De Facto Denial under Nava v. SAIF
By Vincci W. Lam, Attorney at Law
Are you scratching your head after receiving a Request for Hearing alleging a “de facto denial,” but a careful review of the medical record reveals no new/omitted condition request? You may be encountering Nava v. SAIF—the next chapter!
The Court of Appeals issued novel case law in Nava v. SAIF, finding that a Notice of Closure (NOC) was unreasonable and subject to penalties and attorney fees where the employer/insurer/claim processor did not voluntarily accept a “clearly compensable” condition before issuance of a NOC and grant permanent disability benefits for that condition in the NOC.[1] This imposed a new duty to voluntarily/unilaterally expand the scope of acceptance before an NOC.
The attorneys at RW have seen recent Requests for Hearing alleging “de facto denials,” but there has been no claim for new/omitted conditions. It appears worker-side attorneys are seeking to expand the ruling in Nava v. SAIF to timeframes outside of a Notice of Closure, arguing that conditions are “de facto denied” if the condition was clearly compensable and not voluntarily accepted.
A claim processor can preemptively address this “de facto denial” allegation by:
- Being aware of the lurking legal theory (you read this blog!);
- Considering an IME early on to create medical evidence as to the proper scope of acceptance; and
- Conducting periodic review of the medical records to determine if there are clearly compensable diagnoses that arguably ought to be accepted and analyze next steps if so.
The attorneys at RW have formulated arguments against this emerging legal theory. The Oregon Supreme Court may, at some point, review a future case that seeks to apply or expand Nava, where the Supreme Court could reject, limit, or affirm Nava. Stay tuned!
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[1] Nava v. SAIF, 333 Or App 196 (2024), was a departure from longstanding practice and ORS 656.267 which places the burden on claimant to request a new/omitted condition if a claimant felt the scope of acceptance was deficient. Nava v. SAIF altered that longstanding scheme, imposing a new obligation on employers/insurers to voluntarily/unilaterally expand the scope of acceptance before publishing a NOC, or risk an unreasonable closure penalty and attorney fee. The Court of Appeals’ issued its decision on June 12, 2024, making this fairly new case law. The Oregon Supreme Court declined to review the Court of Appeals decision, meaning Nava’s unreasonable closure penalty is currently the “law of the land.”