Brief Outline of Procedures

Under the North Carolina Workers' Compensation Act

North Carolina Industrial Commission

Michael F. Easley, Governor
Buck Lattimore, Chairman

N.C. Industrial Commission · 4340 Mail Service Center · Raleigh, North Carolina 27699-4340

Main Telephone: (919) 807-2500 · Fax: (919) 715-0282

Internet Address: http://www.comp.state.nc.us/

First Report of Injury

As required under the rules of the Commission and the provisions of N.C. Gen. Stat. §97-92(a) the employer shall, within five days after knowledge of the occurrence of an injury to an employee which causes absence from work of more than one day or medical expense in excess of $2,000.00, report the injury to the Commission on Form 19, Employer's Report of Accident.

Failure to file this report subjects the employer or carrier to a fine of up to $25.00 in each compensation case. The report must be sent through the employer's compensation carrier. If the employer is a self-insurer, the report must be mailed to the Commission through the claims processor, if one is utilized. Under the provisions of N.C. Gen. Stat. §97-97, notice to the employer constitutes notice to the carrier, and the carrier is therefore not permitted to delay the reporting of an injury to the Commission.

"Minor Medical" Cases

Claims shall be reported by carriers and self-insurers to the Commission as "Minor Medical" cases on Form 51. Form 19 does not have to be filed with the Commission when all four of the following conditions are met:

1. The injured employee is not absent from work more than one working day as a result of the injury.

2. The total medical expenses do not exceed $2,000.00.

3. The medical bill submitted is in substantial compliance with the Medical Fee Schedule published by the Commission.

4. The medical report gives no indication of permanent partial disability or disfigurement.

Carriers, self-insurers, and third party administrators who qualify to process medical bills via the North Carolina Industrial Commission's electronic system may submit minor medical bills electronically in order to have them reviewed/reduced/approved in accordance with the Medical Fee Schedule. A Medical Bill Analysis generated from data provided by the electronic system must be attached to the payment and returned to the medical services provider. At the present time, the Commission is not accepting any new vendors who wish to file electronically.

Beginning February 15, 1995, permission was granted to those institutions responsible for paying medical bills in Workers' Compensation claims under the North Carolina Workers' Compensation Act to calculate those medical bills pursuant to the approved Medical Fee Schedule of the North Carolina Industrial Commission, as the same may be changed from time to time.

Inpatient Hospital Bills: Inpatient hospital bills are not included at this time among those bills being turned over to the carriers, self-insurers, and third party administrators for calculation. Such hospital bills are subject to calculation in accordance with the State Health Care Plan, the hospital plan that is applicable to employees of the State of North Carolina. At the present time, inpatient hospital bills will be calculated by the North Carolina Industrial Commission. At a future time, these bills may also be turned over for processing. These bills are processed by Diagnostic Related Groups (DRGs).

Outpatient Hospital Bills: On November 15, 1995, permission was granted to carriers, self-insurers, and third party administrators who qualify to process their medical bills to pay outpatient hospital, outpatient facility, and ancillary charges. These bills are subject to calculation by the State Health Care Plan, which is five percent (5%) on all outpatient charges.

Minor Medical Hospital Bills: Carriers, self-insurers, and third party administrators who qualify to process their medical bills may pay minor medical bills in accordance with the State Health Care Plan for hospital outpatients, which is five percent (5%) less than charges billed. Inpatient bills must be submitted to the Commission for processing.

Bills of medical providers submitted pursuant to contracts with managed care organizations are not subject to the Commission's Medical Fee Schedule, pursuant to the provisions of the Workers' Compensation Reform Act of 1994 [N.C. Gen. Stat. §97-26(c)].

