HomeMy WebLinkAbout06. Approve PSA w-Adminsure Inc. for TPA ServicesAPPROVED BY
TO: HONORABLE MAYORCITY COUNCIL CITY MANAGER
FROM: OFFICE OF _
DIRECTORBY: MIKE HARARY, OF •
D OCTOBER
•" -A9061 U4 I Is] -1' 0'. -
i t i
That the City Council authorize the Mayor to execute a Professional Services Agreement
with AdminSure Inc. to continue to provide third party administrator (TPA) services for
processing and managing the City's Workers' Compensation claims.
The City has had an agreement with AdminSure, Inc. (formerly known as Colen and Lee) to
provide third party administrative (TPA) services for all City Workers' Compensation claims
since June 1992. To determine whether AdminSure's fees were competitive, staff
contacted several other vendors to receive informal quotes for providing comparable
services to AdminSure. Based on these quotes, staff discovered AdminSure's fees (around
$115,000 per year) are about one-half the expense of these other vendors (Hazelrigg
quoted $220,000 to $255,000; and AIMS quoted $245,000 to $265,000 per year).
Therefore, staff proposes to continue to retain AdminSure Inc. to provide Workers'
Compensation TPA services. The attached agreement document needs to be updated to
reflect current terms and conditions between the City and AdminSure, Inc.
Fiscal Responsibility
There is no fiscal impact since these costs have already been incorporated into the City's
2018/19 budget.
ATTACHMENTS
Exhibit A — Workers' Compensation Program Professional Services Agreement
CITY OF DOWNEY
PROFESSIONAL
WITH ADMINSURE INC.
FOR WORKERS' COMPENSATION PROGRAM SERVICES
1. PARTIES AND DATE.
This Agreement is made and entered into this day of 2018 by and
between the City of Downey, a California municipal corporation and charter city with its
principal place of business at 11111 Brookshire Avenue, Downey California 90241 ("City")
and AdminSure Inc., a California Corporation, with its principal place of business at 3380
Shelby Street, Ontario, California, 91764 ("Consultant"). City and Consultant are sometimes
individually referred tows "Party" and collectively as "Parties."
2. RECITALS.
Consultant desires to perform and assume responsibility for the provision of certain
professional third party administrative services in connection with the City's Workers'
Compensation Program required by City on the terms and conditions set forth in this
Agreement. Consultant represents that it has demonstrated competence and experience in
providing Workers' Compensation Program services to public clients, is licensed in the State
of California, and is familiar with the plans of City.
City desires to engage Consultant to render third party administrative services for the
City's Workers' Compensation Program project ("Project") as set forth in this Agreement.
3. TERMS.
3.1.1 General --Scope of Services. Consultant promises and agrees to furnish
to City all labor, materials, tools, equipment, services, and incidental and customary work
necessary to fully and adequately supply third party administrative services for the City's
Workers' Compensation Program and to process, evaluate, adjust and handle workers'
compensation claims ("Scope of Services and Minimum Performance Standards for Third
Party Administrative Services"). The Services are more particularly described in Exhibit "A°
performed in accordance with, this Agreement, the exhibits attached hereto and incorporated
herein by reference, and all applicable local, state and federal laws, rules and regulations.
3.1.2 Term. The term of this Agreement shall be from July 1, 2018 to June 30,
2023, unless earlier terminated as provided herein. Consultant shall complete the Services
ttiin_th t _of_ ymt blista._i and
deadlines. The term of this Agreement may be extended by written amendment to this
Agreement signed by the City Manager and the Consultant.
3.2.1 Control anti Payment of Subordinates` Independent Contractor. The
Services shall be performed by Consultant or under its supervision. Consultant will
determine the means, methods and details of performing the Services subject to the
requirements of this Agreement. City retains Consultant on an independent contractor basis
and not as an employee. Consultant retains the right to perform similar or different services
for others during the term of this Agreement. Any additional personnel performing the
Services under this Agreement on behalf of Consultant shall also not be employees of City
and shall at all times be under Consultant's exclusive direction and control. Consultant shall
pay all wages, salaries, and other amounts due such personnel in connection with their
performance of Services under this Agreement and as required by law. Consultant shall be
responsible for all reports and obligations respecting such additional personnel, including, but
not limited to: social security taxes, income tax withholding, unemployment insurance,
disability insurance, and workers' compensation insurance.
In the event that Consultant or any employee, agent, or subcontractor of Consultant
providing services under this Agreement claims or is determined by a court of competent
jurisdiction or the California Public Employees Retirement System (CaIPERS) to be eligible
for enrollment in CaIPERS as an employee of City, Consultant shall indemnify, defend, and
hold harmless CITY for the payment of any employee and/or employer contributions for
CaIPERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as
well as for the payment of any penalties and interest on such contributions, which would
otherwise be the responsibility of City.
3.2.2 Schedule of Services. Consultant shall perform the Services
expeditiously, within the term of this Agreement, and in accordance with the Schedule of
Services set forth in Exhibit "B" attached hereto and incorporated herein by reference.
Consultant represents that it has the professional and technical personnel required to perform
the Services in conformance with such conditions. In order to facilitate Consultant's
conformance with the Schedule, City shall respond to Consultant's submittals in a timely
manner. Upon request of City, Consultant shall provide a more detailed schedule of
anticipated performance to meet the Schedule of Services. The parties acknowledge that the
Schedule of Services may e a elided by r ut al agreement due to ohanges in
circumstances, including changes in the performance schedules of other third parties
performing work for the City on the Project, which affect the timing of Consultant's
performance of the Services.
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3.2.3 Conformance to Applicable, Requirements. All work prepared by
Consultant shall be subject to the approval of City.
3.2.4 Substitution of ley Personnel. Consultant has represented to City that
certain key personnel will perform and coordinate the Services under this Agreement. Should
one or more of such personnel become unavailable, Consultant may substitute other
personnel of at least equal competence upon written approval of City. In the event that City
and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to
terminate this Agreement for cause. As discussed below, any personnel who fail or refuse to
perform the Services in a manner acceptable to the City, or who are determined by the City to
be uncooperative, incompetent, a threat to the adequate or timely completion of the Project or
a threat to the safety of persons or property, shall be promptly removed from the Project by
the Consultant at the request of the City.
3.2.5 City's Representative. The City hereby designates Michael D. Harary,
Director of Human Resources, or his designee, to act as its representative for the
performance of this Agreement ("City's Representative"). City's Representative shall have
the power to act on behalf of the City for all purposes under this Contract. Consultant shall
not accept direction or orders from any person other than the City's Representative or his or
her designee.
3.2.6 Consultant's Representative. Consultant hereby designates`Alithia
Vargas -Flores, -President, or her designee, to act as its representative for the performance of
this Agreement ("Consultant's Representative"). Consultant's Representative shall have full
authority to represent and act on behalf of the Consultant for all purposes under this
Agreement. The Consultant's Representative shall supervise and direct the Services, using
her best skill and attention, and shall be responsible for all means, methods, techniques,
sequences and procedures and for the satisfactory coordination of all portions of the Services
under this Agreement.
