STATE OF OREGON
BEFORE THE OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE DEPARTMENT OF CONSUMER AND BUSINESS SERVICES
WORKERS' COMPENSATION DIVISION
In the Matter of the ORS 656.260 )
Managed Care Dispute of ) PROPOSED AND FINAL
John Crowe, Claimant ) CONTESTED CASE
)
PACIFIC EMPLOYERS INSURANCE CO., ) HEARING ORDER
Petitioner )
)
v. ) Contested Case No: H02-131
) Claim No: C780C2649152/700
JOHN CROWE, HAROLD LEE, M.D., & ) Date of Injury: 12/28/99
WORKERS COMPENSATION WCD File No: D986403
DEPARTMENT, Respondents.
HISTORY OF THE CASE
Pacific Employers Insurance (Pacific) appeals an administrative order issued on
December 11, 2002 by the Medical Review Unit (MRU) of the Workers’ Compensation
Division, Department of Consumer and Business Services.
On January 13, 2004, Administrative Law Judge Rick Barber conducted a telephone
hearing originating in Salem, Oregon. Pacific was represented by its attorney, Brad Scheminske.
Respondent Harold Lee, M.D. appeared personally and represented himself. The Workers’
Compensation Division (WCD) was represented by Assistant Attorney General Lori Lindley.
Claimant did not participate in the hearing. Dr. Lee and Theresa Rinallo testified in the hearing,
both being called on behalf of Pacific. The record closed on the date of hearing.
ISSUE
Whether insurer must pay the medical bills of Dr. Lee for treatment claimant received
between April 5, 2002 and June 10, 2002.
EVIDENTIARY RULINGS
Workers’ Compensation Division (WCD) Exhibits A1 through A31 and Pacific Exhibits
B1 through B12 (including Exhibit B11A) were admitted into evidence at the hearing. WCD
objected to Exhibit B11A, contending that it was untimely and not relevant. The objection was
overruled and the document admitted. Finally, although not considered evidence in the case (and
therefore not marked as exhibits), I am including as part of the documentary record the
following: Pacific’s Hearing Memorandum dated April 15, 2003; the DOJ Hearing
Memorandum dated June 9, 2003, and Pacific’s Reply Memorandum dated June 13, 2003.
PROPOSED AND FINAL ORDER: John Crowe
Page 1 of 9
STIPULATED FACTS
The parties have stipulated to the following facts as being true:
(S1) At the time claimant’s claim was closed on March 13, 2001, Dr. Dover was the
attending physician for Mr. Crowe.
(S2) Dr. Lee first examined claimant on April 2, 2001 and first sent notice of his
involvement to Pacific by sending in a Form 827 dated April 23, 2001.
(S3) Dr. Lee is not, and has never been, a member of Providence MCO.
(S4) Mr. Crowe was enrolled in Providence MCO on April 17, 2000.
FINDINGS OF FACT
In addition to the Stipulated Facts noted above, I find the following:
(1) Claimant John Crowe suffered a workers’ compensation injury to his neck on
December 28, 1999, while working for Pacific’s insured, Reynolds Metals. (Ex. B2). His claim
for cervical strain was accepted by Pacific on April 17, 2000. (Ex. A4). On that same date,
claimant was advised that he was enrolled in Providence MCO and that his medical treatment
needed to take place with an MCO doctor. (Ex. A3). Claimant had previously been advised that
he would be part of the MCO if his claim was accepted. (Ex. B3).
(2) Claimant’s attending physician (AP) was Dr. Dover. In February 2001, claimant
was sent by Pacific to an evaluation by Drs. Duff and Radecki, who declared claimant medically
stationary as of February 6, 2001. (Ex. A7). A concurrence letter was sent to Dr. Dover, asking
whether he agreed with the report of Drs. Duff and Radecki, but Dr. Dover did not respond to the
insurer. (Ex. B11-A). Based upon the report of Drs. Duff and Radecki, as well as Dr. Dover’s
failure to respond, Pacific issued a Notice of Closure on March 13, 2001. The insurer listed the
medically stationary date as February 12, 2001. (Ex. A11).
