New North Carolina Medical Fees Expected to Save on Work Comp

By | April 9, 2015

Revised medical fees approved in February by the North Carolina Industrial Commission and planned to take effect this year are expected to save the state’s workers compensation system $27 million annually, as well as encourage increased access to medical care, according to a statement put out by the Commission.

“The new Medical Fee Schedule replaces an out-of-date fee schedule and was developed in response to legislation requiring the Industrial Commission to revise its medical fee schedule to use current Medicare reimbursement rates and payment methodologies,” the Commission statement said.

The fee schedule changes reflect a compromise agreement between insurance carriers, hospitals, physicians, and other medical providers. As a result, maximum fees for hospitals and other institutional providers are set to decrease while fees for physicians, nurses, and other professional providers will increase.

“Under the previous medical fee schedule, fees for hospital services were high compared to other states, while the fees for professional services were low compared to other states,” said Graham H. Wilson, deputy director of communications for the North Carolina Department of Commerce. “The new rules are intended to bring both reimbursement rates closer to the national average while meeting the standards set forth in Session Law 2013-410.”

Wilson says the standards were adopted to ensure a high standard of medical care for injured workers; that health care providers are reimbursed reasonable fees for their services; and that system-wide medical costs are adequately contained.

The estimated annual savings of $27 million to the states workers compensation system is the result of an analysis by the National Council on Compensation Insurance (NCCI), and is based on 2013 written workers compensation insurance premiums and self-insured employer data.

“These savings may continue to increase as North Carolina insurance carriers expand their workers compensation premium base in response to the state’s growing economy,” according to the Commission’s statement.

The new institutional service fees – inpatient and outpatient facilities – took effect on April 1 and the revised rates for professional services – general medicine, physical medicine, radiology, and surgery –will take effect July 1. This schedule is meant to allow insurance carriers and health care providers to transition to the new fee schedule “as seamlessly as possible” the statement says. As of July 1, 2014, providers are no longer required to submit medical bills to the Industrial Commission unless there is a payment dispute. Medical fee schedule adjustments for institutional services will be gradually phased in through 2017.

Carrier and industry association groups that provided input on the new medical fee schedule rules included: American Insurance Association, Property Casualty Insurance Association of America, Key Risk Management, Builders Mutual Insurance Co., NC Home Builders Association, NC Retail Merchants Association, NC Chamber of Commerce, Capital Associated Industries, Inc, and the North Carolina Medical Society.

This is the first update to the hospital medical fee schedule since April 1, 2013, and the schedule for professional services has not received a comprehensive update in several years, said Wilson. Specifically, the old professional services fee schedule was still based on 1995 Medicare reimbursement rates, and the institutional services fee schedule was based upon a percentage of charges billed rather than on current Medicare rates.

About Amy O'Connor

O'Connor is the Southeast editor for Insurance Journal and associate editor of MyNewMarkets.com. More from Amy O'Connor

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