3.2.7 Coordination of Services. Consultant agrees to work closely with City
staff in the performance of Services and shall be available to City's staff, consultants and
other staff at all reasonable times.
3.2.8 Standardof Care; Performance of Pm to ees. Consultant` shall perform
all Services under this Agreement in a skillful and competent manner, consistent with the
standards generally recognized as being employed by professionals in the same discipline in
the State of California. Consultant represents and maintains that it skilled in the
professional calling necessary to perform the Services. Consultant warrants that all
employees and subcontractors shall have sufficient skill and experience to perform the
Services assigned to thein. Finally, Consultant represents that i, its employees and
subcontractors have all licenses, permits, qualifications and approvals of whatever nature
that are legally required to perform the Services, including a City Business License, and that
such licenses and approvals shall be maintained throughout the term of this Agreement. As
provided for in the indemnification provisions of this Agreement, Consultant shall perform, at
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its own cost and expense and without reimbursement from the City, any services necessary
to correct errors or omissions which are caused by the Consultant's failure to comply with the
4 standard of care provide for herein. Any emplye, of the Consultant or its sub -consultants
who is determined by the City to be uncooperative, incompetent, a threat to the adequate or
timely completion of the Project, a threat to the safety of persons or property, or any
employee who fails or refuses to perform the Services in a manner consistent with the
standard of care set forth herein, shall be promptly removed from the Project by the
Consultant and shall not be re-employed to perform any of the Services or to work on the
Project.
3.2.9 Laws and Regulations. Consultant shall keep itself fully informed of and
in compliance with all applicable local, state and federal laws, rules and regulations in force at
the time the Services are performed by Consultant and in any manner affecting the
performance of the Project or the Services, including all applicable Cal/OSHA requirements,
and shall give all notices required by law. Consultant shall be liable for all violations of such
laws and regulations in connection with Services. If the Consultant performs any work
knowing it to be contrary to such laws, rules and regulations and without giving written notice
to the City, Consultant shall be solely responsible for all costs arising therefrom. Consultant
shall defend, indemnify and hold City, its officials, directors, officers, employees and agents
free and harmless, pursuant to the applicable indemnification provisions of this Agreement,
from any claim or liability arising out of any failure or alleged failure to comply with such laws,
rules or regulations. Consultant's violation of such laws, rules and regulations shall also
constitute a material breach of this Agreement.
3.2.10 Insurance.
3.2.10.1 Time for Compliance. Consultant shall not commence the
Services or the Project under this Agreement until it has provided evidence satisfactory to the
City that it has secured all insurance required under this section. In addition, Consultant shall
not allow any subcontractor to commence work on any subcontract until it has provided
evidence satisfactory to the City that the subcontractor has secured all insurance required
under this section. The City reserves the right to modify these requirements, including limits,
based on the nature of the risk, prior experience with insurer, coverage or other special
circumstances.
3.2.10.2 Minimum Requirements. Consultant shall, at its expense,
procure and maintain for the duration of the Agreement insurance against claims for injuries
to persons or damages to property which may arise from or in connection with the
performance of the Agreement, the Services or the Project by the Consultant, its agents,
representatives, employees or subcontractors. Consultant shall also require all of its
subcontractors to procure andmaintain the same,insurance for the duration of the
Agreement. Such insurance shall meet at least the following minimum levels of coverage'
(A) Minimum Scope of Insurance. (1) Commercial General
Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an "occurrence"
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basis including products and completed operations, property damage, bodily injury and
personal and advertising injury; (2) Automobile Liability: Insurance Services Office Form
Number CA 0001 covering Code 1 (any auto) or if Consultant owns no autos, Code 8 (hired)
and 9 (non -owned); and (3) Workers' Compensation: Workers' Compensation insurance as
required by the State of California with Statutory Limits; and (4) Employer's Liability
Insurance.
(B) Minimum Limits of Insurance. Consultant shall maintain
limits no less than: (1) Commercial General Liability (CGL): No less than $2,000,000 per
occurrence for products and completed operations, bodily injury, property damage and
personal and advertising injury. If Commercial General Liability Insurance or other form with
general aggregate limit applies, either the general aggregate limit shall apply separately to
this Agreement/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be
twice the required occurrence limit; (2) Automobile Liability: No less than $2,000,000 per
accident for bodily injury and property damage; and (3) Workers' Compensation: Workers'
Compensation limits as required by the Labor Code of the State of California with Statutory
Limits; (4) Employer's Liability: Employer's Liability limits of no less than $2,000,000 per
accident for bodily injury or disease. Employer's Liability coverage may be waived by the City
if City receives written verification that Consultant has no employees.
If the Consultant maintains broader coverage and/or higher limits than the minimum shown in
this subdivision 3.2.10.2, the City requires and shall be entitled to the broader coverage
and/or the higher limits maintained by the Consultant. Any available insurance proceeds in
excess of the specified minimum limits of insurance and coverage shall be available to the
City.
3.2.10.3 Professional Liability (Errors & Omissions). Consultant
shall procure and maintain, and require its sub -consultants to procure and maintain, for
period of five (5) years following completion of the Services or the Project, errors and
omissions liability insurance appropriate to its profession. Such insurance shall be in an
amount not less than $2,000,000 per occurrence or claim and $2,000,000 in the aggregate,
and shall be endorsed to include contractual liability. If the Consultant maintains broader
coverage and/or higher limits than the minimum shown in this subdivision 3.2.10.3, the City
requires and shall be entitled to the broader coverage and/or higher limits maintained by the
Consultant. Any available insurance proceeds in excess of the specified minimum limits of
insurance and coverage shall be available to the City.
3.2.10.4 Insurance Endorsements. The insurance policies shall
contain the followingprovisions, or Consultant shall provide endorsements on forms
approved by the City to add the following provisions to the insurance policies:
(A) Additional Insured Status. The Commercial General
Liability policy shall be endorsed to state that: (1) the City, its directors, officials, officers,
employees, agents and volunteers shall be covered as additional insureds with respect to
liability arising from the work, Services, Projector operations performed by or on behalf of the
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Consultant, including materials, parts or equipment furnished in connection with such work,
Services, Project or operations; and (2) the insurance coverage shall be primary insurance as
resoects the_City its directors:, officials,_ officers, employees, agents and volunteers,_ or if
excess, shall stand in an unbroken chain of coverage excess of the Gonsult nt's scnectuieci
underlying coverage. Commercial General Liability insurance coverage may be provided in
the form of an endorsement to the Consultant's insurance (at lease as broad as ISO Form
CG 20 10 11 85 or both CG 20 10, CG 20 26, CG 20 33 or CG 20 38; and CG 20 37 forms if
later revisions are used).
