care
provider that has been denied participation in the managed care
organization plan.
  (i) Does not prohibit the injured worker's attending physician
from advocating for medical services and temporary disability
benefits for the injured worker that are supported by the medical
record.
  (j) Complies with any other requirement the director determines
is necessary to provide quality medical services and health care
to injured workers.
  (5) The director shall refuse to certify or may revoke or
suspend the certification of any health care provider or group of
medical service providers to provide managed care if the director
finds that:
  (a) The plan for providing medical or health care services
fails to meet the requirements of this section.
  (b) Service under the plan is not being provided in accordance
with the terms of a certified plan.
  (6) Any issue concerning the provision of medical services to
injured workers subject to a managed care contract and service
utilization review, quality assurance, dispute resolution,
contract review and peer review activities as well as
authorization of medical services to be provided by other than an
attending physician pursuant to ORS 656.245 (2)(b) shall be
subject to review by the director or the director's designated
representatives. The decision of the director is subject to
review under ORS 656.704. Data generated by or received in
connection with these activities, including written reports,
notes or records of any such activities, or of any review
thereof, shall be confidential, and shall not be disclosed except
as considered necessary by the director in the administration of
this chapter.  The director may report professional misconduct to
an appropriate licensing board.
  (7) No data generated by service utilization review, quality
assurance, dispute resolution or peer review activities and no
physician profiles or data used to create physician profiles
pursuant to this section or a review thereof shall be used in any
action, suit or proceeding except to the extent considered
necessary by the director in the administration of this chapter.
The confidentiality provisions of this section shall not apply in
any action, suit or proceeding arising out of or related to a
contract between a managed care organization and a health care
provider whose confidentiality is protected by this section.
  (8) A person participating in service utilization review,
quality assurance, dispute resolution or peer review activities
pursuant to this section shall not be examined as to any
communication made in the course of such activities or the
findings thereof, nor shall any person be subject to an action
for civil damages for affirmative actions taken or statements
made in good faith.
  (9) No person who participates in forming consortiums,
collectively negotiating fees or otherwise solicits or enters
into contracts in a good faith effort to provide medical or
health care services according to the provisions of this section
shall be examined or subject to administrative or civil liability
regarding any such participation except pursuant to the
director's active supervision of such activities and the managed
care organization.  Before engaging in such activities, the
person shall provide notice of intent to the director in a form
prescribed by the director.
  (10) The provisions of this section shall not affect the
confidentiality or admission in evidence of a claimant's medical
treatment records.
  (11) In consultation with the committees referred to in ORS
656.790 and 656.794, the director shall adopt such rules as may
be necessary to carry out the provisions of this section.
  (12) As used in this section, ORS 656.245, 656.248 and 656.327,
'medical service provider' means a person duly licensed to
practice one or more of the healing arts in any country or in any
state or territory or possession of the United States.
  (13) Notwithstanding ORS 656.005 (12) or subsection (4)(b) of
this section, a managed care organization contract may designate
any medical service provider or category of providers as
attending physicians.
  (14) If a worker, insurer, self-insured employer or the
attending physician is dissatisfied with an action of the managed
care organization regarding the provision of medical services
pursuant to this chapter, peer review, service utilization review
or quality assurance activities, that person or entity must first
apply to the director for administrative review of the matter
before requesting a hearing. Such application must be made not
later than the 60th day after the date the managed care
organization has completed and issued its final decision.
  (15) Upon a request for administrative review, the director
shall create a documentary record sufficient for judicial review.
The director shall complete administrative review and issue a
proposed order within a reasonable time. The proposed order of
the director issued pursuant to this section shall become final
and not subject to further review unless a written request for a
hearing is filed with the director within 30 days of the mailing
of the order to all parties.
  (16) At the contested case hearing, the order may be modified
only if it is not supported by substantial evidence in the record
or reflects an error of law. No new medical evidence or issues
shall be admitted. The dispute may also be remanded to the
managed care organization for further evidence taking, correction
or other necessary action if the Administrative Law Judge or
director determines the record has been improperly, incompletely
or otherwise insufficiently developed. Decisions by the director
regarding medical disputes are subject to review under ORS
656.704.
  (17) Any person who is dissatisfied with an action of a managed
care organization other than regarding the provision of medical
services pursuant to this chapter, peer review, service
utilization review or quality assurance activities may request
 { +  administrative + } review under ORS 656.704.
  (18) Notwithstanding any other provision of law, original
jurisdiction over contract review disputes is with the director.
