IN THE SUPREME COURT OF IOWA No. 14–0231
Filed June 5, 2015
DES MOINES AREA REGIONAL TRANSIT AUTHORITY and UNITED HEARTLAND,
Appellants,
vs.
ARBREINA YOUNG,
Appellee.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Polk County, Eliza J.
Ovrom, Judge.
An injured worker awarded workers’ compensation benefits
following a hearing seeks further review of a decision by the court of
appeals denying the assessment of expenses of a medical examination as
costs of the hearing taxed to the employer. DECISION OF COURT OF
APPEALS AFFIRMED; DISTRICT COURT JUDGMENT REVERSED AND
CASE REMANDED.
David L. Jenkins of Bradshaw, Fowler, Proctor & Fairgrave, P.C.,
Des Moines, for appellant.
Robert E. Tucker of Tucker Law Office, Des Moines, for appellee. 2
CADY, Chief Justice.
In this workers’ compensation appeal, we must decide whether
Iowa Code section 85.39 (2009) provides the exclusive method for
reimbursement of an independent medical examination obtained by a
claimant or if the workers’ compensation commissioner may tax the
expense of the examination as costs incurred in the hearing under an
administrative rule authorizing the taxation of costs of obtaining reports
by doctors. In this case, the deputy workers’ compensation
commissioner taxed as costs to the employer a medical examination
obtained by the worker outside of the provisions of section 85.39. The
workers’ compensation commissioner and the district court affirmed the
taxation of the cost. On appeal, the court of appeals reversed, holding
the reimbursement would be inconsistent with Iowa Code section 85.39.
On our review, we affirm the decision of the court of appeals and remand
the case to the district court to further remand to the commissioner for
further proceedings consistent with this opinion.
I. Factual Background & Proceedings.
The Des Moines Area Regional Transit Authority (DART) employed
Arbreina Young as a bus driver. On June 2, 2009, the bus she was
driving collided with an empty vehicle on DART premises. She sought
medical treatment for a back injury and returned to work on June 8,
2009. She was reassigned to perform light work.
Young received physical therapy for her injury and was sent by
DART to an orthopedic surgeon, Dr. Daniel McGuire. He determined
surgery would not aid in Young’s healing. Dr. McGuire referred Young to
Dr. Donna Bahls for pain management. Dr. Bahls treated Young from
August 2009 to November 2011. Young regularly attended physical
therapy from June 2009 through March 2010. 3
On March 18, 2010, Young went to Dr. Jacqueline Stoken for a
medical examination. The examination was not authorized by DART, but
arranged independently by Young. Dr. Stoken examined Young,
reviewed her medical records, and drafted a report. In the report,
Dr. Stoken concluded Young reached maximum medical improvement
(MMI) on March 11, 2010, and suffered a permanent disability to her
back. She assigned Young a fifteen percent body-as-a-whole impairment
rating. Dr. Stoken also imposed work restrictions.
On April 16, Young underwent a functional capacity evaluation.
The evaluation found she should be limited to light to medium categories
of work. On May 18, Dr. Bahls determined Young had reached MMI,
suffering a permanent disability to her back, and assigned her a five
percent body-as-a-whole impairment rating. She also adopted the
restrictions recommended by the functional capacity evaluation.
Young filed a workers’ compensation claim on December 29, 2010,
and the case proceeded to a hearing before a deputy workers’
compensation commissioner. At the hearing, Young submitted the report
from Dr. Stoken as evidence. Following the hearing, the deputy
commissioner found Young suffered a permanent partial disability to her
back resulting in a twenty-five percent reduction in earning capacity.
The deputy commissioner also taxed as a cost against DART the expense
of Dr. Stoken’s examination and report under the administrative rule
governing the assessment of costs in a hearing. The fee for the
examination and report was $2800.
The commissioner affirmed the decision of the deputy
commissioner. DART filed for judicial review. The district court affirmed
the decision of the commissioner. The district court held that the
reimbursement was proper under Iowa Code section 86.40 and Iowa 4
Administrative Code rule 876—4.33, as the “statute and corresponding
rule give the Workers Compensation Commissioner discretion to award
costs related to hearings before the agency.”
DART appealed, and we transferred the case to the court of
appeals. The sole issue raised concerned the award as a cost of the
examination and report by Dr. Stoken. The court of appeals reversed the
district court’s ruling. It found the practice of assigning the expense of
an examination as a cost under the rule would defeat the statutory
requirements governing the reimbursement of an independent medical
examination. Further, the court of appeals determined that Dr. Stoken’s
bill was a charge for the examination, not a report, as required by the
language of Iowa Administrative Code rule 876—4.33. Young sought and
we granted further review.