(B) Waiver of Subrogation. Consultant hereby grants to City a
waiver of any right to subrogation which any insurer of said Consultant may acquire against
the City by virtue of the payment of any loss under said insurance policies set forth herein.
Consultant agrees to obtain any endorsement that may be necessary to affect this waiver of
subrogation, but this provision applies regardless of whether or not the City has received a
waiver of subrogation endorsement from the insurer.
(C) All Coverages. Each insurance policy required by this
Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided,
reduced or canceled except with written notice by certified mail, return receipt requested to
the City; and (B) any failure to comply with reporting or other provisions of the policies,
including breaches of warranties, shall not affect coverage provided to the City, its directors,
officials, officers, employees, agents and volunteers.
3.2.10.5 Prima Coverage. For any claims related to this
Agreement, the Consultant's insurance coverage shall be primary insurance and primary
coverage at least as broad as ISO CG 20 01 04 13 with respect to the City, its directors,
officials, officers, employees, agents and volunteers. Any insurance or self-insurance
maintained by the City, its directors, officials, officers, employees, agents and volunteers shall
be excess of the Consultant's insurance and shall not be called upon to contribute with it in
any way.
3.2.10.6 Separation of Insureds; No Special Limitations. All
insurance required by this Section shall contain standard separation of insureds provisions.
In addition, such insurance shall not contain any special limitations on the scope of protection
afforded to the City, its directors, officials, officers, employees, agents and volunteers.
3.2.10.7 Deductibles and Self-insurance Retentions. Any
deductibles or self-insured retentions must be declared to and approved by the City. City may
require Consultant to provide proof of ability to pay losses and related investigations, claim
administration and defense expenses and costs within the retention. The policy language
shall provide; or be endorsed to provide that the self�irrsured retention may b satisfied b
either the named insured or City..
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3.2.10.8 Acceptbili of Insurers. Insurance is to be placed with
insurers with a current A.M. Best's rating no less than A:VII, authorized to do business in
California, and satisfactory to the City.
3.2.10.9 Verification of Coverage. Consultant shall furnish City with
original certificates of insurance, including all required amendatory endorsements (or copies
of the applicable policy language effective coverage required by this provision) and a copy of
the Declarations and Endorsement Page of the Commercial General Liability policy listing all
policy endorsements to the City before the commencement of work under this Agreement.
However, failure to obtain the required documents prior to the commencement of work under
this Agreement shall not waive the Consultant's obligation to provide them to the City. The
City reserves the right to require complete, certified copies of all required insurance policies,
including endorsements, at any time.
3.2.10.10 Claims -Made Policies. If any of the policies provide
coverage on a claims -made basis.
(A) The retroactive date must be shown and must be before the date of this
Agreement or the date work commences under this Agreement, whichever is earliest;
(B) Insurance must be maintained and evidence of insurance must be
provided for at least five (5) years after completion of the Services provided under this
Agreement;
(C) If coverage is canceled, non -renewed, and not replaced with another
claims -made policy form with a retroactive date prior to the effective date of this Agreement
or the date work commences under this Agreement, whichever is earliest, the Consultant
must purchase extended reporting coverage for a minimum of five (5) years after completion
of the Services under this Agreement.
3.2.11 Safety. Consultant shall execute and maintain its work so as to avoid
injury or damage to any person or property. In carrying out its Services, the Consultant shall
at all times be in compliance with all applicable local, state and federal laws, rules and
regulations, and shall exercise all necessary precautions for the safety of employees
appropriate to the nature of the work and the conditions under which the work is to be
performed. Safety precautions as applicable shall include, but shall not be limited to: (A)
adequate life protection and life-saving equipment and procedures; (B) instructions in
accident prevention for all employees and subcontractors, such as safe walkways, scaffolds,
fall protection ladders, bridges, gangplanks, confined space procedures, trenching and
shoring,_ equipment and other safety devices, equipment and wearing apparel as are
necessary or lawfully required to prevent accidents or injuries; and (C) adequate facilities for
the proper inspection and maintenance of all safety measures.
3.3 --F-66 and Payments.
3.3.1 Compensation. Consultant shall receive compensation, including
authorized reimbursements, for all Services rendered under this Agreement at the rates set
forth in Exhibit "B" attached hereto and incorporated herein by reference. The total
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compensation for the term of the Agreement shall not exceed six -hundred and ten thousand
nine hundred and seventy-six dollars and 00/100 cents ($610,976.00). Extra Work may be
authorized, as described below, and if authorized, said Extra Work will be compensated at
the rates and manner set tortn in MIS Agreement.
3.3.2 R,a ment of Compensation. Consultant shall submit to City a monthly
itemized statement which indicates work completed and hours of Services rendered by
Consultant. The statement shall describe the amount of Services and supplies provided
since the initial commencement date, or since the start of the subsequent billing periods, as
appropriate, through the date of the statement. City shall, within thirty (30) days of receiving
such statement, review the statement and pay all approved charges thereon.
3.3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for
any expenses unless authorized in writing by City..
3.3.4 Extra Work. At any time during the term of this Agreement, City may
request that Consultant perform Extra Work. As used herein, "Extra Work" means any work
which is determined by City to be necessary for the proper completion of the Project, but
which the parties did not reasonably anticipate would be necessary at the execution of this
Agreement. Consultant shall not perform, nor be compensated for, Extra Work without
written authorization from the City Manager.
3.4 Accounting Records.
3.4.1 Maintenance and Inspection. Consultant shall maintain complete and
accurate records with respect to all costs and expenses incurred under this Agreement. All
such records shall be clearly identifiable. Consultant shall allow a representative of City
during normal business hours to examine, audit, and make transcripts or copies of such
records and any other documents created pursuant to this Agreement. Consultant shall allow
inspection of all work, data, documents, proceedings, and activities related to the Agreement
for a period of three (3) years from the date of final payment under this Agreement.
3.5.1 Termination of Agreement.
3.5.1.1 Grounds for Termination. City may, by written notice to
Consultant, terminate the whole or any part of this Agreement at any time either for cause or
for the City's convenience and without cause by giving written notice to Consultant of such
termination, and specifying the effective date thereof, at least seven (7) days before the
effective date of such termination. Consultant may only terminate this Agreement for cause
upon giving the City not less than seven (7) calendar days' written notice..
Upon termination, Consultant shall be compensated only for those services which
have been adequately rendered to City, and Consultant shall be entitled to no further
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compensation. The City shall within fifteen (15)calendardays following termination pay the
Consultant for all services adequately rendered and all reimbursable costs incurred by
Consultant up to the date of termination, in accordance with the payment provisions of this
Agreement.
