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2011 Legislation Summary

Posted 07/21/11

The 2011 Legislative session ended on June 30. While it was a busy session for many issues, including education and health care, it was relatively quiet for workers’ compensation issues. A selection of key legislation is described below, including links to the bills on the Legislative Assembly webpage.

House Bill 2093
This bill gives the Department of Consumer and Business Services the ability to take administrative action against a person or company that is actively managing the care of workers when that person or company is not certified as a managed care organization. The department will be able to address these violations by imposing civil penalties and issuing cease-and-desist orders. The bill also provides a process for the person or company to appeal the department’s action.

Effective: Jan. 1, 2012
Contact: Nanci Johnston, Medical Section, 503-947-7767
Link to bill: http://www.leg.state.or.us/11reg/measpdf/hb2000.dir/hb2093.en.pdf

House Bill 2094
This bill allows a delay of the reconsideration process for up to 45 days when the parties are actively engaged in settlement negotiations that include reconsideration issues and both parties agree to delay the process. This gives the parties more time to reach an agreement, without extending the department’s time to complete the reconsideration process if the negotiations are not successful. Either party may request that the reconsideration process be resumed. If the parties fail to reach a settlement on reconsideration issues, the reconsideration process will restart at the end of the deferral period and the department will complete the process as usual. The bill also provides that permanent disability payments to the worker continue during the settlement negotiations, as currently happens during the reconsideration process.

Effective: Jan. 1, 2012
Contact: Rae Howe, Benefit Services Section, 503-947-7018
Link to bill: http://www.leg.state.or.us/11reg/measpdf/hb2000.dir/hb2094.en.pdf

House Bill 2712
This is a large bill that changes and standardizes statutory references to fines, violations, and penalties. As a result, there are updates to some of the workers’ compensation penalties found in ORS 656.990 (see Section 268 of the bill). Instead of specifying the fine or prison sentence, this section now refers to specific types of violations (e.g., Class A misdemeanor). These categories of violations are defined elsewhere in statute.

Effective: Jan. 1, 2012
Contact: Reg Gregory, Compliance Section, 503-947-7665
Link to bill: http://www.leg.state.or.us/11reg/measpdf/hb2700.dir/hb2712.en.pdf

House Bill 2743
This bill gives podiatric physicians and surgeons the ability to serve as attending physicians without limitation. The bill also removes the requirement that podiatric physicians and surgeons must certify that they have reviewed informational materials about the workers’ compensation system developed by the director.

Effective: Jan. 1, 2012
Contact: Juerg Kunz, Medical Section, 503-947-7741
Link to bill: http://www.leg.state.or.us/11reg/measpdf/hb2700.dir/hb2743.en.pdf

House Bill 3490
In 2009, the Legislature required workers’ compensation coverage be provided for certain search-and-rescue volunteers that were not required to be covered under the law. In the process of implementing this change, counties raised questions about coverage responsibility in situations where a county requests the services of another county’s volunteers or the volunteers themselves offer their services in an emergency. This bill maintains the requirement for mandatory election of coverage for the otherwise nonsubject volunteers, but clarifies which county must provide the coverage.

Effective: June 17, 2011
Contact: Reg Gregory, Compliance Section, 503-947-7665
Link to bill: http://www.leg.state.or.us/11reg/measpdf/hb3400.dir/hb3490.en.pdf

Senate Bill 43
Under current law, the Department of Justice may order amounts to be withheld from an obligor’s income to satisfy current or past-due child or spousal support obligations. There are limitations on how much may be withheld from the obligor’s disposable monthly income and other employment or insurance-type payments, benefits, or settlements, including workers’ compensation. This bill increases the amount that can be withheld from workers’ compensation benefits for this purpose, including up to half of lump-sum permanent disability payments, permanent disability benefits, and benefits under a compromise and release or disputed claim settlement.

Effective: Jan. 1, 2012
Contact: Sally Coen, Compliance Section, 503-947-7687
Link to bill: http://www.leg.state.or.us/11reg/measpdf/sb0001.dir/sb0043.en.pdf

Senate Bill 173
As part of the disputed claim settlement process, a worker can agree to settle unpaid medical bills related to the claimed condition. The current law limits how much of the settlement can go toward medical bills (40 percent of the total settlement unless the worker agrees to have his or her settlement pay a higher share) and limits the payment amount to 50 percent of what may be charged under the workers’ compensation fee schedule. The provider is allowed to collect any outstanding balance directly from the worker, and this amount is not limited to the workers’ compensation fee schedule. This bill allows a worker to pay a higher reimbursement rate for his or her unpaid medical bills directly out of his or her settlement. The amounts would be calculated at 100 percent of the workers’ compensation fee schedule, instead of 50 percent. If the worker does that, this bill requires medical providers to accept this as payment in full and not balance-bill the worker for any charges that exceed the workers’ compensation medical fee schedule.

