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WCD Admin. Order No. 94-050 .2 C;. - 0 I ?-

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BEFORE TKE DIRECTOR OF THE DEPARTMENT O F CONSUMER AND BUSINESS SERVICES

O F THE STATE OF OREGON

In the Matter of the Amendment of 1 OAR Chapter 436, Workers' Compensation ) ORDER OF ADOPTION Division, Diirision 60, Claims ) OF TEMPORARY RULES Administration: Rule 003, Applicability 1 of Rules; Rule 030, Payment of Temporary 1 Partial Disability Compensation 1

To All Interested Persons:

The Director of the Department of Consumer and Business Services, pursuant ta the rule making authority in ORS 656.726(3) and 656.212, and in accordance with the rocedureprovided by ORS 183.355, hereby amends OAR Chapter 436, Wor g ers' Compensation Division, Division 60, Claims Administration, Rules 003 and 030.

These rules are being amended without prior notice pursuant to both ORS 183.335(5) and (6). A temporary rule is necessq because of the recent Oregon Court of Appeals decision in Stone v. Whittier Wood Products, 124 Or App 117 (1993) which invalidated the present OAR 436-60-030. In light of that decision, it is necessary to revise the rule so that adequate consideration is given to the worker's lost earning power apart from the job at injury in calculating temporary partial disability (TPD). I, therefore, conclude that failure to act promptly will result in serious prejudice to the public interest and that the rule revision is necessary to appropriately address the payment of temporary partial disability compensation to injured workers.

While this temporaw rule is in effect, the department will be developing a permanent rule regarding a TPD calculus for all workers utilizing their relevant considerations identified in Stone v. Whittier Wood Products, supra. We encourage any interested party who has suggestions to d t e the Benefib Section, Workers' Compensation Division, at 21 Labor & Industries Building, Salem, Oregon 97310, by March 18,1994.

FOR EASE IN READING THESE 'IZMPoRARY RULES, LANGUAGE TO BE DELETED IS ENCLOSED IN IBRACKETSI. PROPOSED NEW LANGUAGE IS

PURSUANT TO THE AXEXICANS W I l Z DISABllJTlES ACT GUlDETJNES, ALTEENATE FORMAT COPIES OF THE RULFS WILL BE W E AVAILABIJE TO QUALlFlED INDIVIDUALS UPON REQUEST TO 3WE DIVISION.

Order of Adoption of Temporary Rules Page 2

IT IS THEREFORE ORDERED:

(1) OAR Cha ter 436, Division 60, Rules 003 and 030 as set forth in Exhibit " A a certifie c r true copy of which is attached hereto and made a part of this Order, is temporarily adopted effective March 1, 1994.

(2) Ekhibit 'B," consisting of the Citation of Statutory Authority, Statement of Need and Documents Relied Upon, is hereby made a part of this Order.

(3) A certified true copy of the Order of Adoption, 'Exhibit "A" and Exhibit "B" shall be fded with the Secretary of State.

(4) A copy of the Rule and the attached Exhibit "B" s h d be f led with the Legislative Counsel, pursuant to ORS 183.715, within 10 days aRer filing with the Secretary of State.

Dated this 38- day of Feb-, 1994.

DEPAR- OF CONSUMER AND BUSINESS SERVICES

4593 Kerry B ett, D i r h r

Distribution: A through V X through AA

ExEmIT "A"

CHAPTER 436 DEPARTMENT OF OINSULYIER AND BUSINESS SERVICES

WORKERS' COMPENWWION DIVISION DIVISION 60

APPUCABKLTY OF RULES

436-60-003 (1) These rules govern claims processing and carry out the provisions of:

(a) ORS 656.210. Temporary total disability;

(b) ORS 656.212. Temporary partial disability;

(c) ORS 656.230. Lump sum payments;

(d) ORS 656.236. Disposition of compensable claims;

(e) ORS 656.262. Responsibility for processing and payment of compensation, sight drafts, acceptance and denial and reporting of claims, and penalties for payment delays ;

(0 ORS 656.264. Required reporting of information la the department;

(g) ORS 656.265. Notices of accidents from workers;

(h) ORS 656.268. Insurer claim closures;

(i) ORS 656.307. Determination of responsibility for compensation payments;

(j) ORS 656 32.5 Required medical examinations, suspension of compensation, injurious practices. claimant's duty to reduce disabilie, and reduction of benefits for failure to partlopate in rehabilitation;

(k) ORS 656.33 1. Notice to worker's attorney; and,

(1) ORS 656.7261 3 r . The department's powers and duties generally.