The following reasons shall constitute "cause" for which either party may terminate this
Agreement as provided herein:
Substantial failure by the other party to perform in accordance with the terms of
this Agreement and through no fault of the terminating party;
Assignment of this Agreement or transfer of the Project by either party to any
other entity without the prior written consent of the other party;
Suspension of the Projector the Consultant's Services by the City for more than
ninety (90) calendar days, consecutive or in the aggregate, without good cause;
Material changes in the conditions under which this Agreement was entered
into, the Scope of Services or the nature of the Project, and the failure of the
parties to reach agreement on the compensation and schedule adjustments
necessitated by such changes.
3.5.1.2 Effect of Termination. If this Agreement is terminated as
provided herein, City may require Consultant to provide all finished or unfinished Documents
and Data and other information of any kind prepared by Consultant in connection with the
performance of Services under this Agreement. Consultant shall be required to provide such
Documents and Data and other information within fifteen (15) days of the City's request.
3.5.1.3" Additional Services. In the event this Agreement is
terminated in whole or in part as provided herein, City may procure, upon such terms and in
such manner as it may determine appropriate, services similar to those terminated.
3.5.2 Delivery of Notices. All notices permitted or required under this
Agreement shall be given to the respective parties at the following address, or at such other
address as the respective parties may provide in writing for this purpose:
Consultant:
AdminSure Inc.
3380 Shelby Street
Ontario,_ California 91764
Phbhe: (909) 861=17$16
Fax: (909) 978-1131
Attn: Alithia Vargas -Flores, President
C7
City:
City of Downey
Downey, California 90241
Phone: (562) 904-7286
Fax: (562) 622-4648
Attn: City Manager
With a courtesy copy to:
City of Downey
City Attorney's Office
11111 Brookshire Avenue
Downey, California 90241
Such notice shall be deemed made when personally delivered or when mailed, forty-
eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to
the party at its applicable address. Actual notice shall be deemed adequate notice on the
date actual notice occurred, regardless of the method of service.
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3.5.3.1 Documents & Data,° Licensing of Intellectual Pro` ert This
Agreementcreates' a non-exclusive and perpetual license for City to copy, use, modify,
reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied
in plans, specifications, studies, drawings, estimates, and other documents or works of
authorship fixed in any tangible medium of expression, including but not limited to, physical
drawings or data magnetically or otherwise recorded on computer diskettes, which are
prepared or caused to be prepared by Consultant under this Agreement ("Documents &
Data"). Consultant shall require all subcontractors to agree in writing that City is granted a
non-exclusive and perpetual license for any Documents & Data the subcontractor prepares
under this Agreement. Consultant represents and warrants that Consultant has the legal
right to license any and all Documents & Data. Consultant makes no such representation
and warranty in regard to Documents & Data which were prepared by design professionals
other than Consultant or provided to Consultant by the City. City shall not be limited in any
way in its use of the Documents and Data at any time, provided that any such use not within
the purposes intended by this Agreement shall be at City's sole risk.
3.5.3.2 Confidentiality. All ideas, memoranda, specifications,
plans, procedures, drawings, descriptions, computer program data, input record data, written
information, and other_Documents and' Data either created' by or provided to Consultant' in
connection with the performance of this Agreement shall be held confidential by Consultant.
Such materials shall not, without the prior written consent of City, be used by Consultant for
any purposes other than the performance of the Services. Nor shall such materials be
disclosed to any person or entity not connected with the performance of the Services or the
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Project. Nothing furnished to Consultant which is otherwise known to Consultant or is
generally known, or has become known, to the related industry shall be deemed confidential
Consultant shall not use City's name or insignia, photographs of the Project, or any publicity
pertaining to the Services or the Project in any magazine, trade paper, newspaper,_ television
or radio production or other similar medium without the prior written consent of City.
3.5.4 Cooperation; Further Acts. The Parties shall fully cooperate with one
another, and shall take any additional acts or sign any additional documents as may be
necessary, appropriate or convenient to attain the purposes of this Agreement.
3.5.5 Attorney's Fees. In the event of any litigation, whether in a court of law,
administrative hearing,_ arbitration, or otherwise, arising from or related to this Agreement of
the services provided under this Agreement, the prevailing party shall be entitled to recover
from the non -prevailing party all reasonable costs incurred, including staff time, court costs,
attorneys' fees and all other related expenses in such litigation.
3.5.6 Indemnification.
3.5.6.1 General Indemnification. Except as provided in subdivision
3.5.6.2 below which is applicable to "design professionals" only, Consultant shall defend (with
counsel acceptable to City), indemnify and hold the City, its officials, officers, employees,
volunteers and agents free and harmless from any and all claims, demands, causes of action,
costs, expenses, liability, loss, damage or injury, in Jaw or equity, to property or persons,
including wrongful death, in any manner arising out of or incident to any alleged negligent
acts, errors, omissions or willful misconduct of Consultant, its officials, officers, employees,
agents, consultants and contractors arising out of or in connection with the performance of
the Services, the Project or this Agreement, including without limitation the payment of all
consequential damages and attorneys' fees and other related costs and expenses.
Consultant shall defend, at Consultant's own cost, expense and risk, any and all such
aforesaid suits, actions or other legal proceedings of every kind that may be brought or
instituted against City, its directors, officials, officers, employees, agents or volunteers.
Consultant shall pay and satisfy any judgment, award or decree that may be rendered
against City or its directors, officials, officers, employees, agents or volunteers, in any such
suit, action or other legal proceeding. Consultant shall reimburse City and its directors,
officials, officers,- employees, agents and/or volunteers, for any and all legal expenses and
costs incurred by each of them in connection therewith or in enforcing the indemnity herein
provided. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if
any, received by the City, its directors, officials officers,_ employees, and agents or volunteers.
Consultant shall not be obligated to defend, indemnify or hold the City harmless in any
manner whatsoever for any claims or liability arising solely out of the City's own negligent
acts, errors or omissions or 11llfuf misconduct.
3.5.6.2 Design Professionals. The provisions of this subdivision
3.5.6.2 shall apply only in the event that Consultant is a "design professional" within the
meaning of California Civil Code section 2782.8(c). If Consultant is a "design professional"
within the meaning of Section 2782.8(c), then, notwithstanding subdivision 3.5.6.1 above, to
the fullest extent permitted by law (including, without limitation, Civil Code sections 2782 and
r it
indemnify and hold harmless City and City's officers, officials, employees, volunteers and
agents from and against any Claim that arises out of, pertains to, or relates to, directly or
indirectly, in whole or in part, the negligence, recklessness, or willful misconduct of
Consultant, any subconsultant, subcontractor or any other person directly or indirectly
employed by them, or any person that any of them control, arising out of Consultant's
performance of any task or service for or on behalf of City under this Agreement. Such
obligations to defend, hold harmless and indemnify City or any City officers, officials,
employees or volunteers shall not apply to the extent that such Claims are caused in part by
the sole active negligence or willful misconduct of City or such City officers, officials,
employees, volunteers and agents. Consultant's cost to defend City and/or City's officers,
officials, employees or volunteers against any such Claim shall not exceed Consultant's
proportionate percentage of fault with respect to that Claim; however, pursuant to Civil Code
section 2782.8(a), in the event that one or more defendants is unable to pay its share of
defense costs due to bankruptcy or dissolution of the business, Consultant shall meet and
confer with City (and, if applicable, other parties) regarding any unpaid defense costs. To the
extent Consultant has a duty to indemnify City or any City officers, officials, employees,
volunteers and/or agents under this subdivision 3.5.6.2, Consultant shall be responsible for
all incidental and consequential damages resulting directly or indirectly, in whole or in part,
from Consultant's negligence, recklessness or willful misconduct.
