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GRAHAM ERLACHER & ASSOCIATES

3504 VEST MILL ROAD - SUITE 22

WINSTON-SALEM, NORTH CAROLINA 27103

336/768-1152

STATE OF NORTH CAROLINA

BEFORE THE NORTH CAROLINA INDUSTRIAL COMMISSION

NOVEMBER 18, 2016

PUBLIC HEARING BEFORE THE FULL COMMISSION

REGARDING

PROPOSED TEMPORARY RULE AMENDING RULE 04 NCAC 10J .0103

Full Commission Public Hearing, November 18, 2016

GRAHAM ERLACHER & ASSOCIATES

3504 VEST MILL ROAD - SUITE 22

WINSTON-SALEM, NORTH CAROLINA 27103

336/768-1152

A P P E A R A N C E S

COMMISSIONERS:

Charlton L. Allen, Chairman

Bernadine S. Ballance

Linda Cheatham

Christopher C. Loutit

Tammy R. Nance

I N D E X

SPEAKERS

: PAGE Kendall Bourdon . . . . . . . . . . . . . . . . . . . . . 2 Kelli Collins. . . . . . . . . . . . . . . . . . . . . . 6 Andy Ellen. . . . . . . . . . . . . . . . . . . . . . . 11 Ronnie Cook . . . . . . . . . . . . . . . . . . . . . . 18

E X H I B I T S

IDENTIFIED

ADMITTED

(Bourdon) Exhibit Number 1 . . . . . . . . . 3 38 (Bourdon) Exhibit Number 2 . . . . . . . . . 3 38 (Bourdon) Exhibit Number 3 . . . . . . . . . 3 38

Full Commission Public Hearing, November 18, 2016

GRAHAM ERLACHER & ASSOCIATES

3504 VEST MILL ROAD - SUITE 22

WINSTON-SALEM, NORTH CAROLINA 27103

336/768-1152

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P R O C E E D I N G S

CHAIRMAN ALLEN: Okay. We are on the record.

Good afternoon. Today is November 18, 2016. This is a North Carolina Industrial Commission public hearing on proposed rulemaking. I'm Charlton Allen, Chairman of the North Carolina Industrial Commission. In compliance with the requirements of Chapter 138A-15(e) of the State Government Ethics Act, I remind all members of the Commission of their duty to avoid conflicts of interest under 138A. I also inquire as to whether there is any known conflict of interest to any matters coming before the Commission at this time. Hearing none, we will proceed. The purpose of this hearing is to receive comments from the public regarding 04 NCAC 10J .0103 proposed for temporary rulemaking by the Commission and submitted for publication on the Office of Administrative Hearings' website on October 18, 2016. We have not yet received comments - written comments from the public, but the record will be held open to receive written comments from the public through the close of business in - on

November 29, 2016. At this time, I would like to

introduce the other Commissioners. To my right are

Commissioners Bernadine Ballance and Christopher

Loutit, and to my left are Commissioners Linda

Full Commission Public Hearing, November 18, 2016

GRAHAM ERLACHER & ASSOCIATES

3504 VEST MILL ROAD - SUITE 22

WINSTON-SALEM, NORTH CAROLINA 27103

336/768-1152

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Cheatham and Tammy Nance. Commissioner Daughtridge could not be with us today. At this time, the Commission wishes to thank members of the public and the various stakeholders who attended our public comment meeting on October 3 rd , 2016, and gave comments or proposals regarding the rulemaking options considered by the Commissioners. The Commission very much appreciates everyone's time and efforts in that regard. Anyone who wishes to speak at this hearing must sign up to do so with Kendall Bourdon - Ms. Bourdon, would you please raise your hand - so that we have the correct spelling of your name and can call you in order to speak. If anybody would like to speak and has not yet signed up, please do so now. Seeing no movement toward Ms. Bourdon's table, the first speaker will be Kendall Bourdon, the rulemaking coordinator, followed by the members of the public in the order that they have signed up. Ms. Bourdon.

KENDALL BOURDON

CHAIRMAN ALLEN: Ms. Bourdon, will you please

state your name, position and with whom you work? MS. BOURDON: My name is Kendall Bourdon, and I am the rulemaking coordinator for the North Carolina

Industrial Commission.

CHAIRMAN ALLEN: And do you have any prepared

Full Commission Public Hearing, November 18, 2016

GRAHAM ERLACHER & ASSOCIATES

3504 VEST MILL ROAD - SUITE 22

WINSTON-SALEM, NORTH CAROLINA 27103

336/768-1152

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exhibits that you would like to place into the record of these proceedings?

MS. BOURDON: I do. I have Exhibit 1, which is a

copy of the proposed rule amendment as submitted to the North Carolina Office of Administrative Hearings,

Rules Division, for publication on its website on

October 18

th , 2016. Next, I have Exhibit 2, which is a copy of the Superior Court Decision in the case Surgical Care Affiliates, LLC, versus North Carolina Industrial Commission, No. 16-CVS-0060, Wake County Superior Court. And finally, I would like to submit Exhibit 3, which is a record of the public comment meeting held by the Commission on October 3 rd , 2016. (Exhibit Numbers 1, 2 and 3 are identified.)

