Booth v. Tektronix

Citations: 823 P.2d 402; 312 Or. 463; 1991 Ore. LEXIS 100Docket: WCB 84-07174; CA A50290; SC S36388

Court: Oregon Supreme Court; December 19, 1991; Oregon; State Supreme Court

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In the case of Lois Booth v. Tektronix, Inc., the Supreme Court of Oregon addressed two primary issues related to workers' compensation: the applicability of the physician-patient privilege in Workers' Compensation Board (the Board) proceedings and the legality of the Board's interpretation of its rules permitting pre-hearing communications between an employer's attorney and a claimant's treating physicians without prior notice to the claimant. 

Lois Booth sustained a work-related injury on October 24, 1983, which led to a series of claims and denials regarding her medical condition. After her initial claim was denied, further medical evaluations revealed a herniated disc, prompting the employer to reopen the claim and ultimately award her 25 percent permanent partial disability for her mid-back injury. However, the employer denied responsibility for her low-back issues, which led to a hearing where evidence from pre-hearing communications with her physicians was admitted over her objections.

The Board upheld its previous decisions allowing such communications without notifying the claimant, which the Court of Appeals affirmed. The Supreme Court ultimately affirmed the Court of Appeals' decision, ruling that the physician-patient privilege did not apply in this context and that the Board's interpretation of its rules was not erroneous.

The Board upheld the referee's ruling that the claimant's letters were admissible and that her low-back condition was not related to her on-the-job injury, thus denying her compensation for that issue. However, the Board found the referee's assessment of the claimant's permanent disability for her compensable mid-back injury was incorrect and increased her award from 25% to 50% permanent disability. The claimant challenged the admission of evidence from pre-hearing communications, arguing that without this evidence, there was insufficient support for the Board's findings regarding her low-back problem and the determination of partial, rather than total, disability. The Court of Appeals affirmed the Board's decision without opinion, leading the claimant to seek further review. 

The core of the claimant's argument is that the Board's interpretation of statutes and rules permitting the evidence in question is erroneous and falls within the review scope under ORS 656.298(6) and 183.482(8)(a). The analysis begins with the physician-patient privilege in workers' compensation hearings. The claimant contends that the pre-hearing communication evidence is protected under Oregon Evidence Code (OEC) 504-1, which neither statutes nor Board rules allow to be waived. The employer counters that the privilege does not apply in workers' compensation proceedings. The Workers' Compensation Law, ORS chapter 656, is examined, indicating that procedural rules differ based on whether the matter concerns a claim. Since this case involves a claim, the relevant procedural statutes and Board rules would apply, but no statute or rule has been identified that explicitly addresses the applicability of the physician-patient privilege in this context.

ORS 656.283(7) states that in Workers' Compensation hearings, referees are not bound by common law or statutory rules of evidence and can conduct hearings to achieve substantial justice. Consequently, the physician-patient privilege outlined in OEC 504-1 is not applicable, meaning the referee was not obligated to exclude evidence from pre-hearing communications. The claimant contends that the Oregon Evidence Code (OEC) and the Oregon Administrative Procedures Act (OAPA) render the privilege applicable, citing the Commentary to OEC 101, which indicates that the rules of evidence do not apply to administrative agencies in contested cases, per ORS 183.450. However, ORS 183.450(1) permits the exclusion of irrelevant or repetitive evidence while allowing the admission of other relevant evidence commonly relied upon in serious affairs. Agencies must respect legal privileges, but ORS 183.315(1) specifies that the rules of privilege do not apply to the Department of Insurance and Finance concerning its functions under ORS chapters 654 and 656. Thus, the evidentiary rules of privilege in contested cases (ORS 183.450) do not extend to workers' compensation hearings, supporting the conclusion that the physician-patient privilege is not applicable in this context. The Board's permission for pre-hearing communications between an employer’s attorney and a claimant’s physician is legally sound. Nonetheless, the claimant raises concerns about the appropriateness of such communications, arguing that despite the lack of privilege, the special relationship between patient and physician should be protected, and that workers' compensation statutes and rules do not anticipate this type of interaction.

The Policy Claimant and the Oregon Trial Lawyers Association (OTLA) reference multiple sources emphasizing the significant relationship between patients and physicians, including the Hippocratic Oath, legal repercussions for disclosing professional secrets under ORS 677.190(5), tort liability for breaches of confidentiality per Humphers v. First Interstate Bank, the constitutional right to privacy as outlined in Roe v. Wade, and ethical obligations of lawyers in personal injury cases. However, the document clarifies that such considerations do not apply to workers' compensation cases, particularly due to the absence of evidentiary privilege in this context. Consequently, the arguments for prohibiting communications between employers and claimants' physicians are viewed as mere policy arguments, which should be evaluated by the legislature rather than the courts.

