ORS 656.260
Certification procedure for managed health care provider

  • required findings
  • denial or termination of provider authorization
  • scope of director’s review
  • confidentiality of certain information
  • immunity from liability
  • rules
  • medical service dispute resolution
  • penalties

(1)

Any health care provider or group of medical service providers may make written application to the Director of the Department of Consumer and Business Services to become certified to provide managed care to injured workers for injuries and diseases compensable under this chapter. However, nothing in this section authorizes an organization that is formed, owned or operated by an insurer or employer other than a health care provider to become certified to provide managed care.

(2)

Each application for certification shall be accompanied by a reasonable fee prescribed by the director. A certificate is valid for such period as the director may prescribe unless sooner revoked or suspended.

(3)

Application for certification shall be made in such form and manner and shall set forth such information regarding the proposed plan for providing services as the director may prescribe. The information shall include, but not be limited to:

(a)

A list of the names of all individuals who will provide services under the managed care plan, together with appropriate evidence of compliance with any licensing or certification requirements for that individual to practice in this state.

(b)

A description of the times, places and manner of providing services under the plan.

(c)

A description of the times, places and manner of providing other related optional services the applicants wish to provide.

(d)

Satisfactory evidence of ability to comply with any financial requirements to insure delivery of service in accordance with the plan which the director may prescribe.

(4)

The director shall certify a health care provider or group of medical service providers to provide managed care under a plan if the director finds that the plan:

(a)

Proposes to provide medical and health care services required by this chapter in a manner that:

(A)

Meets quality, continuity and other treatment standards adopted by the health care provider or group of medical service providers in accordance with processes approved by the director; and

(B)

Is timely, effective and convenient for the worker.

(b)

Subject to any other provision of law, does not discriminate against or exclude from participation in the plan any category of medical service providers and includes an adequate number of each category of medical service providers to give workers adequate flexibility to choose medical service providers from among those individuals who provide services under the plan. However, nothing in the requirements of this paragraph shall affect the provisions of ORS 441.055 (Health care facility medical staff and bylaws) relating to the granting of medical staff privileges.

(c)

Provides appropriate financial incentives to reduce service costs and utilization without sacrificing the quality of service.

(d)

Provides adequate methods of peer review, service utilization review, quality assurance, contract review and dispute resolution to ensure appropriate treatment or to prevent inappropriate or excessive treatment, to exclude from participation in the plan those individuals who violate these treatment standards and to provide for the resolution of such medical disputes as the director considers appropriate. A majority of the members of each peer review, quality assurance, service utilization and contract review committee shall be physicians licensed to practice medicine by the Oregon Medical Board. As used in this paragraph:

(A)

“Peer review” means evaluation or review of the performance of colleagues by a panel with similar types and degrees of expertise. Peer review requires participation of at least three physicians prior to final determination.

(B)

“Service utilization review” means evaluation and determination of the reasonableness, necessity and appropriateness of a worker’s use of medical care resources and the provision of any needed assistance to clinician or member, or both, to ensure appropriate use of resources. “Service utilization review” includes prior authorization, concurrent review, retrospective review, discharge planning and case management activities.

(C)

“Quality assurance” means activities to safeguard or improve the quality of medical care by assessing the quality of care or service and taking action to improve it.

(D)

“Dispute resolution” includes the resolution of disputes arising under peer review, service utilization review and quality assurance activities between insurers, self-insured employers, workers and medical and health care service providers, as required under the certified plan.

(E)

“Contract review” means the methods and processes whereby the managed care organization monitors and enforces its contracts with participating providers for matters other than matters enumerated in subparagraphs (A), (B) and (C) of this paragraph.

(e)

Provides a program involving cooperative efforts by the workers, the employer and the managed care organizations to promote workplace health and safety consultative and other services and early return to work for injured workers.

(f)

Provides a timely and accurate method of reporting to the director necessary information regarding medical and health care service cost and utilization to enable the director to determine the effectiveness of the plan.

(g)

Intentionally left blank —Ed.