Effective: Jan. 1, 2012
Contact: Juerg Kunz, Medical Section, 503-947-7741
Link to bill: http://www.leg.state.or.us/11reg/measpdf/sb0100.dir/sb0173.en.pdf

Directing or Managing Care: House Bill 2093, Workers' Right to Choose Health Care Provider Posted 11/16/11

Under Oregon law, no one may require a worker injured on the job to obtain treatment from a specific provider or type of provider. The law limits the length of time some health care providers may treat injured workers, or if they can authorize time off work.

In Oregon, only a certified managed care organization (MCO) may restrict the choice of a health care provider or medical service provider, in addition to imposing specific treatment guidelines, protocols, or standards. Even within the MCO, the worker is free to choose his or her provider from a list of health care providers who are members of the certified MCO’s panel. An employer whose workers’ compensation claims are covered by an MCO is not permitted to direct an injured worker to a particular health care provider.

House Bill 2093 goes into effect on Jan. 1, 2012.

The law prohibits an employer, insurer, service company, or any of its agents from engaging in any of the following activities, specifying that only a certified MCO may:
1) Restrict a worker’s choice of health care or medical service provider.
2) Restrict a worker’s access to any category of medical service providers.
3) Restrict a medical service provider’s ability to refer a worker to another provider.

4) Require preauthorization or precertification to determine the necessity of medical services or treatment.
5) Restrict treatment provided to a worker by a medical service provider to specific treatment guidelines, protocols, or standards.

House Bill 2093 expressly allows referral from one medical provider to another, use of an on-site medical service facility by the employer to assess the nature or extent of a worker’s injury, and treatment provided by a medical service provider or transportation of a worker in an emergency or trauma situation.

The director of the Department of Consumer and Business Services may impose civil penalties if a person has engaged in the prohibited conduct. If a violation is repeated or willful, the director has the authority to issue a cease-and-desist order, prohibiting the person committing the violation from “making any future communication with injured workers or medical service providers or from taking any other actions that directly or indirectly affect the delivery of medical services provided under [the Oregon Workers’ Compensation Law].”

If you have questions, contact the Workers’ Compensation Division Medical Section at 503-947-7606 or e-mail wcd.medicalquestions@state.or.us.

Medical case management:
When does it really work and reduce costs?

Posted 04/20/11

Insurers and employers often believe  they are saving claim costs through medical case management, but they may not be considering overall costs of more than one company duplicating services. These medical case management practices can interfere with each company's bottom line.

Certified managed care organizations (MCOs) manage workers' medical care. They must ensure workers will receive high-quality, medically necessary, and appropriate care, and they must prevent inappropriate and excessive treatment. They accomplish this through required and director-approved processes such as utilization review, peer review, and dispute resolution. These processes give providers, workers, and insurers avenues of remedy if they disagree with MCO medical management decisions.

An insurer, or someone acting on behalf of the insurer, also has the right to conduct utilization review and case management activities as part of its business operations. Many such contractors are located outside of Oregon and work from outside the state. However, all the players must remember that in Oregon, only a certified MCO may restrict a worker's choice of providers or compel a provider to adhere to specific treatment guidelines, standards, and protocols.

Is there a point where medical case managers' actions and activities interfere with an MCO’s delivery of a worker's medical services and may actually increase costs in a claim? Consider the following real-life sequence of events the Workers’ Compensation Division (WCD) Medical Section’s Managed Care Team uncovered after receiving a complaint from a worker’s attorney.

In this case, the worker was enrolled in a certified MCO. The insurer contracted with a third-party administrator (TPA) to process its claims, and both the insurer and the TPA contracted with other noncertified organizations.

