MID AMERICAN CONSTRUCTION LLC and GRINNELL MUTUAL v. MARSHALL SANDLIN
No. 22-0471
IN THE SUPREME COURT OF IOWA
February 9, 2024
Submitted December 14, 2023
Waterman, J.
Appeal from the Iowa District Court for Polk County, Scott D. Rosenberg, Judge.
An employee seeks further review of court of appeals decision that limited his reimbursement for an independent medical examination under the 2017 amendment to
Waterman, J., delivered the opinion of the court, in which all justices joined.
Stephen W. Spencer and Christopher S. Spencer of Peddicord Wharton, LLP, West Des Moines, for appellants.
Zeke R. McCartney of Reyolds & Kenline, LLP, Dubuque, for appellee.
WATERMAN, Justice.
In this appeal, we must determine whether the court of appeals correctly applied
On our review, we hold that the employee is entitled to the reasonable cost of the examination accompanying the physician‘s determination of the impairment rating, not merely the component cost of the impairment rating itself. Under the 2017 amendment, reasonableness is to be based on the typical fee charged in the locale where the examination is performed. To determine the rating, the physician in this case examined and tested the claimant and reviewed records.
I. Background Facts and Proceedings.
Marshall Sandlin, then age 42, began working at Mid American Construction LLC as a laborer in May 2017. On September 6, Sandlin was working in Dubuque on a two-story deck removing rotten boards. He was standing on a step ladder removing a trim board about ten feet off the ground when the ladder gave way. As he fell onto the concrete floor, his left foot caught on the ladder. Sandlin‘s foot hurt, but he tried to “walk it off.” When he remained unable to put any weight on his foot without pain, he called his boss, who told him to come see him. His boss looked at Sandlin‘s foot and told him to “go home and put ice on it.”
Sandlin stayed home for a few days, but his pain persisted. His boss told him to “[j]ust give it more time [and] just stay off work.” Frustrated, Sandlin told his employer he needed to see a doctor. On Saturday, September 9, Sandlin, on his own initiative, saw Dr. Frederick Isaak at Medical Associates Clinic—his primary physician and the only clinic open that weekend. Dr. Isaak ordered X-rays that showed a possible fracture in Sandlin‘s fifth metatarsal. Dr. Isaak advised him to keep his foot elevated, use ice, and take ibuprofen for pain.
Dr. Isaak referred Sandlin to a podiatrist, Dr. Tracy Hughes, at Medical Associates Podiatry. Sandlin saw Dr. Hughes on September 13. She noted Sandlin‘s continued reports of pain and ordered Sandlin to wear a boot and use crutches. Sandlin returned to see Dr. Hughes the next month. Dr. Hughes observed that Sandlin‘s foot was improving and advised that he could return to work “full time without restrictions in 1 week.”
On December 14, Sandlin underwent an IME by Dr. Erin Kennedy at Tri-State Occupational Health. The parties dispute how this IME was set. Sandlin later testified that Mid American‘s insurance carrier, Grinnell Mutual, had its medical case manager schedule the examination and directed Sandlin to see Dr. Kennedy; the insurer argues that Dr. Hughes referred Sandlin to Dr. Kennedy. Regardless, Dr. Kennedy performed the examination in under thirty minutes and determined that Sandlin had reached maximum medical improvement. She assigned Sandlin a 0% impairment rating. Dr. Kennedy did note, however, that Sandlin continued to experience minor symptoms resulting from the fracture. The examination fee totaled $174.25. Other records show Dr. Kennedy regularly performs examinations for employers’ insurers, including Grinnell Mutual.
