"PPD" RATE - "214(2)" -

          Ellis B. Smith, 57 Van Natta 356 (February 15, 2005). In determining claimant's permanent disability (PPD) rate under ORS 656.214(2) for his hearing loss condition, the Board held that the rate was based on the law in effect when he first sought treatment from a medical doctor in 2002, rather than in 1987 when he underwent an audiogram and received hearing aids from an uncertified audiologist. Asserting that the 1987 audiogram and hearing aid fitting constituted claimant's first "medical treatment," the carrier contended that his PPD rate should be based on the version of ORS 656.214(2) in effect at that time.

          The Board disagreed with the carrier's contention. Finding that the 1987 audiogram and hearing aids dispensing did not involve either a medical doctor or certified audiologist, the Board concluded that, at most, claimant received services from a "hearing aid dispenser." Relying on Raytheon Constructors v. Tobola, 195 Or App 396 (2004), and Foster Wheeler Corp. v. Marble, 188 Or App 579 (2003), the Board determined that claimant did not seek medical treatment in 1987. Consequently, because he did not receive "medical treatment" until 2002, the Board held that his PPD rate was based on the version of ORS 656.214(2) in effect at that time.


          Mark A. Hess, 57 Van Natta 277 (February 2, 2005). The Board held that claimant's injury, which occurred while he was performing duties that were not his regular duties with the knowledge of his employer, arose out of the course and scope of his employment. Claimant, a sales manager for a temporary service agency, was on the work site of an important client for his employer, when he discovered that a temporary worker was not at the site. Concerned about losing an important account for his employer, claimant notified the employer's account manager that he planned to perform the job that required physical labor. When he received no objection to his plan, claimant began performing the job and, while doing so, injured his back. The carrier denied the claim, contending that claimant's injury did not arise out of the course and scope of his employment as a sales manager.

          The Board disagreed with the carrier's contention. Finding that claimant reasonably believed that his employer would lose an important account if he did not satisfy the client's request for a temporary worker, the Board concluded that claimant's activities were "in the course of" his employment because they took place within the period of his employment, at a place where he was reasonably expected to be, and while he was reasonably fulfilling the duties of his employment.

          Turning to the "arising out of" prong of the compensability test, the Board identified the question as whether claimant was engaged in an activity that was within the boundaries of his ultimate work. See Andrews v. Tektronix, Inc., 323 Or 154, 166 (1996). Although performing physical labor was not part of his regular job, the Board reasoned that his employer was aware of his decision to perform the physical labor and did not instruct him not to do so. Determining that claimant's activities provided a definite benefit to his employer, the Board concluded that claimant was engaged in an activity that was within the boundaries of his ultimate work. Reasoning that there was a sufficient work connection between claimant's injury and his employment, the Board held that the claim was compensable.

COURSE & SCOPE: "005(7)(b)(B)"

          Royanne Messer, 57 Van Natta 271 (February 2, 2005). The Board held that claimant's injury, which occurred during a 3-hour period between her shifts as a bus driver when she fell while delivering lunch to a co-worker on her employer's premises, was not compensable under ORS 656.005(7)(b)(B) because her activity at the time of injury was a social activity primarily for her personal pleasure. Noting that claimant's injury had been sustained while she had obtained lunches from a facility on her employer's premises and was delivering them to a co-worker to eat them before boarding a bus to be transported to her next assignment, the carrier argued that her injury was barred by ORS 656.005(7)(b)(B) because her activity at the time of the injury was a social activity primarily for her personal pleasure.

          The Board agreed. Citing Roberts v. SAIF, 196 Or App 414 (2004), the Board acknowledged that an injury is not excluded from coverage under ORS 656.005(7)(b)(B) if the worker is primarily engaged in work activities at the time of the injury. Nonetheless, the Board found that, although she was in uniform, claimant was not working at the time of her injury nor was she required to be on the premises and could have eaten lunch anywhere. Furthermore, notwithstanding her reasonable decision to eat lunch on her employer's premises before being transported to her next work assignment, the Board reasoned that such a decision did not change the dispositive fact that claimant was not engaged in work activities at the time of her injury.

