WRME Eligibility Turns on Insurer’s Current Reliance on an IME: Oregon Supreme Court Adopts a “Time-of-Decision” Test in Teitelman v. SAIF

Introduction

In Teitelman v. SAIF, 374 Or 271 (2025), the Oregon Supreme Court resolved a recurring statutory interpretation question in workers’ compensation disputes: when assessing a worker’s entitlement to a worker requested medical examination (WRME) under ORS 656.325(1)(e), at what point do we determine whether a “denial of compensability” “is based on” an independent medical examination (IME) report?

The case arises from a claim by Thomas K. Cardoza alleging a work-related back injury while employed by Werner Gourmet Meat Snacks, Inc. SAIF Corporation, Werner’s workers’ compensation insurer, denied compensability. After Cardoza requested a hearing, SAIF obtained an IME supporting its denial. Cardoza’s attending physician disagreed with the IME. Cardoza then sought a WRME. The Workers’ Compensation Division’s Medical Resolution Team (MRT) denied the request, reasoning that the IME occurred after the written denial and thus the denial was not “based on” the IME.

The central issue: Must the IME exist before the original written denial (and hearing request) for the denial to be “based on” an IME under ORS 656.325(1)(e), or is it sufficient that at the time the WRME request is decided the insurer is using the IME to support its continued denial?

In a decision authored by Justice Bushong, the Court held that the proper time to assess whether a denial “is based on” an IME is when the WRME request is decided. If, at that point, the insurer is relying on an IME to defend its ongoing denial and the worker’s attending provider does not concur, the worker qualifies for a WRME. Justice Garrett, joined by Justice DeHoog, dissented, arguing that “denial” refers to the initial mailed notice, tying the WRME entitlement to the basis for that original decision.

Summary of the Opinion

The Oregon Supreme Court affirmed the Court of Appeals, reversed the Workers’ Compensation Board, and remanded. The Court held that:

• Under ORS 656.325(1)(e), whether a denial “is based on” an IME is assessed as of the time the WRME request is decided, not as of the initial written denial or the worker’s hearing request.
• The Workers’ Compensation Law contemplates that an insurer’s “denial of compensability” is an ongoing decision that can be supported by different evidence at different stages while the claim remains open and in litigation.
• The legislature intended the WRME to supply workers with an impartial counterweight to insurer-selected IME reports used to litigate a denial; limiting WRMEs based on the happenstance of when the IME was obtained would undercut that purpose.

Applying that rule, because SAIF conducted an IME after the written denial, stated that it would rely on the IME to defend its denial at the hearing, and Cardoza’s attending physician disagreed with the IME, Cardoza was entitled to a WRME. The contrary MRT and Board decisions were error.

The dissent would tie “denial of compensability” to the mailed notice referenced in ORS 656.319(1), concluding that the IME must have existed and formed the basis of the initial denial for the WRME right to attach.

Factual and Procedural Background

• Cardoza alleged a compensable back injury while working at Werner Gourmet Meat Snacks.
• SAIF issued a written denial, asserting the back condition was not work-caused.
• Cardoza timely requested a hearing.
• After the hearing request, SAIF compelled an IME by Dr. Ballard, who opined that a preexisting condition—not a work injury—was the major cause of disability/treatment.
• Cardoza’s attending physician, Dr. Mitchell, disagreed.
• Cardoza requested a WRME under ORS 656.325(1)(e). MRT denied the request because the IME post-dated the denial.
• SAIF filed hearing exhibits including the IME and confirmed its intent to rely on it to defend the denial. The ALJ denied the WRME request and later upheld the denial, citing the IME as persuasive.
• The Workers’ Compensation Board affirmed. The Court of Appeals reversed on the WRME issue. The Supreme Court granted review and now affirms the Court of Appeals, reversing the Board.

