03.06 Workers Compensation Claims* °* AGENDA ITEM
January 9, 2018
TO: Honorable Mayor and
Members of the City (
it
ReviewedNerified By:
City Manager
Finance Directo
To Be Presented-By:
Steven V. Pham and
Nathalie Adourian
X Cons Calendar
City Mgr Rpts
Council Reports
Legal Affairs
Boards /Cmtes
Public Hrgs
Admin Reports
Plan /Environ
THRU: Rick Otto
City Manager
FROM: Steven V.
Human Resources,
Relations Director
1. SUBJECT
Agreement for Claims Administration Services between the California Insured Pool Authority on
behalf of the City of Orange and AdminSure Inc. for workers' compensation claims administration
services.
2. SUMMARY
After three years with the current third party administrator for workers' compensation services,
staff determined it would be prudent to request proposals for claims administration and medical
management services to compare costs and best practices. After a careful review of all proposals
submitted, AdminSure Inc. was selected as the company that would provide the best overall
service, claims management, and oversight to the City's workers' compensation program.
AdminSure has an outstanding reputation for excellent customer service and will provide enhanced
and improved oversight of claims management. The City will continue to utilize its current vendor
Lien On Me Inc. for bill review services. This unbundled approach will maintain transparency.
3. RECOMMENDED ACTION
Approve and authorize the California Insurance Pool Authority to execute the Agreement and First
Amendment to Agreement for Claims Administration Services between California Insurance Pool
Authority on behalf of the City and AdminSure Inc. in an amount not to exceed $593,460 for a
three -year term.
ITEM # 3. (0 1 1/9/18
4. FISCAL IMPACT
Funds are available each fiscal year in the following accounts:
730.1412.52232.00000 Workers' Compensation $171,000.00
730.1412.52210.00000 Claims Compensation $21,000.00
5. STRATEGIC PLAN GOAL(S)
2. Be a fiscally healthy community
Strategies:
a) Expend fiscal resources responsibly.
d) Effectively manage and develop City assets.
4. Provide outstanding public service
Strategies:
b) Provide facilities and services to meet customer expectations.
16. GENERAL PLAN IMPLEMENTATION
Not Applicable.
17. DISCUSSION and BACKGROUND
The foundation of a successful workers' compensation program is compliance, efficiency and
collaboration. This is achieved with proactive risk management, an experienced third party
administrator, quality medical providers, departmental liaisons, and the employees or retirees.
Third party administrators have personnel with specialized skills and certifications required to
effectively and efficiently handle workers' compensation claims caseloads. Specifically, they work
with employers, risk pools, injured employees and retirees, general public /residents, medical
providers, contractors /vendors, and attorneys to investigate, negotiate, and settle claims.
The City, along with several other local municipalities, is self - insured for workers' compensation
with California Insurance Pool Authority ( "CIPA "). CIPA has the authority to enter into
agreements with third party vendors on behalf of its member agencies. The City's workers'
compensation program is contracted between CIPA on behalf of the City and the City's current
third party administrator.
After three years with Keenan & Associates, our current third party administrator for workers'
compensation services, staff determined it would be prudent to request proposals for claims
administration and medical management services to compare costs, services, and best practices.
Currently, the City's annual claims administration fee is $168,947 and the estimated total annual
cost, including claims administration and medical management, is $248,785. Below are the
responsive companies ranked by estimated grand total including claims administration and medical
management:
ITEM # 2 1/9/18
The top three claims administration companies that were interviewed were AdminSure, Keenan &
Associates and Corvel. All three interviewed companies' estimated total costs are lower than the
City's current costs. During the interview process, AdminSure demonstrated the highest level of
services and at a competitive annual administrative price with fixed and inclusive claim services
fees. The City will continue to utilize Lien On Me for bill review services. Although AdminSure's
claims administration fees were not the lowest, reasons for staff s recommendation include:
• AdminSure provides claims administration services to 61 California municipalities, 52 of
which are full- service with public safety. It is one of the best in the industry with police,
fire, and public works. This is crucial because of the complexities of Labor Code 4850,
Memoranda of Understanding, payroll concerns, and CalPERS Industrial Disability
Retirements. The wealth of resources and ability to communicate with similarly situated
municipalities will be key to the continuing growth and development of the City's workers'
compensation program.
• Eleven of the 13 CIPA member entities contract with AdminSure. AdminSure abides by
CIPA's stringent reporting requirements and its performance is continually audited by both
the member entities and the risk pool. AdminSure already has an established ability to
following CIPA's claim guidelines, reserving guidelines, litigation guidelines, reporting
guidelines, and file review guidelines.
• AdminSure presented the lowest turnover rate of their employees. AdminSure was the only
company whose interviewees consisted of the individuals who would be servicing the
City's account: the actual claims examiner, claims supervisor, transition representative,
and President of the company.
• AdminSure is assigning two experienced indemnity examiners and one claims supervisor
for the City's account and all open claims will be reviewed within the first sixty days.
• AdminSure provided a host of references demonstrating its ability to complete the work
included within the scope of this agreement. Several clients were contacted as due
diligence.
• AdminSure has not lost any services agreements with Southern California municipalities
in the last three years. Due diligence was completed by contacting an array of Southern
California municipalities that are currently AdminSure clients. Feedback received was
consistent.
• At no additional cost, AdminSure will provide extensive and ongoing training for staff as
well as development and implementation of processes to mitigate exposure.
