Court of Appeals Reverses Agency on Issue of Costs and IME

Des Moines Area Regional Transit Authority v. Young, No. 14-0231 (Iowa App. Oct. 1, 2014) is a case involving the payment of an IME in a situation where the IME was obtained prior to defendants obtaining a rating of impairment.  The agency concluded that although the costs of the IME could not be paid for under section 85.39 of the Code, costs were properly taxed against defendants, in the discretion of the agency, under 876 IAC 4.33(6).  On appeal, the Court of Appeals reversed, concluding that an IME could not be paid for as costs.

Claimant and the agency relied on the court of appeals decision in John Deere Dubuque Works v. Caven, 804 N.W.2d 297, 301 (Iowa App. 2011).  The Young court noted that the award in Caven  was based on section 86.40 and not on section 85.39, which is a true statement, so far as it goes.  The court concluded that in a situation where no rating had been obtained by defendants, "to allow a claimant the costs of an IME conducted prior to the employer's physician's report under Iowa Administrative Code rule 876-4.33 would be to allow an agency rule to defeat the requirements of a statute enacted by the legislature."

The court does not address the situation where defendants have simply not obtained a rating, despite their obligation to do so.  Presumably, under the Young decision, a defendant could simply not ask the treating doctor to provide a rating, thereby denying claimant the right to payment for the IME under section 85.39.  The decision in Young would thereby preclude payment for the IME under 4.33(6), thus seemingly defeating any right to payment for these costs by the simple expedient on not providing a rating of impairment.  Such an approach would appear to be contrary to the liberal construction of the act.  The Young case reverses agency precedent, and is seemingly inconsistent with the earlier decision in Caven.

A request for further review of the Young decision has been filed by claimant, and a determination from the Supreme Court as to whether the case will be accepted remains.

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