Don't fall into these liability traps

Workers' comp exams and IMEs may expose you to negligence claims, even if there's no doctor-patient relationship.

By Berkeley Rice
Senior Editor

In an era of declining reimbursements, more doctors are supplementing their incomes—or are thinking about it—by doing workers' compensation or independent medical exams. What you may not realize is that both opportunities present special liability risks—even if there's no doctor-patient relationship with the people you examine. Consider the following two examples:

Rhonda James was working as a nurse's assistant at Heartland Hospital in St. Joseph, MO, in April 1998 when she was kicked in the neck and shoulder by a patient. After an exam at the hospital's ED, she was sent to an FP for treatment under the hospital's workers' compensation plan. When a consulting neurologist recommended a cranial MRI, the FP referred James to Michael Poppa, an occupational medicine specialist, for a second opinion.

Based on his exam, Poppa concluded that James needed no further treatment or medication and could return to work with no restrictions. Relying on Poppa's recommendations, the hospital told James that it wouldn't authorize further treatment, and ordered her to resume full-time work without restrictions.

Three days after returning to work, James suffered a relapse. She subsequently underwent extensive medical and psychological treatment, including hospitalization. She was diagnosed with reflex sympathetic dystrophy syndrome, a permanent condition. James sued Poppa for negligence, alleging that his "improper and inappropriate" opinions were responsible for her relapse and condition.

Poppa moved for dismissal, arguing that James' claim came under the exclusive jurisdiction of the state's Workers' Compensation Law, and that he was therefore "immune" from a malpractice suit. The trial judge agreed and dismissed the claim. James appealed, arguing that the workers' comp law doesn't bar a malpractice claim against a physician who aggravates a compensable injury.

Last year, a state appellate court sided with James, reversing the judge's dismissal and reinstating her suit. That decision was later upheld by the Missouri Supreme Court, and the case is now headed for trial. According to the appellate court, Missouri's Workers' Compensation Law permits civil actions against "third parties" who are liable for an injury to the employee. (The court defined third party as one who does not have a "servant/master relationship" with the employer.) For the appellate judges, the central issue was whether Poppa was such a third party, as James claimed. The judges ruled that he was.

According to the appellate opinion, "The alleged incorrect diagnosis of Dr. Poppa, which aggravated the original compensable injury, is not pre-empted by the WCL because there is no master and servant relationship between Heartland and Dr. Poppa." Since his advice was merely requested as a second opinion, the appellate judges concluded, he was therefore a third party according to the workers' compensation law, and thus not immune from a malpractice suit.

An IME results in a negligence suit

In another case, Marquis Dyer went to Edward Trachtman, a physical medicine specialist in Bloomfield Hills, MI, for an independent medical exam (IME) in connection with a civil suit. Dyer claims he told Trachtman that he had recently had surgery to repair a tear in his right shoulder, and was supposed to restrict its movement. During the exam, however, Trachtman allegedly rotated Dyer's right arm and shoulder so forcefully that it required surgery to repair the damage.

Dyer sued Trachtman for malpractice, but the trial judge dismissed the case on the grounds that since Trachtman had conducted an IME, he had no doctor-patient relationship with Dyer. Dyer moved to amend his suit to include a claim for ordinary negligence, but again the judge denied the motion. Dyer appealed. Last March, a Michigan appellate court overturned the judge's dismissal and reinstated the ordinary negligence claim. (The case has since been appealed to the state's supreme court.)

According to the appellate court, while the lack of a doctor-patient relationship does preclude a malpractice claim, it doesn't mean that a doctor performing an IME bears no duty of care to the patient. Citing similar cases in Colorado and Texas, the appellate court ruled that a physician doing an IME has a duty to not cause physical harm to the examinee.

How to determine whether you're at risk

As these cases illustrate, a doctor's potential liability for workers' comp or IME exams depends not only on the particular facts of the case, but also on state law and court rulings. For instance, Texas is one of the states that requires a doctor-patient relationship to support a malpractice claim, says James Ewbank, an Austin, TX, malpractice attorney who has defended doctors in workers' comp and IME cases. "But patients can still file a common law negligence claim for battery," he says.

There are other legal concerns with workers' comp or IME exams besides malpractice. David Karp, a risk management consultant in Cloverdale CA, urges physicians who conduct such exams to familiarize themselves with their state laws governing patient confidentiality. "For example," he says, "doctors may be restricted from disclosing to the employer personal information revealed by the patient during the exam. On the other hand, even if there's no doctor-patient relationship, they may be required to disclose medically significant findings—such as an abnormal heart rate—to the patient. They can't simply include it in the report to the employer and assume that the employer will tell the patient."

Lee J. Johnson, a healthcare attorney in Mt. Kisco, NY, who specializes in risk management, offers this advice to doctors who conduct workers' comp or IME exams for employers: "Don't offer the patient unsolicited advice, and don't perform any test that might cause injury. If the patient asks you to recommend treatment, explain that you're working for the employer, and suggest that the employee consult his own doctor for such advice."

Does your malpractice policy cover you?

Most malpractice policies cover claims relating to workers' comp or independent medical exams, as long as the doctor was "engaged in the practice of medicine." Some policies, however, restrict coverage to the original exam, and not to subsequent exams for second opinions. Or a policy may cover the cost of a doctor's defense in such cases, but not a resulting verdict or settlement.

"Workers' comp and IME consultations are a gray area in malpractice coverage because it's not always clear if there is a doctor-patient relationship," says Ron Neupauer, vice president of underwriting at Medical Insurance Exchange of California. "Some companies do cover medical evaluations on nonpatients, but it depends on the terms of the policy, and sometimes on the carrier's attitude."

Berkeley Rice. Don't fall into these liability traps.

Medical Economics

Dec. 5, 2003;80:31.