ITEM # 3 1/9/18
Keenan/
Lien On Me/
AdminSure/
Corvel
York
Intercare
Athens
Excel
Lien On Me
Claims
Administration
$168,947
$192,000
$159,995
$218,252
$257,074
$217,079
Only
Estimated Grand
Total
$209,920
$232,980
$237,748
$278,390
$306,402
$324,108
The top three claims administration companies that were interviewed were AdminSure, Keenan &
Associates and Corvel. All three interviewed companies' estimated total costs are lower than the
City's current costs. During the interview process, AdminSure demonstrated the highest level of
services and at a competitive annual administrative price with fixed and inclusive claim services
fees. The City will continue to utilize Lien On Me for bill review services. Although AdminSure's
claims administration fees were not the lowest, reasons for staff s recommendation include:
• AdminSure provides claims administration services to 61 California municipalities, 52 of
which are full- service with public safety. It is one of the best in the industry with police,
fire, and public works. This is crucial because of the complexities of Labor Code 4850,
Memoranda of Understanding, payroll concerns, and CalPERS Industrial Disability
Retirements. The wealth of resources and ability to communicate with similarly situated
municipalities will be key to the continuing growth and development of the City's workers'
compensation program.
• Eleven of the 13 CIPA member entities contract with AdminSure. AdminSure abides by
CIPA's stringent reporting requirements and its performance is continually audited by both
the member entities and the risk pool. AdminSure already has an established ability to
following CIPA's claim guidelines, reserving guidelines, litigation guidelines, reporting
guidelines, and file review guidelines.
• AdminSure presented the lowest turnover rate of their employees. AdminSure was the only
company whose interviewees consisted of the individuals who would be servicing the
City's account: the actual claims examiner, claims supervisor, transition representative,
and President of the company.
• AdminSure is assigning two experienced indemnity examiners and one claims supervisor
for the City's account and all open claims will be reviewed within the first sixty days.
• AdminSure provided a host of references demonstrating its ability to complete the work
included within the scope of this agreement. Several clients were contacted as due
diligence.
• AdminSure has not lost any services agreements with Southern California municipalities
in the last three years. Due diligence was completed by contacting an array of Southern
California municipalities that are currently AdminSure clients. Feedback received was
consistent.
• At no additional cost, AdminSure will provide extensive and ongoing training for staff as
well as development and implementation of processes to mitigate exposure.
ITEM # 3 1/9/18
The annual fee for claims administration is clear and structured as follows:
Year 1
$192,000
Year 2
$197,760
Year 3
$203,700
In conclusion, AdminSure's claims philosophy aligned with the City's. A traditional approach
supported by expertise is what the City seeks. Credibility, reliability, efficiency, and an equitable
approach to claims resolution will allow the City's workers' compensation program to succeed.
This is achieved through excellent customer service and communication with employees and
retirees. Based on prior authority granted by our City Council, CIPA is authorized to enter into a
contract with AdminSure on behalf of the City. Upon approval of this action, groundwork will
begin to transition to AdminSure seamlessly. City will embark in a revival of the current workers'
compensation program and update appropriate forms, protocols, and provide continuous trainings
to all supervisors.
Therefore, staff recommends that the City Council to authorize CIPA to execute the Agreement
and First Amendment for Claims Administration Services between CIPA on behalf of the City of
Orange and AdminSure in an amount not to exceed $593,460 for a three -year term.
8. ATTACHMENTS
• Agreement and First Amendment to Agreement for Claims Administration Services
between CIPA on behalf of the City of Orange and AdminSure.
ITEM # 4 1/9/18
AGREEMENT FOR
CLAIMS ADMINISTRATION SERVICES
Article 1. GENERAL
This Agreement is entered into on July 1, 2017 by and between the CALIFORNIA INSURANCE
POOL AUTHORITY ( "CIPA "), a California public joint powers authority, on behalf of the
CITIES OF ARCADIA, CYPRESS, IRVINE, LAGUNA BEACH, MONTCLAIR, TUSTIN,
WESTMINSTER AND YORBA LINDA ( "Member Cities or Member City ") and AdminSure,
Inc. ( "Administrator "), having an office at 3380 Shelby Street, Ontario CA 91764 -5566.
Article 2. SCOPE OF APPOINTMENT /RELATIONSHIP OF THE PARTIES
Administrator, its agents and employees are hereby appointed as CIPA and/or Member Cities'
agents and representatives to administer Member Cities' self - insured workers' compensation
program and process, evaluate, adjust and handle workers' compensation claims against Member
Cities. Administrator agrees to provide the services set forth in Article 4 of this Agreement.
The relationship of Administrator and CIPA and /or Member Cities established by this Agreement
is that of independent contractors, and nothing contained in this Agreement shall be construed to
establish an employer /employee relationship or to constitute the parties as partners, joint
ventures, co- owners, or otherwise as participants in a joint and common undertaking.
Administrator, its agents and employees are representatives of CIPA and /or Member Cities only
for the purpose of administering Member Cities' self - insured workers' compensation program as
set forth in this Agreement, and they have no power or authority as agent, employee, or in any
other capacity to represent, act for, bind or otherwise create or assume any obligation on behalf of
CIPA and /or Member Cities for any purpose whatsoever, except as specifically required to
perform Administrator's obligations under this Agreement.
Article 3. DURATION
This Agreement applies to all work performed by Administrator which is described in Article 4,
whether performed in anticipation of or following the execution of this Agreement. The initial
teen shall begin on July 1, 2017 and shall expire June 30, 2020. Subsequent annual terms from
July 1, to June 30, may be mutually agreed upon between the parties.
The Agreement shall automatically renew from year -to -year subject to termination by either party
at any time during the life of the Agreement upon sixty (60) days written notice. CIPA maintains
the right to tenninate this Agreement if CIPA determines that it is in the best interest to do so, in
CIPA's sole discretion and with or without cause. In the event that Member Cities purchase
workers' compensation insurance or its Certificate of Consent to Self - Insure is rescinded or
revoked, this Agreement shall automatically terminate upon the effective date of such event.
When this Agreement is tenninated, the parties shall, as necessary, make an adjustment to the
payment schedule in Article 6 to prorate fees through date of tennination. Thereafter, Member
Cities shall pay Administrator moneys due and owing after such adjustment, if any, or
Administrator shall refund moneys due and owing Member Cities after such adjustment, if any.
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Adjustments due and owing shall be paid within 60 days after termination of the Agreement.
