Irvine-based CorVel Corp. is expanding its services and opening itself up to new markets to position itself for future growth, its chief executive recently said.
CorVel sells software and services for managing workers’ compensation claims, reviewing medical bills and providing healthcare services to keep insurance costs in check. It also employs nurses who manage the healthcare of workers injured on the job and maintains a network of other service providers.
Chief Executive Daniel Stark said on a recent earnings call that CorVel’s “unique approach to workers’ compensation claims management” helped make the company “a viable option for local, regional and national employers.”
For the September quarter, CorVel’s profit was $7.9 million, up 10% from a year earlier.
Quarterly revenue grew 12% to $105 million.
Stark said the results reflected sustained growth from CorVel’s Enterprise Comp software, which is used to manage workers’ compensation cases and aid healthcare providers by suggesting early treatment and other steps.
The company boss also touted the company’s MedCheck software, which consolidates transactional data.
“We have achieved double-digit growth for eight consecutive quarters,” Stark said. “Our goal is to now maintain that type of growth.”
CorVel had a recent market value of about $504 million, though it largely operates below Wall Street’s radar with only analyst Dhananjay Gaikwad of Boston-based Virtua Research following the stock.
The company’s customers include insurance companies, employers that provide their own healthcare plans and third-party administrators in both areas.
Rebates Unlikely
Federal regulators recently said that a majority of health insurance plans have met a requirement in the healthcare reform law passed in 2010, saying that they can’t take more than a certain amount of premium revenue for purposes other than medical care; hence, they aren’t required to rebate the difference to customers.
The healthcare insurance industry includes UnitedHealth Group Inc., a Minnesota company that employs more than 3,000 people in Cypress.
The Government Accountability Office, which is Congress’ investigative arm, said earlier this month that about 77% of insurers providing coverage for 39 million workers at large companies would have hit the spending target last year.
Regulators said some 64% of healthcare insurers in all markets—individual, small-business and large group—spent enough of their premium revenue on healthcare.
Under the reform law, health insurance companies can’t use more than 20% of their premium revenue for profit or for salaries and other administrative expenses.
At least 80% of premiums have to be spent on patient care, and plans that spend less have to rebate the difference.
Regulators also said that the government would not let insurance plans deduct the cost of fees they pay to their brokers and agents when calculating how much they spend on patient care.
The National Association of Insurance Commissioners and brokers had lobbied to exclude fees from the formula.
ICU Contract
San Clemente medical device maker ICU Medical Inc. won a three-year contract with Novation, an Irving, Texas-based hospital group purchasing organization.
A contract value was not disclosed.
ICU will provide its full line of critical-care products, including hemodynamic monitors, catheters, disposable pressure transducers and in-line blood sampling systems, to Novation, which has some 30,000 sites it serves.
ICU will participate in a new standardization program from Novation geared toward critical-care medicine and product lines associated with that type of care. It’s intended to provide participating customers a directed rebate for total qualified contract purchases.
Bits and Pieces
Omni West Group Inc., a commercial real estate development and investment firm in Laguna Hills, acquired a 29,000-square-foot, two-story medical office building in Bermuda Dunes, an Inland Empire community, with HG Capital LLC of Menlo Park. A purchase price wasn’t disclosed. … Children’s Hospital of Orange County said it was one of 10 pediatric hospitals in the country named to a top hospitals list published by the Leapfrog Group, a San Francisco-based coalition of public and private buyers of employee health insurance. … Spectrum Pharmaceuticals Inc., a Nevada drug maker with Irvine research and development operations, said there were 19 presentations covering its Zevalin cancer treatment at the American Society of Hematology’s recent meeting in San Diego.
