Kahn v. Providence Health Plan

13 P.3d 556, 170 Or. App. 602, 2000 Ore. App. LEXIS 1838
CourtCourt of Appeals of Oregon
DecidedNovember 1, 2000
Docket9710-08059; CA A103759
StatusPublished
Cited by3 cases

This text of 13 P.3d 556 (Kahn v. Providence Health Plan) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kahn v. Providence Health Plan, 13 P.3d 556, 170 Or. App. 602, 2000 Ore. App. LEXIS 1838 (Or. Ct. App. 2000).

Opinion

LANDAU, P. J.

Plaintiff initiated this action for negligence and breach of contract against defendant, based on defendant’s failure to authorize medical treatment for injuries arising out of plaintiffs employment. The trial court entered summary judgment in favor of defendant on the ground that plaintiffs exclusive remedy lies under the workers’ compensation statutes. We agree and affirm.

The relevant facts are not in dispute. Plaintiff worked for Industrial Indemnity, which, in turn, contracted with defendant, a certified managed care organization (MCO), to provide various services related to the administration of Industrial Indemnity’s workers’ compensation claims. Among other things, defendant provided “service utilization review” decisions, which involve physician review of a worker’s proposed medical procedures to determine whether the proposed procedures are necessary.

In the 1970s, plaintiff compensably injured her back. In the mid-1990s, she began experiencing back pain. In December 1996, her treating physician proposed that she undergo back surgery. In January 1997, defendant performed a service utilization review of the proposed surgery and determined that it was not medically necessary. Several months later, Industrial Indemnity approved the surgery anyway.

Plaintiff then initiated this action against defendant for negligence and breach of contract, claiming damages for the pain and suffering that she endured from the time of defendant’s service utilization review until the surgery was completed. Defendant moved for summary judgment on the ground that, among other things, under ORS 656.260, plaintiffs sole remedy was review by the Director of the Department of Consumer and Business Services (DCBS). The trial court agreed and entered summary judgment dismissing plaintiffs claims. On appeal, plaintiff argues that the trial court erred in entering summary judgment for defendant. According to plaintiff, ORS 656.260 does not require that her claims be heard exclusively by the director of DCBS.

[605]*605We review the trial court’s entry of summary judgment to determine whether there is a genuine issue of material fact and whether the moving party has demonstrated that it is entitled to judgment as a matter of law. ORCP 47 C; Jones v. General Motors Corp., 325 Or 404, 407, 939 P2d 608 (1997).

ORS 656.260(6) provides, in part:

“Any issue concerning the provision of medical services to injured workers subject to a managed care contract and service utilization review * * * shall be subject solely to review by the director or the director’s designated representatives, or as otherwise provided in this section.”

Defendant argues, and the trial court held, that, because plaintiffs complaint challenges defendant’s service utilization review decision, the sole remedy under the statute is review by the director or one of his or her designated representatives. Plaintiff argues that she is not seeking review of the service utilization review decision, but is instead seeking damages for negligence and breach of contract, which the director is not authorized to award. In any event, she argues, the statute does not limit review to the director but permits her to seek such remedies as are “otherwise provided in this section.” According to plaintiff, other subsections of the statute implicitly recognize the possibility of civil actions concerning service utilization review decisions.

Plaintiffs initial argument is easily refuted. Both of her claims depend on whether defendant’s decision not to approve the proposed surgery was correct; if defendant correctly disapproved the surgery, she cannot prevail. The statute plainly states that the review of the correctness of a managed care provider’s service utilization review decision is “solely” as provided in the statute. The only issue, therefore, is whether the statute itself provides for review other than by the director.

The text of the statute declares that review of service utilization review decisions “shall be subject solely to review by the director or the director’s designated representatives, or as otherwise provided in this section.” ORS 656.260(6). Nowhere does the section “otherwise provide[ ]” for direct [606]*606review of service utilization review decisions by means of a civil action in court, however. What is “otherwise provided” in ORS 656.260 is a process for obtaining judicial review of the director’s decision.

Under ORS 656.260(14), if a worker is dissatisfied with an MCO’s service utilization review decision, he or she “must first apply to the director for administrative review of the matter.” ORS 656.260(15) then requires that, when the director reviews a service utilization review decision or similar medical services decision, there must be prepared “a documentary record sufficient for judicial review.” That section further declares that the director’s initial decision is “not subject to further review” unless a request for a hearing is filed within a specified number of days of that decision. Id. ORS 656.260(16) then provides for a contested case hearing on that documentary record and for review of the resulting decision under the judicial review provisions of the Administrative Procedures Act (APA), ORS 183.310 to ORS 183.550. In addition, ORS 656.260(17) provides that decisions of a managed care organization other than service utilization review, peer review, or quality assurance activities may be subject to a contested case hearing before the director upon request and that the director’s decision is subject to review by this court, as provided in the APA.

There is mention of civil proceedings in three subsections of the statute, but in a very limited way. Under ORS 656.260(7):

“No data generated by service utilization review, quality assurance, dispute resolution or peer review activities and no physician profiles or data used to create physician profiles pursuant to this section or the director’s review thereof shall be used in any action, suit or proceeding except to the extent considered necessary by the director ”

That section merely guarantees the confidentiality of information generated in the administrative review process.

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Related

Rivera v. Perlo Construction, LLC
336 Or. App. 307 (Court of Appeals of Oregon, 2024)
Kahn v. Providence Health Plan
71 P.3d 63 (Oregon Supreme Court, 2003)

Cite This Page — Counsel Stack

Bluebook (online)
13 P.3d 556, 170 Or. App. 602, 2000 Ore. App. LEXIS 1838, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kahn-v-providence-health-plan-orctapp-2000.