Here’s what happened:

  • The TPA, on behalf of the insurer, enrolled the worker in a certified MCO.
  • An attending physician on the MCO’s panel treated the worker. 
  • The attending physician referred the worker to another MCO panel provider for a diagnostic imaging test.
  • A noncertified organization then notified the TPA this provider was not on the noncertified organization’s provider network. The noncertified organization scheduled an appointment with a different provider in its network, directing the worker away from the MCO panel provider.
  • The worker’s attending physician also arranged a consultation with a specialist physician on the MCO’s panel.
  •  The noncertified organization sent a letter to the worker informing him it would be assisting in the medical management of his care.
  • The TPA and its case manager (a registered nurse working on site at the TPA but employed by the noncertified organization) contacted the certified MCO asking it to arrange for an earlier appointment with another MCO physician specialist.
  • The case manager called the specialist physician’s office and canceled the worker’s consultation appointment.
  • The MCO scheduled an earlier appointment with another panel specialist.
    The worker said he wasn’t aware his original consultation had been canceled until he called the specialist’s office and was told the TPA’s nurse case manager canceled it.
  • The worker became confused and anxious about how to proceed and retained an attorney.
  • The worker’s attorney told him to keep his appointment with the original specialist and not attend the other appointment with the second specialist.
  • When the worker called the original specialist, that appointment was no longer available so he scheduled another appointment.
  • The worker did not keep the appointment with the second specialist the MCO scheduled. The specialist may have charged the insurer a no-show fee.
  • On the date of this appointment, the noncertified organization’s case manager called to see if the worker kept his appointment. After learning he did not, she rescheduled another appointment with this specialist.
  • Neither the TPA nor the noncertified organization’s case manager informed the certified MCO of their actions.
  • Until WCD contacted the attending physician, he didn’t know the original consultation he arranged had been canceled.

Despite the best intentions of the professionals involved, much of this series of events was unproductive and probably didn’t result in decreased costs in this worker’s claim. For the sake of workers, employers, medical providers, MCOs, and all the system participants, medical case management needs to be managed, too.

Division 009 medical fee and payment rules:
Pharmaceutical clinical justification for workers’ compensation

Posted 04/20/11

The Workers’ Compensation Division assesses and attempts to address medical and other cost drivers in the workers’ compensation system. Pharmaceutical cost data show that a few brand-name drugs comprise a significant and growing part of the medical costs of the workers’ compensation system. In fact, the costs associated with the seven brand-name drugs on Form 4909 make up about 30 percent of the total pharmaceutical costs in Oregon’s workers’ compensation system.

We’ve also received feedback from some Oregon providers that cost information about the drugs they prescribe is not always available to them.

Therefore, the new Form 4909, “Pharmaceutical Clinical Justification for Workers' Compensation,” was created through the administrative rules process. Effective April 1, 2011, prescribing providers are required to fill out Form 4909 and submit it to the workers’ compensation insurer when prescribing Celebrex, Cymbalta, Fentora, Kadian, Lidoderm, Lyrica, or OxyContin for more than five days.

The form’s purpose is to help raise awareness of the cost of these seven drugs. The provider will see on the form information comparing the cost of these drugs to some alternative medications.  

Providers are not required to prescribe any of the alternative medications listed on the form. The form is not required for refills of the seven drugs listed, nor is there a specified time frame for submitting the form.

The form asks if the provider has considered alternative medications and whether the provider anticipates the patient will need the medication for more than 60 days.

While the insurer may file a complaint with the division if it doesn’t receive Form 4909 from a provider, there is no penalty for providers who don’t submit the form. When the division receives a complaint that a provider didn’t use the form, the division will follow up with the provider to offer education. 

The division asked the Oregon boards of Medical Examiners, Dentistry, Naturopathy, and Nursing to put links to the new bulletin and form on their websites, and to tell their members about this new requirement. Notices also went out to medical boards in California, Idaho, Nevada, and Washington.  

The link for the Division 009 pharmacy rules, OAR 436-009-0090, can be found at http://wcd.oregon.gov/policy/rules/rules.html.

Providers can obtain Bulletin 361 and Form 4909 through the following links:

Bulletin 361:
Form 4909: 

Go to the division’s website for frequently asked questions about the new bulletin and form at http://www.cbs.state.or.us/wcd/rdrs/mru/4909_faqs.pdf.

For more information, contact the division’s Medical Section by phone at 503-947-7606 or by e-mail at wcd.medicalquestions@state.or.us.

Independent medical exams survey Posted 04/20/11

Starting April 1, 2011, the Division 010 rules no longer require the insurer to send the worker a survey regarding the independent medical exam.

The Workers' Compensation Division has created an online survey  (https://www4.cbs.state.or.us/exs/wcd/ime_survey/index.cfmthe worker can take after the independent medical exam.

The link is included in the "Important information about independent medical exams for workers" brochure, which the insurer must send to the worker before the independent medical exam.

To file a complaint about the independent medical exam without taking the survey, the worker can contact WCD at 503-947-7606 or e-mail wcd.medicalquestions@state.or.us.