The Medical Bill Analysis or the EOB must contain the following verbiage:

     If any bill for services rendered under G.S. §97-25 by any provider of health care is not paid within 60 days after its receipt by the Payor responsible for direct reimbursement pursuant to G.S. §97-26(g), there may be added to such unpaid bill an amount equal to ten percent (10%) thereof [pursuant to G.S. §97-18(g)], which may be paid at the same time as, but in addition to, such medical bill. If the Payor disputes the 10% penalty, it shall nonetheless pay the remainder of the bill forthwith, and the provider can request a hearing by filing a Form 33.

It is a criminal offense to bill any person for the difference in the amount of the original medical bill and the bill as reduced in accordance with the Medical Fee Schedule. G.S. §97-90(b).

Rules Applicable to Such "Minor Medical" Cases

1. Insurance carriers and self-insurers submitting "Minor Medical" reports will be responsible for maintaining in their files for a period of not less than two years properly executed copies of Form 19, Employer's Report of Accident, covering each injury, together with medical bills and attending physician's reports so that they may be produced upon demand by the Commission.

2. When a case reported as a "Minor Medical" no longer meets the $2,000.00 or less restriction, a Form 19 and a copy of the bill which causes the total medical expense to exceed $2,000.00 should be filed with the Commission. Copies of the medical bills previously paid as "Minor Medical" items should be retained in the carrier's or self-insurer's file.

   EXAMPLE: Employee is injured 1 January, and loses no time. Dr. A submits a bill for $1,050.00 on 7 January. It is paid. On 7 February, a bill is received from Dr. B for $951.00, making a total medical of $2,001.00. The Form 19 should immediately be forwarded to the Commission, along with a copy of Dr. B's bill. The bill from Dr. A should be retained in the carrier's file as a "Minor Medical" item.

3. No late-reporting penalty will be assessed if the carrier or self-insurer forwards the required information within five days after the case no longer qualifies to be a "Minor Medical" case.

   EXAMPLE: Once an employee is absent from work more than one day, the case is no longer a "Minor Medical." A Form 19 and copies of all medical bills, regardless of the amount, must be submitted to the Commission within five days after knowledge that the employee was absent from work more than one day.

Annual Consolidated Fiscal Report
of "Medical Only" or "Lost Time" Cases

It is the responsibility of the carrier, self-insured employer, group self-insured as certified by the North Carolina Department of Insurance, and Statutory self-insured (State Agencies and Political Subdivisions) to submit a consolidated fiscal report yearly to the North Carolina Industrial Commission. Third Party Administrators may file on behalf of the parties required to make this filing. The information requested below must be submitted on or before July 30 of each year and shall cover the preceding twelve calendar months, beginning each July 1 and ending June 30. Form 51 has been designed for reporting these cases.

Legal and Medical Fees

N.C. Gen. Stat. §97-90 states that legal and medical fees are to be approved by the Commission, and it is a misdemeanor to receive fees not approved by the Commission.

1. Fees for attorneys, physicians, hospitals, and other medical care providers rendering services under this Article shall be subject to the approval of the Commission; but no physician or hospital or other medical facilities shall be entitled to collect fees from an employer or insurance carrier until the reports required by the Industrial Commission in connection with the case have been submitted.

2. Any person (i) who receives any fee, other consideration, or any gratuity on account of services so rendered, unless such consideration or gratuity is approved by the Commission or such court, or (ii) who makes it a business to solicit employment for a lawyer or for himself in respect of any claim or award for compensation, shall be guilty of a misdemeanor, and upon conviction thereof shall, for each offense, be punished by a fine of not more than five hundred dollars ($500.00) or by imprisonment not to exceed one year, or by both such fine and imprisonment.

Medical and Hospital Reports

The Commission requires that at the time of rendering the first treatment to an injured employee, the physician shall complete a Form HCFA-1500, Health Claim Insurance Form approved by the AMA. This form shall immediately be filed in duplicate with the employer, unless the physician has knowledge of the name of the employer's insurance carrier, in which event the forms shall be filed with the carrier.

