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Iowa Supreme Court Crafts An Avenue Of Relief For Employers Who Fail To Notify Injured Workers That Medical Care Is No Longer Authorized

Posted in Workers' Compensation

Even so, employers are best protected in giving statutory notice and medical providers are best protected in assuring that continued care remains authorized.

Notification requirements imposed by Iowa’s workers’ compensation law upon employers authorizing care for an injured employee took center stage in a recent decision of the Iowa Supreme Court. In that case, Ramirez-Trujillo v Quality Egg, L.L.C., et. al. (No. 14-0640, filed April 15, 2016), an employee suffered back injuries from a slip and fall at work. The employer acknowledged the workplace injury and authorized care through a care provider selected by the employer. The employee received treatment for acute low back pain and muscle spasms until the authorized provider released the employee to return to full duty work without restrictions. Weeks later, however, the employee returned to the authorized care provider for additional treatment for acute low back pain and muscle spasms over a period of several months.

The employer claimed that this additional course of treatment was not related to the employee’s work injury and disavowed cost liability. The employee argued, however, that her continued care was causally-related to her workplace injury and, further, the employer remained liable in failing to provide her with notice that care was no longer authorized as required by Iowa’s workers’ compensation law. In particular, Iowa Code section 85.27(4) states in pertinent part:

For purposes of this section, the employer is obliged to furnish reasonable services and supplies to treat an injured employee, and has the right to choose the care. If the employer chooses the care, the employer shall hold the employee harmless for the cost of care until the employer notifies the employee that the employer is no longer authorizing all or any part of the care and the reason for the change in authorization. (All emphases added).

The employer conceded it had not given statutory notice but argued the employee should have known that care received several weeks later was not authorized.

The workers’ compensation commissioner found that the employee’s second round of care was not causally-related to her workplace injury but assigned cost liability to the employer for failing to give statutory notice. On appeal, the district court and the Iowa Court of Appeals agreed that the employee’s continued care was not causally-related to her workplace injury, but disagreed on the employer’s cost liability for failure to give statutory notice. The Supreme Court (“Court”) made no finding on whether the second course of care was related to the employee’s workplace injury, saying that an employee is not required to establish medical causation in challenging the employer’s failure to give section 85.27(4) notice.

The Court focused solely on the meaning and intent of section 85.27(4) and, in doing so, engaged in an exhaustive analysis of this statutory provision, concluding that section 85.27(4) means what it says. “[A]n employer who authorizes care is responsible for the cost of the care up to the time when the employer notifies the employee it is no longer authorizing the care.” Employers under this statute have the power to choose care and with that, the Court said, comes the responsibility to monitor care for the purpose of determining when further care will no longer be authorized.

However, the Court went on to say that section 85.27(4)’s notice obligation is not meant to permit “an employee to take advantage of an employer by seeking compensation after the fact for care the employee knew or should have known was not within the scope of the employer’s prior authorization.” As such, an employer who fails to give statutory notice nonetheless should be permitted to show, by a preponderance of the evidence, that the employee knew or reasonably should have known either that the care the employee received was unrelated to the employee’s claim for workers’ compensation benefits or the employer no longer authorized the care. The Court sent the case back to the workers’ compensation commissioner to make this evidentiary finding under the facts in this case.

One justice dissented, arguing that section 85.27(4)’s notice obligation is clear and unambiguous and employers are well-equipped to monitor care and give such notice when the employer deems it appropriate to no longer authorize that care. If the legislature had meant to give employers a second option of proof, it would have said so in the law. “With due respect, the clear language of the statute and its bright-line allocation of responsibility for care provided by authorized providers prior to notice of a change is far superior to (and far simpler than) the majority’s new unwieldy standard.”

This case, decided in April of 2016, was about disputed costs for care received from May 2010-April 2011, and liability for those costs is still not settled. If nothing else, employers are reminded by this case that the legislature meant business when it imposed section 85.27(4) workers’ compensation notice obligations upon them. Similarly, medical providers treating injured workers may want to assure as reasonably as they can that care provided to an injured worker continues to be authorized by the employer. As the old saw goes, time is money. Engaging in protracted evidentiary battles around liability is far from free.