II. Scope of Review.
Our review of this workers’ compensation appeal is governed by the
Iowa Administrative Procedure Act, Iowa Code chapter 17A. Mycogen
Seeds v. Sands, 686 N.W.2d 457, 463 (Iowa 2004). Iowa Code section
17A.19(1) entitles parties who are “aggrieved or adversely affected by any
final agency action” to judicial review. Iowa Code § 17A.19(1). “We apply
the standards of section 17A.19(10) to the Commissioner’s decision and
decide whether the district court correctly applied the law in exercising
its [section 17A.19(1)] judicial review function.” Lakeside Casino v. Blue,
743 N.W.2d 169, 172–73 (Iowa 2007). If we reach the same conclusions
as the district court, “ ‘we affirm; otherwise, we reverse.’ ” Neal v. Annett
Holdings, Inc., 814 N.W.2d 512, 518 (Iowa 2012) (quoting Mycogen Seeds,
686 N.W.2d at 464).
“[W]e give an agency substantial deference when it interprets its
own regulations,” so long as such interpretation is not in violation of the 5
rule’s plain language and clear meaning. Boehme v. Fareway Stores,
Inc., 762 N.W.2d 142, 146 (Iowa 2009) (“ ‘When the language of a statute
is plain and its meaning clear, the rules of statutory construction do not
permit us to search for meaning beyond the statute’s express terms.’ ”
(quoting Rock v. Warhank, 757 N.W.2d 670, 673 (Iowa 2008))). When
discretion has been vested in the commissioner, “we reverse only if the
commissioner’s application was ‘irrational, illogical, or wholly
unjustifiable.’ ” Larson Mfg. Co. v. Thorson, 763 N.W.2d 842, 850 (Iowa
2009) (quoting Iowa Code § 17A.19(10)(l)). On the other hand, if
discretion has not been clearly vested, “then the court must disregard
any interpretation by the agency that it finds erroneous.” Evercom Sys.,
Inc. v. Iowa Utils. Bd., 805 N.W.2d 758, 762 (Iowa 2011). We “are not
bound by the agency’s interpretation [of law] and may substitute our own
to correct a misapplication of law.” SZ Enters., LLC v. Iowa Utils. Bd.,
850 N.W.2d 441, 449 (Iowa 2014); accord Iowa Code § 17A.19(10)(c).
When interpreting statutes, we look to the intent of the legislature
based on the words used and what interpretation will best effect the
purpose of the statute. IBP, Inc. v. Harker, 633 N.W.2d 322, 325 (Iowa
2001). It is well established that “[w]e liberally construe workers’
compensation statutes in favor of the worker,” Ewing v. Allied Constr.
Servs., 592 N.W.2d 689, 691 (Iowa 1999), because “[t]he primary purpose
of the workers’ compensation statute is to benefit the worker and his or
her dependents, insofar as statutory requirements permit,” McSpadden v.
Big Ben Coal Co., 288 N.W.2d 181, 188 (Iowa 1980).
III. The Positions of the Parties.
DART argues that Iowa Code section 85.39 occupies the entire field
for the reimbursement of what has become known as an independent
medical examination (IME), and therefore, the commissioner cannot 6
provide for the reimbursement of an IME outside the framework of
section 85.39. Young argues the process works to the disadvantage of
the employee. She claims it is unfair and impractical to wait to obtain an
IME until after the employer has had the employee examined by a
physician of the employer’s choice. For example, Young asserts that an
employee, who must wait under section 85.39 to obtain a reimbursable
examination with the employee’s choice of physician until after the
employer’s choice of physician has performed an examination, may be
unable to file a timely claim because the employer could refuse to
establish an impairment rating and, in effect, prevent the employee from
filing a claim. As to the question of precisely what costs may be taxed,
Young argues the physical examination is part of the cost of obtaining
the doctor’s report and so can be taxed at the commissioner’s discretion
as hearing costs.
The deputy commissioner found that Dr. Stoken’s IME report did
not qualify for reimbursement under Iowa Code section 85.39 because it
was premature. However, the deputy noted that an IME is “routinely
awarded as costs” under the rule because section 85.39 limits
reimbursement to a single examination. Further, the deputy
commissioner found the rule was not limited to an assessment of the
costs of the report but could include the underlying examination. The
commissioner affirmed, finding the fee was properly assessed under the
rule and that the cost of the report included the time spent examining
the claimant and reviewing the records.
The district court held that section 85.39 did not control the
awarding as a cost of Dr. Stoken’s IME because it was at a time not
contemplated in the statute. However, the court combined the discretion
vested in the commissioner to award costs under section 86.40 with our 7
general principle of construing workers’ compensation statutes liberally
in favor of the worker to give deference to the commissioner’s
interpretation that he had the authority to tax as a hearing cost an IME
not covered by section 85.39.
IV. Analysis.
When an injury is sustained by a worker covered by our system of
workers compensation, a statutory process exists that not only directs
the treatment and care for the worker, but also the future examination
for any disability resulting from the injury following the healing period.
See Iowa Code §§ 85.27, .39. However, the two processes are separate
and operate with different objectives.
The statutory process first tasks the employer with the
responsibility to provide medical and related health care to the injured
worker. See id. § 85.27(1). This obligation is focused on the treatment
and rehabilitation following the injury and generally authorizes the
employer to select the care providers. Id. § 85.27(4). If the employee is
dissatisfied with the care provided, a process exists for the selection of
alternative care. See id. Additionally, an injured worker can always seek
an alternative care provider at the worker’s own expense.
