September 30, 2010 Betty Arinder, Attorney – Wells Marble and Hurst, PLLC Hal Caudell, District Manager – CorVel Corporation Bob Fusinatto, Regional Claims Manager – Safety National Casualty Corporation Steve Link, Executive VP of Marketing – Midwest Employers Casualty Corporation

 Timely Report of Injury  Investigate and Adjudicate  Predict and Intervene – Right Resources at the Right time!  Concurrent Reviews  Analytics and Trending  Impacting Outcomes

 Agent Reporting ◦ Why is the Center for Medicare Services (CMS) Requiring Reporting  Complying with Medicare Mandatory Insurer Reporting Requirements (MMIRR)  Identifying Authorized Representative, Account Manager and Account Designee  Testing  Going Live

 What are the CMS Requirements for MSA’s ◦ Claims estimated to settle for more than $250,000 when the beneficiary will become eligible for Medicare in less than 30 months ◦ Claims estimated to settle for more the $25,000 when the beneficiary is already eligible for Medicare  What about Liability Claims?

 Current Medicare Guidelines and Affect on Settlement Values ◦ Major Cost Driver’s – Pharmacy  Real Life Example of MSA Impact:  Lifetime Medical Treatment - $22,  Lifetime Medicare Prescription - $611, Total$634,  What Type Settlement Should I Pursue  What Interventions/Options are Available

Top Five

 Explain workers’ compensation process to injured employee  Employer: stay in touch with injured employee; re-assure of employment  Adjuster: communication is key; prompt payments

 Explain choice of physician to injured worker  Make sure that employee has clear choice  Document choice

 Temporary  Longer out of work, less likely to return  Permanent

 Attorney represents employer, not just carrier  Communication with adjuster and attorney  Providing information and documents promptly

 You have more control  Less costly than hearing  More options for concluding; can be more creative  Maintains relationships

 Reduces Direct Costs (losses)  Reduces Indirect Costs (Lost productivity, increased labor costs, etc.)  Reduces Excess Premium and Self Insured Retention  Improves Employee Morale- Increased Productivity

 Investigation  Medical Management  Vendor Management  Reserving  Recoveries  Return to Work – Settlement  Supervision, Documentation, Action Plans

 Excess Reporting

 We Share the Risk of our Clients  TPA “Quality is Critical to our own Mutual (Client/Excess Insurer) Success  High Quality Claim Administrative Services Alone cannot Guarantee an Employer will Achieve Best Practice Results  Best Practice Results can only be Achieved Through Proactive Employer Management of all Aspects of the Program

WC Medical Severity Rising at Twice the Medical CPI Rate Sources: Med CPI from US Bureau of Labor Statistics, WC med severity from NCCI based on NCCI states. Insurance Information Institute. Average annual increase in WC medical severity from 1995 through 2008 was more than twice the medical CPI (8.1% vs. 4.0%). New healthcare reform legislation is unlikely to have any impact on the gap.

Medical Distribution of Total Costs Source: NCCI (based on states where NCCI provides ratemaking services)

Medical Claim Cost Inflation WC Insurers Experience Inflation More Intensely than 2009, CPI Suggests Healthcare Costs Are a Major WC Insurance Cost Driver. They Are Likely to Increase Faster than the CPI for the Next Few Years, at Least Source: Bureau of Labor Statistics; Insurance Information Institute.

No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30% Obesity Trends* Among U.S. Adults BRFSS, 1990, 1999, 2008 (*BMI  30, or about 30 lbs. overweight for 5’4” person) Source: CDC Behavioral Risk Factor Surveillance System

 Questions?