N.C. Industrial Commission Rules
for Managed Care Organizations
Effective January 1, 1996
- PURPOSE. These rules are intended to facilitate the timely and cost-effective delivery
of appropriate medical compensation services to fulfill the employer's duty to provide
such services as are reasonably necessary to effect a cure, give relief, or shorten the
period of disability resulting from compensable injuries through the use of Managed Care
Organizations (MCOs). These rules do not affect existing, informal lists or "employer
networks" of providers assembled by employers or insurers for their own referrals. N.C.
Gen. Stat. §§97-2(19), (20) and (21); 97-25; 97-25.2; 97-25.3(e); 97-26(b), (c), and
(g); and 97-25.4(a).
- DEFINITIONS. As used in these rules, unless context otherwise dictates:
- MANAGED CARE ORGANIZATION (MCO) -- A preferred provider organization (PPO) or a health
maintenance organization (HMO) regulated under Chapter 58 of the General Statutes. N.C.
Gen. Stat. §§97-2(21) and 58-50-50.
- HEALTH CARE PROVIDER (PROVIDER) -- Any medical doctor, chiropractor, other physician,
hospital, pharmacy, nurse, dentist, podiatrist, physical therapist, rehabilitation
specialist, psychologist and any other person or firm providing medical care pursuant to
the Workers' Compensation Act. Payment for services rendered for a workers' compensation
patient shall be controlled by contract between the provider and MCO, or if none, by the
Commission's Medical Fee Schedules. N.C. Gen. Stat. §§97-2(20); 97-26(b) and (c).
- EMPLOYER -- Any person, firm, corporation, or governmental entity obligated by the
Workers' Compensation Act to pay or provide indemnity or medical compensation, including
any insurance carrier, self-insurance fund, third party administrator or other person,
firm or corporation undertaking to pay or adjust claims on behalf of the employer's
employees. N.C. Gen. Stat. §§97-2(3) and 97-25.2.
- COMMISSION -- The North Carolina Industrial Commission and its employees acting on its
behalf. N.C. Gen. Stat. §§ 97-77 and 97-79.
- WORKERS' COMPENSATION ACT -- The North Carolina Workers' Compensation Act, Chapter 97,
Article 1 (N.C. Gen. Stat. §§97-1 - 97-101), as interpreted and applied by the
rules and decisions of the Commission and the courts of North Carolina and the United
- EMPLOYER NETWORK -- As used in Rule I., means any group of providers assembled by or for
an entity liable for medical compensation which agrees to accept the referrals of that
entity's workers' compensation patients, and from among whom an adjuster, officer,
employee, or insured patient of the entity chooses the initial provider; provided, the
entity has no right to sell the services of the providers to a third party. N.C. Gen.
- QUALIFICATION BY DEPARTMENT OF INSURANCE. Prior to provision of any service for workers'
compensation patients pursuant to an MCO contract with any employer, an MCO shall comply
with the applicable requirements of N.C. Gen. Stat. Chapter 58, Insurance, and the
regulations promulgated pursuant thereto, in addition to these rules, except as they may
be interpreted to specifically conflict with the Workers' Compensation Act and these
rules; provided, that MCOs with such existing contracts on the effective date of these
rules shall comply with this rule on or before February 1, 1996. In the absence of
effective and binding regulations administered by the N.C. Department of Insurance setting
appropriate and sufficient requirements and standards for health care provider contracts,
accessibility of providers, financial ability to meet contract commitments, quality
management or quality assurance programs, health care provider credentialing, conflicts of
interest, records and examinations, internal auditing, confidentiality and other
appropriate matters, every MCO offering medical compensation services shall comply with
temporary orders or provisional regulations issued by the Commission, consonant with the
Workers Compensation Act, pending further formal rulemaking by the Commission or the
Department of Insurance. N.C. Gen. Stat. §97-2(21) and 97-25.2.
- QUALIFICATION AND REVOCATION. Upon receipt of documents complying with Rule V., nothing
otherwise appearing, the Commission will issue a letter to the MCO acknowledging receipt
and stating that the MCO is qualified to contract to serve workers compensation patients
while it holds an MCO certificate from the Department of Insurance, subject to renewal at
a specified time, not exceeding three (3) years. For good cause, including, but
not limited to, ineffective delivery of medical services, failure to comply
with applicable laws, rules or regulations, and failure to timely respond to lawful orders
of the Commission or other regulatory authorities, the Commission may suspend or revoke an
MCO's permission to deal with any particular workers' compensation patients, employers or
providers, groups or classes of them, or all of them. N.C. Gen. Stat. §97-25.2.
- NOTICE TO COMMISSION. Upon contracting with an employer to provide medical compensation
services, the MCO shall provide to the Commission (1) a copy of that portion of the
contract containing the provisions specified in Rule VI, and the method for determining
payment to the MCO, excluding those of its terms kept confidential by the N.C. Department
of Insurance, initialed by the employer; (2) a copy of its current certificate(s) issued
annually by the N.C. Department of Insurance pursuant to N.C. Gen. Stat. Chapter 58; (3)
the name and address of all owners or shareholders, or related groups of owners or
shareholders, holding more than 10% interest in the MCO, and whether they are or have any
relationship with a provider. Persons or firms are related, for the purposes of this rule,
if either has a financial interest in the other; shares officers, agents, or employees;
or, if natural persons, are first cousins or closer in kinship. An MCO subject to these
rules shall report its medical compensation expenditures annually on I.C. Form 51. N.C.
