Case Name: In the Matter of the Compensation of Richard J. Taskinen, Claimant. QUAKER STATE OIL COMPANY and Travelers Insurance Company, Petitioners, v. Richard J. TASKINEN, Respondent
Court: Oregon Court of Appeals
Jurisdiction: Oregon
Decision Date: 1997-03-26
Citations: 147 Or. App. 245
Docket Number: 93-10255; CA A87486
Parties: In the Matter of the Compensation of Richard J. Taskinen, Claimant. QUAKER STATE OIL COMPANY and Travelers Insurance Company, Petitioners, v. Richard J. TASKINEN, Respondent.
Judges: DEITS, J.
Reporter: Oregon Reports, Court of Appeals
Volume: 147
Pages: 245–256

Head Matter:
Argued and submitted February 14, 1996; resubmitted In Banc January 14,
reversed and remanded to the Board with instructions March 26,
petition for review denied August 12, 1997 (326 Or 43)
In the Matter of the Compensation of Richard J. Taskinen, Claimant. QUAKER STATE OIL COMPANY and Travelers Insurance Company, Petitioners, v. Richard J. TASKINEN, Respondent.
(93-10255; CA A87486)
935 P2d 1229
Jerald P. Keene argued the cause and filed the brief for petitioners.
Anita C. Smith argued the cause for respondent. With her on the brief was Estell and Associates.
DEITS, J.
Warren, J., concurring.
Edmonds, J., concurring.

Opinion:
DEITS, J.
In this medical services dispute, petitioners seek review of an order of the Workers' Compensation Board that held that claimant's medical services claim for proposed low back surgery was appropriate and that claimant's counsel was entitled to attorney fees. We reverse and remand to the Board with instructions to vacate the Board's order and remand to the Director of the Department of Consumer and Business Services (Director) for further proceedings.
This medical services dispute concerns the appropriateness of a ninth surgery on claimant's spine. The employer challenged this procedure and sought review by the Director pursuant to ORS 656.327. The Director issued an order disapproving the treatment. Claimant then requested a hearing before the Board's Hearings Division. A hearing was held and the administrative law judge (ALJ) concluded, relying on our decisions in Jefferson v. Sam's Cafe, 123 Or App 464, 861 P2d 359 (1993), rev den 320 Or 453 (1994), and Niccum v. Southcoast Lumber Co., 123 Or App 472, 861 P2d 360 (1993), aff'd 320 Or 189, 880 P2d 923 (1994), that the Director's order was a "nullity" because jurisdiction over disputes regarding proposed medical services was vested in the Hearings Division under ORS 656.283 and not the Director under ORS 656.327. The ALJ also concluded that the surgery was a reasonable and necessary expense of the compensable injury. Employer requested Board review, and the Board held that employer was responsible for the proposed surgery. It also awarded claimant attorney fees.
Employer sought review of the Board's order by this court. After the briefs were filed in this court, but before oral argument was held, the legislature amended the workers' compensation law. Because this case was pending before the courts on the effective date of the legislation, June 7, 1995, the amended version of the law applies. Volk v. America West Airlines, 135 Or App 565, 899 P2d 746 (1995), rev den 322 Or 645 (1996).
ORS 656.327(2) establishes the process for review of medical services disputes. The amended version provides:
"The director shall review medical information and records regarding the treatment. The director may cause an appropriate medical service provider to perform reasonable and appropriate tests, other than invasive tests, upon the worker and may examine the worker. Notwithstanding ORS 656.325(1), the worker may refuse a test without sanction. Review of the medical treatment shall be completed and the director shall issue an order within 60 days of the request for review. The director shall create a documentary record sufficient for purposes of judicial review. If the worker, insurer, self-insured employer or medical service provider is dissatisfied with that order, the dissatisfied party may request a contested case hearing before the director pursuant to ORS 183.310 to 183.550. At the contested case hearing, the administrative order may be modified only if it is not supported by substantial evidence in the record or if it reflects an error of law. No new medical evidence or issues shall be admitted. If the director issues an order declaring medical treatment to be not compensable, the worker is not obligated to pay for such treatment. Review of the director's order shall be by the Court of Appeals pursuant to ORS 183.310 to 183.550."