The employer and carrier shall, when necessary, write the medical care provider for reports, sending a copy of the letter to the Commission. If the reports are not sent within two weeks thereafter, the employer or carrier shall write a second letter for the report, sending the Commission a copy marked "second request." Upon receipt of the "second request," the Commission will send a letter to the medical care provider requiring the submission of the reports and bills within thirty (30) days.

Rules Governing the Application of the Fee Schedule

1. Reports required by the Workers' Compensation Act shall be made by the attending physician and hospital without extra charge.

2. Original reports must show in detail the nature and extent of the injury and contain a full description of the treatment.

3. A health care provider, or its agent, may charge a reasonable fee to cover the costs incurred in searching, handling, copying, and mailing medical records to plaintiffs, or their attorneys, defendant employers, adjusting agencies, insurance carriers, or their attorneys; and rehabilitation nurses. But in no event shall be the maximum fee for the first forty pages exceed fifty cents ($.50) per page, provided that the health care provider, or its agent, may impose a minimum fee of up to ten dollars ($10.00), inclusive of copying costs. The maximum fee for each copy after the first forty pages shall be twenty cents ($.20) per page.

   However, health care providers shall provide without charge to the first requesting party among the following: employers, carriers, third party adjusting agencies, and rehabilitation nurses medical reports as required by Article 1 of Chapter 97 of the General Statutes. Second and subsequent requests for medical reports previously provided without charge shall be subject to the provisions of the above paragraph of these Minutes relating to costs for copies of medical reports.

   Upon agreement by the parties, medical records may be introduced into evidence in lieu of live testimony. Therefore, prompt provision of the medical reports may alleviate the inconvenience to health care providers, particularly physicians, of providing live testimony.

4. Upon request the attending physician shall submit to the Commission and to the insurance carrier or self-insured employer a report of progress not less often than sixty (60) days in cases which disability extends beyond this point. Fees will be allowed largely upon the basis of the facts contained in the written reports rendered during the treatment of the case. When a bill is submitted for approval, it should outline in detail the procedure for which a charge is made and show the procedure number of numbers.

5. Final reports shall be filed upon forms approved by the Commission. They shall contain a fully itemized statement of charges made and shall describe as fully as possible the nature and extent of any permanent injury or disfigurement.

6. It is the duty of the attending physician to inform the Commission promptly if the claimant is found to be suffering from any disability or disease not connected with the injury sustained.

Medical and Hospital Charges

Upon completion of the services by the physician, hospital, or other medical care provider, their statement of charges shall be submitted to the employer on the HCFA-1500, Health Insurance Claim Form approved by the AMA, and UB-82, Hospital Statement, in duplicate. If the carrier for the employer is known, the medical provider shall transmit the bills to the carrier. All hospital bills are subject to calculation by the State Health Care Plan, which is five percent (5%) on all outpatient charges; and all inpatient charges are based on DRGs.

The physician is required to report on a HCFA-1500: whether the patient's treatment is terminated; the date the injured is able to return to work; "none" if there is no permanent disability; and if there is permanent partial disability, the nature and extent of such permanent disability.

The insurance carrier or self-insurer is authorized to pay bills for drugs, travel, ambulance, nursing home, rehabilitation nurses, industrial rehabilitation, out-of-state medical services, and "minor medical" cases without further approval of the Industrial Commission. A file copy for the insurance carrier's or self-insurer's file is the only documentation that is required. Do not submit "FILE-PAID" copies to the Commission.

When deemed urgent and necessary by the attending physician, special duty nurses may be employed. Such necessity must be stated in writing when more than seven days of nursing services are required. Board charges for the special nurses are included in the allowed fees.

In unusual cases where the treating physician certifies the need, fees for practical nursing services by members of the immediate family of the injured will be approved only when written authority for the rendition of such services for pay is first obtained from the Industrial Commission. In cases where such written authorization is given, a fee commensurate with the services rendered will be established by the Commission.

The usual fee charges by registered nurses and licensed practical nurses will ordinarily be approved by the Commission. One nurse attending two or more patients will be limited to one and one-half the regular fee.