Detailed Analysis

A. Precedents and Authorities Cited

• Armstrong v. Rogue Federal Credit Union, 328 Or 154 (1998):
  • Key proposition: A work injury is compensable from occurrence; a denial suspends payment of most benefits but does not extinguish entitlement. If the injury is later found compensable, the insurer owes back benefits, interest, penalties, and fees.
  • Role here: Supports the majority’s “continuing denial” concept—denial has ongoing legal consequences while a claim remains open and in dispute.
• SAIF Corp. v. Allen, 320 Or 192 (1994):
  • Key proposition: The written notice of denial is a key procedural component guiding dispute resolution; failure to timely accept/deny can be treated as a denial.
  • Role here: Distinguishes procedural notice from the substantive, ongoing “denial of compensability” status that can evolve as the claim proceeds.
• Robinson v. Nabisco, Inc., 331 Or 178 (2000):
  • Key proposition: IME’s purpose is to provide information to the insurer from a non-attending doctor to protect its legal position.
  • Role here: Contextualizes insurers’ use of IMEs both pre- and post-denial to develop litigation defenses.
• Darling v. Johnson Controls Battery Group, 188 Or App 190 (2003), rev den, 336 Or 376 (2004):
  • Key propositions: ORS 656.325(1)(a) authorizes IMEs throughout the open period of a claim; a denial “suspends” payment of most benefits but does not extinguish entitlement.
  • Role here: Reinforces that insurers may request IMEs after a denial, and that denials are not static, bolstering the majority’s “time-of-decision” perspective.
• Brownstone Homes Condo. Assn. v. Brownstone Forest Hts., 358 Or 223 (2015):
  • Key proposition: Verb tense can inform statutory meaning.
  • Role here: The majority acknowledges “is based on” is present tense but concludes, contextually, it refers to current reliance at the time the WRME request is decided.
• State v. Gaines, 346 Or 160 (2009):
  • Key proposition: Standard Oregon statutory interpretation framework—text, context, and useful legislative history.
  • Role here: Framework applied to ORS 656.325(1)(e).

B. Statutory Text and Context: The Majority’s Legal Reasoning

ORS 656.325(1)(e) authorizes a WRME when:

• The worker made a timely request for a hearing on a denial of compensability (per ORS 656.319(1)(a));
• The denial “is based on” one or more IME reports (conducted under ORS 656.325(1)(a)); and
• The attending physician or authorized nurse practitioner does not concur with the IME(s).

The parties agreed that Cardoza requested a hearing; had undergone an IME; his attending physician disagreed; and SAIF intended to use the IME to defend the denial. The dispute centered on the timing embedded within “is based on”: does it refer to the state of play at the hearing request, or at the decision on the WRME?

The Court’s analysis proceeds in layers:

• Textual ambiguity:
  • While SAIF’s reading (tie to initial denial at time of hearing request) is plausible, so is the worker’s. The present tense “is based on” can be read as describing the insurer’s present reliance when the WRME request is adjudicated, not frozen at the date of the mailed denial.
• Context of the Workers’ Compensation Law:
  • Denial as a continuing status: The written notice is a procedural trigger; the substantive “denial of compensability” persists during litigation and may change as new evidence emerges, including post-denial IMEs.
  • Open claim dynamics: Insurers can require IMEs throughout the open claim period, including after a denial and before or during hearing preparation (OAR 436-010-0265).
  • Suspension vs. extinguishment: A denial suspends benefits but leaves entitlement in dispute (Armstrong; Darling). Because entitlement remains at stake, fairness requires giving workers access to a countervailing examination when the insurer relies on an IME during litigation.
• Practical architecture of the statute:
  • The WRME right depends on a temporal “coinciding” of conditions: a pending hearing request, an IME in the record, a non-concurring attending provider, and the insurer’s use of the IME to support the continuing denial at the time the WRME is decided.
  • If, by then, the insurer accepts the claim, or the worker withdraws the hearing request, or the insurer disclaims reliance on the IME, a WRME would not be authorized because the statutory conditions would not simultaneously exist.
• Policy and fairness:
  • Reading “is based on” to require pre-denial IMEs would allow the insurer’s litigation use of a post-denial IME to go unanswered by a WRME, contrary to the statute’s balancing function and the legislature’s directive that the Workers’ Compensation Law be interpreted “in an impartial and balanced manner” (ORS 656.012(3)).

C. Legislative History

The WRME provision—originally codified as ORS 656.325(1)(b) (2001), later renumbered to ORS 656.325(1)(e)—was enacted as part of SB 485 (2001) with MLAC’s support. The legislative history shows a consistent theme: introduce balance into the IME process by furnishing workers, when litigating denials, with an impartial examination to counter insurer-selected IMEs.

• Initial problem framing: Worker concerns about bias in insurer-selected IMEs. John Shilts (then WCD Administrator) described the reforms as adding “more worker input” and a “level of choice” absent in the existing system.
• Evolution of mechanism: Representative Kevin Mannix proposed allowing workers who are “at risk in litigation” and facing an IME-based denial to obtain an impartial “second opinion” from a director-selected physician (akin to the medical arbiter model), with the cost borne by the insurer.
• House articulation: Shilts explained that the bill “allows workers who are litigating a denial that is based on an IME to request an examination from the arbiter list,” thereby “provid[ing] for an impartial examination for workers in litigation.”
• Consistent advocacy: Witnesses emphasized new oversight and balance—giving workers a right to refer adverse IME determinations to an independent examiner for a second opinion.

