Why This Matters
When we took on this case, we thought this was a straight-ahead issue. We were wrong. It got a complicated, and summarizing this case was an exercise in untangling all the complex arguments the insurer pushed in driving this case to the Oregon Supreme Court.
We considered not reporting this case on the website because, well, frankly it's not the most dramatic case we ever argued.
But, it's important for injured workers because this decision may put a stop to the decades long practice of Oregon Workers' Comp. insurers underpaying injured workers for their permanent lost earning capacity.
AND, as you read ahead, you will find some good tips and valuable information that can help you know where you stand on your claim.
Introduction: Setting up The Statute
To explain the decision, a quick lesson on Oregon workers’ compensation is a good place to start.
The Oregon workers’ compensation system is nothing more than an insurance policy that provides a schedule of benefits to injured workers.
Every injured worker gets medical coverage. That is what a workers' compensation claim is. Other benefits include:
Temporary Disability: This benefit replaces wages when the injury or treating the injury (surgery) disables the injured worker.
Vocational Benefits: If you meet the requirements, vocational benefits include retraining and job placement. Job training can include temporary disability (wage replacement) benefits.
Aggravation Benefits: The term “aggravation” means “worsening.” If the on-the-job injury worsens within five years after the claim is closed, a treating physician files the aggravation claim. If approved, the injured worker gets all the benefits an original claim allows.
Permanent Partial Disability: When the injured worker no longer requires medical care to cure their condition, the insurer must pay a permanent partial disability benefit, also called “PPD.” This cash benefit includes a “whole person” benefit based on a closing medical examination, and in some cases, a “work disability” benefit if the injury prevents the injured worker from going back to the job held at injury.
The Common Denominator: The Accepted Condition
All these benefits depend on the “accepted condition.” This is the medical problem that the insurer accepts at the beginning of the claim. Review your Notice of Acceptance to find out what your insurer is accepting.
For example, the medical benefits for a knee strain is different than those for a torn ligament or tendon.
Sometimes, the insurer pays medical bills for a medical problem it did not accept. Paying medical bills does not make the insurer responsible for the condition treated. The Notice of Acceptance does.
So, the insurer can pay a medical bill for something it has not accepted, but is not responsible to cover that medical problem when it comes to other benefits like time loss or permanent disability.
Learn why this can and should be fixed.
Pre-Existing Conditions and Combined Conditions
pre-existing condition: Something you treated for before the on the job injury, or arthritis (even if you never treated for it or knew you had it!). This kind of condition is part of a combined condition claim, but cannot be a claim all by itself.
combined condition claim: this is a claim where the insurer decides that an on the job injury combined with a pre-existing condition (a low back strain combines with low back arthritis).
injury condition claim: This is a claim where the insurer accepts only an injury condition that is not combining with any kind of pre-existing condition. In the cases we are summarizing here, we were dealing with an accepted knee strain, and an accepted low back strain.
For several years, Oregon followed the old rule: An injured worker is taken is found.
If a worker with pre-existing low back arthritis strains their lower back, chances are the low back strain will worsen or “light up” the arthritis. That worker may have more complications with medical care, and a greater chance of suffering permanent impairment. Under the old rule, any additional medical treatment or permanent disability the injury caused included the worsened arthritis. So, the worker was taken as found.
That all changed in the early 1990's in Oregon. The Oregon Legislature changed the statute so insurers could separate the arthritis out of a claim, allowing more claim denials and lower disability awards. If you think that sounds like discrimination, you are not the only one. This is where pre-existing conditions and combined condition claims come in.
There are two ways insurers save money with combined condition claims. The first is accepting and denying a combined condition claim. Here is how it works:
Under the newer rules, the insurer can accept a combined condition (injury + arthritis) when the on-the-job injury (low back strain) combines with a pre-existing condition (low back arthritis). Why do this?
The claim is covered only so long as the low back strain part of the combined condition is the main reason for medical care or disability from work (more than 50%). If the pre-existing condition takes over as the main cause of need for care or disability, the insurer can deny the whole claim, which cuts off temporary disability and medical benefits. That can be a big savings for an insurance company, and a big problem for an injured worker facing a surgery and months off work, not to mention possible permanent work limitations.
There is a catch. The insurer must deny the claim in writing, and the injured worker can request a hearing to appeal the denial. At hearing, the insurer must prove that the on-the-job injury is no longer the main need for medical care or disability.
The second way insurers save money is at closure. Here is how that works:
If an insurer accepts a combined condition, and then denies the combined condition, it can discount the pre-existing condition's contribution to the permanent impairment, and get a big discount what it pays the injured worker. For example, if an injured worker has a low back strain combined with pre-existing low back arthritis, and the insurer finds that the low back strain is causing 30% of the disability, it gets a 70% discount on the permanent disability finding. That’s a lot.
Our Case (Actually Two Cases)
There were actually two cases we took to the Supreme Court. The first involved a knee injury and pre-existing knee arthritis. The other involved a low back strain and low back arthritis.
Our Beef: The Insurer Closed the Wrong Claim the Wrong Way
We argued the insurer violated the statute because it accepted one kind of claim (injury claim), but closed the claim using rules only for another kind of claim (combined condition claim), kind of like a bait and switch.
The insurer accepted low back and knee injury claims, but used rules only reserved only for combined condition claims to discount the disability benefit. The "Wrong Way" part of the argument is that to use this discounting statute, the insurer must first accept and then deny the combined condition so our clients know what is going on, and can appeal that denial and make the insurer to prove its denial. The insurers here did not, and our clients were left in the dark.
The "Wrong Claim" part of our argument is that the insurer should have closed the claim it accepted. Accepting the injury claims as a knee strain and a back strain requires the insurer to pay for all permanent disability the injury causes, even if it is worsening of pre-existing arthritis. By using the discounting provision reserved only for combined conditions to close a low back strain, the insurer was underpaying our client by at least half on one case. The insurer's switching the way it handled the claim for an injured worker mid-stream is breaking the rules.
After oral argument in September 2018, the Supreme Court recently issued an Opinion in August of this year, finding that if the insurer accepted a low back strain or knee strain that worsened pre-existing arthritis, any permanent worsening of the pre-existing arthritis was included in the permanent partial disability award. Permanent disability discounts apply only for combined conditions that that have been accepted, and then denied.
In response to this significant change in Oregon Workers’ Compensation law, the Oregon Workers’ Compensation Division is temporarily amending its rules, and will later propose permanent rules. Whether the State of Oregon agency is doing enough to obey the Supreme Court ruling is another question, but we shall see.
Often, when the Oregon Supreme Court or Court of Appeals clarifies issues like this, it creates other issues for injured workers and their claims. It may also result in yet more changes in the statute.
If you had a recently closed claim or you have an open claim and need to know whether the insurer is accepting full responsibility for your on-the-job injury, contact us. We are on top of this issue, and we can tell you where you stand.