Attorney for Appellant Attorney for Appellee
Michael Rader Kathryn A. Moll
Terre Haute, Indiana Nation Schoening Moll
Attorneys For Amicus Curiae
Indiana State AFL-CIO
William R. Groth
Fillenwarth Dennerline Groth & Towe
Mark T. Robbins
Attorneys For Amicus Curiae
Indiana Trial Lawyers Association
Craig R. Van Schouwen
Randall J. Zromkoski
Thomas F. Macke
David L. Hollenbeck
Bradley L. Banks
Appeal from the Indiana Workers Compensation Board, No. C-147608
The Honorable G. Terrence Coriden, Judge
On Petition To Transfer from the Indiana Court of Appeals, No. 93A02-0110-EX-671
February 5, 2004
Because he was still experiencing pain, Daugherty requested the Workers Compensation Board to
appoint an Independent Medical Examiner. The Board granted the request and appointed
Dr. Frank Throop. After conducting a physical examination, Dr. Throop determined that
Daugherty suffered lingering pain in his right knee, but concluded that Daughertys injury
had achieved its maximum medical improvement. R. at 215. Dissatisfied with
the result, and still suffering pain, Daugherty on his own contacted Dr. Peter
J. Brooks, an orthopedic surgeon at the Cleveland Clinic. Dr. Brooks recommended
that Daugherty undergo a total knee replacement. Daugherty contacted IC&Es workers compensation
insurance carrier and relayed Dr. Brooks recommendation. The insurance carrier responded that
the procedure was not authorized at that time. Nonetheless, Daugherty followed Dr. Brooks
recommendation. He underwent knee replacement surgery, which proved to be a success,
and returned to work four months later eventually resuming his normal duties.
Daugherty filed an application for adjustment of claim with the Workers Compensation Board
seeking, among other things, payment of the charges and expenses incurred for his
knee replacement surgery. After conducting a hearing, a single hearing member found
in relevant part: Based largely upon [Daughertys] return to work and his
credible testimony as to his improvement following the surgery by Dr. Brooks, it
is found, with the benefits of hindsight, that Dr. Brooks recommended care and
treatment was reasonable and appropriate. Order at 3. The single hearing
member went on to find, [A]s appropriate as the care was, it was
clearly and definitively unauthorized by [IC&E] and its workers [sic] compensation carrier at
the time [Daugherty] chose to go forward with it. Id. Finally,
the single hearing member concluded, [B]ecause the care was specifically indicated by [IC&E]
to be unauthorized, [Daugherty] is not entitled to payment of the charges and
expenses incurred for the right knee replacement at the Cleveland Clinic. Id.
Daugherty appealed to the full Board, which adopted the single hearing members decision
by a vote of 4-3. Raising several issues, Daugherty then sought review
before the Court of Appeals. A divided panel of the court affirmed
concluding among other things the Board did not err when it declined to
cover the cost of the surgery itself because Daugherty proceeded without authorization from
[IC&Es] insurance carrier or the Board . . . . Daugherty v.
Indus. Contracting & Erecting, 765 N.E.2d 1280, 1284 (Ind. Ct. App. 2002).
Having previously granted transfer, we now reverse the decision of the Workers Compensation
Board on this issue and remand this cause for further proceedings. On all
other issues we summarily affirm the opinion of the Court of Appeals.
(b) During the period of temporary total disability resulting from the injury, the
employer shall furnish the physician services, and supplies, and the workers compensation board
may, on proper application of either party, require that treatment by the physician
and services and supplies be furnished by or on behalf of the employer
as the workers compensation board may deem reasonably necessary . . . .
(d) If, because of an emergency, or because of the employers failure to
provide an attending physician or surgical, hospital, or nursing services and supplies, or
treatment by spiritual means or prayer, as required by this section, or because
of any other good reason, a physician other than that provided by the
employer treats the injured employee during the period of the employees temporary total
disability, or necessary and proper surgical, hospital, or nurses services and supplies are
procured within the period, the reasonable cost of those services and supplies shall,
subject to the approval of the workers compensation board, be paid by the
Our courts have long held that under the foregoing statute an employee generally
is not free to elect at the employers expense additional treatment or other
physicians than those tendered by the employer. K-Mart v. Morrison, 609 N.E.2d
17, 33 (Ind. Ct. App. 1993); Richmond State Hosp. v. Waldren, 446 N.E.2d
1333, 1336 (Ind. Ct. App. 1983); Perez v. United States Steel Corp., 359
N.E.2d 925, 927 (Ind. Ct. App. 1977). This view is consistent with
the majority rule, which provides:
[I]t is generally held that the employee should ordinarily not incur medical expense without first giving the employer a reasonable opportunity to furnish such services, and an employee who does so will be liable for that expense. The mere fact that claimant has more faith in the family doctor, or lacks confidence in the employers doctor, is not enough to change the rule.
