Gage v. Fred Meyer Stores - Kroger Co.

360 December 6, 2023 No. 634

IN THE COURT OF APPEALS OF THE

STATE OF OREGON

In the Matter of the Compensation of

Monika M. Gage, Claimant.

Monika M. GAGE,

Petitioner,

v.

FRED MEYER STORES - KROGER CO.,

Respondent.

Workers’ Compensation Board

1900021OM; A177315

Argued and submitted February 14, 2023.

Julene M. Quinn argued the cause and filed the briefs for

petitioner.

Rebecca A. Watkins argued the cause for respondent.

Also on the brief was SBH Legal.

Before Shorr, Presiding Judge, and Mooney, Judge, and

Pagán, Judge.

MOONEY, J.

Reversed and remanded.

Cite as 329 Or App 360 (2023) 361

MOONEY, J.

This is an “own motion” workers’ compensation

claim on judicial review from the Workers’ Compensation

Board (board).1 Claimant seeks judicial review of the

“Second Own Motion Order Reviewing Carrier Closure on

Reconsideration,” which affirmed the self-insured employ-

er’s notice of claim closure without an award for additional

permanent disability. The primary issue before the board

was whether claimant’s facet cyst at L4-5, a newly accepted

medical condition initiated after aggravation rights had

expired, or any direct sequelae attributable to that cyst,

resulted in any additional permanent impairment or work

restrictions. After rejecting the report of the medical arbi-

ter panel as “ambiguous,” and relying instead on the opin-

ion of an attending physician, the board determined that

claimant’s facet cyst at L4-5 did not qualify as an additional

impairment resulting from a previous, compensable injury.

The board, thus, concluded that claimant was not entitled to

a redetermination of her permanent disability.

Claimant seeks reversal of the board’s order and

raises three assignments of error. The first two assignments

challenge as unsupported by substantial evidence and rea-

son the board’s findings that the arbiter panel opinion was

ambiguous, and that an attending physician’s report was

more accurate and persuasive. In her third assignment,

claimant argues that the board’s order violates constitu-

tional and statutory provisions by refusing to seek clarifi-

cation of the ambiguity from the arbiter panel and refusing

to obtain another medical arbiter report. We conclude that

substantial evidence and reason do not support the board’s

determinations that the medical arbiter panel’s report was

ambiguous, and that the attending physician’s report was

more accurate. We need not, and do not, reach the third

assignment of error. We reverse and remand.

We review legal issues for errors of law and fac-

tual issues for substantial evidence. ORS 183.482(8)(a), (c);

SAIF v. Williams, 281 Or App 542, 543, 381 P3d 955 (2016).

1

ORS 656.278 gives the board the authority to modify orders and awards

on its own motion, even after the expiration of a claimant’s “aggravation rights.”

That authority is referred to as “own motion” jurisdiction.

362 Gage v. Fred Meyer Stores - Kroger Co.

“[S]ubstantial evidence supports a finding when the record,

viewed as a whole, permits a reasonable person to make the

finding.” Garcia v. Boise Cascade Corp., 309 Or 292, 294,

787 P2d 884 (1990). Our review for substantial evidence

necessarily includes review for substantial reason because

our task is to determine whether the board adequately

explained how it got from the factual findings that it made

to the legal conclusions that it reached that caused it to issue

its order. SAIF v. Harrison, 299 Or App 104, 105, 448 P3d

662 (2019). We recount the pertinent facts adopted by the

board and from claimant’s medical records. Harvey v. SAIF,

286 Or App 539, 540, 398 P3d 944 (2017).

Claimant sustained work-related injuries in 2005

when she slipped and fell at work. She filed a workers’ com-

pensation claim, which her employer accepted in its capac-

ity as claimant’s self-insured employer, for various disabling

injuries, including right lumbar strain and a herniated

L5-S1 disc. Dr. Moore, an orthopedic surgeon, performed two

surgeries on the L5-S1 region, and claimant was awarded

permanent disability. The claim was closed in December

2012, with claimant’s right to claim additional compensa-

tion for worsened conditions—her “aggravation rights”—set

to expire in December 2017, under ORS 656.273(4)(a).2

In June 2013, an MRI revealed, among other things,

a developing cyst at claimant’s L4-5 disc level. Dr. Andrews,

a physician in Moore’s clinical practice who specializes in

nonsurgical approaches to conditions of the spine, attempted

to treat the cyst by aspiration and injection but those efforts

were not successful. Moore then requested authorization

for an L4-5 posterior discectomy and laminectomy, but that

claim was initially denied.