The director may resolve the matter by issuing an order subject
to review under ORS 656.704, or the director may determine that
the matter in dispute would be best addressed in another forum
and so inform the parties.
  (19) The director shall conduct such investigations, audits and
other administrative oversight in regard to managed care as the
director deems necessary to carry out the purposes of this
chapter.
  SECTION 8. ORS 656.262 is amended to read:
  656.262. (1) Processing of claims and providing compensation
for a worker shall be the responsibility of the insurer or
self-insured employer. All employers shall assist their insurers
in processing claims as required in this chapter.
  (2) The compensation due under this chapter shall be paid
periodically, promptly and directly to the person entitled
thereto upon the employer's receiving notice or knowledge of a
claim, except where the right to compensation is denied by the
insurer or self-insured employer.
  (3)(a) Employers shall, immediately and not later than five
days after notice or knowledge of any claims or accidents which
may result in a compensable injury claim, report the same to
their insurer. The report shall include:
  (A) The date, time, cause and nature of the accident and
injuries.
  (B) Whether the accident arose out of and in the course of
employment.
  (C) Whether the employer recommends or opposes acceptance of
the claim, and the reasons therefor.
  (D) The name and address of any health insurance provider for
the injured worker.
  (E) Any other details the insurer may require.
  (b) Failure to so report subjects the offending employer to a
charge for reimbursing the insurer for any penalty the insurer is
required to pay under subsection (11) of this section because of
such failure. As used in this subsection, 'health insurance' has
the meaning for that term provided in ORS 731.162.
  (4)(a) The first installment of temporary disability
compensation shall be paid no later than the 14th day after the
subject employer has notice or knowledge of the claim, if the
attending physician or nurse practitioner authorized to provide
compensable medical services under ORS 656.245 authorizes the
payment of temporary disability compensation. Thereafter,
temporary disability compensation shall be paid at least once
each two weeks, except where the Director of the Department of
Consumer and Business Services determines that payment in
installments should be made at some other interval. The director
may by rule convert monthly benefit schedules to weekly or other
periodic schedules.
  (b) Notwithstanding any other provision of this chapter, if a
self-insured employer pays to an injured worker who becomes
disabled the same wage at the same pay interval that the worker
received at the time of injury, such payment shall be deemed
timely payment of temporary disability payments pursuant to ORS
656.210 and 656.212 during the time the wage payments are made.
  (c) Notwithstanding any other provision of this chapter, when
the holder of a public office is injured in the course and scope
of that public office, full official salary paid to the holder of
that public office shall be deemed timely payment of temporary
disability payments pursuant to ORS 656.210 and 656.212 during
the time the wage payments are made. As used in this subsection,
' public office' has the meaning for that term provided in ORS
260.005.
  (d) Temporary disability compensation is not due and payable
for any period of time for which the insurer or self-insured
employer has requested from the worker's attending physician or
nurse practitioner authorized to provide compensable medical
services under ORS 656.245 verification of the worker's inability
to work resulting from the claimed injury or disease and the
physician or nurse practitioner cannot verify the worker's
inability to work, unless the worker has been unable to receive
treatment for reasons beyond the worker's control.
  (e) If a worker fails to appear at an appointment with the
worker's attending physician or nurse practitioner authorized to
provide compensable medical services under ORS 656.245, the
insurer or self-insured employer shall notify the worker by
certified mail that temporary disability benefits may be
suspended after the worker fails to appear at a rescheduled
appointment. If the worker fails to appear at a rescheduled
appointment, the insurer or self-insured employer may suspend
payment of temporary disability benefits to the worker until the
worker appears at a subsequent rescheduled appointment.
  (f) If the insurer or self-insured employer has requested and
failed to receive from the worker's attending physician or nurse
practitioner authorized to provide compensable medical services
under ORS 656.245 verification of the worker's inability to work
resulting from the claimed injury or disease, medical services
provided by the attending physician or nurse practitioner are not
compensable until the attending physician or nurse practitioner
submits such verification.
  (g) Temporary disability compensation is not due and payable
pursuant to ORS 656.268 after the worker's attending physician or
nurse practitioner authorized to provide compensable medical
services under ORS 656.245 ceases to authorize temporary
disability or for any period of time not authorized by the
attending physician or nurse practitioner. No authorization of
temporary disability compensation by the attending physician or
nurse practitioner under ORS 656.268 shall be effective to
retroactively authorize the payment of temporary disability more
than 14 days prior to its issuance.