(3) Claimant sought the services of an attorney. On March 16, 2001, claimant’s
attorney filed a Request for Reconsideration on claimant’s behalf, seeking among other issues to
have the closure set aside as premature. A copy of the attorney’s request was sent to claimant.
(Ex. A12). On March 22, 2001, Dr. Dover’s deposition was taken by attorneys for claimant and
Pacific concerning a possible consequential condition claim. Dr. Dover indicated that claimant’s
condition had been “relatively stable” since December 2000. (Ex. B12).
(4) On April 12, 2001, WCD issued an Order on Reconsideration finding that
claimant had been medically stationary since February 6, 2001. (Ex. A14). Claimant requested a
hearing on the order, and the premature closure issue was presented “on the record1” before ALJ
1
A submission on the record means that the parties submitted documents and the judge decided the case on the basis
of the documents alone, without testimony or other argument.
PROPOSED AND FINAL ORDER: John Crowe
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Lipton on June 18, 2001. On August 31, 2001, Judge Lipton concluded that the claim was not
prematurely closed and affirmed the Order on Reconsideration. (Ex. A16).
(5) On April 2, 2001, claimant sought treatment from Harold Lee, M.D. for the first
time. Claimant was again examined by Dr. Lee on April 18, 2001, at which time claimant signed
an 827 form, signifying his change of physician to Dr. Lee. Claimant did not tell Dr. Lee that his
claim was already closed. Dr. Lee felt that the treatment he was offering claimant was curative in
nature and, being unaware that the claim had been closed, continued to treat claimant.
(Testimony of Lee).
(6) Although claimant signed the Form 827 on April 18, Dr. Lee did not sign the
document until April 23 and then gave the document to his office staff to mail. Dr. Lee does not
know when the document was actually mailed, but his business practice was that it would be
mailed “a day or so” later. Dr. Lee continued to treat claimant over the next 14 months—through
June 2002—but did not receive any information from Pacific about the claim. Dr. Lee did not
contact Dr. Dover’s office to obtain a copy of his file. (Testimony of Lee).
(7) From April 2001 through April 2002, Pacific paid Dr. Lee’s bills without
questioning them. In April 2002, Pacific stopped paying Dr. Lee’s bills because there had been
no palliative care request. On July 18, 2002, Dr. Lee’s office filed a request for medical fee
dispute resolution, contesting the failure to pay the bills. (Ex. A23). The matter was assigned to
the Medical Review Unit (MRU) for review. (Ex. A26).
(8) On December 11, 2002, MRU issued an administrative order which required
Pacific to pay Dr. Lee’s bills between April 5, 2002 and June 10, 2002 (Dr. Lee’s previous bills
had been paid by Pacific and were not part of this dispute). The reviewer concluded the bills
must be paid because Pacific failed to notify Dr. Lee of the medically stationary status of the
claim and was required, pursuant to OAR 436-010-0270(6), to pay all bills until such notice was
given. (Ex. A30 at 3). Pacific requested a hearing on the MRU decision. (A31).
CONCLUSIONS OF LAW
Pacific is not required to pay the medical bills of Dr. Lee.
OPINION
Scope of Review
The question of the appropriateness of the requested medical treatment lies with the
Director of the Department of Consumer and Business Services (DCBS). ORS 656.260(6). The
Administrative Order may be modified only if it is not supported by substantial evidence in the
record or if it reflects an error of law. ORS 656.260(16). In this case, Pacific has the burden of
establishing either an error of law or a lack of substantial evidence to support the Administrative
Order. ORS 183.450(2). Pacific’s primary position in this case is that MRU erred as a matter of
law.
PROPOSED AND FINAL ORDER: John Crowe
Page 3 of 9
Basis for the Director’s Decision
As noted in the Findings of Fact, the reviewer in this case based her decision upon the
nature of the closure of the claim. She stated:
[T]he director finds the dispositive fact in this dispute is that Pacific found Mr.