(2) The pronsions of OAR 436-60-030 apply to all claims where temporary partial disability is calculated on or after the effective date of said rule.

Hist: Filed 427.78 as WCD Admin. Order 6-1 978, eff. 4/27/78 Amended 111 1'80 as WCD Admin. Order 1-1980, eff. 111 1/80 Amended 1 2 Z i 81 as WCD Admin. Order 81981, eff. 1/1/82 Amended 12i29:83 as WCD Admin. Order 8-1983, eff. 1/1/84 Amended 4/4/84 as WCD Admin. Order 3-1984, eff. 4/4/84 Renumbered from 43654-003, May 1,1985 Amended 12/12/85 as WCD Adrnin. Order 8-1985. eff. 1/1/86 Amended 12/18/87 as WCD Admin. Order 4-1987, eff. 1/1/88 Amended 12/22/89 as WCD Admin. Order 7-1989, eff. 1/1/90 Amended 6/18/90 as WCD Admin. Order 8-1 990, eff. 7/1/90 (Temporary) Amended 11/30/90 as WCD Admin. Order 281990. eff. 12/26/90 Amended 1/3/92 as WCD Admin. Order 1-1992, eff. 2/1/92 Amended 2/28/94 as WCD Adrnin. Order 050-1994, eff. 3/1/94 (Temp)

OAR 436-60-030 Payment o f TPD Compensation

PA- OF TEMPORARY PARTIAL DISABILITY COMPENSATION

436-60-030 (1) The amount of temporary partial disability (TPD) due an .injured worker shall be based on the worker's earning power at any kind of work as demonstrated by the worker's employment history for the five years immediately preceding and including the workers7 job at the time of injury.

(a) A worker's earning power shall be determined by the highest weekly wage obtained by the injured worker fi-om among:

(A) The job with the highest physical capacity within the worker's past five-year employment history that the worker currently is unable to perform as a result of the i n j ~ '

(B) The job with the highest Specific Vocational Preparation (SVP) as determined in the same mnnner as OAR 436-35-300(3)(a) within the worker's past five-year employment history that the worker currently is unable to perform as a result of the injury;

(C) The worker's job at the time of the injury.

(b) If the worker currently is able to perform the regular duties of the highest wage job, the next lughest wage job in which the worker is unable to perform the regular duties as a result of the injury shall be used to calculate TF'D. If the only reasons that a worker is unable to perform the duties of a previous job are due to conditions unrelated to the work injury, the wages of that job shall not be used to calculate TPD. (i.e., previous amputation, blindness)

(2) The insurer shall review and determineloss of earning power at any kind of work whether or not the injured worker has returned immediately to modified employment at full wage. The worker shall be entitled to TPD so long as any post-injury wage is less than the earning power determined in section (I). If TF'D is due and payable, the claim shall be classified as disabhng and must be reported to the director pursuant to ORS 656.262.

(3) To determine a worker's loss of earning power for the calculation of TPD when the worker has been released by the attendmg physician to modified employment, or otherwise is performing post-in- employment, the insurer immediately shall, and not later than 14 days of knowledge of release to modified employment or post-injury employment, request the worker to provide his or her employment history for the previous five years, to include: name, address and telephone number of each employer; types of occupations performed; descriptions of job duties; dates of employment; and weekly wages received for each occupation. The insurer may request this information prior to the worker being released to modified employment to expedite the processing of potential TPD. The insurer shall advise the worker of the purpose for requesting the work history and how TPD wilI be calculated until the work history is received by the insurer. The insurer shall request similar information fi-om the employer at injury about the worker's past and, if any, current employment

OAR 436-60-030 Payment of TPD Compensation tcon't)

with same employer. The insurer shall use the wage at time of injury to calculate and pay any TPD due until the worker's earning power is determined as prescxibed by section (1).