After it was later determined that the proposed sur-

gery would be compensable, but before the surgery occurred,

Moore ordered a second MRI. In June 2015, the second MRI

was read and reported as showing that the cyst was no

2

ORS 656.273(4) provides, in part,

“The claim for aggravation must be filed within five years:

“(a) After the first notice of closure made under ORS 656.268 for a disabling

claim[.]”

Cite as 329 Or App 360 (2023) 363

longer present. Because the cyst appeared to have resolved,

the employer sought to close the claim.

The employer retained Dr. Ha, an orthopedic sur-

geon, to perform the closing examination. Ha concluded that

claimant’s conditions were medically stationary, and that

she could perform sedentary or light work. It was his opin-

ion that no further surgical intervention would be required

because the 2015 MRI indicated that the cyst had resolved.

Andrews concurred, and claimant’s claim was closed with-

out an additional permanent disability award.

Moore concluded that the 2015 MRI had not been cor-

rectly read or reported by the radiologist. Moore documented

that she could “see the cyst very clearly on the sagittal view” of

the 2015 MRI study itself. She ordered a follow-up MRI, which

was completed in June 2016. That MRI showed a cyst at the

L4-5 disc, along with an L4-5 herniation and nerve impinge-

ment on both the left and right sides. Moore again requested

authorization for an L4-5 discectomy and decompression for

the purpose of accomplishing surgical decompression and to

excise the cyst. That request was again denied.

Other arrangements were made for health insur-

ance coverage, and Moore performed the surgery without

approval from the employer. Upon request for additional

information, Moore confirmed that the surgery she per-

formed was the same surgery that she “had proposed in

early 2014 to decompress the spine and remove the cyst at

L4-5[.]” Reimbursement for the surgery was again denied

when the employer determined that the surgery “was

directed to claimant’s denied bilateral L4-5 lateral recess

and foraminal stenosis.”

In April 2018, claimant submitted a request to add

a new/omitted medical condition claim for the cyst. The

employer accepted the new claim which was then reopened

for processing. As part of its investigation, the employer

sent a check-the-box questionnaire to Andrews asking if he

“consider[ed] the L4-5 facet cyst condition to be medically

stationary as of, at the latest, June 30, 2015, when a repeat

lumbar spine MRI showed ‘[t]he previously documented sub-

ligamentous right synovial cyst [was] no longer present.’ ”

364 Gage v. Fred Meyer Stores - Kroger Co.

Andrews checked the “yes” box. He similarly checked the “yes”

box indicating that he agreed that the L4-5 cyst did not result

in any additional permanent impairment or work restrictions.

A subsequent CT scan showed continued deteri-

oration of the L4-5 region and L5-S1 stenosis. Moore rec-

ommended an epidural steroidal injection, which Andrews

administered. After two such injections, claimant reported

only temporary relief, and Moore recommended an L4-5

decompression and fusion to treat claimant’s L4-5 stenosis

and spondylolisthesis. Moore performed the surgery in May

2019, and both Moore and Andrews reported that claimant’s

condition was improved.

In June 2019, the employer issued an Own Motion

Notice of Closure that did not award additional permanent

disability for claimant’s L4-5 synovial cyst. The closure was

based on Andrews’ “yes” responses concerning the cyst that

we just described. Claimant requested review.

THE BOARD’S REVIEW

On review, claimant requested that the board

increase her permanent disability award. Because she

contested Andrews’ statements about the cyst, she also

requested that the board appoint a medical arbiter under

OAR 438-012-0060(6)(a).3 The board referred the case to

the Appellate Review Unit (ARU) to appoint the arbiter.

The medical arbiter, a panel consisting of three physicians,

conducted an examination and reported its findings to the

ARU. In its report, the arbiter panel stated that it agreed

with Andrews that “the newly accepted condition is not con-

tributing to the noted motion loss in the lumbar spine.” It

concluded that “it is medically probable the loss of motion

* * * is related to the herniated disk at L4-L5 and the sub-

sequent surgeries to address th[at] issue.” The panel also

3

OAR 438-012-0060(6)(a) provides:

“(6) After the claimant requests Board review of a Notice of Closure of a ‘post-

aggravation rights’ new medical condition(s) or omitted medical condition(s)

claim * * *, the Board may refer the claim to the Director for appointment of

a medical arbiter to evaluate permanent disability attributable to the claim-

ant’s ‘post-aggravation rights’ new medical conditions(s) or omitted medical

conditions(s) if:

“(a) The claimant objects to the impairment findings used to rate impairment

* * * and requests appointment of a medical arbiter[.]”

