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HomeMy WebLinkAboutAIMS - Acclamation Insurance Management Services - 2010-08-16Dept. ID HR 13-005 Page 1 of 2 Meeting Date: 9/3/2013 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 9/3/2013 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Michele Warren, Director of Human Resources SUBJECT: Approve and authorize execution of Amendment No. 1 to Professional Services Contract with Acclamation Insurance Management Services (AIMS) and Allied Managed Care (AMC) to provide workers' compensation, medical and disability bill review services Statement of Issue: Amendments to the existing Professional Services Agreements with Acclamation Insurance Management Services (AIMS) and Allied Managed Care (AMC) to continue to provide third -party administration (TPA) and managed bill review services for workers' compensation claims for one (1) additional year with an option to extend for one (1) more additional year if performance expectations are met. AIMS has agreed to keep the administrative rates flat at $320,180.00 per year for the next two years should both single -year extensions be granted. Financial Impact: Sufficient funding for the contracts is authorized under account number 10030503.69415 and 10030503.69410. Recommended Action: A) Approve and authorize the Mayor and City Clerk to execute "Amendment No. 1 to Professional Services Contract Between the City of Huntington Beach and Acclamation Insurance Management Services (AIMS) to Provide Workers' Compensation, Medical and Disability Claims Management Services;" and, 5 ,VVB) Approve and authorize the Mayor and City Clerk to execute "Amendment No. 1 to Professional Services Contract Between the City of Huntington Beach and Allied Managed Care, Inc. (AMC) to s`Provide Workers' Compensation, Medical and Disability Bill Review Services." c It Alternative Action(s): Do not approve the amendment and instruct staff how to proceed Analysis: As both AIMS and AMC have performed at the level of expectation requested, staff recommends the approval of the extension of the contracts. AIMS/AMC has provided efficient claims administration and has improved reporting time, claims closing ratios, litigation and case management outcomes. Both vendors have also provided ancillary services and have shown cost savings through their medical bill review and utilization review processes. In addition, the City of Huntington Beach has recently implemented an ADR program for our POA, PMA, HBFA and FMA groups. This program will significantly decrease the time frames for necessary decisions regarding the employee's ability to return to work, and the determination of disability benefits in the workers' compensation process. Representatives from AIMS and AMC have been involved in this process for the last three years. Both are prepared to move forward with the changes necessary to administer claims appropriately within the ADR program. Item 8. - 1 xB -276- Dept. ID HR 13-005 Page 2 of 2 Meeting Date: 9/3/2013 If a new TPA is to be selected, this will require the preparation and issuance of an RFP, data transfer, and training of staff of the new third -party administrator. Furthermore, any vendor selected will need to have the ability to move forward with the newly implemented Alternative Dispute Resolution (ADR) program and the ability to provide claims administration services accordingly. Environmental Status: NA Strategic Plan Goal: Improve long-term financial sustainability Attachment(s): 1. Amendment No. 1 To Professional Services Contract between City of Huntington Beach and Acclamation Insurance Management Services (AIMS) 2. Amendment No. 1 to Professional Services Contract between City of Huntington Beach and Allied Managed Care, Inc. (AMC) xB -277- Item 8. - 2 ATTACHMENT #1 Item 8. - 3 HB -278- AMENDMENT NO. I TO PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND ACCLAMATION INSURANCE MANAGEMENT SERVICES (AIMS) TO PROVIDE WORKERS' COMPENSATION, MEDICAL AND DISABILITY CLAIMS MANAGEMENT SERVICES THIS AMENDMENT is made and entered into by and between the CITY OF HUNTINGTON BEACH, a California municipal corporation, hereinafter referred to as "City," and ACCLAMATION INSURANCE MANAGEMENT SERVICES, a California corporation, hereinafter referred to as "AIMS." WHEREAS, City and AIMS are parties to that certain agreement dated October 1, 2010, entitled "Professional Services Contract Between the City of Huntington Beach and Acclamation Insurance Management Services (AIMS) to Provide Workers' Compensation, Medical and Disability Claims Management Services," which agreement shall hereinafter be referred to as the "Original Agreement," and City and