Upon notice of termination of the Agreement, the Administrator will fully cooperate with the
new Administrator, CIPA and Member Cities in providing required information and service.
Failure to fully cooperate will result in a 10% reduction in fees paid to the Administrator during
the period of time the Administrator does not fully cooperate.
Article 4. ADMINISTRATOR SERVICES
Administrator will provide Member Cities the following services:
A. Claims Administration
1. Administrator will adhere to the Minimum Performance Standards enumerated in
Addendum 1.
2. Provide all forms and reports necessary for the efficient operation of Member Cities'
programs of self - insurance with respect to workers' compensation claims and losses,
and prepare and file all forms and reports required by law in a timely manner.
3. Identify each claim which has subrogation recovery potential. Initiate correspondence
to effect collection, and follow up, as appropriate. Assist legal counsel where
litigation is required to affect recovery. Establish, maintain and monitor monthly
subrogation report which details all potential recoveries and statute of limitation
dates.
4. Obtain settlement authority on all cases from Member Cities.
5. Administrator will participate and assist Member Cities in coordination of this
program with other associated disability and medical programs.
6. At the request of Member Cities, Administrator will attend hearings at no charge
to Member Cities.
7. Maintain records in accordance with legal requirements.
8. Perform other general administrative services, as necessary, to effectively
discharge Member Cities' duties to its employees and under the workers'
compensation State statutes.
B. Communication and Training
1. Attend CIPA and Member City meetings as requested.
2. Conduct on -site formal educational programs for supervisors, managers and other
staff responsible for managing the workers' compensation program as requested, and
at least once a year.
3. Review open claims, procedures and other issues on -site at each Member City, as
requested, and no more than quarterly for each Member City.
4. Conduct meetings with Member Cities' preferred medical providers to maximize
effectiveness of procedures and medical care as requested, and no more than quarterly
for each Member City.
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5. To the extent allowable by law, provide copies of file correspondence and
documentation as requested by CIPA and/or Member Cities.
C. State and Federal Reports
1. Prepare Self- Insurer's Annual Reports for Member Cities' and /or CIPA's signature
and submission to the State of California.
2. Prepare Federal Information Return (Forms 1099) for applicable payments.
E. Information Management System
1. In coordination with CIPA and /or Member Cities, develop management reports that
assist CIPA and /or Member Cities and Administrator in effectively managing the
workers' compensation program. Standard Reports will be provided within ten (10)
days after the end of the month or quarter.
2. Any hardware or cabling required by Member Cities to access the on -line system is
Member Cities' responsibility.
3. The Administrator will report loss information to the excess insurance carrier(s),
including CIPA, in accordance with established procedures.
F. Consulting
Provide a comprehensive Annual Program Review which:
1. Analyzes past statistics, program costs and projects future trends.
2. Recommends program changes to favorably impact costs and improve procedures.
3. Upon request, Administrator will provide a comprehensive program review more
frequently than annually.
G. Compliance
Provide all aforementioned services in accordance with the applicable Workers'
Compensation Laws of the State of California.
H. Allocated Loss Expense
"Allocated loss expense" shall mean all reasonable costs actually incurred by
Administrator including, without limitation, all Workers' Compensation Appeals Board
or court fees and expenses; fees for service or process; copy service; fees to retain
attorneys; the cost of the services of investigators and detectives to perform
surveillance; and other professional assistance required to provide these services, if
previously authorized by Member City. Allocated loss expense shall not include any
costs or expenses incurred by Administrator in connection with services performed by
it, which services are approved by CIPA and /or Member Cities and are normally
perfonned in the course of administering workers' compensation claims. Allocated
charges are to be paid by Member Cities.
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I. Index Bureau & Edex Charges
Index Bureau and Edex charges will be paid by the Administrator. Copies of the reports
will be distributed to Member Cities within 10 days of receipt.
J. Storage of Closed Claims
Administrator will provide storage of all closed claims, including storage of closed claims
from prior administrator(s).
Article 5. MEMBER CITY OBLIGATIONS
In connection with this Service Agreement, Member Cities accept responsibility to:
A. Provide data to Administrator on a timely basis to pen compliance with State of
California reporting requirements.
B. Obtain and pay for excess insurance coverage, if desired by Member City.
C. Arrange for checking account and provide appropriate funding.
Article 6. COMPENSATION
In consideration of the services provided by Administrator, each Member City agrees to pay
Administrator the monthly fee as shown below. CIPA has no obligation to pay fees:
A. Claims Administration
Monthly claims administration fees by Member are shown below:
" AFl
Cuent Monthly Fee
(7/1/16- 6/30/17)
Monthly Fee
(7/1/17- 6/30[18)
Monthly Fee
(7 /1/18 - 6/30/19)
Monthly Fee
(7/1/19 - 6/30/20)
Arcadia
$8,423
$8,676
$8,936
$9,204
Cypress
$3,766
$3,879
$3,995
$4,115
Irvine
$19,106
$19,679
$20,270
$20,878
Laguna Beach
$7,234
$7,451
$7,675
$7,905
Montclair
$5,502
$5,667
$5,837
$6,012
Tustin
$5,054
$5,206
$5,362
$5,523
i
Westminster
$10,049
$10,350
$10,661
$10,981
1
Yorba Linda
$99
$102
$105
$108
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B. Ancillary Services
Ancillary services are not tied to this Agreement and may be purchased from another
vendor at the option of CIPA. When purchased from Administrator, the fee shall be as
follows:
1. Bill Review
a. The flat fee per bill is $9.00.
b. The PPO fee is 20% of savings above the fee schedule with the exception of
Blue Cross PPO which is at 23% of savings.
If bill review services are not purchased from AdminSure, all electronic data
interchange services will be provided by vendor, and not by AdminSure.
2. Utilization Review
a. The Utilization Review fee is $85.00 per hour, billed at 10 minute increments.
Examiners will perform Utilization Review in accordance with the Guidelines.
b. Utilization review by a physician is billed separately at 10 minute increments,
at the rate of $200 per hour.