3.5.7 Entire Acireement. This Agreement contains the entire Agreement of the
parties with respect to the subject matter hereof, and supersedes all prior negotiations,
understandings or agreements.
3.5.8 Governing Law. This Agreement shall be governed by the laws of the
State of California. Venue shall be the courts in Los Angeles County.
3.5.9 Time of Essence. Time is of the essence for each and every provision of
this Agreement.
3.5.10 Cit 's Right to Em alloy tither Consultants. City reserves right to employ
other consultants in connection with this Project.
3.5.11 Successors and Assi" ns>. This Agreement shall be binding on the
successors and assigns of the parties.
3.5.12 Assignment or Transfer. Neither party shall assign, hypothecate, or
transfer, either directly or by operation of'iaw, this Agreement or any interest herein without
the prior written consent of the other party. Any attempt to do so shall be null and void, and
any assignees, hypothecates or transferees shall acquire no right or interest by reason of
such attempted assignment, hypothecation or transfer.
12
3.5.13 Construction; References; Captions;. Since the Parties or their agents
have participated fully in the preparation of this Agreement, the language of this Agreement
shall be construed simply, according to its fair meaning, and not strictly for or against any
Party. Any term referencing time, days or period for performance shall be deemed calendar
days and not work days. All references to Consultant include all personnel, employees,
agents, and subcontractors of Consultant, except as otherwise specified in this Agreement.
All references to City include its elected officials, officers, employees, agents and volunteers
except as otherwise specified in this Agreement. The captions of the various articles and
paragraphs are for convenience and ease of reference only, and do not define, limit,
augment, or describe the scope, content, or intent of this Agreement.
3.5.14 Amendment Modification. No supplement, modification, or amendment
of this Agreement shall be binding unless executed in writing and signed by both Parties.
3.5.15 Waiver. No waiver of any default shall constitute a waiver of any other
default or breach, whether of the same or other covenantor condition. No waiver, benefit,
privilege, or service voluntarily given or performed by a Party shall give the other Party any
contractual rights by custom, estoppel, or otherwise.
3.5.16 No. Third Party Beneficiaries. There are no intended third party
beneficiaries of any right or obligation assumed by the Parties.
3.5.17 Invalidity: Severability. If any portion of this Agreement is declared
invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions shall continue in full force and effect.
3.5.18 Prohibited Interests. Consultant maintains and warrants that it has not
employed nor retained any company or person, other than a bona fide employee working
solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it
has not paid nor has it agreed to pay any company or person, other than a bona fide
employee working solely for Consultant,_ any fee, commission, percentage, brokerage fee, gift
or other consideration contingent upon or resulting from the award or making of this
Agreement. For breach or violation of this warranty, City shall have the right to rescind this
Agreement without liability. For the term of this Agreement, no member, officer or employee
of City, during the term of his or her service with City, shall have any direct interest in this
Agreement, or obtain any present or anticipated material benefit arising therefrom.
3.5.19 Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee or
applicant for`employmenf because of race, religion, color, national origin,-handicap,'ancestry,'
sex or age. Such non-discrimination shall include, but not be limited to, all activities related to
initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising,
layoff or termination. Consultant shall also comply with all relevant provisions of any City
17
Minority Business Enterprise program, Affirmative Action Plan or other related programs or
guidelines currently in effect or hereinafter enacted.
µ 3.5.20 Labor Certification. By its 4signature hereunder, Consultant certifies that x
it is aware of the provisions of Section 3700 of the California Labor Code which require every
employer to be insured against liability for Worker's Compensation or to undertake self-
insurance in accordance with the provisions of that Code, and agrees to comply with such
provisions before commencing the performance of the Services.
3.5.21 Authority to Enter Agreement., Consultant has all requisite power and
authority to conduct its business and to execute, deliver, and perform the Agreement. Each
Party warrants that the individuals who have signed this Agreement have the legal power,
right, and authority to make this Agreement and bind each respective Party.
3.5.22 Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute one and the same instrument.
3.5.23 Effect. of Conflict.
In the event of any conflict, inconsistency, or incongruity between any provision of this
Agreement, any of its exhibits, attachments, purchase order, or notice to proceed, the
provisions of this Agreement will govern and control.
3.6.1 Prior Approval Cie uired. Consultant shall not subcontract any portion of
the work required by this Agreement, except as expressly stated herein, without prior written
approval of City. Consultant shall require and verify that all subcontractors maintain
insurance meeting all of the requirements set forth in this Agreement. Consultant shall ensure
that City is an additional insured as required in Section 3.2.10.4. Subcontracts, if any, shall
contain a provision making them subject to all provisions stipulated in this Agreement.
14
CITY OF DOWNEY,
and charter city
By:
Mayor
City Clerk
I rity -Attorn"ey
By-
Alithia Vargas -Flores, President
15
EXHIBIT "A"
SCOPE OF ■
IBM
r r
Consultant, its agents and employees are retained to serve as the City's third party administrator for
the City's Worker's Compensation Program, to administer the City's Worker's Compensation Program
and to process, evaluate, adjust and handle workers' compensation claims against City.
Minimum performance standards are listed below and will be incorporated as part of this Agreement
between City and Consultant. All staff assigned to provide services under this Agreement must read
and sign that they acknowledge receipt and will adhere to these minimum performance standards:
1. Caseload
An ideal caseload is 150 open indemnity claims, with each future medical claim (settled; no pending
issues other than the payment of the approved Award, medical treatment, liens and excess) or
medical -only claim being counted as one-half of an indemnity claim.
2. New Claim Set Up
Upon receipt of the Employer's Report of Occupational Injury or Illness (Form 5020), Workers'
Compensation Claim Form (DWC 1), or Application for Adjudication of Claim, the claims administrator
will create a claim file within two workdays.
In the event a DWC 1 Form is not received by the claims administrator within one to two workdays
after receiving Form 5020, the claims administrator will contact the employer to ensure that a DWG 1
Form was provided to the injured worker within one workday of the employer's date of knowledge of
the injury. If a DWC 1 Form was not provided, the claims administrator will immediately send a DWC 1
Form directly to the injured worker.
The claims administrator will immediately request Form 5020 from the employer when the Doctor's
First Report of Occupational Injury or Illness (Form 5021) is received first.