          Turning to the definition of "social," the Board determined that it means "marked by or passed in pleasant companionship with one's friends or associates * * * taken, enjoyed, or engaged in with friends or for the sake of companionship." Webster's Third New Int'l Dictionary, 2161 (unabridged ed 1993). Based on the common meaning of the word "social," the Board found that claimant's activities at the time she was injured were "social" and "primarily for her personal pleasure."

          In reaching its conclusion, the Board distinguished Tri-Met, Inc. v. Lamb, 193 Or App 564 (2004), where a bus driver's injury was found compensable because she was leaving a bus to return to her employer's garage while she was receiving wages. In contrast to Lamb, the Board concluded that claimant's injury neither took place within a reasonable period of time after her earlier shift or before her next shift nor during a period when she was receiving wages.


          Robert G. Warwick, 57 Van Natta 361 (February 15, 2004). The Board held that claimant was entitled to a scheduled permanent disability award for a "chronic condition" under OAR 436-035-0010(5), finding that he had a "significant limitation" based on a medical arbiter's response to an Appellate Review Unit (ARU) letter that claimant's accepted nerve dysfunction "does limit" his ability to repetitively use his wrist. Asserting that the arbiter did not state that claimant had a "significant limitation" in his ability to repetitively use his wrist, the carrier argued that he was not entitled to a "chronic condition" award.

          The Board disagreed with the carrier's contention. Noting that the arbiter's conclusion that claimant's wrist nerve dysfunction "does limit" his repetitive use ability was provided in response to an ARU letter seeking information regarding his repetitive use limitations, the Board interpreted the arbiter's answer to constitute a "significant limitation." Relying on Cassie C. Whitney-Carter, 55 Van Natta 741, 743-44 (2003), the Board found that the arbiter's response, particularly in relation to ARU's question, was sufficient to establish a "chronic condition" award under OAR 436-035-0010(5).

          In reaching its conclusion, the Board distinguished James P. Dillon, 52 Van Natta 939 (2000), where a "chronic condition" award was not granted based on an arbiter's statement that the accepted condition "does limit" the claimant's repetitive use ability. Noting that Dillon focused on the content of the arbiter's report in determining that the "significant limitation" requirement had not been satisfied, the Board reasoned that the present case was distinguishable because the record provided not only the arbiter's response, but also included ARU's "limitation" questions. Inasmuch as the arbiter's specific response to ARU's question whether claimant was "significantly limited" in his ability to repetitively use his wrist had been that he was still suffering from nerve dysfunction which "does limit" his repetitive use ability, the Board interpreted the arbiter's answer to mean that claimant had a "significant limitation" under OAR 436-035-0010(5).

TTD: "325(5)(b)" -
"060-0030(6)(b)" REQUIREMENT -

          Robert A. Harvey, 57 Van Natta 415 (February 23, 2005). The Board held that a self-insured employer was not authorized to cease claimant's temporary total disability (TTD) benefits under ORS 656.325(5)(b) upon his attending physician's approval of a modified job that would have been offered had he not been previously terminated from his employment because the employer lacked "written documentation" of the wages for the modified job as required by OAR 436-060-0030(6)(b). Noting that the administrative rule requires that "insurers" have such "written documentation," the self-insured employer contended that the rule was not applicable.

          The Board disagreed. Citing OAR 436-060-0005, the Board observed that "insurers" include self-insured employers "unless the context requires otherwise." Noting that ORS 656.325(5) expressly refers to situations where "the insurer or self-insured employer" shall cease paying TTD, the Board reasoned that the reference to "the insurer" in OAR 436-060-0030(6) extends to a self-insured employer.

          Finally, the Board disagreed with the self-insured employer's argument that the "written documentation" portion of the rule was meaningless when applied to a self-insured employer. Determining that compliance with the "written documentation" requirement is needed for an examination of the claim file if the termination of a claimant's TTD is subsequently challenged or if the self-insured employer's claim processing actions are later audited, the Board concluded that the rule achieves a readily apparent and reasonable outcome.




          Jordan v. SAIF, 197 Or App 599 (February 16, 2005). The court affirmed the Board's Own Motion order in James W. Jordan, 53 Van Natta 726, on recon 53 Van Natta 1232 (2001), previously noted 20 NCN 5:6, that suspended claimant's temporary total disability (TTD) benefits based on his unreasonable failure to attend a medical examination and physical therapy appointments. On appeal, claimant contended that the Board was not authorized to adopt a "TTD suspension" rule (OAR 438-012-0035(5)) because such authority exclusively rested with the Director under ORS 656.325.