A separate component of the process, however, is devoted to the
examination of an injured worker for the purpose of ascertaining “the
extent and character of the injury” for purposes of paying benefits in the
event of a disability resulting from the injury. Daugherty v. Scandia Coal
Co., 206 Iowa 120, 124, 219 N.W. 65, 67 (1928); see also Iowa Code
§ 85.39. These benefits are paid to the employee by the employer. Iowa
Code §§ 85.33–.34.
Under the evaluation process, an injured worker is required to
submit to an examination by a physician selected by the employer at the 8
employer’s expense as often as reasonably required. Id. § 85.39. At the
same time, the employee is entitled to have a physician of the employee’s
choice, at the employee’s own expense, present to participate in the
examination. Id.
If the evaluation by the physician retained by the employer
includes a permanent disability rating and “the employee believes this
evaluation to be too low,” the employee may obtain a subsequent
examination by a physician of the employee’s choice and be reimbursed
by the employer for the reasonable fee of the examination, plus
transportation expenses. Id. The employee is required to apply to the
commissioner to receive this reimbursement and must provide notice to
the employer and the employer’s insurance carrier. Id. The process is
known as an IME because the examination is independent of the
examination done by the physician selected by the employer. It can
apply, subject to approval by the commissioner, each time an employer
requires the employee to submit to an evaluation of permanent disability
by a new physician selected by the employer.
Although the statute sets forth a process to follow in evaluating
injured workers following maximum medical improvement, the statute
does not preclude an employee from seeking evaluations outside the
statutory process at the employee’s own expense. Additionally, the
process does not preclude a treating physician from offering a disability
rating. The statutory process balances the competing interests of the
employer and employee and permits the employee to obtain an
independent medical examination at the employer’s expense. See id.;
IBP, Inc., 633 N.W.2d at 327 (“[I]t is apparent that the legislature
intended to balance the competing interests of the employee and
employer with respect to the choice of doctor.”). An employer, however, is 9
not obligated to pay for an evaluation obtained by an employee outside
the statutory process. See IBP, Inc., 633 N.W.2d at 327 (limiting
reimbursable disability evaluations to when the “physician chosen by the
employer gives [an unsatisfactory] disability evaluation”).
An injured worker needs to be evaluated by a physician under the
workers’ compensation law to determine an award of compensation for
permanent disabilities. See Iowa Code § 85.34. The assessment is a
critical component to an award of benefits for permanent disabilities.
See id. § 85.34(2)(u)–(v). If the employer and employee are unable to
agree on the medical assessment of the disability or unable to reach a
settlement, a claim for benefits by the employee is decided by the
workers’ compensation commissioner following a hearing at which the
medical evidence of a disability is presented. Iowa Code §§ 86.14, .17;
Iowa Admin. Code r. 876—4.18 (“Any relevant medical record or report
served upon a party . . . shall be admissible as evidence at hearing of the
contested case . . . .”). This evidence is commonly presented in the form
of a written report. See Iowa Admin. Code r. 876—4.18. Under Iowa
Code section 86.40, “[a]ll costs incurred in the hearing . . . shall be taxed
in the discretion of the commissioner.” Under rules promulgated by the
commissioner, the assessment of costs under section 86.40 include “the
reasonable costs of obtaining no more than two doctors’ or practitioners’
reports.” Iowa Admin. Code r. 876—4.33.
The issue presented in this case pits the assessment-of-costs rule
against the statute governing evaluations for purposes of disability
ratings. The question to be resolved is whether the commissioner can
tax the fees of a physician arising from the evaluation of an employee
done outside the process set forth in Iowa Code section 85.39 as “costs
incurred in the hearing” when the employee submits a written report of 10
the evaluation at the hearing. See Iowa Code § 86.40. We must decide if
the assessment-of-costs rule is limited to the cost of the doctor’s report
or whether the rule also includes the fees of the underlying medical
examination that was the subject of the report.
We recognize the resolution of this dispute involves an
administrative rule, but it more fundamentally concerns two statutes. A
rule promulgated by the workers’ compensation commissioner cannot
exceed the statutory authority to promulgate the rule. See Wallace v.
Iowa State Bd. of Educ., 770 N.W.2d 344, 348 (Iowa 2009) (“When rules
adopted by an administrative agency exceed the agency’s statutory
authority, the rules are void and invalid.”). Our legislature only granted
the commissioner discretion to tax “[a]ll costs incurred in the hearing
before the commissioner.” Iowa Code § 86.40 (emphasis added). It did
not grant the commissioner authority to restructure the statutory
process governing evaluations of permanent disabilities and the
employer’s statutory obligation to reimburse the employee for an
independent evaluation. See id. § 85.39. In this respect, we emphasize
that we do not defer to the commissioner’s interpretation of a statute if
the interpretation is beyond the scope of the powers delegated to it by the
governing statute. See Iowa Code § 17A.19(10)(b)–(c); Wallace, 770
N.W.2d at 348; see also Burton v. Hilltop Care Ctr., 813 N.W.2d 250, 256–
57 (Iowa 2012) (examining when the commissioner has the authority to
interpret a statute). Thus, the fundamental question is whether the
legislature intended section 86.40 to provide a means to seek
reimbursement for disability evaluations independent of section 85.39.
