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HomeMy WebLinkAboutAgenda Report - June 20, 2018 C-16TM CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM C•mibi AGENDA TITLE: Adopt Resolution Authorizing the City Manager to Execute Third Amendment to the Workers' Compensation Self -Insurance Service Agreement with York Risk Services Group, Inc., of Roseville ($128,894) MEETING DATE: June 20, 2018 PREPARED BY: Risk Manager RECOMMENDED ACTION: BACKGROUND INFORMATION: Adopt resolution authorizing the City Manager to execute third amendment to the Workers' Compensation Self -Insurance Service Agreement with York Risk Services Group, Inc., of Roseville for $128,894. The City of Lodi has maintained the current Agreement for Workers Compensation Claims Adjusting and Administration Services York Risk Services Group since 2008. The current contract expires June 30, 2018. Staff is recommending a one year amendment to the contract to allow time to conduct a comprehensive request for proposal process to ensure the City is receiving the best service and value for the cost currently available in the marketplace. The attached third amendment to the Agreement calls for a two percent increase in administration costs, and allow for termination without cause on 60 -day notice. All other fees will remain capped as shown in the attached amendment for the duration of the Agreement. FISCAL IMPACT: Claims administration services - $128,894 over one year. 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 Andrew Keys Deputy City Manager/Internal Services Manager 4 Beverly Jen e VL. Risk Manager APPROVED: abauer, City Manager THIRD AMENDMENT TO THE WORKERS'COMPENSATION SELF-INSURANCE SERVICE AGREEMENT (Dated Effective as of December 1, 2005) This Third 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: Claims Services York will provide claims handling at the following rate(s): ANNUAL FEE LINE OF BUSINESS ANNUAL FEE Workers' Compensation $128,894 Definitions: Annual Fee: York's Annual Fee quotation is a guaranteed flat annual fee and applies to claims administration services provided during the 12 month contract term. Any additional administration beyond the initial 12 month contract term will be subject to an additional negotiated flat annual fee or other mutually agreed upon rate structure. If there is a significant increase in claims volume, York may propose additional charges. If client agrees to such additional charges, the fees will be adjusted accordingly. If client does not agree to such charges, York will have the right to terminate services on 60 days' notice. This agreement may be terminated by either party without cause upon (60) day written notice. Services of the Account Manager, along with quarterly claim reviews, are provided at no additional charge. THIRD AMENDMENT TO THE WORKERS'COMPENSATION SELF-INSURANCE SERVICE AGREEMENT (Dated Effective as of December 1, 2005) Managed Care Fees: DETAIL FEE CLAIMS $9.95 per Bill EINCAL BILL " EVIEW = OR#CRS bOMPENSATION Fee Per Bill PPO Network & Out of Network Savings CASE MANAGEMENT 20% of Savings $98.00 per Hour Telephonic Case Management Field Case Management $98.00 per Hour, Plus Mileage (IRS Reimbursement Rate & Expenses) Life Care Plan $150.00 per Hour DETAIL FEE ' UTILIZATION REVIEW / CEI v. • a_•-.... Nurse Review $68.00 per Review Physician Review $149.00 per Review Appeal Reviews $400.00 per Review ,73::1._Ef '";aii:A,IIi. Peer Review $225.00 per Hour Physician Intervention Review (Pharmacy Review w/P2P) ~ MEDICARE SECONDARY PAYER SERVICES (MSA) $225.00 per Hour Mandatory CMS MMSEA Reporting No charge Standard MSA $2,950.00 per Referral Rush MSA Additional $500 00 per Referral MSA CMS Submission $500.00 per Referral Medical Cost Projections $1,750.00 per Referral Conditional Payment Request $150.00 per Inquiry Conditional Payment Dispute Resolution $125.00 per Hour Medicare / Medicaid Investigation $50.00 per Inquiry Medical Cost Projection to MSA Conversion $1,200.00 per Referral York's medical management services include a complete suite of all ancillary medical services, using multiple networks that address our clients' needs — including, but not limited to, pharmacy benefit THIRD AMENDMENT TO THE WORKERS'COMPENSATION SELF-INSURANCE SERVICE AGREEMENT (Dated Effective as of December 1, 2005) management, diagnostics, durable medical equipment, transportation and translation, home health, physical therapy, and independent medical exams. These services are subject to the bill review rates as quoted above, plus the applicable percentage of network savings achieved below the fee schedule or usual & customary charges. General Fees, Services, Terms and Conditions r Outside Activity/Field Investigations will be billed at time and expense. Y Billing: York will issue an electronic invoice monthly, via e-mail. Payments shall be due and payable no later than thirty days from the invoice date. • Pricing has been developed based on provided loss data. In the event that the loss data is erroneous or otherwise incorrect both parties agree to discuss an equitable adjustment of service fees. Y The City of Lodi may request that the services York performs be rendered in a particular or different way or additional services be provided, and York will make all reasonable efforts to comply. If such request increases York's cost of providing the services, York shall be entitled to an equitable adjustment in its compensation. ➢ York's proposed fees will remain in effect for 90 days from the date of this proposal. • This proposal contemplates that York will be entering into a direct contract with City of Lodi. Should York be required to contract with any other party, different terms may apply. Allocated Loss Adjustment Expenses York will arrange for various services and other costs as agent for our client. These costs are referred to as Allocated Loss Adjustment Expenses (ALAE). A list of these expenses follows. Payment of ALAE is the responsibility of City of Lodi. York's fees do not cover ALAE, and York is under no obligation to pay ALAE with its own funds. • Fees of outside counsel for claims in suit, coverage opinions and litigation and for representation at hearings or pretrial conferences Fees of court reporters Y All court costs, court fees and court expenses ➢ Fees for service of process Costs of undercover operatives and detectives y Costs for employing experts for the preparation of maps, professional photographs, accounting, chemical or physical analysis, diagrams y Costs for employing experts for the advice, opinions or testimony concerning claims under investigation or in litigation or for which a declaratory judgment is sought • Costs for independent medical examination or evaluation for rehabilitation ➢ Costs of legal transcripts of testimony taken at coroner's inquests, criminal or civil proceeding Costs for copies of any public records or medical records r' 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 in the preparation of litigation or used on a one-time basis to resolve disputes • Witness fees and travel expenses THIRD AMENDMENT TO THE WORKERS'COMPENSATION SELF-INSURANCE SERVICE AGREEMENT (Dated Effective as of December 1, 2005) r Costs of photographers and photocopy services • Costs of appraisal fees and expenses (not included in flat fee or performed by others) Costs of indexing claimants • Services performed outside York's normal geographical regions ➢ Costs of outside investigation, signed or recorded statements • Out of the ordinary expenses incurred in connection with an individual claim or requiring meeting with Customer Y Any other extraordinary services performed by York at Customer's request • Investigation of possible fraud including SIU services and related expenses • Any other similar cost, fee or expense reasonably chargeable to the investigation, negotiation, settlement or defense of a claim or loss or to the protection or perfection of the subrogation rights of Customer. York may, but need not, elect to utilize its own staff or affiliated entities to perform any of these services. Associated fees and costs will be charged as ALAE. Optional Service - York Workers' Compensation Investigation Fees: ink AOEICOE Investigations Services $81.00 Per Hour Auto Expenses IRS Rate Secretarial $8.00 Per Page Transcribed Statements $6.00 Per Page Photocopies $0.25 Each Photographs $2.50 Each CD's $1.00 Each Other Expenses Actual Cost THIRD AMENDMENT TO THE WORKERS'COMPENSATION SELF-INSURANCE SERVICE AGREEMENT (Dated Effective as of December 1, 2005) IN WITNESS WHEREOF, CITY and CONTRACTOR have executed this Agreement as of the date first above written. ATTEST: CITY OF LODI, a municipal corporation JENNIFER M. FERRAIOLO STEPHEN SCHWABAUER City Clerk City Manager APPROVED AS TO FORM: York Risk Services, INC JANICE D. MAGDICH, City Attorney By: By: A/. Name: To dti V►tioss Title: 5e:. V CA..? fe5t Attachments: Exhibit A — Insurance Requirements Funding Source: (Business Unit & Account No.) Doc ID- E, ltTi4 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: WORKERS' COMPENSATION CLAIMS ADMINISTRATION SERVICES FLAT ANNUAL. FEE Year 1 Year 2 Year 3 $120,870 $123,290 $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 Re . + rt i n _ Re ► u i cements Page 1 of 6 Mariag,ed Care Fees: DETAIL Medicare Reporting Iiii.I, IZI•:\'I1:\\ Fee Per Bill . 