          The court disagreed with claimant's contention. After considering the text and context of ORS 656.278, ORS 656.325, and ORS 656.726(5), the court agreed with the Board's determination that it was authorized to suspend claimant's TTD. In particular, the court noted that ORS 656.278(1) gives the Board authority "upon its own motion, from time to time [to] modify, change or terminate former findings, orders or awards" and that ORS 656.726(5) also specifically gives the Board authority to adopt all rules "reasonably required in the performance of its duties, including but not limited to * * * exercising its authority under ORS 656.278." In addition, the court found nothing in the statutory scheme to suggest that the Board did not have authority, in its own motion jurisdiction, to suspend benefits or that the Director's "suspension" authority under ORS 656.325 extended to benefits arising under the Board's own motion jurisdiction.

          Citing Edward Hines Lumber Co. v. Kephart, 81 Or App 43 (1986), the court observed that the Board's own motion jurisdiction "only provides the mechanism for adjustments" in compensation and that other provisions of the Workers' Compensation Act providing standards and rules should guide the Board in exercising its own motion jurisdiction. See Wausau Ins. v. Morris, 103 Or App 270 (1990). Consistent with Kephart, the court stated that the Board views OAR 438-012-0035(5) as a provision "parallel" to ORS 656.325(2) for own motion claims, and "reasonably required" under ORS 656.726(5) as a necessary corollary to the Board's authority to grant TTD under ORS 656.278.

          Finally, the court concluded that there was substantial evidence to support the Board's finding that claimant had acted unreasonably in not attending the examinations and physical therapy appointments (and in doing so had lengthened his period of disability). Consequently, the court held that the Board had not erred in suspending his TTD benefits.


MCO - "260(4)(a)" -
"NONMEMBER" Authorization

          Managed Healthcare Northwest, Inc. v. DCBS, 338 Or 92 (February 17, 2005). The Supreme Court affirmed the Court of Appeals opinion, 189 Or App 444 (2003), which had rejected the argument of two managed health care organizations (MCOs) that the Department of Consumer and Business Services (DCBS) had exceeded its rulemaking authority in adopting former OAR 436-015-0070(2) (2002) that prohibited MCOs from using "past practices" as a basis for denying authorization of nonmember primary care physicians (PCP) to treat subject workers. Noting that ORS 656.260(4)(g) uses the "present tense" in requiring only that a nonmember PCP "agrees to comply" with all MCO rules, terms, and conditions, the Court disagreed with the MCO's contention that the statute permits an MCO to rely on a PCP's past practices in making an authorization decision.

          Furthermore, the Court reasoned that ORS 656.260(4)(d) (which authorizes an MCO's plan to "exclude from participation in the plan those individuals who violate these treatment standards") refers to a different healthcare provider population (those providers who have entered into contracts with an MCO to provide services under the managed care plan) than the population addressed by ORS 656.260(4)(g) and former OAR 436-015-0070(2) (PCPs who are not a member of the MCO). Consequently, the Court concluded that the administrative rule did not conflict with the statutory directive of ORS 656.260(4)(d).

          Finally, the Supreme Court disagreed with the MCO's assertion that the administrative rule contravened the policy prescribed in ORS 656.260(4)(c), which requires that a prospective MCO's plan provide appropriate financial incentives to reduce service costs and utilization without sacrificing the quality of service. Reasoning that the legislature had decided to require MCOs to compensate treatment provided to workers by nonmember PCPs subject to the conditions prescribed in ORS 656.260(4)(g), the Court found nothing in the administrative rule's prohibition regarding a PCP's past practices to provide a disincentive for practitioners to join MCOs. Likewise, based on the clear legislative determination in ORS 656.260(4)(g) that a worker is permitted to continue receiving care from a nonmember PCP that agrees to follow the MCO's rules, terms, and conditions, the Court declined to interpret the general requirement in (4)(c) to provide "appropriate" financial incentives in a manner that would undermine the legislature's specific determination in (4)(g) that allows a worker to receive compensable treatment from a nonmember PCP



