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Kahn v. Providence Health Plan6/12/2003
Argued and submitted September 6, 2001.
The decision of the Court of Appeals and the judgment of the circuit court are reversed. The case is remanded to the circuit court for further proceedings.
This is an action by an injured worker (plaintiff) against defendant, a managed care organization (MCO) that, under an arrangement with plaintiff's employer's workers' compensation insurer, was responsible for making recommendations respecting the kind of medical care that plaintiff should receive for her injury. The complaint alleged two claims, one for negligence and one for breach of contract, both of which were based on defendant's refusal to approve an operation that plaintiff's physician had recommended. The trial court granted summary judgment for defendant, holding that plaintiff's sole remedy was under the workers' compensation statutes, as provided in ORS 656.260(6). The Court of Appeals agreed. Kahn v. Providence Health Plan, 170 Or App 602, 13 P3d 556 (2000). We allowed plaintiff's petition for review to consider whether, under the circumstances alleged, an injured worker may bring an action for damages arising out of an MCO's conclusion that a proposed medical treatment is unnecessary. We conclude, on grounds somewhat different than those that the Court of Appeals stated, that the relevant statute appears to preclude such an action.
When, as here, we review a decision granting summary judgment, we take the facts in the record in the light most favorable to the nonmoving party -- in this case, plaintiff. See Jones v. General Motors Corp., 325 Or 404, 420, 939 P2d 608 (1997) (stating rule). The following facts are not in dispute. Plaintiff suffered a compensable back injury in 1977 and underwent major back surgery at that time. Plaintiff had no significant problems with her back for the next 17 years. In 1994, however, plaintiff began to experience back pain, which gradually increased in severity. Plaintiff eventually sought medical treatment and also sought to reopen her original workers' compensation claim.
In September 1996, plaintiff's employer's workers' compensation insurer, Industrial Indemnity, informed plaintiff that her claim for reopening had been accepted and that she had been enrolled in defendant MCO for purposes of that claim. Shortly thereafter, in November, Industrial Indemnity advised plaintiff that defendant had authorized her doctor, Golden, to treat her back injury.
Golden proposed to treat plaintiff's back problems with surgery. Pursuant to its contract with Industrial Indemnity, defendant evaluated Golden's surgery proposal through a process known as "utilization review." In that review process, defendant concluded that the proposed surgery was not medically necessary and, therefore, declined to recommend it. Defendant issued its decision to that effect in January 1997.
Although the workers' compensation statutes provide an administrative review process that a dissatisfied worker may use to challenge decisions like defendant's decision in this case, see ORS 656.260(14)-(16) (setting out procedure), plaintiff did not avail herself of that process. Nonetheless, for reasons that are not clear from the record, Industrial Indemnity decided to authorize and pay for the surgery. The surgery was performed in March 1997 -- about nine weeks after defendant's initial decision -- and, according to plaintiff, "greatly improved" her condition. It is the delay between the initial decision and the subsequent surgery that lies at the heart of this case.
Following her surgery, plaintiff filed the present action against defendant for negligence and breach of contract, seeking damages for extreme pain, continued disab
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