In June 2018, Sandlin‘s counsel arranged for another IME by Dr. Mark Taylor at Medix Occupational Health Clinic in Cedar Rapids. Dr. Taylor spent more time examining Sandlin than Dr. Kennedy, spending about one hour with Sandlin. Unlike Dr. Kennedy, Dr. Taylor used instruments to test Sandlin‘s range of motion in his foot and ankle. He also made Sandlin perform walking and stretching exercises to determine Sandlin‘s discomfort in his foot, and he spent time reviewing Sandlin‘s medical history and records. Dr. Taylor diagnosed Sandlin‘s injury and assigned a 2% impairment rating to Sandlin‘s left foot for his work injury. Dr. Taylor also prepared a report outlining his findings, concluding
The fees for this examination are reasonable based upon my training and certification in performing such examinations as a Board Certified specialist in Occupational and Environmental Medicine, as well as certification as an Independent Medical Examiner by the American Board of Independent Medical Examiners[,] the time spent with the examinee obtaining the history and performing the examination, the time spent in preparing this report, [and] the time spent by my staff preparing the file for use in preparing this report.
Dr. Taylor sent an invoice to Sandlin‘s counsel for $2,020. The invoice provided the following fee breakdown:
- IME Exam 1st Hour: $700
- IME Exam time greater than 1 hour: $209
- IME Report 1st hour: $700
- IME Report time greater than 1 hour: $411
Neither the invoice nor Dr. Taylor‘s report addressed the fees typically charged in the Cedar Rapids area for impairment ratings.
Sandlin sought reimbursement from Grinnell Mutual under
Sandlin filed a petition for arbitration seeking compensation benefits and full reimbursement for Dr. Taylor‘s examination. The parties stipulated that Sandlin “suffered an injury to his left foot which arose out of and in the course of employment on September 6, 2017.” But Mid American disputed whether Sandlin suffered a permanent disability, the extent of any disability, and his eligibility to get his IME expense reimbursed.
A deputy workers’ compensation commissioner conducted an evidentiary hearing. Sandlin testified that he “has a dull, throbbing pain in the mid to side of [his] foot” and that he is unable to engage in hobbies “as much as he did before” the injury. The deputy found Sandlin‘s testimony “believable.” Exhibits introduced into evidence included Dr. Hughes‘s report, Dr. Taylor‘s report and invoice for his IME, and the letter from Grinnell Mutual denying reimbursement. Mid American introduced Dr. Kennedy‘s IME report and invoice as well as a separate document from Dr. Taylor‘s office, Medix, entitled “Examination Fees 7/1/2015–Present” setting forth the following fee schedule:
| Physician time billed at $95 per 15-minute increment. | $1400 Base Fee |
| Rush IME Report Inside of 1-week from appt date/Inside of 3-weeks from appt date. | $750/$600 |
| Impairment Rating/Restrictions Exam Includes cost for one body part. Additional $150 per addit body part. | $500 Flat Fee |
| Rush IR Report Inside of 3-weeks from appt date. | $300 |
| File Review | $95 per 1/4 hour |
| Phone Conference | $95 per 1/4 hour |
| Letter Fee | $95 per 1/4 hour |
| IME Cancel Fee Less than 2-weeks notice | $500 |
| Impairment Rating Cancel Fee Less than 2-weeks notice | $250 |
| IME No-Show Fee | $750 |
| Impairment Rating No-Show Fee | $300 |
The deputy‘s arbitration decision found Sandlin suffered a 2% impairment rating to his left leg and ruled that Sandlin qualified for reimbursement under
Mid American filed a motion for rehearing, arguing that it did not “retain” Dr. Kennedy to evaluate Sandlin‘s impairment; therefore, he was ineligible for reimbursement for the IME by Dr. Taylor under
Mid American appealed to the Workers’ Compensation Commissioner. The commissioner affirmed the deputy‘s finding that Sandlin suffered a 2% impairment rating and affirmed the deputy‘s award of the full $2,020 cost of Dr. Taylor‘s IME. The commissioner found that Grinnell Mutual‘s medical case manager sought out “the appointment with Dr. Kennedy for the purposes of obtaining an impairment rating” and concluded that Mid American thereby
Mid American filed this action for judicial review. The district court affirmed the commissioner‘s findings, including the impairment finding and the IME reimbursement of $2,020. Specifically, the district court reasoned:
Therefore, while the legislature amended the law so that a reasonableness determination must address impairment ratings, it did not go so far as grant reimbursement solely for impairment ratings. As Petitioners point out, IMEs can have components beyond impairment ratings. They may also have opinions on causation, permanent restrictions, additional treatment, and maximum medical improvement for example. . . . Additionally, the amendment added a point of reference for reasonability comparisons, which is “based on a typical fee charged by a medical provider in the local area where the examination is conducted.”