Denial of Liability

When liability for payment of compensation is denied, the Commission, claimant, his attorney, if any, and all known providers of health care shall be promptly notified of the reason for such denial on a Form 61. The denial shall not be worded in general terms but must detail the exact reason for the denial of liability.

Rule 601 specifies that the detailed statement of the basis of denial shall set forth a statement of the facts, as alleged by the employer, concerning the injury or any other matter in dispute; a statement identifying the source, by name or date and type of document, of the facts as alleged by the employer; and a statement explaining why the facts, as alleged by the employer, do not entitle the employee to workers' compensation benefits.

Payment of Compensation

Under the provisions of N.C. Gen. Stat. §97-18, if the employer admits employee's right to compensation, the first payment of compensation is due on the 14th day after the employer's knowledge of the injury or death. The Commission prescribes that either a Form 21 (Agreement) or Form 60 (Direct Payment) providing for payment of compensation shall be submitted by the employer or carrier to the employee with the first payment. The original shall be submitted to the Commission.

When there is a subsequent period of disability, either a Form 21 or Form 26 Agreement or Form 62 for direct pay should be submitted.

Employer/carrier can switch back and forth between agreements and direct pay for subsequent periods of disability. A Form 21 is always the first agreement, if agreements are used, even after a period of direct pay. Agreements should be submitted to the Commission in triplicate. One copy will be approved and returned to the employer/carrier and one copy will be approved and returned to the employee. A copy of an agreement shall be given to the employee when he signs the agreement.

Under the provisions of N.C. Gen. Stat. §97-18(d), the employer or carrier is uncertain whether the claim is compensable, they may initiate compensation payments without prejudice and without admitting liability by submitting a Form 63 with the first payment of compensation by sending a copy to the employee and the original to the Commission. Payments under this section may continue for up to ninety (90) days from the date the employer has notice of the injury. If prior to the expiration of 90 days the employer or carrier determines the claim should be denied, they should submit a denial on a Form 61. If denied, the employer or carrier may terminate benefits immediately. If the claim is not denied prior to the expiration of 90 days, the employer/carrier waives its right to contest compensability. A thirty (30) day extension may be granted by the Commission prior to the expiration of 90 days by writing the Chief Claims Examiner at the Commission and giving reasonable grounds for the extension.

Agreements to provide for payments of compensation in fatal cases shall be executed on Form 30. In every fatal case, the employer/carrier shall submit to the Commission a Form 22, Wage Statement, unless the average weekly wage shown on the Form 30 indicates a maximum compensation rate, a Form 29 listing dependents or next of kin, death certificate, and documentation of dependency. If a minor or minors are shown on the Form 29, a Form 42, Application for Appointment of Guardian ad litem, must also be submitted. Form 30 need not be submitted in triplicate since the Commission approves a Form 30 with a Notice of Death Award.

Agreement for compensation, either Form 21 or 26, are mandatory in regard to payments for permanent partial disability, disfigurement, permanent total disability or when payments are being made to an employee who is incompetent or under 18 years of age. A Form 30 agreement is mandatory in fatal cases.

Particular attention is directed to Question No. 7 on Form 19 and to Rule 401 of the Commission relative to the beginning date of disability. Many employers in submitting Form 19 show that the employee was paid in full for the date of injury, while actually the employee was only paid for the hours he worked that day. Under Rule 401, if the employee is not paid wages for the entire day on the date of injury, then it is considered the first day of disability and included in the seven-day waiting period.

Termination of Compensation--Rule 404

N.C. Gen. Stat. §97-18.1 and Industrial Commission Rule 404 address the procedure through which a carrier or self-insured employer must apply to the Commission to terminate or suspend the ongoing payments of temporary total or temporary partial disability compensation. If the carrier or self-insured employer stops payment without complying with Rule 404, a penalty will be assessed for such stoppage under the provisions of N.C. Gen. Stat. § 97-18. The carrier or self-insured employer must file a Form 24 rev., Application to Terminate or Suspend Compensation with the Commission, and send copies to the employee and the employee's attorney, if any. The grounds for the application must be stated clearly and supported by attached documentation. The grounds also must be valid according to the applicable law.