  (h) The worker's disability may be authorized only by a person
described in ORS 656.005 (12)(b)(B) or 656.245 for the period of
time permitted by those sections. The insurer or self-insured
employer may unilaterally suspend payment of temporary disability
benefits to the worker at the expiration of the period until
temporary disability is reauthorized by an attending physician or
nurse practitioner authorized to provide compensable medical
services under ORS 656.245.
  (i) The insurer or self-insured employer may unilaterally
suspend payment of all compensation to a worker enrolled in a
managed care organization if the worker continues to seek care
from an attending physician or nurse practitioner authorized to
provide compensable medical services under ORS 656.245 that is
not authorized by the managed care organization more than seven
days after the mailing of notice by the insurer or self-insured
employer.
  (5)(a) Payment of compensation under subsection (4) of this
section or payment, in amounts per claim not to exceed the
maximum amount established annually by the Director of the
Department of Consumer and Business Services, for medical
services for nondisabling claims, may be made by the subject
employer if the employer so chooses. The making of such payments
does not constitute a waiver or transfer of the insurer's duty to
determine entitlement to benefits. If the employer chooses to
make such payment, the employer shall report the injury to the
insurer in the same manner that other injuries are reported.
However, an insurer shall not modify an employer's experience
rating or otherwise make charges against the employer for any
medical expenses paid by the employer pursuant to this
subsection.
  (b) To establish the maximum amount an employer may pay for
medical services for nondisabling claims under paragraph (a) of
this subsection, the director shall use $1,500 as the base
compensation amount and shall adjust the base compensation amount
annually to reflect changes in the United States City Average
Consumer Price Index for All Urban Consumers for Medical Care for
July of each year as published by the Bureau of Labor Statistics
of the United States Department of Labor. The adjustment shall be
rounded to the nearest multiple of $100.
  (c) The adjusted amount established under paragraph (b) of this
subsection shall be effective on January 1 following the
establishment of the amount and shall apply to claims with a date
of injury on or after the effective date of the adjusted amount.
  (6)(a) Written notice of acceptance or denial of the claim
shall be furnished to the claimant by the insurer or self-insured
employer within 60 days after the employer has notice or
knowledge of the claim. Once the claim is accepted, the insurer
or self-insured employer shall not revoke acceptance except as
provided in this section. The insurer or self-insured employer
may revoke acceptance and issue a denial at any time when the
denial is for fraud, misrepresentation or other illegal activity
by the worker. If the worker requests a hearing on any revocation
of acceptance and denial alleging fraud, misrepresentation or
other illegal activity, the insurer or self-insured employer has
the burden of proving, by a preponderance of the evidence, such
fraud, misrepresentation or other illegal activity. Upon such
proof, the worker then has the burden of proving, by a
preponderance of the evidence, the compensability of the claim.
If the insurer or self-insured employer accepts a claim in good
faith, in a case not involving fraud, misrepresentation or other
illegal activity by the worker, and later obtains evidence that
the claim is not compensable or evidence that the insurer or
self-insured employer is not responsible for the claim, the
insurer or self-insured employer may revoke the claim acceptance
and issue a formal notice of claim denial, if such revocation of
acceptance and denial is issued no later than two years after the
date of the initial acceptance. If the worker requests a hearing
on such revocation of acceptance and denial, the insurer or
self-insured employer must prove, by a preponderance of the
evidence, that the claim is not compensable or that the insurer
or self-insured employer is not responsible for the claim.
Notwithstanding any other provision of this chapter, if a denial
of a previously accepted claim is set aside by an Administrative
Law Judge, the Workers' Compensation Board or the court,
temporary total disability benefits are payable from the date any
such benefits were terminated under the denial. Except as
provided in ORS 656.247, pending acceptance or denial of a claim,
compensation payable to a claimant does not include the costs of
medical benefits or funeral expenses. The insurer shall also
furnish the employer a copy of the notice of acceptance.
  (b) The notice of acceptance shall:
  (A) Specify what conditions are compensable.
  (B) Advise the claimant whether the claim is considered
disabling or nondisabling.
  (C) Inform the claimant of the Expedited Claim Service and of
the hearing and aggravation rights concerning nondisabling
injuries, including the right to object to a decision that the
injury of the claimant is nondisabling by requesting
reclassification pursuant to ORS 656.277.
  (D) Inform the claimant of employment reinstatement rights and
responsibilities under ORS chapter 659A.
  (E) Inform the claimant of assistance available to employers
and workers from the Reemployment Assistance Program under ORS
656.622.