Iowa Code § 85.39(2) . The Commissioner applied facts to law when he determined that Dr. Kennedy‘s fee breakdown is not an appropriate comparison to Dr. Taylor. He found that Petitioners did not indicate whether Dr. Kennedy had fee-reduction agreements in place, which resulted in an incomplete picture of her fees and thus not a proper point of comparison to Dr. Taylor. On the other hand, the Commissioner found Dr. Taylor‘s fee statement reasonable, including the time spent on the report and time spent reviewing Sandlin‘s records. The Commissioner committed no error of law when he found that Dr. Taylor‘s full IME charge is allowable underIowa Code section 85.39 . Likewise, the Commissioner‘s findings of fact and application of law to facts are supported by substantial evidence and are not irrational.
(Citations omitted.)
Mid American appealed. Without challenging the 2% impairment rating, Mid American argued that “Sandlin was not entitled to reimbursement for the IME, and if he was, the amount was unreasonable.” Mid American reiterated that it did not retain Dr. Kennedy to perform an examination to determine an impairment rating under
We transferred this case to the court of appeals. The court of appeals affirmed the district court‘s conclusion that “substantial evidence support[ed] the commissioner‘s determination that the employer and insurer, via the medical case manager, chose Dr. Kennedy to perform the examination.” But the court of appeals reversed on the reasonableness of the IME costs, finding that
We granted Sandlin‘s application for further review.
II. Standard of Review.
We review the commissioner‘s “legal interpretations of
III. Analysis.
We must decide whether the court of appeals erred in interpreting
Second, we must determine whether the district court erred in upholding the commissioner‘s award for the full $2,020 charged by Dr. Taylor for his IME. The commissioner failed to make a finding of fact necessary under the 2017 amendment: the fee typically charged in that local area. We reverse the district court on that issue and remand the case for further factfinding by the commissioner.
Sandlin argues that the district court and commissioner correctly interpreted
We begin our analysis with the text of the statute. We quote in full
1. After an injury, the employee, if requested by the employer, shall submit for examination at some reasonable time and place and as often as reasonably requested, to a physician or physicians authorized to practice under the laws of this state or another state, without cost to the employee; but if the employee requests, the employee, at the employee‘s own cost, is entitled to have a physician or physicians of the employee‘s own selection present to participate in the examination. If an employee is required to leave work for which the employee is being paid wages to attend the requested examination, the employee shall be compensated at the employee‘s regular rate for the time the employee is required to leave work, and the employee shall be furnished transportation to and from the place of examination, or the employer may elect to pay the employee the reasonable cost of the transportation. The refusal of the employee to submit to the examination shall forfeit the employee‘s right to any compensation for the period of the refusal. Compensation shall not be payable for the period of refusal.
2. If an evaluation of permanent disability has been made by a physician retained by the employer and the employee believes this evaluation to be too low, the employee shall, upon application to the commissioner and upon delivery of a copy of the application to the employer and its insurance carrier, be reimbursed by the employer the reasonable fee for a subsequent examination by a physician of the employee‘s own choice, and reasonably necessary transportation expenses incurred for the examination. The physician chosen by the employee has the right to confer with and obtain from the employer-retained physician sufficient history of the injury to make a proper examination. An employer is only liable to reimburse an employee for the cost of an examination conducted pursuant to this subsection if the injury for which the employee is being examined is determined to be compensable under this chapter or chapter 85A or 85B. An employer is not liable for the cost of such an examination if the injury for which the employee is
being examined is determined not to be a compensable injury. A determination of the reasonableness of a fee for an examination made pursuant to this subsection, shall be based on the typical fee charged by a medical provider to perform an impairment rating in the local area where the examination is conducted.