The undisputed facts of this case highlight the statutory conflict
presented by the commissioner’s interpretation of administrative rule
876—4.33. Under the commissioner’s interpretation, a worker can 11
obtain an evaluation independent of the statutory process and
nevertheless be awarded reimbursement for the evaluation fee under the
statutory and regulatory procedure governing “costs incurred in the
hearing.” Iowa Code § 86.40.
When two statutes are applied in a conflicting manner, we “must
attempt to harmonize them in an effort to carry out the meaning and
purpose of both statutes.” Kelly v. State, 525 N.W.2d 409, 411 (Iowa
1994). Our legislature would not have written one statute to supersede
another. Nevertheless, it is possible to read sections 85.39 and 86.40 so
they do not conflict with each other. Section 85.39 addresses
reimbursement for a physician’s examination fee and is silent on the cost
of a subsequent report of that examination needed for a hearing.
Instead, section 86.40 addresses the costs “incurred in the hearing.” If
this language in section 86.40 includes the fees of an evaluation incurred
prior to the report, then section 86.40 would largely render the
reimbursement provision in section 85.39 superfluous. However, if
section 86.40 is confined to costs attributable to the hearing and
excludes expenses incurred for medical treatment and evaluations, the
conflict is eliminated.
Additionally, the language of the rule promulgated by the
commissioner lends itself to a construction that is harmonious with the
two statutes. See Iowa Admin. Code r. 876—4.33 (“Costs taxed . . . shall
be . . . the reasonable costs of obtaining . . . reports.”). A “report” is a
“formal oral or written presentation of facts or a recommendation for
action.” Black’s Law Dictionary 1492 (10th ed. 2014). The word “obtain”
is used as a modifier in the rule and means “[t]o bring into one’s own
possession; to procure, esp[ecially] through effort.” Id. at 1247. Thus,
the concept of obtaining a report for a hearing is separate from the 12
concept of a physical examination. A “physical examination” is “[a]n
examination of a person’s body by a medical professional to determine
whether the person is healthy, ill, or disabled.” Id. at 680. The concept
of “obtaining” a report is separate from the process of “obtaining” an
examination. Our legislature recognized as much by separately
authorizing the commissioner to appoint “a duly qualified, impartial
physician to examine the injured employee and make report.” Iowa Code
§ 86.38. A medical report for purposes of a hearing is aligned with a
prehearing medical deposition. In the context of the assessment of costs,
the expenses of the underlying medical treatment and examination are
not part of the costs of the report or deposition.
It is also important to recognize that our legislature separately
provided for the taxation of costs “incurred in the hearing” and for the
reimbursement of fees and transportation expenses “incurred for [an]
examination.” See Iowa Code § 85.39; id. § 86.40. Hearing costs are
awarded in the discretion of the commissioner, while fees incurred by an
employee for an independent examination and evaluation of disability
permanency are separately reimbursed by the employer upon application
to the commissioner. Id. § 85.39; id. § 86.40. The concept of
reimbursement under section 85.39, as opposed to taxation, is
consistent with the overall approach under the workers’ compensation
statute that makes the employer responsible for the medical care of an
employee. See id. § 85.27. Yet, costs necessary to conduct a hearing
adopt an entirely different approach predicated on the discretion of the
commissioner. See id. § 86.40. Thus, a distinction exists under the
statutory scheme between the taxation of costs incurred in a hearing and
medical expenses incurred by an employee after the injury but prior to
the hearing. 13
Accordingly, we reject Young’s argument that hearing costs include
the expenses of an independent examination because the examination is
necessary to obtain a report on the results of the examination for a
hearing. We agree that a physician’s written report of an examination
and evaluation under section 85.39 would be a reimbursable expense
under section 85.39, just as an unreimbursed written report of an
examination and evaluation, like deposition testimony and witness fees,
could be taxed as hearing costs by the commissioner. Yet, a physician’s
report becomes a cost incurred in a hearing because it is used as
evidence in lieu of the doctor’s testimony. The underlying medical
expenses associated with the examination do not become costs of a
report needed for a hearing, just as they do not become costs of the
testimony or deposition. The logic of Young’s argument is not supported
by the language of the governing statutes or the overall workers’
compensation scheme.
Finally, when a general statute conflicts with a specific statute, the
more specific statute normally prevails. Kelly, 525 N.W.2d at 411; see
also Iowa Code § 4.7 (providing the special provision prevails if the
statutes cannot be construed to give effect to both). This rule of
statutory construction militates in favor of Iowa Code section 85.39
governing the assignment of IME fees, as it is a specific provision
governing only a narrow subset of fees and expenses, whereas Iowa Code
section 86.40 is a general provision otherwise governing “[a]ll costs
incurred in the hearing before the commissioner.” Iowa Code § 85.39; id.
