HomeMy WebLinkAbout1986-06-03; City Council; 6645-2; Workers comp claim admin services agreement.. . .
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4B# 6b45-*2 TITLE: AGREEMENT FOR WORKERS'
COMPENSATION CLAIMS HTG. 6-3-86
3EPT. ADMINISTRATION SERVICES PER ICITY MOR..*
RECOMMENDED ACTION:
That Council apprave Resolution No. FsK authorizing an agrement with
Bierly and Associates for Workers' Compensation Claims Administration Sezvices.
ITEM EXPLANATION
The current contract for workers' canpensation claims service with Bierly and Associates was signed in 3une, 1983, and expires on 3uly 1, 1986. The contract provides for a year to year renewal and an opportunity to propose changes at least 90 days preceding expiration. Initially, the City desired an extension of a year and Bierly desired an increase in charges. The proposed cost changes were submitted prior to the 90 day limit and there was a mutual agrement to extend the contract.
The proposed renewal and cost proposals were then reviewed by the City's Risk
Manqement Consultant, Mr. Don 3ack, who recanmended the City seek a three (3)
year renewal.
Associates over the ten of the contract and Mr. Jack's recanmendation, the
staff also recanneds a three (3) year renewal.
In light of the excellent services provided by Bierly and
FISCAL IMPACT
The initial contract with Bierly and Associates provided $75.00 per case charge
with a yearly maximum mount of $6,000. based upon the Consumer Price Index for San Diego County and presently are
$84.19 per claim with an annual maximum of $6,735.
The costs of the renewed contract would be $115.00 per claim with a monthly arbitrary billing increased to $1,000 per month.
These costs were increased annually
EXHIBITS
Resolution No. p573'
Bierly and Associates letter dated March 13, 1986. Don 3ack's letter dated March 21, 1986.
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RESOLUTION N0.8575 -
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA APPROVING AN AGREEMENT WITH BIERLY AND ASSOCIATES
FOR WORKERS ' COMPENSATION CLAIMS ADMINISTRATION SERVICES -
WHEREAS, the City of Carlsbad has established a workers' canpensation self-
insurance progran; and
WHEREAS, as part of this progran the City will require claims administratic
services; and
WHEREAS, the City has received and evaluated a proposal fran Bierly and
Associates to continue to supply such service.
NOIV, THEREFORE, RE IT RESOLVED by the City Council of the City of Carlsbad
as follows:
1. That the abwe recitations are true and correct.
2. That the agrement between the City of Carlsbad and Bierly and
Associates for claims administration semices, attached hereto as Exhibit A is
hereby approved.
3. That the City Manager is hereby authorized to sign the agrement on
behalf of the City.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council on tl
June , 1986, by the following vote, to wit: -- 3rd day of --
AYES: Council Members Casler, Lewis, Kulchin, Chick and Pettine
NOES: None
ABSENT: None
.__
n ATTEST:
AGR EMEWT FOR WORKERS ' COHPlEWSAT IO N ADMINISTRATION SERVICES
, 1986, between -_. THIS AmEEMENT is enteral into this day of
BIERLY AND ASSOCIATES, hereinafter called "Bierly" ard the CITY OF CARSBAD,
hereinafter called "City".
The Parties agree as follows:
I. The period of this Agreement shall be fran 3uly 1, 1986 through June 30,
1989.
11. Rierly shall perform the following semices on behalf of the City:
A. PROGRAM DEVELOPENT
1. Consult with the City's personnnel and assist in developing the
necessary procedures, prstices and coordination to implement the City's
Self-Insured Progran ad to meet the legal requirements of the State.
2.
personnel involved directly or indirectly in the processitq of industrial
injury cases.
Conduct, or assist in conducting, orientation meetings for the City's
3.
statutes, rules and regulations affecting the City's responsibility under a
1 eg a1 1 y un ins UT ed Workers ' Can pe nsa t io n Pr ogr an.
Prwide the City with information on charges or proposed charges in
4. Review with the City's representatives progran progress, including
identification of problem areas and recanmerd solutions thereto.
5. Establish procedures and necessary documentation to provide for the
payment of benefits, medical costs, legal fees and other related costs to
enzble either the City or Bierly to issue checks to cwer such
expenditures .
B. CLAIMS ADMINISTRATION
1. Maintain all City's open and closed claim files, log books and other
records. Claims information shall be inputted in Bierly's canputer system
and included in reports hereafter described.