Diagnostic medical services Posted 04/20/11

Diagnostic medical services identify the particular injury, disease, or condition from which the patient or worker suffers and are compensable in an open or closed claim, similar to prescription medications. The insurer or self-insured employer pays these services if the service is necessary or appropriate to determine the nature or extent of a compensable injury, regardless of whether the condition is ultimately identified as a “compensable condition.”

One case the Oregon Court of Appeals decided that established this principle was Brooks v. D&R Timber, 55 Or App 688 (1982). The worker experienced a left knee injury, which was accepted. The treating orthopedist performed a diagnostic arthroscopy, believing that the worker had suffered a torn meniscus from the work injury. No meniscus tear was found, and it turned out the worker had a condition that was not related to his injury or work activities. In spite of this, payment for the exploratory surgery was found to be the responsibility of the employer because the surgery had been done to determine the nature and extent of the worker’s compensable injury. A similar, more recent decision by the court can be found in SAIF v. Martinez, 219 Or App 182 (2008).

When a worker’s claim has been enrolled in a managed care organization (MCO), the worker and the physician must be aware of the particular MCO rules or protocols regarding diagnostic medical services. Under some circumstances, the physician’s ability to perform a particular diagnostic procedure, with reimbursement from the employer/insurer, may be conditioned upon precertification through the MCO. This can depend upon a variety of factors and generally will vary from one MCO to another. Participating panel providers with the different MCOs must abide by the protocols established by the individual MCO, which may or may not require precertification of the diagnostic service in any given case.

The Workers’ Compensation Board has considered the question of compensability of diagnostic medical services. One such case was In the Matter of the Compensation of John D. Swartz, 62 Van Natta 570 (2010). The claim was accepted for a lumbar contusion, resulting from the worker’s fall from a height of five feet onto his tailbone and buttocks. The attending physician proposed lumbar facet injections in order to better define the worker’s condition and to form an appropriate treatment plan. A majority of the three-person panel concluded that the injections were the insurer’s responsibility because the evidence at hearing established that the attending physician wanted to perform the injections in order to determine the nature and extent of his patient’s work injury. Based on this finding, the board majority concluded that there was a sufficient relationship between the proposed diagnostic medical services and the worker’s compensable injury to require payment by the insurer.

A similar board decision is In the Matter of the Compensation of Marcelo Hernandez-Rolon, 63 Van Natta 120 (2011). In that case, the insurer was obligated to pay for an electromyography (EMG) and a magnetic resonance imaging (MRI). The board pointed out in that decision that the worker’s medically stationary status had no bearing on his entitlement to reimbursement for these diagnostic medical services. 

The board’s most recent decision addressing this issue is In the Matter of the Compensation of Rafael R. Soto-Regalado, 63 Van Natta 720 (2011). The case involved a claim that was accepted for thoracic strain, right pectoralis muscle strain, and right lateral epicondylitis. The attending physician reported a possible “cervical spine origin for (the worker’s) posterior shoulder/upper back pain,” and, therefore, prescribed X-rays and an MRI “of the cervical spine to evaluate for a herniated disc, or more likely, foraminal stenosis with some cervical radiculopathy.” The board agreed with the administrative law judge’s determination that the MRI in dispute was compensable, based upon its conclusion that the study was ordered, at least in part, for the purpose of determining whether the worker’s accepted thoracic strain and right pectoralis muscle strain were causing his symptoms.

The Workers’ Compensation Division’s Medical Section addressed a situation in which the diagnostic medical services involved an entirely different area of the body than the area the insurer accepted. The worker was involved in a serious motor vehicle accident that occurred while the worker was traveling in her car. The trauma directly resulted in the need for spinal surgery. Approximately three weeks after the collision, the worker began to complain of blood in her urine (hematuria). The attending physician, who was a general practitioner, referred the worker to a urologist. The insurer initially refused to pay for the referral, which included a series of diagnostic studies, based upon the fact that the hematuria did not develop until the third week after the collision. After obtaining a brief narrative report from the attending physician, which explained why the physician believed that the work-up for the hematuria was directly related to the motor vehicle accident, the insurer changed its position and agreed to voluntarily pay for the urologist’s services, including the related diagnostic work-up. The insurer paid these medical services on a diagnostic basis. No claim for the hematuria condition was made or pursued.

Medical providers often want some guarantee of payment before providing services. There is no guarantee available in the workers’ compensation system. However, when a claim is enrolled in a certified MCO, an awareness of the principles governing the insurers’ obligation to reimburse for diagnostic medical services and familiarity with any applicable managed care protocols may provide some reassurance of payment for medical services considered diagnostic in nature. This, in turn, may help avoid unnecessary delays in the performance of important diagnostic procedures, which often enable the worker to proceed with timely, effective medical care.   

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