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HomeMy WebLinkAboutAgenda Report - September 16, 2015 C-07AGENDAITEM Cm7 CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Adopt Resolution Authorizing the City Manager to Execute Second Amendment to the Workers' Compensation Self -Insurance Service Agreement with York Risk Services Group, Inc. ($120,870 Year One, $123,290 Year Two, and $125,750 Year Three) MEETING DATE: PREPARED BY: September 16, 2015 Risk Manager RECOMMENDED ACTION: Adopt resolution authorizing the City Manager to execute Second Amendment to the Workers' Compensation Self -Insurance Service Agreement with York Risk Services Group, Inc. in the amount of $120,870 Year One, $123,290 Year Two, and $125,750 Year Three BACKGROUND INFORMATION: The City of Lodi has maintained the current Agreement for Workers Compensation Claims Adjusting and Administration Services (as amended December 1, 2008) on a month-to-month basis with York Risk Services Group since December 1, 2011. The attached second amendment to the Agreement calls for a two percent increase on an annual basis over the next three years, with increases in bill review fees of 25 cents per bill in year one and 10 cents per bill in each of the subsequent two years. All other fees will remain capped as shown in the attached agreement for the duration of the agreement. Generally rates for this contract have not changed since 2011. A primary focus for a Third Party Administrator is to provide stabilization of reserves, ensuring predictability of costs and the elimination of excessive loss development factors. In addition, since implementation of the first amendment to the agreement in December 2008, York Risk Services Group, Inc. has processed 8,668 medical bills totaling over $7.40 million. Diligent review and negotiation of those bills resulted in a savings of over $5.39 million. FISCAL IMPACT: Claims administration services - $369,910 over three years. Additional fees such as bill review, utilization review, and investigations are billed based on factors detailed in the amendment. FUNDING AVAILABLE: Funds are available in the Workers Compensation 66525100.72450 account to cover expenditures for York Risk Services Group services Jordan Ayers, Deputy City Manage APPROVED: hen Scbwat5auer, City Manager SECOND AMENDMENT TO THE WORKERS' COMPENSATION SELF-INSURANCE SERVICE AGREEMENT (Dated Effective as of December 1, 2005) This Second Amendment to that certain Workers' Compensation Self -Insurance Service Agreement dated as of December 1, 2005 and all amendments, letters of agreement and exhibits collectively (the "Agreement") by and between CITY OF LODI ("Client") and YORK RISK SERVICES GROUP, INC. ("YORK"); WITNESSETH Whereas: The parties wish to extend the term of their Agreement as reflected below; and The parties wish to revise the Consideration term of the Agreement as reflected below; and The parties wish to adapt the insurance requirements as listed on Exhibit A, hereto NOW THEREFORE The parties hereby agree as follows: 1. The "Term of Agreement " and "Compensation" shall reflect the following: Year 1 $120,870 Year 2 $123,290 Year 3 $125,750 PRICING NOTES The annual flat fee proposed contemplates handling all claims activity in a 12 -month period (claims already open at the beginning of the 12 -month term and any new claims reported during the 12 -month term). The pricing quoted includes all indemnity, future medical and medical only claims as listed. The flat annual fee includes all services detailed in this proposal, including, but not limited to, the ancillary services listed below. Ancillary Services included in flat annual fee Excess Reporting Account Management Data Management Trust Account (Excluding Check and Bank Charges) Management Attendance at Claim Review Meetings Monthly Computer Loss Information Special Quarterly and Annual Reports Claim Reporting (fax, telephonic) On -Line 5020 Reporting Preparation of 1099's Annual Stewardship Report Standard Reporting Requirements Page 1 of 6 Managed Care Fees: DI&TAIL FEE No charge Fee Per Bill $9.75 (15/16) $9.85 16/17 $9.95 17/18 PPO and Other Negotiated Savings 20% Fee Schedule Savings No change to prior Agreement Duplicates No Charge effilling No Charge EDI Re orting No Charize Telephonic Nurse Case Management $98.00 per hour Field Case Mana ement $98.00 er hour, plus E- 1010rAllm"UH IRS Mileage Rate Utilization Review Procedure Rate — Level 1 $68.00 per event Utilization Review Procedure Rate — Level 2 $149.00 per event Utilization Review Procedure Rate — Level 3 $149.00 per event Medical Director Review/Peer Review $225.00 per hour Specialty Review/Appeals $1,500 for Application $48.00 per Claim Access (For the Life of the Contract) $400.00 i2er hour Optional Medicare Reporting & Nledic,,tre Set Asides (NISAs) Medicare Reporting No charge Standard MSA with or without submission to CMS for approval $2,750.00 flat rate Final Settlement Document Submission $75.00 flat rate SSA and SSDI Checks $125.00 p2r hour Medicare Check $50.00 flat rate Conditional Payment Investigation $150.00 flat rate Conditional Payment Resolution $125.00 per hour Optional Investivation Services York charges $81.00 per hour plus expenses at the rates outlined below. Allocated Expenses for Investigation Services Expenses Miles Photographs Photocopying Telephone Charges Secretarial Services File Set Up Rates Prevailing IRS rate $2.50 per color print $ .25 per page Included $6.00 per page $25.00 per file Page 2 of 6 Audio Cassettes Video Cassettes Other