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WHITE v. NORTHWESTERN BELL TELEPHONE CO.3/23/1994
[514 NW2d Page 72]
This appeal stems from a dispute between an employee and his former employer over payment of medical expenses under a settlement agreement approved by the Iowa Industrial Commissioner. The main issue is whether settlement approval under Iowa Code section 85.35 (1991) terminates the commissioner's jurisdiction over subsequent claims arising from the agreement. The district court assumed jurisdiction over the dispute and awarded the employee compensatory and punitive damages. We affirm in part, reverse in part, and remand for entry of judgment in accordance with this opinion.
Until his retirement in 1979, appellee Richard White worked for thirty-one years as a telephone installer for appellant US West. He claimed to have incurred a work-related back injury, and sought workers' compensation benefits. US West disputed both the source of White's injury and the degree of his disability. Eventually the parties negotiated a compromise case settlement pursuant to Iowa Code section 85.35 (1979), which was approved by the industrial commissioner in March 1980.
Under the settlement, US West agreed to
furnish future medical care to the claimant of the same kind and to the same degree as would be required of the employer under the Iowa Workers' Compensation Act had settlement not been approved and had claimant's injuries been held by the industrial commissioner to have been compensable.
The agreement further provided:
Furnishing of future medical care by the employer is not a determination of entitlement to such care under the Iowa Workers' Compensation Act, but rather, is furnished under denial of liability and pursuant to the agreement of the parties in full, final and complete settlement of their disputes. . . . This approval is binding upon the parties and shall not be construed as an original proceeding. This approval constitutes a final bar to any further rights arising under chapters 85, 85A, 86 and 87 Code of Iowa, except further medical treatment under ยง 85.27 of the 1979 Code of Iowa. Payment under this Order shall not be construed as the payment of weekly compensation.
Until 1985, the parties proceeded without relative incident under the agreement. During most of this time, White submitted his medical bills for review by US West's benefits committee; on approval, payment was made directly to White, who in turn paid the health care provider. Sometime in 1984, however, US West changed its payment policy. Thereafter White's bills were reviewed at US West's Des Moines office by its workers' compensation manager, Kathie Hungerford. Hungerford's position evolved to the point of possessing nearly total discretion to approve or deny a claim and, upon her approval, payment was sent directly to the provider. This change in practice proved to be the catalyst for the controversy now before us.
For a number of years, White's doctors prescribed the drug Percodan for pain control. US West approved payment. In September 1985, however, US West informed White that, despite objections from his attending physician, the company would no longer pay for Percodan prescriptions. Dr. Lawrence Staples, US West's medical director, cited the addictive potential of the narcotic drug as the ground for the decision. Dr. Staples offered White alternatives to [514 NW2d Page 73]
Percodan such as pain clinic therapy or treatment with less addictive analgesics. White sought the advice of Dr. James Blessman, a physician at Mercy Hospital's pain clinic, who recommended against such therapy because of the age of White's injury. White testified at trial that he told Hungerford of Dr. Blessman's recommendation, but she
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