How to find it. How to fight it

The IME -- An Ethical Quagmire

When a claimant claims an injury that does not agree with the facts of the incident claimed to cause the injury, the SIU investigator will often seek the assistance of an Independent Medical Examiner ("IME") to verify the extent of the claimed injury. The IME is usually a forensic physician or a chiropractor who has agreed to evaluate an injured person for a fee and is not involved in the treatment of the injured person.

SIU investigators, who by definition, see mostly people who are attempting to defraud an insurer. They, and the physicians they employ as an IME, will occasionally lose sight of the obligation of an insurer to treat its insured fairly and in good faith.

Failure To Use an IME in Good Faith

One such failure was reported in Sprague v. Equifax Inc., 166 Cal. App. 3d 1012, 213 Cal. Rptr. 69 (Cal.App.Dist.2 04/16/1985) where the court found, among other things: that the investigator wrote a, to Dr. Ramey, the IME, regarding plaintiff's examination that read as follows:

"I am representing TOP, Inc. They have asked that I have you examine one of their insured's [ sic ] who is currently on disability. Mr. Sprague has been disabled since 5-31-75 due to a back problem. We do not know the exact nature of his problem. In your examination, please determine whether or not you would consider him to be totally and permanently disabled from any and all occupations for which he might reasonably be fitted. . . ." In fact, TOP had not told Mr. Roath [the Investigator] that they did not know the nature of plaintiff's problem, and Mr. Roath did not request more information. Mr. Roath also did not inquire what definition of disability applied to plaintiff under the insurance policy, and did not inform Dr. Ramey that under California law, plaintiff would still be deemed disabled unless he could perform "the substantial and material acts necessary to . . . a business or occupation in the usual or customary way," (McMackin v. Great American Reserve Ins. Co. (1971) 22 Cal. App. 3d 428, 437 [99 Cal. Rptr. 227]) or that he would still be disabled even if he could perform sporadic tasks (Erreca v. West. States Life Ins. Co. (1942) 19 Cal. 2d 388 [121 P.2d 689, 141 A.L.R. 68]).

***

Dr. Ramey's report, dated May 6, 1977, the same day as the examination, concluded that plaintiff was suffering from a lumbosacral strain and degenerative arthritis and should be restricted to "light work, . . . with a minimum of . . . physical effort . . . ." On May 12, TOP cut off benefits as of May 7, based on the report. Mr. Namel testified that he was told by his supervisor at TOP that the purpose of a claims department was not to find ways to pay claims, but to find ways to deny claims. Thus, based on Dr. Ramey's report, he felt that there was sufficient information to deny plaintiff's claim, and that it was unnecessary to consider any other information. (Italics added)

The opposite of what the insurer testified to was true. The purpose of a claims department is to find ways to pay, not deny, claims. The $5 million verdict that resulted the Sprague case made insurers much more careful when they ordered Independent Medical Exams in California.

Time has passed and insurers are forgetting the lesson Sprague taught. The errors made by the investigators and claims people were breaches of their ethical obligations. They should have instructed the IME as to the proper definition of total disability and should have known that the disability benefits were owed when the IME reported the existence of degenerative arthritis.

It is the obligation of the SIU investigator to obtain the best, and most accurate information available from the medical examiner. The SIU investigator should be ready and willing to advise the insurer to pay benefits if the IME establishes that the person being examined was truly injured.

In 2003 Justice Hickman of the Supreme Court of New York (its trial court) in Chapman v. Mayo, an action to recover damages for personal injuries, where the defendants unsuccessful attempt to reduce a jury verdict over $1,000,000 for the plaintiff's injuries gained the ire of the Justice. After complaining about the defendant (and his insurer's) lack of cooperation in the settlement process, Justice Hickman found it necessary to comment on the IME presented by the defense. It reported:

In defendant's expert physician's file, which plaintiff's counsel was allowed to examine prior to cross-examination, was a request that the doctor conduct an "Independent Medical Examination (IME)." & Attached, as an exhibit, to this decision is a copy of this request marked at the trial as plaintiff's exhibit 14. The contents of this request raise serious questions about whether the Courts are being seriously and routinely misled by the concept of a truly independent medical examination. If, in fact, as seems clearly to be the case here, many doctors who perform IME's are being directed to only make findings adverse to a plaintiff and do not advise of anything favorable to that plaintiff, there is no "independence" involved.

[I]t is clear that in many legitimate lawsuits involving serious injury [the insurer] is intentionally suppressing medical information that should be a part of the file. How can those responsible for evaluating and settling cases do so fairly, effectively and justly when they do not receive critical information from an IME? The whole purpose of an IME is to give the carrier an opportunity to do their own medical evaluation. It should not be used to suppress all information favorable to a legitimate plaintiff with serious injuries. (Emphasis added)

Although the insurer was not a party to the action it was clear that Justice Hickman wanted it made clear to the defendant, insured, that he was treated wrongfully by the insurer. The judge was so angered -- and properly so -- by the wrongful conduct of the insurer that he solicited the insured defendant to file a bad faith suit.