(A)

Authorizes workers to receive compensable medical treatment from a primary care physician or chiropractic physician who is not a member of the managed care organization, but who maintains the worker’s medical records and is a physician with whom the worker has a documented history of treatment, if:
(i)
The primary care physician or chiropractic physician agrees to refer the worker to the managed care organization for any specialized treatment, including physical therapy, to be furnished by another provider that the worker may require;
(ii)
The primary care physician or chiropractic physician agrees to comply with all the rules, terms and conditions regarding services performed by the managed care organization; and
(iii)
The treatment is determined to be medically appropriate according to the service utilization review process of the managed care organization.

(B)

Nothing in this paragraph is intended to limit the worker’s right to change primary care physicians or chiropractic physicians prior to the filing of a workers’ compensation claim.

(C)

A chiropractic physician authorized to provide compensable medical treatment under this paragraph may provide services and authorize temporary disability compensation as provided in ORS 656.005 (Definitions) (12)(b)(B) and 656.245 (Medical services to be provided) (2)(b). However, the managed care organization may authorize chiropractic physicians to provide medical services and authorize temporary disability payments beyond the periods established in ORS 656.005 (Definitions) (12)(b)(B) and 656.245 (Medical services to be provided) (2)(b).

(D)

As used in this paragraph, “primary care physician” means a physician who is qualified to be an attending physician referred to in ORS 656.005 (Definitions) (12)(b)(A) and who is a family practitioner, a general practitioner or an internal medicine practitioner.

(h)

Provides a written explanation for denial of participation in the managed care organization plan to any licensed health care provider that has been denied participation in the managed care organization plan.

(i)

Does not prohibit the injured worker’s attending physician from advocating for medical services and temporary disability benefits for the injured worker that are supported by the medical record.

(j)

Complies with any other requirement the director determines is necessary to provide quality medical services and health care to injured workers.

(5)

Intentionally left blank —Ed.

(a)

Notwithstanding ORS 656.245 (Medical services to be provided) (5) and subsection (4)(g) of this section, a managed care organization may deny or terminate the authorization of a primary care physician or chiropractic physician to serve as an attending physician under subsection (4)(g) of this section or of a nurse practitioner or physician assistant to provide medical services as provided in ORS 656.245 (Medical services to be provided) (5) if the physician, nurse practitioner or physician assistant, within two years prior to the worker’s enrollment in the plan:

(A)

Has been terminated from serving as an attending physician, nurse practitioner or physician assistant for a worker enrolled in the plan for failure to meet the requirements of subsection (4)(g) of this section or of ORS 656.245 (Medical services to be provided) (5); or

(B)

Has failed to satisfy the credentialing standards for participating in the managed care organization.

(b)

The director shall adopt by rule reporting standards for managed care organizations to report denials and terminations of the authorization of primary care physicians, chiropractic physicians, nurse practitioners and physician assistants who are not members of the managed care organization to provide compensable medical treatment under ORS 656.245 (Medical services to be provided) (5) and subsection (4)(g) of this section. The director shall annually report to the Workers’ Compensation Management-Labor Advisory Committee the information reported to the director by managed care organizations under this paragraph.

(6)

The director shall refuse to certify or may revoke or suspend the certification of any health care provider or group of medical service providers to provide managed care if the director finds that:

(a)

The plan for providing medical or health care services fails to meet the requirements of this section.

(b)

Service under the plan is not being provided in accordance with the terms of a certified plan.

(7)

Any issue concerning the provision of medical services to injured workers subject to a managed care contract and service utilization review, quality assurance, dispute resolution, contract review and peer review activities as well as authorization of medical services to be provided by other than an attending physician pursuant to ORS 656.245 (Medical services to be provided) (2)(b) shall be subject to review by the director or the director’s designated representatives. The decision of the director is subject to review under ORS 656.704 (Actions and orders regarding matters concerning claim and matters other than matters concerning claim). Data generated by or received in connection with these activities, including written reports, notes or records of any such activities, or of any review thereof, shall be confidential, and shall not be disclosed except as considered necessary by the director in the administration of this chapter. The director may report professional misconduct to an appropriate licensing board.

(8)

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 a review thereof shall be used in any action, suit or proceeding except to the extent considered necessary by the director in the administration of this chapter. The confidentiality provisions of this section shall not apply in any action, suit or proceeding arising out of or related to a contract between a managed care organization and a health care provider whose confidentiality is protected by this section.

