Michael F. Easley, Governor
Buck Lattimore, Chairman

Bernadine S. Ballance, Commissioner
Thomas J. Bolch, Commissioner
Laura K. Mavretic, Commissioner
Christopher Scott, Commissioner
Dianne C. Sellers, Commissioner
Pamela T. Young, Commissioner

North Carolina
Industrial Commission



Insurance Carriers, Self-Insurers and Third-Party Administrators Processing Workers’ Compensation Medical Bills


Chairman Buck Lattimore


July 12, 2005


Reimbursement of Medical Bills

It has come to the attention of the Industrial Commission that certain insurance carriers, self-insurers, and third-party administrators are requesting invoices for inpatient hospital bills. G.S. §97-26 states the Commission may consider any and all reimbursement methodologies including, but not limited to, the use of current procedural terminology (“CPT”) codes and diagnostic-related groupings (“DRGs”). In utilizing the DRG methodology for reimbursement, providers are entitled to 77.07% to 100% of billed charges. No additional reductions shall be taken for supplies or equipment as the Durable Medical Equipment Supply Fee Schedule applies only to items billed on a CMS (HCFA) 1500 not UB-92. However, per Rule 407, when a responsible party seeks an audit of hospital charges, and has paid the hospital charges in full, the payee hospital, upon request, shall provide all reasonable access and copies of appropriate (medical) records (not invoices) without charge or fee, to the person(s) chosen by the payor to review and audit the records. In conclusion and adherence to G.S. §97-26, all inpatient medical bills are subject to DRG reimbursement methodology with no additional reductions being allowed. All outpatient medical bills must be paid at 95% of billed charges with no additional reductions being allowed. Medical services being performed at ambulatory surgical centers (ASCs) are to be paid at 100% of billed charges. Medical services billed on a CMS (HCFA) 1500 are reduced according to the fee established in the Medical Fee Schedule for the current procedural terminology (“CPT”) codes and the Health Care Procedure Coding System (HCPCS) codes. If a Health Care Procedure Coding System (HCPCS) code is billed on the CMS (HCFA) 1500, and does not have a fee assigned in the Medical Fee Schedule, the provider is entitled to 20% above invoice cost for the Health Care Procedure Coding System (HCPCS) code only.

Thank you for your anticipated cooperation.

N.C. Industrial Commission · Medical Fees Section
4337 Mail Service Center · Raleigh, NC 27699-4327
Telephone: (919) 807-2503 · Fax: (919) 715-0282
NCIC Home Page: http://www.comp.state.nc.us/