(4) After receiving a request for employment history and wage information from the insurer, it shall be the worker's responsibility to provide documented evidence of such information prior to employment with the employer at injury. The information fkom the employer a t injuq includmg that of the wage at time of injury shall be used to determine earning power and to calculate TPD except when and until it is supplemented by the documented employment history and wage information provided by the worker.

(5) The insurer shall document for audit purposes its efforts to obtain the information requested in section (3) and any failure of the worker or employer to provide the information in section (4).

(6) The insurer shall be responsible for documenting any of the jobs held within the previous five years the worker is able to perform by securing current restrictions of the worker &om the attending physician. The insurer shall be responsible for providing the attending physician with a description of the physical and mental demands for the work duties of each job to determine which of the jobs the worker can currently perform within the current restrictions of the worker. The insurer s h d direct the physician to bill for those services using CPT Code 99199 and b d h g for actual time spent on the report.

(7) Upon determining that it has received all forthcoming employment history and, if necessary, an attending hysician report of w e n t restrictions, the insurer

ir within 14 days of receipt of sai documentation shall redetermine the worker's earning power as presmibed by section (1). The insurer shall then calculate and pay TPD actually due in accordance with this section and section (8). The insurer also shall ascertain whether or not any adjustment is due the worker for any difference in the rate of TPD used pursuant to section (3) for periods of temporary partial disability prior to the redetermination and, if necessary, issue an adjustment check for that time period. Any adjustment in favor of the worker for unpaid TPD ascertained following redetermination shall be issued by the insurer within 14 days of the redetermination. Issuance of an adjustment check shall not interrupt or change the existing time loss payment schedule.

(8) The amount of temporary partial disability compensation due a worker shall be determined by:

(a) Subtracting post-injury wage earnings by the worker h m any kind of work from

(b) The earning power as evidenced by the highest wage as prescribed in section (1); then

OAR 436-60-030 Payment of TPD Compensation (can't)

(c) Dividing the difference by the wage earnings used in subsection (b) to arrive a t the percentage of loss of earning power; then I

(d) Multiplying the m e n t temporary total disability compensation rate by the percentage of loss of earning power in subsection (c). I

(9) The following examples are provided for understanding the formula to calculate TPD benefits. The worker is entitled to the post-injury wage at any employment plus TPD due as determined by the f o d a in section (8). Temporary disability is not due if any post-injury wages equal or exceed the worker's earning power as presczibed in section (1).

Example One: (Based on weekly wages) I $500 = wage of job with the highest SVP

(worker is currently unable to perform duties due to i n , )

$450 = wage of job with the highest physical strength $300 = wage for job at injury $400 = wage for post-injury job $500 = earning power of injured worker $500 - 400 = 100 100/500 = 20% 20% x 'ITD ($200) = TPD ($40)

The worker receives wage for p o s t - i n . job ($400) plus TPD ($40) for total amount of $440 .

Example Two: (Based on weekly wages) I $500 = wage of job with the highest SVP

(worker is currently able to perform regular duties) $425 = wage of job with the next highest SVP

(worker is currently unable to perform regular duties)

$450 = wage of job with the highest physical strength (worker is currently unable to perform regular duties)

$300 = wage for job at injury $400 = wage for post-injury job $450 = earning power of injured worker $450 - 400 = 50 50/450 = 11% 11% x 'ITD ($200) = TPD ($22)

The worker receives wage for post-injury job ($400) plus TPD ($22) for total amount of $422

OAR 436-60-030 Payment of TPD Compensation (con ' t )

Example Three: (Based on weekJy wages) I $400 = wage for job with the highest SVP

(also wage of job with the highest physical strength and job a t injury)

$400 = wage for post-injury job $400 = earning power of injured worker $400 - 400 = 0 0/400 = 0% 0% x TTD ($266.68) = TPD (0)

The worker receives wage for post-injury job ($400) plus no TPD for total amount of $400

(10) An insurer shall cease payin temporary total disability compensation and f start paying temporary partial disab' 'ty compensation &om the date an injured worker begins any kind of wage earning employment prior to claim determination.