3. Medical Provider Network
Medical Provider Network fees, if utilized, will be billed at cost.
Article 7. REIMBURSEMENTS
Member Cities agree to reimburse Administrator within thirty (30) days of presentation of an
itemized statement for the costs of charges not considered allocated expenses or included in
Administrator's fee, which are incurred on behalf of Member Cities, provided Member Cities
have previously authorized such expense.
Article 8. AUDITS
Administrator agrees to cooperate with CIPA in making any and all claim files and records
available to CIPA for audit by CIPA or Member City's appointed representatives. During normal
office hours, CIPA and /or Member City's representatives shall have reasonable access to the
necessary portions of Administrator's facilities, files and records for review or audit purposes, so
as not to interfere with Administrator's normal business.
Article 9. ASSIGNMENTS
Neither party may assign this Agreement, in part or in total, without the express written consent
of the other party.
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Article 10. LEGAL RESPONSIBILITIES
A. The Administrator shall comply with all State and Federal laws, as well as all county and
municipal ordinances and regulations which in any manner affect the performance of
services pursuant to this agreement, or persons employed by the Administrator.
B. Administrator agrees that in the performance of the terms of this Agreement, no
discrimination shall be made in the employment of persons because of race, color,
national origin, ancestry, or religion of such persons. A violation of this provision will
subject the Administrator to all penalties imposed by law.
Article 11. INSURANCE
A. Administrator shall provide to CIPA, on the effective date of this Agreement, Certificates
of Insurance for the following coverages from insurance companies acceptable to CIPA.
Administrator further agrees to maintain this insurance in full force and effect throughout
the period of this Agreement, and any renewals or extensions thereof. All policies shall
be endorsed to provide that the policy shall not be canceled or the coverage reduced until
a thirty (30) day written notice of cancellation or reduction has been served upon CIPA
except ten (10) days shall be allowed for non - payment of premium:
1. Commercial General Liability insurance with minimum limits of $1,000,000 per
occurrence.
2. Automobile Liability insurance with minimum limits of $1,000,000 per
accident.
3. Workers' Compensation with statutory limits, as required by the Labor Code of
the State of California, and Employer's Liability with minimum limits of
$1,000,000 per occurrence.
4. Professional Liability /Errors and Omissions insurance with minimum limits of
$2,000,000 per occurrence.
5. Crime Loss or Fidelity Coverage with minimum limits of $1,000,000 per
occurrence.
Article 12. INDEMNIFICAITON
Administrator shall defend, indemnify and hold harmless CIPA and /or Member Cities including
its governing board, directors, officers, administrators, employees, and agents, from any and all
claims, losses and liabilities against or incurred by CIPA and /or Member Cities arising out of the
actions, omissions to act or other conduct of Administrator, its agents, employees or
subcontractors, in the performance of its duties under this Agreement or otherwise in connection
with its activities pursuant to this Agreement. This includes, but is not limited to, any breach by
Administrator of its duties or responsibilities under the Agreement, as well as any losses
occasioned by a failure of Administrator to provide the services contracted for by CIPA pursuant
to this Agreement. In addition, Administrator agrees to assume the defense, at Administrator's
expense, using attorneys reasonably acceptable to CIPA of any lawsuit or other proceeding which
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names CIPA and or Member Cities or its directors, officers, employees and agents as defendants.
Article 13. BUSINESS LICENSE.
Administrator shall maintain a business license for each City as required.
Article 14. RIGHTS TO DATA
All claim files, paper and computer, are and shall remain the property of CIPA and/or Member
Cities. CIPA and/or Member Cities reserve the right to obtain original claim files, data discs,
copies of reports and other documents applicable to CIPA and /or Member Cities in the event this
Agreement is terminated. No documents shall be destroyed unless they have been scanned into
the system. Original documents received after termination of this agreement shall be forwarded
to the new administrator. Administrator shall bear the cost of relocating any claim files from the
premises of Administrator to the premises of CIPA or designated parry upon termination of the
Agreement.
Article 15. CONFIDENTIALITY
It is agreed and understood that Administrator shall treat information, reports and analyses
obtained or developed pursuant to this Agreement as being confidential. Prior written consent
from CIPA and/or Member Cities shall be required before any information, in any format, is
disclosed to any third party. It is further agreed and understood that Administrator shall produce,
maintain and dispose of all such information, reports and analyses in a manner to guarantee
reasonable safeguards to such confidentiality.
Article 16. INTERNAL SERVICES PROVIDED BY ADMINISTRATOR
No internal services shall be provided for a fee without the express written permission of
Member Cities.
Article 17. EXTERNAL PROVIDER/VENDOR SERVICES
All services provided by external providers /vendors shall be approved by Member Cities and
billed at actual cost with no "mark -up" by the Administrator. All external providers /vendors will
be selected from a panel approved by each Member City. Prior to establishment of the approved
panel, the administrator will provide each Member City with a listing of all proposed
providers /vendors. The list shall include the fee charged by each provider /vendor.
Article 18. DOCUMENTS /CORRESPONDENCE
Each Member City will designate documents /correspondence they will require for their files and
a timeframe for receipt of such documents /correspondence.
Article 19. MATERIAL PROBLEMS AND REGULATORY CHANGES
The Administrator will advise CIPA on any material problems or need for improvements in any
matter related to this Agreement, including advice relating to changes and proposed changes in
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statutes, regulations and rules affecting Member Cities' workers' compensation programs.
Article 20. NOTICES
All notices required or permitted hereunder shall be personally delivered or dispatched by first
class mail and sent to the other party at the following addresses, or at such other address as may
be provided in writing to the other party from time to time:
To Administrator: Alithia Vargas - Flores
AdminSure Inc.