AIMS wish to extend the Term of the Original Agreement for one (1) additional year, NOW, THEREFORE, it is agreed by City and AIMS as follows: 1. EXTENSION OF TERM The term of the Original Agreement is hereby extended for one (1) additional year. The Original Agreement shall now expire on September 30, 2014. By subsequent mutual agreement, the parties may further extend the Original Agreement an additional one year period. The City Manager of City is hereby authorized to execute such additional extension on behalf of City if he deems it to be necessary, convenient, and in the best interest of City. 2. REAFFIRMATION Except as specifically modified herein, all other terms and conditions of the Original Agreement shall remain in full force and effect. REST OF PAGE INTENTIONALLY LEFT BLANK 13-3885/100443 IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed by their authorized officers on�T� ®� , 2013. ACCLAMATION INSURANCE MANAGEMENT SERVICES, a California Ora i e By: print name ITS: (circle one) Cha esiden ice President print name ITS: (circle one) Secretary/Chief Financial Officer/Asst. Secretary - Treasurer *REVAoo�NDi�PROVED-.r 13-3885/100443 2 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California uman Resources ROVED AS TO FORM: Attorney . ), Client#: 6105 ACCLINSU AC R®rM CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DDIYYYY) 1 7/11/2013 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Edgewood Partners Ins. Center Lic#0629730 (415) 356-3900 135 Main Street, 21th Floor San Francisco, CA 94105 CONTACT LAURIE MARTIN NAME: A"c°NN Ext , 415 356-3934 FAX No): ADoRIESS: LMARTIN@EDGEWOODINS.COM INSURER(S) AFFORDING COVERAGE NAIC# INSURER A: Hanover Insurance Company 22292 INSURED Acclamation Insurance Management 10445 Old Placerville Road Sacramento, CA 95827 INSURERB: California Insurance Company 38865 INSURERC, OneBeacon America 21970 INSURER DIndian Harbor Insurance Co 36940 INSURER EAllmerica Financial Benefit Ins 122292 INSURER F COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE ADDL INSR SUBR WVD POLICY NUMBER POLICY EFF MM/DD POLICY EXP MM/DD/YY LIMITS A GENERAL LIABILITY ZHF896001303 1/01/2013 01/01/2014 EACH OCCURRENCE $1 000 000 MERCIAL GENERAL LIABILITY CLAIMS MADE OCCUR 11:_70M PREMISES ERENTED ocou ence $1 000 000 MED EXP (Any one person $ 5 000 PERSONAL & ADV INJURY $1,000,000 :,. ,, b„,�� GENERAL AGGREGATE $2,000,000 GEN'LAGGREGATE LIMIT APPLIES PER: PRODUCTS -COMP/OPAGG $2,000,000 $ POLICY ECTI X ILOC E AUTOMOBILE LIABILITY AWF897538202 1/01/2013 01/01/201 COEa aBIMNidentED SINGLE LIMIT cc $ � 1,000 000 BODILY INJURY (Per person) $ X ANY AUTO BODILY INJURY (Per accident) $ ALL OWNED SCHEDULED AUTOS AUTOS NON -OWNED X HIRED AUTOS X AUTOS PROPERTY DAMAGE Per accident $ A X UM13RELLALIAB X OCCUR UHF896146402 1/01/2013 01/01/2014 EACH OCCURRENCE $10 000 000 AGGREGATE $10 000 000 EXCESS LIAB CLAIMS MADE DED I I RETENTION $ $ B WORKERS COMPENSATION AND EMPLOYERS' LIABILITY ANY PROPRIETOR/PARTNER/EXECUTIVE Y I N OFFICER/MEMBER EXCLUDE07 N (Mandatory In NH) N / A 738351510102 1/01/2013 01/01/201 WC X TORYLI IT ER.- E.L. EACH ACCIDENT $1 00O 000 E.L. DISEASE - EA EMPLOYEE $1 000 000 E.L. DISEASE - POLICY LIMIT $1 000,000 If yes, describe under DESCRIPTION OF OPERATIONS below C Privacy Liability NSP023413 7/11/2013 07/11/2014 $3,000,000 ea claim/agg D Professional Liab MPP003820601 7/11/2013 07/11/2014 $5,000,000 AnnAggregate Errors&Omissions 1 1 $25 000 SIR E&O & C ber DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (Attach ACORD 101, Additional Remarks Schedule, if more space is required) Third party claims administration services. Thirty day notice of cancellation will be provided to the certificate holder but 10 days for non-payment of premium. Named insured includes: Acclamation Insurance Management Services, Inc:; Allied Managed Care, Inc.; WR Holdings, Inc.; WR Properties, LLC (See Attached Descriptions) BE City of Huntington Beach THEULD EXANYPIRATTIIONH DATE VTHEREOF, E NO� CEIEELLED WILLL CBE CDE IVEREDO W 2000 Main Street ACCORDANCE WITH THE POLICY PROVISIONS. Huntington Beach, CA 92648 AUTHORIZED REPRESENTATIVE ©1988-2010 ACORD CORPORATION. All rights reserved. ACORD 25 (2010105) 1 of 2 The ACORD name and logo are registered marks of ACORD /+S2£3 "AS 7!)(n!