(11) Temporary partial disability compensation paid under section (10) shall continue until: I

(a) The attending physician verifies that the worker cannot continue workmg and is again temporarily totally disabled;

(b) The job no longer exists or the job offer is withdrawn by the employer. This includes, but is not limited, to termination of temporary employment, layoff or plant closure. A worker who has been released to and has been doing modified work a t fSU wage from the onset of the claim shall be included in this subsection. The worker is entitled to temporary total disability compensation as of the date the job no longer is available. For the purpose of this d e , a worker quitting the job or the employer [~Idischarging the worker for violation of normal employment standards is not withdrawal of a job offer, but shall be considered the same as the worker failing to begin employment pursuant to ORS 656.268(3)(c);

(c) The compensation is terminated by order of the department or by claim I

closure by the insurer pursuant to ORS 656.268; or

(d) The compensation has been paid for two years.

(12) An insurer shall cease ayin temporary total disability compensation and B, i& start paying temporary partial ab ty compensation under section (8) as if the worker had begun the employment when an injured worker fails to begin wage earning employment pursuant to ORS 656.268(3 Xc), under the following conditions:

(a) The attending physician has been notified by the employer or insurer of the I physical tasks to be performed by the injured worker;

OAR 436-60-030 Payment of TPD Compensation (can't)

(b) The attendmg physician agrees the employment appears to be within the worker's capabilities; and

(c) The employer has confirmed the offer of employment in writing to the worker stating the beginning time, date and place; the duration of the job, if known; the wages; an accurate description of the physical requirements of the job and that the attending physician has found the job to be within the worker's capabilities.

(13) Tem orarg partial disability compensation paid under section (12) shall continue -tip: I

(a) The attending physician verifies the worker can no longer perform the job and is again temporarily totally disabled;

(b) The job no longer exists or the job offer is withdrawn under the same conditions as stated in subsection (11Xb). The worker is again entitled to temporary total disability compensation as of the date the job no longer is available. I

(c) The compensation is terminated by order of the department or by claim I

closure of the insurer pursuant to ORS 656.268; or

(d) The compensation has been paid for bvo years.

(14) The insurer shall provide the injured worker and the worker's attorney a written notice of the reasons for changes in the compensation rate, and the method of compu$ation, whenever a change is made. I

(15) Failure to request the information required under this rule in a timely manner will subject the insurer to civil penalties under OAR 436-60-200.

Htit Filed 4/27/76 as WCD Admin. Order 6-1 978. eff. 4/27/80 Amended 1111180 as WCD Admin Order 1-1980, eff. 1111180 Amended 1223f81 as WCD Admin. Order 6-1981, eff. 111182 Amended 1=/83 as WCD Admm. Order 8-1983. eff. 1/1/84 Renumbered from 43654-222, May 1,1985 Amended 12112/85 as WCD Admin. Order 8-1985, eff. 1/1/86 Amended 1211 8/87 as WCD Admm. Order 4-1 987,eff. 1 H 188 Amended 1- as WCD Admm. Order 7-1989, eff. 1/1/90 Amended 6/18/90 as WCD Admin. Order 8-1 990. eff. 7/1/90 (Temporary) Amended 11130/90 as WCD Admin. Order 261990, eff. 12/26/90 Amended 1/3/92 as W D Admim. Order 1-1 992. eff. 2/1/92 Amended 2/2W94 as WCD Admin. OIljer 050-1994. eff. 3/1/94 (Temp)

for WCD Admin. Order No. 94-050

EXHIBIT "B"

BEFORE THE DIRECTOR OF THE DEPARTMENT OF CONSUMER AND BUSINESS SERVICES

OF THE STATE OF OREGON

In the Matter of the Amendment of OAR ) CITATION OF STATUTORY Chapter 436, Workers' Compensation ) AUTHORITY, STATEMENT OF Division, Division 60, C l d ) NEED, AND PRINCIPAL Administration: Rule 030, Payment of ) DOCUMENTS RELIED UPON Temporary Partial Disability 1 Compensation 1

1. -. The Statutory Authority for promulgation of these rules is 656.726(3).

2. Need for Rule. Temporary rule is necessaxy because of the recent Oregon Court of Appeals decision in Stone v. Whittier Wood Products, 124 Or App 117 (1993). In light of that decision, it is necessary to revise the rule to assure that adequate consideration is given to the worker's lost earning power utilizing their relevant circumstances in calculating temporary partial disability (TPD). The rule revision is necessary to adequately address the payment of TPD compensation to injured workers.