3380 Shelby Street
Ontario, CA 91764 -5566
To CIPA: Janet D. Kiser
General Manager
California Insurance Pool Authority
366 San Miguel Drive
Suite 312
Newport Beach, CA 92660
Article 21. DWC AUDIT PENALTY
All penalties assessed by the Workers' Compensation Division, Office of Benefit Assistance and
Enforcement shall be paid, whether directly or through reimbursement, by the party responsible
for the assessment of the penalty. No claim shall be settled to include payment of any penalty
without the express written consent of the Member City. Settlement of any penalty incurs an
additional settlement cost and the responsible party shall pay the additional cost for the penalty.
If either party disputes the liability for payment of the penalty, the parties shall negotiate to
resolve the dispute. If the dispute is not resolved within 30 days after notice to both parties of the
penalty, then such dispute shall be submitted to arbitration for determination of the party
responsible for the assessment and payment of the penalty. The provisions of this Article shall
survive any termination of this Agreement.
The Administrator shall provide a detailed monthly listing of penalties identifying those payable
by Member Cities and those payable by the Administrator. The listing shall include fines,
penalties and 10% self - imposed increases paid through settlement of a claim. The obligations of
the Administrator to pay for fines, penalties, and 10% self - imposed increases shall survive the
termination of this Agreement.
Article 22. MMSEA Reporting
The Administrator shall report all claims in compliance with Medicare, Medicaid and SCHIP
Extension Act ( MMSEA) Section 111 Mandatory Reporting.
Article 23. ASSIGNED PERSONNEL
Each dedicated claims adjuster assigned to CIPA will not have a case load that exceeds 150 for
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all claims combined (including indemnity, medical only, future medical, record only or any other
type of claim). The claims adjusters will not handle claims for any other account. Designated
claims assistants and medical only clerks will be assigned. If the caseload of a claims adjuster
exceeds 150 claim files for two consecutive months, CIPA and/or Member Cities will have the
discretion of allowing the excess, or will have the Administrator assign an additional non -
dedicated claims adjuster to handle the overflow claims. The claims adjusters will have a valid
California Self - Insured Administrator Certificate, unless mutually agreed to otherwise by the
parties. Member Cities will maintain final approval in the selection of staff assigned to their
account and the right to request new staff if the service is unacceptable to CIPA and /or Member
Cities for any reason.
The claims adjusters assigned to the account must have a minimum of five years full -time
experience as a workers' compensation claims adjuster in California, and have a California Self -
Insured Workers' Compensation Certificate unless otherwise agreed to in writing by Member
City.
Article 24. FUNDS
Member Cities may provide Administrator initial funding in an amount mutually agreed to by
each Member City and Administrator to be held in trust by, and used by Administrator to meet
the obligations of Member Cities. Administrator and Member Cites may establish written
procedures for approval or ratification of expenditures from such trust accounts and methods of
handling such funds; in such event Administrator shall provide a copy of the written procedures
to Member Cities. Trust funds shall be used and paid out by Administrator only in the manner
set forth in this Agreement.
Article 25. WAIVER
The failure of either party at any time to enforce any right or remedy available to it under this
contract with respect to any breach or failure by the other party shall not be constructed to be a
waiver of such right or remedy.
Article 25. MISCELLANEOUS
This Agreement shall be governed by, and construed in accordance with, the laws of the State of
California. In the event that any of the provisions of this Agreement shall be held by a court or
other tribunal of competent jurisdiction to be unenforceable, the remaining portions of this
Agreement shall remain in full force and effect.
All terms and conditions of the Administrator's proposals of August 4, 2008 are incorporated
into this contract, except that in the event of any conflict between the Agreement and the
proposal, this Agreement shall be controlling. Any modifications of this Agreement must be in
writing and signed by both parties.
Each member of CIPA identified herein shall be a third party beneficiary of this Agreement with
the right to enforce the provisions of this Agreement against Administrator.
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In witness whereof the parties hereto have signed this Agreement as of the date set forth in
Article 1.
CIPA: California Insurance Pool Authority
Au forized Signature
Jluex
Print Name
ADMINISTRATOR: AdminSure, Inc.
Authorized S
Print Name
"Title
Date
CFO
Title
7161
Date
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ADDENDUM I
MINIMUM PERFORMANCE STANDARDS
THIRD PARTY ADMINISTRATOR
Minimum performance standards are listed below and will be incorporated as a part of the
Agreement between CIPA (Member Cities) and the selected third party administrator (TPA).
Modifications to the Minimum Performance Standards may be made by individual Member
Cities. All staff assigned to the account must read and sign that they acknowledge receipt and
will adhere to the Minimum Performance Standards.
1. PROCESSING
A. All Employers' Reports of Occupational Injury or Illness, or notification of a new claim
from any other source, will be reviewed for compensability and a decision made to
accept, delay or deny within seven (7) calendar days of receipt, or sooner if a delay in
payment or notice will result.
B. Employees will be contacted by telephone or in person within two (2) business days of
receipt of a claim by the examiner unless the employee is represented by an attorney.
During this initial contact, employees will be provided with an explanation of their
benefits, and will be asked whether they have any questions or concerns. These will be
addressed immediately. A benefit pamphlet will be sent to the employee notifying them
of their rights under workers' compensation laws of California. Contact will be made
sooner if delay will result in a late payment or a penalty situation.
C. The injured or ill employee will be contacted at least every two (2) weeks while they are
disabled from working, unless they are represented by an attorney or their claim has been
finalized.
D. The Member City will be contacted within three (3) business days of receipt of a claim to
verify continuing disability, clarify issues and request additional required information.
Contact will be made sooner if delay will result in a late payment or a penalty situation.
E. Employer contact is required to verify continuing disability and explore the availability of
modified or light duty before processing disability payments.
F. The employee's treating doctor will be contacted within three (3) business days of receipt
of claim to verify duration of disability, compensability, proposed treatment, clarify
issues and request additional information. Contact will be made sooner if a delay will
result in a late payment or penalty situation. Thereafter, the Administrator will maintain
contact, at least every thirty (30) calendar days with the attending physician, obtaining
medical reports, reviewing and monitoring medical treatment progress and facilitating an
early return to work.
