by | Feb 13, 2024

In Mid American Construction, LLC v. Sandlin, the Iowa Supreme Court held that under Section 85.39(2), an employee is entitled to the reasonable cost of an entire examination accompanying a physician’s determination of the employee’s impairment rating, not just the component cost of the impairment rating itself. Additionally, the Court held that agency factfinding must include a determination of the reasonableness of the employee’s IME fees based on fees typically charged in that locale.

Section 85.39(1) of the Iowa Code provides that an employer can request an injured employee to submit to an examination for the purposes of evaluating the employee’s permanent disability. If the employee finds the resulting impairment rating to be too low, the employee can then elect to be evaluated for permanent disability by a physician of  the employee’s own choosing (also known as an IME), and can be reimbursed by the employer for the reasonable fee of that examination. As amended in 2017, subsection (2) now states that a determination of the reasonableness of the fee must be based on fees typically charged by medical providers in the local area where the IME was conducted.

In Mid American, the injured employee first received a 0% impairment rating from an examination requested by the employer. The employee then arranged for an IME, and received a 2% impairment rating. The employee sought reimbursement from the employer under Section 85.39(2) for the total cost of the IME, which was $2,020. The employer refused, and argued the employee was only entitled to reimbursement of a reasonable fee for the component cost of the impairment rating, not the entire examination. The issue was appealed to the Iowa Supreme Court.

First, the Court interpreted the amended language of Section 85.39(2), and found that the Iowa Legislature used the word “examination” throughout the Section. Such verbiage was not altered by the amendments in 2017. Furthermore, the Iowa Workers’ Compensation Commission has long awarded the full costs of IMEs to employees, and the Court reasoned that if the Legislature wanted to change this practice, it could have. Therefore, the Court held that Section 85.39(2) requires employers to reimburse the reasonable costs of an IME, and that such costs include records review, the physical examination and testing, causation opinions, permanent impairment and restrictions assessments, further treatment recommendations, and any written reports.

Next, the Court looked to the Commissioner’s finding that the $2,020 IME fee was reasonable. In reviewing the Commissioner’s award, the Court found that its analysis and factfinding were incomplete. Per the 2017 amendments to Section 85.39(2), the Court held it is necessary for the agency to make a finding of the reasonableness of IME fees in its awards “based on the typical fee charged by a medical provider to perform an impairment rating in the local area where the examination is conducted.” This analysis was missing from the Commissioner’s award. Therefore, the case was ultimately remanded to the Commissioner to make such a finding, and to accordingly award a reasonable fee for the employee’s examination.

This post was drafted by Faith Kowalski, a law clerk at Baylor Evnen Wolfe & Tannehill. If you have questions regarding reasonable IME fees in your case, please call Paul Barta or Micah Hawker-Boehnke at 402-475-1075.