Princival Documents Relied Upon: OAR Chapter 436, Division 60, Claims Admjnistration; ORS Chapter 656; Position Paper on Affect of Court of Appeals Decision, Stone v. Whittier Wood Products, 124 Or App 117 (1993); Letter fkom SAJT Corporation, January 2 1,1994; Letter from Liberty Northwest Insurance, January 21,1994.

These documents are available for public review at the Administrator's Office, Department of Consumer and Business Services, Workers' Compensation Division, Labor and Industries Building, Salem, Oregon 97310, during regular business hours, 8:00 a.m. to 5:00 p e n , Monday through Friday.

-2T Dated this day of February, 1994.

DEPARTMENT OF CONSUMER AND BUSINESS S E r n C E S

Kerrg karnett, Director

EXHIBIT "B"

BEFORE THE DIRECTOR OF THE DEPARTMENT OF CONSUMER AND BUSINESS SERVICES

OF THE STATE OF OREGON

In the Matter of the Amendment ) CITATION OF STATUTORY of Rules Governing Claims ) AUTHORITY, STATEMENT OF Administration (OAR Cha~ter 436 ) NEED. PRINCIPAL DOCUMENTS Workers' Compensation ~lvision, ) RELIED UPON, AND STATEMENT Division 60) ) OF FISCAL IMPACT

1. Citation of Statutory Authoritv. The Statutory Authority for promulgation of these rules is ORS 656.325 and 656.726(3). -

Need for Rules. The statute requires a review and analysis of all rules at least once every three years. These rules and the pro osed changes are the result of the Department's review process. Additiona fi y, the recent Court of Appeals decision in Stone v. Whittier Wood Products, 124 OR App 117 (1993) invalidated existing rule OAR 436-60-030 and necessitated the adoption of a temporary rule to assure that adequate consideration is given t o the worker's lost earning power a art from the job at injury in calculating temporary partial disability. T% is temporary rule 4 1 expire on August 28,1994.

The Department is proposing two alternatives to carry out the Court of A peals decision in Stone for public comment inorder to determine a method w FI ich best meets the objective to compensate for temporary partial loss of earning power resulting from the compensable injury.

3. Princiual Documents Relied Upon. OAR Chapter 436, Division 60

ORS Chapter 656

Stone v. Whittier Wood Products, 124 OR App 117 (1993)

Temporary Rules on Claims Administration: Rule 003, Applicability of Rules; Rule 030, Payment of Temporary Partial Disability Compensation.

Letters received from parties involved in the workers' compensation process in response to notice of intent to review administrative rules.

Summary of comments of advisory committee meetings held on April 12, 13, 14 and 19, 1994.

Summary of minor and "housekeeping" issues.

These documents are available for public review at the Administrator's Office, Department of Consumer and Business Services? Workers' Compensation Division, Labor & Industries Building, Salem, Oregon 97310, during regular business hours, 8:00 a.m. to 5:00 p.m., Monday through Friday.

Exhibit B Page 2

4. Advisorv Committee: The Director of the Department of Consumer and Business Services appointed an Advisory Committee representing insurers, claims examiners, self-insured employers, claimant attorneys, the Workers' Compensation Division and the Workers' Compensation Ombudsman to provide comments on issues identified by the Workers' Compensation Division and to identify other relevant issues. The committee comments are summarized and listed under Principal Documents Relied Upon.

5. Fiscal and Economic Impact. The Department has identified that these rules have an economic impact on:

. -

a. Oregon subject workers; b. Ore on subject employers; and, c. Wor 'k ers' compensation insurers, self-insured employers, and service

companies.

The amount of the impact cannot be quantified on most rules based on available data, however the actual amount should be minimal. However, as a result of the Court of Appeals decision in Stone v. Whittier Wood Products, 124 OR App 11'7 (1993) there may be:

a. More nondisabling claims being classified as disabling claims.

b. Potential for an injured worker to earn more money in a modified job than on temporary total disability.

c. An adverse impact on the early return-to-work efforts.

d. Increase in administration of claims.

Dated this 11 day of August, 1994.

DEPARTMENT OF CONSUMER ANGBUSINESS SERVICES