Importantly, nothing in the legislative history indicates the legislature intended to condition the WRME entitlement on an IME existing before the initial notice of denial. To the contrary, the focus was on the phase “in litigation,” i.e., after a denial when the insurer is using IME evidence to defend a denial in the hearing process.

D. The Dissent’s Reading and Its Rationale

Justice Garrett (joined by Justice DeHoog) would anchor “denial of compensability” to the event of the mailed notice referenced three times in ORS 656.319(1). By linking ORS 656.325(1)(e) to ORS 656.319(1)(a), the dissent reads the WRME entitlement to depend on the initial denial’s basis: the IME must predate and ground the original denial for a WRME to be authorized.

• Textual focus: The dissent emphasizes that a hearing is requested “on a denial,” and ORS 656.319(1) measures timeliness from the “mailing of the denial,” signaling a discrete event rather than a continuing status.
• Drafting alternatives: If the legislature wanted WRMEs whenever an IME is later obtained or relied upon, it could have said so. The choice to tie the entitlement to a hearing request “on a denial … as required by ORS 656.319(1)(a)” reflects a narrower scope.
• Legislative process and compromise: Given MLAC’s balanced gatekeeping role, the dissent infers a compromise limiting WRMEs to cases where the initial denial was IME-based, protecting insurers from broader WRME exposure while still addressing IME bias concerns.
• Practical incentives: Because insurers face penalties for unreasonable denials judged at the time of the initial decision, they already have incentive to obtain an IME before denying if medical evidence is needed—mitigating the concern that insurers will “game” timing to avoid WRMEs.

The majority rejects the dissent’s premise that the cross-reference to ORS 656.319(1)(a) carries substantive weight beyond timeliness, and reads it instead as a timing condition (i.e., there must be a timely hearing request) rather than a restriction on what evidence can support a denial during litigation.

E. Impact and Practical Implications

1) Clarified entitlement: A “time-of-decision” test

The controlling rule now is:

• At the time a WRME request is decided, if:
  • a timely hearing request is pending;
  • the insurer’s continuing denial is based on (i.e., the insurer is using or intends to use) an IME report obtained under ORS 656.325(1)(a); and
  • the attending physician or authorized NP does not concur;
  then the worker is entitled to a WRME at the insurer’s expense.

2) Litigation strategy and evidentiary management

• Insurers:
  • Front-loading medical development: Expect more pre-denial IMEs if insurers want to avoid automatic WRME exposure later.
  • Reliance disclaimers: The majority indicates that insurers can avoid WRME obligations by expressly disclaiming reliance on an IME to defend their denial. However, any such disclaimer must be genuine and reflected in litigation conduct; using the IME as a hearing exhibit or relying on its conclusions would likely trigger the WRME right.
  • Cost and timing: More WRMEs will be authorized where post-denial IMEs have become central to the defense, with attendant cost and scheduling considerations.
• Claimants:
  • Record building: Promptly document the attending provider’s nonconcurrence with the IME. Request that the insurer confirm whether it will rely on the IME in defending the denial.
  • WRME timing: File WRME requests when the temporal conditions coincide. If MRT denies based on timing sequence (IME after denial), Teitelman supports appeal.
  • Hearing practice: If the insurer seeks to rely on a post-denial IME, move to enforce WRME rights, and if refused, preserve objections and appellate issues.

3) Administrative rule alignment

The Court found nothing in OAR 436-060-0147 (WRME implementation) requiring that an IME predate the denial. Post-Teitelman, DCBS/WCD and MRT should align guidance and decision templates with the “time-of-decision” test and the majority’s emphasis on contemporaneous reliance.

4) Open questions and boundaries

• What constitutes “based on” in practice?
  • Express reliance (e.g., listing as exhibits, referencing in position statements) should suffice. If an insurer purports to “not rely” on an IME but uses its logic through other means (e.g., cross-examination predicated on IME findings), disputes may arise. ALJs and the Board will likely look to substance over labels.
• Temporal snapshot:
  • The decisive moment is the agency’s decision on the WRME request. Parties may need to update the record to reflect current reliance at that time.
• Interplay with penalties for unreasonable denial:
  • Teitelman does not alter that reasonableness of a denial (for penalty purposes) is judged at the time of the initial decision. It does, however, allow a WRME to be authorized later if the insurer subsequently builds its defense around an IME.
• Effect of claimant’s death:
  • The Court of Appeals noted the Board should address any effect Cardoza’s death may have on the claim on remand. Teitelman’s rule on WRMEs is unaffected, but practical remedies and benefits may be impacted by survivorship rules.

