NCCI’s Court Case Update – Idaho, Iowa, and New Mexico – April 2024

Idaho, Medical Benefit Payments

On April 2, 2024, the Supreme Court of Idaho, in Thompson v. Burley Inn, Inc., held that an employer/workers compensation insurer (E/C) was required to reimburse an employee’s medical expenses for the full amount invoiced for treatment, even though the medical expense was fully paid for by Medicaid.

In this case, the E/C denied authorization for a claimant’s hip replacement surgery and Medicaid ultimately paid for the procedure. The Idaho Industrial Commission determined that the surgery should have been paid by the E/C as the hip condition was work related and, relying on the state supreme court’s decision in Neel v. Western Construction, Inc., ordered the E/C to pay for the full amount invoiced for this procedure even though Medicaid fully covered its costs.

The employer appealed the decision to the Supreme Court of Idaho, which affirmed the Industrial Commission and noted that, according to Neel, an E/C must pay the full invoiced amount for a medical claim when: (1) the E/C denies the claim; and (2) the claim is later deemed compensable. The court found that both prongs of Neel’s “full invoice” doctrine were met, rejecting the E/C argument that there should be an exception in cases where Medicaid fully covered the medical expenses. The court reasoned that excluding Medicaid recipients from the application of this doctrine would create an incentive for employers to deny legitimate workers compensation claims.

Iowa, Scheduled and Unscheduled Injuries

On March 29, 2024, the Supreme Court of Iowa, in Bridgestone Americas, Inc. v. Anderson, held that an employee’s shoulder and arm injuries were compensable as “scheduled injuries” under Iowa statute 85.34(2), which provides compensation for permanent partial disabilities.

An employee who suffered compensable work-related injuries to his arm and shoulder filed for workers compensation benefits. The employee and the employer disagreed as to whether those injuries should be compensable as “scheduled” or “unscheduled” injuries under Iowa statute 85.34, which provides for different manners of compensation depending on whether injuries are “scheduled” or “unscheduled.” The court clarified that pursuant to the statute, an unscheduled injury is one that is not described or referred to in sections (a) through (u) of the statute. The court noted that the employee’s shoulder and arm injuries are described or referred to within those sections—noted in (n) and (m), respectively—and are therefore within the group of scheduled injuries.

With this ruling, the court reversed the lower court decisions that the employee’s shoulder and arm injuries were compensable as unscheduled injuries and remanded the case to the Commissioner for a recalculation of the compensation award.

New Mexico, Compensation for Secondary Mental Impairment

On April 1, 2024, the Supreme Court of New Mexico, in Aztec Municipal Schools v. Cardenas, held that the limit on the duration of disability benefits for a secondary mental impairment violates the equal protection clause of the New Mexico constitution.

In this case, a claimant suffered a compensable injury to the knee and a secondary mental impairment. A workers compensation judge limited the claimant’s duration of benefits for the secondary mental impairment to 150 weeks. This is the same period that was set for the scheduled injury to the knee, as required by New Mexico statutes 51-1-41 and 52-1-42, which limit the duration of disability benefits for secondary mental impairments to the number of weeks allowable for an employee’s physical impairment.

The court, in finding the limit on the duration of disability benefits for a secondary mental impairment unconstitutional, reasoned that the equal protection clause of the state constitution mandates that similarly situated individuals be treated alike absent a sufficient reason to justify disparate treatment. The court found that workers with subsequent physical impairment and workers with secondary mental impairment are similarly situated, as they have both suffered separate compensable injuries caused by work-related injuries that impair their ability to perform a job and earn wages. However, the court noted, workers with secondary mental impairment receive different treatment because the duration of their benefits is tied to the benefit period for the original physical injury, whereas subsequent physical impairments are treated as distinct and separate injuries for compensation purposes.

The court further held that the disparate classification for secondary mental impairments did not have a substantial relation to an important government interest and is contrary to the purposes of the New Mexico Workers’ Compensation Act.

For more information on other cases monitored by NCCI's Legal Division, visit previous Court Case Updates and Court Case Insights under the Legal section of INSIGHTS on ncci.com.

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