The legislature has granted authority to an agency to establish rules regarding physician reporting, per ORS 656.252, and courts generally defer to agency expertise and statutory interpretations. The court's role is limited to ensuring that the agency's decisions fall within its discretionary authority. The Board has the latitude to interpret its rules to accommodate future cases, as seen in prior rulings. The Board's decision to permit communications aligns with the Workers' Compensation Law's aim to minimize litigation delays and costs. 

Claimant's assertion that the workers' compensation statutes and rules imply a prohibition of certain communications is deemed unconvincing. ORS 656.252(1) allows rules on physician reporting without specifying that these must be written reports. Thus, there is no legislative intent to restrict communication to written formats or to eliminate verbal exchanges between employers or their representatives and injured workers' physicians.

ORS 656.252 mandates that physicians must advise insurers or self-insured employers within five days regarding a worker's return to work or the reopening of a closed claim and must notify them of changes in physicians or referrals within the same timeframe. The statute does not specify how this information should be relayed, as long as it is timely and accurate. The claimant argues that the emphasis on written reports in administrative rules indicates a policy aimed at protecting the confidentiality of the physician-patient relationship. However, this claim is contradicted by the statute's purpose, which focuses on ensuring prompt and accurate reporting for compensation related to compensable injuries. Legislative history reveals a priority on promptness over confidentiality concerns. 

ORS 656.252 also protects physicians from legal liability for disclosing medical information, indicating that confidentiality was not a primary legislative concern. The statute serves as a general guideline for communications between physicians and insurers, allowing the Board to define acceptable communication methods in its rules. The Board's interpretation, which asserts that insurers are not required to notify claimants before contacting their physicians, aligns with legislative intent to promote efficient information sharing and reduce litigation. Although the claimant suggests that the absence of specific communications in the statutes implies prohibition, the Board interprets this absence as permission for such communications. The Board’s interpretation is deemed reasonable and consistent with the Workers' Compensation Law. The Court of Appeals' decision and the Workers' Compensation Board's order are affirmed. A concurring and dissenting opinion acknowledges agreement on the protection of physician-patient privilege but disagrees on the permissibility of ex parte communications between treating physicians and employers' lawyers.

The court is tasked with reviewing the Board's interpretation of law to determine if it has incorrectly interpreted statutory provisions, specifically whether a correct interpretation necessitates a specific action. The Board, in its decision regarding Alan W. Hayes, Jr., indicated that insurers are not required to notify claimants before contacting their physicians, aligning this stance with a policy for full disclosure and reduced adversarial processes in workers' compensation claims. The court acknowledges that while the Board can establish general policies for rule interpretation, it cannot modify the terms of a statute through its rules. The authority of administrative agencies is limited to the powers granted by statute, which dictates their actions and does not allow for discretionary policy enforcement.

The Workers' Compensation Law aims to create a fair administrative system that minimizes litigation. The Board has developed procedural rules under ORS 656.726(4) to support this, but the court emphasizes that these rules do not explicitly allow for ex parte communication with treating physicians. The court highlights ORS 656.252, which governs physician contact and contains specific provisions for rulemaking regarding medical service audits and physician reporting. It concludes that ORS 656.252 limits the Board's authority to create rules concerning treating physician contacts under ORS 656.726(4), indicating a potential conflict between these statutes.

The Board has the authority to create rules beyond those specified in ORS 656.252(1)(a) through (e), but this authority is limited to the scope of 'reports by attending and consulting physicians and other personnel of all medical information relevant to the determination of a claim.' This limitation restricts the Board's rulemaking power under both ORS 656.726(4) and 656.726(3)(a). The inclusion of specific rules suggests a legislative intent to exclude other related matters. The term 'reports' in ORS 656.252 is interpreted to mean 'written reports,' as indicated by the context and legislative history. Reports must be submitted to all specified parties: the injured worker's representative, employer, insurer, and department, using the conjunctive 'and,' which implies that verbal reports are insufficient unless all parties are present. ORS 656.252(4) provides immunity for those reporting medical information in compliance with rules, further supporting the notion that reports must be written to be shared with all parties. The Board's indication that ex parte contact with physicians is permitted contradicts the requirement for reports to be submitted to all parties together. Although the Board cited the policy of the workers' compensation law to support its position, it acknowledged that the preferred method for presenting medical evidence is through written reports, aligning with legislative intent to ensure efficient claim processing.

