Supreme Court Action Preserves Big Workers’ Comp Victory For Builders

On Friday, the Supreme Court of North Carolina announced that it declined to review a November 2017 NC Court of Appeals decision upholding the hospital and physician fee schedule adopted by the NC Industrial Commission (IC) in 2015. Since its adoption, this fee schedule has been credited with substantially reducing the medical cost component of workers’ compensation claims and thereby reducing premiums which NC employers must pay for coverage.

“It is difficult to overstate the significance of winning this case,” said Mike Carpenter, NCHBA General Counsel. “It is estimated that this victory saved employers over $150 million. We worked closely with Builders Mutual Insurance Company (BMIC) and a broad coalition of business and governmental interests to achieve this result.”

The fee schedule was attacked by Surgical Care Associates (SCA), a national, publicly traded company which operate several ambulatory surgery centers (ASCs) in the state on behalf of itself and other ASCs. The schedule was adopted by the IC as a result of a two-year negotiation, in which NCHBA and BMIC played a leading role, between the business community and entities representing hospital and physician interests. In fact, the two-day mediation session which successfully concluded the negotiations occurred at the Builders First Center.

SCA claimed it had been left out of the negotiations and that the fee schedule did not apply to them because an ASC is neither a “hospital nor a physician.” While the trial court bought that specious argument, neither the Court of Appeals nor the Supreme Court did.

At state was more than $150 million dollars in potential reimbursements to ambulatory surgery centers in the state—the difference between the reimbursement to ASCs under the old fee schedule and the revised fee schedule adopted in 2015. This case was important not only to the business community but also to the State itself (which self-insurers its workers’ comp liability) and to local governments who also self-insure.

With the cooperation of the Attorney General’s Office (which represented the IC), we were successful in getting the trial judge to stay his order (which prevented BMIC and everyone else from immediately having to pay the difference between the old and new reimbursement schedules) pending review by the appellate courts. Our broad business and local government coalition hired Chris Browning as our counsel (formerly the top appellate lawyer for the AG’s office) to represent us during the stay proceedings and to prepare and file an amicus brief in the Court of Appeals. The Court of Appeal’s opinion closely tracked Chris’ brief.

“This is yet another excellent example of the vital partnership between BMIC and NCHBA to protect our policyholders and members.,” Carpenter concluded.

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NCHBA 1st Quarter Board Meeting
June 4-5
NCHBA Legislative Conference & 2nd Quarter Board Meeting
November 12
NCHBA Third Quarter Board Meeting
December 10
NCHBA 4th Quarter Board Meeting & Installation

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