Cite as 329 Or App 360 (2023) 365

noted that claimant had been using a walker on a consistent

basis since her most recent surgery—the 2019 L4-5 decom-

pression and fusion.

The ARU sent a request for additional information

to the arbiter panel:

“In your report you stated the worker stated since her most

recent [surgery] she needed to use a walker. For the record,

please respond to the following:

“1. Please indicate whether or not the worker is prevented

from being on her feet for more than two hours in an

8-hour period, due to the newly accepted condition(s) and

direct medical sequela of the newly accepted condition(s). If

so, please explain the necessity for this restriction.”

(Emphasis, underscore, and boldface in original.) The same

panel member who wrote the original report, Dr. Harris,

responded on behalf of the arbiter panel. He answered “Yes,”

and added “Too much pain + lack of motion after numerous

surgeries to low back,” and that “40% of the need for this

restriction is related to newly accepted condition, and 60%

is related to other accepted conditions.”4

The board affirmed the employer’s notice of clo-

sure. It declined to adopt the arbiter panel’s report, finding

it to be “ambiguous,” and reasoning that the report “was

made in the context of, and based on, claimant’s statements

that she needed to use a walker” since the 2019 surgery.

Noting that the 2019 surgery was “performed by Dr. Moore

to treat claimant’s L4-5 stenosis, which is a denied condi-

tion,” and that “the medical arbiter panel report erroneously

stated that claimant had no denied conditions,” the board

concluded that there was “no indication that the panel was

aware that Dr. Moore had recommended the surgery to treat

claimant’s L4-5 stenosis condition or that the condition had

been denied[.]” Because Andrews had greater “familiar-

ity with claimant’s conditions,” the board found that “his

impairment findings preponderate over those of the medi-

cal arbiter panel,” that they were “more accurate,” and that

they “should be used to rate claimant’s permanent impair-

ment.” Based on Andrews’ findings, the board concluded

4

The parties refer to this response from Harris as the panel’s supplemental

report.

366 Gage v. Fred Meyer Stores - Kroger Co.

that “there are no impairment findings * * * that support an

additional permanent disability award.”

Claimant requested reconsideration, arguing that

the medical arbiter panel’s opinion was not ambiguous and

that, under Hicks v. SAIF, 194 Or App 655, 96 P3d 856,

adh’d to as modified on recons, 196 Or App 146, 100 P3d

1129 (2004), the board could not disregard the medical arbi-

ter panel’s opinion. Instead, she argued, the board must seek

clarification from the arbiter panel. She also argued that

Andrews’ opinion was based on an old MRI and was there-

fore neither accurate nor current. The board disagreed and

affirmed its decision finding Andrews’ report to be more per-

suasive than the panel’s report because he was more famil-

iar with claimant and her medical history. The board also

determined that it lacked the authority to send the report

back to the medical arbiter panel for clarification.

Claimant again requested reconsideration, this

time arguing, among other things, that because the board

would not allow correction of the arbiter panel’s report that

the board had concluded was ambiguous, she was effectively

left without the ability to challenge the board’s reliance on

Andrews’ report over that of the panel. The board again

affirmed its decision, and claimant petitioned for judicial

review.

THE BOARD’S “OWN MOTION” JURISDICTION

ORS 656.278(1) authorizes the board to “modify,

change or terminate former findings” on its own motion.

That authority is limited to cases in which a condition

for which the board has awarded disability worsens, ORS

656.278(1)(a), or in cases where the claimant’s aggravation

rights have expired and a new medical condition thought

to be materially related to the original workplace injury is

accepted for the first time, ORS 656.278(1)(b). All relevant

statutes that control disability awards “apply equally to” the

board’s orders under ORS 656.278. Edward Hines Lumber

Co. v. Kephart, 81 Or App 43, 46, 724 P2d 837 (1986).

