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Iowa Supreme Court Clarifies 2017 Amendment to Statute Relating to Employer Reimbursement for IMEs

• Feb 27, 2024

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Legal Update by Attorney Morgan Todd Borron

In 2017, the Iowa Legislature overhauled Iowa Code Chapter 85 and made numerous amendments to previously established workers’ compensation statutes, and the impact of those amendments continues to be the center of much of the workers’ compensation litigation in Iowa today.

Iowa Code § 85.39 was one of the statutes subject to the 2017 amendments. Attorneys Stephen W. Spencer and Christopher S. Spencer of Peddicord Wharton recently had the opportunity to bring a case to the Iowa Supreme Court to clarify the impact that the 2017 amendment has had on reimbursement of independent medical examinations (“IME”) per § 85.39. The case was retained by the Iowa Supreme Court on further review from a decision of the Iowa Court of Appeals.

In Mid American Construction, LLC v. Sandlin, Claimant presented for an exam with Dr. Kennedy. There was a dispute as to whether Dr. Kennedy was retained by the Employer and Insurance Carrier for purposes of triggering Iowa Code § 85.39, but the issue was decided in favor of the Claimant on factual grounds. Thereafter, Sandlin’s counsel arranged for Claimant to be evaluated by Dr. Taylor for an IME and requested reimbursement for Dr. Taylor’s fees associated with the IME, in the amount of $2,020, per Iowa Code § 85.39. Defendants contended that, per Iowa Code § 85.39 as amended in 2017, Claimant was only entitled to reimbursement for the cost to obtain an impairment rating of his own to rebut the rating of Dr. Kennedy, and not the cost of the entire IME.

The Iowa Court of Appeals found that the 2017 amendment to Iowa Code § 85.39 limited the Claimant to solely the costs to perform an impairment rating. On further review, the Iowa Supreme Court held that Iowa Code § 85.39, as amended, entitles employees to the reasonable cost of an examination conducted by a physician of their choosing, in addition to the cost of that physician’s determination of impairment, and not merely the cost assessed for the impairment rating itself. See Mid American Construction, LLC v. Sandlin, No. 22-0471, 2024 WL 500652 at *1, *9 (Iowa Ct. App. Feb. 9, 2024). Further, that the reasonableness of the IME physician’s fees for the examination are to be analyzed in conjunction with what physicians in that locality typically charge for an IME, “including costs of reviewing medical records, conducting a physical examination, opining on causation, assessing permanent impairment, assigning restrictions, and addressing further treatment recommendations.” Id. at *9 (quoting Turner v. NCI Bldg. Sys., Inc., Iowa Workers’ Comp. Comm’n No. 1652235.01, 2022 WL 1787301 at *26 (Feb. 24, 2022). 

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