§ 86.40; see also Christiansen v. Iowa Bd. of Educ. Exam’rs, 831 N.W.2d
179, 189 (Iowa 2013) (“[T]he more specific provision controls over the
general provision.”). Moreover, “Iowa statutes providing for recovery of
costs are strictly construed.” Hughes v. Burlington N. R.R., 545 N.W.2d 14
318, 321 (Iowa 1996). Fee-shifting statutes using “all costs” language
have been construed “to limit reimbursement for litigation expenses to
those allowed as taxable court costs.” City of Riverdale v. Dierks, 806
N.W.2d 643, 660 (Iowa 2011) (denying reimbursement for deposition
expenses that did not comply with Iowa Rule of Civil Procedure 1.716).
We conclude section 85.39 is the sole method for reimbursement of
an examination by a physician of the employee’s choosing and that the
expense of the examination is not included in the cost of a report.
Further, even if the examination and report were considered to be a
single, indivisible fee, the commissioner erred in taxing it as a cost
under administrative rule 876—4.33 because the section 86.40
discretion to tax costs is expressly limited by Iowa Code section 85.39.
Our legislature established a statutory process to govern
examinations of an injured worker in order to obtain a disability rating to
determine the amount of benefits required to be paid by the employer.
Neither courts, the commissioner, nor attorneys can alter that process by
adopting contrary practices. If the injured worker wants to be
reimbursed for the expenses associated with a disability evaluation by a
physician selected by the worker, the process established by the
legislature must be followed. This process permits the employer, who
must pay the benefits, to make the initial arrangements for the
evaluation and only allows the employee to obtain an independent
evaluation at the employer’s expense if dissatisfied with the evaluation
arranged by the employer. Iowa Code § 85.39.
Young argues the process is unfair to workers because the
employer has too much control over the evaluation and can impose
adverse consequences on the employee. She argues the process unfairly
limits her to one reimbursable, independent evaluation and could permit 15
employers to sabotage the claim process by failing to initiate the
evaluation process. Yet, these arguments have been impliedly rejected
by the legislature in enacting section 85.39. Additionally, the
consequences feared by Young fail to consider the authority given to the
commissioner by the legislature to order an examination and report of
the injured worker by an impartial physician. Id. § 86.38. If an
employer unduly delays in seeking an examination under section 85.39,
or fails to obtain an examination, the employee may request the
commissioner to appoint an independent physician to examine the
employee and make a report. Id.
Overall, the evaluation process provided by our legislature was
conceived at the same time the workers’ compensation statute was
conceived. See 1913 Iowa Acts ch. 147, § 12 (codified at Iowa Code
§ 2477-m11 (Supp. 1913)). See generally 1913 Iowa Acts ch. 147
(codified at Iowa Code §§ 2477-m through 2477-m50). It was part of the
original purpose of the workers’ compensation law to provide a prompt
resolution of claims without litigation. Shepard v. Carnation Milk Co.,
220 Iowa 466, 469, 262 N.W. 110, 112 (1935). We must adhere to this
process until otherwise directed by the legislature. At the center of this
controversy is the battle of medical experts. If injured workers believe
the battle favors the employer, the change sought must come from the
legislature. We cannot interpret the statutory process to undermine or
defeat the intent of the legislature.
V. Conclusion.
We conclude the commissioner erred in interpreting Iowa Code
sections 85.39 and 86.40 (2009) and Iowa Administrative Code rule 4.33.
We therefore affirm the decision of the court of appeals. We remand to
the district court to remand the case to the commissioner for further 16
proceedings consistent with this decision. Only the costs associated with
the preparation of the written report of Dr. Stoken can be assessed as
costs of the hearing. We tax the costs of this action to Young, pursuant
to Iowa Rule of Appellate Procedure 6.1207.
DECISION OF COURT OF APPEALS AFFIRMED; DISTRICT
COURT JUDGMENT REVERSED AND CASE REMANDED.
All justices concur except Hecht, J., who dissents and is joined by
Appel and Zager, JJ., and Appel, J., who dissents and is joined by Hecht
and Zager, JJ. 17
#14–0231, Des Moines Area Reg’l Transit Auth. v. Young
HECHT, Justice (dissenting).
Every square is a rectangle, but not every rectangle is a square.
Although Dr. Stoken apparently believed she was performing an
examination and preparing a report under Iowa Code section 85.39 (a
square), I find no reason for concluding the commissioner abused his
discretion in concluding the doctor’s report was taxable under the
agency’s rule on taxation of costs (a rectangle). Accordingly, I would
vacate the decision of the court of appeals and affirm the district court’s
judgment affirming the commissioner’s taxation of the cost of
Dr. Stoken’s report to Des Moines Area Regional Transit Authority
(DART).
Just a few months ago, we concluded the Iowa Code “does not
provide the sole basis for the [workers’ compensation] commissioner to
require an employer file a first report of injury.” Denison Mun. Utils. v.
Iowa Workers’ Comp. Comm’r, 857 N.W.2d 230, 238 (Iowa 2014). The
commissioner can therefore utilize delegated rulemaking authority to
promulgate rules ensuring the same functional result in “circumstances
beyond those already required” by the workers’ compensation statutes.