          Cummings v. SAIF, 197 Or App 312 (February 2, 2005). The court reversed the Board's order in Steven R. Cummings, 55 Van Natta 3062 (2003), that upheld a carrier's denial of claimant's combined low back condition. Based on an opinion from an insurer-arranged medical examination (IME), the Board concluded that the carrier had sustained its burden of proving under ORS 656.266(2)(a) that claimant's work injury was not the major contributing cause of his need for treatment or disability for his combined low back condition. Claimant appealed the Board's order, asserting the Board had not addressed claimant’s argument that the IME's opinion was unpersuasive because the IME physician had not weighed the relative contributions of the preexisting disease and the work injury, particularly because the IME physician had not reviewed imaging studies and did not know the extent of claimant's preexisting condition.

          The court agreed. Citing Dietz v. Ramuda, 130 Or App 397, 401 rev dismissed 321 Or 416 (1995), the court stated that in assessing the major contributing cause of a combined condition, ORS 656.005(7)(a)(B) requires "a comparison of the relative contribution of the preexisting disease or condition and the work-related incident."

          Turning to the case at hand, the court noted that, although the IME had "suspected" and "assumed with medical probability that there is some degree of lumbar degenerative disc disease associated with [L5-S1] level," the IME did not order any new diagnostic studies and did not review any of the "older diagnostic studies antedating [claimant's] work exposure." The court reasoned that such circumstances plausibly supported claimant's contention that the IME's failure to consider, much less address, claimant's preexisting degenerative disease, substantially subverted the persuasiveness of the IME's opinion. Because the Board had not addressed the apparent deficiency in the IME's opinion (which went ultimately to the core of the Board's reliance on the IME's opinion), the court remanded for the Board to do so. See The Boeing Company v. Cole, 194 Or App 120, 124 (2004).

OWN MOTION: ("278(1)(a), (b)") -

          Cruz v. SAIF, 197 Or App 402 (February 2, 2005). The court, per curiam, affirmed the Board's order in Lourdes A. Cruz, 55 Van Natta 3068 (2003), that concluded that claimant was not entitled to permanent disability benefits following claim closure for her Own Motion claim for a "worsened" condition under ORS 656.278(1)(a). The court cited Goddard v. Liberty Northwest Ins. Corp., 193 Or App 238 (2004).

PTD: "206(1)(a)" -

          Fimbres v. SAIF, 197 Or App 613 (February 16, 2005). The court affirmed the Board's order in Filbert M. Fimbres, 55 Van Natta 2751 (2003), that held that claimant was not entitled to permanent total disability (PTD) benefits under ORS 656.206(1)(a) because his noncompensable preexisting degenerative disc disease was not a preexisting disability at the time of his compensable injury. On appeal, claimant contended that a preexisting condition does not have to be disabling at the time of the injury to be considered in determining whether a worker is permanently and totally disabled.

          The court disagreed. Relying on Elder v. Rosboro Lumber Co., 106 Or App 16, 19 (1991), the court reiterated that ORS 656.206 requires a preexisting disability, not merely a preexisting condition. Finding no evidence in the record that claimant's preexisting degenerative condition caused "disabling effects" before his compensable injury, the court determined that disability that developed as a result of his preexisting condition after the injury could not be considered in evaluating his entitlement to PTD benefits.

          The court also rejected claimant's assertion that the carrier's later acceptance of a "combined condition" (including the preexisting degenerative condition) required the preexisting condition to be considered in his PTD evaluation. The court observed that the carrier's subsequent denial of the "combined condition" had previously been upheld. Fimbres v. SAIF, 173 Or App 446 (2001). Furthermore, citing Multifoods Specialty Distribution v. McAtee, 164 Or App 654, 661 (1999), aff'd 333 Or 629 (2002), the court noted that the acceptance of a combined condition is not an outright acceptance of a preexisting condition. Finally, the court concluded that substantial evidence supported the Board's findings that claimant's preexisting condition was not intertwined with his compensable condition that the preexisting condition should be considered in determining his entitlement to PTD.