Upon receipt of the Form 24 rev. in the Executive Secretary's office, the application will be held for seventeen days to permit the employee to file an objection to the application. If the employee files an objection within the seventeen-day period, or such other reasonable time as the Commission may allow, then an informal hearing will be scheduled by notice to each party or their representative. The informal hearing will be conducted by a Special Deputy Commissioner via a thirty-minute telephone conference. During the hearing, each party will be given ten minutes to state its position and five minutes to respond to the opposing party's position. An Administrative Decision and Order setting forth the Commission's ruling and reasons therefor will be filed within five business days following the informal hearing.

If the employee does not respond with an objection to the application, an Administrative Decision and Order will be filed based on a consideration of the documentation submitted after the time period for the receipt of a response has expired.

Trial Return to Work--Rule 404-A

When compensation is terminated because the employee has returned to work for the same or a different employer, such termination is subject to the Trial Return to Work provisions of N.C. Gen. Stat. §97-32.1. If the employee returns to work with any restrictions or limitations when compensation is terminated under these circumstances, the employer/carrier shall file Form 28T and provide a copy of it to the employee and the employee's attorney of record, if any.

An employee may attempt a trial return to work for a period not to exceed nine months.

If during the trial return to work period the employee must stop working due to the compensable injury, the employee shall complete and file Form 28U with the employer/carrier and a copy to the Industrial Commission.

The employer/carrier must reinstate benefits upon receipt of a properly completed Form 28U.

Compromise Settlement Agreements--Rule 502

1. N.C. Gen. Stat. §97-17 and Industrial Commission Rule 502 allows an employee and a carrier or self-insured employer to enter into a settlement agreement. All such agreements must be submitted to the Commission for approval. The Commission evaluates the agreements and only those deemed fair, equitable, and in the best interest of all parties will be approved. Generally, as of 1996, the review of a Compromise Settlement Agreement requires approximately five to seven days from the date it is received at the Commission. If further information is needed for the review, the time period may be extended by several days.

2. No compromise settlement agreement will be approved unless it contains the following language or its equivalent, unless waived by the Commission in its discretion:
   1. Where liability is admitted, that the employer or carrier/administrator undertakes to pay all medical expenses to the date of the agreement.

   2. Where liability is denied, that the employer or carrier/administrator undertakes to pay all unpaid medical expenses to the date of the agreement. However, where application of this Rule shall work an injustice, it may be waived in the discretion of the Industrial Commission.

   3. That the employee knowingly and intentionally waives the right to further benefits under the Workers' Compensation Act.

   4. That the employer or carrier/administrator will pay all costs incurred.

   5. That no rights other than those arising under the provisions of the Workers' Compensation Act are compromised or released.

   6. That the employee has, or has not, returned to a job or position at the same or a greater average weekly wage as was being earned prior to the injury or occupational disease.

   7. Where the employee has not returned to a job or position at the same or a greater wage as was being earned prior to the injury or occupational disease, that the employee has, or has not, returned to some other job or position, and, if so, the description of the particular job or position, the name of the employer, and the average weekly wage earned. This subsection of the Rule shall not apply where the employee is represented by counsel or, even if the employee is not represented by counsel, where the employee certifies that partial wage loss due to an injury or occupational disease is not being claimed.

   8. Where the employee has not returned to a job or position at the same or a greater average weekly wage as was being earned prior to the injury or occupational disease, the agreement shall summarize the employee's age, educational level, past vocational training, past work experience, and any impairment, emotional, mental or physical, which predates the current injury or occupational disease. The parties will be relieved of this duty only upon a showing that providing such information creates an unreasonable burden upon them. This subsection of the Rule shall not apply where employee is represented by counsel or, even if the employee is not represented by counsel, where the employee certifies that total wage loss due to an injury or occupational disease is not being claimed.