Pursuant to ORS 656.278, the board has promul-

gated rules to govern its “own motion jurisdiction.” An own

motion claim is processed first by the workers’ compensation

Cite as 329 Or App 360 (2023) 367

carrier or, as here, by the self-insured employer. OAR 438-

012-0020(1). The carrier will close the claim and provide

any award of permanent disability once the new or previ-

ously omitted condition has become medically stationary.

OAR 438-012-0055.

The findings of the injured worker’s attending phy-

sician are generally used to determine when a condition is

medically stationary and the degree of impairment caused

by that condition. OAR 436-035-0007(5)(a). When a worker

requests a medical arbiter examination, the arbiter’s report

is instead used to establish impairment—unless a prepon-

derance of the medical evidence establishes that the attend-

ing physician’s findings are more accurate. OAR 436-035-

0007(5)(b); SAIF v. Banderas, 252 Or App 136, 145, 286

P3d 1237 (2012). If the arbiter’s report is ambiguous as to

whether impairment is the result of a compensable injury,

the board must interpret the report to determine whether

the report attributes impairment to the injury. See Harvey,

286 Or App at 546-47 (where the board did not interpret an

ambiguous arbiter’s report, we could not review the board’s

inferences for substantial evidence).

As we have already mentioned, claimant’s first two

assignments of error contend that there was not substan-

tial evidence to support the board’s conclusion that the med-

ical arbiter’s report was ambiguous or its conclusion that

Andrews’ report was more accurate and reliable than the

arbiter panel’s report. We address each of those assertions

in turn.

THE MEDICAL ARBITER PANEL REPORT

In her first assignment of error, claimant asserts

that the board lacked substantial evidence and reason to

conclude that the medical arbiter panel report was ambigu-

ous. She argues that the arbiter panel clearly identified the

newly accepted condition, and unambiguously attributed 40

percent of her impairment to that condition. The employer

disagrees, arguing that the panel’s original and supplemen-

tal reports contradict one another, and that it is unclear

from the report if the panel understood the scope of their

task because the original report did not identify the newly

368 Gage v. Fred Meyer Stores - Kroger Co.

accepted condition, and it did not indicate that there were

denied conditions.

We review the board’s conclusion that the arbiter

panel report was ambiguous by focusing on the conclusions,

rather than the reasoning, of the arbiter panel. For example,

in Khrul v. Foremans Cleaners, 194 Or App 125, 93 P3d 820

(2004), we concluded that substantial evidence supported

the board’s conclusion that the arbiter panel’s report that

“claimant’s impairment ‘at this time’ is 35 percent” was

ambiguous as to the permanency of the impairment. Id. at

132. Noting that “it is possible to infer that * * * the reported

35 percent impairment was permanent impairment,” we

concluded that the report also “permit[ted] an inference

that, although claimant had impairment at the time of rat-

ing, [the arbiter] believed that the impairment was not per-

manent or caused by the compensable condition and would

resolve after claim closure.” Id. In Harvey, we agreed that

substantial evidence supported a conclusion that the report

was ambiguous where the board “could have found that the

arbiters did not believe claimant’s [impairment] to be the

result of her injury.” 286 Or App at 546. Alternatively, “the

board could have concluded that the arbiters did attribute

claimant’s [impairment] to her brain injury[.]” Id.

Conversely, when a medical arbiter is used and its

report is clear and unambiguous, “impairment is established

based on the objective findings of the medical arbiter.” OAR

436-035-0007(5)(b). The ultimate question in Hicks was

whether the board was free to reject the medical arbiter’s

unambiguous report when it was the only opinion of impair-

ment. On reconsideration, we said that the medical arbiter’s

report was unambiguous in attributing impairment to the

compensable condition, and we emphasized that the board

was not free to interpret that report to conclude that it was

not persuasive and reject it. Hicks v SAIF, 196 Or App 146,

151-52, 100 P3d 1129 (2004). In this case, the arbiter pan-

el’s report likewise unambiguously attributed claimant’s

impairment to the compensable new condition. Whether a

report is ambiguous is a separate question from whether it

is persuasive. Considering the thought process and method

by which an arbiter reaches its conclusions is useful in

Cite as 329 Or App 360 (2023) 369

determining the persuasiveness of the report. But the per-

suasiveness of a report is not relevant to whether its con-

clusions are ambiguous. Here, the medical arbiters’ report

attributed “40% of the need * * * to [the] newly accepted

condition, and 60% * * * to other accepted conditions.” That

attribution of impairment is unequivocal. It does not give

rise to competing inferences and it is not ambiguous.

