Determining Reasonable IME Fees in Iowa Requires Looking at Rates in Relevant Area

Des Moines, IA (WorkersCompensation.com) -- When it comes to money, what's reasonable in one place might be too expensive somewhere else.

As the Iowa high court explained in Mid American Construction LLC v. Sandlin, No. 22-0471 (Iowa 02/09/24), when it comes to expenses involved with independent medical examinations, a provision of state law requires hearing the evidence on what the reasonable going rate in the area is before making a ruling.

A laborer was working on a two-story deck removing rotten boards when a step ladder he was standing on gave way. As the laborer feel onto the concrete floor, his left foot caught on the ladder. Although his foot hurt, the laborer thought he could "walk it off." However, due to pain, the laborer called his boss, who told him to "go home and put ice on it."

After the laborer spent a few days at home with no decrease in pain, the boss told the laborer to "just give it more time." Nonetheless, the laborer eventually saw a doctor, who ordered X-rays that showed a possible fracture.

The laborer underwent two IMEs, the second of which was ordered by the laborer's attorney. For this IME, the physician sent the attorney an invoice for $2,020. The laborer sought reimbursement from the employer's insurer, which was denied.

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Following an attempt at arbitration, the employer disputed whether the laborer suffered a permanent disability, the extent of any disability, and the laborer's eligibility to get his IME expense reimbursed, and the case wound up in the hands of a deputy workers' compensation commissioner.

The workers' compensation commissioner awarded the full $2,020 charged by the physician, who opined that his own charge was reasonable. On appeal, the district court affirmed, which prompted the employer to appeal to the court of appeals, which reduced the reimbursement to $500 based on its interpretation of a statutory amendment as limiting reimbursement to the impairment rating alone without the accompanying examination.

The employee appealed to the Supreme Court of Iowa.

Under a 2017 amendment to Iowa's workers' compensation law, "reasonableness" is to be based on the typical fee charged in the locale where the examination is performed.

The Iowa Supreme Court held that the employee was entitled to the reasonable cost of the IME accompanying the physician's determination of the impairment rating, not merely the cost of the impairment rating itself. According to the court, the commissioner failed to make a finding under the 2017 amendment as to the fee typically charged in the locale.

The court explained that Iowa law contains a proviso that "levels the playing field" between employers and employees. In particularly, Iowa entitles an employee to receive an examination if the employee believes the evaluation made by the employer's physician was too low.

In the laborer's case, the employer's IME found zero impairment, triggering the laborer's right to an IME by a physician of his choosing.

So, was $2,020 a reasonable fee? Not necessarily. The court explained that the commissioner did not take the step required by statute of determining what a typical fee was.

Thus, the court sent the case back to make a reasonableness finding "based on the typical fee charged by a medical provider to perform an impairment rating in the local area where the examination is conducted."

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