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G. Claims will be created and entered in the computer within two (2) business days of
receipt of the Form 5020.
H. Telephone calls will be returned within twenty -four (24) hours. If the Administrator's
staff member called is not available within this time frame, another designated staff
member will return the call.
L All written communications requiring acknowledgment or action by a claims
administrator will be responded to and mailed within ten days or sooner if an immediate
response is required.
J. Accurate and timely benefits will be paid to employees as required by State statutes.
K. Accurate and timely benefit notices will be sent in accordance with Title 8, California
Code of Regulations.
L. Lost -time claims, with the exception of future medical claims, will be reviewed on diary
every thirty (30) calendar days or more frequently when needed.
M. Medical -only claims will be reviewed every thirty (30) calendar days for possible closure.
They will be transferred to an indemnity claim when disability is due, compensability is
an issue, they are over ninety (90) calendar days old or medical payments (excluding
diagnostic expenses) exceed $1,500.
N. Indemnity claims will be reviewed by the appropriate supervisor no less frequently than at
the following intervals: file creation, before cases are delayed and/or denied, when
reserve increases exceed the examiner's limit of authority, proposed settlements or
payments exceed the examiner's limit of authority, at AOE /COE and subrosa
investigative referrals, at medical case management referrals, upon defense counsel
referrals, fifteen (15) calendar days before mandatory settlement conferences and fifteen
(15) calendar days before scheduled trials.
O. Subrogation possibilities will be identified and appropriate steps taken to investigate
within five (5) calendar days after a claim is opened, or within five (5) calendar days after
information is available that subrogation may exist.
P. All medical, legal, rehabilitation, investigation and other service provider invoices will be
reviewed before payment regarding causal relationship to injury and if services billed are
for services requested. Invoices will be paid according to State allowable rates, or
appropriateness, or for compliance with any agreements in place with the facility, or as
agreed to when service was requested. Vendors providing service at an excessive rate, or
billing for services that are not requested or required will be notified of the amount and
reason for their reduction in payment. Member Cities will be notified of any provider
who continues to bill unreasonably for services.
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Q. Obtain proof of life confirmation annually from all claimants receiving life pensions.
2. FILE DOCUMENTATION
A. All files will have a "Plan of Action" identified including time frames for completing
activity. Progress on the plan of action will be documented, as will the reasons for any
delays or modifications to the plan and include all information that relates to the direction
and value of the case. An active case strategy will be documented in the case until
closure.
B. Delayed claims will clearly document the reasons for the delay; the information needed to
determine compensability and the anticipated date of a final decision. In no case will the
final decision be more than eighty -five (85) calendar days from the Member City's date of
knowledge. Cases will be diaried every fourteen (14) calendar days or sooner to monitor
the investigation process. All delay in decision letters will be reviewed by the appropriate
Supervisor before mailing.
C. All denied claims will document the factual, medical or legal basis for denial in
accordance with State statutes. Denials will be made as soon as information is available
that the claim should be denied. All denial letters will be reviewed by the appropriate
supervisor before mailing.
D. All invoices from medical, legal, rehabilitation, investigation and other service providers
will be reviewed for accuracy, appropriateness and relationship to injury. Vendors
providing service at an excessive rate or billing for services that are not requested or
required will be notified of the amount and reason for their reduction in payment.
Members will be notified of any provider who continues to bill unreasonably.
E. All hardcopy files will be in chronological order with correspondence in the designated
section. All handwritten correspondence must be legible and any action taken on the file
must identify who completed it. Notes and activity completed in the computer system
must identify who completed the entry and dated. All actions must be documented in the
computer file notes.
F. All files will contain file contents as specified in Title 8, California Code of Regulations.
3. INVESTIGATIONS
A. The Member City will be notified of any claim being delayed or denied before a Notice is
sent to the employee. The Member City will also be notified before any questionable
claim is accepted.
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B. On questionable indemnity claims, investigative assignments will be made to outside
vendors with prior authorization from Member City. Referrals will include specific
written instructions regarding the scope of the investigation.
C. In cases where claims investigations are being conducted, claims will be placed on diary
every fourteen (14) calendar days until all outstanding issues are resolved.
D. Where medical causation is unclear, a qualified medical examination will be scheduled.
All relevant medical records and investigative information will be provided to the
physician for review before the date of examination.
E. An Index Bureau and Edex Request will be submitted on all new claims. Thereafter,
requests will be submitted at least annually, or at appropriate intervals if the possibility of
other injuries is suspected, and when requested by Member City.
F. Investigators will be selected from a panel approved by Member City. The Administrator
will evaluate and monitor the panel's performance. All concerns or recommendations for
panel additions /deletions will be discussed with Member City.
4. MEDICAL MANAGEMENT & COST CONTAINMENT
A. Employees who have not pre - designated a personal physician will be directed to panel
medical providers. Panel medical providers will be selected and approved by Member
City. The Administrator will evaluate and monitor the panel's performance. All
concerns or recommendations for panel additions /deletions will be discussed with
Member City.
B. Medical treatment will be monitored to ensure that treatment is appropriate and related to
the compensable injury or illness. Inappropriate medical reports will be objected to
timely.
C. The employee will be called before sending notification of permanent disability and QME
letter, to explain process and answer employee's questions.
D. The Member City will be notified within three (3) business days after knowledge that
employee has been found permanent and stationary by the treating doctor.
E. Independent medical examinations by qualified physicians will be scheduled when
needed to address necessity or reasonableness of care. A cover letter will be provided to
the physician outlining the specific issues and concerns along with the examiner's
questions. All medical /investigations reports will be sent to the physician prior to the
examination.
F. Pre - existing medical conditions and medical records will be explored/obtained on lost -
time claims and as requested by Member City.
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G. Treatment recommendations for care such as physical therapy, chiropractic
manipulations, etc., will be verified with the physician as to duration, frequency and
anticipated results.
H. Claims referred for outside medical management services will reflect the intent and scope
of services requested and must be authorized on a case -by -case basis by Member City.