-?R5776 I_M A4 SAUI I I A Z5.3 (Z09 U/U5) 2 Of 2 #S285879/M285776 CITY OF HUNTINGTON BEACH Professional Service Approval Form Amendment # 1 0�� 1. Date Requested: 8/23/13 2. Contract Number to be Amended: 3. Department: Human Resources 4. Requested By: Patti Williams 5. Name of Consultant: ACCLAMATION INSURANCE MANAGEMENT SERVICES (AIMS) RECEIVED AUG 2 6 2013 6. Amount of Original/Prior Contract: $942,834.00 7. Additional Compensation Requested: $640,360 (This is an estimate)�3����D�"J 8. Original Commencement Date: 10/1/10 9. Original Termination Date: 9/30/13 10. Extended Date Requested: 9/30/15 11. Reason for Contract Amendment: To provide workers' compensation, medical, and disability claims management services 12.Are sufficient funds available to fund this contract? Yes ® No ❑ 13. Business Unit and Object Code where funds are budgeted: 10030503.69415 Department Head Signature •- lal,v, Enr��� Director of Finance (or designee) Signature City of Huntington Beach Funds Available - Detail Report 8/27/13 Object Account Cumulative 14 Budget 2013 Cumulative 14 Funds Availlable 2013 10030503 - Employee Safety 51000 - PERSONAL SERVICES 493,748.45 493,748.45 63125 - Office Supplies 1,000.00 1,000.00 63345 - USPS Charges 1,000.00 1,000.00 63295 - Postage Deliveries 1,000.00 1,000.00 64485 - Dues and Memberships 1,000.00 1,000.00 63000 - Equipment and Supplies 3,000.00 3,000.00 68560 - Training - Other 4,000.00 4,000.00 68550 - Training 4,000.00 4,000.00 68620 - Conferences - Other 3,000.00 3,000.00 68610 - Conferences 3,000.00 3,000.00 68500 - Conferences and Training 7,000.00 7,000.00 69360 - Prof Svcs - Medical 50,000.00 50,000.00 69410 - Prof Svcs - Medical Case Mgmt 275,000.00 275,000.00 69415 - Prof Svcs - TPA Admin Fees 310,854.00 310,854.00 69300 - Professional Services 635,854.00 635,854.00 72225 - Workers' Compensation 3,080,614.00 3,080,614.00 72000 - Claims Expense 3,080,614.00 3,080,614.00 75260 - State of CA 175,000.00 175,000.00 75000 - Payments to Other Governments 175,000.00 175,000.00 60000 - OPERATING EXPENSES 3,901,468.00 3,901,468.00 88650 - Payroll Charges -4.395,216.00 -4,395,216.00 88000 - NON -OPERATING EXPENSES -4,395,216.00 -4,395,216.00 50000 - EXPENDITURES 0.45 0.45 _ Attachment # 3 CITY OF HUNTINGTON BEACH PROFESSIONAL SERVICES LISTING FISCAL YEAR 2013/14 Human Resources Division/Fund Human Resources Description Legal Professional Services Recruitment & Retention Professional Services Employee Relations - Labor Consulting Professional Services Amount $5,000 $39,000 $22,500 Liability Insurance - Consulting/Other Professional Services $200,000 Employee Safe - Medical Professional Services $635,854 Total Professional Services $902,354 320,180 Acclamation Insurance Mc Patti Willia 8/23/2013 275,000 Allied Managed Care Patti Willia 8/23/2013 City Of Huntington Beach 2000 Main Street ® Huntington Beach, CA 92648 (714) 536-5227 ® www.huntingtonbeachca.gov Office of the City Clerk Joan L. Flynn, City Clerk September 5, 2013 Acclamation Insurance Management Services 10445 Old Placerville Road Sacramento, CA 95827 To Whom It May Concern" Enclosed for your records is a copy of "Amendment No. 1 to Professional Services Contract Between The City of Huntington Beach Acclamation Insurance Management Services (AIMS) To Provide Workers' Compensation, Medical and Disability Claims Management Services." Sincerely, Joan L. Flynn City Clerk JF:pe Enclosure Sister Cities: Anjo, Japan ♦ Waitakere, New Zealand Council/Agency Meeting Held:_ o Deferred/Continued to: d Co d'tionally Approved enied fit.. it Cler s Sig ure Council Meeting Date: August 16, 2010 Department ID Number: HR10-013 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Administrator PREPARED BY: Michele Carr, Director of Human Resources SUBJECT: Approve the implementation of Third Party Claims Administration for the City's Workers' Compensation Program; and, _award and authorize the City Administrator to execute a contract and all related documents with Acclamation Insurance Management Services (AIMS) Statement of Issue: The city currently is self administered for workers' compensation program services. In an effort to streamline processes and improve program efficiency, the City desires to utilize third -party administration services for the workers' compensation program. Financial Impact: If the Council approves this action, there will be a net reduction of General Fund projected expenditures in 2010-11 totaling $145,651. Recommended Action: Motion to: Approve implementation of third -party administration services for the City's workers' compensation program including award of the contract to Acclamation Insurance Management Services (AIMS), and authorize the City Administrator to execute all related documents in furtherance thereof, in a form acceptable to the City Attorney. Alternative Action(s): Continue to self-administer the City's workers' compensation program. Select another vendor to administer the City's workers' compensation program. m63® Item Sm a Page I REQUEST FOR COUNCIL ACTION MEETING DATE: 8/16/2010 DEPARTMENT ID NUMBER: HR10-013 Analysis: The City presently