ORS 656.252 aims to ensure prompt and accurate reporting, mandating that reports be in written form and shared mutually. Legislative history indicates that "reports" specifically refers to written documents, as shown in House Bill 1594, which required reports on forms established by the board. Administrative rules further define "report" as medical information in written form, encompassing various formats such as narrative reports and treatment plans. 

The 1990 amendments to these definitions do not limit the board's authority to establish additional rules for obtaining information. However, ORS 656.252(1) restricts the board's methods to those consistent with its provisions unless explicitly authorized otherwise. The board could interpret this to permit rules for written and certain verbal reports but not ex parte communications. The board's previous ruling allowing ex parte contact with physicians was deemed an erroneous interpretation of the law. 

Consequently, since evidence obtained through these improper communications influenced the case, the Court of Appeals' decision should be reversed, and the case remanded to the board to determine appropriate consequences regarding the inadmissible evidence. The opinion includes references to judicial precedents and definitions relevant to ex parte communications.

The court has the authority to affirm, reverse, or remand orders based on the agency's interpretation of law. If an agency misinterprets a legal provision, the court must set aside or modify the order or remand the case if a correct interpretation necessitates a specific action. Under OEC 504-1(2), patients possess a privilege to refuse the disclosure of confidential communications made for diagnosis or treatment purposes, which includes interactions with their physician and those involved in their care. Following a 1987 reorganization, references to the Workers' Compensation Department were replaced with the Department of Insurance and Finance, which now oversees the Workers' Compensation Board. This reorganization does not affect the current case. Many states commonly exempt workers' compensation proceedings from physician-patient privilege. Claimants and amicus OTLA reference withdrawn legal ethics opinions from the Oregon State Bar regarding ethical obligations, noting that there are no current opinions restricting communication between lawyers and physicians, although existing rules provide exceptions for communications aligned with workers' compensation regulations. The objective of the Workers' Compensation Law, per ORS 656.012(2)(b), is to create a fair administrative system for delivering benefits to injured workers, minimizing litigation and adversarial proceedings. OAR 438-05-035 emphasizes the Board's policy of liberal construction of rules in favor of injured workers, aiming for substantial justice, particularly regarding the financial hardships of the parties involved. Unrepresented injured workers are not strictly held accountable for rule compliance, while representatives must adhere to these rules. Additional specific OARs pertain to medical reporting and evidence presentation during hearings. ORS 656.252(1) mandates the director to establish rules ensuring timely and accurate reporting of compensation for compensable injuries, which includes medical information relevant to claims being shared with all pertinent parties.

Attending physicians are mandated to report injuries to insurers or self-insured employers promptly after the initial service and to provide follow-up reports within designated timelines or upon request. Examining physicians must also submit their reports within specified timeframes. The director may establish additional reporting requirements to ensure timely compensation payments and necessary information dissemination for claim determinations. Insurers and self-insured employers are required to audit all medical service billings. Under ORS 656.252(4), individuals reporting medical information in compliance with department rules are protected from legal liability to promote timely information sharing and prevent delays due to confidentiality concerns. The statute does not restrict employer-physician communication, and there is no legislative intent to limit such interactions. Comparisons to common-law tort rules are deemed irrelevant, as the Oregon workers' compensation system aims to simplify compensation processes. A cited Washington Supreme Court case regarding pre-hearing communications is considered unpersuasive in this context due to the differing legal frameworks. The term "ex parte" refers to communications with the claimant's treating physicians by employers or their representatives without the claimant's consent. The Board's policy supports allowing such ex parte contacts, and the director has broad rule-making authority to support these regulations.

Ex parte contact between physicians and parties involved in legal claims raises concerns regarding the fairness of the system. The majority opinion references various sources highlighting the special relationship between patients and physicians, distinct from the evidentiary privilege. Recent discussions on ex parte contacts can be found in legal literature, including annotations and surveys from multiple jurisdictions. 

Rule OAR 438-07-005 was proposed alongside OAR 438-05-035, with subsequent language changes in ORS 656.254(1) suggesting that medical reports do not necessarily need to be on a specific form, potentially allowing for reports in letter format. However, the legislative history does not clarify the importance of this change.

The former rule defined "report" broadly to include various forms of medical information communication, emphasizing legibility and relevance. The author contends that the Board's rule permitting ex parte contact lacks statutory authority for immunity, potentially exposing physicians to tort liability for breaching confidentiality as established in Humphers v. First Interstate Bank and ORS 677.190, which addresses the repercussions for divulging professional secrets.