436-060-0140 Acceptance or Denial of a Claim (1) Claim investigations. The insurer is required to conduct a "reasonable" investigation based on all available information in determining whether to deny a claim. (a) A reasonable investigation is whatever steps a reasonably prudent person with knowledge of the legal standards for determining compensability would take in a good faith effort to ascertain the facts underlying a claim, giving due consideration to the cost of the investigation and the likely value of the claim. (b) In determining whether an investigation is reasonable, the director will only look at information contained in the insurer’s claim record at the time of denial. The insurer may not rely on any fact not documented in the claim record at the time of denial to establish that an investigation was reasonable. (2) Notice to worker. The insurer must give the worker written notice of acceptance or denial of a claim within the following time frames: (a) For claims with a date of injury before Jan. 1, 2002, within 90 days of: (A) The employer’s notice or knowledge of an initial claim; (B) The insurer’s receipt of a Form 827 signed by the worker or the worker’s attorney, and the worker’s attending physician indicating an aggravation claim; or (C) Written notice of a new medical condition claim; (b) For claims with a date of injury on or after Jan. 1, 2002, within 60 days after: (A) The employer’s notice or knowledge of an initial claim; (B) The insurer’s receipt of a Form 827 signed by the worker or the worker’s attorney and the worker’s attending physician indicating an aggravation claim; or (C) Written notice of a new medical or omitted condition claim; or (c) For claims with any date of injury, if the worker challenges the location of an independent medical examination under OAR 436-010-0265 and the challenge is upheld, within 90 days after the employer’s notice or knowledge of the claim. (3) Penalty for untimely acceptance and denials. The director may assess a penalty under OAR 436-060-0200 against any insurer delinquent in accepting or denying a claim beyond the time frame required under section (2) of this rule. (4) Notice of acceptance. A notice of acceptance must comply with ORS 656.262(6)(b) and OAR chapter 438. It must include a current mailing date, be addressed to the worker, be copied to the worker’s attorney, if any, and the worker’s attending physician, and describe to the worker: (a) What conditions are compensable; (b) Whether the claim is disabling or nondisabling; (c) The Expedited Claim Service, of hearing and aggravation rights concerning nondisabling injuries including the right to object to a decision that the injury is nondisabling by requesting the insurer review the status; (d) The employment reinstatement rights and responsibilities under ORS chapter 659A; (e) Assistance available to employers from the Re-employment Assistance Program under ORS 656.622; (f) That claim related expenses paid by the worker must be reimbursed by the insurer when requested in writing and accompanied by sales slips, receipts, or other reasonable written support, for meals, lodging, transportation, prescriptions and other related expenses. The worker must be advised of the two year time limitation to request reimbursement as provided in OAR 436-009-0025 and that reimbursement of expenses may be subject to a maximum established rate; (g) That if the worker believes a condition has been incorrectly omitted from the notice of acceptance, or the notice is otherwise deficient, the worker must first communicate the objection to the insurer in writing specifying either that the worker believes the condition has been incorrectly omitted or why the worker feels the notice is otherwise deficient; and (h) That if the worker wants the insurer to accept a claim for a new medical condition, the worker must put the request in writing, clearly identify the condition as a new medical condition, and request formal written acceptance of the condition. (5) Notice of acceptance, fatal claims. In the case of a fatal claim, the notice must be addressed "to the estate of" the worker and the requirements of subsection (4)(a) through (h) of this rule must not be included. (6) Initial, modified, and updated notices of acceptance. (a) The first acceptance issued on the claim must contain the title "Initial Notice of Acceptance" near the top of the notice. Any notice of acceptance must contain all accepted conditions at the time of the notice. (b) An insurer must issue a "Modified Notice of Acceptance" (MNOA) when the insurer: (A) Accepts a new or omitted condition; (B) Accepts an aggravation claim; (C) Changes the disabling status of the claim; or (D) Amends a notice of acceptance, including correcting a clerical error, except for an error or omission on an "Updated Notice of Acceptance at Closure." (c) When an insurer closes a claim, it must issue