2017 Iowa Acts ch. 23, § 15 (codified at
In subsection 2, the legislature leveled the playing field between the employer and the employee. See
Young, 867 N.W.2d at 843–44. Here, Dr. Kennedy found zero impairment, which Sandlin believed was too low, triggering his statutory right to an IME by a physician of his choosing—Dr. Taylor.
Subsection 2, as amended in 2017, continues to expressly require the employer to reimburse the employee for the “reasonable fee for a subsequent examination by a physician of the employee‘s own choice.”
The 2017 amendment added three sentences to the end of subsection 2. 2017 Iowa Acts ch. 23, § 15 (codified at
medical provider in the local area where the examination is conducted.’ ” (Quoting
Mid American argued, and the court of appeals agreed, that Sandlin should only be reimbursed for the cost of an impairment
When determining the meaning of a statute, a core canon of statutory interpretation requires us to construe the statute as a whole. See Iowa Ins. Inst. v. Core Grp. of Iowa Ass‘n for Just., 867 N.W.2d 58, 72 (Iowa 2015); Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 167–69 (2012) [hereinafter Scalia & Garner, Reading Law] (stating that this canon “calls on the judicial interpreter to consider the entire text, in view of its structure and of the physical and logical relation of its many parts“). Throughout
target of the fee reimbursement—i.e., the examination—when it amended the statute. The legislature instead defined how “the reasonable fee for a subsequent examination” would be determined—i.e., “based on the typical fee charged by a medical provider to perform an impairment rating in the local area.” Id.
The 2017 amendment effectively necessitates fact-finding by the commissioner on the fees typically charged in the local area where the examination is performed. Parties may offer evidence of the fees typically charged in that locality to support or challenge the fee charged in a particular case. And the amendment allows consideration of the agency‘s own experience adjudicating IME reimbursement claims in the local area where the examination is performed. In Nguyen v. Hy-Vee, Inc., the commissioner observed that “many IMEs come before the agency, which allows the [commissioner] to use agency experience and expertise to conclude that [the physician‘s] charges are in line with those of an occupational medicine doctor with a practice in the . . . [local] area performing an evaluation of permanent impairment in accordance with the [AMA] Guides.” Iowa Workers’ Comp. Comm‘n, No. 21003118.03, 2023 WL 7128682, at *32 (Oct. 20, 2023). We agree.
Under
rating of impairment“); Spike v. AALFS Mfg., Iowa Workers’ Comp. Comm‘n No. 913731, 1993 WL 13016106, at *5, *7 (Jan. 29, 1993) (awarding the employee the full cost of the IME and travel expenses). If the legislature wanted to change this practice, it could have amended the language allowing “the reasonable fee for a subsequent examination” to instead say that an employee could be reimbursed “the reasonable fee for an impairment rating.” But it chose not to. “[W]e look to the language chosen by the legislature and not what the legislature might have said.” Ramirez-Trujillo v. Quality Egg, LLC, 878 N.W.2d 759, 770 (Iowa 2016).
Other canons support our interpretation. A statute is to be “liberally construed with a view to promote its objects.”
“The primary purpose of the workers’ compensation statute is to benefit the worker and his or her dependents, insofar as statutory requirements permit.” Harker, 633 N.W.2d at 325 (quoting McSpadden, 288 N.W.2d at 188); see also Young, 867 N.W.2d at 846 (stating that “the overall approach under the workers’ compensation statute [is to] make[] the employer responsible for the medical care
of an employee“). The purpose of
Next, we construe the phrase “to perform an impairment rating.”
the impairment rating punctuating that process.” Id. (“Under the [AMA] Guides, the evaluation of permanent impairment is inextricably intertwined with assigning an impairment rating.“). Thus, the commission has repeatedly found a physician‘s impairment rating to be unpersuasive when they do not use the AMA Guides. 15 John Lawyer & James R. Lawyer, Iowa Practice Series Workers’ Compensation § 15.3, at 228 (2022–2023 ed. 2022); see also Shrum v. Boldt Grp., Inc., Iowa Workers’ Comp. Comm‘n No. 5067317, 2020 WL 7338305, at *3 (Dec. 7, 2020).
