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Employer Reimbursement Obligations for IME’s and Apportionment for Pre-7/1/2017 Injuries

On February 9, 2024, the Iowa Supreme Court released their opinions for the cases of: Loew v. Menard, Inc., No. 22-1894, 2024 WL 501439 (Iowa Feb. 9, 2024); Mid Am. Constr. LLC v. Sandlin, No. 22-0471, 2024 WL 500652 (Iowa Feb. 9, 2024); and P.M. Lattner Mfg. Co. v. Rife, No. 22-1421, 2024 WL 500665 (Iowa Feb. 9, 2024). These opinions addressed the 2017 amendments to Chapter 85 of the Iowa Code pertaining to (1) apportionment credit for injuries before July 1, 2017, compensated based on a loss of earning capacity, and (2) Claimant IME reimbursement.

  1. Apportionment for Pre-7/1/2017 Injuries

In Loew and Rife, the employers argued that because Claimants’ pre-July 1, 2017, unscheduled member injuries were awarded industrial disability, the employers were entitled to an apportionment credit for the full industrial disability awarded towards the current post-July 1, 2017, scheduled member injuries. The Iowa Supreme Court concluded that offsetting a functional impairment award against a prior award based on loss of earning capacity was an improper comparison of apples to oranges. Instead, the employer is only entitled to an offset or credit for the functional impairment caused by the first injury. Stated differently, the employer is only liable for the marginal increase in functional impairment caused by the second injury. Further, if an employer fails to provide evidence on the extent of the prior impairment, the agency may order that additional evidence be taken when the evidence is material and there was good reason the employer failed to present it.

It is important to note the limitations in these decisions. The Court made clear that they were addressing apportionment in cases where the first injury was compensated based on loss of earning capacity and the second injury was compensated as a loss of functional impairment. Apportionment for injuries in which both were compensated based on the same type of loss will not be affected by these decisions.

  1. Claimant IME Reimbursement

In Rife and Sandlin, the Iowa Supreme Court addressed Claimant IME reimbursement under Iowa Code section 85.39. The Supreme Court held that Claimants are “entitled to the reasonable cost of the examination accompanying the physician’s determination of the impairment rating, not merely the component cost of the impairment rating itself.” Claimant has the burden of proving the reasonableness of the fee. Reasonableness is based on the typical fee charged in the location where the IME is to occur.

We wanted you all to be aware of these decisions as they will undoubtedly have an impact on how claims are to be handled moving forward. As always, please feel free to contact any of our attorneys with questions regarding this or any other workers’ compensation issues. 

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