administers workers' compensation claims internally. Due to the constantly changing and increasingly complex nature of state workers' compensation regulations, and the increased costs of claims administration software required to comply with state program regulations; the City issued -an RFP for third -party administration services. Utilizing a third -party administrator would build service capacity and lower overall operational costs. The City issued the RFP in mid -February. Sixteen proposals were received, however only twelve of the sixteen proposals met the City's minimum qualification criteria. The remaining twelve proposals were further reviewed and eight respondents meeting the City's evaluative criteria were invited for oral interviews. (A panel of four (4) raters experienced in workers' compensation evaluated the twelve (12) qualified respondents and rated the proposals.) The top eight (8) vendors were invited for oral interviews with the panel. The panel was comprised of two (2) representatives of the City and two (2) representatives from other Orange County public agencies. All are professionals with extensive workers' compensation program knowledge and experience. Overall, the evaluating panel's collective working knowledge of the State of California workers' compensation program exceeds 75 years. The proposals were rated in the following areas: ■ Project Understanding ® Knowledge & Experience with Similar Projects ® Staff Experience ® Compliance with RFP requirements ® Price/Cost of Services ® References After the oral interviews, four (4) finalists were evaluated further, including reference checks and service structure cost considerations. AIMS was identified as the most responsible bidder. AIMS (Acclamation Insurance Management Services) has been in the business of third -party claims administration since 1973. Headquartered in Sacramento, with branch offices throughout California and Hawaii, AIMS third party claims administration experience demonstrates the ability to handle the City's workers' compensation program with efficiency and professionalism. AIMS has significant public entity claims administration experience including, but not limited to, service to the County of Madera, County of Santa Clara, City and County of San Francisco, County of Los Angeles, and the City of Bakersfield. AIMS is qualified to handle a full compliment of workers' compensation claims, including public safety claims and complex litigated claims. In addition to basic claims administrative services, AIMS offers other ancillary services such as Medical Bill Review, Medical Case Management, Utilization Review and Peer Review. These ancillary services were mandated by State of California workers' compensation program legislative reform in 2004. The City currently uses, Stratacare and RWI, Inc. to provide these services. The City's account will be serviced from the branch office in Valencia. BEQUEST FOR COUNCIL AC , ON MEETING ®ATE: 8/16/2010 DEPARTMENT I® NUMBER: HR10-013 There are three budgeted staff positions in the 2009-2010 budget, (Senior Workers' Compensation Claims Examiners). Two of the three incumbents will be retiring by September 30, 2010. This would create the need to recruit to replace the staff if the workers' compensation program continued to be administered in-house. Outsourcing the workers' compensation unit to a third -party administrator would involve the displacement of one Senior Workers' Compensation Claims Examiner. (Staff will work with the Association to explore all appropriate options with respect to this item.) The 2009-2010 direct costs to the City for self -administration of Workers' Compensation claims are approximately $444,951. Following, are the submitted rates for claims administration by the final four Third Party -Administrators: Firm Year 1 Year 2 Year 3 Current AIMS $299,300 -30% --$308,279 $317,527 InterCare $399,600 -10% $411,588 $423,836 York $479,813 +7% $491,808 $504,103 AdminSure $534,000 +16% --$539,340 $544,740 (City of HB) 1 ($444,951) Staff recommends council approval of the resolution and contract for services with AIMS. Environmental Status: N/A Strategic Plan Goal: Maintain financial viability and our reserves Attachment(s): -65- Item 8m a Page 3 ATTACHMENT #1 Ll - i Item 8e a Paige 4 -66- yy CITY OF HUNTINGTON QEACN f ' 7 Professional Service Approval Form >:rr- PART 1 Date: 1/29/2010 Project Manager Name: Patti Williams Requested by Name if different from Project Manager: Department: Human Resources PARTS I OF THE PROFESSIONAL SERVICES CONTRACTS APPROVAL FORM MUST BE COMPLETED BY THE REQUESTING DEPARTMENT AND SIGNED BY THE CITY ADMINISTRATOR, FOR APPROVAL, BEFORE PROCEEDING WITH THE SOLICITATION OR CONTRACT PROCESS. PART I MUST BE FILED WITH ALL A PPROVED_ CONTRACTS. 