©2014 CorVel Corporation. All rights reserved. Physician Dispensing in Work Comp Impact of the practice on overall costs and exposure Tips on how to manage it

©2014 CorVel Corporation. All rights reserved. Pharmacy drives 10-20% of your unit cost as a percent of total medical. Source: 2011 NCCI Issues Report What percent of your total exposure relates to claims with prescription meds and IWs suffering from pain?

©2014 CorVel Corporation. All rights reserved. Physician Dispensing Price Difference: Tramadol Tramadol 50 MG Manufacturer/ Labeler AWP Price per Pill AWP Price - 60 Pills Package Size DispensedMark-up* Teva USA $.83 $ % Amneal $.83 $ % Bryant Ranch $1.61 $ % Aidarex Pharm $1.62 $ % Stat Rx USA $1.66 $ % DRX $1.55 $ % St. Mary’s $1.41 $ % Dispensing Solutions $1.55 $ % * Percent of mark-up measured against original manufacturers’ AWP.

©2014 CorVel Corporation. All rights reserved. Release of StudyMedical Costs Indemnity Costs Source CA Feb %+13% IL May %+27% (JOEM _ Volume 56, Number 5, May 2014 Physician-Dispensed Medication and Workers’ Compensation Claim Outcomes) IL May 2014 opioids +78%+57% (JOEM _ Volume 56, Number 5, May 2014 Physician-Dispensed Medication and Workers’ Compensation Claim Outcomes) What the studies say: Impact of Physician Dispensing on Total Claim Costs

©2014 CorVel Corporation. All rights reserved. Questions for the Audience Where do we see “third party billing?”  Retail, Physician Dispensing, Everywhere!  Stone River (retail and physicians), Prescription Partners

©2014 CorVel Corporation. All rights reserved. Questions for the Audience Where do we see “third party Partners What is the legal status of the third party biller?  Assignee What are the obligations of an assignee?  Identical to the underlying provider

©2014 CorVel Corporation. All rights reserved. Questions for the Audience Where do we see “third party eywhertail and p What are the obligations of an assignee?  Identical to the underlying provider

©2014 CorVel Corporation. All rights reserved. The Facts Assignees are ALREADY OBLIGATED! PBM Contracts with underlying pharmacies PPO Contracts with underlying prescribers

©2014 CorVel Corporation. All rights reserved. The Facts Assignees are ALREADY OBLIGATED! PBM Contracts with underlying pharmacies PPO Contracts with underlying prescribers Impact of contracts with assignees Grant them rights and frees them from obligations Disables Prospective Mgt/ Enables more retro PBM re-sells transaction at a spread Expedient? Right thing to do?

©2014 CorVel Corporation. All rights reserved. What you can do Apply underlying PPO discount Can I? Everywhere? Yes you can! Deny subsequent transactions based on PPO contractual obligations Can I? Everywhere? PPO - Utilization Mgt or specific prohibition Contractually yes, but leverage is the issue Requires notice Re

©2014 CorVel Corporation. All rights reserved. Question for the Audience What presents more risk in terms of your cost drivers? Unit price? Utilization? The unknown?

©2014 CorVel Corporation. All rights reserved. Identify providers who dispense meds in office Leverage bill review Manage the data Maximize provider selection tools Include a physician dispensing indicator Layer the order based on criteria Preclude panel populating Educate your PPO providers Re You can make the unknown more known!

©2014 CorVel Corporation. All rights reserved. Search Results – Make them meaningful

©2014 CorVel Corporation. All rights reserved. Appendix

©2014 CorVel Corporation. All rights reserved. Agenda

©2014 CorVel Corporation. All rights reserved. Agenda