Let’s Talk Overpayments…(in Oregon)
One of the most significant areas of exposure over the life of a claim is temporary disability benefits. Recent changes to the administrative rules and statutes now impose a significant burden on the insurer/TPA before they can end temporary disability benefits. Oftentimes the insurer/TPA continues paying procedural temporary disability when an injured worker’s return to work status is unclear.
When the claim is ready for closure, the insurer/TPA can go back and review the periods temporary disability benefits were paid to determine whether claimant was substantively entitled to those benefits, or if an overpayment exists. If an overpayment is discovered, the insurer/TPA may offset any compensation payable to the worker to recover the overpaid benefits from a claim with the same insurer. ORS 656.268(14)(a). There are limitations on the insurer/TPA’s ability to recover an overpayment: (1) they cannot collect more than 25% of the temporary disability or permanent total disability payable to the worker; (2) they cannot collect more than 50% of the permanent partial disability payable to the worker; and (3) they cannot assert an overpayment of benefits that were paid more than two years prior to the date the overpayment is asserted. ORS 656.268(14)(a); ORS 656.268(16)(a); ORS 656.268(16)(b).
Historically, overpayments have been accepted as a standard claims administration action. Practically speaking, the insurer/TPA is often unable to recover any of their overpayment because there are no further benefits payable to the worker or the worker does not have another claim with the same insurer. Despite the practical issues that often prevent an actual recovery of the overpayment, workers’ attorneys have been working to place further burden on the insurer/TPA’s ability to assert overpayments.
Notably, despite claimant being the one who filed a request for hearing challenging the overpayment, it is the insurer/TPA’s burden to provide sufficient evidence of the overpayment. Metro Rigging v. Tallent, 94 Or App 245, 248 (1988); Nyla J. Vanalstine, 67 Van Natta 510, 510 (2015). The burden of proof includes (a) an allegation of a specific amount of overpayment and (b) either an explanation or calculation of how the overpayment occurred. The insurer/TPA can satisfy its burden by providing audit letters explaining the amount and calculation of the overpayment in the absence of rebuttal evidence from the worker. See Francis I. Bowman, 45 Van Natta 500, 502 (1993).
A Board case recently issued in March 2026, Rachel C. Bonine, 78 Van Natta 137 (2026), involved an overpayment asserted following an Order on Reconsideration which modified the dates of authorized temporary disability. The insurer’s overpayment letter stated temporary disability was paid but was not authorized by claimant’s attending physician for benefits paid beyond the date of closure. Claimant challenged the overpayment arguing the insurer did not meet its burden of proof to establish entitlement to the asserted overpayment. The Board determined the insurer did not meet its burden of proof because it did not provide a calculation establishing the amount of the overpayment nor did it provide an audit of the temporary disability benefits actually paid to claimant. Additionally, the Board determined the insurer’s overpayment letter also did not provide sufficient information to establish the actual amount of the overpayment or what benefits had been paid to claimant during the life of the claim. For these reasons, the Board held the asserted overpayment was disallowed.
The above case showcases the Board’s current position regarding what constitutes “sufficient evidence” for insurer to establish its burden in asserting the overpayment. The case seems to suggests that for an overpayment to be allowed, the insurer must include calculations and/or audits of the payments made; an explanation as to the reason for the overpayment may no longer be sufficient on its own to prove entitlement to an asserted overpayment – despite the language of the statute.
Although it creates more burden on the insurer/TPA, the best practice going forward when asserting an overpayment is to provide a ledger establishing the benefits paid and TTD/TPD calculation worksheet with the overpayment letter to the injured worker.
If you have any questions or issues regarding an overpayment on one of your claims, please feel free to contact me at 503-412-3111 or .
Posted by Elyse Waters.
