Court of Appeals Concludes that 85.39 Examinations are Appropriate Even in Denied Claims
In City of Davenport v. Newcomb, No. 11-1035 (Iowa App. April 11, 2012), the court addressed an issue that has been the subject of a great deal of controversy - the ability of the defendants to obtain an examination under section 85.39 of the Iowa Code when a claim has been denied. The court decided, contrary to the previous views of the commissioner, that defendants had the right to such an examination in denied cases. In Newcomb, the court also addressed issues of whether the deputy erred in permitting the testimony of certain witnesses but not other, and whether penalty benefits were appropriate.
The question concerning testimony arose because one deputy heard the evidence before making a decision on the case. The deputy assigned to decide the claim (Walshire) decided that he needed to hear from the claimant and his wife because their testimony was so different than the treating physician concerning the back problems alleged by claimant, and their credibility had been called into account. The deputy did not believe the doctor needed to testify, because his credibility was not being challenged. The court found that, given the circumstances, this was an appropriate resolution of the problem. The court stated that because factual determinations were within the province of the agency, this resolution of the problem was within the deputy's discretion.
The court reviewed the IME question on an abuse of discretion standard. The court first addressed the motion of the defendants under IRCP 1.515 to have an evaluation conducted. The court agreed with the agency that there must be good cause presented in order to justify such an examination, and that this is something more than simply indicating in the motion that good cause exists. The court noted that conclusory allegations in the pleadings do not suffice to establish good cause. Since the initial motion did not contain anything more than conclusory allegations, the court found this motion was appropriately denied. A second motion, which specifically indicated that an evaluation was needed because no evaluations had been conducted for defendants by a neurosurgeon was denied by failure to rule on the motion. The court found that this was improper and that the agency had abused its discretion. It did not remand on this issue, however, because the court found that under section 85.39, the evaluation was appropriate.
In addressing the 85.39 issue, the court distinguished McSpadden v. Big Ben Coal Co., 288 N.W.2d 181, 194 (Iowa 1980), which had held that reimbursement under 85.39 was not proper until liability for the injury had been established and Winnebago Industries v. Haverly, 727 N.W.2d 567, 575 (Iowa 2006), which held that the employer's right to control care is lost if it denies liability. The court found that there was nothing in section 85.39 that wholly precluded a DME in a denied case. The court cited a 1928 case, Daugherty v. Scandia Coal Co., 219 N.W. 65, 67 (Iowa 1928) which indicated that 85.39 was for the purpose of enabling the employer to determine the extent and character of the injury. The court found that denying a DME in a denied case puts the employer at a disadvantage, and noted that a records review would not be adequate in terms of the weight given to a records review versus a report from a doctor who had actually examined the patient. The case was remanded to permit the defendants to have claimant examined by their neurosurgeon, Dr. Abernathey.
The court also upheld the agency's denial of penalty benefits, finding that the question of the compensability of the injury was "fairly debatable" given the testimony of the treating physician that claimant had no permanency from the injury.
Newcomb provides defendants with substantially more ammunition to obtain DME's in denied cases. It is unknown at this juncture whether an application for further review will be filed in Newcomb, but such an application would be helpful to all practitioners to obtain a final word on whether DME's are allowable under 85.39 in cases where benefits are being denied.
Note - following the initial publication of this post, it was learned that claimant's attorney was not going to file an application for further review, so the decision of the Court of Appeals will stand.
The question concerning testimony arose because one deputy heard the evidence before making a decision on the case. The deputy assigned to decide the claim (Walshire) decided that he needed to hear from the claimant and his wife because their testimony was so different than the treating physician concerning the back problems alleged by claimant, and their credibility had been called into account. The deputy did not believe the doctor needed to testify, because his credibility was not being challenged. The court found that, given the circumstances, this was an appropriate resolution of the problem. The court stated that because factual determinations were within the province of the agency, this resolution of the problem was within the deputy's discretion.
The court reviewed the IME question on an abuse of discretion standard. The court first addressed the motion of the defendants under IRCP 1.515 to have an evaluation conducted. The court agreed with the agency that there must be good cause presented in order to justify such an examination, and that this is something more than simply indicating in the motion that good cause exists. The court noted that conclusory allegations in the pleadings do not suffice to establish good cause. Since the initial motion did not contain anything more than conclusory allegations, the court found this motion was appropriately denied. A second motion, which specifically indicated that an evaluation was needed because no evaluations had been conducted for defendants by a neurosurgeon was denied by failure to rule on the motion. The court found that this was improper and that the agency had abused its discretion. It did not remand on this issue, however, because the court found that under section 85.39, the evaluation was appropriate.
In addressing the 85.39 issue, the court distinguished McSpadden v. Big Ben Coal Co., 288 N.W.2d 181, 194 (Iowa 1980), which had held that reimbursement under 85.39 was not proper until liability for the injury had been established and Winnebago Industries v. Haverly, 727 N.W.2d 567, 575 (Iowa 2006), which held that the employer's right to control care is lost if it denies liability. The court found that there was nothing in section 85.39 that wholly precluded a DME in a denied case. The court cited a 1928 case, Daugherty v. Scandia Coal Co., 219 N.W. 65, 67 (Iowa 1928) which indicated that 85.39 was for the purpose of enabling the employer to determine the extent and character of the injury. The court found that denying a DME in a denied case puts the employer at a disadvantage, and noted that a records review would not be adequate in terms of the weight given to a records review versus a report from a doctor who had actually examined the patient. The case was remanded to permit the defendants to have claimant examined by their neurosurgeon, Dr. Abernathey.
The court also upheld the agency's denial of penalty benefits, finding that the question of the compensability of the injury was "fairly debatable" given the testimony of the treating physician that claimant had no permanency from the injury.
Newcomb provides defendants with substantially more ammunition to obtain DME's in denied cases. It is unknown at this juncture whether an application for further review will be filed in Newcomb, but such an application would be helpful to all practitioners to obtain a final word on whether DME's are allowable under 85.39 in cases where benefits are being denied.
Note - following the initial publication of this post, it was learned that claimant's attorney was not going to file an application for further review, so the decision of the Court of Appeals will stand.
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