The Medical Examiners Ethical Obligations

Medical Examiners have established their own codes of ethics with regard to an IME and are obligated by that Code to report fairly and accurately. The American Board of Independent Medical Examiners has published the following Code of Ethics:

Physicians shall:

1. Be honest in all communications.

2. Respect the rights of the examinees and other participants, and treat these individuals with dignity and respect.

3. At the medical examination:

a. Introduce himself/herself to the examinee as the examining physician

b. Advise the examinee they are seeing him/her for an independent medical examination, and the information provided will be used in the assessment and presented in a report

c. Provide the examinee with the name of the party requesting the examination

d. Advise the examinee that no treating physician-patient relationship will be established

e. Explain the examination procedure

f. Provide adequate draping and privacy if the examinee needs to remove clothing for the examination

g. Refrain from derogatory comments, and

h. Close the examination by telling the examinee that the examination is over and ask if there is further information the examinee would like to reach conclusions that are based on facts and sound medical knowledge and for which the independent medical examiner has adequate qualifications to address

4. Be prepared to address conflict in a professional and constructive manner

5. Never accept a fee for services which are dependent upon writing a report favorable to the referral service

6. Maintain confidentiality consistent with the applicable legal jurisdiction. [http://www.abime.org/abime/content/cime/m_guidelines.asp?site=4]

Conclusion

The SIU investigator who follows the rules profiled by the American Board of Independent Medical Examiners, which are similar to those posited by the International Association of Special Investigation Units ("IASIU") should have no difficulty and should receive appropriate independent medial advice.

As the IASIU requires, the SIU investigator must be dedicated to: "Promoting a coordinated effort within the industry to combat insurance fraud; Providing education and training for insurance investigators; Developing greater awareness of the insurance fraud problem; Encouraging high professional standards of conduct among insurance investigators; and Supporting legislation that acts as a deterrent to the crime of insurance fraud." [http://www.iasiu.com/about/index.cfm]

When an IME is retained the insurer should advise the IME of his obligations in writing, in substantially the following manner:

You have been retained by the ABC Insurance Company to conduct an independent medical examination of the claimant and report to me, concerning the injuries sustained, the present condition, your prognosis and your evaluation of any continuing treatment needed by the claimant. To assist you in that regard we enclose as complete as possible all of the medical records of the claimant of which we are aware.

The purpose of your examination is to thoroughly review all relevant facts within your field of expertise so we may determine whether the injuries reported by the claimant captioned above was caused by the accident and, if so, the extent of the injuries so that we may properly evaluate his claim against our insured. We expect your examination to provide the Company with sufficient facts to assist it in its obligation to make a decision with regard to the claim.

The Company intends to deal fairly and in good faith with its Insured and the claimant and has therefore retained you to thoroughly examine the claimant so that the Company may discover the extent of its obligations. We, therefore, request that you complete your examination as soon as possible within the confines of your professional responsibility and report to me the following:

1. The current condition of the claimant.

2. The cause, if available, of the injuries or illnesses claimed.

3. The treatment necessary to resolve the injuries.

4. Whether full recovery is possible.

5. Whether the claimant has any permanent disability.

6. Whether the claimant can perform the normal duties of his profession and if not, your prognosis when the claimant will be able to return to work.

7. Whether the claimant can perform the duties of any profession and if not, your prognosis when the claimant will be able to do any type of work.

8. Your best estimate of the cost of future medical treatment you believe is necessary to allow the claimant to recover.

The ethical fraud investigator will never:

• Instruct and IME as to the findings required.
• Conceal from the IME information know to the SIU investigator that might effect the IME report.
• Misrepresent to the IME any facts.
• Advise the IME that the investigator suspects fraud.
• Fail to provide the IME with all available medical records of the claimant or insured.
• Obtain the reports of more than one IME if the first report does not support a finding of fraud.
• Use only one IME for all examinations.

The ethical fraud investigator will always:

• Retain the services of an IME in writing.
• Use multiple IME physicians and chiropractors who have proved to follow the ethical obligations of a member of the American Board of Independent Medical Examiners even if not a member.
• Provide all available medical records to the IME.

Insurance is a business of the utmost good faith. Although insurers are frequent victims of fraud they must treat all of the people they come in contact with as honest until proven, by a preponderance of the available evidence, to be a fraud. The IME is a tool that can be abused. The ethical fraud investigator will never abuse the tool.

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