(9)

A person participating in service utilization review, quality assurance, dispute resolution or peer review activities pursuant to this section shall not be examined as to any communication made in the course of such activities or the findings thereof, nor shall any person be subject to an action for civil damages for affirmative actions taken or statements made in good faith.

(10)

No person who participates in forming consortiums, collectively negotiating fees or otherwise solicits or enters into contracts in a good faith effort to provide medical or health care services according to the provisions of this section shall be examined or subject to administrative or civil liability regarding any such participation except pursuant to the director’s active supervision of such activities and the managed care organization. Before engaging in such activities, the person shall provide notice of intent to the director in a form prescribed by the director.

(11)

The provisions of this section shall not affect the confidentiality or admission in evidence of a claimant’s medical treatment records.

(12)

In consultation with the committees referred to in ORS 656.790 (Workers’ Compensation Management-Labor Advisory Committee) and 656.794 (Advisory committee on medical care), the director shall adopt such rules as may be necessary to carry out the provisions of this section.

(13)

As used in this section, ORS 656.245 (Medical services to be provided), 656.248 (Medical service fee schedules) and 656.327 (Review of medical treatment of worker), “medical service provider” means a person duly licensed to practice one or more of the healing arts in any country or in any state or territory or possession of the United States.

(14)

Notwithstanding ORS 656.005 (Definitions) (12) or subsection (4)(b) of this section, a managed care organization contract may designate any medical service provider or category of providers as attending physicians.

(15)

If a worker, insurer, self-insured employer, the attending physician or an authorized health care provider is dissatisfied with an action of the managed care organization regarding the provision of medical services pursuant to this chapter, peer review, service utilization review or quality assurance activities, that person or entity must first apply to the director for administrative review of the matter before requesting a hearing. Such application must be made not later than the 60th day after the date the managed care organization has completed and issued its final decision.

(16)

Upon a request for administrative review, the director shall create a documentary record sufficient for judicial review. The director shall complete administrative review and issue a proposed order within a reasonable time. The proposed order of the director issued pursuant to this section shall become final and not subject to further review unless a written request for a hearing is filed with the director within 30 days of the mailing of the order to all parties.

(17)

At the contested case hearing, the order may be modified only if it is not supported by substantial evidence in the record or reflects an error of law. No new medical evidence or issues shall be admitted. The dispute may also be remanded to the managed care organization for further evidence taking, correction or other necessary action if the Administrative Law Judge or director determines the record has been improperly, incompletely or otherwise insufficiently developed. Decisions by the director regarding medical disputes are subject to review under ORS 656.704 (Actions and orders regarding matters concerning claim and matters other than matters concerning claim).

(18)

Any person who is dissatisfied with an action of a managed care organization other than regarding the provision of medical services pursuant to this chapter, peer review, service utilization review or quality assurance activities may request review under ORS 656.704 (Actions and orders regarding matters concerning claim and matters other than matters concerning claim).

(19)

Notwithstanding any other provision of law, original jurisdiction over contract review disputes is with the director. The director may resolve the matter by issuing an order subject to review under ORS 656.704 (Actions and orders regarding matters concerning claim and matters other than matters concerning claim), or the director may determine that the matter in dispute would be best addressed in another forum and so inform the parties.

(20)

The director shall conduct such investigations, audits and other administrative oversight in regard to managed care as the director deems necessary to carry out the purposes of this chapter.

(21)

Intentionally left blank —Ed.

(a)

Except as otherwise provided in this chapter, only a managed care organization certified by the director may:

(A)

Restrict the choice of a health care provider or medical service provider by a worker;

(B)

Restrict the access of a worker to any category of medical service providers;

(C)

Restrict the ability of a medical service provider to refer a worker to another provider;

(D)

Require preauthorization or precertification to determine the necessity of medical services or treatment; or

(E)

Restrict treatment provided to a worker by a medical service provider to specific treatment guidelines, protocols or standards.

(b)

The provisions of paragraph (a) of this subsection do not apply to:

(A)

A medical service provider who refers a worker to another medical service provider;

(B)

Use of an on-site medical service facility by the employer to assess the nature or extent of a worker’s injury; or

(C)

Treatment provided by a medical service provider or transportation of a worker in an emergency or trauma situation.