As can be seen, under the new law, the Director has exclusive authority to initially review medical services disputes. The procedures for the development and review of the Director's order are also set forth in the statute and are changed from the prior law. Or Laws 1995, ch 332, § 41, 50. ORS 656.327(2) now provides that if a party is dissatisfied with the Director's determination regarding a bona fide medical services dispute, the party may request a contested case hearing before the Director and may seek further review of the Director's order in the Court of Appeals.
In this case, the procedures of the new statute described above were not followed because the amended law did not exist at the time this matter was brought before the Director. Nonetheless, because the legislature has chosen to make the new procedures apply retroactively, and because the amended procedures could alter the Director's or our analyses of the case, it is necessary to remand this case to the Board with instructions to vacate the Board's order and to remand to the Director for further proceedings.
Judge Warren asserts in his concurrence that, although he agrees with our "disposition," we are wrong in failing to acknowledge that we lack jurisdiction to review the Board's order in this case and in failing to overrule our earlier decision in Baar. The first problem with his assertions is that neither of those arguments are made by the parties in this case. Aside from that, his position is based on a faulty premise.
It is Judge Warren's view that we only have jurisdiction to review an order of the Director regarding a medical services dispute when the Director has conducted a contested case hearing and, accordingly, issued a contested case order. He contends that, because the order here was not issued after a contested case hearing, we lack the authority to review the Director's order. In his view, the Director's order here was an "order in other than a contested case" under the Administrative Procedures Act (APA) and, as an order in other than a contested case, review of the Director's order would first have to go to circuit court under ORS 183.484. 147 Or App at 252 n 2. Review of the circuit court order is by this court. ORS 183.500.
In reaching the conclusion that the Director's order is an order in other than a contested case and is subject to the general APA provisions concerning review of such orders, the concurrence ignores the plain language of ORS 656.327, which provides specific procedures for review of the Director's decisions on medical services disputes. As discussed above, that statute specifically provides that if a party is dissatisfied regarding a medical services issue, the party must request review of the matter with the Director. ORS 656.327(1). If the Director issues an order finding that a medical services dispute exists, ORS 656.327(2) becomes applicable. Under that provision, the Director then reviews the matter and in that process is required to "create a documentary record sufficient for purposes of judicial review." As we have noted, if dissatisfied with the Director's decision at this point, a party may request a contested case hearing and the Director will then issue a new order following the hearing.
ORS 656.327(2) also provides that "[r]eview of the Director's order shall be by the Court of Appeals pursuant to ORS 183.310 to 183.550." Judge Warren reads this language to mean that we only may review the Director's order if a contested case hearing is held. However, that is simply not what the statute says. This court is given authority to review the "director's order [.]" There is nothing in the language of the statute that limits our direct review of the Director's order only to cases where there has been a contested case hearing.
Further, such a result would make little sense. Under Judge Warren's view, a party that was dissatisfied with the Director's initial decision regarding the medical services dispute could choose to opt out of the specific review process that the legislature devised for review of medical services disputes. The dissatisfied party could do this by simply not requesting a contested case hearing by the Director and seeking review of the Director's decision in circuit court. The circuit court would then review the matter. If any party was dissatisfied with the court's decision, review by this court could then be sought. It is difficult to understand why the legislature would have created a comprehensive scheme for review of medical services disputes by the Director, who presumably has expertise in this area, only to let the parties, at their option, go through an entirely different process that does not utilize the expertise of the Director and certainly does not carry out the legislature's apparent intent to expedite the workers' compensation process.
Judge Warren's assertion that we must overrule our decision in Baar also is based on its premise that unless the Director has conducted a contested case hearing, we lack jurisdiction to review the Director's order. As discussed above, this is wrong. Consequently, we should not overrule Baar.
Reversed and remanded to the Board with instructions to vacate its order and remand to the Director of the Department of Consumer and Business Services.
At the time of the relevant events, the agency was known as the Department of Insurance and Finance.
Our disposition here is different than in Baar v. Fairview Training Center, 139 Or App 196, 911 P2d 1232, rev den 323 Or 690 (1996), because, in contrast to this case, in Baar there were no factual issues in dispute, nor were there any substantive changes in the applicable law that could possibly alter the director's or our analyses. Accordingly, there was no reason to remand the case in Baar.