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83rd OREGON LEGISLATIVE ASSEMBLY--2025 Regular Session
Senate Bill 445
Sponsored by Senator PATTERSON (Presession filed.)
SUMMARY
The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject
to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the
measure as introduced.The statement includes a measure digest written in compliance with applicable readability
standards.
Digest: The Act would let SAIF form or acquire subsidiaries. The Act would let SAIF or a
subsidiary provide managed care to injured workers. The Act would require the Department of
Consumer and Business Services to make an annual audit of the managed care that they provide.
(Flesch Readability Score: 60.6).
Authorizes the State Accident Insurance Fund Corporation to form or acquire subsidiaries to
perform any function the corporation may delegate under law. Authorizes the corporation or a sub-
sidiary to provide managed care services to injured workers.Sets forth the membership and duties
of the board of directors that governs a subsidiary. Requires an annual audit of the managed care
services provided by the corporation or a subsidiary.
Takes effect on the 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to medical services for injured workers; creating new provisions; amending ORS 656.260
and 656.752; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 656.752 is amended to read:
656.752. (1) The State Accident Insurance Fund Corporation is created for the purpose of
transacting workers’ compensation insurance and reinsurance business. The State Accident Insur-
ance Fund Corporation also may insure an Oregon employer against any liability such employer may
have on account of bodily injury to a worker of the employer arising out of and in the course of
employment as fully as any private insurance carrier.
(2) The functions of the State Accident Insurance Fund Corporation shall be:
(a) To confer with and solicit employers and to determine, handle, audit and enforce collection
of premiums, assessments and fees of insured employers insured with the State Accident Insurance
Fund Corporation;
(b) To make insurance available to as many Oregon employers as inexpensively as may be con-
sistent with the overall integrity of the Industrial Accident Fund, in accordance with ORS 656.634
and sound principles of insurance;
(c) To receive and handle and process the claims of workers and beneficiaries of workers injured
in the employ of insured employers insured with the State Accident Insurance Fund Corporation;
and
(d) To perform all other functions which the laws of this state specifically authorize or which
are necessary or appropriate to carry out the functions expressly authorized.
(3) The State Accident Insurance Fund Corporation in its name may sue and be sued.
(4) The State Accident Insurance Fund Corporation may form or acquire a subsidiary
corporation to perform any function of the State Accident Insurance Fund Corporation that
may be delegated to the subsidiary under any provision of this chapter.
NOTE:Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted.
New sections are in boldfaced type.
LC 1072 SB445
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[(4)] (5) The State Accident Insurance Fund Corporation [may authorize self-insured employers
or other insurers to use any physical rehabilitation center operated by the State Accident Insurance
Fund Corporation on such terms as theStateAccidentInsuranceFundCorporationdeems
reasonable.] or a subsidiary may:
(a) Provide managed care services to injured workers under ORS 656.260;
(b) Authorize self-insured employers or other insurers to use such managed care services
on such terms as the State Accident Insurance Fund Corporation deems reasonable; and
(c) Solicit and coordinate with medical service providers to provide medical services to
injuredworkers.
[(5)] (6) The State Accident Insurance Fund Corporation or a subsidiary, in its own name,
may:
(a) Acquire, lease, rent, own and manage real property[.];
(b) [It may] Construct, equip and furnish buildings or other structures as are necessary to ac-
commodate its needs[.];
(c) [It may] Purchase, rent, lease or otherwise acquire for its use all supplies, materials, equip-
ment and services necessary to carry out its functions[.]; and
(d) [It may] Sell or otherwise dispose of any property acquired under this subsection.
[(6)] (7) Any real property acquired and owned by the State Accident Insurance Fund Corpo-
ration or a subsidiary under this section shall be subject to ad valorem taxation.
[(7)] (8) The State Accident Insurance Fund Corporation may furnish advice, services and excess
workers’ compensation and employer liability insurance to any employer qualified as a self-insured
employer under the provisions of ORS 656.407, on such terms and conditions as the State Accident
Insurance Fund Corporation deems reasonable.
