“The Commission acted without notice, hearing, evidence or written order and without conducting a contested case hearing or promulgating a regulation subject to approval by the General Assembly,” they continue.

The Commisison argues it took up surgery center fees under the umbrella of its Hospital Advisory Committee and that committee’s work was publicized.  But the heart of the Commission’s position is that it has the authority under current regulations to set fees for providers and need not go before the General Assembly.  The agency maintains the surgery centers have no inherent “property interest” because they know prospectively what their fees would be and are free to decide whether or not to treat workers’ compensation patients.

In 2009, Judge John M Milling, presiding judge Fifth Judicial Circuit, ruled the surgery centers were denied due process.  The court said before making changes to the payment system, the Commission should have promulgated a new regulation and had it approved by the General Assembly.  This process would have given involved parties appropriate notice and warning of impending changes.

Judge Milling concluded the Commission cannot enforce the new payment system against the surgery centers until it develops a regulation that is in accordance with the Administrative Procedures Act and has been reviewed and approved by the General Assembly.  “The adoption of a Regulation will afford the Plaintiffs with certain due process rights, including notice, an opportunity to be heard, and the opportunity for review and approval by the General Assembly,” the judge ruled.

The Commission appealed the ruling and requested the state Supreme Court to intervene in the matter. In the meanwhile, the surgery centers can continue to bill as before, but perhaps tempered by market forces. There is some suggestion that employers are directing injured workers to less expensive alternatives.

The Commission has previously noted South Carolina needs a new fee schedule because outpatient charges have been rising substantially. Specifically, from 2000 to 2006, the number of workers’ compensation cases seen by ambulatory surgery centers increased 64%, while total charges increased 324%. The Commission also reports that between 2006-2008, the number of cases increased an additional 25% while charges increased 45%.