Gen. Stat. §97-25.2.
- CONTRACT PROVISIONS. An MCO's contract with an employer subject to these rules shall
include these provisions: (1) the principal place(s) of employment of the covered
employees, including address(es) and phone number(s) of the workplace(s); (2) the name,
title, mailing address, phone number, fax number, and e-mail address, if any, of an
officer or responsible employee of the MCO empowered to assent to the treatment or
referral of covered employees, capable of obtaining and providing complete business,
administrative and medical records generated pursuant to the contract, and empowered to
resolve routine disputes with patients, employers and providers under the Commission's
jurisdiction; (3) the name, title, mailing address, phone number, fax number, and e-mail
address, if any, of an adjuster, officer, agent or employee of the employer empowered to
negotiate the resolution of routine medical compensation disputes, and receive orders of
the Commission on behalf of the employer; (4) an acknowledgment that the MCO is bound by
applicable requirements of N.C. Gen. Stat. Chapters 58 and 97 and these rules, and subject
to orders of the Commission to the same extent as the employer; (5) the agreement of the
employer that it will cooperate and actively assist in furnishing its employees and
supervisors with a phone number and instructions for obtaining emergency treatment and/or
contacting the MCO upon injury to any employee during the workday or on the employer's
premises requiring physician attention, and with furnishing to its injured employees the
information and card hereinafter required in Rule VII; (6) specify a dispute
resolution plan in accordance with N.C. Gen. Stat. §97-25.2 and 11 N.C. Admin. Code
12.0914, including provisions for notice of decision in appeals within 30 days, or within
72 hours of appeal when the regular appeals process would cause a delay in the rendering
of health care that would be detrimental to the health of the employee; (7) describe
physician panels, including specialties represented, and the employee's right to select
his or her attending physician from the appropriate panel, and to subsequently change
attending physicians once within the members of the panel; (8) whether the MCO or employer
will be responsible for securing the services of "out of network" providers when
needed. N.C. Gen. Stat. §97-25.2.
- . INFORMATION FOR EMPLOYEE/PATIENT. The employer shall inform employees of its
arrangements with an MCO for providing medical compensation through its usual means of
communicating company policies and benefit information, and provide a wallet-size card
bearing a phone number to be contacted in case of a work-related injury, and otherwise
complying with Department of Insurance regulations. As soon as reasonably possible
following the injury, the employer or MCO shall provide to the employee a printed
explanation of the system being utilized for his care, suitable for sharing with
emergency, "out-of-network", and referral physicians, which shall be filed with
any Form 19 submitted to the Commission; provided, that electronic filers may otherwise
notify the Commission of the identity of the MCO. This statement shall include the
following information: (1) The offices to contact concerning medical treatment for the
injury, including a telephone number; (2) if known at that time, the employee's chosen
treating physician, including a phone number for seeking medical assistance outside normal
business hours if the injury might cause such a need; (3) the applicable methods for
choosing and changing treating physicians and resolving disputes concerning physicians or
treatment pursuant to N.C. Gen. Stat. §97-25.2; (4) that the MCO can make available
physicians in all the fields and specialties licensed by the State of North Carolina; (5)
the employer's obligation to pay for treatment for which the employee/patient is referred
to the MCO, whether or not the employer admits liability for the injury per N.C.
Gen. Stat. §97-90(e); (6) the employee's duty to cooperate in treatment, and right to
secure treatment at his or her own expense that does not interfere with the treating
physician's treatment; and, (7) the I.C. File Number, if known when filed. Information for
providers concerning billing may be included, labeled as such.
- I. INCLUSIVE PROVIDER PANELS. As soon as reasonably possible following onset or injury,
and upon a patient's first request to change attending physician, the MCO shall provide
the patient with a list of reasonably accessible and available panel
physicians qualified to treat or manage the primary condition for which the employer has
accepted liability or authorized treatment from which the employee may select the
attending physician. The employer and MCO shall provide for reasonable access and
availability to all medical compensation services, and include in its panels, or otherwise
make available for the employee's choice, one or more physicians representing all
specialties available in the community that are licensed to provide foreseeably necessary
treatment for the patient's primary compensable condition, if a physician of that
specialty meets the MCO's reasonable credentialing criteria for that specialty and is
willing to contract to provide their services on a non-discriminatory basis. N.C. Gen.
Stat. §§97-2(19), 97-2(20), 97-25 and 97-25.2
- QUALITY ASSURANCE AND UTILIZATION REVIEW. An MCO subject to these rules shall comply
with the requirements of the N.C. Department of Insurance for quality assurance and
utilization review plans, and upon request, provide the Commission with copies of records
generated by, or utilized in, the operation of those programs, and copies of plans or
amendments to plans not yet filed with the Department of Insurance.
- WAIVER. For good cause, and in its discretion, subject to statutory requirements, the
Commission may waive adherence to any of these Rules. N.C. Gen. Stat. §97-80(a).
N.C. Industrial Commission ·
4340 Mail Service Center ·
Raleigh, NC 27699-4340
Main Telephone: (919) 807-2500 ·
Fax: (919) 715-0282
NCIC Home Page: http://www.ic.nc.gov/