2. Review and process all claims for Workers' compensation benefits in
accordance with the requirenents of the Industrial Relations Department for
reporting ad notification.
3. Determine the canpensability of claimed injuries and illnesses in
accordance with the State's Workers' Compensation law.
4. Detenine eligibility for authorized payments of medical benefits and
autbrize examinations to determine the nature and extent of disability
when appropriate.
C.
5.
disability canpensation in coordination with medical advice and
rehabilitation efforts.
Determine eligibility for and authorize payment of temporary
6.
workers utUizing as necessary aixl desireable, advisory ratings of the
Permanent Disability Rating Burem.
Determine the degree of pennanent disability, if any, of injured
7.
benefits in accordance with advisory ratings, orders of the Workers'
Compensation Appeals Board, or Compranise and Release settlements.
Authorize the payment of permanent disability canpensation and death
8.
attorneys, utilizing an agreed listing of legal fins. Assist in the
preparation of litigated cases, negotiations of Compranise and Release
settlements and subrogation actions.
Where necessary, and with apprwal of City, refer litigated cases to
9.
related expenses on each case.
Maintain current estimates of costs of all anticipated benefits and
10. Investigate or arrarge for investigation of, as necessary and
appropriate, questiondle cases and the status of disabled employees in
order to adjsut all cases and to assist in the trial or settlement of
litigated cases.
11.
that no claims examiner will be required to hardle more than 200 open
indemnity cases at any one the.
Assure that sufficient numbers of claims personnel are available so
12. Protect City's interests in all third party cases herwer indicated,
including filing of subrogation clahs, and liens here appropriate, with
approval of City.
13.
of all claims which may exceed City's retention ad maintain records and
effect collection on all cases wherein City is entitled to reimbursement
for a losss in excess of its retention.
Notify City's Excess Reinsurance Carrier on behalf of the self-insurer
MEDICAL CONTROL
1. Develop and recanmend to the City a panel of physicians, dentists,
chiropractors and other practitioners for the treatment of injured
employees and recanmend a panel of such specialists as may be required for
lorg-tern or other disabilities requiring special treatment.
2. Monitor treatment prograns for injured employees including the rwiew
of all "Doctor's First Report of Work Injury" to ensure that the treatment
is related to a canpensable injury or illness.
3. Maintain close liaisn with treating physicians to ensure that
employees receive proper care and to avoid over-treatment situations.
4. Consult with the Cty's personnel and provide guidance and evaluations
of the physical capabilities of injured employees to rehrrn to mrk.
D.
E.
5. Recanmend and assist in the development of medical standards and
health requirements for the City's occupational classifications.
EMPLOYEE SERVICES
1. Provide information and guidance to the City's employees regarding Workers' Comensation benefits, inquiries on specific injuries and permanent
disabilities ratings in accordance with the City's policies.
2. Assist in resolving employee problems related to an industrial injury or illness in noplitigated cases.
3.
injured employees for apprwal by the City, the employee, and other agencies to prwide rehabilitation, retraining or reassignment for employees with physical or performance limitations resulting fran
When medically appropriate, develop rehzbilitation prograns for
industrial injuries.
4. Consult with employee groups and cnions on problem cases in accordance with the City's policies within a reasonable scope.
5. Develop and recanmend policies and procedures to insure that the
employee's ability to work is consistent with the findings of the Workers'
Compensation Appeals Board.
FISCAL ANALYSIS
1. Prwide the City's administration with continuing infonation on the
progress of individual claims and the effectiveness of safety and other cost control prqrans on Workers' Canpensation claims.
2. Submit monthly statistical sunmaries and narrative reports to assist
in the evaluation of the City's progran.
3.. Provide periodic projections of cash flow and actuarial projections of annual incurred costs.
4. Prwide a quarterly narrative status report on all major claims with a total expected cost of Ten Thousand Dollars ($10,000) or more. Such report shall also identify those cases/claims believed to involve legal expense in
excess of One Thousand Dollars ($1,000).
5. Provide canputer and mangement assistance services to penit filing
for reimbursement of State Mandated Costs under Senate Bill 90 with respect to Workers' Compensation benefits and expenses. Said services shall include the provision of a breakdown under both Methoc I and Method I1 of the State Instructions.