1) Briefly provide -the purpose for the agreement: To seek the services of a Third Party Administrator for the Workers' Compensation Program 2) Estimated cost of the services being sought: $ 450,000.00 (This is an estimate) 3) Are sufficient funds available to fund this contract? ❑ Yes M No 4) Is this contract generally described on the list of professional service contracts approved by the City Council? If the answer to this question is "No," the contract will require approval from the City Council.) ❑ YesE No 5) Business Unit and Object Code where funds are budgeted: 100.30.503 (Will be budgeted) 6) Check below how the services will be obtained: ® A Bid solicitation pro s in accordance to the MC 3.03.060 procedures will be conducted. ❑ MC 3.03.08(b they Interag y . greement procedure will be utilized. ❑ MC 3.03.Q.8 -- Contract I imi$ ,000 or less exempt procedure will be utilized. r-, ✓' L Department ad Signa —al-Lire ate 'ROVED DENIED ❑ �j Citi/Abrhinistrators Signature Date r Director of Finance's Initials Deputy City Administrator's Initials Date Date _87- Item 8. m Page 5 Esparza, Patty From: Surf City Pipeline [noreply@user.govoutreach.com] Sent: Thursday, August 12, 2010 10:07 AM To: CITY COUNCIL; agendaalerts@surfcity-hb.org Subject: Surf City Pipeline: Comment on an Agenda Item (notification) Request # 6133 ;from the Government Outreach System has been assigned to .Johanna Stephenson. Request type: Comment Request area: City Council - Comment on an Agenda Item Citizen name: Michael Kelly Description: As a retired police sergeant with the HBPD and one that has had extensive dealings with workers comp issues, I am very concerned that the HB City Council and Staff have moved to terminate the City's own Risk Management office and farm the services out to a 3rd party agency called Acclamation Insurance Management Services (AIMS). Aside from my own concerns about being forced to deal with an impersonal 3rd party with my ongoing medical issues, I have talked with people familiar with this company. The objective anticipation is that service to the employees will suffer substantially and litigation costs to the City will increase. That doesn't include the, costs associated with extrapolated consequences of conflict and friction due to employee disenfranchisement and animosity. I understand that this decision is tied to the current offer the City has made to veteran employees to exp edite their retirement. I believe the City's offer to the employees is fine and I wish all well who will take advantage of it. But, as always, there's a problem when the City wants to facilitate a good thing with a bad thing. Some people have suggested that a 3rd party just might provide a superior service, because that's all they do with a larger staff That sounds good, but I think the reality is that a 3rd party will strive to maintain their contract by giving the City what they want: cost savings. Like any insurance administrator, they will do that by spending less of the City's money. I'm in favor of that, except that will naturally become the priority and will be achieved by denying coverage or making it difficult for employees to get the medical services they need, despite agreements to do otherwise. As a 3rd party, that will be easier to do due to their impersonal relationship with employees and limited accountability. The City's Risk Management employees answer directly to City Staff and you if there's a problem (no matter how small). Typically, the private sector is interested in staying in business and making money ... not necessarily serving the people. With the current anti-publi c employee wave sweeping public opinion via conservative politics, I dare say the only ones who will complain will be the City employees themselves and their representatives, especially when negotiating future contracts. I recently had a problem obtaining a prescription. Janice Gannon resolved this relatively small problem in an hour or two. It would have taken a 3rd party at least a week or more. That's a week or more of frustation and delayed medical treatment. I've encouraged numerous others with similar concerns to contact you. This is my effort to do so. Based on the "done deal" attitude surrounding the agenda item, I don't think merely showing up at the meeting at the last minute will do. If nothing else, I feel the Council should acknowledge the shortcomings of this move and make preparations for 81/6 X-9, 0 / 0 L473F CDMMu0//c0+7ia.J - the negative consequences. Here's a short list of Pro's and Con's I put together with very little thought. Pro's: Potential savings Fewer people to supervise/manage Con's: Permanent loss of City jobs Contract negations w/ 3rd party Lack of accountability Impersonal service Prolonged resolution of conflicts Breakdown in communication Increased employee animosity Need for future HBPOA intervention Added political strife Complications in future negotiations Respectfully yours, Mike Kelly Expected Close Date: 08/13/2010 Click here to access the request Note: This message is for notification purposes only. Please do not reply to this email. Email replies are not monitored and will be ignored. I'ROIaI?SS.LONhL.,SLIZlTiCI:'sS.CIJ.N'1`.R�1CI 131 L' N. 