Iowa Change in How Scheduled Member Ratings Are Determined Affects Workers' Compensation Decisions

A 2017 change to the Iowa Code removed the discretion once granted to the Iowa Workers' Compensation Commission to establish impairment ratings for scheduled member injuries. Previously, deputies could adopt the rating of any physician or determine a percentage based on a variation in evidence. The legislation removed the ability of deputies to assign an “in between” rating to scheduled member injuries.

Iowa Code Section 85.34(2)(x) provides that, when determining functional disability, the extent of loss shall be determined solely by using the AMA Guidelines to the Evaluation of Permanent Impairment, 5^th Edition  (the “Guides”). Before the 2017 change, deputies were free to adopt the specific rating provided by any physician or to use their own discretion to determine a different percentage based on some variation of the ratings in evidence. Now, the amendment prohibits the use of lay testimony and agency expertise to establish a rating different from that provided by one of the medical experts.

Deputies are obligated to choose one of the medical experts’ ratings. That makes exposure easier to calculate, but highly disparate ratings involve more risk. For example, if medical experts offer upper extremity ratings of 10 percent and 45 percent, the risk at hearing is greater for both sides (assuming comparable medical evidence). In these situations, there may be greater incentive to settle somewhere in the middle.

Cases decided under this statute have applied the amendment fairly consistently. Initially erroneous decisions were corrected on appeal. While deputies have not used lay testimony or their expertise to arrive at ratings, they have considered evidence in determining which rating to accept.

These cases highlight the importance of assuring expert medical reports follow three criteria:

• Expert medical reports must be detailed.
• Reports strictly adhere to the Guides (5^th edition only).
• Reports cite the pages and tables relied upon.

To illustrate the point, consider the arbitration decisions and appeal decisions in these cases:

• Sorenson v. T.A. Bauer, Inc. and Protective Ins. Co., File No. 5059588  (Arb. Dec. December 23, 2019) (Deputy Gerrish-Lampe):
  Claimant sustained an elbow and knee injury on July 25, 2017. Although the only functional ratings were 0 percent and 10 percent, the deputy erroneously determined Claimant sustained a 25 percent lower extremity impairment. In making this determination, she cited pre-2017 law permitting the use of other evidence in addition to the medical rating, such as Claimant’s testimony and demonstration of the difficulties incurred in using the injured member.

Appeal Decision, August 4, 2020 (Commissioner Cortese):
Commissioner Cortese modified the deputy’s award of 25 percent. He found that under Section 85.34(2)(x) the only option was to adopt one of two impairment ratings assigned by experts in the case: 0 percent or 10 percent. The 10 percent lower extremity rating was adopted.

• Ramirez v. Arconic, Inc. and Indemnity Ins. Co., File No. 5066573 (Arb. Dec. January 30, 2020) (Deputy Christenson):
  Claimant sustained a right shoulder injury on November 8, 2017. Dr. Hussain assigned a 2 percent impairment to the right upper extremity, and Dr. Bansal assigned a 7 percent rating. Deputy Christenson found several problems with Dr. Hussain’s report and accepted the findings of Dr. Bansal. In discussing the impairment rating, Dr. Hussain did not provide measurements to support his findings and did not indicate he took any measurements at all. The deputy found Dr. Bansal’s report to be far more detailed and identified three measurements for various tests. The deputy was able to follow, using the cited figures from the Guides, how Dr. Bansal arrived at his rating.

Defendants asserted arguments regarding Claimant’s lack of credibility, citing legal precedent that Claimant’s credibility is always in issue. However, the deputy noted this case law pre-dates the new statute. The new statute now indicates Claimant’s testimony, as lay testimony, would not be relevant in a scheduled member case.

• Streif v. John Deere Dubuque Works of Deere Company, File No. 5068621 (Arb. Dec. December 3, 2019) (Deputy Christenson):
  Claimant sustained an injury to his left thumb on February 22, 2018. The left-hand impairment ratings assigned were 20 percent and 21 percent, by Dr. Kruse and Dr. Taylor, respectively. Deputy Christenson expressed the opinion that the new legislation prohibits the use of lay testimony in determining percentage of loss but does not appear to prohibit using it to ascertain which rating is more convincing. The deputy analyzed both reports and considered the corroboration of lay testimony to assist in determining Dr. Taylor’s report was more credible. “Assuming, for argument’s sake, the new statute…completely prohibits using any evidence, other than the rating, in determining a percentage of permanent impairment, it is still found the rating of Dr. Taylor is more convincing….”

Appeal Decision, July, 10, 2020 (Commissioner Cortese):
Defendants appealed asserting the new legislation required a finding that Claimant’s permanent disability is limited to the thumb and did not extend into the hand. Affirming the deputy, Commissioner Cortese stated: “I found the impairment…extended his permanent disability into his hand. In making this finding, I considered the situs of the impairment and well-established case law regarding what constitutes an injury to a digit versus an injury to the hand. I then used Dr. Taylor’s impairment rating, all of which were based on the Guides, to determine the loss of percentage of permanent impairment. At no point did I consider lay testimony or agency expertise to determine the loss percentage…to his hand. This case is not a scenario in which the agency ‘split the baby’ between two impairment ratings or assigned an impairment rating that was not consistent with the Guides. My finding that Claimant’s permanent impairment disability extends into his hand is therefore consistent with Iowa Code Section 85.34(2)(x).”

• Alm v. Archer Daniels Midland Co., Inc., File No. 5067128 (Arb. Dec. June 10, 2020) (Deputy Pals):
  Claimant alleged a cumulative back injury on September 1, 2017. He returned to work with the defendant employer. There were two ratings. Dr. Kuhnlein set forth his methodology under the Guides. The deputy could not determine whether Dr. Boarini used the Guides in determining his rating and accepted Dr. Kuhnlein’s rating. Because the Claimant returned to work with the employer, the functional rating only was awarded.

Appeal Decision, November 13, 2020, (Commissioner Cortese):
The decision was affirmed in its entirety.

• Manuel v. Gannett Publishing Services, File No. 5067758 (Arb. Dec. February 4, 2021) (substituted and amended decision, February 18, 2021) (Deputy Walsh):
  Claimant was found to have work-related right and left shoulder (sequela) injuries.  The impairment ratings provided were 6 percent for the right and 0 percent for the left (Dr. Sullivan) and 23 percent for the right and 17 percent for the left (Dr. Sussman). The deputy stated he was not satisfied with either set of impairment ratings. Despite believing Dr. Sassman’s was too high, he chose it as more representative. Critical of amended Section 85.34(2)(x), he stated, “Had I had the authority to use my expertise to evaluate his actual loss of function, I likely would have come down somewhere in between the two ratings. I am, alas, bound to interpret the statute as written.”

The legislative changes to Iowa Code Section 85.34 also made work injuries to the shoulder scheduled member injuries. Read the Nyemaster team’s review of recent appeal decisions on shoulder injuries originally deemed as body as a whole injuries and their impact on employers.

Contact the Nyemaster workers' compensation team for guidance on navigating the changes resulting from 2017 workers' compensation legislation in Iowa.