The Member City will approve medical management firms and all other review firms.
I. On future medical claims, yearly medical reports will be obtained if the employee
continues to receive medical treatment.
J. Medical bills submitted without a supporting medical report will not be paid until a
medical report is obtained. Medical bills will be paid /denied /objected to in accordance
with state statutes, and paid in accordance with the fee schedule or negotiated rate.
K. Medical -legal costs will be reviewed for appropriateness and necessity. Bills which do
not qualify as valid medical -legal expense will be objected to on a timely basis according
to the Labor Code.
5. SUPPLEMENTAL JOB DISPLACEMENT /REHABILITATION MANAGEMENT
A. For injuries on or after January 1, 2004, the Administrator shall coordinate with Member
City to offer modified or alternate work within twenty -five (25) calendar days of the last
payment of temporary disability.
B. For injuries on or after January 1, 2004, employees not returning to work shall be
provided a supplemental job displacement benefit in accordance with regulations,
including the issuance of timely notices.
6. ALLOCATION OF CLAIMS COSTS TO APPROPRIATE FILE OR OCCURRENCE
A. For all injuries resulting in the need for permanent disability and /or future medical care
where the injured worker has a prior claim to the same body part, the claims administrator
shall obtain a medical opinion addressing allocation and payment of future benefits. The
medical opinion is to determine the specific allocation for permanent disability and a
separate allocation for future medical care related to the industrial injuries. The
percentage allocated to indemnity and future medical care benefits will not be assumed to
be the same.
7. CLAIMS LITIGATION MANAGEMENT
A. The examiner will retain primary responsibility on all claims referred to defense counsel.
Defense counsel will not be used to perform routine activities that should be the
responsibility of the examiner. Some examples of routine tasks include: setting medical
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examinations, preparing medical cover letters, filing and serving medical reports, lien
negotiations, arranging for photocopying, investigators or other outside vendors.
Exceptions will be approved by Member City.
B. Legal counsel will be selected from a panel approved by Member City. The
Administrator will evaluate and monitor the panel's performance. Legal counsel will be
reviewed for their ability to identify issues, aggressiveness in resolving claims,
responsiveness, timeliness, and billing practices. All concerns or recommendations for
panel additions /deletions will be discussed with Member City.
C. Claims sent to defense counsel will be accompanied by a transmittal letter outlining the
status of the case, results of investigations, primary issues, requested action, a complete
copy of the file, and any documentation. Ongoing documentation will be sent timely to
defense counsel.
D. At the close of discovery on cases going to trial, the file will have been adequately
prepared to include necessary depositions, medical examinations and witness
identification and contact information.
E. Settlement worksheets will be prepared and submitted to Member City and CIPA for
approval on all settlements as required. Overpayments will be identified on any
settlement request.
F. Legal counsel will be monitored for adherence to CIPA's Litigation Management
Guidelines.
8. RESERVING
A. Reserves established on indemnity claims will reflect the ultimate probable cost of each
claim based on the information developed to date. Reserve worksheets will be used to
document all reserve changes and reflect amounts allocated to temporary disability,
permanent disability, and vocational rehabilitation (if applicable), medical care and
allocated expense. The injured workers' disability, age and occupation will be considered
in estimating permanent disability.
B. Reserves will be evaluated and modified upon receipt of new information, and no less
frequently than every ninety (90) calendar days on indemnity claims that have not been
finalized. Reserves on claims finalized will be evaluated at least annually.
C. Payments and reserves will not be lumped on one claim when a claimant has multiple
claims, including continuous trauma claims. Files will accurately reflect the payinents
and reserves related to the exposure on each separate claim.
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9. EXCESS INSURANCE REPORTING
The Administrator shall report to the excess insurance carrier(s), including CIPA, in
accordance with established procedures.
10. MMSEA REPORTING
The Administrator shall report all claims in compliance with Medicare, Medicaid and SCHIP
Extension Act ( MMSEA) Section 111 Mandatory reporting.
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EXHIBIT A
Claims adjusters may approve the following Request for Authorizations (RFAs). All RFAs outside of the
authorization criteria listed below must be referred to and processed by Utilization Review:
Treatment Request Claims Adiuster Authorization Criteria
Occupational Therapy /Physical
May have 24 visits for the life of the claim.
Therapy
Initial request — up to 12 visits.
Additional requests (up to 24 visits) may be approved if provider
documents functional improvement.
All post- surgical physical therapy should be processed by
Utilization Review.
Chiropractic Treatment
Initial request — up to 6 visits.
Additional requests (up to 18 visits) may be approved if provider
documents functional improvement.
Acupuncture Treatment
Initial request — up to 6 visits.
Additional requests may be approved if provider documents
unctional improvement
Initial Evaluation, Consultations,
All physician referralslvisits, etc. may be authorized by the claims
Second Opinion, Transfer of
adjuster.
Care, Office Visits
Injections
The claims adjuster may approve injections completed in the
physician's office such as cortisone. Injections such as epidural
steroid, nerve block, and synvisclorthovisc should be processed by
Utilization Review.
Sur
All surgery requests must be processed by Utilization Review.
RadiologylDiagnostic
All x -rays, CT Scans, and MRIs, etc. may be approved by the claims
adjuster. Unfamiliar diagnostics (such as cardiac or cancer) should
be processed Utilization Review.
Psychiatric
Requests for psychiatriclneuro psych or counseling' may be
a proved b the claims adjuster.
Cancer Treatment
All specialized cancer treatmentltherapy will require Utilization
Review.
Durable Medical Equipment
Claims adjuster may a rove all DME urchases and/or rentals.
Home Health Care
The claims adjuster may approve home health care up to 7 days.
Any requests for home health care greater than 7 days must be
p rocessed by Utilization Review.
Weight Loss /Gym Membership
Weight loss and gym membership will be reviewed on a case -by-
case basis to determine the necessityfor Utilization Review.
Trans ortation
The claims adjuster may approve transportation when yppro riate.