Id. Likewise, I believe Iowa Code section 85.39 does not provide the sole
basis for the commissioner’s authority to shift to the employer the
reasonable cost incurred by claimants obtaining medical evidence based
in part on an examination. In other words, this case illustrates another
application of the principle we applied in Denison.
The commissioner has express statutory authority to tax costs in
workers’ compensation cases. Iowa Code § 86.40 (2009) (“All costs
incurred in the hearing before the commissioner shall be taxed in the
discretion of the commissioner.”). The commissioner has implemented 18
this authority through an administrative rule specifying the categories of
taxable costs. Iowa Admin. Code r. 876—4.33. The rule provides that
costs may include “the reasonable costs of obtaining no more than two
doctors’ or practitioners’ reports.” Id. Rule 876—4.33 is, in my view,
comfortably within the statutory authority granted to the commissioner.
Section 86.40 vests the commissioner with discretion to tax costs; rule
876—4.33 merely defines which costs are taxable in the exercise of that
discretion. Rule 876—4.33 does not require the commissioner to tax
costs; it therefore does no more than the legislature authorized.
Although the circumstances of this case did not authorize
reimbursement to Young for Dr. Stoken’s report under section 85.39
because DART had not obtained an evaluation of Young’s permanent
disability when Dr. Stoken prepared her report, the commissioner clearly
had discretion to tax the reasonable cost incurred by Young in obtaining
Dr. Stoken’s report as a cost under section 86.40 and rule 876—4.33.
In evaluating the commissioner’s exercise of discretion, we should
consider the common purposes of section 85.39 and rule 876—4.33. The
animating remedial principle undergirding the statute and the rule is
that claimants must not be deterred by economic realities from obtaining
and presenting evidence supporting their claims at a hearing. Through
cost shifting, section 85.39 ensures claimants will be able to obtain and
offer in evidence a physician’s opinion on disability countering or
supplementing an opinion obtained by the employer or its insurer. 1 See
1Although section 85.39 expressly provides that the commissioner may transfer the cost of an examination of the claimant and makes no express reference to the cost of a report resulting from the examination, the essential purpose of the statute aids claimants in obtaining medical opinions supporting their claims. See Iowa Code § 85.39. Because examinations under section 85.39 have no practical utility for a claimant or an employer if examining physicians do not memorialize relevant opinions in a report suitable for presentation at a hearing, it should come as no surprise that in 19
Iowa Code § 85.39. Rule 876—4.33 similarly aids claimants by
permitting the commissioner to shift the cost of obtaining two experts’
reports offered in evidence by the claimant at a hearing. See Iowa
Admin. Code r. 876—4.33. Thus, the fundamental cost-shifting function
of the statute and the rule is calculated to level the workers’
compensation playing field by ensuring claimants lacking financial
resources will be able to obtain and present medical evidence supporting
their claims. In this important cost-shifting sense, physicians’ reports
and the opinions they communicate are fungible, whether the costs of
obtaining them are shifted under section 85.39 or rule 876—4.33.
I believe the majority fails to consider another common feature of
reports generated by physicians as a consequence of section 85.39
examinations and other reports generated by physicians and offered in
evidence under rule 876—4.33. In both instances, physicians’ reports
express expert opinions routinely based on a factual foundation
consisting of a recent examination of the claimant, the claimant’s
medical history as evidenced by medical records, and information about
the alleged injury gleaned from the claimant and other sources in the
particular case. If such reports fail to take account of any of these
foundational elements, they will likely be criticized by the opposing party
and be given less weight by the fact finder. Put another way, whether
generated as a consequence of a claimant’s invocation of the section
85.39 procedure or for presentation in evidence as an element of the
________________________ the workers’ compensation world the essential objective of a party invoking the benefit of the statute is a report expressing opinions on the nature and extent of the claimant’s disability. Physicians performing examinations for claimants or employers under section 85.39 therefore routinely prepare reports documenting their opinions for presentation at hearings as an essential aspect of their work under the statutory procedure. 20
claimant’s costs under rule 876—4.33, physicians’ reports pack less
probative force if they are not based on the same foundational
components. A physical examination of the claimant is certainly a
crucial foundational component of reporting physicians’ opinions in
workers’ compensation cases. Because this is true, it seems sensible to
expect that the cost of obtaining a medical report taxed under rule 876—
4.33 would include the reasonable cost of an examination and would be
similar in amount to the cost of obtaining reports generated as a
consequence of examinations performed under 85.39.
The experts’ written reports, whether generated for the claimant at
the employer’s cost as a consequence of a claimant’s invocation of
section 85.39 or for presentation by the claimant as evidence and taxed
as a cost under rule 876—4.33, are routinely offered in evidence as
exhibits at workers’ compensation hearings in lieu of the physicians’
much more expensive live testimony or deposition testimony. Because
the factual foundation, content, and purpose of the reports are similar in
each instance, I conclude they are for all practical purposes fungible for
purposes of the commissioner’s taxation of costs under the agency’s rule.
