University of Alaska 2nd QTR FY13 Utilization review 7/1/2012 to 12/31/2012

1. University of Alaska 2nd QTR FY13 Utilization review7/1/2012 to 12/31/2012

2. Premera- Medical

3. Premera Medical – Inpatient & Outpatient • Inpatient • Paid claims per member per month (PMPM) for inpatient services increased significantly from $66.80 for FY12 (07/11-12/11) to $92.82 for FY13 (07/12-12/12) • The average length of stay for inpatient services increased from 4.06 to 5.57 and FY13 was above the Premera Norm of 4.62 • Paid claims per admissions increased from $19,825 for FY12 to $21,246 for FY13 • Outpatient • Paid claims PMPM for outpatient services decreased from $80.80 for FY12 to $77.03 for FY13 and was below the Premera Norm of $83.45 • Outpatient services per 1,000 members decreased slightly from 3,976 for FY12 to 3,829 for FY13

4. Premera Medical – Emergency Room & Large Claims • Emergency Room • ER paid claims per visit decreased from $1,286 for 2nd Qtr FY12 to $1,198 for 2nd Qtr FY13, but was above the Premera Norm of $1,138 • Visits per 1,000 members for ER services increased from 148 for 2nd Qtr FY12 to 152 for 2nd Qtr FY13 and was below the Premera norm of 208 • Large Claims • Large Claims have increased from FY12 compared to FY13 • 18 large claimants over $100k through FY12 • None were over $400k • $2,913,620total paid • 25 large claimants over $100k through FY13 • 2 are over $400k • $5,009,186 total paid • Estimate 37 claims over $100k in a 12 month period • 2 claims over $500k • 1 claim over $700k

5. Medical Utilization Norm is based on Premera’s Alaska large group book of business

6. Large Claims Analysis Large Claims percentage of Total Medical & Rx Claims

7. Claimants over $100k – FY13 ( July 2012 – December 2012)

8. Claimants over $100k – FY12 (July 2011 - December 2011)

9. Major Diagnostic Category Health Status and Services jumped from #2 to #1 Musculoskeletal system dropped from #1 to #2 Circulatory Systems (Heart) jumped from #8 to #3

10. Member Responsibility

11. Caremark - Pharmacy

12. Pharmacy Observations • The total gross costs decreased $187,127 for 2nd Quarter FY12 to FY13 from $4,253,408 to $4,066,281 • The percent of mail order scripts/claims decreased from 20.0% to 18.8% for 2nd Qtr FY13 • The generic dispensing rate increased from 68.7% to 75.3%, a 9.6% increase • Specialty drug gross costs increased 29.8% from $659,867 to $856,288 • 0.7% of membership utilize the specialty drugs accounting for 21.1% of pharmacy spend

13. Pharmacy FY 12 to FY13 Comparison

14. Top 25 Drugs by Gross Cost

15. Top 25 Drugs by Script Count

16. Appendix

17. Medical Utilization Definitions • Contract Months – Number of enrolled employees for a 12 month period • Medical Total PMPM – Total medical cost on a per member per month basis • Inpatient – Services provided to patients who are hospitalized • Outpatient – Hospital based services where the employee is not admitted • Professional – Primary Care or Specialist Care Physician services • Average Contract Size – The average number of dependents (Spouse and Children) for each enrolled employee

18. Major Diagnostic Code Definitions