Court of Appeals Finds that Opinion of DME Doctor Finding No Causation Can Be Triggering Mechanism for Payment of IME

Kern v. Fenchel, Doster & Buck, P.L.C, No. 20-1206 (Iowa App. Sept. 1, 2021)

Claimant suffered an injury while working, but when sent for an examination with a doctor engaged by the employer, that doctor found that the injury was not causally related to work.  Claimant subsequently had an IME with Dr. Bansal, who found causation and permanent impairment.  The commissioner found that claimant had suffered a permanent impairment as a result of an injury arising out of and in the course of employment.  Claimant's request for penalty benefits was denied.  A request for reimbursement of the IME was also denied, with the commissioner concluding that a finding of no causal connection was not tantamount to a finding of no impairment.  Citing DART v. Young, the commissioner denied reimbursement under 85.39.  Costs under rule 4.33 were also denied.

On appeal, the Court of Appeals agreed that the case was governed by DART v. Young, noting that employers were "not obligated to pay for an evaluation obtained by an employee outside the statutory process."  The court noted that defendants' doctor had not providing an impairment rating, but simply denied causation.  The court found that although Young did not specifically address the question of whether a no causation finding was tantamount to a finding of no impairment, it had indicated that a precondition for payment of an IME was if the employee was "dissatisfied with the evaluation arranged by the employer."  Citing IBP v. Harker, the court also indicated that reimbursement was allowed "when the physician chosen by the employer gives a disability evaluation unsatisfactory to the employee.

The court found that Dr. Paulson's evaluation was "clearly a disability evaluation"  and that claimant clearly disagreed with this evaluation.  The court indicated that if 85.39 was read in its narrowest sense, i.e. to require an impairment rating, the door "would be closed to claimants like Kern who were examined by a doctor chosen by the employer when such evaluation resulted in a no-disability determination based on no causation."  Finding that the statute is to be construed liberally, the court concludes that Dr. Paulson's "no causation determination was a finding of no compensable permanent disability."  According to the court, "Kern's request that the employer pay for that evaluation is consistent with the statutory procedural requirements of section 85.39 and also promotes an appropriate balance of the interests of each party."  The court found this construction of 85.39 "compelling."

The court also addressed a question about the taxation of costs under 86.40 and 876 IAC 4.33.  Dr. Bansal had provided a breakdown of fees for the report, specifying the costs of the physical exam and record review and report.  The deputy refused to award costs because the costs of the report was not distinguished from the costs of the record review.   The commissioner was directed to reconsider the question of reimbursement for the cost of report preparation.  

Claimant also challenged the assessment of impairment made by the commissioner.  The court finds that this determination was supported by substantial evidence.  Finally, claimant challenged the denial of penalties.  The court affirmed this finding, concluding that there was substantial evidence for delay of the investigation as well as reasonable reliance on the opinions of Dr. Paulson.  Penalty benefits were accordingly denied.