CorVel Corporation Q1 FY2023 earnings call

• Revenue for the June quarter was $176 million, up 16% from $153 million in Q2 2021. Earnings per share were $0.94, up 2% from $0.92 in Q2 2021.
• Adjusting to increased operational costs to improve bottom line, with aggressive hiring during the Great Resignation, aiming for return to traditional attrition levels plus automation/efficiencies for increased transaction volume.
• CareIQ unit saw revenue increases in all service lines for prospective and retrospective billing. CERiS with payment integrity focus in health market contributed strongly.
• Received Business Insurance Innovation Award for CogencyIQ data analytics solution.
• Headwinds include COVID variants, inflation, recession threat, labor market challenges, and telemedicine regulatory progress still ongoing.
• Telehealth and virtual care still in demand; PPO providers using tech for injured worker engagement. CorVel continues to pursue workflow automation to reduce tasks, increase efficiency, and improve outcomes.
• In Network Solutions, CERiS expanding payment integrity solutions for health carriers.

For the June quarter, total revenues were $176 million. The patient management segment, including third-party administration, TPA services, and traditional case management, had revenue of $115 million, an annual increase of 14%. The Network Solutions segment, which sells in the wholesale market, had revenue of $61 million, an annual increase of 18%. Revenue contribution: Patient management accounted for approximately 65.34% of total revenue ($115 million / $176 million), while Network Solutions accounted for approximately 34.66% ($61 million / $176 million).

• Continue reviewing synergistic acquisition opportunities, noting reduced valuations may present opportunities.
• Increase investment in IT resources due to availability of high-caliber IT resources from tech sector slowdown.
• Maintain focus on automation and operational efficiencies to support increased transaction volume with conservative staffing model.

• Economic factors like COVID variants, inflation, and looming recession.
• Labor market challenges including Great Resignation impact, aging workforce leading to more mega claims.
• Regulatory issues with telemedicine state licensure still in progress.
• Supply chain instability impacting revenue cycle management.

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