  (F) Be modified by the insurer or self-insured employer from
time to time as medical or other information changes a previously
issued notice of acceptance.
  (c) An insurer's or self-insured employer's acceptance of a
combined or consequential condition under ORS 656.005 (7),
whether voluntary or as a result of a judgment or order, shall
not preclude the insurer or self-insured employer from later
denying the combined or consequential condition if the otherwise
compensable injury ceases to be the major contributing cause of
the combined or consequential condition.
  (d) An injured worker who believes that a condition has been
incorrectly omitted from a notice of acceptance, or that the
notice is otherwise deficient, first must communicate in writing
to the insurer or self-insured employer the worker's objections
to the notice pursuant to ORS 656.267. The insurer or
self-insured employer has 60 days from receipt of the
communication from the worker to revise the notice or to make
other written clarification in response. A worker who fails to
comply with the communication requirements of this paragraph or
ORS 656.267 may not allege at any hearing or other proceeding on
the claim a de facto denial of a condition based on information
in the notice of acceptance from the insurer or self-insured
employer. Notwithstanding any other provision of this chapter,
the worker may initiate objection to the notice of acceptance at
any time.
  (7)(a) After claim acceptance, written notice of acceptance or
denial of claims for aggravation or new medical or omitted
condition claims properly initiated pursuant to ORS 656.267 shall
be furnished to the claimant by the insurer or self-insured
employer within 60 days after the insurer or self-insured
employer receives written notice of such claims. A worker who
fails to comply with the communication requirements of subsection
(6) of this section or ORS 656.267 may not allege at any hearing
or other proceeding on the claim a de facto denial of a condition
based on information in the notice of acceptance from the insurer
or self-insured employer.
  (b) Once a worker's claim has been accepted, the insurer or
self-insured employer must issue a written denial to the worker
when the accepted injury is no longer the major contributing
cause of the worker's combined condition before the claim may be
closed.
  (c) When an insurer or self-insured employer determines that
the claim qualifies for claim closure, the insurer or
self-insured employer shall issue at claim closure an updated
notice of acceptance that specifies which conditions are
compensable. The procedures specified in subsection (6)(d) of
this section apply to this notice. Any objection to the updated
notice or appeal of denied conditions shall not delay claim
closure pursuant to ORS 656.268. If a condition is found
compensable after claim closure, the insurer or self-insured
employer shall reopen the claim for processing regarding that
condition.
  (8) The assigned claims agent in processing claims under ORS
656.054 shall send notice of acceptance or denial to the
noncomplying employer.
  (9) If an insurer or any other duly authorized agent of the
employer for such purpose, on record with the Director of the
Department of Consumer and Business Services denies a claim for
compensation, written notice of such denial, stating the reason
for the denial, and informing the worker of the Expedited Claim
Service and of hearing rights under ORS 656.283, shall be given
to the claimant. A copy of the notice of denial shall be mailed
to the director and to the employer by the insurer. The worker
may request a hearing pursuant to ORS 656.319.
  (10) Merely paying or providing compensation shall not be
considered acceptance of a claim or an admission of liability,
nor shall mere acceptance of such compensation be considered a
waiver of the right to question the amount thereof. Payment of
permanent disability benefits pursuant to a notice of closure,
reconsideration order or litigation order, or the failure to
appeal or seek review of such an order or notice of closure,
shall not preclude an insurer or self-insured employer from
subsequently contesting the compensability of the condition rated
therein, unless the condition has been formally accepted.
  (11)(a) If the insurer or self-insured employer unreasonably
delays or unreasonably refuses to pay compensation, or
unreasonably delays acceptance or denial of a claim, the insurer
or self-insured employer shall be liable for an additional amount
up to 25 percent of the amounts then due plus any attorney fees
assessed under this section. The fees assessed by the director,
an Administrative Law Judge, the board or the court under this
section shall be proportionate to the benefit to the injured
worker. The board shall adopt rules for establishing the amount
of the attorney fee, giving primary consideration to the results
achieved and to the time devoted to the case. An attorney fee
awarded pursuant to this subsection may not exceed $3,000 absent
a showing of extraordinary circumstances. The maximum attorney
fee awarded under this paragraph shall be adjusted annually on
July 1 by the same percentage increase as made to the average
weekly wage defined in ORS 656.211, if any. Notwithstanding any
other provision of this chapter, the director shall have
exclusive jurisdiction over proceedings regarding solely the
assessment and payment of the additional amount and attorney fees
described in this subsection. The action of the director
 { - and the review of the action taken by the director - }
shall be subject to review under ORS 656.704.
