1. © 2012 CorVel Corporation. All rights reserved. The Risks of Opioid Mismanagement © 2013 CorVel Corporation. Identifying and Managing Your Exposure from Opioids

2. © 2012 CorVel Corporation. All rights reserved. Key Terms Opioid: psychoactive chemical used as an analgesic PBM: Pharmacy Benefit Management NDC: National Drug Code UR: Utilization Review Clinical Modeling: In-depth look at claimant’s behaviors to determine risk and next steps

3. © 2012 CorVel Corporation. All rights reserved. Workers’ Comp Pharmacy Costs

4. © 2012 CorVel Corporation. All rights reserved. Known and expected Pill Price ( location, inflation, brand/generics, physician dispensing ) Utilization Behavior ( prescriber and patient – dependency & addiction ) Extending employer exposure Addiction and third party liability Addiction and reputational exposure Pharmacy Exposure and Medical and Other Exposure

5. © 2012 CorVel Corporation. All rights reserved. Narcotics on the rise What is your exposure? © 2011 CorVel Corporation. 627% Increase 296% Increase National Vital Statics System, multiple cause of death data set and DEA ARCOS system, 2007 opioid sales figure is preliminary

6. © 2012 CorVel Corporation. All rights reserved. National Vital Statics System, multiple cause of death data set and DEA ARCOS system, Drug Overdose Death Rate

7. © 2012 CorVel Corporation. All rights reserved. “Fix me” Lack of physician prescriber education Lawsuits over withholding “needed pain meds” Big Pharma profits Pain meds in comp are easy to attain and “free” Doctor shopping Drivers of addictive pain meds

8. © 2012 CorVel Corporation. All rights reserved. Delayed return to work Fatal overdoses = death benefit Non-fatal overdoses = long term care How many of my claimants are addicts? Expected outcomes and costs of addicted claimants in comp – beyond the pill price

9. © 2012 CorVel Corporation. All rights reserved. December 2011, PA appellate court upheld death benefit The Heffernan Decision The Decision In December 2011, PA appellate court upheld death benefit. The Decision In December 2011, PA appellate court upheld death benefit. U/R ruling. No more Dr. Rodriguez! 10 am Dr. R appt. Need new script for pain meds 10 am Dr. R appt. Need new script for pain meds Call Dr. R at his home #. 8:30 am Appt. w/ Dr. R’s sister, Daisy 8:30 am Appt. w/ Dr. R’s sister, Daisy 4 – 6 pm Heffernan Wake Boyle Funeral Home 4 – 6 pm Heffernan Wake Boyle Funeral Home 10 am Funeral Mass St. Agnes 10 am Funeral Mass St. Agnes OMG – meds denied! I need my meds! WHERE ARE THEY! Fed Ex here Thank God! Fed Ex here Thank God! 9 am Meeting with lawyer 9 am Meeting with lawyer Mr. Heffernan suffered chronic pain from a compensable 2002 lower back injury. At some point between 2002 – 2007, he became addicted to his pain meds. Mr. Heffernan suffered chronic pain from a compensable 2002 lower back injury. At some point between 2002 – 2007, he became addicted to his pain meds. June 2007

10. © 2012 CorVel Corporation. All rights reserved. It did not matter that the fatal dose was denied by U/R. U/R is not a defense. Retro U/R is not enough. Employer has a duty/responsibility to take care of the addicted claimant Clear extension of employer/payor liability http://www.leagle.com/xmlResult.aspx?xmldoc=In% 20PACO%2020111202462.xml&docbase=CSLWAR3- 2007-CURR The Appellate Court’s Rationale

11. © 2012 CorVel Corporation. All rights reserved. You might have to defend your company Drug addicts causing mayhem is big news Potential exposure: Potentially no statutory limits to third party liability Damage to reputation/brand What does this mean for my organization?

12. © 2012 CorVel Corporation. All rights reserved. What your PBM may not be telling you What I am going to do about all the transactions I don’t see? PBMs are losing traction every year

13. © 2012 CorVel Corporation. All rights reserved. Dispensing channels

14. © 2012 CorVel Corporation. All rights reserved. The view of the work comp PBM

15. © 2012 CorVel Corporation. All rights reserved. Growing annually in SC 2007 / 2008 = 12% of scripts 2010 / 2011 = 18% of scripts What’s wrong with my doctor dispensing drugs?

16. © 2012 CorVel Corporation. All rights reserved. Total Exposure Management Solutions

17. © 2012 CorVel Corporation. All rights reserved. More resources 100% visibility to timely and actionable Rx data Maximize prospective management and stop the penetration games Retro U/R is not enough Real-time Integration with PBM and Bill Review

18. © 2012 CorVel Corporation. All rights reserved.

19. Assess the risk of all your claims with 100% of the pharmacy data set Pharmacist reviews have limited value Most treating physicians need help Board certified pain management physicians Address the needs of the patients, functional and behavioral Clinical Profiling and Peer to Peer Intervention

20. © 2012 CorVel Corporation. All rights reserved.

21. Pharmacy exposure continues to increase, and your exposure goes far beyond unit cost PBMs are critical for managing your exposure, but... they have limits Integration with bill review and PPO yields better results Leverage data and clinical resources Summary

22. © 2012 CorVel Corporation. All rights reserved. Tracy Snell Account Manager CorVel Corporation (O) 803.451.3404 (C) 803.451.1458 Tracy_snell@corvel.com