Tips and Guidance for Starting an Independent Medical Examination Practice

An independent medical examination (IME) is a medical evaluation of a person who is injured at work or in a motor vehicle collision. Typically, the party requesting the IME wants to know three things: causality, future care needs (e.g., physical therapy, surgery), and work status (i.e., can the claimant return to the job held on the day of injury or work with restrictions?).

IMEs are commonly requested by insurance companies, lawyers, employers, and government agencies, and they are performed by a healthcare professional who is not the injured person’s treating physician.

An IME-based practice can be a fulfilling option for orthopaedic surgeons seeking to transition away from surgical care or enhance their current practice.

What are the components of an IME?
An IME often entails a review of medical records and a physical examination of the body parts injured or being treated, followed by a written report. The most common body parts to be assessed include the cervical and lumbar spines, followed by the upper and lower extremities.

The IME physician is not asked to determine a monetary award; however, IME reports often are used by lawyers and courts to determine awards. Often, an IME is requested if the claimant’s physical condition or causality is in controversy.

Is liability insurance needed for IME work?
Physicians often erroneously assume that their medical malpractice policies will cover them for IME work. However, it must be emphasized that malpractice policies are written to respond to claims of bodily injury caused by acts of medical care misdiagnosis and negligence, and IMEs are outside the physician-patient relationship covered by such policies.

The insurance policy to protect against this claim is called a professional liability policy or an errors and omissions (E&O) policy, which is recommended for individuals providing professional advice or services in case the advice, opinion, or service rendered results in financial loss to the recipient party. E&O events are not written into surgical malpractice policies.

Despite the lack of a physician-patient relationship in an IME, there are examples where care responsibilities have been enforced. For example, in a recent Arizona litigation (Ritchie v. Krasner, 1 CA-CV 08-0099), the Court of Appeals found that “a formal doctor-patient relationship need not exist for a duty of reasonable care to arise.”

Although an IME physician is typically not permitted to treat the claimant, the physician should take care when reviewing medical records and physical examinations in case something of concern is found. In this situation, the IME physician has two duties. First, encourage the claimant to seek further evaluation and management. Second, include the findings in the IME report, along with any concerns and recommendations for further evaluation and management.

Another important consideration, especially in veterans, is the risk of suicide. IME providers have a responsibility to report suicide risk to the appropriate authorities and provide information about preventive or hotline resources.

How much does an E&O policy cost?
Many factors play into an E&O policy premium, including geographic location, the size of the group, the group’s annual revenue, IME volume, and the practitioner’s legal (lawsuit) history. In general, an E&O policy will cost $5,000 per year.

Legal counsel is advised to ensure adequate coverage is obtained for all possible scenarios each provider may face. Most E&O insurance policies cover judgments, attorney fees, court costs, and settlements up to the limits of the policy. E&O policy limits are typically $1,000,000 but can vary from $100,000 to $5,000,000. These numbers reflect occurrence and aggregate coverage amounts, respectively. Be aware that E&O policies do not cover every type of liability claim, such as illegal acts and purposeful wrongdoing.

Furthermore, E&O claims are related to the work performed. Unhappy claimants file the majority of E&O claims.

What are common complaints or lawsuits against IME providers?
An informal search of case law identified four common allegations against IME providers: The final report contained (1) factual errors, (2) inconsistencies, (3) omissions about the plaintiff’s medical records/treatment, and (4) wrongful denial of medical treatment necessity. Often, these lawsuits are driven by the IME provider’s report conflicting with the claimant’s treating physician’s report.

A lawsuit is usually resolved when another physician performs another IME that corroborates the claimant’s lawsuit. It is not clear who pays for IME adjudication.

There is one significant financial risk related to defending a medical lawsuit (IME or other) of any kind as opposed to settling the case, and that is if the insured must take financial responsibility for damages awarded beyond the policy limits.

How can one avoid an E&O claim?
In the author’s opinion, avoiding an E&O claim mirrors avoiding a malpractice claim. This means communication; documentation; polite, professional interactions with the claimant; and, most importantly, only performing the tasks requested and staying within one’s specialty. Furthermore, avoid commenting on any previous treatments either to the claimant or in your report. In the author’s experience, most claimants presenting for an IME are guarded and apprehensive.

Moreover, many claimants are angry and frustrated with their employers and the medical system. At the beginning of every IME, ask the claimant whether they have had an IME before and if they understand the purpose of the IME.

Lastly, end the IME by thanking the claimant for keeping their appointment and by asking them if they have any questions.

What is the average indemnity payment?
According to a report by the Medical Professional Liability (MPL) Association, from 2016 to 2018, orthopaedics had an average indemnity payment of $346,000 for all claims, not just E&O claims. Therefore, when contemplating insurance, one must consider the average indemnity payment versus annual premiums.

Some practices will go as far as self-insuring the practice rather than pay annual premiums. In a few years, the premiums that would have been paid can be pooled into a self-insurance fund. No data exist on the financial success of self-insurance. Again, always consult professionals for legal and financial guidance.

What is the value of IME reports to healthcare?
According to the MPL Association, a highly credible and defensible IME report provides average savings of $54,706 to $125,375 for the claimant’s insurer.

What are best practices for IME work?
Provide timely, professional responses to all inquiries. Be prepared to review additional records and write an addendum to the report. Establish a payment schedule for all the work required. Most importantly, have a prepayment policy and a no-show or cancellation fee.

An IME may require up to 4 hours or more to complete. Therefore, a flat rate of $500 to $1,000 or more per IME is common and reasonable.

Lastly, you may ask to be videotaped or to permit the claimant’s legal aid to be present for the exam. In many states, this is the claimant’s right, although they must inform the IME provider of the recording. Some offices may also record the examination to safeguard against an incomplete or edited recording by the claimant or others present with them. During a recorded exam, keep in mind that there is a general expectation that range of motion is measured three times with a goniometer.

If an injured joint has reached maximum medical improvement, the contralateral joint should be examined as well.

What are the personal safety risks of IME work?
In the November 2023 issue of AAOS Now, the article “The Good, Bad, and Ugly of Patient Reviews” from Danby et al explored the risk factors and global trends of motivations behind violence against physicians. The risk factors include dissatisfaction with prescriptions and treatment methods, among others. Therefore, IME physicians should consider the potential personal risks of violence against them when performing IME work and take precautions.

Additionally, if the claimant is belligerent or difficult, consider having a medical assistant present for the duration of the exam. Also consider having a chaperone present for female claimants if you are a male IME provider.

Finally, readers are encouraged to consult their insurance underwriters and practice attorneys for further guidance on the topics presented herein.

Daniel R. Schlatterer, DO, MS, FAAOS, is the former chair of the orthopaedic surgery residency program and former chief of orthopaedic trauma at WellStar Health System in Atlanta, Georgia. He is a member of the AAOS Now Editorial Board.

References

1. Institute of Medicine Committee on Quality of Health Care in America; Kohn LT, Corrigan JM, Donaldson MS (Eds.): To Err is Human: Building a Safer Health System. Washington, D.C.: National Academies Press; 2000.
2. Wong DA, Herndon JH, Canale ST, et al: Medical errors in orthopaedics. Results of an AAOS member survey. J Bone Joint Surg Am 2009;91(3):547-57.
3. Ring DC, Herndon JH, Meyer GS: Case records of the Massachusetts General Hospital: case 34-2010: a 65-year-old woman with an incorrect operation on the left hand. N Engl J Med 2010;363(20):1950-7.