[(8)] (9) With the approval of the Director of the Department of Consumer and Business Ser-
vices, the State Accident Insurance Fund Corporation may provide reinsurance coverage to Oregon
employers on such terms and conditions as the State Accident Insurance Fund Corporation deems
reasonable.
[(9)] (10) The State Accident Insurance Fund Corporation may contract with the Oregon De-
partment of Administrative Services to provide claim management services for claims filed under
ORS 655.505 to 655.555 by adults in custody of institutions of the Department of Corrections.
SECTION 2. (1)(a) A subsidiary corporation formed or acquired by the State Accident
Insurance Fund Corporation shall be governed by a board of five directors appointed by the
Governor as follows:
(A) One member with expertise or an interest in labor.
(B) One member with expertise or an interest in management.
(C) Three members representing the State Accident Insurance Fund Corporation ap-
pointed from among individuals recommended by the board of the State Accident Insurance
Fund Corporation.
(b) Members of the board of directors are subject to confirmation by the Senate pursuant
to section 4, Article III of the Oregon Constitution.
(2) No member of the board of directors of a subsidiary shall have any pecuniary interest,
other than an incidental interest which is disclosed and made a matter of public record at
the time of appointment to the board, in any corporation or other business entity doing
business in the workers’ compensation insurance industry.
(3)(a) The term of office of a member is four years, but a member serves at the pleasure
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of the Governor.
(b) Notwithstanding the term of office specified under paragraph (a) of this subsection,
of the members first appointed to a board after the formation or acquisition of a subsidiary,
at the choice of the Governor:
(A) One shall serve for a term of two years.
(B) Two shall serve for a term of three years.
(C) Two shall serve for a term of four years.
(c) Before the expiration of the term of a member, the Governor shall appoint a succes-
sor.
(d) A member is eligible for reappointment.
(e) If there is a vacancy for any cause, the Governor shall make an appointment to be-
come immediately effective for the unexpired term.
(4) A member of the board of directors is entitled to compensation and expenses as pro-
vided in ORS 292.495.
(5) The board of directors shall select one of its members as chairperson and another as
vice chairperson, for such terms and with such duties and powers as the board of directors
considers necessary for performance of the functions of those offices.
(6) A majority of the members of the board of directors constitutes a quorum for the
transaction of business.
(7) The board of directors shall meet at least once every three months at a time and
place determined by the board. In addition, the board of directors shall meet at such other
times and places specified by the call of the chairperson or of a majority of the members of
the board.
(8) It is the function of the board of directors to establish the policies for the operation
of the subsidiary that it governs in accordance with all applicable provisions of law.
(9) Not later than April 15 of each year, the board of directors shall file with the State
Accident Insurance Fund Corporation a report covering the activities and operations of the
subsidiary for the preceding year.
SECTION 3. ORS 656.260, as amended by section 112, chapter 73, Oregon Laws 2024, is
amended to read:
656.260. (1)(a)The State Accident Insurance Fund Corporation and any health care provider
or group of medical service providers may make written application to the Director of the Depart-
ment of Consumer and Business Services to become certified to provide managed care to injured
workers for injuries and diseases compensable under this chapter.
(b) [However] Notwithstanding paragraph (a) of this subsection, nothing in this section au-
thorizes an organization that is formed, owned or operated by an insurer or employer other than a
health care provider or the State Accident Insurance Fund Corporation to become certified to
provide managed care.
(c) As used in this section:
(A) “Contract review” means the methods and processes whereby the managed care or-
ganization monitors and enforces its contracts with participating providers for matters other
than matters enumerated in subparagraphs (D), (F) and (G) of this paragraph.
(B) “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
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certifiedplan.
(C) “Managed care applicant” means the State Accident Insurance Fund Corporation, a
health care provider or group of medical service providers that apply for certification under
this section.
(D) “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.
(E) “Primary care physician” means a physician who is qualified to be an attending phy-
sician referred to in ORS 656.005 (12)(b)(A) and who is a family practitioner, a general prac-
titioner or an internal medicine practitioner.