All coding fields will be accurate and complete.
eCo nsabihty
The initial compensability determination (accept claim, deny claim, or delay acceptance pending the
results of additional investigation or medical documentation) and the reasons for such a determination
will be made and documented in the claims administrator's file notes no later than fourteen (14)
calendar days of the filing of the claim with the employer.
Upon knowledge of preexisting medical conditions which may be pertinent to a claim, medical records
will be explored and obtained as necessary and/or approved by the employer.
When medical causation is unclear, a medical evaluation will be scheduled with a physician by way of
a State Panel Qualified Medical Exam, Defense Qualified Medical Exam, or Agreed Medical Exam
(ME). A cover letter, when appropriatewill be provided to the physician outlining the specific issues, -
concerns and questions. All relevant medical reports, investigation reports, and information will be
provided to the physician for review prior to the examination date.
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Delayed claims will clearly document the reason for the delay, the information needed to determine
compensability and the anticipated date of the final decision. If a claim was initially delayed pending a
physician's report and/or other medical, legal, or investigation report, a decision will be made within
five workdays from receipt of such reporting, or sooner, if any delay will result in a penalty situation.
For all denied claims, the claims administrator will document the factual, medical, and/or legal basis
for the denial, in accordance with the Workers' Compensation Laws of California.
The claims administrator will notify the employer of all claims where a delay or denial is
recommended. The claims administrator will also notify the employer before any questionable claim is
accepted. Thereafter, a proper notice will be sent to the injured worker notifying him/her of the
decision and their rights under the Workers' Compensation Laws of California.
In no case will a compensability decision be made more than ninety (90) days from the employer's
date of knowledge of the injury and/or the employer's receipt of the Workers' Compensation Claim
Form (DWC 1).
4. ISO'ClaimSearch® and EDEX-
The claims administrator will request a report from ISO ClaimSearch® and/or EDEX on all new
indemnity claims. Thereafter, requests will be submitted if the possibility of other injuries is suspected,
it appears permanent disability may be paid, or a claim file becomes litigated.
5. Three -Point Contact
a. Employers will be contacted within two workdays of receipt of a "claim to discuss and verify
compensability, disability, clarify issues, and request additional information, if necessary. Contact will
be made sooner if any delay will result in a late payment, late notice, or any penalty situation.
b. All injured workers will be contacted by telephone within two workdays of receipt of a claim.
During this initial contact, injured workers will be provided with an explanation of their benefits and will
be asked whether they have any questions or concerns regarding their claim.
Injured workers who have not returned to work will be contacted by telephone within two workdays of
receipt of a lost time claim unless the injured worker is represented by an attorney.
During this initial contact, injured workers will be provided with an explanation of their benefits
and will be asked whether they have any questions or concerns regarding their claim.
Injured workers will continue to be contacted at least twice a month while they are disabled from
working, unless they are represented by an attorney, or their claim has been finalized.
c. Treating physicians will be contacted within two workdays of notice or receipt of a lost time
claim to verify the diagnosis, compensability, duration of disability, proposed treatment and other
issues, as appropriate. Contact will be made sooner if any delay will result in a late payment, late
notice or any penalty situation. Thereafter, the claims administrator will maintain contact at least every
thirty (30) days with the treating physician to monitor the disability status and the progress of medical
treatment, facilitate an early return to work, and obtain medical reports.
_e _ ._ .
Tele `hone and Written Communication
Telephone calls will be returned within one workday. If the designated claims administrator is not
available within this time frame, another claims administrator will return the telephone call.
Written communications from the employer, defense counsel and injured workers requiring
acknowledgment or action will be responded to within five workdays. Written communications from all
17
other parties will be responded to within thirty (30) days or sooner, if an immediate response is
necessary or required. All incoming written communication will have the date of receipt clearly date
stamped.
The claims administrator will respond to the employer's request for verbal status reports on claim files
within twenty-four (24) to forty-eight (48) hours.
In lieu of written status reports, the employer will be provided with online computer access to claim
status information.
7. Investigation ;Management
With prior authorization from the employer, the claims administrator will immediately assign an
investigator, as needed, when any identified issue arises that may impact the nature, extent, or scope
of the employer's liability.
Referrals will be made within five workdays from the employer's approval and will include specific,
written instructions regarding the scope of the investigation. The employer will be kept informed of the
results of all investigations.
8. Fraudulent Claims
Any claim that is believed to be fraudulent will be referred to an investigator for additional
investigation, and with the employer's prior approval, the claim will be referred to the appropriate law
enforcement agency for further investigation.
g. Subrogation Management
Whenever practical, the claims administrator will aggressively pursue recovery in all subrogation
claims. The claims administrator will attempt to maximize the recovery for benefits and payments
made and assert credit against an injured worker's net recovery for future benefit payments.
Subrogation potential will be identified and appropriate steps will be taken to initiate an investigation
within ten (10) workdays after information is available that subrogation may exist. In all cases where it
appears a third party is responsible for the injury to the injured worker(s), and once the responsible
party has been identified, the third party will be contacted within ten (10) workdays with notification of
the employer's right to subrogation and the recovery of claim expenses.
The claim will be monitored to determine the need to file a complaint in order to preserve the statute
of limitations. If the injured worker brings an action against the party responsible for the injury, the
claims administrator will consult with the employer about the value of the subrogation claim and other
considerations. Upon employer authorization, subrogation counsel will be assigned to file a Lien or a
Complaint in Intervention in the action. The claims administrator will identify and seek recovery from a
state fund, entity, or individual that may be a party to the claim.
The employer will be kept informed of the results of all subrogation efforts and findings.
Should an employer request that we not pursue subrogation efforts and/or the claims administrator
recommends subrogation efforts not be made for whatever reason(s), we shall document all
discussions, decisions, etc. in our computer notepad.
1 Q. -Litigation Management
When a defense attorney is not necessary, the claims administrator will work closely with the
applicant's attorney towards disposition of the claim.
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In the event the claims administrator and the employer determine s claim warrants referral to a
workers' compensation defense attorney, the claim administrator will retain primary responsibility.
Defense counsel will not be used to perform routine activities that are the responsibility of the claims
administrator. Exceptions will be approved by the employer.
The claims administrator will communicate with the defense attorney to provides complete overview
of the claim. The claims administrator will also prepare a complete copy of the claim file for
transmission to the defense attorney with a transmittal form or cover letter outlining the status of the
case, results of investigations and discovery completed to date, primary issues, requested action and
plan of action. Ongoing documentation will be sent to the defense attorney timely.
The claims administrator will carefully evaluate and monitor the defense attorney's aggressiveness in
resolving claims, ability to identify issues, responsiveness, timeliness, and billing practices. The claims
administrator will also provide the employer with advance notice of hearings and trials so they may
attend, if necessary or desired.
11. Claim Reserves
Initial claim reserves will reflect the most probable value of the claim based on the information
available at the time and the facts developed to date.