1 / + Isitmatall PPO and Other Ne . otiated Savin . s 20% Fee Schedule Savin l s No chan .e to • rior A. reement Du i licates No Char .e eBillin No Char .e EDI Re ortin N'II:I)I('.\I (',\si: Tele • honic Nurse Case Mana . ement No Char:e Nil ‘N x(.I;\II:NN'l $98.00 .er hour Field Case Mana,ernent 111 I I,I/..\ !ION Utilization Review Procedure Rate — Level 1 $98.00 .er hour, lus IRS Milea_e Rate I I•:\I I;\1 $68.00 I er event Utilization Review Procedure Rate — Level 2 $149.00 • er event Utilization Review Procedure Rate — Level 3 $149.00 • er event Medical Director Review/Peer Review $225.00 . er hour S ecial Review/A ears OI''riu' s.1, \11;I)I( :%I. I'R1)\ $1,500 for Application $48.00 per Claim Access (For the Life of the Contract) $400.00 er hour Iul•;It NI:I' OR Oi►Iinnal Iie)licarc Repealing, R I\1cdicary 'et -\si(I,. ('I',\s) Medicare Reporting No charge Standard MSA with or without submission to CMS for approval $2,750.00 flat rate $75.00 flat rate Final Settlement Document Submission _ SSA and SSDI Checks $125.00 per hour Medicare Check $50.00 flat rate Conditional Payment Investigation $150.00 flat rate Conditional Payment Resolution $125.00 per hour Optional Investigation Services York charges $81.00 per hour plus expenses at the rates outlined below. Allocated Expenses for Investigation Services Expenses Rates Miles Prevailing IRS rate Photographs $2.50 per color print Photocopying $ .25 per page Telephone Charges Included Secretarial Services $6.00 per page File Set Up $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 • • • • s ■ • r • • 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 Mann, ed care services, exeludin _ NCM/TCM which are medical ex enses or the flat annual option 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 Byf• By. Jody A. Moses Senior Vice President YORK RIS VICES GROUP, INC. Date: Date: 4711401 a AeiC JRfiice Magdich, City Attorney I/VI As CITY OF LODI 13y: Date: CITY OF LODI B Jennil r Ferraiolo tevee hwa. ager City Clerk Cit Manager qfr? I 1 Date: /1) -- Page Page 3 of 6 EXHIBIT C Page 4 of 6 EXHIBIT C. insurance Requirements for Con'rac;or 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. COMPREIIENSIYE.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 1 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) Addlllatt atncd insured E do sment 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 01 04 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 project that it is insuring. (c) Waiver of Subrogation Include a waiver of subrogation against the City of Lodi, its elected and appointed boards, commissions, officers, agents, employees, and volunteers. (d) Limits of Coverage 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 Requirements for Contractile (continued) Page 5 of 6 (e) CompfctcclOperatiorL 1inclorsement 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. (t) $ everabi l i tv of Interest Clause 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 Q(Cancellotion or Change in Coverggc Enclora, a eitt 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) Con timiity of COmage 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 Comply 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 (1$') 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. (j) Ounlifted il risl 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'nrnpeoy1,tian In5uranre 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. 2018-124 A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE CITY MANAGER TO EXECUTE THIRD AMENDMENT TO THE WORKERS' COMPENSATION SELF-INSURANCE SERVICE AGREEMENT WITH YORK RISK SERVICES GROUP, INC., OF ROSEVILLE NOW, THEREFORE, BE IT RESOLVED, that the Lodi City Council does hereby authorize and direct the City Manager to extend an Agreement for Workers Compensation claims adjusting and administration service with York Risk Services Group, Inc., of Roseville, California, beginning July 1, 2018, in an amount not to exceed $128,894; and BE IT FURTHER RESOLVED that the Lodi City Council hereby authorizes the City Manager to execute the agreement on behalf of the City of Lodi. Dated: June 20, 2018 I hereby certify that Resolution No. 2018-_ was passed and adopted by the City Council of the City of Lodi in a regular meeting held June 20, 2018, by the following votes: AYES: COUNCIL MEMBERS — Johnson, Kuehne, Mounce, and Mayor Nakanishi NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — Chandler ABSTAIN: COUNCIL MEMBERS — None U1, . NNIFE . FERRAIOLO City Clerk 2018-124