3. No compromise agreement will be considered unless the following additional requirements are met:
   1. All medical, vocational, and rehabilitation reports known to exist, including but not limited to those pertinent to the employee's future earning capacity, must be submitted with the agreement to the Industrial Commission by the employer, the carrier/administrator, or the attorney for the employer.

   2. Parties and all attorneys of record must have signed the agreement.

4. When a settlement has been reached, the written agreement must be submitted to the Industrial Commission within a reasonable time. All compromise settlement agreements which are currently calendared for hearing before a Commissioner or Deputy Commissioner shall be sent directly to that Commissioner or Deputy Commissioner at the Industrial Commission. Before a case is calendared, or once a case has been continued, or removed, or after the filing of an Opinion and Award, all compromise settlement agreements shall be directed to the Executive Secretary of the Industrial Commission.

5. Once a compromise settlement has been approved by the Industrial Commission, the employer or carrier/administrator shall furnish an executed copy of said agreement to the employee or his attorney of record, if any.

Timely Payment of Compensation

Payments of compensation are due pursuant to an Award of the Commission twenty-six days from receipt of notice of the Award by the carrier or self-insured employer. This time period includes fifteen days within which to appeal the Award, one day following the expiration of the time for appeal, and a ten-day time period before the payment becomes due. Then, if payment is not made within fourteen days of when it became due on the 26th day, a ten percent (10%) late payment penalty applies to the late payment, unless the carrier or self-insured employer shows the Commission that it could not make the payment timely due to conditions beyond its control.

After a Full Commission Award, the calculation of days is the same as above, except that it is based on a thirty-day time period for appeal, unless the parties waive the right to appeal.

Report of Compensation and Medical Paid

In cases in which compensation is paid, the Commission requires that the employee be furnished a copy of the Form 28B with his or her last compensation check. Failure to file said form with the Commission within 16 days following final payment of compensation for either temporary total or permanent partial disability subjects the defendant to a fine of $25.00. See N.C. Gen. Stat. §97-18(f). This form is required in every case in which compensation is paid, including those settled by compromise agreements or resolved by decision of the Commission.

At the end of the temporary total compensation period, if it is known additional compensation will be due for permanent partial disability, the Form 28B should show this fact on Line 16. In cases where the Form 28B has been submitted and an additional medical bill is paid, do not submit another Form 28B. In cases in which compensation is paid over an extended period of time, the Commission requires that a Form 28B be filed every 12 months, showing compensation and medical paid to date.

Second Injury Fund

The Commission will bill the employer or its insurance carrier for an assessment to be paid into the Second Injury Fund as provided in N.C. Gen. Stat. §97-40.1 when an agreement for permanent disability, Forms 21 or 26, is approved which indicates loss of a minor or major member. Payment should be made promptly by the employer or carrier to the Commission.

Ombudsman Section

Pursuant to N.C. Gen. Stat. §97-79(f), the N.C. Industrial Commission has created an Ombudsman Section to assist claimants, employers, and other parties in protecting their rights. In addition, the Ombudman Section serves as the information source for the Industrial Commission, and answers questions pertaining to all aspects of Workers' Compensation.

If you need help with a claim, have a Workers' Compensation question, or want to know your rights as an employee, please direct your questions to the Ombudsman Section of the N.C. Industrial Commission. Dial toll free (800) 688-8349 in North Carolina or call (919) 807-2501 Monday-Friday from 8:00 A.M. to 5:00 P.M.

Publications and Forms

Publications and forms may be obtained by contacting the N.C. Industrial Commission, 4340 Mail Service Center, Raleigh, NC 27699-4340, calling (919) 807-2527, or e-mailing Marian Breyer at breyerm@ind.commerce.state.nc.us. Orders require prepayment. Please call or e-mail to obtain current prices and to confirm quantities available.