I II. INSURANCE
A. Agreement, Workers' Canpensation Insurance as required by law.
Bierly agrees to maintain in force at all times during the tan of this
6.
Agrement, Professional Liability Insurance in the amount of One Million Dollars
($1,000,000) which shall provide coverage for any damages or losses suffered by
City as the result of any error or omission or neglect by Bierly which arises
out of the professional services required by this Agrement.
Bierly agrees to maintain in force at all times during the ten of this
C.
Agreement fidelity Insurance in an amount not less than $1,000,000.
Fidelity insurance shall cover all officers and employees of Bierly.
Bierly agrees to maintain in force at all times during the ten of this
Said
D.
cancelled or reduced by the insurance carrier without City having been qiven
forty-five (45) days prior written notice thereof by such carrier. Bierly
agrees that it will not cancel or reduce said insurance coverage.
Insurance policies shall provide that the insurance coverage shall not be
E.
file with the City Clerk of City a certificate of the insurance carrier or
carriers showing that the aforesaid policies are in effect in the mounts abwe
prwided, and that the policies cannot be cancelled or reduced except on forty-
five (45) days notice to City.
compensation under this Agreement until such certificate or certificates are
filed with the City Clerk.
At all times during the tern of this Agrement, Bierly shall maintain on
Bierly shall not have the right to receive
IV. RENEWAL OF AGREEMENT
After the initial contract period this Agreement may be renewed fran year to
year by mutual consent, prwided, however, that any proposed revisions in the
Agreement by either party must be submitted in writing no later than 90 days
preceding the expiration date of the contract.
V. TERMINATION OF AGREEMENT
After the first nine (9) months, either party may terminate the Agrement or any
renewal by submitting to the other party in writing its intent to teminate.at
lest 60 days prior to the date of termination. Bierly shall not be required to
perform any of its services beyond the date of tenination.
VI. FEES
Subject to a maximum anrual fee of Fourteen Thousand Three Hundred Seventy Five
Dollars ($14,375.00) the City shall pay the sun of One Hundred Fifteen Dollars
($115) for each employee claiming Workers' Compensation benefits as a result of
any one accident occurring during the first year this Agrement is in effect.
Said amounts shall be adjusted on 3uly 1, 1987 and again on 3uly 1, 1988 in
accordance with the 3une San Diego Consumer Price Index for all urban consumers
and said adjusted amounts shall apply during the second and third year of this
Agreement respectively.
-
Payment shall be made monthly canmencing August 1, 1986, at an estimated monthly
rate of $1,000. The 3uly 1 billing each year shall reflect any adjustment based
on the number of claims recorded on Bierly's statistical run, as lnay be agreed
by City.
previous service agent.
Bierly will recieve no fee for administration of claims reported to
....
The preceding fees shall include all services under this Agreement except for
payments made by Bierly on the City's behalf for medical, disability, other
benefits or allocated loss expenses.
Allocated Loss Expenses shall mean all Workers' Compensation Appeals Board or
court costs, fees and expenses; fees for service of process; fees to attorneys;
fees of independent adjusters or salaried employees of Bierly; the cost of
employing experts for the purpose of preparing maps, photographs, diagrans,
chemical or physical questions; the cost of copies of transcripts of testimony
at coroner's inquests or private records; the cost of depositions and court
reporter or recorded statements, and any similar costs or expenses properly
chargeable to the defense of a particular claim or to the protection of the
subrogation rights of the City - provided however, that any of the &we
services performed by salaried employees of Bierly shall not be considered
alocateed expenses.
service fees.
Allocated Loss Expenses are not included in the Bierly
VII. ADDITIONAL CONDITIONS
A. Bierly agrees to indemnify, hold haxmless and defend City, its City Council
and each member thereof, and every officer and employee of City fran any and all
liability or financial loss resulting fran any suits, claims losses or actions
brought against and fran all costs and expenses of litigation brought against
City, its City Council and each member thereof and any officer or employee of
City which results directly or indirectly fran the wroqful or negligent acts of
Bierly, its officers, agents, or employees vrt\ile ergages in the performance of
this Agrement.
B. While performing services hereunder, Bierly is an independent contractor
and not an officer, agent or employee of the City.
C.
written consent of the other party.
0.
now or in the future are deemed to be the practice of law.