Complex Concepts Simplified

• Compensability: Whether an injury “arises out of and in the course of employment,” requiring medical services or resulting in disability or death. If compensable, the worker is entitled to benefits.
• Denial of compensability vs. notice of denial:
  • Notice of denial: The written document the insurer must issue (typically within 60 days) stating it is denying the claim.
  • Denial of compensability: The substantive position that the claim is not compensable. It persists and can evolve during litigation as the insurer marshals evidence.
• IME (Independent/Insurer Medical Examination): An examination by a physician selected by the insurer from a director-approved list. Insurers can require up to three per claim opening without prior authorization. Purpose: to gather evidence to evaluate/defend the claim.
• WRME (Worker Requested Medical Examination): An examination by a physician selected by the director (from a statutory list) that a worker may request—and the insurer must pay for—when the statutory conditions are met; intended to counterbalance insurer IMEs.
• Open claim: A claim remains “open” until finally resolved (acceptance/closure or a final adjudication). During this time, denials can be litigated, and IMEs can be compelled.
• Attending physician/authorized nurse practitioner: The worker’s primary provider under ORS 656.245 whose disagreement with the insurer’s IME is a prerequisite for a WRME.
• MRT (Medical Resolution Team): A unit within DCBS/WCD that administratively decides certain medical disputes, including initial WRME authorization.
• MLAC (Management-Labor Advisory Committee): A bipartisan stakeholder body created in the 1990 reforms, instrumental in shaping workers’ compensation legislation, including the 2001 WRME provisions.
• ALJ/Board/Court of Appeals/Supreme Court: The sequential adjudicatory bodies that review workers’ compensation disputes (hearing; Board review; judicial review; Supreme Court on review).

Practice Pointers

• For claimant’s counsel:
  • Secure prompt written nonconcurrence from the attending provider with any IME used by the insurer.
  • When filing a WRME request, document the insurer’s current reliance on the IME (e.g., exhibit lists, written statements to the ALJ, correspondence).
  • If MRT denies due to IME timing (post-denial), cite Teitelman’s “time-of-decision” standard.
  • Ask ALJs to preclude insurers from relying on IMEs absent WRME authorization, or in the alternative, to grant interim WRME relief before hearing.
• For insurers:
  • Consider obtaining IMEs before denial if medical grounds are contemplated; otherwise be prepared for a WRME if an IME becomes central to the defense.
  • If you truly do not need the IME, consider an express disclaimer of reliance to avoid WRME costs—but ensure litigation conduct matches the disclaimer.
  • Verify IME providers are on the director’s authorized list at the time of the exam to preserve report usability.
  • Evaluate settlement opportunities if WRME results could neutralize or undermine your IME.
• For MRT/DCBS:
  • Update decision criteria and templates to reflect Teitelman. Focus on contemporaneous reliance at the time of the WRME decision rather than the chronological sequence of denial and IME.

Conclusion

Teitelman v. SAIF announces a clear, worker-protective, but textually and contextually grounded rule: the WRME entitlement under ORS 656.325(1)(e) depends on whether the insurer’s ongoing denial “is based on” an IME at the time the WRME request is decided. The Court’s “time-of-decision” test harmonizes the WRME statute with the broader architecture of Oregon’s Workers’ Compensation Law, which treats a denial as suspending benefits during an open, litigated claim, allows IMEs throughout the open claim period, and demands a fair and balanced process.

The decision aligns with the 2001 legislature’s purpose, as reflected in SB 485’s history, to offset perceived or actual IME bias by furnishing workers an impartial “second opinion” when they are “at risk in litigation” and the insurer relies on an IME. While the dissent would tie WRME eligibility to the initial written denial, the majority’s reading acknowledges the dynamic reality of claims litigation and ensures that timing quirks do not deprive workers of the WRME safeguard precisely when IME evidence becomes central to the defense.

Going forward, Teitelman will influence litigation strategy on both sides. Insurers may front-load medical evidence or explicitly disclaim reliance on certain IMEs; workers and MRT will focus on whether an IME is being used to support the continuing denial when the WRME request is made. Administrative rules and practices should be calibrated to this decision, which will likely result in more WRMEs where post-denial IMEs become pivotal. Most importantly, the decision advances the legislature’s objective of an “impartial and balanced” system by ensuring access to countervailing medical evidence whenever IMEs drive the defense of a denial during litigation.