The employer argues that there is “a contradiction”

between the original panel’s report and the supplemental

report because the original “stated no reduction in motion

could be related to the facet cyst,” while the second report

attributed impairment to the cyst. But there is no contradic-

tion. The first report stated that the new condition did not

contribute to claimant’s loss of motion in her lumbar spine.

The second report answered the question put to it about

whether claimant was “prevented from being on her feet for

more than two hours in an 8-hour period[.]” (Emphasis,

underscore, and boldface in original.) Those topics—loss of

spinal motion and inability to stand for two hours—are dif-

ferent. The panel’s report is not contradicted by its response

to follow-up questions. Its response to the follow-up inquiry

addresses a different topic than the one that the board now

points to in the first report as having been contradicted by

the panel in its response. The panel’s response to follow-up

questions does not create an ambiguity in the first report.

Neither substantial evidence nor substantial reason support

the board’s conclusion to the contrary.

We address claimant’s second assignment of error

because the issue that it raises is likely to arise on remand.

See State v. Savage, 305 Or App 339, 342, 470 P3d 387 (2020)

(“[W]e will consider issues likely to arise on remand when

the trial court or agency has determined a question of law

that will still be at issue after the case is remanded.”).

ANDREWS’ REPORT

In her second assignment, claimant asserts that

substantial evidence and reason “do not support the board’s

finding that Dr. Andrews’ report regarding claimant’s per-

manent disability * * * was more accurate and persuasive”

than the arbiter panel’s report. The employer responds,

370 Gage v. Fred Meyer Stores - Kroger Co.

first, that Andrews had greater familiarity with claimant’s

medical history than did the panel and, next, that Andrews’

opinion was better aligned with claimant’s medical history

than was the panel’s. We review each of the board’s conten-

tions for substantial evidence and reason. See Garcia, 309

Or at 296 (explaining that, if the board asserts a finding of

fact in explaining its decision to disregard certain evidence,

that fact “is subject to attack” if it is not, itself, supported by

substantial evidence).

The board ties its conclusion that the panel did

not consider all of claimant’s medical history in forming its

opinion to claimant’s statement that she needed a walker

after her most recent surgery, which was performed for a

denied condition. But the panel did not list that statement,

directly or otherwise, as a basis for its final conclusion.

And the board points to nothing else in the report or in the

record to suggest that the panel relied on, or was signifi-

cantly influenced by, claimant’s statement about when she

began using a walker. Moreover, the board’s contention that

the panel’s report “erroneously stated that claimant had no

denied conditions” does not explain or otherwise add rea-

son to its decision to reject the panel’s report and to instead

rely upon Andrews’ opinion. The medical arbiter panel, like

Andrews, examined the claimant after reviewing medical

records detailing her medical history, and then reached

diagnostic opinions about her conditions, potential causes

of those conditions, and related levels of impairment. The

panel’s failure to accurately designate certain medical con-

ditions as “accepted” or “denied” for workers’ compensation

purposes is not relevant to its medical opinions about those

conditions.

Similarly, the board’s reliance on Andrews’ opin-

ion because he was more familiar with claimant’s condi-

tions is not supported by substantial evidence or reason.

Andrews concluded in 2015 that claimant’s L4-5 facet cyst

had resolved based on an MRI report from that same year.

Certainly, resolution of the cyst then might have been evi-

dence that Andrews’ aspiration of the cyst in July 2013

had been successful. But the board made an express find-

ing that the 2016 MRI confirmed that the cyst had not, in

Cite as 329 Or App 360 (2023) 371

fact, resolved and that Moore ended up removing the cyst

in a subsequent surgery. That finding was consistent with

Moore’s conclusion, reached after visualizing the 2015 MRI

images—in particular the sagittal view in which the cyst

was visible—and her surgical findings from the later sur-

gery when she excised the cyst.

It is not clear why the board selected Andrews

rather than Moore as claimant’s attending physician given

that they both treated her spinal conditions, non-surgically

and surgically, respectively. It is clear, though, that the rea-

sons the board gave for its conclusion that Andrews’ opinion

was “more accurate and persuasive” than that of the panel

is not based on substantial evidence or reason. More impor-

tantly, and as we have explained, the arbiter panel’s report

is not ambiguous. Because we are reversing and remanding

on those bases, there is no need for us to address the third

assignment of error, and we do not do so.

Reversed and remanded.