Medication (NSAIDs, Muscle
All initial requests for medications may be approved. Additional
Relaxants, and To icals)
re uests far medications should be processed by Utilization Review.
Medication - Opioids (Percocet
May be approved for acute pain (pain lasting up to 4 weeks from
and Norco)
onset of injury). Opioids should only be prescribed for documented
severe pain. Additional requests for medications should be
processed by Utilization Review;
Detox Programs
All requests for detox programs will be processed by Utilization
Review.
* Please note: only a Physician may modify, delay or deny RFAs
FIRST AMENDMENT TO AGREEMENT FOR
CLAIMS ADMINISTRATION SERVICES
This First Amendment ( "Amendment ") is entered into on February 15, 2018 ( "Effective
Date "), as an amendment to the Agreement for Claims Administration Services dated July 1,
2017 ( "Agreement "), by and between the California Insurance Pool Authority ( "CIPA "), a
California public joint powers authority, on behalf of the Cities of Arcadia, Cypress, Irvine,
Laguna Beach, Montclair, Orange, Tustin, Westminster and Yorba Linda (individually,
"Member City" and collectively, "Member Cities ") and AdminSure ( "Administrator ").
IT IS HEREBY AGREED AS FOLLOWS:
1. The City of Orange shall be added to the Agreement effective February 15, 2018.
2. Article 4 "Administrator Services" shall be amended to add the following for the City of
Orange:
Program Conversion/Documentation
1. Coordinate with prior Administrator, as necessary, to secure all claim files,
MIS reports, tapes, State correspondence and other files by January 15, 2018.
2. Analyze and audit all priority claim files identified by CIPA and /or Member
City and report findings by February 1, 2018.
3. Review all claims that have been reported to excess carriers or should be
reported to excess carrier and report findings by February 1, 2018.
4. Analyze and audit all other claim files and report findings by February 1,
2018.
5. Convert claims files to Administrator's claims management database by: test
data due by January 15, 2018, final data due by February 19, 2018, and
reconcile converted data with prior data for accuracy.
6. Assure uninterrupted claim payments to all legitimate claimants.
7. Provide written communication to interested parties regarding Administrator
change by February 1, 2018.
8. Meet with Member City personnel to develop procedures, forms, instructions,
schedules and responsibilities to administer the workers' compensation
program.
9. Assist Member City personnel in the development of directives, notices and
any other program communications to employees.
10. Provide instructional meetings, as requested, to review and explain
procedures.
3. Article 6. A. "Claims Administration" shall be amended to add the monthly claims
administration fee for the City of Orange.
Monthly Fee
Monthly Fee
Monthly Fee
2/15/18 to 1/31/19
2/1/19 to 1/31/20
2/1/20 to 6/30/20
$16,000
$16,480
$16,974
Q
9
Article 6.B.1. "Bill Review" shall be amended to add:
Bill Review services shall be provided by a third party for the City of Orange and not by
Administrator. The City of Orange shall pay the Administrator $3.00 per bill reviewed
by the third party for processing, handling, printing and mailing of Explanation of
Benefits /Explanation of Reviews.
Article 6.13.2. "Utilization Review" shall be amended to read:
2. The Utilization Review fee is a flat $85.00 per review.
a. Each City's adjuster is authorized to approve treatment in accordance with
the attached Exhibit A (Utilization Review Authorization Criteria). All
treatment requests outside of Authorization Criteria listed in the
attachment must be reviewed with the City to determine whether referral
to utilization review is appropriate, unless otherwise instructed by the
City.
b. AdminSure will notify providers to forward utilization review requests
directly to the AdminSure adjuster and not directly to the Utilization
Review department.
c. Utilization review by a physician is billed separately at 10 minute
increments, at the rate of $200 per hour.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
Effective Date.
CIPA: ADMINISTRATOR:
California Insurance Pool Authority AdminSure, Inc.
Authorized Signature
Name
Authorized Signature
Name
Title Title
CITY COUNCIL MINUTES
3. CONSENT CALENDAR
JANUARY 9, 2018
All items on the Consent Calendar are considered routine and are enacted by one motion
approving the recommended action listed on the Agenda. Any member of the City Council,
staff or the public may request an item be removed from the Consent Calendar for
discussion or separate action. Unless otherwise specified in the request to remove an item
from the Consent Calendar, all items removed shall be considered immediately following
action on the remaining items on the Consent Calendar.
3A. CITY CONSENT CALENDAR
3.1 Confirmation of warrant registers dated December 8, 14, and 21, 2017. (C2500.J.1.7)
ACTION: Approved.
3.2 City Council Minutes, Regular Meeting of December 12, 2017. (C2500.D.4)
ACTION: Approved.
3.3 Waive reading in full of all ordinances on the Agenda.
ACTION: Approved.
3.4 Cooperative Agreement with Orange Dog Park Association for use of the Dog Park
located at Yorba Park. (A2100.0; AGR -6562)
ACTION: Approved agreement with the Orange Dog Park Association and authorized the
Mayor and the City Clerk to execute on behalf of the City.
3.5 Second Amendment to Professional Services agreement with Lyons Security Service,
Inc. for additional park security services. (A2100.0; AGR- 6355.2)
ACTION: 1) Appropriated $30,000 from unreserved General Fund balance to account
100.7022.51700.00000; and 2) Approved Second Amendment to Professional Services
Agreement with Lyons Security Service, Inc., and authorized the Mayor and the City Clerk
to execute on behalf of the City.
3.6 Agreement for Claims Administration Services between the California Insured Pool
Authority on behalf of the City of Orange and AdminSure, Inc. for workers'
compensation claims administration services. (A2100.0; AGR- 0233.J)
ACTION: Approved and authorized the California Insurance Pool Authority to execute the
Agreement and First Amendment to Agreement for Claims Administration Services
between California Insurance Pool Authority on behalf of the City and AdminSure, Inc. in
an amount not -to- exceed $593,460 for a three -year term.
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