The Iowa Supreme Court Creates New Test for Employer Liability of Unrelated Medical Care Provided by Authorized Treating Physician

On April 22, 2016, The Iowa Supreme Court reversed the Iowa Court of Appeals’ decision in Ramirez-Trujillo v. Quality Egg, which held Quality Egg liable for a back surgery that was unrelated to the compensable work injury. The Court of Appeals previously upheld the District Court and Commissioner’s decision because Quality Egg did not withdraw authorized care prior to the authorized treating physician performing the unrelated back surgery.

Ramirez-Trujillo suffered a low-back injury at work on August 1, 2009.  She was released from care as of September 30, 2009 and she returned to work without restrictions. She continued to treat with the authorized doctor for other low-back issues related to a home shoveling incident, including undergoing surgery in March 2011. She had told Quality Egg that the treatment was not related to her work injury.

The hearing deputy determined that her low-back condition after September 30, 2009 was not related to her work injury.  But, the Commissioner found that Quality Egg was responsible for her medical treatment after that date, including the surgery, because Quality Egg had never withdrawn authorization for treatment as required by section 85.27(4).

Iowa Code section 85.27(4) provides, in pertinent part, “If the employer chooses the care, the employer shall hold the employee harmless for the cost of care until the employer notifies the employee that the employer is no longer authorizing all or any part of the care and the reason for the change in authorization.”

The Iowa Supreme Court disagreed with the reasoning of the lower courts stating that they simply do not believe section 85.27(4) requires an employer to notify an employee it is no longer authorizing care when the employee knows or reasonably should know the care sought is for a condition unrelated to a compensable workplace injury or the prior authorization is no longer in effect.

Accordingly, The Iowa Supreme Court created an objective test for an employer to prove they are not liable for the cost of unrelated medical care an employee received from an authorized medical provider if the employer failed to give actual notice of a change of authorization. The new test requires that the employer prove by a preponderance of the evidence that the employee knew or reasonably should have known either that the care was unrelated to the medical condition or conditions upon which the employee’s claim for workers’ compensation benefits is based or that the employer no longer authorized the care the employee received at the time the employee received it.

The Supreme Court pointed out that the Commissioner made no findings of fact that would permit them to assess whether Ramirez-Trujillo knew or reasonably should have known that Quality Egg no longer authorized further care. Therefore, they remanded this issue to the commissioner to hear further evidence regarding the same.

Should you have questions regarding application of the new test regarding liability of unrelated medical care provided by authorized physicians in Iowa, please don’t hesitate to contact Iowa Workers’ Compensation attorney, Paul Barta at pbarta@baylorevnen.com or Amanda Phillips at aphillips@baylorevnen.com or call (402) 475-1075 to speak to any of our Iowa attorneys.