(c)

Except as provided in paragraph (b) of this subsection, if the director finds that a person has violated a provision of paragraph (a) of this subsection, the director may impose a sanction that may include a civil penalty not to exceed $2,000 for each violation.

(d)

If violation of paragraph (a) of this subsection is repeated or willful, the director may order the person committing the violation to cease and desist from making any future communications with injured workers or medical service providers or from taking any other actions that directly or indirectly affect the delivery of medical services provided under this chapter.

(e)

Intentionally left blank —Ed.

(A)

Penalties imposed under this subsection are subject to ORS 656.735 (Civil penalty for noncomplying employers) (4) to (6) and 656.740 (Review of proposed order declaring noncomplying employer or nonsubjectivity determination).

(B)

Cease and desist orders issued under this subsection are subject to ORS 656.740 (Review of proposed order declaring noncomplying employer or nonsubjectivity determination). [1990 c.2 §12; 1995 c.332 §27; amendments by 1995 c.332 §27a repealed by 1999 c.6 §1; 1997 c.639 §§1,2; 2005 c.26 §8; 2005 c.364 §1; 2007 c.423 §1; 2011 c.98 §1; 2013 c.179 §2; 2023 c.87 §3]

Source: Section 656.260 — Certification procedure for managed health care provider; required findings; denial or termination of provider authorization; scope of director’s review; confidentiality of certain information; immunity from liability; rules; medical service dispute resolution; penalties, https://www.­oregonlegislature.­gov/bills_laws/ors/ors656.­html (accessed May 26, 2025).

Notes of Decisions

Primary care physician who is not member of managed care organization, but agrees to comply with rules, terms and conditions of organization, is not plan participant for purposes of organization duty to exclude individuals who violate treatment standards from plan participation. Managed Healthcare Northwest, Inc. v. Department of Consumer and Business Services, 189 Or App 444, 75 P3d 912 (2003), aff’d 338 Or 92, 106 P3d 624 (2005)