CHAIRMAN ALLEN: And would you briefly give us

some background and list the rules that would be affected by the proposed rule changes?

MS. BOURDON: Yes. We have one rule for a

temporary rulemaking. This rule is found in Title 04 of the Administrative Code, Subchapter 10J. We propose to amend Rule .0103, titled Fees for Institutional Services. This proposed temporary rule would be effective January 1, 2017. This temporary rule is proposed pursuant to North Carolina General

Full Commission Public Hearing, November 18, 2016

GRAHAM ERLACHER & ASSOCIATES

3504 VEST MILL ROAD - SUITE 22

WINSTON-SALEM, NORTH CAROLINA 27103

336/768-1152

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Statute 150B-21.1(a)(5). The effects of the August 9 th , 2016 Decision in Surgical Care Affiliates, LLC, versus North Carolina Industrial Commission , which was submitted as Exhibit 2 in this proceeding, necessitate the expedited implementation of this temporary rule. This recent Court Decision invalidated the Industrial

Commission's medical fee schedule provisions for

ambulatory surgery centers which had taken effect April 1, 2015, based on the Court's interpretation of

Session Law 2013-410, Section 33(a), and the

application of its fiscal note exemption language. Due to the Court Decision, the medical fee schedule as applied only to ambulatory surgery centers reverts back to the pre-April 1, 2015 provisions which provided for a maximum reimbursement rate of 67.15 percent of billed charges, resulting in an unforeseen retroactive and prospective multi-million dollar increase in costs to the workers' compensation system. Although the August 9, 2016 Decision has been stayed by the Superior Court during the appeal to the North

Carolina Court of Appeals, it is the Industrial

Commission's statutory obligation to adopt a rule as quickly as possible to restore balance to the workers' compensation system pursuant to North Carolina General Statute 97-26 in the event the Decision is upheld on

Full Commission Public Hearing, November 18, 2016

GRAHAM ERLACHER & ASSOCIATES

3504 VEST MILL ROAD - SUITE 22

WINSTON-SALEM, NORTH CAROLINA 27103

336/768-1152

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appeal. By putting a temporary rule in place as soon as possible, the period of time subject to a potential retroactive invalidation of the ambulatory surgery center fee schedule provisions will be limited to

April 1, 2015 to December 31

st , 2016, providing certainty regarding medical costs for 2017 and beyond. Prior to proposing the temporary rule, the Industrial Commission voluntarily held a non-mandatory public comment meeting on October 3 rd , 2016, and accepted written comments from September 2 nd , 2016 through

October 10

th , 2016, in order to allow any person or entity the opportunity to present comments and proposals regarding potential rulemaking options to address the effects of the August 9 th , 2016 Court

Decision. The record of that meeting and all

proposals and comments received in conjunction with that meeting has been submitted as Exhibit 3 here in this proceeding. The Commission gave thorough consideration to all comments and materials presented in formulating the proposed temporary rule. The proposed temporary rule was submitted to the North

Carolina Office of Administrative Hearings, Rules

Division, on October 18

th , 2016. The rule was published on their website on October 21 st , 2016. Simultaneously, notice of the proposed rule was posted

Full Commission Public Hearing, November 18, 2016

GRAHAM ERLACHER & ASSOCIATES

3504 VEST MILL ROAD - SUITE 22

WINSTON-SALEM, NORTH CAROLINA 27103

336/768-1152

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on the Industrial Commission website as required by statute. Also, notice was emailed with a link to this rule to the Commission's Rules Listserv. This is an interested person's Listserv that we are required to maintain.

CHAIRMAN ALLEN: Okay. Do any members of the

Commission have questions for Ms. Bourdon? Okay. If not, you may return to your seat.

MS. BOURDON: Thank you.

CHAIRMAN ALLEN: Thank you.

(SPEAKER DISMISSED)

CHAIRMAN ALLEN: The first speaker will be

Ms. Kelli Collins. Ms. Collins, if you would step up to this table (indicating).

KELLI COLLINS

MS. COLLINS: This looks like something I could

really hurt myself on.

CHAIRMAN ALLEN: It's all right. Take your time.

MS. COLLINS: And you were so graceful.

CHAIRMAN ALLEN: Ms. Collins, would you please

state your name for the record and tell us whom you represent, if any particular organization?

MS. COLLINS: Yes. My name is Kelli Collins, and

I'm the regional vice-president of operations for

Surgical Care Affiliates, and that's who I'm

Full Commission Public Hearing, November 18, 2016

GRAHAM ERLACHER & ASSOCIATES

3504 VEST MILL ROAD - SUITE 22

WINSTON-SALEM, NORTH CAROLINA 27103

336/768-1152

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