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Version 09.16.19 ALAE Exhibit Orange County Page 20 <br />CA Form - W04M6F19 <br />© (2019) The Travelers Indemnity Company. All rights reserved. <br />of the cause, extent or responsibility for the injury, disease, or damage, including evaluation and settlement of covered <br />claims; and <br />Expenses which are defined as either an indemnity or medical loss. <br />2.Medical cost containment expenses consist of the following components, which apply to Workers Compensation claims with a <br />date of accident beginning with the first date of the Program Term of the applicable Program Exhibit. <br />A. There is a 27% charge applied to any savings resulting from the following medical bill repricing, pharmacy bill repricing and <br />hospital bill audit activity: <br />Application of preferred provider network discounts to physicians’ bills, hospital bills and pharmacy bills, including: <br />1. Repricing as a result of negotiation of out-of-network physicians’ bills, pharmacy bills and hospital bills; and <br />2. Repricing of medical bills, pharmacy bills and hospital bills by reviewing the bills and applying state rules/edits <br />and proprietary rules/edits. <br />Repricing of medical bills, pharmacy bills and hospital bills by manual bill review by our medical review team <br />B. Savings realized from medical bill, pharmacy bill and hospital bill review to which the 27% charge is not applied are: <br />1. Savings realized from the detection and elimination of duplicate bills <br />2. Savings achieved by the claim case manager, i.e. bills containing unrelated/unauthorized treatment <br />3. Savings achieved by the medical case manager, i.e. bills containing unapproved medical treatment <br />4. Savings realized from medical bill repricing, pharmacy bill repricing and hospital bill audit activity achieved by applying <br />any state-mandated schedule <br />5. Savings realized from the elimination of non-compensable bills. <br />For purposes of this Exhibit, the term “savings” shall refer to the difference between the amount billed by physician, <br />hospital, pharmacy and other medical providers and the amount ultimately paid. adhere to state-mandated fee schedules <br />and/or usual and customary pricing for certain procedures, may contract with preferred provider networks which have <br />contractual arrangements with certain of those providers to perform certain procedures at pre-determined rates (which <br />may be below fee schedule), and may utilize other fee negotiation resources determine are necessary and appropriate to <br />determine the amount that should pay on any given medical bill. <br />C. The 27% charge will be capped at $10,000 per bill and charged to the claim file as an Allocated Loss Adjustment Expense, <br />unless required by state law to charge it to the claim file as a different component of the applicable rating plan. The <br />$10,000 per bill cap applies to bills with a date of service beginning with the first day of the Program Term set forth in the <br />applicable Program Exhibit. <br />D. Certain items are still charged separately to the claim file as Allocated Loss Adjustment Expenses. These items include but <br />are not limited to: <br />1. Utilization Review (pre-certification and concurrent review) services charged on a per activity basis; <br />2. Independent medical examinations*; <br />3. Second opinions by a physician*; <br />4. Chiropractic reviews; and <br />5. Physician advisor programs. <br />*unless ordered by an industrial board or state equivalent, in which case it is treated as Medical. <br />DocuSign Envelope ID: FCD9FE56-CF01-4E96-B983-B8E8DFE6811C