Crowe medically stationary based on preponderance, not on the opinion of the
attending physician.
OAR 436-010-0270(6) states, “When a medically stationary date is established by
the insurer and is not based on the findings of an attending physician, the insurer
shall notify all medical service providers of the worker’s medically stationary
status. Applicable to all injuries occurring on or after October 23, 1999, the
insurer shall be responsible for reimbursement to all medical service
providers for services rendered until the insurer provides the notice to the
attending physician (emphasis added).”
(Ex. A30 at 3; emphasis in original). The reviewer concluded that Dr. Lee was the attending
physician, not Dr. Dover, and that Pacific had to advise Dr. Lee of the medically stationary status
of the claim. Since Pacific had not advised Dr. Lee of the claim status, the reviewer concluded
that Pacific was responsible for the medical bills.
The Procedural Status of the Case
In all that follows, it is essential to understand the status of the case procedurally.
Claimant became medically stationary in February 2001, and his claim was closed on March 13,
2001. That closure was affirmed by the Director and also at a hearing. At no time after March 13,
2001, was claimant’s claim in open status. Thus, the entirety of Dr. Lee’s treatment of claimant,
which began on April 2, 2001, was in the context of a closed claim.
Dr. Lee and WCD focus on Dr. Lee’s perception of the status of the claim instead of on
the actual status of the claim. I do not doubt that Dr. Lee was operating in good faith when he
continued to treat claimant.2 However, the apparent failure on Pacific’s part to contact the doctor
and apprise him of the claim closure does not erase the closure of the claim. If Dr. Lee is to
recover, it will not be by ignoring the actual procedural status of the claim.
Was There an Error of Law?
When the reviewer made the MRU decision in this case, she relied upon OAR 436-010-
0270(6), which states:
(6) When a medically stationary date is established by the insurer and is not based
on the findings of an attending physician or authorized nurse practitioner, the
2
Dr. Lee was also of the impression that claimant did not know about the closure of his claim. While Dr. Lee’s
impression is undoubtedly sincere, it is equally obvious that claimant did know of the closure since he litigated the
Notice of Closure at the director level and in a hearing.
PROPOSED AND FINAL ORDER: John Crowe
Page 4 of 9
insurer shall notify all medical service providers of the worker's medically
stationary status. Applicable to all injuries occurring on or after October 23, 1999,
the insurer shall be responsible for reimbursement to all medical service
providers for services rendered until the insurer provides the notice to the
attending physician or authorized nurse practitioner.
(Emphasis added). By the terms of this rule, an insurer failing to advise an attending physician of
the claimant’s medically stationary status would have to continue to pay the bills until such
notice was provided.3 On its face, the rule would seem to support the MRU decision requiring
payment by Pacific.
However, Pacific argues that the language of the rule exceeds the statutory authority for
the rule. As noted by counsel for WCD in her hearing memorandum, the rule relied upon by
WCD was promulgated in response to the enactment, in 1999, of the language which became
ORS 656.245(1)(d). That subsection states:
(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.
(Emphasis added).
A comparison of the rule and the statute, and particularly the emphasized language in
both, shows that there is a difference. While the administrative rule indicates that an insurer is
responsible for all services rendered to all medical service providers, the statute limits such
recovery to only “otherwise compensable” services. With this difference in mind, I must
determine whether the difference in the Department’s rule is an appropriate extension of the rule
to which I must defer, or whether the Department has exceed its authority. As the Court of
Appeals has stated:
Although we will defer to an agency’s plausible construction of its own rules, we
may not permit an agency to read into its rules requirements that are inconsistent
with their wording, their context, or any other source of law. Don’t Waste Oregon
Com. v. Energy Facility Siting, 320 Or 132, 142, 881 P2d 119 (1994).
Deschutes County v. Scott, 164 Or App 6, 9, 988 P2d 449 (1999).
