SUBJECT/RECOMMENDATION:
Title
Approve CorVel Healthcare Corporation’s Annual Agreement for the review of Workers Compensation Medical bills and to provide Pharmacy Benefit Management services with discounted network pricing, effective January 1, 2017 through January 1, 2018, pursuant to City Code Section 2.564 (l) (i), services associated with Workers Compensation exempt from bidding and authorize the appropriate officials to execute same. (consent)
Body
SUMMARY:
The Risk Management Division of the Finance Department has a current pricing agreement with CorVel for these services:
• MedCheck Bill Review: 1.27per line,2 line minimum
• Professional Review, CorCare Network 35% of savings
• CorCareRX Pharmacy: GenericAWP-12% + $4.00,Brand AWP-7% +4.00
• Field Case Management: $85.00per hour
• FROI/SROI reporting $25/$20 resubmit charge $20
The new agreement pricing effective January 1, 2017 will change to:
• MedCheck Bill Review: $6.50 per bill subject to a 3% increase per year
• Professional Review, and Network: 28% of Savings
• CorCareRX Pharmacy: Generic AWP-12%+$4.00. Brand AWP-7%+$4.00.
• Field Case Management: $87.00 per hour
• FROI/SROI reporting $25/$20, resubmit charge $20
• Checks to be issued at $4.00/check
This agreement automatically renews with 3% increases unless the City provides 30 days written notice of its intent to terminate. Annual renewals will be brought forward to Council prior to the 30-day notice period, so proper notice can be provided if Council does not approve.
The new proposed structure will generate approximately 1% increase over previous bill review and fee rates. The City will pay a lower fee on savings made (35% to 28%) and the bill review process will change from a cost per line fee to a flat charge per bill. These rates are administrative and subject to a 3% increase per year. The Pharmacy Rates and Cost will remain unchanged and are actually charged per claim and paid from the Central Insurance Fund. Claims staff will save approximately 10 hours a week with CorVel issuing checks after approval instead of processing them manually as currently done.
APPROPRIATION CODE AND AMOUNT:
Account # 590-07590-545800-519-000-0000 $150,000