5 Arthur Larson & Lex K. Larson, Workers Compensation Law § 94.02 (2002).
Nonetheless, the statute allows the employee to select medical treatment under three
circumstances: (1) in an emergency; (2) if the employer fails to provide
needed medical care; or (3) for other good reason. Ind. Code §
22-3-3-4(d); Richmond, 446 N.E.2d at 1336.
In its brief in opposition to transfer, IC&E does not address Indiana Code section 22-3-3-4 and its application to the facts of this case. Rather, directing this courts attention to Indiana Code section 22-3-3-7(c) IC&E contends Daughertys failure to request a hearing before the Board, prior to obtaining knee replacement surgery, is fatal to his claim. See Br. in Resp. to Pet. for Trans. at 6-12. IC&E points specifically to that portion of Indiana Code section 22-3-3-7(c) which provides, [i]f either party disagrees with the opinion of the independent medical examiner, the party shall apply to the board for a hearing under IC 22-3-4-5. According to IC&E, once Doctor Throop determined that Daughertys injury had achieved its maximum medical improvement, Daugherty was required to seek a hearing before the Board if he did not agree with the doctors opinion. We disagree.
Indiana Code section 22-3-3-7(c) begins, [o]nce begun, temporary total disability benefits may not be terminated by the employer unless [certain events not at issue here occur]. I.C. § 22-3-3-7(c) (emphasis added). The statute goes on to say, the employer must notify the employee in writing of the employers intent to terminate the payment of temporary total disability benefits and sets forth a procedure for the employee to contest the employers decision if the employee disagrees. Id. (emphasis added). The statute continues [i]f the board is unable to resolve the disagreement within ten (10) days . . . the board shall immediately arrange for an evaluation of the employee by an independent medical examiner. Id. Significantly, the statute instructs:
If the independent medical examiner determines that the employee is no longer temporarily
disabled or is still temporarily disabled but can return to employment that the
employer has made available to the employee, or if the employee fails or
refuses to appear for examination by the independent medical examiner, temporary total disability
benefits may be terminated. If either party disagrees with the opinion of
the medical examiner, the party shall apply to the board for a hearing
under IC 22-3-4-5.
Id. (emphasis added).
At issue here are payments for physician services and supplies, I.C. § 22-3-3-4(b),
and not payments for temporary total disability. The record shows that an
independent medical examiner indeed determined that Daugherty no longer was temporarily disabled and
assigned him an impairment rating. Thus, Daughertys temporary total disability benefits were
terminated. However, nothing in the record shows that Daugherty disagreed with the
medical examiners opinion that he was no longer temporarily disabled. Although as
a part of his claim, Daugherty sought payment of TTD benefits from the
date he was assigned an impairment rating until the date he went back
to work, the record shows that the termination of TTD benefits were not
Daughertys primary concern. Rather, Daugherty testified, I wanted my knee fixed and
wanted back to the line of work I did prior. R. at
14. Because the issue in this case has nothing to do with
the independent medical examiners opinion concerning Daughertys temporary disability, Daugherty was not required
to seek a hearing before the Board to contest the issue. In
essence, Indiana Code section 22-3-3-7(c) has no applicability here.
The question remains whether Daugherty was required to seek Board approval or approval
from IC&E before undergoing knee replacement surgery. As we mentioned above, the
answer is generally yes. However there are exceptions. No prior approval
is necessary: (1) in an emergency; (2) if the employer fails to provide
needed medical care; or (3) for other good reason. There is no
claim here that the surgery was required because of an emergency. Nor
does Daugherty claim that IC&E failed to provide him needed medical care.
In fact, at IC&Es e
xpense, Daugherty received the services of over six treating
physicians. Each physician essentially determined that there was little else medical science
could to do to alleviate the pain in Daughertys knee. This case
is not one of failure to provide needed medical care, but rather a
disagreement over the appropriate care. Here, Daugherty argues that IC&E should bear
the cost of his knee surgery under the other good reason exception to
the general rule.
When an employee seeks treatment other than that provided by the employer or the Board, he or she does so at his or her own peril and risks not being reimbursed. The mere fact that the unauthorized medical treatment is an acceptable method of treating the condition does not mean that the employer should pay for the treatment. However as Professor Larson observes:
[D]ifficult questions can arise when there is a difference of opinion on diagnosis or appropriate treatment, as when the employers doctor recommends conservative measures while the claimant thinks he or she should have surgery.
5 Larson, Larsons Workers Compensation Law § 94-02, at 94-19 (2002). One
way to settle this kind of controversy is to let the result turn
on whose diagnosis proved to be right. Id. Several jurisdictions have
embraced this approach. See, e.g., Caldwell v. Vestal, 371 S.W.2d 836, 838
(Ark. 1963) (noting that claimant acted at his peril in overriding the insurers
warning that the proposed operation would be at the claimants own expense, but
on the strength of hindsight knowledge that the operation was in fact necessary,
the court held employer responsible for paying the incurred medical expenses); McCoy v.