  (b) When the director does not have exclusive jurisdiction over
proceedings regarding the assessment and payment of the
additional amount and attorney fees described in this subsection,
the provisions of this subsection shall apply in the other
proceeding.
  (12)(a) If payment is due on a disputed claim settlement
authorized by ORS 656.289 and the insurer or self-insured
employer has failed to make the payment in accordance with the
requirements specified in the disputed claim settlement, the
claimant or the claimant's attorney shall clearly notify the
insurer or self-insured employer in writing that the payment is
past due. If the required payment is not made within five
business days after receipt of the notice by the insurer or
self-insured employer, the director may assess a penalty and
attorney fee in accordance with a matrix adopted by the director
by rule.
  (b) The director shall adopt by rule a matrix for the
assessment of the penalties and attorney fees authorized under
this subsection. The matrix shall provide for penalties based on
a percentage of the settlement proceeds allocated to the claimant
and for attorney fees based on a percentage of the settlement
proceeds allocated to the claimant's attorney as an attorney fee.
  (13) The insurer may authorize an employer to pay compensation
to injured workers and shall reimburse employers for compensation
so paid.
  (14) Injured workers have the duty to cooperate and assist the
insurer or self-insured employer in the investigation of claims
for compensation. Injured workers shall submit to and shall fully
cooperate with personal and telephonic interviews and other
formal or informal information gathering techniques. Injured
workers who are represented by an attorney shall have the right
to have the attorney present during any personal or telephonic
interview or deposition. However, if the attorney is not willing
or available to participate in an interview at a time reasonably
chosen by the insurer or self-insured employer within 14 days of
the request for interview and the insurer or self-insured
employer has cause to believe that the attorney's unwillingness
or unavailability is unreasonable and is preventing the worker
from complying within 14 days of the request for interview, the
insurer or self-insured employer shall notify the director. If
the director determines that the attorney's unwillingness or
unavailability is unreasonable, the director shall assess a civil
penalty against the attorney of not more than $1,000.
  (15) If the director finds that a worker fails to reasonably
cooperate with an investigation involving an initial claim to
establish a compensable injury or an aggravation claim to reopen
the claim for a worsened condition, the director shall suspend
all or part of the payment of compensation after notice to the
worker.  If the worker does not cooperate for an additional 30
days after the notice, the insurer or self-insured employer may
deny the claim because of the worker's failure to cooperate. The
obligation of the insurer or self-insured employer to accept or
deny the claim within 60 days is suspended during the time of the
worker's noncooperation. After such a denial, the worker shall
not be granted a hearing or other proceeding under this chapter
on the merits of the claim unless the worker first requests and
establishes at an expedited hearing under ORS 656.291 that the
worker fully and completely cooperated with the investigation,
that the worker failed to cooperate for reasons beyond the
worker's control or that the investigative demands were
unreasonable. If the Administrative Law Judge finds that the
worker has not fully cooperated, the Administrative Law Judge
shall affirm the denial, and the worker's claim for injury shall
remain denied. If the Administrative Law Judge finds that the
worker has cooperated, or that the investigative demands were
unreasonable, the Administrative Law Judge shall set aside the
denial, order the reinstatement of interim compensation if
appropriate and remand the claim to the insurer or self-insured
employer to accept or deny the claim.
  (16) In accordance with ORS 656.283 (3), the Administrative Law
Judge assigned a request for hearing for a claim for compensation
involving more than one potentially responsible employer or
insurer may specify what is required of an injured worker to
reasonably cooperate with the investigation of the claim as
required by subsection (14) of this section.
  SECTION 9. ORS 656.327 is amended to read:
  656.327. (1)(a) If an injured worker, an insurer or
self-insured employer or the Director of the Department of
Consumer and Business Services believes that the medical
treatment, not subject to ORS 656.260, that the injured worker
has received, is receiving, will receive or is proposed to
receive is excessive, inappropriate, ineffectual or in violation
of rules regarding the performance of medical services, the
injured worker, insurer or self-insured employer must request
administrative review of the treatment by the director prior to
requesting a hearing on the issue and so notify the parties.
  (b) Unless the director issues an order finding that no bona
fide medical services dispute exists, the director shall review
the matter as provided in this section. Appeal of an order
finding that no bona fide medical services dispute exists shall
be made directly to the Workers' Compensation Board within 30
days after issuance of the order. The board shall set aside or
remand the order only if the board finds that the order is not
supported by substantial evidence in the record. Substantial
evidence exists to support a finding in the order when the
record, reviewed as a whole, would permit a reasonable person to
make that finding. The decision of the board is not subject to
review by any other court or administrative agency.