          Judge Wollheim concurred, noting that, if writing on a clean slate, he would interpret ORS 656.206(1)(a) to allow preexisting conditions to be considered in determining whether an injured worker is entitled to PTD benefits. After describing a hypothetical to illustrate his position, Judge Wollheim stated that the purpose of ORS 656.206(1)(a) is to look at the whole person and determine whether the whole person can regularly perform gainful and suitable work.

SANCTIONS: "390" -

          Liberty Northwest v. Hughes, 197 Or App 553 (February 16, 2005). Applying ORS 656.390, the court imposed a sanction against a carrier for a frivolous appeal of the Board's order in Lewis T. Hughes, 55 Van Natta 2332 (2003), that had assessed a penalty for unreasonable claim processing regarding the carrier's failure to timely pay a permanent disability (PPD) award as required by an unambiguous administrative rule. Following the court's decision to affirm the Board's order without an opinion, claimant moved for an award of sanctions under ORS 656.390 for a frivolous appeal. In response, the carrier argued that it had a good faith basis for its appeal because the Board had reversed an ALJ's decision that had found that the applicable administrative rule was ambiguous and, as such, it had a legitimate doubt concerning its obligation to pay the PPD award.

          The court disagreed with the carrier's analysis. After reviewing the administrative rule (OAR 436-060-0150(7)), the court determined that the rule was not ambiguous and clearly provided when the carrier was obligated to pay claimant's PPD award. Furthermore, noting that the rule had been in effect at least 8 months before the dispute arose, the court reasoned that the carrier had sufficient time to apprise itself of the current state of the law. Finally, the court reasoned that any doubt concerning the carrier's obligation to pay the PPD award was resolved by the Board's decision.

          Citing Brown v. Argonaut Insurance Company, 93 Or App 588, 591 (1988), the court observed that a carrier's interpretation of a statute or administrative rule that once was tenable may no longer be tenable and, as such, the carrier has a continuing obligation to reconsider its position based on the current status of the law. Applying those principles to the case at hand, the court held that the carrier's petition for judicial review of the Board's order was "initiated without reasonable prospect of prevailing" and that a sanction under ORS 656.390 was warranted. See Winters v. Woodburn Carcraft Co., 142 Or App 182 (1996).


ALJ Retirement

          ALJ Bruce Holtan will be retiring effective April 1, 2005. Judge Holtan has been an ALJ with the Workers' Compensation Board since 1985. During those 20 years he has given excellent service to WCB and the workers' compensation community, as a fair, thoughtful adjudicator during the first half of his tenure and a highly skilled, effective mediator the past ten years. All of us who have known and worked with Judge Holtan through the years will miss his expertise and his sense of humor. We wish him all the best in his retirement activities.

Modification to WCB's Case Numbering System

          In an effort to improve customer service, the case numbering system has recently been modified. Depending on the type of case, the WCB case number will be a series of numeric and sometimes alpha characters. A "regular" WCB case will, as in the past, have seven numbers, with the first two numbers reflecting the calendar year the case is created: e.g., 05-00001. Other, less frequently seen, "case types" will have a seven-digit number followed by one or two capital letters, as follows:

          CP – Civil Penalty
          CV – Crime Victim
          M – Own Motion
          MN – Mediation
          NC – Non-Complying Employer
          S – Stipulation (where no request for hearing has been filed)
          SD – Non-Subjectivity Determination
          TP – Third Party

          Please be careful to note the presence or absence of alpha characters in the case number shown on any document you receive from WCB (Notice of Hearing, letter, order, etc.). For example, cases with case numbers 05-00001, 05-00001NC, and 05-00001CP would be three different cases/files. It is very important that you reference the exact case number (with alpha characters, when applicable), when you communicate, by phone or in writing, with WCB. That will allow WCB to correctly identify the case in our data system. Thank you for your careful attention to this matter.


          Some proposed CDAs neglect to fully comply with WCB rules. These proposals result in an addendum letter, requiring supplementation before receiving approval. To avoid future delays in the CDA approval process, parties and practitioners are reminded to double-check their agreement before submitting it for Board approval. As a means to reduce or eliminate these processing problems, the CDA Unit has listed the following common situations that result in addendum letters.

          Confidentiality Clause. Some Claim Disposition Agreements (CDAs) contain a provision stating that the terms of the disposition will be kept confidential. An approved CDA constitutes a Board order and, as such, is a public document. Therefore, if the confidentiality provision of a proposed CDA purports to extend beyond the parties (to include the Board), the CDA is not approvable.