In this case, to the extent that the rule requires reimbursement of medical bills which are
not otherwise compensable, the rule is inconsistent with another source of law and exceeds the
statutory authority. While that conclusion does not necessarily invalidate the rule, it does mean
that the rule must be read within the limitations of the enabling statute.
3
There are factual and legal questions arising from this rule which would be of some importance, such as whether a
later AP, such as Dr. Lee, would need to be apprised of the claim status, and whether the information provided to
Dr. Dover was sufficient to constitute notice of medically stationary status. However, since my decision is ultimately
based on the differences between the rule and the statute, I do not need to address these matters.
PROPOSED AND FINAL ORDER: John Crowe
Page 5 of 9
In this case, the question remains whether MRU’s application of the rule exceeded the
statutory authority. Analyzing both the statute and the facts of this case,4 I find that the agency
did exceed the statutory authority.
Analysis of ORS 656.245(1)(c) and (d)
The MRU decision was based on OAR 436-010-0270(6), which (as discussed) was
enacted to conform to ORS 656.245(1)(d). That statute limits reimbursement to what is
“otherwise compensable.” Therefore, the question is whether the treatment provided by Dr. Lee
was otherwise compensable.5
To determine what is a compensable medical service and what is not, I look to another
section of the same statute, ORS 656.245(1)(c), which states in part:
(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:
*****
The subsection then lists several exceptions, the most pertinent of which will be addressed
below. However, understanding the opening paragraph of the subsection is critical. By its terms,
it applies to medical services “after the worker’s condition is medically stationary.” It further
states that such medical services are “not compensable” unless they fall within the exceptions.
As discussed above, Dr. Lee’s treatment in this case was provided after the claim had
already been closed. Therefore, it must be determined whether Dr. Lee’s treatment of claimant
fits any of the exceptions found in ORS 656.245(1)(c). If his treatment fits any of the categories,
it would be “otherwise compensable” for purposes of the next subsection and Pacific might be
responsible for the bills. If the medical services are not compensable under subsection (1)(c),
Pacific would not be responsible for the bills under (1)(d).
The exceptions in subsection (1)(c) with some possible relevance to the current case are
as follows:
(F) Services provided pursuant to an accepted claim for aggravation under ORS
656.273.
*****
(H) Services that are necessary to diagnose the worker’s condition.
*****
4
Since any factual review in this case must be one of substantial evidence, I am limited to the facts as found by
MRU. The only pertinent fact in the MRU decision that is not supported by substantial evidence is the conclusion
that Dr. Lee was the attending physician. WCD conceded, and I find, that Dr. Dover was the attending physician at
the time of closure.
5
I am mindful of the fact that compensability, as such, is an issue for the Workers’ Compensation Board and not the
Department. However, “compensability” in the context of this decision is limited to a consideration of medical
services involving both ORS 656.260 and 656.245, both of which fall under the purview of the Department.
PROPOSED AND FINAL ORDER: John Crowe
Page 6 of 9
(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.
(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 * * *.
(L) Curative care provided to a worker to stabilize a temporary and acute waxing
and waning of symptoms of the worker’s condition.
These listed exceptions are the only ones which could even possibly apply to the facts of this
case. However, there has been no claim of aggravation and no indication that services are
necessary to diagnose claimant’s condition. There have been no known advances in medical
science which apply to this case.
Only exceptions (J) and (L) merit further discussion. Dr. Lee testified that the care he was
providing was curative in nature (and, therefore, not palliative), but there was no aggravation
request. In such a situation, only (L) could apply. However, there is no evidence to show that
what the doctor was treating was a temporary and acute waxing and waning of symptoms. In
fact, Dr. Lee treated claimant for more than a year. Consequently, (L) does not apply.
Similarly, the exception involving a palliative care request under (J) does not apply. The
treatment was not considered palliative by the doctor. To the extent that the treatment was
procedurally palliative—that is, it was palliative because the curative treatment ended with claim
closure—the doctor made no request to provide such palliative care. Such a request is necessary
before palliative care can be rendered.