Furthermore, the majority reaches a result likely to produce
untoward consequences. Under the majority’s interpretation, if
Dr. Stoken had spent the same amount of time and issued an identical
report in this case, but relied only upon extensive study of Young’s
existing medical records—and perhaps conducted additional research—
the reasonable cost of her report would unquestionably be taxable under
the agency’s rule. As I have already noted, reports offered in evidence in
workers’ compensation cases and taxed under the agency’s rule are
routinely based in part on recent physical examinations of claimants.
Such examinations are sensibly and routinely deemed essential 21
foundational work informing physicians’ opinions detailed in medical
reports. Indeed, the taxable cost of “obtaining” a report under section
86.40 and rule 876—4.33 has historically been based—and must as a
practical matter surely continue in the future to be based—on more than
the value of the physician’s time as a scrivener. 2 We cannot expect
physicians to donate their time when formulating the opinions they
express in their reports in workers’ compensation cases. To be sure, the
universe of physicians willing to prepare reports in such cases will shrink
drastically if compensation is denied them for time spent performing
physical examinations informing their opinions.
I recognize we have stated section 85.39 is not intended “merely to
aid the claimant’s discovery.” McSpadden v. Big Ben Coal Co., 288
N.W.2d 181, 194 (Iowa 1980). But the legislature has specifically given
the commissioner authority to tax costs in his or her discretion. See
Iowa Code § 86.40. I would defer, as this court routinely does, to the
commissioner’s interpretation of agency rules. See, e.g., Neal v. Annett
Holdings, Inc., 814 N.W.2d 512, 518 (Iowa 2012); Boehme v. Fareway
Stores, Inc., 762 N.W.2d 142, 146 (Iowa 2009); see also John Deere
Dubuque Works v. Caven, 804 N.W.2d 297, 300–01 (Iowa Ct. App. 2011);
cf. Franich v. Real Estate Comm’n, 681 N.W.2d 620, 623 (Iowa 2004)
(“[W]e give ‘appropriate deference’ to the view of the Commission with
respect to the interpretation of . . . the rules adopted pursuant to the
authority granted in [chapter 543B].”). The legislature has granted the
workers’ compensation commissioner authority to make and enforce
2Isuspect DART’s primary objection to the taxing of this particular cost stems from its $2800 price tag. The agency rule only allows the commissioner to tax reasonable costs. Iowa Admin. Code r. 876—4.33. If DART thought Dr. Stoken’s fee was unreasonable in amount, it could have raised that argument before the commissioner. It did not. 22
“rules necessary to implement [the workers’ compensation statutes].”
Iowa Code § 86.8(1)(a). Section 86.40 is indisputably a workers’
compensation statute granting the commissioner broad discretion to tax
costs. Thus, our decision in this case should turn on whether the
commissioner’s interpretation of the agency rule implementing section
86.40 is “irrational, illogical, or wholly unjustifiable”—in other words,
whether it calls every rectangle a square. Iowa Code § 17A.19(10)(l)
(emphasis added). For all the reasons stated above, I do not think the
commissioner’s interpretation comes even close to violating this
deferential standard of review. Accordingly, I respectfully dissent. I
would affirm the taxation of the cost of Dr. Stoken’s report and hold the
reasonable cost of obtaining a physician’s report under rule 876—4.33
includes time spent performing a physical examination of the claimant.
Appel and Zager, JJ., join this dissent. 23
APPEL, Justice (dissenting).
In my view, this case presents a relatively straightforward question
of statutory interpretation.
The proper analysis begins with the general rule related to recovery
of costs in a workers’ compensation proceeding. This general rule is
contained in Iowa Code section 86.40 (2009). This broadly framed cost-
recovery provision states, “All costs incurred in the hearing before the
commissioner shall be taxed in the discretion of the commissioner.” Id.
There are several material features of this statute. First, “All costs
incurred in the hearing” are potentially recoverable. Id. (emphasis
added). Not some costs, but all costs.
Second, in order to be recoverable, the cost must be “incurred in
the hearing.” Id. (emphasis added). A report that is prepared for a party,
but for whatever reason is not used at the hearing, is not compensable
under the plain language of the statute.
Third, the recovery of costs under Iowa Code section 86.40 is
subject to the exercise of discretion by the commissioner. There is no
statutory mandate that certain costs be recovered. Instead, there is a
statutory directive that the commissioner award costs in the sound
exercise of his or her discretion. Id.
Pursuant to this broad discretionary authority vested in the
commissioner, the commissioner has promulgated a rule “to implement
Iowa Code section 86.40.” Iowa Admin. Code r. 876—4.33. This rule
generally provides for the recovery of “the reasonable costs of obtaining
no more than two doctors’ or practitioners’ reports.” Id. r. 876—4.33.
And, a rule that allows for the recovery of the cost of obtaining a
report must be interpreted to include recovery of more than the cost of 24
the physical components of the report or the cost of printing verbiage in
it. It would be an odd rule that allowed recovery of the cost of physical
production of a report only and not the cost of the mental processes
required to prepare the report. If the mental processes required to
prepare a report include an examination, then it necessarily follows that
recovery of the cost of the examination is permitted in the discretion of
the commissioner.
