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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

or

Commission file number 000-19291

CORVEL CORPORATION

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

The number of shares outstanding of the registrant’s Common Stock, $0.0001 par value per share, as of December 31, 2002 was 10,697,000.

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CORVEL CORPORATION
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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheets – March 31, 2002 (audited) and December 31, 2002
(unaudited)- Page 3

Consolidated Statements of Income — Three months ended December 31, 2001 and
2002 (both unaudited) — Page 4

Consolidated Statements of Income — Nine months ended December 31, 2001 and
2002 (both unaudited) — Page 5

Consolidated Statements of Cash Flows – Nine months ended December 31, 2001 and
2002 (both unaudited) — Page 6

Notes to Consolidated Financial Statements (unaudited) — December 31, 2002 —
Page 7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations – Page 10

Item 3. Quantitative and Qualitative Disclosures About Market Risk – Page 16

Item 4. Controls and Procedures – Page 16

PART II. — OTHER INFORMATION

Item 1. Legal Proceedings — Page 16

Item 2. Changes in Securities and Use of Proceeds — Page 16

Item 3. Defaults upon Senior Securities — Page 16

Item 4. Submission of Matters to a Vote of Security Holders — Page 16

Item 5. Other Information — Page 16

Item 6. Exhibits and Reports on Form 8-K – Page 16

Signatures and Certifications – Page 17

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Part I — Financial Information

Item 1. Financial Statements

CORVEL CORPORATION

As of March 31, 2002 and December 31, 2002

See accompanying notes to consolidated financial statements.

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CORVEL CORPORATION

See accompanying notes to consolidated financial statements.

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CORVEL CORPORATION

See accompanying notes to consolidated financial statements.

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CORVEL CORPORATION

See accompanying notes to consolidated financial statements.

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CORVEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002 (Unaudited)

A. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended December 31, 2002 are not necessarily indicative of the results that may be expected for the year ending March 31, 2003. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended March 31, 2002 included in the Company’s registration statement on Form 10-K.

B. Earnings per Share

Earnings per common and common equivalent shares were computed by dividing net income by the weighted average number of shares of common stock and common stock equivalents outstanding during the period. For calculation of the common and common equivalent shares, see below.

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CORVEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002 (Unaudited)

B. Earnings per Share (continued)

C. Shareholder Rights Plan

During fiscal year 1997, the Company’s Board of Directors approved the adoption of a Shareholder Rights Plan. The Rights Plan, which is similar to rights plans adopted by numerous other public companies, provides for a dividend distribution to CorVel stockholders of one preferred stock purchase “Right” for each outstanding share of CorVel’s common stock. The Rights are designed to assure that all stockholders receive fair and equal treatment in the event of any proposed takeover of the Company and to encourage a potential acquirer to negotiate with the Board of Directors prior to attempting a takeover. In April 2002, the Company’s Board of Directors approved an amendment to its existing stockholder rights agreement (the “Rights Agreement”) to: 1) extend the expiration date of the rights to February 10, 2012, 2) increase the initial exercise price of each right from $42 ($125 before adjusting for the two-for-one stock split in the form of a 100% stock dividend in May 1999 and the three-for-two stock split in the form of a 50% stock dividend in August 2001) to $118 and 3) enable Fidelity Management & Research Company and its affiliates to purchase up to 18% of the shares of common stock of the Company without triggering the stockholder rights. The limitations under the Rights Agreement remain in effect for all other stockholders of the Company. The Rights will not be exercisable until the occurrence of certain takeover-related events. The issuance of the Rights has no dilutive effect on the Company’s earnings per share.

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D. Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) No. 143, “Accounting for Asset Retirement Obligations.” This statement addresses the financial accounting and reporting for the retirement of tangible long-lived assets and the associated asset retirement costs. The Company believes the adoption of SFAS 143 will have no significant impact on its financial statements.

In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” This statement addresses the financial accounting and reporting for the impairment or disposal of long-lived assets. The Company believes the adoption of SFAS 144 will have no significant impact on its financial statements.

In June 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” This statement addresses the financial accounting and reporting for the costs associated with exit or disposal activities and nullifies previous standards. The Company believes the adoption of SFAS 146 will have no significant impact on its financial statements.

E. Ancicare Acquisition

On May 16, 2002, the Company acquired AnciCare, PPO, Inc., which is a Florida-based national provider of diagnostic imaging services, including MRIs, CAT Scans, and Bone Scans. With a network of operations in over 30 states, this acquisition represents a further expansion of CorVel’s CorCare Preferred Provider Organization (PPO). The down payment for the acquisition was paid from the Company’s existing cash on hand. If the results of the Ancicare operations attain certain revenue levels, the Company will pay an additional amount for the purchase which is expected to be funded from future earnings of the Company.

F. Treasury Stock

On August 2, 2002, the Company announced that its Board of Directors approved a 1,000,000 share expansion to its existing stock repurchase plan, increasing the total number of shares approved for repurchase to 6,100,000 shares from 5,100,000 shares. CorVel commenced its share repurchase program in the fall of 1996. Since that time, the Company has spent $80 million to repurchase 5,109,774 shares, equal to 32% of the outstanding common stock. These purchases have been funded primarily from net earnings. CorVel has 10,697,000 shares of common stock outstanding as of December 31, 2002.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

RESULTS OF OPERATIONS

The following table contains certain financial data as a percentage of revenues:

Revenues. Revenues for the three months ended December 31, 2002 increased by $14 million to $73 million, an increase of 25% over the $58 million revenue for the comparable period in the prior fiscal year. The increase in revenues is primarily attributable to a 45% increase in provider program revenues, primarily provider bill review and PPO revenues, and revenues from independent medical examinations (IME) and MRI services. Provider programs revenue grew to $42 million from $29 million in the prior year, an increase of $13 million.

The growth rates noted above reflect the classification of revenue from independent medical examinations as provider program revenues for both the current and prior periods. The significant increase in provider program revenues is primarily attributable to the growth in the Company’s independent medical examination scheduling services, an increase in the number of bills reviewed through the Company’s proprietary MedCheck software along with revenues from Ancicare, a Florida-based provider of MRI examinations, which was acquired during the quarter ending June 30, 2002. The increase in patient management revenues is primarily attributable to a price increase during the past year offset by a unit volume decrease.

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Revenues for the nine months ended December 31, 2002 increased by $34 million to $209 million, an increase of 19% over the $175 million revenue for the comparable period in the prior fiscal year. The increase in revenues is primarily attributable to a 33% increase in the services provided by the Company’s provider programs, including provider bill review and PPO, IME’s and MRI’s. Provider programs revenue grew to $114 million from $85 million in the prior year, an increase of $29 million. This increase is primarily attributable to the increase in the number of provider bills review, the volume of IME services and the acquisition of Ancicare noted above.

Cost of Revenues. The Company’s cost of revenues consists primarily of salaries, salary related taxes and fringe benefits, rent, telephone, and costs related to the Company’s computer operations in the field. Cost of revenues increased from 81.8% of revenues for the three months ended December 31, 2001 to 82.2% of revenue for the three months ended December 31, 2002. The increase in the cost of revenue percentage compared to the same period for the prior year is primarily due to the roll-out of the Company’s CorcareRX service during the three months ended December 31, 2002 which has a higher cost of revenue percentage than most of the Company’s other services.

Cost of revenues decreased from 82.0% of revenues for the nine months ended December 31, 2001 to 81.5% of revenue for the nine months ended December 31, 2002. This decline in the cost of revenue percentage and corresponding increase in the gross profit percentage is primarily due to the higher growth rates in the provider program services compared to the growth in patient management services. The bill review and PPO services within provider programs generate a higher gross profit rate than patient management services. Cost of revenues for the three months ended December 31, 2002 increased to $60 million from $48 million in the prior year, an increase of $12 million. Cost of revenues for the nine months ended December 31, 2002 increased to $170 million from $144 million in the prior year, an increase of $26 million. The increase in cost of sales is primarily due to the increase in revenues.

General and Administrative. General and administrative expenses as a percentage of revenues increased from 7.9% for the three months ended December 31, 2001, to 8.6% for the three months ending December 31, 2002. The growth in general and administrative expense was primarily due to increased MIS staff to support the Company’s implementation of Care^MC and further electronic data interface capabilities as required by customer needs. The general and administrative expenses as a percentage of revenues increased from 7.9% for the nine months ended December 31, 2001, to 9.0% for the nine months ending December 31, 2002. The increase in the general and administrative expense for the nine-month period ended December 2002 is primarily as a result of the write off of certain capitalized software which has become obsolete. The managed care industry is currently experiencing a rapid evolution in the processing of medical reimbursement. The implementation of new methods of data capture and processing, have substantially changed process requirements. Upon review of the capitalized software, management adjusted the valuation of prior generation software assets, whose functionality has been replaced by newly developed software.

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LIQUIDITY AND CAPITAL RESOURCES

The Company has funded its operations and capital expenditures primarily from cash flow from operations. During the nine months ended December 31, 2002, net working capital decreased by $1.1 million, from $35.5 million at March 31, 2002 to $34.4 million at December 31, 2002. This decline was primarily due to the Ancicare acquisition during the quarter ended June 30, 2002. During the nine months ended December 31, 2002, net income was $12.3 million and the Company spent $10.9 million in repurchases of its common stock.

During the quarter ended December 31, 2002, the Company repurchased 100,000 shares of its common stock for $3.3 million. Since the repurchase program was enacted in the fall of 1996, the Company has repurchased 5.1 million shares for $80 million. These repurchases were paid from cash generated by the operations of the Company.

As of December 31, 2002, the Company had $8.0 million in cash, primarily in short-term highly-liquid investments with maturities of 90 days or less. The Company has historically required substantial capital to fund the growth of its operations, particularly working capital to fund the growth in accounts receivable and fixed assets. The Company believes, however, that the cash balance at December 31, 2002 along with anticipated internally generated funds and capacity to borrow will be sufficient to meet the Company’s expected cash requirements for at least the next twelve months. As of December 31, 2002, the Company had no interest bearing debt.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in the Company’s Annual Report on Form 10-K for the year ended March 31, 2002, and Quarterly Report on Form 10-Q for the quarter ended December 31, 2002, such as statements concerning the development of new services, possible legislative changes, and other statements contained herein regarding matters that are not historical facts, are forward-looking statements (as such term is defined in the Securities Act of 1933, as amended). Because such statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.

Past financial performance is not necessarily a reliable indicator of future performance, and investors should not use historical performance to anticipate results or future period trends. Factors that could cause actual results to differ materially include, but are not limited to, those discussed below. In addition, reference is made to the Company’s most recent Annual Report on Form 10-K for the fiscal year ended March 31, 2002.

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Potential Adverse Impact of Government Regulation. Many states, including a number of those in which the Company transacts business, have licensing and other regulatory requirements applicable to the Company’s business. Approximately half of the states have enacted laws that require licensing of businesses which provide medical review services. Some of these laws apply to medical review of care covered by workers’ compensation. These laws typically establish minimum standards for qualifications of personnel, confidentiality, internal quality control, and dispute resolution procedures. These regulatory programs may result in increased costs of operation for the Company, which may have an adverse impact upon the Company’s networks having contracts with the Company or to provider networks which the Company may organize.

To the extent the Company is governed by these regulations, it may be subject to additional licensing requirements, financial oversight and procedural standards for beneficiaries and providers. In addition, new laws regulating the operation of managed care provider networks have been adopted by a number of states.

Regulation in the health care and workers’ compensation fields is constantly evolving. The Company is unable to predict what additional government regulations, if any, affecting its business may be promulgated in the future. The Company’s business may be adversely affected by failure to comply with existing laws and regulations, failure to obtain necessary licenses and government approvals or failure to adapt to new or modified regulatory requirements. Proposals for health care legislative reforms are regularly considered at the federal and state levels. To the extent that such proposals affect workers’ compensation, such proposals may adversely affect the Company’s business and results of operations. In addition, changes in workers’ compensation laws or regulations may impact demand for the Company’s services, require the Company to develop new or modified services to meet the demands of the marketplace or modify the fees that the Company may charge for its services. One of the proposals which has been considered is 24-hour health coverage, in which the coverage of traditional employer-sponsored health plans is combined with workers’ compensation coverage to provide a single insurance plan for work-related and non-work-related health problems. Incorporating workers’ compensation coverage into conventional health plans may adversely affect the market for the Company’s services.