Expenses Data Conversion $3.00 per cassette $15.00 per cassette At cost Included ■ Fees of outside counsel for claims in suit, coverage opinions and litigation and for representation at hearings or pretrial conferences. ■ Fees of court reporters and all court costs, court fees and court expenses ■ Fees for service of process + Costs of undercover operatives and detectives ■ Costs for employing experts for the preparation of maps, professional photographs, accounting, chemical or physical analysis, diagrams • Costs of legal transcripts of testimony taken at coroner's inquests, criminal or civil proceedings • Costs for independent medical examination or evaluation for rehabilitation • Costs for copies of any public records or medical records + Costs of depositions and court reported or recorded statements + Costs and expenses of subrogation ■ Costs of engineers, handwriting experts or any other type of expert used • Witness fees and travel expenses • Costs of photographers and photocopy services • Costs of appraisal fees and expenses + Costs of outside investigation, signed or recorded statements • Managed care services, excluding NCM/TCM which are medical expenses or the flat annual 2. York shall take out and maintain during the life of this Amendment, insurance coverage as set forth in Exhibit A attached hereto and incorporated by this reference. 3. Except as noted above, the Agreement shall remain unchanged. In witness whereof, the parties have executed this amendment as of the date below and with an agreement effective date of July 1, 2015. CITY OF LODI By: Janice Magdich, City Attorney r1K Date: CITY OF LODI Jennifer Ferraiolo City Clerk Date: YORK RISK SERVICES GROUP, INC. By: [.,///x -- Jody A. Moses Senior Vice President Date: Au. ys 1- a ,x015 -9 CITY OF LODI IIn Date: Page 3 of 6 Steve Schwabauer City Manager EXHIBIT A Page 4 of 6 ERE EXHIBIT A Insurance 11cquirentents for C=ontractor The Contractor shall take out and maintain during the life of this Agreement, insurance coverage as listed below. These insurance policies shall protect Contractor and any subcontractor performing work covered by this Agreement from claims for damages for personal injury, including accidental death, as well as from claims for property damages, which may arise from Contractor's operations under this Agreement, whether such operations be by Contractor, or by any subcontractor, or by anyone directly or indirectly employed by either of them, and the amount of such insurance shall be as follows: 1. COMPREHENSIVE GENERAL LIABILITY $2,000,000 Each Occurrence $4,000,000 General Aggregate 2. COMPREHENSIVE AUTOMOBILE LIABILITY $1,000,000 Combined Single Limit Such insurance shall cover liability arising out of any vehicle (including, owned, hired and non -hired vehicles) operated in performing any and all services pursuant to this Agreement. Coverage shall be written on ISO form CA 00 01 12 90, or a later version of this form, or an equivalent form providing equivalent liability coverage. 3. PROFESSIONAL LIABILITY / ERRORS AND OMISSIONS $2,000,000 Each Occurrence All limits are to be designated strictly for the City of Lodi, its elected and appointed boards, commissions, officers, agents, employees, and volunteers. All deductibles or self-insured retentions (SIR) must be disclosed to City's Risk Manager for approval and shall not reduce the limits of liability set forth hereinabove. Insurance policies containing any deductible or SIR provision shall provide, or be endorsed to provide, that the deductible or SIR may be satisfied by either the Named Insured(s) or the City of Lodi. It is required that any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirements and/or limits set forth above, shall be available to City as an additional insured. Furthermore, the requirements for coverage and limits shall be (i) the minimum coverage and limits specified in these insurance requirements; or (ii) the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the Contractor; whichever is greater. Contractor agrees and stipulates that any insurance coverage provided to the City of Lodi shall provide for a claims period following termination of coverage which is at least consistent with the claims period or statutes of limitations found in the California Tort Claims Act (California Government Code Section 810 et seq.). A copy of the certificate(s) of insurance with the following endorsements shall be furnished to the City: (a) Additional Named Insured Endorsement Pursuant to a separate endorsement (ISO form CG 2010 (11/85) or equivalent form) such insurance as is afforded by this policy shall also apply to the City of Lodi, its elected and appointed boards, commissions, officers, agents, employees, and volunteers as additional named insureds. (b) Primary and Non -Contributory Insurance Endorsement Additional insurance coverage under the Contractor's policy shall be "primary and non-contributory" and will not seek contribution from City's insurance or self-insurance and shall be at least as broad as ISO form CG 20 0104 13. NOTE: (1) The street address of the CITY OF LODI must be shown along with (a) and (b) above: 221 West Pine Street, Lodi, California, 95240; (2) The insurance certificate must state, on its face or as an endorsement, a description of the RMLect that it is insuring. (c) Waiver of Subro ani tion Include a waiver of subrogation against the City of Lodi, its elected and appointed boards, commissions, officers, agents, employees, and volunteers. (d) Limits of CoveraW The limits