656.001
Short title 656.003
Application of definitions to construction of chapter 656.005
Definitions 656.006
Effect on employers’ liability law 656.008
Extension of laws relating to workers’ compensation to federal lands and projects within state 656.010
Treatment by spiritual means 656.012
Findings and policy 656.017
Employer required to pay compensation and perform other duties 656.018
Effect of providing coverage 656.019
Civil negligence action for claim denied on basis of failure to meet major contributing cause standard 656.020
Damage actions by workers against noncomplying employers 656.021
Coverage exception for laborers under contracts with construction and landscape contractor licensees 656.023
Who are subject employers 656.025
Individuals engaged in commuter ridesharing not subject workers 656.027
Who are subject workers 656.029
Obligation of person awarding contract to provide coverage for workers under contract 656.031
Coverage for municipal volunteer personnel 656.033
Coverage for participants in work experience or school directed professional training programs 656.035
Status of workers in separate occupations of employer 656.037
Exemption from coverage for persons engaged in certain real estate activities 656.039
Election of coverage for workers not subject to law 656.041
City or county may elect to provide coverage for adults in custody 656.043
Governmental agency paying wages responsible for providing coverage 656.044
State Accident Insurance Fund Corporation may insure liability under Longshoremen’s and Harbor Workers’ Compensation Act 656.046
Coverage of persons in college work experience and professional education programs 656.047
Oregon Health Authority obligation to provide coverage for volunteer emergency health care providers 656.052
Prohibition against employment without coverage 656.054
Claim of injured worker of noncomplying employer 656.056
Subject employers must post notice of manner of compliance 656.070
Definitions for ORS 656.027, 656.070 and 656.075 656.075
Exemption from coverage for newspaper carriers 656.126
Coverage while temporarily in or out of state 656.128
Sole proprietors, limited liability company members, partners, independent contractors may elect coverage by insurer 656.132
Coverage of minors 656.135
Coverage of deaf school work experience trainees 656.138
Coverage of apprentices, trainees participating in related instruction classes 656.140
Coverage of persons operating equipment for hire 656.154
Injury due to negligence or wrong of a person not in the same employ as injured worker 656.156
Intentional injuries 656.160
Effect of incarceration on receipt of compensation 656.170
Validity of provisions of certain collective bargaining agreements 656.172
Applicability of and criteria for establishing program under ORS 656.170 656.174
Rules 656.202
Compensation payable to subject worker in accordance with law in effect at time of injury 656.204
Death 656.206
Permanent total disability 656.208
Death during permanent total disability 656.209
Offsetting permanent total disability benefits against Social Security benefits 656.210
Temporary total disability 656.211
“Average weekly wage” defined 656.212
Temporary partial disability 656.214
Permanent partial disability 656.216
Permanent partial disability 656.218
Continuance of permanent partial disability payments to survivors 656.222
Compensation for additional accident 656.225
Compensability of certain preexisting conditions 656.226
Cohabitants entitled to compensation 656.228
Payments directly to beneficiary or custodian 656.230
Lump sum award payments 656.232
Payments to noncitizens residing outside of United States 656.234
Compensation not assignable nor to pass by operation of law 656.236
Compromise and release of claim matters except for medical benefits 656.240
Deduction of benefits from sick leave payments paid to employees 656.245
Medical services to be provided 656.247
Payment for medical services prior to claim acceptance or denial 656.248
Medical service fee schedules 656.250
Limitation on compensability of physical therapist services 656.252
Medical report regulation 656.254
Medical report forms 656.256
Considerations for rules regarding certain rural hospitals 656.258
Vocational assistance service payments 656.260
Certification procedure for managed health care provider 656.262
Processing of claims and payment of compensation 656.263
To whom notices sent under ORS 656.262, 656.265, 656.268 to 656.289, 656.295 to 656.325 and 656.382 to 656.388 656.264
Compensable injury, denied claim and other reports 656.265
Notice of accident from worker 656.266
Burden of proving compensability and nature and extent of disability 656.267
Claims for new and omitted medical conditions 656.268
Claim closure 656.273
Aggravation for worsened conditions 656.277
Request for reclassification of nondisabling claim 656.278
Board has continuing authority to alter earlier action on claim 656.283
Hearing rights and procedure 656.285
Protection of witnesses at hearings 656.287
Use of vocational reports in determining loss of earning capacity at hearing 656.289
Orders of Administrative Law Judge 656.291
Expedited Claim Service 656.295
Board review of Administrative Law Judge orders 656.298
Judicial review of board orders 656.304
When acceptance of compensation precludes hearing 656.307
Determination of issues regarding responsibility for compensation payment 656.308
Responsibility for payment of claims 656.310
Presumption concerning notice of injury and self-inflicted injuries 656.313
Stay of compensation pending request for hearing or review 656.319
Time within which hearing must be requested 656.325
Required medical examination 656.327
Review of medical treatment of worker 656.328
List of authorized providers and standards of professional conduct for providers of independent medical examinations 656.331
Contact, medical examination of worker represented by attorney prohibited without written notice 656.340
Vocational assistance procedure 656.360
Confidentiality of worker medical and vocational claim records 656.362