In summary, none of the exceptions in ORS 656.245(1)(c) apply to this case. Since the
treatment offered by Dr. Lee was not compensable treatment, it was not “otherwise
compensable” for purposes of ORS 656.245(1)(d). It was therefore error for MRU to require
payment of the bills, because the agency’s interpretation of the administrative rule exceeded the
limitations of the statute.
Other Arguments for Reimbursement
I have concluded that MRU erred in requiring Pacific to pay Dr. Lee’s bills because they
were not “otherwise compensable” under ORS 656.245(1)(c). However, respondents make (or
allude to) two other arguments which must be addressed for completeness’ sake. First, there is an
argument (primarily by Dr. Lee) that Pacific should pay the bills because it had paid the bills
previously for a period of a year. However, that contention conflicts with ORS 656.262(10),
which states in part:
(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.*
**
PROPOSED AND FINAL ORDER: John Crowe
Page 7 of 9
Pursuant to this statute, I must conclude that Pacific’s payment of the medical bills from April
2001 until April 2002 does not, by itself, lead to the requirement that the later medical bills be
paid.
The final argument presented by WCD concerns whether ORS 656.245(1)(c) is even
applicable, or whether I should apply subsection (1)(d) without reference to the other subsection.
In other words, the Department contends that the different subsections stand alone.
However, I conclude that the subsections of the statute were meant to be read together.
Whether starting from the type of treatment being rendered (medical services after claimant is
medically stationary), or from the problem of a doctor who was not informed of the closure, both
subsections are involved and, ultimately, the compensability of the services under (1)(c) controls.
They cannot be read separately. Subsection (1)(c) uses the phrase, “[n]otwithstanding any other
provision of this chapter,” and (1)(d) limits itself to “otherwise compensable” services. Since the
first subsection is not limited by any other section, it cannot be limited by (1)(d). However, since
(1)(d) is limited only to services “otherwise compensable,” and since (1)(c) addresses the
compensability of medical services after claim closure, I conclude that (1)(c) must be included in
the (1)(d) analysis. If the medical services are not compensable under (1)(c), they are not
“otherwise compensable” under (1)(d).
In summary, I conclude that MRU erred as a matter of law in requiring Pacific to pay Dr.
Lee’s medical bills. Consequently, the Administrative Order dated December 11, 2002 will be
reversed.6
Since the application of the statute to the case has disposed of the issue raised by Pacific,
there is no need to address the other issues raised by them.
6
It is recognized that this decision seems to penalize Dr. Lee, who was operating in good faith, and “reward”
Pacific, who failed to keep in touch with the doctor. However, in a statutory system I must address the law rather
than perceptions of equity.
PROPOSED AND FINAL ORDER: John Crowe
Page 8 of 9
ORDER
IT IS HEREBY ORDERED that:
1. The Directors Review and Order dated December 11, 2002 is REVERSED.
DATED this 22nd day of January 2004.
__________________________________
Rick Barber
Administrative Law Judge
Office of Administrative Hearings
NOTICE OF REVIEW AND APPEAL RIGHTS
As provided in ORS 183.460, the parties are entitled to file written exceptions, including
argument, to this Proposed and Final Contested Case Hearing Order. The exceptions must
be served on the parties and filed with the Administrator of the Workers’ Compensation
Division at the address set forth below within 30 days following the date of service of this
order. Written responses to exceptions must be filed within 20 days of service of the
exceptions. Replies, if desired, must be filed within 10 days of service of the response.
If no exceptions are filed, this order shall become final upon expiration of 30 days following
the date of service on the parties.
After this order becomes final, you are entitled to judicial review pursuant to the
provisions of ORS 183.480. Judicial review may be obtained by filing a petition with the
Court of Appeals within 60 days from the date that this order becomes final.
Mail any exceptions and a copy of any petition for judicial review to:
Technical Coordinator, Policy Section
Workers’ Compensation Division
Department of Consumer and Business Services
350 Winter Street NE
P.O. Box 14480
Salem, OR 97309-0405
PROPOSED AND FINAL ORDER: John Crowe
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