What can Brown do for you? In a long-awaited decision, the Oregon Supreme Court reverses Brown v. SAIF

It has been almost three years since the Oregon Court of Appeals issued its decision in Brown v. SAIF, 262 Or App 640 (2014), finding that a “compensable work injury” referred to the injurious incident and all the conditions that flowed from it, accepted or not. The case was appealed to the Oregon Supreme Court, which issued its decision on March 30, 2017, reversing the Court of Appeals’ decision and affirming the Workers’ Compensation Board decision. In a lengthy opinion, the Supreme Court ruled that the term “compensable injury” shall be interpreted to mean only the medical conditions accepted by the insurer or self-insured employer.

This case involved a combined condition denial. The claim was accepted for a lumbar strain combined with preexisting lumbar disc disease and spondylolisthesis. SAIF issued a combined condition denial contending that the work-related lumbar strain was no longer the major contributing cause of claimant’s disability or need for treatment. An ALJ affirmed the denial, as did the Board on review. In May 2014, the Court of Appeals reversed the Board and concluded that the term “otherwise compensable injury” should be interpreted as the injury-incident, not limited to the accepted conditions, but rather all medical conditions related to the injurious incident itself. While the Court of Appeals’ decision was made in the context of a combined condition, it affected claim closure, permanent impairment, and other benefits. The DCBS revised its administrative rules and mandated that, at the time of closure, the insurer must rate impairment for the accepted conditions, their direct medical sequelae, and all other conditions “directly resulting from the work injury.”

In its 42-page decision, the Supreme Court interpreted the terms “injury” and “compensable,” exploring their statutory and textual use, historical context and construction, and the legislative intent behind the relevant rules and statutes. Claimant and the Oregon Trial Lawyers Association argued that the term “injury” refers to the injurious event, covering not only the accepted conditions but all that flows from the injurious event. SAIF and the Oregon Self Insurers Association, among others, argued that the term should be interpreted as solely the medical conditions caused by the injurious incident. The Supreme Court agreed that the term “injury” is most consistent with the medical conditions caused by an injurious incident, and not the event itself.

The Court then shifted its analysis to the scope of conditions covered by the term “compensable,” and found that if the term “injury” means a specific medical condition, then the statutory term “compensable” is most consistent with meaning the specific, accepted conditions. The Court explained (and reiterated on separate occasions) that an injured worker has statutory protection against and a cure for any adverse consequences of limiting the scope of “compensable injury” to the accepted conditions. The injured worker is free to submit an expansion request for new or omitted conditions at any time, under ORS 656.262(6)(d).

So, in this much-anticipated decision, the Oregon Supreme Court held that the term “compensable injury” refers to the particular medical conditions accepted by the insurer or self-insured employer. We have contacted the DCBS, which is evaluating this decision to determine how to address pending disputes before the department. The DCBS amended the claim closure rules in 2015 to require an impairment rating based on the compensable injury rather than the accepted conditions. Our argument is that, effective immediately, the insurer is only required to pay for benefits due to the accepted conditions. We think this extends to ratable permanent impairment at closure and temporary disability authorization. Nevertheless, if you have a pending closure in which you are able to address the accepted conditions and all conditions directly resulting from the injury, that is the conservative approach until the DCBS publishes new administrative rules. Finally, the Court specifically noted that the decision does not yet extend to medical services due under ORS 656.245, and that issue is the subject of a separate pending dispute before the Court.

This is a fantastic outcome for Oregon administrators, insurers, and self-insured employers, alike. Please contact me with any questions related to how the Brown v. SAIF decision affects your claim processing, or with any other Oregon workers’ compensation questions or concerns. I can be reached at 503-595-6109 or Aevenson@sbhlegal.com.

CLICK HERE to read the Oregon Supreme Court decision.