  (c) The insurer or self-insured employer shall not deny the
claim for medical services nor shall the worker request a hearing
on any issue under this section until the director issues an
order under subsection (2) of this section.
  (2) The director shall review medical information and records
regarding the treatment. The director may cause an appropriate
medical service provider to perform reasonable and appropriate
tests, other than invasive tests, upon the worker and may examine
the worker. Notwithstanding ORS 656.325 (1), the worker may
refuse a test without sanction. Review of the medical treatment
shall be completed and the director shall issue an order within
60 days of the request for review. The director shall create a
documentary record sufficient for purposes of judicial review. If
the worker, insurer, self-insured employer or medical service
provider is dissatisfied with that order, the dissatisfied party
may request
  { - review - }   { + a hearing + } under ORS 656.704. The
administrative order may be modified at hearing only if it is not
supported by substantial evidence in the record or if it reflects
an error of law. No new medical evidence or issues shall be
admitted. The worker is not obligated to pay for medical
treatment determined not to be compensable under this subsection.
  (3) Upon request of either party, the director may delegate to
a physician or a panel of physicians the review of medical
treatment under this section. At least one member of any such
panel shall be a practitioner of the healing art of the medical
service provider whose treatment is being reviewed. No member of
any such panel shall be a physician whose treatment is the
subject of review. The panel shall be chosen in such manner as
the director may prescribe, in consultation with the committee
referred to in ORS 656.790. The physician or panel shall submit
findings to the director within the time limits as prescribed by
the director.
  (4) The physician or the panel of physicians and the medical
arbiter or panel of medical arbiters appointed pursuant to ORS
656.268 acting pursuant to the authority of the director are
agents of the Department of Consumer and Business Services and
are subject to the provisions of ORS 30.260 to 30.300. The
findings of the physician or panel of physicians, the medical
arbiter or panel of medical arbiters, all of the records and all
communications to or before a panel or arbiter are privileged and
are not discoverable or admissible in any proceeding other than
those proceedings under this chapter. No member of a panel or a
medical arbiter shall be examined or subject to administrative or
civil liability regarding participation in or the findings of the
panel or medical arbiter or any matter before the panel or
medical arbiter other than in proceedings under this chapter.
  (5) The costs of review of medical treatment by the physician
or panel of physicians pursuant to this section and costs
incurred by the worker in attending any examination required
under this section, including child care, transportation, lodging
and meals, shall be paid by the insurer or self-insured employer.
  SECTION 10. ORS 656.340 is amended to read:
  656.340. (1)(a) The insurer or self-insured employer shall
cause vocational assistance to be provided to an injured worker
who is eligible for assistance in returning to work.
  (b) For this purpose the insurer or self-insured employer shall
contact a worker with a claim for a disabling compensable injury
or claim for aggravation for evaluation of the worker's
eligibility for vocational assistance within five days of:
  (A) Having knowledge of the worker's likely eligibility for
vocational assistance, from a medical or investigation report,
notification from the worker, or otherwise; or
  (B) The time the worker is medically stationary, if the worker
has not returned to or been released for the worker's regular
employment or has not returned to other suitable employment with
the employer at the time of injury or aggravation and the worker
is not receiving vocational assistance.
  (c) Eligibility may be redetermined by the insurer or
self-insured employer upon receipt of new information that would
change the eligibility determination.
  (2) Contact under subsection (1) of this section shall include
informing the worker about reemployment rights, the
responsibility of the worker to request reemployment, and wage
subsidy and job site modification assistance and the provisions
of the preferred worker program pursuant to rules adopted by the
Director of the Department of Consumer and Business Services.
  (3) Within five days after notification that the attending
physician or nurse practitioner authorized to provide compensable
medical services under ORS 656.245 has released a worker to
return to work, the insurer or self-insured employer shall inform
the worker about the opportunity to seek reemployment or
reinstatement under ORS 659A.043 and 659A.046. The insurer shall
inform the employer of the worker's reemployment rights, wage
subsidy and the job site modification assistance and the
provisions of the preferred worker program.
