Bernadine S. Ballance, Commissioner
Thomas J. Bolch, Commissioner
Laura K. Mavretic, Commissioner
Renée C. Riggsbee, Commissioner

James B. Hunt Jr., Governor
Christopher Scott, Commissioner
Dianne C. Sellers, Commissioner

North Carolina
Industrial Commission


Order Adopting New Inpatient Hospital Billing Band for Workers' Compensation Cases

The North Carolina Industrial Commission published a "Notice of Rule-Making by the North Carolina Industrial Commission to Establish Hospital Fees for Workers' Compensation Cases" in the North Carolina Public Register on December 1, 1999, and on the Industrial Commission's web site continuously from November 4th, 1999, through January 11, 2000.

Pursuant to the Notice, a Public Hearing was held on December 17, 1999, in the North Carolina Industrial Commission Hearing Room, Room 2173 of the Dobbs Building in Raleigh, NC. An affidavit and exhibits were received into the record. No other material was introduced at the Public Hearing and no person attending the Public Hearing offered comments when invited to do so. The record of the Public Hearing was held open for written comments through the close of business on January 11, 2000.

After careful review of the record, the Commission adopts the following:

Beginning January 12, 2000, for service dates on and after that date, inpatient hospital bills for workers' compensation claims in North Carolina will be approved by using the following methodology: (1) Hospitals shall submit to the workers' compensation insurance carrier, third party administrator or self-insured employers their UB-92 claim forms for such inpatient hospital care; (2) Payments to the hospitals shall be based upon the State Health Plan DRG (Diagnostic Related Grouping) Grouping for such inpatient care compared to the UB-92 charges. The maximum DRG payment will be 100% of the hospital's itemized charges as shown on the UB-92 claim form. The minimum DRG payment shall be 82.28% of the charges as shown on the UB-92 claim form. Any DRG falling within the band limited by the maximum and minimum will be paid as is.

Certain DRGs will not be paid according to this methodology. Bills for inpatient psychiatric and rehabilitation shall be paid at room and board charges discounted by 5% and ancillary charges discounted by 8%, following the State Health Plan.

The 82.28% minimum was established by: (a) reviewing data from the State Health Plan to ascertain the aggregate hospital itemized charges and aggregate amounts authorized for payment by the State Health Plan (including payments actually made by the State Plan and deductible, coinsurance, or other amounts for which the patient/insured may have been liable) for inpatient hospital claims paid to participating hospitals by the State Health Plan during the fiscal year ending June 30, 1999. The Commission then utilized the data described in the preceding sentence to calculate the extent, if any, to which aggregate State Plan authorized payments were less than aggregate charges on inpatient hospital claims paid by the State Health Plan during the fiscal year ending June 30, 1999; and (b) calculating aggregate inpatient hospital itemized charges and aggregate payments authorized by the Commission on all inpatient hospital workers' compensation claims approved for payment by the Commission during the fiscal year ending June 30, 1999. Based on the data described in subdivisions (a) and (b) immediately preceding, the Commission established a minimum percentage that resulted in a payment rate for inpatient workers' compensation cases that in the aggregate bears a percentage relationship to inpatient hospital itemized charges that is equal to the State Health Plan relationship between aggregate payments authorized and aggregate itemized charges for claims paid by the State Health Plan during the fiscal year ending June 30, 1999.

The Industrial Commission takes this action pursuant to Sections 97-26(a), 97-26(b)(3), and 97-80(a) of the North Carolina General Statutes.

The Industrial Commission expects this Inpatient Medical Fee Schedule to be in effect from January 12, 2000, through December 31, 2000.

This 12th day of January 2000.


Bernadine S. Ballance

Thomas J. Bolch

Laura Kranifeld Mavretic

Renée C. Riggsbee

Christopher L. Scott

Dianne C. Sellers

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