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

James B. Hunt Jr., Governor
J. Howard Bunn Jr., Chairman
Christopher Scott, Commissioner
Dianne C. Sellers, Commissioner

North Carolina
Industrial Commission


Filed August 20, 1999

North Carolina Industrial Commission Revised Fees for Inpatient Hospital Care

Effective September 1, 1999

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 July 1, 1999, and on the Industrial Commission’s web site continuously from May 26, 1999, through August 4, 1999.

Pursuant to the Notice, a Public Hearing was held on July 22, 1999, in the North Carolina Utilities Commission Hearing Room, Room 2149 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 August 2, 1999, as indicated in the Notice, but no written comments were submitted.

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

Beginning September 1, 1999, 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 81.35% 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 81.35% 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, 1998. 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, 1998; 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, 1998. 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, 1998.

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 September 1, 1999, through December 31, 1999. Later in 1999 another public hearing will be scheduled by the Industrial Commission to determine what changes are necessary to allow an updated Inpatient Medical Fee Schedule to take effect on January 1, 2000.

This 18th day of August 1999.

J. Howard Bunn Jr.

Bernadine S. Ballance

Thomas J. Bolch

Laura K. Mavretic

Renée C. Riggsbee

Dianne C. Sellers

Return to N.C. Industrial Commission Home Page

Return to NCIC Alternate Home Page

N.C. Industrial Commission · 4319 Mail Service Center · Raleigh, NC 27699-4319
Main:  (919) 733-4820  ·   Fax:  (919) 715-0282  ·   BBS:  (919) 715-5920
Internet Address: