HomeMy WebLinkAboutAgenda Report - July 6, 2005 E-06AGENDA ITEM E40
CITY OF Lobi
MV COUNCIL COMMUNICATION
TM
AGENDA TITLE: Authorize City Manager to solicit Requests for Proposals (RFP's) for
Workers' Compensation Third Party Administration Services (HR)
MEETING DATE: July 6, 2005
PREPARED BY: Kirk J. Evans, Risk Manager
RECOMWN#3ED ACTION: That City Council provide authorization for the City Manager to solicit
Requests for Proposals (RFP's) for Workers' Compensation Third Party
Administration Services (Administrative Services).
BACKGROUND INFORMATION: The workers compensation system in California is extremely
complex. The intricacies of managing claims increase with the
introduction of each new item of workers compensation legislation.
The City's third party administrator is responsible for preparation of
numerous time sensitive letterslnotifications regarding workers compensation benefits for each injured
employee, preparation of reports for the State and other entities, review of medical information and
arranging for disability ratings regarding injured employees, as well as processing all claims in
accordance with rules and regulations established by the Department of Industrial Relations.
ICS currently serves as the City of Lodi's third party administrator. Their agreement expires September
30, 2005. Staff has prepared an RFP (attached), which it is now bringing to Council for approval prior to
the expiration of this agreement.
FISCAL IMPACT: The current annual contract amount is $82,154. Sufficient funds are
available in the Workers Compensation account 310202.7323 to cover the
projected contract award amount in FY 2005-06.
Attachments
cc: City Attorney
APPROVED:
Blair King, Manager
July 7th, 2005
Workers Compensation Claims Administrator
Address
REQUEST FOR PROPOSAL FOR
WORKERS COMPENSATION CLAIMS ADMINISTRATION SERVICES
Dear
The City of Lodi (City), is seeking proposals for the administration of its self-insured
workers compensation claims program. We wish to find the administrator with the most
talented professionals and strongest management capabilities, to ensure the City receives
the best workers compensation claims administration services.
We are interested in learning more about your firm and its current capabilities. We
would appreciate receiving a proposal from you describing:
• Your qualifications to handle the City's self-insured workers
compensation claims.
• Your staffing capabilities and approach to training staff to serve our
account.
• Your clients whom we can approach to discuss the quality of your
workers compensation claims administration services.
As further detailed in the accompanying Request for Proposal, your response is due by
4:00 p.m., July 29, 2005.
Upon reviewing the proposals, we may contact you to obtain answers to any questions we
have. We will then select workers compensation claim administrators for interviews.
Following the interviews, we will select the claims administrator who can best service
our self-insured workers compensation claims.
Please contact the undersigned at (209) 333-6704 or kevans@lodi.gov with any
questions. Thank you for your interest in the City of Lodi. We look forward to receiving
your proposal.
Sincerely,
Kirk J. Evans
Risk Manager
City of Lodi
CITY OF LODI
REQUEST FOR PROPOSAL FOR
WORKERS COMPENSATION CLAIMS
ADMINISTRATION SERVICES
July 7th, 2005
TABLE OF CONTENTS
I. Introduction.............................................................................................................. l
A. Background..................................................................................................1
B. Timetable....................................................................................................1
C. Evaluation Criteria.......................................................................................2
D. Claims History.............................................................................................2
II. Services Required...................................................................................................3
A. Account Management..................................................................................3
B. Claims Administration................................................................................4
C. Claims Management Information System...................................................4
D. Optional Services.........................................................................................5
III. Submission of Proposal..........................................................................................5
A. Your Firm — Experience and Background..................................................5
B. Claims Administration Program Approach.................................................6
C. Staffing Approach........................................................................................6
D. Training Approach.......................................................................................6
E. Transition Implementation Approach..........................................................6
F. Fees..............................................................................................................6
G. Insurance Requirements...............................................................................7
H. Contract........................................................................................................7
Appendix
A Claims History
ii
I. INTRODUCTION
A. BACKGROUND
The City of Lodi (City) invites your firm to submit a proposal to provide workers
compensation claims administration services.
The City, formed in 1906, provides workers compensation services to 427 regular
employees and 302 part-time employees. It is governed by a five member City Council
and administered by a City Manager. Innovative Claims Solutions of Rancho Cordova
currently provides claims administration services.
The City provides workers compensation coverage to limits of $150 million via the Local
Agency Workers Compensation Excess Joint Powers Authority. Our self-insured
retention is $250,000 per incident. All claims, from inception, are administered by the
third -party administrator (TPA) contracted by the City.
All claims are reported to the City monthly in a loss data report. The City's -selected TPA
inputs this data into the Claim Management Information System (CMIS), tracks and
provides claims oversight.
More detailed descriptions of the City's insurance programs are available on the Local
Agency Worker's Compensation Excess- Joint Powers Authority (LAWCX) website,
www.lawcx.org.
B. TIMETABLE
The important dates in this selection process are shown in Table 1.
Table 1
Selection Schedule
Activity
Date
Issue RFP
7/7/05
Receive written questions from proposers until
7/15/05
Provide proposers response to questions by
7/22/05
Receive written proposals
7/29/05
1
Activity
Date
Notify TPAs to be interviewed by
8/5/05
Interview selected TPAs
8/12/05
Select TPA
8/26/05
Contract negotiations completed
9/9/05
Receive insurance certificates
9/16/05
New workers compensation claims administration
contract begins
10/03/05
C. EVALUATION CRITERIA
A panel will evaluate and rank proposals based on the requirements outlined in this RFP.
Proposers are encouraged to respond to the RFP requirements to achieve the highest
scores. Proposals will be rated on information received. Lengthy proposals containing
irrelevant boilerplate and generic brochures are not desired. Proposers are
encouraged to submit concise proposals, tailored to the City's needs.
While this RFP is designed to provide a framework for response, it is not intended to
limit the proposers' freedom to submit service proposals that, in their judgment, are
beneficial and cost-effective for the City.
D. CLAIMS HISTORY
See Appendix A for a summary of claim activity for the City over the past five years.
2
II. SERVICES REQUIRED
The City seeks a workers compensation claims administrator who can provide:
A. ACCOUNT MANAGEMENT
Required account management services include:
1. Check production and trust account management.
2. Meeting with the City no less than quarterly to discuss claims
management trends with Department Heads.
3. Submitting claims management reports to the City with regular monthly
and periodic reports in the format and number requested. Such reports
include but may not be limited to:
a. Loss experience.
b. Claims closure productivity.
C. Average cost of closed claims.
d. Frequency report by member agency.
e. Monthly check register.
f. Annual tax statements including Federal Form 1099 and State
Form 599, as appropriate.
g. Review of large, litigated and aging claims.
4. Maintaining all claim files, reports, records and other documents or
materials pertaining to the City's workers compensation claims as the
property of the City, available for the City's use and review at any time.
Such records shall be delivered to the City upon termination of the
agreement.
5. Preparation of Public Self -Insurer's Annual Report for the Department of
Industrial Relations.
6. Provide consultation and advice to the City regarding all open claims and
other issues.
3
B. CLAIMS ADMINISTRATION
Claims administration requirements include, but are not limited to:
1. Timely initial contact with claimant or attorney.
2. Regular follow up with claimant.
3. Timely, complete and cost-effective investigations.
4. Timely and appropriate evaluation of workers compensation and damages.
5. Identification and collection of subrogation recoveries.
6. Cost-effective litigation strategies and budgets.
7. Timely and thorough communication with the City's Risk Manager of
disposition plans.
8. Timely and cost/benefit-conscious billings for third -party administration
expenses.
C. CLAIMS MANAGEMENT INFORMATION SYSTEM
Claims management information system requirements include:
1. System -accessible storage fields for:
a. Public Risk Data Project cause and nature of loss coding.
b. Accident location, agency and department coding.
C. Payment categories for tracking expenditures.
d. Reserve categories for tracking losses.
e. Claims note fields for tracking claims activity - planned and
performed.
2. Programming capability to provide monthly and periodic reports for
review and assessment of claim costs to the City and members.
The City has a strong preference that its TPA offers an on-line capability for viewing
claims. It is requested that responders include sample loss run(s) or CMIS reports which
will allow the City to evaluate the type and quality of report the responder's CMIS is able
to produce.
0
D. OPTIONAL SERVICES
The City is also interested in learning of any additional services that you can offer and
feel are important. Please describe any such services and their associated cost.
III. SUBMISSION OF PROPOSAL
Proposals may be mailed or personally delivered, but must be received no later than
4:00 p.m. on Friday July 29, 2005. Three copies must be received by Mr. Evans:
Mr. Kirk J. Evans
Risk Manager
City of Lodi
221 West Pine Street
Lodi, California 95240
This chapter of the RFP requests answers to specific questions. Your response will be
used to evaluate your proposal. Please respond to questions in the order shown below.
A. YOUR FIRM -EXPERIENCE AND BACKGROUND
To learn more about your firm, please provide:
1. A description of your firm, including brief history, size, number and
location of offices and other pertinent information.
2. The names of personnel who will provide workers compensation claims
administration services:
a. Include a resume on each team member, showing background,
ongoing education and transit or public entity pool experience.
b. Describe firm experience with transit and other pools, cities and
large governmental entities or organizations.
C. Note office location of each account team member.
You should include information on account executives and other key
account team members.
L1
3. Three current client references, showing:
• Name of client.
• Name, title and telephone number of contact.
• Why this client is pertinent to this proposal.
• When your firm served the account.
• Approximate client annual budget.
4. A listing of clients similar to The City's that your firm is currently serving.
B. CLAIMS ADMINISTRATION PROGRAM APPROACH
Please describe your approach to delivering services required (see RFP Chapter II):
C. STAFFING APPROACH
Describe the steps in your approach to recruit and retain staff to serve the City.
D. TRAINING APPOACH
Describe steps in your approach to ensure training needs are identified and met to serve
the City.
E. TRANSITION IMPLEMENTATION APPROACH
Describe the steps in your approach to ensure the setup of workers compensation claims
administration services is promptly handled with a smooth transition for The City's
member transit agencies.
F. FEES
Describe in detail all claims administration fees to be charged, including:
• Flat annual fee for first year of contract.
• Proposal for second and third year of contract.
3
• Please describe any fees for takeover of existing claims including date of
conversion.
• Outline fees not included in claims administration fee, if any.
The fee structure may be quoted on an annual basis, a three-year basis, or both. Discuss
the additional cost, if any, should a new claims administrator be selected and open claims
be transferred to the new administrator for processing to their conclusion.
G. INSURANCE REQUIREMENTS
Please confirm your ability to provide a certificate of insurance evidencing workers
compensation, general workers compensation, professional workers compensation,
automobile workers compensation and fidelity coverage for your firm. Minimum
required limits are $1,000,000.
H. CONTRACT
Please provide a copy of your standard contract.
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APPENDIX A
Claims Data
Claims Summary by Year
Loss Dates: 01/01/1900-12/31/2005 Extract:Logical
Annual Periods End: 6/30 / Open and Closed / / Info Included /
Pending Included
As Of 05/31/2005
City of Lodi
CLAIMS
Type Open Closed Total Leg
Period Ending 6/30/1974
Medical 0
1
1 0
Total 0
1
1 0
Period Ending 6/30/1975
Medical 0
1
1 0
Total 0
1
1 0
Period Ending 6/30/1977
Indemnity 0
4
4 0
Medical 0
1
1 0
Total 0
5
5 0
Period Ending 6/30/1978
Indemnity 0
1
1 0
Medical 0
1
1 0
Total 0
2
2 0
Period Ending 6/30/1979
Indemnity 1
4
5 0
Medical 0
1
1 0
Total 1
5
6 0
Period Ending 6/30/1980
Indemnity 0
9
9 0
Medical 0
4
4 0
Total 0
13
13 0
Period Ending 6/30/1981
Indemnity 0
7
7 0
Medical 0
2
2 0
Total 0
9
9 0
Period Ending 6/30/1982
Indemnity 0
4
4 0
Medical 0
4
4 0
Total 0
8
8 0
Period Ending 6/30/1983
Indemnity 0
16
16 0
Medical 0
26
26 0
Total 0
42
42 0
Period Ending 6/30/1984
Indemnity 1
20
21 0
Medical 0
143
143 0
Total 1
163
164 0
Period Ending 6/30/1985
Indemnity 4
31
35 0
Medical 0
150
150 0
Total 4
181
185 0
Period Ending 6/30/1986
Indemnity 0
27
27 0
Medical 0
94
94 0
Total 0
121
121 0
Period Ending 6/30/1987
Indemnity 1
35
36 0
Medical 0
76
76 0
Total 1
111
112 0
Period Ending 6/30/1988
Indemnity 0
45
45 0
Medical 0
62
62 0
Total 0
107
107 0
Period Ending 6/30/1989
Indemnity 1
44
45 0
Medical 0
95
95 0
Total 1
139
140 0
Period Ending 6/30/1990
Indemnity 1
38
39 0
Medical 0
75
75 0
Total 1
113
114 0
Period Ending 6/30/1991
Indemnity 1
47
48 1
Medical 0
105
105 0
Total 1
152
153 1
Period Ending 6/30/1992
Indemnity 3
50
53 2
Medical 0
70
70 0
Total 3
120
123 2
Period Ending 6/30/1993
Indemnity 1
23
24 1
Medical 1
85
86 0
Total 2
108
110 1
Period Ending 6/30/1994
Indemnity 2
35
37 0
Medical 0
86
86 0
Total 2
121
123 0
Period Ending 6/30/1995
Indemnity 0
20
20 0
Medical 0
79
79 0
Total 0
99
99 0
Period Ending 6/30/1996
Indemnity 1
43
44 2
Medical 0
106
106 0
Total 1
149
150 2
Period Ending 6/30/1997
Indemnity 8
33
41 5
Medical 0
59
59 0
Total 8
92
100 5
Period Ending 6/30/1998
Indemnity 3
44
47 3
Medical 0
78
78 0
Total 3
122
125 3
Period Ending 6/30/1999
Indemnity 10
34
44 11
Medical 0
92
92 0
Total 10
126
136 11
Period Ending 6/30/2000
Indemnity 7
27
34 7
Medical 0
57
57 1
Total 7
84
91 8
Period Ending 6/30/2001
Indemnity 5
32
37 4
Medical 0
75
75 0
Total 5
107
112 4
Period Ending 6/30/2002
Indemnity 10
25
35 10
Medical 0
72
72 0
Total 10
97
107 10
Period Ending 6/30/2003
Indemnity 10
41
51 14
Medical 0
46
46 0
Total 10
87
97 14
Period Ending 6/30/2004
Indemnity 12
16
28 4
Medical 1
64
65 0
Total 13
80
93 4
Period Ending 6/30/2005
Indemnity 13
4
17 0
Medical 9
28
37 1
Total 22
32
54 1
Total for City of Lodi
Indemnity 95
761
856 64
Medical 11
1,838
1,849 2
Total 106
2,595
2,701 66