Indus. Accident Commn, 410 P.2d 362, 365 (Cal. 1966) (declaring employee entitled to
reimbursement for self-procured treatment from her doctor because the care was reasonably required
to cure or relieve the effects of the injury); Mattingly v. Okla. Indus.
Court, 382 P.2d 125, 128 (Okla. 1963) (describing as mere idle gesture the
medical care provided by employer and holding employer liable for employees successful but
self-procured, unauthorized medical expenses); cf. Halbert v. U.S. Fid. & Guar. Co, 178
N.W.2d 781, 783 (Neb. 1970) (awarding employee the costs of an unsuccessful self-procured
surgery because it was grounded upon a reasonable belief that improvement would result),
modified, 180 N.W.2d 879 (Neb. 1970).
We find particularly persuasive the Virginia case of Shenandoah Prods., Inc. v. Whitlock,
421 S.E.2d 483 (Va. Ct. App. 1992). In that case, the employee
suffered a work-related lower back injury, and was treated by several doctors, one
of whom was designated as the authorized treating physician. After reviewing tests
from a physical therapist and neurologist, the treating physician issued an evaluation that
concluded the employee could return to work without restrictions. Apparently still in
pain and dissatisfied with the evaluation, the employee sought the advice of a
specialist for a neurosurgical evaluation. At the specialists suggestion, the employee underwent
surgery. Prior to doing so, both the employer and treating physician refused
authorization for treatment. The State of Virginias Workers Compensation Commission awarded medical
expenses to the employee on grounds that she benefited from the surgery.
Id. at 485. The employer appealed contending the surgery was not authorized
and therefore the employer was not liable for payment.
Construing a Workers Compensation Statute that is similar to our own,
See footnote the Virginia
Court of Appeals noted that without a referral from an authorized treating physician,
treatment by an u
nauthorized physician is allowed in an emergency or for other
good reason. Id. In that case there was no question the
treatment the employee received was not required due to an emergency. However,
acknowledging this was a case of first impression in Virginia, and citing supporting
authority from other jurisdictions, the Court fashioned the following test:
[I]f the employee, without authorization but in good faith, obtains medical treatment different
from that provided by the employer, and it is determined that the treatment
provided by the employer was inadequate treatment for the employees condition and the
unauthorized treatment received by the claimant was medically reasonable and necessary treatment, the
employer should be responsible, notwithstanding the lack of prior approval by the employer.
These legal principles which provide a basis for the payment of unauthorized medical
treatment are part of the other good reasons test.
Id. at 486 (citations omitted); accord H.J. Holtz & Son, Inc., v. Dumas-Thayer,
561 S.E.2d. 6 (Va. Ct. App. 2002). We agree with Virginias approach,
and adopt the foregoing test as appropriate for evaluating the existence of good
reason under Indiana Code section 22-3-3-4. The test is also consistent with
the longstanding rule of this State, namely:
[T]erms contained in our Work[er]s Compensation Act are to be liberally construed so as to effectuate the humane purposes of the Act; doubts in the application of terms are to be resolved in favor of the employee, for the passage of the Act was designed to shift the economic burden of a work-related injury from the injured employee to the industry and, ultimately, to the consuming public.
Talas v. Correct Piping Co., Inc., 435 N.E.2d 22, 28 (Ind. 1982); see
also Stump v. Commercial Union, 601 N.E.2d 327, 331-32 (Ind. 1992). We
hasten to add that reimbursement for medical treatment not authorized by the employer,
or the Board, should be the rare exception. Indeed the employee runs
a high risk that he or she will not be reimbursed for such
treatment. And the employee can avoid that risk simply by obtaining prior
Nonetheless, if an employee can demonstrate good reason for the unauthorized care, then
subject to the approval of the Board, the employer will be responsible for
paying the cost of certain medical care. Applying the foregoing test, we
determine that Daugherty has made such a showing. The record shows that
Daugherty submitted to the treatment of Dr. Brooks without obtaining approval of the
employer or the Board. However, he did first seek prior approval from
the employers insurance carrier. This fact suggests he acted in good faith.
The record also shows that the course of treatment being offered by
IC&E was inadequate. Despite the efforts of numerous physicians and other health
care professionals Daugherty still suffered pain and was unable to return to
work performing his regular duties. Finally, the Board specifically found that Dr.
Brooks recommended care and treatment was reasonable and appropriate. We think this
is the functional equivalent of reasonable and necessary. In sum, the record
before us is sufficient to demonstrate that Daughertys decision to obtain unauthorized medical
care fell under the other good reason exception to the general rule that
an employee is not free to elect, at the employers expense, additional treatment
or other physicians than those tendered by the employer.
Shepard, C.J., and Dickson, Sullivan and Boehm, JJ., concur.
Va. Code § 65.2-603(C).