Neither party shall assign this Agrement or any part thereof without the
The services to be perfoned by Bierly shall specifically exclude any *ich
E.
pertaining to the City's claims shall be the property of the City ard shall be
delivered to the City or its designee by Bierly upon termination of this
Agrement. Bierly shall also prcrvide cmputer tapes containing canputerized
data pertainiq to the City and its claims, together with the format thereof
upon such termination.
All claim files, records reports and other documents and material
I'
1986, in the City of Carlsbad, - day of - ------’ Executed this
California.
City of Carlsbad, a knicipal Corporation
of the State of California
ATTEST:
- ALE TTL. RAWIR ANz ,- 7.imFd--
BIERLY AND ASSOCIATES
Apprcrved as to fonn:
--Y- VINCENT F. BIONDO~F., city Attorney
Mr. Jerry Pieti
Director of Personnel
CITY OF CARLSBAD
1200 Elm Avenue
Carlsbad, California 91008
Bl ERLY AND Amc
SELF INSURANCE ADMINISTRATON
March 13, 1986
Dear Mr. Pieti:
As always, it was a pleasure to talk to you on March 12, 1986.
At your request, the following are the list of changes which
I propose for your workers' compensation claims administration
for the upcoming year.
In reviewing your contract I see two basic changes which need
to be made for the upcoming fiscal year: (1) Increasing the
cap on the number of claims used to compute the maximum workers'
compensation fee (2) Raising the per claim fee charge.
The major with the current administration contract is the cap
in computing the maximum administration fee. Under the current
contract the cap is set at 80 claims. Beginning last year and
continuing on this year your claims volume has risen dramatically.
You are now averaging between 110 and 115 workers' compensation
claims per year. With your increased hiring and the expansion
of your City, I fully expect that trend to continue. Therefore,
in order to protection ourselves I feel that cap should be
raised to a maximum number of claims of 125 claims.
Our current contract was signed three years ago and the beginning per claim charge was $75 per claim. After two years of increases
based on the Consumer Price Index, the claim fee is now $84.13
per claim. This figure is not only well below our normal per
claim charge but well below the going rate for claims administra-
tion charges in San Diego County. Currently in San Diego County
the administration firms are charging anywhere between $130 and
$160 per claim. Because we have developed such an outstanding
working relationship over the last three years, and our staff
is already familiar with your existing case load, I am willing
to offer you a per claim charge of $115 per claim. The monthly
arbitrary billing wou'd be increased to $1,000.00 per month.
DENY G A5SOCIAlES. INC.. 1631 HWNGTON DNM. SOURI PPSAMN4 WFORNlA 9l1030 (818) 441 -3151
Jerry Pieti
City of Carlsbad
March 13, 1986
Page Two
After you have had an opportunity to review this letter, I would
certainly be glad to talk to you and answer any questions you
may have about the proposed fee increase and the rationale behind
it.
Sincerely,
BIERLY AND ASSOCIATES
BRUCE L. MILLER
Vice President
BLM/ ag
cc: Leslie Renney
Branch Manager - San Diego
OlENY G ASXXATES. INC.. 1631 HUNTINGTON DPM. SOU" PASADENA CALIFORNIA 91030 (818) 441-3151
March 21, 1986
TO : RUTH FLETCHER, Risk Management Coordinator
FROM: Don 3ack, Risk Management Consultant
WORKERS' COUPENSATION ADUINISTRATION
I have reviewed the proposal submitted by Bierly and Associates in their letter
of March 13, 1986, relating to 3uly Ist renewal of their contract for workers
compensation administration service.
When we originally engaged the services of Bierly and Associates three years
ago, for various reasons we were able to negotiate an extremely favorable
contract.
satisfactory, and I believe their renewal proposal is extremely fair.
I understand that the services they have provided have been extremely
Recently I was involved in interviewing a number of workers compensation
administrators for services for the Long Beach Unified School District. The
charges quoted per claim ranged from a low of $110.00 to over $150.00. I do not
believe that any firm could profitably provide the services which the City needs
for less than the proposed charge of $115.
number of claims must be increased to meet the growing frequency of City
accidents.
In addition, obviously the maximum
Since I am recommending acceptance of their proposal, I believe we should ask
for one thing in return, and I would suggest we require a further three year
contract at the new rate. This would avoid further changes, and the need to go
annually to City Council for contract approval.
DON 3ACK
Risk Management Consultant
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