'I'I'il- CITY Olz I-IUNTINGTON MIMI-I AND ACCLAMATION INSURANCE MANAOLMI N'1' SI RVIC:,£ S (AIMS)TO PROVIDE WORKERS' COMPENSATION, MI3DICAL AND DISABII..ITY CLAIMS MANAGT;MI N'I' S1 RVICI S 71115 AGRI T MI N'I' {"Elgreelxient") is blade and entered. into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter referred to as "CITY, and Acclamation Insurance Management Services (AIMS), a California corporation, hereinafter referred to as "CONSULTANT." W141,Rl:sAS, CITY desires to engage tl.ie services of a consultant to administer certain workers compensation, disability and medical claims; and Pursuant to documentation on file in the office of the City Clerk, the provisions of the Huntington Beach Municipal Code, Chapter 3.03, relating to procurement of professional service contracts have been complied with; and CONSULTANThas Been selected to perform these services, NOW, `1'IA.dZEFORL, it is agreed by CITY laid CONSULTANT as follows: STATEMENT OI; WORK CONSUL"I'ANT shall provide all services as described in Exhibit "A," which is attached hereto and incorporated into this Agreement by this reference. These services shall sometimes hereinafterbe referred to as the "PRO.II CT.,' CONSULTANT" hereby designates tyre current company president who shall represent it and be its sole contact and agent in all consultations with CITY during the performance of this Agreement. Page I of 17 I U-2G I h/52557 C11 Y_,S1,A _I-ASSI -ASSISTANCE, CITY shall assign a staff coordinator to work directly with CONSULTANT in the performance of this Agreement. 3. TERM, PT;I FORMANC,'1 Time is of the essence ofthis Agreement. The services of CONSULTANT' are to commence on _ � I `a'1 , 20 /1) {the "C'ollimencernent Date"). This Agreement shall automatically terminate three (3) years from the CommencL'n2ent Date;, unless extended or sooner terminated as provided herein. All tasks specified in Exhibit "A" shall be completed no later than three (3) years from the Commencement Date, The Schedule for performance of the tasks is identified in Exhibit "A." This schedule may be amended to benefit the PRO.IEC I" if mutually agreed to in writing by CITY and CONSULTANT, In the event the Commencement mate precedes the Effective bate, CONSULTANI' shall be bound by all terms and conditions as provided herein. During the term of this Agreement the CONSULTANT" will be the exclusive claims administrator in connection with claims detailed in Exhibit "A" attached. Notices of new claims that the CI1'Y receives during; the term of this Agreement will be forwarded to the CONSI.. LTANf for the purposes of providing; claim services as set out herein. CITY and/or the CONSUIJANI' shall not forward or assign notice of new claims to any claims administrator or person other than CONSULTANT except as provided herein. Rither party may terminate this Agreement by }giving the other party 90 days advance written notice of its intention to do so. 4. COMPENSATION lit consideration of the performance of the services described herein, CITY agrees to pay CONSULTANT', on a time and material basis, as follows: Page 2 of 17 10-2.610152557 :.. Yc(ii .::.1. t.�)Q $301,800 -- AIMS flat cost LL I MN — Onc time data conversion fee $311,800 Year 2 ilp tq $310,854 AIMS fiat cost: Year 3 �L11 !:o $320,180 - AIMS flat cost Additional payment terms are specified in Exhibit " B," which is attached hereto and incorporated by reference into this Agreement. The total fee for services, including all costs and expenses, shrill not exceed Nine hundred Forty'fwo Thousand Six Hundred. Six Dollars ($942,834) during the three year terin of this Agreement. The above 3-year pricing structure is contingent upon the CITY contracting for manage care services with Allied Managed Care, Inc ("AMC") during the sank time period contemplated herein. In the event CITY does not contract with AMC, this Agreement may be terminated by either party. This Agreeineii.t is also contingent on the appropriation of suf ficient funding by the CITY for the services covered by this Agreement. If funding is reduced or deleted by the CITY fiir purposes of this Agreement, the CITY has the option to either germinate this Agreement by giving ninety (90) days written notice or to offer an amendment with different terms to the CONSULTANT. CONSULTANT shall have thirty days to accept or reject: an offer with differing terms. In the event of termination, CONSULTANT will be paid for work completed, as deemed by CITY as sufficient, up to the termination date. 5. EXTRA WORK In the event CITY requires radditional services not included i❑ Exhibit "A" or changes in the scope of services described in Exhibit "A," CONSULTANT will undertake such Page 3 of 17 I0-261(V52557 r vu��rlc only after ccei vi>a wxittcn autilorir_atioil frcini C'I 1"Y.'