N.C. Industrial Commission Rules
for Managed Care Organizations

Effective January 1, 1996

1. 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).
    
2. DEFINITIONS. As used in these rules, unless context otherwise dictates:
    
1. 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.
    
2. 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).
    
3. 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.
    
4. COMMISSION -- The North Carolina Industrial Commission and its employees acting on its behalf. N.C. Gen. Stat. §§ 97-77 and 97-79.
    
5. 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 States.
    
6. 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. Stat. §97-25.
    
3. 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.
    
4. 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.
    
5. 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.
    
6. 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.
    
7. . 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.
    
8. 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
    
9. 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.
    
10. 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).