(F) “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.
(G) “Service utilization review” means evaluation and determination of the reasonable-
ness, 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 re-
view, retrospective review, discharge planning and case management activities.
(d) As used in this section and ORS 656.245, 656.248 and 656.327, “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.
(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] ensure
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]
managed care applicant 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] managed care applicant in accordance with processes ap-
proved 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 partic-
ipation 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
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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 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 con-
siders appropriate. A majority of the members of each peer review, quality assurance, service utili-
zation 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, neces-
sity 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 enu-
merated 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)(A) Authorizes workers to receive compensable medical treatment from a primary care phy-
sician 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.
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(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 (12)(b)(B) and 656.245 (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 (12)(b)(B) and 656.245 (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 (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
organizationplan.
(i) Does not prohibit the injured worker’s attending physician from advocating for medical ser-
vices 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)(a) Notwithstanding ORS 656.245 (5) and subsection (4)(g) of this section, a managed care or-
ganization 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 associate to provide medical services as provided in ORS 656.245 (5) if the
physician, nurse practitioner or physician associate, within two years prior to the worker’s enroll-
ment in the plan:
(A) Has been terminated from serving as an attending physician, nurse practitioner or physician
associate 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 (5); or
(B) Has failed to satisfy the credentialing standards for participating in the managed care or-
ganization.
(b) The director shall adopt by rule reporting standards for managed care organizations to re-
port denials and terminations of the authorization of primary care physicians, chiropractic physi-
cians, nurse practitioners and physician associates who are not members of the managed care
organization to provide compensable medical treatment under ORS 656.245 (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 the State
Accident Insurance Fund Corporation, 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
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other than an attending physician pursuant to ORS 656.245 (2)(b) shall be subject to review by the
director or the director’s designated representatives. The decision of the director is subject to re-
view under ORS 656.704. Data generated by or received in connection with these activities, includ-
ing 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 ad-
ministration of this chapter.The director may report professional misconduct to an appropriate li-
censing 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 pro-
visions 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 other-
wise 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 and 656.794, 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, 656.248 and 656.327, “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)] (13) Notwithstanding ORS 656.005 (12) or subsection (4)(b) of this section, a managed care
organization contract may designate any medical service provider or category of providers as at-
tendingphysicians.
[(15)] (14) 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)] (15) 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.
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[(17)] (16) 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. De-
cisions by the director regarding medical disputes are subject to review under ORS 656.704.
[(18)] (17) 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.
[(19)] (18) 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, or the director may determine that the matter in dispute would be best
addressed in another forum and so inform the parties.
[(20)] (19) The director shall conduct such investigations, audits and other administrative over-
sight in regard to managed care as the director deems necessary to carry out the purposes of this
chapter.
[(21)(a)] (20)(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)(A) Penalties imposed under this subsection are subject to ORS 656.735 (4) to (6) and 656.740.
(B) Cease and desist orders issued under this subsection are subject to ORS 656.740.
SECTION 4. (1) Individuals employed by the State Accident Insurance Fund Corporation
or a subsidiary who receive and process claims may not provide managed care services to
injuredworkers.
(2) The Director of the Department of Consumer and Business Services shall conduct an
annual audit of the State Accident Insurance Fund Corporation or a subsidiary that provides
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managed care services to injured workers under ORS 656.260 to ensure that the corporation
or subsidiary has sufficient separation between claims processing operations and the pro-
vision of managed care services to injured workers.
(3) The director shall issue an annual report to the Governor, the President of the Senate
and the Speaker of the House of Representatives on the results of the audit and review.
(4) The cost of the audit required under subsection (2) of this section shall be paid by the
State Accident Insurance Fund Corporation.
(5) The director may adopt any rules the director considers necessary or appropriate for
the implementation of this section.
SECTION 5. Sections 2 and 4 of this 2025 Act are added to and made a part of ORS
chapter656.
SECTION 6.This 2025 Act takes effect on the 91st day after the date on which the 2025
regular session of the Eighty-third Legislative Assembly adjourns sine die.
[9]