The majority somehow gets confused when it considers the
relationship between Iowa Code section 86.40 and Iowa Code section
85.39. Iowa Code section 86.40, along with its implementing rule, Iowa
Administrative Code rule 876—4.33, generally provides the framework
for awarding all costs incurred in the hearing. Iowa Code section 85.39,
however, does not deal with all costs incurred at the hearing in any way.
Instead, Iowa Code section 85.39 is an exceptional provision that allows
a claimant to recover the expense of a certain, narrow type of
examination prior to and unrelated to any hearing. Further, recovery of
costs under Iowa Code section 85.39 is not subject to the discretion of the
commissioner. In short, Iowa Code section 85.39 provides for early
mandatory payment of a narrow category of costs not incurred in a
hearing provided the requirements of the section are met.
As noted by Justice Hecht, the obvious purpose of Iowa Code
section 85.39 is to allow a claimant to obtain payment of the costs of a
critical type of expert examination—one related to industrial disability—
early in the workers’ compensation process. It is an extraordinary
provision with respect to the timing of cost recovery. It accelerates
payment of costs for which the employee would ordinarily have to wait
until the conclusion of the hearing. And, it eliminates any exercise of
discretion by the commissioner. A failure to meet the requirements of 25
Iowa Code section 85.39 means that the party is not entitled to an early,
mandatory payment of certain costs. Nothing more, nothing less.
The language of the statutes demonstrate that Iowa Code section
86.40, dealing with all costs incurred in a hearing in a workers’
compensation case, and Iowa Code section 85.39, dealing with
accelerated, upfront payment of an examination related to industrial
disability under certain conditions, are not in the least bit inconsistent or
in tension with one another. Nothing in Iowa Code section 85.39 impairs
the discretionary authority of the commissioner to award all costs
incurred in the hearing, pursuant to Iowa Code section 86.40.
Conversely, Iowa Code section 86.40 does not undermine the mandatory
duty of an employer to pay certain qualifying costs under Iowa Code
section 85.39. The language of the two statutes creates a logical and
coherent policy on cost reimbursement in a workers’ compensation case.
There is also nothing in the overall structure of the statute that
suggests, let alone requires, a different result. In that regard, it is
important to note that Iowa Code section 86.40 solely addresses recovery
of costs incurred in a hearing before the commissioner. The provision
has nothing at all to do with medical treatment that the employer must
pay as a benefit under our workers’ compensation statute. It has nothing
to do with the power of an employer to direct the course of treatment. It
has nothing to do with unauthorized medical expenses to treat a worker.
It has nothing to do with the entitlement to an independent medical
examination. It only addresses potential recovery of all costs incurred at
a hearing. See, e.g., Albertini v. McDonald’s, 400 So. 2d 160, 161 (Fla.
Dist. Ct. App. 1991) (distinguishing between statutory provisions
authorizing reimbursement for medical treatment and a statute providing
for recovery of costs of litigation). 26
On the issue of awarding all costs incurred in the hearing, Iowa
Code section 86.40 is unqualified, not contradicted by any other statute,
and must be given full effect. Our duty is to read statutes harmoniously
when possible as it obviously is here, not to go out of our way to
manufacture a nonexistent conflict to promote judicially discovered
policy goals. See Kolzow v. State, 813 N.W.2d 731, 736 (Iowa 2012) (“If
more than one statute relating to the subject matter at issue is relevant
to the inquiry, we consider all the statutes together in an effort to
harmonize them.” (Internal quotation marks omitted.)). Indeed, our
cases indicate we should conscientiously try to read statutes in harmony
and limit the scope of a general statute only if there is an “irreconcilable
conflict” with a more specific statute. See, e.g., State v. Lutgen, 606
N.W.2d 312, 314 (Iowa 2000) (quoting 82 C.J.S. Statutes § 355, at 474
(1999)). We do not find irreconcilable conflict by implication. See, e.g.,
State v. Peters, 525 N.W.2d 854, 856–57 (Iowa 1994) (noting statutes
must actually conflict).
The majority does not follow this basic approach to statutory
interpretation. Instead, it relies on a judicially discovered “legislative
intent.” The legislative intent discovered by the majority is not found in
the text of the statutes or in the structure of the workers’ compensation
chapter, does not arise from a functional analysis of workers’
compensation proceedings, and is not powered by some overriding policy
consideration that provides a convincing rationale for a narrow
interpretation of Iowa Code section 86.40. In sum, Iowa Code section
85.39 does not cast a grim and menacing policy shadow over Iowa Code
section 86.40.
For the foregoing reasons, and the reasons more thoroughly
canvassed by Justice Hecht, I would vacate the decision of the court of 27
appeals and affirm the district court judgment affirming the
commissioner’s taxation of the costs of the report by Dr. Stoken to the
Des Moines Area Regional Transit Authority.
Hecht and Zager, JJ., join this dissent.