Liability for disclosure of worker medical and vocational claim records 656.382
Penalties and attorney fees payable by insurer or employer in processing claim 656.383
Attorney fees in cases prior to decision or after request for hearing 656.385
Attorney fees in cases regarding certain medical service or vocational rehabilitation matters 656.386
Recovery of attorney fees, expenses and costs in appeal on denied claim 656.388
Approval of attorney fees required 656.390
Frivolous appeals, hearing requests or motions 656.403
Obligations of self-insured employer 656.407
Qualifications of insured employers 656.419
Workers’ compensation insurance contracts 656.423
Cancellation of coverage by employer 656.427
Termination of workers’ compensation insurance contract or surety bond liability by insurer 656.430
Certification of self-insured employer 656.434
Certification effective until canceled or revoked 656.440
Notice of certificate revocation 656.441
Advancement of funds from Workers’ Benefit Fund for compensation due workers insured by certain decertified self-insured employer groups 656.443
Procedure upon default by employer or self-insured employer group 656.445
Advancement of funds from Workers’ Benefit Fund for compensation due workers insured by insurer in default 656.447
Sanctions against insurer for failure to comply with contracts, orders or rules 656.455
Self-insured employers to process claims and make records available at authorized locations 656.502
“Fiscal year” defined 656.504
Rates, charges, fees and reports by employers insured by State Accident Insurance Fund Corporation 656.505
Estimate of payroll when employer fails to file payroll report 656.506
Assessments for programs 656.508
Authority to fix premium rates for employers 656.526
Distribution of dividends from surplus in Industrial Accident Fund 656.536
Premium charges for coverage of reforestation cooperative workers based on prevailing wage 656.552
Deposit of cash, bond or letter of credit to secure payment of employer’s premiums 656.554
Injunction against employer failing to comply with deposit requirements 656.556
Liability of person letting a contract for amounts due from contractor 656.560
Default in payment of premiums, fees, assessments or deposit 656.562
Moneys due Industrial Accident Fund as preferred claims 656.564
Lien for amounts due from employer on real property, improvements and equipment on or with which labor is performed by workers of employer 656.566
Lien on property of employer for amounts due 656.576
“Paying agency” defined 656.578
Workers’ election whether to sue third person or noncomplying employer for damages 656.580
Payment of compensation notwithstanding cause of action for damages 656.583
Paying agency may compel election and prompt action 656.587
Paying agency must join in any compromise 656.591
Election not to bring action operates as assignment of cause of action 656.593
Procedure when worker or beneficiary elects to bring action 656.595
Precedence of cause of action 656.596
Damage recovery as offset against compensation 656.602
Disbursement procedures 656.605
Workers’ Benefit Fund 656.612
Assessments for department activities 656.614
Self-Insured Employer Adjustment Reserve 656.622
Reemployment Assistance Program 656.625
Reopened Claims Program 656.628
Workers with Disabilities Program 656.630
Oregon Institute of Occupational Health Sciences funding 656.632
Industrial Accident Fund 656.634
Trust fund status of Industrial Accident Fund 656.635
Reserve accounts in Industrial Accident Fund 656.636
Reserves in Industrial Accident Fund for awards for permanent disability or death 656.640
Creation of reserves 656.642
Emergency Fund 656.644
Petty cash funds 656.702
Disclosure of records of corporation, department and insurers 656.704
Actions and orders regarding matters concerning claim and matters other than matters concerning claim 656.708
Hearings Division 656.709
Ombudsman for injured workers 656.712
Workers’ Compensation Board 656.714
Removal of board member 656.716
Board members not to engage in political or business activity that interferes with duties as board member 656.718
Chairperson 656.720
Prosecution and defense of actions by Attorney General and district attorneys 656.722
Authority to employ subordinates 656.724
Administrative Law Judges 656.725
Duties and status of Administrative Law Judges 656.726
Duties and powers to carry out workers’ compensation and occupational safety laws 656.727
Rules for administration of benefit offset 656.730
Assigned risk plan 656.732
Power to compel obedience to subpoenas and punish for misconduct 656.735
Civil penalty for noncomplying employers 656.740
Review of proposed order declaring noncomplying employer or nonsubjectivity determination 656.745
Civil penalty for inducing failure to report claims 656.751
State Accident Insurance Fund Corporation created 656.752
State Accident Insurance Fund Corporation 656.753
State Accident Insurance Fund Corporation exempt from certain financial administration laws 656.754
Manager 656.758
Inspection of books, records and payrolls 656.772
Annual audit of State Accident Insurance Fund Corporation by Secretary of State 656.774
Annual report by State Accident Insurance Fund Corporation to Secretary of State 656.776
Notice to Secretary of State regarding action on audit report 656.780
Certification and training of claims examiners 656.790
Workers’ Compensation Management-Labor Advisory Committee 656.794
Advisory committee on medical care 656.795
Informational materials for nurse practitioners 656.797
Certification by nurse practitioner of review of required materials 656.798
Duty of insurer, self-insured employer and self-insured employer group to provide information to director 656.799
Informational materials for other health care professionals 656.802
Occupational disease 656.804
Occupational disease as an injury under Workers’ Compensation Law 656.807
Time for filing of claims for occupational disease 656.850
License 656.855
Licensing system for worker leasing companies 656.990
Penalties
Green check means up to date. Up to date

Current through early 2026

§ 656.260’s source at oregon​.gov