Cutler Law Firm, P.C.

Employer Reimbursement Obligations for IME's

Two recent Iowa Court of Appeals decisions may impact the amount of money an employer is required to reimburse an employee under Iowa Code § 85.39 for hiring a physician to perform an independent medical examination (IME) after a work-related injury.

In MidAmerican Construction LLC v. Marshall Sandlin, No. 22-0471, 2023 WL 2148754 (Iowa Ct. App. 2023), the claimant hired a physician to perform an IME for litigation purposes. The itemized billing statement from the doctor charged $1,400 for a base medical exam and a $500 flat fee for an impairment rating. MidAmerican argued that full reimbursement of the entire IME fee was not “reasonable” in line with the language of the statute. The relevant part of § 85.39(2) reads, “a determination of the reasonableness of a fee for an examination made pursuant to this subsection, shall be based on the typical fee charged by a medical provider to perform an impairment rating in the local area where the examination is conducted.” The court agreed with MidAmerican and held that the district court’s award for the cost of the entire examination was unreasonable. They reasoned that when the legislature amended the statute to say “impairment rating,” it meant to only require an employer to reimburse the part of the examination associated with getting an impairment rating. Thus, MidAmerican was only statutorily required to pay the $500 fee associated with the impairment rating portion of the doctor’s examination. To rule otherwise would require reimbursement for an expanded examination, report, and intensive review of medical records in contravention of legislative intent.

In P.M. Lattner Manufacturing Co. v. Michael Rife, No. 22-1421, 2023 WL 3862594 (Iowa Ct. App. 2023), the claimant injured his right shoulder while working as a welder for Lattner. He hired an IME physician to provide an opinion for both work-related and a non-work-related conditions. The Commissioner awarded full reimbursement for the entire IME. The Iowa Court of Appeals reversed, holding that under § 85.39(2), an employer is only required to reimburse a claimant for compensable, work-related body parts, and that the cost of the IME should be limited to the typical fee charged by a provider to provide an impairment rating in the area where the examination is conducted. The court remanded the case to the Commissioner to decide what amount of the IME was for work-related injuries and in accordance with a typical fee charged by a provider for an impairment rating in the area.

We wanted you all to be aware that the courts, in line with the 2017 statutory amendments to Iowa Code § 85.39(2), are limiting the amount of money employers need to reimburse for impairment rating examinations. In each individual case there is still a question of what amount of examination fees are from the impairment rating and what fees are from other parts of the examination. There is also the question of how much a typical examiner in the local area will charge. However, we anticipate that claimant’s counsel will assuredly ask for reimbursement for the full IME as part of any settlement.

If you have any questions regarding these decisions or other workers’ compensation issues, please do not hesitate to reach out to any one of our attorneys.

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