of insurance coverage required may be satisfied by a combination of primary and umbrella or excess insurance. Any umbrella or excess insurance of Contractor shall contain, or be endorsed to contain, a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of the City before the City's own insurance or self-insurance shall be called upon to protect the City as a named insured. Insurance Itcguiremeirts tar C0lit ractor (continued) Page 5 of 6 (e) Completed Operations Endorsement For three years after completion of project, a certificate of insurance with a Completed Operations Endorsement, CG 20 37 07 04, will be provided to the City of Lodi. (f) evemwli LN 9 r F rcti QJ gu se The term "insured" is used severally and not collectively, but the inclusion herein of more than one insured shall not operate to increase the limit of the company's liability. (g) Notice of Cancellatien_or Chanwe in Cove= Endorsement This policy may not be canceled nor the coverage reduced by the company without 30 days' prior written notice of such cancellation or reduction in coverage to the Risk Manager, City of Lodi, 221 West Pine St., Lodi, CA 95240. (h) Continuity of Coverary All policies shall be in effect on or before the first day of the Term of this Agreement. At least thirty (30) days prior to the expiration of each insurance policy, Contractor shall furnish a certificate(s) showing that a new or extended policy has been obtained which meets the minimum requirements of this Agreement. Contractor shall provide proof of continuing insurance on at least an annual basis during the Term. If Contractor's insurance lapses or is discontinued for any reason, Contractor shall immediately notify the City and immediately obtain replacement insurance. (i) Failure to Comgly If Contractor fails or refuses to obtain and maintain the required insurance, or fails to provide proof of coverage, the City may obtain the insurance. Contractor shall reimburse the City for premiums paid, with interest on the premium paid by the City at the maximum allowable legal rate then in effect in California. The City shall notify Contractor of such payment of premiums within thirty (30) days of payment stating the amount paid, the name(s) of the insurer(s), and rate of interest. Contractor shall pay such reimbursement and interest on the first (0) day of the month following the City's notice. Notwithstanding and other provision of this Agreement, if Contractor fails or refuses to obtain or maintain insurance as required by this agreement, or fails to provide proof of insurance, the City may terminate this Agreement upon such breach. Upon such termination, Contractor shall immediately cease use of the Site or facilities and commence and diligently pursue the removal of any and all of its personal property from the site or facilities. 0) Qualified Insure s) All insurance required by the terms of this Agreement must be provided by insurers licensed to do business in the State of California which are rated at least "A-, VI" by the AM Best Ratings Guide, and which are acceptable to the City. Non -admitted surplus lines carriers may be accepted provided they are included on the most recent list of California eligible surplus lines insurers (LESLI list) and otherwise meet City requirements. Workers_ C'ompe_nsation_ Insurnnee The Contractor shall take out and maintain during the life of this Agreement, Worker's Compensation Insurance for all of Contractor's employees employed at the site of the project and, if any work is sublet, Contractor shall require the subcontractor similarly to provide Worker's Compensation Insurance for all of the latter's employees unless such employees are covered by the protection afforded by the Contractor. In case any class of employees engaged in hazardous work under this Agreement at the site of the project is not protected under the Worker's Compensation Statute, the Contractor shall provide and shall cause each subcontractor to provide insurance for the protection of said employees. A waiver of subrogation is required for workers compensation insurance. This policy may not be canceled nor the coverage reduced without 30 days' prior written notice of such cancellation or reduction in coverage to the Risk Manager, City of Lodi, 221 West Pine St., Lodi, CA 95240. NOTE: The City reserves the right to obtain a full certified copy of any insurance policy or endorsements required. Failure to exercise this right shall not constitute a waiver of the City's right to exercise after the effective date. Page 6 of 6 RESOLUTION NO. 2015-169 A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE CITY MANAGER TO EXECUTE THE SECOND AMENDMENT TO THE WORKERS' COMPENSATION SELF-INSURANCE SERVICE AGREEMENT WITH YORK RISK SERVICES GROUP, INC. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby authorize and direct the City Manager to execute the Second Amendment to the Agreement for Workers' Compensation claims adjusting and administration service with York Risk Services Group, Inc., beginning July 1, 2015, in an amount not to exceed as follows: $120,870 (year one) $123,290 (year two) $125,750 (year three) Dated: September 16, 2015 I hereby certify that Resolution No. 2015-169 was passed and adopted by the City Council of the City of Lodi in a regular meeting held September 16, 2015, by the following votes: AYES: COUNCIL MEMBERS — Kuehne, Nakanishi, and Mayor Johnson NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — Chandler and Mounce ABSTAIN: COUNCIL MEMBERS — None �FEERRAIOL0 City Clerk 2015-169