Possible Litigation and Legal Liability. The Company, through its utilization management services, makes recommendations concerning the appropriateness of providers’ medical treatment plans of patients throughout the country, and it could share in potential liabilities for adverse medical consequences. The Company does not grant or deny claims for payment of benefits and the Company does not believe that it engages in the practice of medicine or the delivery of medical services.

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There can be no assurance, however, that the Company will not be subject to claims or litigation related to the grant or denial of claims for payment of benefits or allegations that the Company engages in the practice of medicine or the delivery of medical services. In addition, there can be no assurance that the Company will not be subject to other litigation that may adversely affect the Company’s business or results of operations. The Company maintains professional liability insurance and such other coverages as the Company believes are reasonable in light of the Company’s experience to date. There can be no assurance, however, that such insurance will be sufficient or available in the future at reasonable cost to protect the Company from liability.

Competition. The Company faces competition from large insurers, health maintenance organizations (“HMOs”), preferred provider organizations (“PPOs”), third party administrators and other managed health care companies. The Company believes that, as managed care techniques continue to gain acceptance in the workers’ compensation marketplace, CorVel’s competitors will increasingly consist of nationally focused workers’ compensation managed care service companies, insurance companies, HMOs and other significant providers of managed care products.

Legislative reforms in some states permit employers to designate health plans such as HMOs and PPOs to cover workers’ compensation claimants. Because many health plans have the ability to manage medical costs for workers’ compensation claimants, such legislation may intensify competition in the market served by the Company. Many of the Company’s current and potential competitors are significantly larger and have greater financial and marketing resources than those of the Company, and there can be no assurance that the Company will continue to maintain its existing performance or be successful with any new products or in any new geographical markets it may enter.

Changes in Market Dynamics. Legislative reforms in some states permit employers to designate health plans such as HMOs and PPOs to cover workers’ compensation claimants. Because many health plans have the capacity to manage health care for workers’ compensation claimants, such legislation may intensify competition in the market served by the Company. Within the past few years, several states have experienced decreases in the number of workers’ compensation claims and the average cost per claim which have been reflected in workers’ compensation insurance premium rate reductions in those states. The Company believes that declines in workers’ compensation costs in these states are due principally to intensified efforts by payors to manage and control claim costs, to improved risk management by employers and to legislative reforms. If declines in workers’ compensation costs occur in many states and persist over the long-term, they may have an adverse impact on the Company’s business and results of operations.

Dependence Upon Key Personnel. The Company is dependent to a substantial extent upon the continuing efforts and abilities of certain key management personnel. In addition, the Company faces competition for experienced employees with professional expertise in the workers’ compensation managed care area. The loss of, or the inability to attract, qualified employees could have a material adverse effect on the Company’s business and results of operations.

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Risks Related to Growth Strategy. The Company’s strategy is to continue its internal growth and, as strategic opportunities arise in the workers’ compensation managed care industry, to consider acquisitions of, or relationships with, other companies in related lines of business. As a result, the Company is subject to certain growth-related risks, including the risk that it will be unable to retain personnel or acquire other resources necessary to service such growth adequately. Expenses arising from the Company’s efforts to increase its market penetration may have a negative impact on operating results. In addition, there can be no assurance that any suitable opportunities for strategic acquisitions or relationships will arise or, if they do arise, that the transactions contemplated thereby could be completed. If such a transaction does occur, there can no assurance that the Company will be able to integrate effectively any acquired business into the Company. In addition, any such transaction would be subject to various risks associated with the acquisition of businesses, including the financial impact of expenses associated with the integration of businesses. There can be no assurance that any future acquisition or other strategic relationship will not have an adverse impact on the Company’s business or results of operations.

If suitable opportunities arise, the Company anticipates that it would finance such transactions, as well as its internal growth, through working capital or, in certain instances, through debt or equity financing. There can be no assurance, however, that such debt or equity financing would be available to the Company on acceptable terms when, and if, suitable strategic opportunities arise.