The AMA Guides direct the physician to conduct various tasks to determine an impairment rating. The physician should determine whether the employee is at maximal medical improvement. Linda Cocchiarella & Gunnar B. J. Andersson, AMA Guides to the Evaluation of Permanent Impairment 19 (5th ed. 2001) [hereinafter AMA Guides]. The physician should know about any past injuries to the employee, and they do this by reviewing past medical records. Id. at 11–12. The physician should determine whether the work injury caused the impairment. Id. at 11; see also Kern v. Fenchel, Doster & Buck, No. 20–1206, 2021 WL 3890603, at *4 (Iowa Ct. App. Sep. 1, 2021) (finding that “there can be no disability determination arising out of a disability evaluation without a determination there was causation“). The physician should conduct a physical examination to assess the employee‘s status and perform accurate measurements. AMA Guides 21. The physician should determine a diagnosis. Id. at 22. Under the AMA Guides, a physician is to conduct multiple tasks to perform an employee‘s impairment rating. We construe
This reading of the statute is bolstered by language used earlier in
We construe
B. The Reasonableness of Dr. Taylor‘s IME Fee.
We turn now to the commissioner‘s finding that Dr. Taylor‘s $2,020 IME fee was reasonable. We hold that the burden is on the claimant to show the reasonableness of his chosen physician‘s IME fee. See
[medical] services rendered“). The reasonableness of Dr. Taylor‘s fee is a question of fact to be decided by the commissioner. See Quaker Oats Co. v. Ciha, 552 N.W.2d 143, 154 (Iowa 1996). The commissioner‘s factual findings are binding on appeal if supported by substantial evidence. Gumm, 943 N.W.2d at 28.
The district court ruled that substantial evidence supported the commissioner‘s finding that Dr. Taylor‘s $2,020 IME fee was reasonable. An appellate court cannot substitute its judgment for the factfinder and find the facts anew. See Harpole, 621 N.W.2d at 418. The court of appeals erred by resetting the reimbursement amount to $500 based on a schedule of what Dr. Taylor apparently charges for an impairment rating alone. But we are unable to affirm the commissioner‘s $2,020 award because in our view, the commissioner‘s analysis and factfinding were incomplete considering the 2017 amendment to
We agree the commissioner properly considered Dr. Taylor‘s written opinion that “his fees, including the time spent with claimant, the time spent on the report[,] and the time spent reviewing claimant‘s records, are reasonable.” See Pexa, 686 N.W.2d at 156 (“The reasonable value of medical services can be shown by evidence of the amount paid for such services or through the testimony of a qualified expert witness.“). But in our view, under the 2017 amendment, an additional step is required in the agency factfinding: the reasonableness finding is to be “based on the typical fee charged by a medical provider to perform an impairment rating in the local area where the examination is conducted.”
2017 amendment to
For these reasons, we affirm the decision of the court of appeals and the district court judgment that Dr. Kennedy was chosen by the employer‘s insurer to conduct that examination of Sandlin. We vacate the court of appeals decision that reduced Dr. Taylor‘s IME fee award to $500, and we reverse the district court ruling that awarded $2,020. We remand the case to the district court for entry of an order of remand for further proceedings before the workers’ compensation commissioner consistent with this opinion.
DECISION OF COURT OF APPEALS AFFIRMED IN PART AND VACATED IN PART; DISTRICT COURT JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND REMANDED WITH INSTRUCTIONS.