Initial claim reserves and subsequent reserve changes are reviewed and approved by supervisor
except under the following circumstance: Claims administrators who possess the necessary
Workers' Compensation experience and knowledge may have authority to establish initial reserves up
to $75,000.00 and each subsequent reserve change up to $50,000.00.
As claim values increase and decrease, claim reserves will be reviewed on a regular basis and on
each diary date, but not less than twice a year. The rationale for reserves will be documented in the
file notes and the amounts allocated to each reserve category will be documented.
12. Claim Reconciliation
Claim files will be reconciled to ensure all medical, indemnity, vocational rehabilitation, legal, and
other expense payments are appropriate, were made to the correct individual/provider in the correct
amount and were paid from the correct claim file. The physical file will be verified with the computer
information.
All open claim files will be reconciled annually or when there is a change from one benefit to another.
Proof of the reconciliation will be documented by way of a file note and a completed reserve
worksheet, when applicable.
13. Payments
Prior to payment, all bills will be reviewed for accuracy and appropriateness.
All medical bills will be reviewed for reduction in accordance with the California Official Medical Fee
Schedule (DMFS), InPatient Hospital Fee Schedule (IHFS), Preferred Provider Organization (PPO)
discounts, and/or negotiated rates.
Medical bills submitted without supporting documentation will be objected to within thirty (30) days
from receipt and will not be reviewed for payment until such documentation is obtained, if applicable..
Medical bills will be paid, objected to, or denied no later than thirty (30) days from receipt and/or in
accordance with state statutes.
19
Medical -legal costs will be reviewed for appropriateness and necessity. Bills that do not qualify as
valid medical -legal expenses will be objected to on a timely basis according to the Workers'
Com ensation Laws of California.
As required by SB 899, payment of medical treatment regarding delayed AOE/COE claims will be
processed through Utilization Review and Bill Review but will not exceed $10,000.00.
Mileage reimbursement requests from injured workers will be processed and mailed to the injured
worker within ten (10) workdays of receipt of the request. Advance travel expense payments will be
mailed to the injured worker no later than seven days prior to the anticipated date of travel.
14. Diary
Indemnity claims that are not on a benefit payment schedule will be reviewed on diary every thirty (30)
to sixty (60) days as activity warrants, or more frequently when needed, for resolution of any and all
issues and closure.
Indemnity claims on a benefit payment schedule will be reviewed on diary every fourteen (14) days, or
more frequently when needed, for resolution of any and all issues and closure. Medical -Only claims
will be reviewed on diary every thirty (30) days for closure, or more frequently when needed. A
medical -only claim will be converted to an indemnity claim when disability benefits are due,
compensability becomes an issue, or litigation is initiated by either the injured worker or the employer.
Future -Medical claims will be reviewed on diary at least twice a year, or more frequently when
needed, for the monitoring of future -medical care, Compromise and Release settlement and closure;
1. Indemnity Benefits
Accurate and timely indemnity benefit payments and notices will be computed, processed, and
transmitted to injured workers as required by California Labor Codes, Statutes and Regulations.
Initial indemnity benefit payments and notices will be processed and mailed to the injured worker
within fourteen (14) days of the first day of compensable disability. All subsequent and final indemnity
benefits payments and notices will be verified and issued in compliance with the Workers'
Compensation Laws of California.
Late indemnity payments due directly to the injured worker will include a self-imposed 10% penalty in
accordance with the Labor Code.
16._ Penalties
Late payments of all undisputed bills, benefits, Awards, Commutations, or Compromise and Releases
will include the appropriate self-imposed penalty in accordance with the Workers' Compensation Laws
of California.
The employer will be advised of the assessment of any penalty for late payment, the reason, and the
responsible party within ten (10) workdays of the assessment. In the event the claims administrator is
the responsible party, the claims administrator will submit a reimbursement check to the employer
within -fifteen -(15) workdays of the assessment.
17. Return to Work
The claims administrator will assist the employer in establishing a modified -work (light-duty) plan that
is appropriate and accommodating for injured workers while they are recovering from their injury or
illness and prior to their return to regular duties.
20
The claims administrator will immediately consult with the employer in those cases where the injury or
illness residuals might involve permanent work restrictions and/or retirement potential.
18. Medical Management
The claims administrator's Utilization Review process will monitor treatment recommendations and
medical treatment to ensure it is appropriate, medically necessary, and consistent with the
recommended standards set forth in the American College of Occupational and Environmental
Medicine Occupational Medical Practice Guidelines (ACOEM).
For all conditions and injuries/illnesses not covered by the ACOEM Practice Guidelines, authorized
treatment will be in accordance with other evidence -based medical treatment guidelines that are
relevant to the request, generally recognized by the national medical community, and scientifically
based.
The claims administrator will monitor the medical treatment to ensure it is related to the compensable
injury or illness. The claims administrator will timely object to inappropriate medical reports.
When appropriate, the claims administrator will arrange a medical evaluation byway of a Labor Code
Section §4050 Exam, State Panel Qualified Medical Exam, Defense Qualified Medical Exam, or
Agreed Medical Exam (AME) to address the necessity and/or reasonableness of care for litigated and
non -litigated injured workers and injured workers who have a valid predesignated physician. A cover
letter, when appropriate, will be provided to the physician outlining the specific issues, concerns, and
questions. All relevant medical reports, investigation reports, and information will be provided to the
physician for review prior to the examination date.
If the employer has an approved Medical Provider Network (MPN) in place, all medical evaluations,
determinations, and disputes shall be governed per California Labor Codes and Regulations,
specifically Labor Code Sections §4616 through §4616.4, Regulations §9767.1 through §9767.14, and
pertinent Workers' Compensation Laws of California.
In the event a claim warrants referral to an outside nurse case manager or any other outside medical
management service, the employer will be contacted for prior approval and to discuss the intent and
scope of services requested.
19. Resolution of Claims
The employer will be notified within ten (10) after receipt of the treating physician's or other
relevant physician's Maximum Medical Improvement (Permanent and Stationary) report. The claims
administrator will determine the extent of permanent disability by completing a disability rating,
arranging for an informal disability rating, or requesting a Summary Rating Determination (DEU Form
102) from the Disability Evaluation Unit. The claims administrator will also determine and take credit
for legally permissible apportionment, if any.
The claims administrator will telephone the injured worker, if not represented by legal counsel, and
-- mail-a-notice-outifining-permanent-dasability- -future-medical-car-e, pplicable-rpravide-a-Q- alified - —__—
Medical Examination request form, within ten (10) workdays from receipt of a Maximum Medical
Improvement (Permanent and Stationary) report. The purpose of the telephone call and notice is to
explain the process and answer the injured worker's questions) The claims administrator will take
appropriate action(s) to finalize the claim.