an "Updated Notice of Acceptance at Closure" under OAR 436-030-0015. (A) If the “Initial Notice of Acceptance” is combined with the “Updated Notice of Acceptance at Closure” in the same document, both titles must appear near the top of the document. (B) If the “Modified Notice of Acceptance” is combined with the “Updated Notice of Acceptance at Closure” in the same document, both titles must appear near the top of the document. (7) Acceptance of new or omitted conditions. When an insurer accepts a new or omitted condition on a closed claim, the insurer must reopen the claim and process it to closure under ORS 656.262 and 656.267. When a claim is reopened, the notice of acceptance must specify the conditions for which the claim is being reopened. (8) Notice of denial to worker. A notice of denial must comply with OAR chapter 438 and the following: (a) The notice must specify the factual and legal reasons for the denial, including a specific statement indicating if the denial was based in whole or part on an independent medical examination under ORS 656.325; (b) If the denial was based in whole or part on an independent medical examination under ORS 656.325: (A) The notice must include one of the following statements, as appropriate: (i) "Your attending physician agreed with the independent medical examination report"; (ii) "Your attending physician did not agree with the independent medical examination report"; or (iii) "Your attending physician has not commented on the independent medical examination report"; and (B) If subparagraph (8)(b)(A)(ii) or (iii) of this rule apply, the notice must include the division’s website address and toll-free phone number for the worker’s use in obtaining a brochure about the worker requested medical examination. (c) The notice must inform the worker of the Expedited Claim Service and of the worker’s right to a hearing under ORS 656.283; and (d) If the denial is under ORS 656.262(15), the notice must inform the worker that a hearing may occur sooner if the worker requests an expedited hearing under ORS 656.291. (9) Notice of denial to provider of medical services and health insurance. The insurer must send notice of the denial to each medical service provider and provider of health insurance as defined under ORS 731.162 when compensability of any portion of a claim for medical services is denied. The notice must be sent: (a) At the same time the denial is sent to the worker; (b) Within 14 days of receipt of any billings from medical providers not previously notified of the denial. The notice must advise the medical provider of the status of the denial; or (c) Within 60 days of the date when compensability of the claim has been finally determined or when disposition of the claim has been made. The notification must include the results of the proceedings under ORS 656.236 or 656.289(4) and the amount of any settlement. (10) Payment of compensation. The insurer must pay compensation due under ORS 656.262 and 656.273 until the claim is denied, except where there is an issue concerning the timely filing of a notice of accident as provided in ORS 656.265(4). The employer may elect to pay compensation under this section in lieu of the insurer doing so. The insurer must report to the division payments of compensation made by the employer as if the insurer had made the payment. (11) Medical benefits and funeral expenses. Compensation payable to a worker or the worker’s beneficiaries while a claim is pending acceptance or denial does not include: (a) The costs of medical benefits; or (b) The cost of final disposition of the body or funeral expenses. Statutory/Other Authority: ORS 656.726(4) Statutes/Other Implemented: ORS 656.726(4), 656.262 & 656.325 History: WCD 5-2025, amend filed 12/23/2025, effective 01/01/2026 WCD 14-2024, amend filed 06/07/2024, effective 07/01/2024 WCD 7-2020, amend filed 03/13/2020, effective 04/01/2020 WCD 6-2017, amend filed 12/14/2017, effective 01/01/2018 WCD 6-2016, f. 11-28-16, cert. ef. 1-1-17 WCD 3-2009, f. 12-1-09, cert. ef. 1-1-10 WCD 10-2007, f. 11-1-07, cert. ef. 1-1-08 WCD 8-2005, f. 12-6-05, cert. ef. 1-1-06 WCD 9-2004, f. 10-26-04, cert. ef. 1-1-05 WCD 2-2004, f. 2-19-04, cert. ef. 2-29-04 WCD 13-2003(Temp), f. 12-15-03, cert. ef. 1-1-04 thru 2-28-04 WCD 10-2002, f. 10-2-02, cert. ef. 11-1-02 WCD 11-2001, f. 11-30-01, cert. ef. 1-1-02 WCD 21-1996, f. 10-18-96, cert. ef. 11-27-96 WCD 17-1996(Temp), f. 8-5-96, cert. ef. 8-12-96 WCD 5-1996, f. 2-6-96, cert. ef. 2-12-96 WCD 12-1992, f. 6-12-92, cert. ef. 7-1-92 WCD 29-1990, f. 11-30-90, cert. ef. 12-26-90 WCD 9-1990(Temp), f. 6-18-90, cert. ef. 7-1-90 WCD 6-1989, f. 12-22-89, cert. ef. 1-1-90 WCD 4-1987, f. 12-18-87, cert. ef. 1-1-88 WCD 8-1985, f. 12-12-85, cert. ef. 1-1-86, Renumbered from 436-054-0305 WCD 8-1983, f. 12-29-83, cert. ef. 1-1-84 WCD 6-1981, f. 12-23-81, cert. ef. 1-1-82 WCD 1-1980, f. & cert. ef. 1-11-80