  (4) As soon as possible, and not more than 30 days after the
contact required by subsection (1) of this section, the insurer
or self-insured employer shall cause an individual certified by
the director to provide vocational assistance to determine
whether the worker is eligible for vocational assistance. The
insurer or self-insured employer shall notify the worker of the
decision regarding the worker's eligibility for vocational
assistance. If the insurer or self-insured employer decides that
the worker is not eligible, the worker may apply to the director
for review of the decision as provided in subsection (16) of this
section. A worker determined ineligible upon evaluation under
subsection (1)(b)(B) of this section, or because the worker's
eligibility has fully and finally expired under standards
prescribed by the director, may not be found eligible thereafter
unless that eligibility determination is rejected by the director
under subsection (16) of this section or the worker's condition
worsens so as to constitute an aggravation claim under ORS
656.273. A worker is not entitled to vocational assistance
benefits when possible eligibility for such benefits arises from
a worsening of the worker's condition that occurs after the
expiration of the worker's aggravation rights under ORS 656.273.
  (5) The objectives of vocational assistance are to return the
worker to employment which is as close as possible to the
worker's regular employment at a wage as close as possible to the
weekly wage currently being paid for employment which was the
worker's regular employment even though the wage available
following employment may be less than the wage prescribed by
subsection (6) of this section. As used in this subsection and
subsection (6) of this section, 'regular employment' means the
employment the worker held at the time of the injury or the claim
for aggravation under ORS 656.273, whichever gave rise to the
potential eligibility for vocational assistance; or, for a worker
not employed at the time of the aggravation, the employment the
worker held on the last day of work prior to the aggravation.
  (6)(a) A worker is eligible for vocational assistance if the
worker will not be able to return to the previous employment or
to any other available and suitable employment with the employer
at the time of injury or aggravation, and the worker has a
substantial handicap to employment.
  (b) As used in this subsection:
  (A) A 'substantial handicap to employment' exists when the
worker, because of the injury or aggravation, lacks the necessary
physical capacities, knowledge, skills and abilities to be
employed in suitable employment.
  (B) 'Suitable employment' means:
  (i) Employment of the kind for which the worker has the
necessary physical capacity, knowledge, skills and abilities;
  (ii) Employment that is located where the worker customarily
worked or is within reasonable commuting distance of the worker's
residence; and
  (iii) Employment that produces a weekly wage within 20 percent
of that currently being paid for employment that was the worker's
regular employment as defined in subsection (5) of this section.
The director shall adopt rules providing methods of calculating
the weekly wage currently being paid for the worker's regular
employment for use in determining eligibility and for providing
assistance to eligible workers. If the worker's regular
employment was seasonal or temporary, the worker's wage shall be
averaged based on a combination of the worker's earned income and
any unemployment insurance payments. Only earned income evidenced
by verifiable documentation such as federal or state tax returns
shall be used in the calculation. Earned income does not include
fringe benefits or reimbursement of the worker's employment
expenses.
  (7) Vocational evaluation, help in directly obtaining
employment and training shall be available under conditions
prescribed by the director. The director may establish other
conditions for providing vocational assistance, including those
relating to the worker's availability for assistance,
participation in previous assistance programs connected with the
same claim and the nature and extent of assistance that may be
provided. Such conditions shall give preference to direct
employment assistance over training.
  (8) An insurer or self-insured employer may utilize its own
staff or may engage any other individual certified by the
director to perform the vocational evaluation required by
subsection (4) of this section.
  (9) The director shall adopt rules providing:
  (a) Standards for and methods of certifying individuals
qualified by education, training and experience to provide
vocational assistance to injured workers;
  (b) Standards for registration of vocational assistance
providers;
  (c) Conditions and procedures under which the certification of
an individual to provide vocational assistance services or the
registration of a vocational assistance provider may be suspended
or revoked for failure to maintain compliance with the
certification or registration standards;
  (d) Standards for the nature and extent of services a worker
may receive, for plans for return to work and for determining
when the worker has returned to work; and
  (e) Procedures, schedules and conditions relating to the
payment for services performed by a vocational assistance
provider, that are based on payment for specific services
performed and not fees for services performed on an hourly basis.
Fee schedules shall reflect a reasonable rate for direct worker
purchases and for all vocational assistance providers and shall
be the same within suitable geographic areas.
  (10) Insurers and self-insured employers shall maintain records
and make reports to the director of vocational assistance actions
at times and in the manner as the director may prescribe.  The
requirements prescribed shall be for the purpose of assisting the
Department of Consumer and Business Services in monitoring
compliance with this section to insure that workers receive
timely and appropriate vocational assistance. The director shall
minimize to the greatest extent possible the number, extent and
kinds of reports required. The director shall compile a list of
organizations or agencies registered to provide vocational
assistance. A current list shall be distributed by the director
to all insurers and self-insured employers. The insurer shall
send the list to each worker with the notice of eligibility.