. Such extra work shall be allowed only if the prior written approval of CITY is obtained, 6. METHOD OF PAYMI NI" CONSt. t TANT shall be laid pursuant to the terms of Exhibit "B." 7. DISPOSITION OF PLANS, _ESTIMATES AND OTHER DOCUMENTS CONSULTANT agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, both field and office notices, calculations, computer code, language, data or programs, maps, memoranda, letters and other documents, shall belong to CITY, and upon expiration or termination of this Agreement or upon PROJECT completion, whichever occurs first CONSt.II..TAN`i.', shall turn these materials over to CITY, at no cost to CITY whatsoever, in a readable, identifiable format for all data and programs identified herein. ':These materials may be used by CITY as it sees fit. 8. I.lO%D_IHARMLESS CONSULTANT hereby agrees to protect, defend, indemnify and hold harmless CITY, its officers, elected or appointer] officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with CONSULTANT's (or CONSULTAN'I•'s subcontractors, if any) negligent (or alleged negligent) perftormance of this Agreement or its failure to comply with any of Its obligations contained in this Agreement by CONSULTANT, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of CITY. CONSULTANT will conduct all defense at its sole cost and expense and CITY shall approve selection of CONSULTANT's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are Page 4 of 17 10-2016/5255 7 ilpp reab e. "fhe to liu .. provided by CONSUI..TA.N`l". CON SI.II_TANT expressly acknowledges that much of the information it will be privy to concerns confidential medical information as provided in the California Confidentiality of Medical Information Act and the California Labor Code. As such, CONSUL`fAN'l, will hold the CITY and all. those listed in this clause harmless as provided in this clause for any unauthorized disclosure. 9. PROFESSIONAL LIABILITY INSURANCE. AND BOND CONSULTANT shall obtain and furnish to CITY a professional liability insurance policy covering the work performed by it hereunder. This policy .shall provide coverage for CONSULTANT's professional liability in an aniount not less than One Million Dollars ($1,000,000.00) per occurrence and in the aggregate, The above -mentioned insurance shall not contain a self -insured retention without the express written consent of CITY; however an insurance policy "deductible" of Ten l'housand Dollars ($10,000.00) or less is permitted. A claims -]Wade policy shall be acceptable if the policy further provides that: A. The policy retroactive date coincides with or precedes the initiation of the scope of work (including subsequent policies purchased as renewals or replacements). B. CONSULTANT shall notify CITY of circumstances or incidents that might: give rise to future claims. CONSULTANT will slake every effort to maintain similar insurance during the required extended period of coverage following PRO.II',CI' completion. If insurance is terminated for any reason, CONSULTANT' agrees to purchase an extended reporting provision Page 5 of 17 10••2610/52557 of �it:least: two ()-ye�n'S't<i "I'e19�1t C flitl3S''tiri5lli;' IL)I11' work iierft�rn ed 1I1``( iilillf'Ct��ll'Vyltl]`'t'11IS Agreement, If CONSULTANT fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with required proof that insurance has been procured and is in force and paid for, the CITY shall have the right, at the CITY's election, to forthwith terminate this Agreement. Such termination shall not effect CONSL l"A'ANT's right to be paid for its time and materials expended prior to notification of termination. CONSULTANT waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. The CONSULTANT shall provide the CITY with a blanket fidelity bond in an amount: satisfactory to the CITY. Such bond shall, for the duration of this Agreeixient, be in such terms and an aniount satisfactory to the CITY. The CITY shall allow the CONSULTANT no less than sixty (60) days to procure any changes the CITY may require. 