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0. Rehabilitation Management
All notifications, determinations, and referrals regarding Vocational Rehabilitation Benefits or
Supplemental Job Displacement Benefits, and Qualified Injured Worker or Non -Qualified Injured
' UI Kt:l tAdtUb WWII UU 1114UU Ut I JWIY III Cl4rL,lil Lddl: ILrk: mu I tsm v ImGII mI:.� %Ijj I IvVi s culvi I ma Ws %octmVI l lm4
in place at the time of injury. The claims administrator will:
a. Notify the employer of the injured worker's permanent work restrictions so the employer
may determine the availability of permanent modified or alternate work.
b. Notify the injured worker of their potential rehabilitation rights.
c. With prior employer approval, assign an outside rehabilitation counselor or other service
vendor when the need is identified for a formal job analysis, essential function job analysis, ergonomic
evaluation, or a 90 -Day QRR intervention.
d. Attempt to secure the prompt conclusion of vocational rehabilitation benefits, and settle
rehabilitation where appropriate.
e. Monitor rehabilitation programs on an ongoing basis to verify appropriateness and progress.
f. Monitor and control rehabilitation benefits and costs through conclusion. In addition, the
claims administrator will work with the employer to assist in the coordination of experts in complying
with Americans with Disabilities Act (ADA) and AB 2222 interactive accommodation requirements.
21. Al2proval of Settlements
The claims administrator and/or defense attorney, if applicable, will submit settlement requests to the
employer for approval on all settlement requests. Settlement requests will be clear and concise and
will consist of a verbal and/or written analysis of the claim/issue(s), and monetary recommendations.
After supervisory approval, settlement requests will be presented to the employer in this manner so as
to ensure receipt of a response in sufficient time to process the settlement.
If the settlement exceeds, or may have the potential to exceed, the employer's self-insured retention,
the claims administrator will immediately submit a written analysis of the claim/issues(s) and contact
the excess carrier by telephone to discuss the settlement and obtain approval.
Overpayments will be identified on all settlement requests and where appropriate, the claims
administrator will pursue credit for the overpayment, if any.
22. Award Ra menta
Following receipt of the appropriate, fully executed document(s), payments on undisputed Awards, -
Commutations, or Compromise and Releases will be issued within ten (10) workdays or sooner, if
necessary to ensure payment within twenty (20) calendar days of the Workers' Compensation
Appeals Board (WCAB) approval date, or if any delay will result in a late payment, late notice, or any
penalty situation.
23. Excess Insurance
Claims that have the potential to exceed the employer's self-insured retention will be reported in
accordance with the reporting criteria established by the employer's excess insurance carrier's
policies.
22
Claims that meet the established reporting criteria will be reported to the excess carrier in accordance
with the applicable policy but in no event will the claim be reported to the excess carrier more than
thirty (30) days from the day on which it is known the criteria are meta
Excess reporting correspondence prepared by the claims administrator will be copied to the employer.
Correspondence received by the claims, administrator involving excess claims will be sent to the
employer and responded to by the claims administrator within ten (10) workdays of receipt.
Requests for reimbursement on active claims will be made at least twice a year. For less active
claims, reimbursement will be requested when reimbursement exceeds $2,500.00, but in no event
less frequently than on an annual basis.
24. File Documentation
Any significant development will be documented in the file notes. All file notes will have a "Plan of
Action" that includes time frames for completing tasks or activities. The progress of the "Plan of
Action" will be documented as will the reasons for any delays or modifications to the "Plan of Action."
File documentation also includes all information that relates to the direction, value, and active claim
strategy towards closure of the claim.
All files "will "be in chronological order with correspondence in the designated section. All handwritten
correspondence, if any, will be legible. All file notes, actions, or tasks completed on a claim will
identify the date and the person(s) who completed it.
2. Supervisory Review'
Supervisors do not have a caseload. Their primary role is to direct, monitor and review the work of
claims administrators. All supervisory reviews will be documented in the file notesandlabeled
"Supervisory Review." All claims will be reviewed by a supervisor:
a. At file creation.
b. Before cases are delayed or denied.
c. Before referral to outside investigation, subrosa, medical case management or defense
counsel.
d. When reserve increases, proposed settlements or payments exceed the claims
administrator's limit of authority.
e. Before mandatory settlement conferences or trials.
In addition, supervisors will audit 10% of the claims administrator's caseload each month to evaluate
the work product of the claims administrator, provide direction and review significant activities to
ensure adherence to claims administration standards.
Finally,_ supervisors will review all incoming mail on a daily basis with an eye for anything that might
portend a problem or require special attention.
26. Internal Auditing'
In addition to supervisory audits, claim files are also randomly selected and reviewed by an internal
auditor to further ensure compliance with performance standards outlined herein and to identify any
areas of needed improvement in overall claims handling and reserving.
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27. Closure
Indemnity and medical -only claims will be reviewed for closure and closed within thirty (30) days from
Future -Medical claims will be reviewed for settlement not less than twice a year. When future -medical
benefits are the only remaining benefit due to the injured worker, and the claim is inactive for a period
of two years, it will be closed no later than two years from the date of the last provision of Workers'
Compensation benefits, flagged as "do not destroy" and placed in permanent storage.
28. Record Retention
The claims administrator will retain all claim files for five years after the closure date. The claims
administrator will retain all future -medical claim files for the entire life of the claim file.
Thereafter, the claims administrator will contact the employer to determine if the employer wishes to
retain the claim file.
29. Personnel and Availability
Personnel who handle claim files will be well trained, appropriately certified and will receive continuing
education and training.
The claims administrator, or a supervisor, will be available by telephone Monday through Friday, 8:00
a.m. to 4:30 p.m.
30. Client Services
The claims administrator will provide the employer with all necessary workers' compensation claim
forms in an electronic format with printed forms available at cost.
The claims administrator will provide on-site training, attend on-site meetings, and complete file
reviews for the employer on an as needed basis.
The claims administrator will participate in events pertaining to the employer's Workers'
Compensation Program and will meet with injured workers to resolve issues that arise from claims on
an as needed basis. The claims administrator will meet with the employer on an as needed basis to
provide information, opinions and direction regarding proposed changes to the Workers'
Compensation Laws of California and to meet with the employer's designated personnel to ensure
they are effectively processing the employer's Workers' Compensation claims as required by law.
24
The current claims administration service fee is $9,590 per month. Beginning July 1, 2019,
future increases shall be based on the greater of 2.0% or the March All Urban Consumer
Price Index -(CPI -U) for Los Angeles County to a cap of 3.0%. Subsequent annual terms from
July 1 to June 30 may be adjusted by the Consultant with prior approval from the City.
Consultant shall perform all Bill Review Services through MedReview at 14% of savings.
Preferred Provider Organization (PPO) fees shall not exceed 24% of savings when
applicable, and if there are no savings, there are no PPO fees. Consultant shall perform all
Utilization Review Services through Med Review. Utilization review fees are incorporated into
medical bill review invoices at the rate of 4% of billed charges. The maximum utilization
review fee charged per medical bill is capped at $750.00. Utilization review by a physician is
billed separately at the rate of $200.00 per hour.
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