          In addition, some proposed CDAs containing a "confidentiality" clause will also occasionally include a "civil remedy" provision that purports to authorize a carrier to bring a civil action for damages for any breach of the "confidentiality" clause. The Board's authority to approve CDAs does not extend to matters outside of chapter 656. Karen A. Vearrier, 42 Van Natta 2071 (1990). Consequently, if a "confidentiality" clause includes a "civil remedy" provision, the CDA will not be approved.

          Missing postcards. File enough postcards for all parties and their attorneys. OAR 438-009-0028. (For example, claimant, claimant's attorney, employer, insurer, insurer's attorney.)

          No vocational/work history. Provide claimant's extent of vocational training and a list of occupations that he/she has performed. OAR 438-009-0022(4)(e) and (f). (If claimant is deceased, provide the extent of vocational training and the work history for each of claimant's beneficiaries). Id. If all surviving beneficiaries are minors, guardianship documents should be included.

          Proceeds inconsistent. The amounts listed on the summary page of the CDA and in the body should be consistent. If a handwritten change has been made to amounts, all references to the amounts should be changed and all provisions in the CDA consistent. All parties or their representatives should initial the changes.

          Signatures missing or not original. All parties and their representatives should sign the CDA and they should be original.

          Assignment of Responsibility for installment payments of Structured Settlements. A carrier may assign its obligations to pay future installments of a claimant's CDA payments, provided that the carrier remains ultimately responsible in the event that the assignee is unable to fulfill its obligation. See Thomas H. Kistler, 55 Van Natta 3310 (2003); William I. Tarr, 54 Van Natta 2071 (2002).

          Payment of CDA Proceeds to Someone Other Than Claimant. For CDAs involving a child support lien, 25 percent of the total consideration (prior to the allowance for an attorney fee) is subject to the child support lien. See ORS 656.234(2)(b); ORS 656.234(3)(c). In other words, the total consideration is subject to the child support lien, rather than the total consideration after the attorney fee is deducted. E.g., James F. King, Jr., 53 Van Natta 1096 (2001) (based on the total consideration of $4,000, one fourth of the agreement proceeds, i.e., $1,000, was subject to child support obligations); Jerry Ferguson, 50 Van Natta 240 (1998) (based on the total consideration of $1,200, one fourth of the agreement proceeds, i.e., $300, was subject to child support obligations).


          The Executive Committee of the Workers' Compensation Section is seeking nominations for the annual Douglas Daughtry Award of Merit. The award is given in recognition of a Section member's commitment to the highest standards of professionalism, honesty, integrity and willing adherence to the highest ethical standards, while making outstanding contributions to the Workers' Compensation Section and the hearings process.

          The award (if given this year) will be announced at Salishan 2005. If you wish to nominate an individual, please mail or email your nomination no later than March 31, 2005 to Rodger Hepburn at:

          Reinisch, Mackenzie, Healey, Wilson and Clark
          1250 Lincoln Center Tower
          10260 SW Greenburg, Rd.
          Portland, OR 97223-5522


ALJ Recruitment

          WCB intends to fill an Administrative Law Judge position in the Hearings Division. The location for the position will be determined by WCB at a later date. The salary range is $4,476 - $6,245. Applicants must be members in good standing of the Oregon State Bar or the Bar of the highest court of record in any other state or currently admitted to practice before the federal courts in the District of Columbia. The position requires periodic travel and working irregular hours. The position involves conducting contested case hearings, making evidentiary and other procedural rulings, analyzing complex medical, legal, and factual issues, and issuing written decisions which include findings of fact and conclusions of law. Interested applicants should submit a resume and any other information that demonstrates how the applicant's prior experience would serve him/her in performing the duties of the position. Such resume/information should be submitted to Kerry Garrett, Administrative Assistant to the Presiding Administrative Law Judge, 2601 25th St. SE, Suite 150, Salem, OR 97302-1280. Questions should be directed to Ms. Garrett at (503) 378-3308, ext. 227. The closing date for receipt of applications/resumes is April 29, 2005. The Board is an equal opportunity employer.