May 25, 2022
by Andrew Evenson

Oregon WCB Issues Troubling Decision Regarding New/Omitted Claim Processing Obligations

The Oregon Workers’ Compensation Board recently issued a troubling decision in Luis F. Nava, 74 Van Natta 372 (2022), which impacts how it finds employers/insurers/administrators must process compensable injury claims.

In Nava, claimant sustained a compensable work injury on March 13, 2017. Two days later, a left knee MRI showed a lateral meniscus tear. Claimant’s attending physician diagnosed a left knee sprain, left knee contusion, chest wall contusion, and left knee lateral meniscus tear, although SAIF only accepted a left knee sprain and chest wall contusion. Claimant’s consulting surgeon opined the lateral meniscus tear was a result of the compensable work injury, and he performed a partial lateral meniscectomy. Claimant’s attending physician maintained the same active diagnoses, but never expressly commented on causation. Neither claimant nor his physicians initiated any request for new/omitted medical conditions, and so SAIF never expanded the scope of acceptance. SAIF later issued a Notice of Closure, albeit for a left knee sprain and chest wall contusion only, with no permanent disability. Claimant later initiated an aggravation claim. SAIF’s consultive independent medical evaluation (IME) physician also opined the meniscal tear was the result of claimant’s compensable work injury, but SAIF denied the aggravation claim because no medical evidence established that either accepted condition “actually worsened.”

Claimant then retained counsel who, among other issues, argued that SAIF processed the claim unreasonably, for not previously and independently accepting a lateral meniscus tear, despite claimant never initiating a new/omitted condition claim.

ORS 656.262(6)(b)(F) provides that the employer/insurer/administrator “shall” modify the scope of acceptance “from time to time as medical or other information changes a previously issued notice of acceptance.” Claimant’s counsel argued that this statute creates an affirmative duty for the claim processor to modify the scope of claim acceptance when the medical evidence supports claim expansion, even if claimant does not expressly request it. Alternatively, SAIF argued that ORS 656.267(1) provides that it is the worker’s affirmative duty to initiate new/omitted condition requests in writing.

Unfortunately, the Board agreed with claimant’s counsel and ruled that the employer/insurer/administrator has an “affirmative claim processing obligation to revise the claim acceptance when medical information indicates that a previously issued notice of acceptance should be modified….[and] that, going forward, a failure to revise the claim acceptance in accordance with ORS 656.262(6)(b)(F) may result in a penalty” for unreasonable claim processing. SAIF has not yet determined whether it will appeal the order to the Oregon Court of Appeals, but I think that is reasonable to anticipate.

For obvious reasons, this is a troubling ruling. To begin, the Board rules that the claim processor can be penalized if it issues a “null and void” denial of a new/omitted condition that has not yet been requested in writing. Now, the Board also rules that the claim processor can be penalized for not independently accepting a new/omitted condition, when the record “indicates” it is appropriate. The Board’s findings have wide-ranging implications, but the primary claim processing takeaway is to continue your due diligence throughout the life of the claim. Just as you would perform a “reasonable investigation” of initial compensability, continue to perform such activities thereafter, directed at potential new/omitted conditions. The medical opinion in this case appears to universally support the conclusion that claimant’s work injury caused a left knee lateral meniscus tear, but it is seldom so unequivocal. If that is the case, follow-up with providers and discuss and confirm their opinion. If a provider questions a causation relationship, get that in writing.

It will be interesting to see what approach(es) various claimant’s counsel take in response to this recent ruling, and how far they are willing to push their related arguments. If you have any questions regarding your strategic response to the above, or any other Oregon workers’ compensation question or issue, please contact me at 503-595-6109 or .

Posted by Andrew Evenson.