Iowa Court of Appeals Rules on IME Reimbursement

  • Sep 10, 2021

Legal Update by Attorney Alison Stewart and Law Clerk Jordan Gehlhaar

Iowa Code section 85.39 provides, in part, that: (1) an injured employee shall submit for a medical examination at no cost to them when directed by their employer, and (2) if a permanent disability determination is made by the employer’s physician and the employee believes it is too low, the employee may seek reimbursement of a second examination with a physician of their choice by application to the Commissioner. Iowa Code § 85.39 (2016). The Iowa Court of Appeals recently interpreted the second part of this statute in Kern v. Fenchel, Doster & Buck, P.L.C.

Claimant Kern reported a diagnosis of bilateral carpal tunnel, left thumb trigger finger, and left carpometacarpal joint arthritis to her employer. The employer sent her to orthopedic surgeon Dr. Benjamin Paulson, who determined the injuries were not work related. Based on Dr. Paulson’s opinion, the employer denied workers’ compensation liability. Subsequently, Claimant Kern chose to undergo a separate independent medical examination (IME) with occupational specialist Dr. Sunil Bansal. Doctor Bansal did find the injuries to be work related, and calculated an eight percent whole person permanent impairment.

Claimant Kern requested reimbursement of the IME fee from Dr. Bansal under section 85.39. The Deputy found she did not establish the statutory pre-requisites to entitle her to a second IME at the employer’s expense because Dr. Bansal’s IME “was not responsive to a disputed impairment rating and was outside the scope of section 85.39.” The Commissioner and district court affirmed. This appeal followed.

The Court of Appeals considered an issue of first impression in Iowa: Is denial of causation equivalent to a zero percent impairment rating? Similarly, would a no-causation opinion from an employer’s physician allow reimbursement of a second IME secured by a claimant? The court answered yes to both, and instructed the Commissioner to reconsider the claimant’s application for reimbursement of IME fees. In the court’s view, no specific language was required and Dr. Paulson’s no-causation determination was in effect a finding of no compensable permanent disability. When Claimant Kern disagreed and thought this was too low, she followed the proper statutory procedure of securing her own IME, applying to the Commissioner for reimbursement, and notifying the employer.

Penalties were sought on the basis that the employer maliciously and intentionally chose Dr. Paulson with the awareness of his opinion that carpal tunnel is not a work-related condition. However, the court found it was reasonable for the employer and insurance carrier to rely on Dr. Paulson’s opinion in denying the claim. An employer or insurance carrier may choose which physician will evaluate the claimant; however, even if the physician finds no causation, the employer or insurance carrier may be required to pay for a second evaluation if the claimant disputes the first and follows proper procedure.

Peddicord Wharton will continue to monitor case law on this issue.


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