During the past fiscal year, the Company has made efforts to increase its presence and revenue in the group health market with moderate success. Managed care in this market is more mature than managed care in workers’ compensation and has numerous large competitors, primarily health maintenance organizations. The Company has limited experience in the group health market. There is no assurance that the Company will be successful in this market. The Company expects that a considerable amount of its future growth will depend on its ability to process and manage claims data more efficiently and to provide more meaningful healthcare information to customers and payors of healthcare. There is no assurance that the Company will be able to develop, license or otherwise acquire software to address these market demands as well or as timely as its competitors.

Possible Volatility of Stock Price. The market price of the Company’s Common Stock may be highly volatile. Factors such as variations in the Company’s revenues, earnings and cash flow, general market trends in the workers’ compensation managed care market, and announcements of innovations by the Company or its competitors could cause the market price of the Common Stock to fluctuate substantially. In addition, the stock market has in the past experienced price and volume fluctuations that have particularly affected companies in the health care and managed care markets resulting in changes in the market price of the stock of many companies which may not have been directly related to the operating performance of those companies.

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Item 3. Quantitive and Qualitative Disclosures About Market Risk – The Company does not hold any market risk sensitive instruments for trading purposes.

Item 4. Controls and Procedures — Based on their evaluation as of a date within 90 days of the filing date of this Report, CorVel’s principal executive officer and principal financial officer have concluded that CorVel’s disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934) are effective to ensure that information required to be disclosed by CorVel in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

There have been no significant changes in our internal controls or in other factors that could significantly affect our internal controls subsequent to the date that our principal executive officer and principal financial officer carried out their evaluation.

PART II — OTHER INFORMATION

Item 1. – Legal Proceedings – From time to time, the Company may be involved in litigation relating to claims arising out of the ordinary course of business. The Company believes that resolution of these matters will not result in any payment that, in the aggregate, would be material to the financial position or financial operations of the Company.

Item 2. – Changes in Securities and Use of Proceeds — None.

Item 3. – Defaults Upon Senior Securities — None.

Item 4. – Submission of Matters to a Vote of Security Holders — None.

Item 5. – Other Information — None.

Item 6. – Exhibits and Reports on Form 8-K – None.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

February 14, 2003

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CERTIFICATION OF THE
CHIEF EXECUTIVE OFFICER
UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, V. Gordon Clemons, Chief Executive Officer of CorVel Corporation, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of CorVel Corporation (the “Registrant”);

2.     Based on our knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;

3.     Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Quarterly Report;

4.     The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

	a) designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;
	b) evaluated the effectiveness of the Registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this Quarterly Report (the “Evaluation Date”); and
	c) presented in this Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.     The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrant’s auditors and the audit committee of Registrant’s Board of Directors (or persons performing the equivalent function):

	a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant’s ability to record, process, summarize and report financial data and have identified for the Registrant’s auditors any material weaknesses in internal controls; and
	b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal controls; and

6.     The Registrant’s other certifying officers and I have indicated in this Quarterly Report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of my most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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CERTIFICATION OF THE
CHIEF EXECUTIVE OFFICER
UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CorVel Corporation (the “Registrant”) on Form 10-Q for the quarterly period ended December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), I, V. Gordon Clemons, Chief Executive Officer of the Registrant, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

     (1)  the Quarterly Report fully complies with the requirements of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and

     (2)  the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

CERTIFICATION OF THE
CHIEF FINANCIAL OFFICER
UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Richard Schweppe, Chief Financial Officer of CorVel Corporation, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of CorVel Corporation (the “Registrant”);

2.     Based on our knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report;

3.     Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Quarterly Report;

4.     The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

	a) designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared;
	b) evaluated the effectiveness of the Registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this Quarterly Report (the “Evaluation Date”); and
	c) presented in this Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

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5.     The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrant’s auditors and the audit committee of Registrant’s Board of Directors (or persons performing the equivalent function):

	a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant’s ability to record, process, summarize and report financial data and have identified for the Registrant’s auditors any material weaknesses in internal controls; and
	b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal controls; and

6.     The Registrant’s other certifying officers and I have indicated in this Quarterly Report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

CERTIFICATION OF THE
CHIEF FINANCIAL OFFICER
UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CorVel Corporation (the “Registrant”) on Form 10-Q for the quarterly period ended September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), I, Richard Schweppe, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

     (1)  the Quarterly Report fully complies with the requirements of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and

     (2)  the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

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