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Industry Insights

Hole: A Disappointing Decision

  • State: Oregon

In a very disappointing decision for employers and insurers issued Thursday, the Oregon Supreme Court held that the presence of a legally cognizable pre-existing condition is no longer sufficient to apportion permanent impairment in the absence of combined condition processing.

Trisha Hole

Trisha Hole

In Caren v. Providence Health System Oregon, the worker sustained a low back injury that was accepted for a lumbar strain. A few months later, claimant underwent surgery to address a lumbar disk herniation. Claimant’s attending physician apportioned 50% of the lumbar impairment to pre-existing arthritis upon declaring her medically stationary.

The claim was closed, with half of the impairment segregated from the compensable claim. Claimant appealed, and the medical arbiters estimated that her arthritis was responsible for 70% of her current impairment. The order reduced permanent partial disability (PPD) accordingly.

The Workers' Compensation Board and Oregon Court of Appeals affirmed, finding the claimant had a legally cognizable pre-existing condition that had been apportioned correctly.

The Oregon Supreme Court disagreed. Focusing on prior case law precedent regarding calculation of permanent impairment and subsequent statutory changes involving combined conditions, the court determined that, in the absence of a combined condition denial, an employer must pay compensation “for the full measure of the workers’ permanent impairment if the impairment as a whole is caused in material part by the compensable injury.”

The holding in Caren will have far-reaching implications, from early claim processing decisions through claim closure. The trend in recent Supreme Court cases signals the court’s intent to make limited claim acceptance for strain or contusion-type injuries more onerous. Claim exposure cannot be contained simply by narrowing the scope of acceptance.

Initial compensability decisions must be carefully weighed in light of Caren and Garcia-Solis v. Farmers Ins. Co. Where any part of impairment is attributed to an accepted condition, combined condition processing may be recommended more frequently to mitigate PPD exposure.

There may also be a decline in expansion requests from claimants’ attorneys. Had a pre-closure partial denial been issued for the disk herniation in Caren, PPD apportionment would likely have been permissible. Claimants’ attorneys will surely take note of this and may hold off on expansion requests in the hopes of an increased PPD award at closure.

Claim closure questions to attending physicians and independent medical providers will now need to be even more closely scrutinized and extremely detailed.

Of note, according to the court in Caren, the worker’s impairment as a whole must be caused in material part by the compensable injury. This language suggests there is room for creative maneuvering if the compensable injury does not impact the whole of impairment.

One thing is for certain: It is now more important than ever for employers and insurers to carefully weigh their claim processing options in order to mitigate claim exposure.

Trisha Hole is a partner with Reinisch Wilson Weier PC, headquartered in Portland, Oregon. This column is republished with permission from the firm’s website.

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