  (11) When a worker is eligible to receive vocational
assistance, the worker and the insurer or self-insured employer
shall attempt to agree on the choice of a vocational assistance
provider. If the worker agrees, the insurer or self-insured
employer may utilize its own staff to provide vocational
assistance. If they are unable to agree on a vocational
assistance provider, the insurer or self-insured employer shall
notify the director and the director shall select a provider. Any
change in the choice of vocational assistance provider is subject
to the approval of the director.
  (12) Notwithstanding ORS 656.268, a worker actively engaged in
training may receive temporary disability compensation for a
maximum of 16 months. The insurer or self-insured employer may
voluntarily extend the payment of temporary disability
compensation to a maximum of 21 months. { +  The director may
order the payment of temporary disability compensation for up to
21 months upon good cause shown by the injured worker. + } The
costs related to vocational assistance training programs may be
paid for periods longer than 21 months, but in no event may
temporary disability benefits be paid for a period longer than 21
months.

  (13) As used in this section, 'vocational assistance provider'
means a public or private organization or agency that provides
vocational assistance to injured workers.
  (14)(a) Determination of eligibility for vocational assistance
does not entitle all workers to the same type or extent of
assistance.
  (b) Training shall not be provided to an eligible worker solely
because the worker cannot obtain employment, otherwise suitable,
that will produce the wage prescribed in subsection (6) of this
section unless such training will enable the worker to find
employment which will produce a wage significantly closer to that
prescribed in subsection (6) of this section.
  (c) Nothing in this section shall be interpreted to expand the
availability of training under this section.
  (15) A physical capacities evaluation shall be performed in
conjunction with vocational assistance or determination of
eligibility for such assistance at the request of the insurer or
self-insured employer or worker. The request shall be made to the
attending physician or nurse practitioner authorized to provide
compensable medical services under ORS 656.245. The attending
physician or nurse practitioner, within 20 days of the request,
shall perform a physical capacities evaluation or refer the
worker for such evaluation or advise the insurer or self-insured
employer and the worker in writing that the injured worker is
incapable of participating in a physical capacities evaluation.
  (16)(a) The Legislative Assembly finds that vocational
rehabilitation of injured workers requires a high degree of
cooperation between all of the participants in the vocational
assistance process. Based on this finding, the Legislative
Assembly concludes that disputes regarding eligibility for and
extent of vocational assistance services should be resolved
through nonadversarial procedures to the greatest extent possible
consistent with constitutional principles. The director shall
adopt by rule a procedure for resolving vocational assistance
disputes in the manner provided in this subsection.
  (b) If a worker is dissatisfied with an action of the insurer
or self-insured employer regarding vocational assistance, the
worker must apply to the director for administrative review of
the matter. Application for review must be made not later than
the 60th day after the date the worker was notified of the
action. The director shall complete the review within a
reasonable time.
  (c) If the worker's dissatisfaction is resolved by agreement of
the parties, the agreement shall be reduced to writing, and the
director and the parties shall review the agreement and either
approve or disapprove it. The agreement is subject to
reconsideration by the director under limitations prescribed by
the director, but is not subject to review by any other forum.
  (d) If the worker's dissatisfaction is not resolved by
agreement of the parties, the director shall resolve the matter
in a written order based on a record sufficient to permit review.
The order is subject to review under ORS 656.704. The request for
a hearing must be filed within 60 days of the date the order was
issued. At the hearing, the order of the director shall be
modified only if it:
  (A) Violates a statute or rule;
  (B) Exceeds the statutory authority of the agency;
  (C) Was made upon unlawful procedure; or
  (D) Was characterized by abuse of discretion or clearly
unwarranted exercise of discretion.
  (e) For purposes of this subsection, the term 'parties ' does
not include a noncomplying employer.
  SECTION 11.  { + (1) The amendments to ORS 656.340 by section
10 of this 2011 Act apply to all claims by workers who are
eligible for or actively engaged in vocational training on or
after the effective date of this 2011 Act.
  (2)(a) The amendments to ORS 656.704 by section 4 of this 2011
Act apply to causes of actions existing or arising on or after
the effective date of this 2011 Act.
  (b) Notwithstanding paragraph (a) of this subsection, the
amendments to ORS 656.704 by section 4 of this 2011 Act do not
apply to any matter for which an order has become final prior to
the effective date of this 2011 Act. + }
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