Court: Court of Appeals of Oregon; April 19, 2006; Oregon; State Appellate Court
Employer is contesting a Workers’ Compensation Board order that determined claimant’s lumbar discography was causally related to his accepted back condition and thus a compensable medical service. The employer argues the board exceeded its jurisdiction in this determination and misapplied ORS 656.386 regarding attorney fees, which the court agrees with, reversing the attorney fee award. Claimant, a sandblaster, suffered a compensable back injury from a fall and the employer accepted certain injuries. During diagnosis, the claimant's physician ordered imaging studies, which the employer covered, but declined to pay for a lumbar discography, claiming it was ineffective. The case centers on the authority division between the board and the director related to medical service disputes under ORS 656.704(3). It clarifies that disputes requiring a determination of a medical condition's compensability relate to claims and fall under the board's jurisdiction, while disputes over the appropriateness or effectiveness of medical services do not, falling under the director's jurisdiction. The board is tasked with establishing rules for fair resolution of these disputes, prioritizing those concerning claims.
A dispute regarding the causal relationship between medical services and an accepted claim for compensability falls within the jurisdiction of the board, specifically focusing on the second and third types of disputes. The employer questioned both the causal link of the diagnostic service to the injury and its efficacy. Under ORS 656.704(3)(b)(C), the board has jurisdiction over the causal relationship issue, while ORS 656.704(3)(b)(B) assigns the efficacy issue to the director. After the employer declined to pay for the discography, the claimant’s physician sought a determination of compensability from the director, prompting the department to transfer the case to the board's hearings division.
The Administrative Law Judge (ALJ) found that, although the employer's challenge on the efficacy of the discography was not within her jurisdiction, she could address the causal relationship under ORS 656.704(3)(b)(C). Citing relevant case law, the ALJ concluded that diagnostic services are compensable if necessary to determine the cause or extent of a compensable injury. The ALJ determined that the discography aimed to assess the extent of the claimant’s injury and thus constituted compensable diagnostic services. The ALJ ordered the insurer to reimburse the providers and awarded the claimant attorney fees under ORS 656.386(1) for prevailing on the compensability issue.
The employer appealed, but the board upheld the ALJ's authority to assess the causal relationship and agreed that the discography was compensable. However, the board ruled that issues related to the medical services' appropriateness and reimbursement fell under the director's exclusive authority. Consequently, the board vacated the portion of the ALJ’s order addressing these issues and directed a transfer back to the director. The board affirmed the ALJ's award of attorney fees regarding the causal relationship decision.
Employer seeks judicial review of the board's decision on attorney fees, asserting that the board exceeded its jurisdiction by determining that a discography constituted ‘compensable diagnostic services’ before the medical appropriateness of the treatment was established. Employer acknowledges the board's exclusive jurisdiction over the causal relationship of medical services to a compensable injury and concedes that the diagnostic treatment was necessary for evaluating that injury. However, it contends that the determination of compensability was premature, as it hinged on a subsequent determination of medical appropriateness by the director under ORS 656.704(3). Employer argues that attorney fees awarded to the claimant are inappropriate since the matter of compensability was unresolved at the time of the award, and asserts that this case does not involve a ‘denied claim’ as defined by ORS 656.386(1).
Claimant, on the other hand, maintains that the only remaining issue for the director pertains to the reasonableness and necessity of the treatment, which does not affect the established compensability of the diagnostic test. Claimant argues entitlement to attorney fees, asserting that the board's determination of compensability entitles him to reimbursement under ORS 656.386(1). The board's decision reflects some ambiguity; while it acknowledges the director's exclusive authority over medical service appropriateness, it vacated the portion of the ALJ's order that mandated payment for the services while affirming the finding that they were related to the claimant's accepted condition. The precise understanding of whether the board concurred with the ALJ's characterization of the services as compensable remains unclear.
Claimant argues that the determination of whether diagnostic services are medically appropriate under ORS 656.704(3)(b)(B) pertains solely to reimbursability, not compensability. In contrast, the employer contends that this determination is integral to assessing the compensability of medical services. The employer's position is supported, indicating that if both the causal relationship and the appropriateness of the services are challenged, both must be resolved in favor of the claimant for the services to be deemed compensable. The conclusion is that reimbursability is a necessary component of compensability; thus, if a service is not medically appropriate, it cannot be compensable. The board's prior ruling that the claim's compensability was fully determined was incorrect.
Additionally, the employer challenges the board's decision to award attorney fees based on the finding of only one aspect of compensability being satisfied. The board had referenced an earlier case to justify the fee assessment, but the statute (ORS 656.386) specifies that attorney fees are only awarded when a claimant "finally prevails" over a denied claim. Since the claimant had not prevailed on all aspects of the claim, the award of attorney fees was deemed erroneous. The decision to award attorney fees was reversed, while other aspects of the ruling were affirmed. The excerpt also defines "discography" and notes that the relevant statutes referenced are based on the pre-amendment version from 2005. The employer's alternative argument regarding the nature of the claim (as not being a denied claim) was not addressed due to the resolution of the primary argument.