1.0. CER'.1"IFICA.'I`.1; OF INSURANCE: Prior to commencing performance of the work hereunder, CONSULTANT shall furnish to CITY a certificate of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverage as required by this Agreement; the certificate shall; A, provide the name and policy number of each carrier and policy; B. state that the policy is currently in force; and C. shall promise that such policy shall not be suspended, voided or canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice; however, ten (10) days' prior written notice in the: event of cancellation for nonpayment of premium. Pale 6 of 17 1 o-2616152557 CC3N5UL;1'A3�1`i' shall iita iitir:iii"tlic"i'ore oxz� xiisittail`cc cov i 3 e i t itirfe 'iinti.l, tlic work under this Agreement is fully completed and accepted by CITY. The requirement for carrying the foregoing; insurance coverage shall not derogate from CONSUI 1'ANT's defense, hold harmless and indemnification obligations as set forth in this Agreement. CITY or its representative shall at all tinges have the right to demand the original or a copy of the policy of insurance. CONSUTA'ANT shall pay, in a prompt and timely manner, the premiums oil the insurance hereinabove required. 11. INDI: PE'ND NI' 0 NTRAcTOR CONSULTANT is, auld shall be, acting at all times in the performance of this Agreement as an independent contractor herein and not as an employee of CITY. CONSULTANT shall secure at its own cost and expense, and be responsible -for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for CONSULTANT and its officers, agents and employees and all business licenses, if any, in connection with the PROJI CT and/or th.e services to be performed hereunder. 12. TERMINATION N OFA. UZ 1 Mj- All work required hereunder shall be performed in a good and workmanlike manner. CITY may terminate CONSULTANl''s services hereunder by providing; 90 days notice, with or without cause, and whether or not the PROJECTis fully complete. Any termination of this Agreement by CITY shall be made in writing, notice of which shall be delivered to CONSULTANT as provided herein. In the event of termination, all finished and unfinished doCUlnelltS, exhibits, report, and evidence shall, at the option of C117Y, become its property and shall be promptly delivered to it by CONSULTANT. C:ONSUI,`I"'AKI' will be paid for work completed and deemed sufficient tip to the termination (late, unless CITY orders Page 7 of 17 r 0-20 0/57.557 >O SIIL 'AN f to inmediately cezise"t3'perat oii tlreii"C:t)NSt'1I.`I'AN I" S' hall lac"j taid`ftir`ix&k iip to that day. CONSULTANT may cancel this Agreement by givitrg the CITY ninety (90) days advance written notice of its intention to do so. This Agreement shall terminate automatically, if any public authority cancels or declines to renew the CONSUL`I'ANT's licenses or certificate of authority. It shall also terminate immediately upon determination by the CITY that (1) it has not received advance written notice of a sale, transfer, merger, or consolidation involving the CONSULTANT, or (2) there has been an event of fraud, abandonment, insolvency, or gross or willful misconduct on the part of the CONSUI..TANT. Notwithstanding the I-bregoing, if the CONSULTANT shall commit any material breach of this Agreement or fail to comply with any instruction or direction by the CITY, the CITY may, in its sole discretion, immediately suspend or terminate the authority of the CONSULTANT as to all or any specific bowers granted to the CONSULTANT under this Agreement, and the CITY will be entitled to all legal rights of recovery from the CONSULTANT, including all or any part of the service fees that may be part of this Agreement. Notice of such suspension or germination may be by telephone, telegram, mail or other common method of communication and upon receipt of such notice, the CONS UI I'ANT shall thereupon cease to exercise such power or powers in accordance with such notice. Should the CONSULTANT nail to comply with any such suspension or termination notice, the CONSULTANT agrees to indemnify and to reimburse the CITY for any losses or expense incurred or for any damages caused to the CITY as a consequence thereof. This provision covers any period whereby CONSUUFANT performs services for the CITY contemplated herein unless cancelled pursuant to the provisions of this Agreement. Page 8 of 17 10-2616/52557 ny-caritriitzatrot "tSz` x i ewal "sii�11 b `tl e til jest of ftrrthei iiegrrtia3roir 1� tweclf ilrt p <irtres. 41 the Agreement is not renewed, the CITY shall exercise one of the following options within thirty (30) days prior to the date of termination: 1. Require the CONSULTANT ANT to conclude the handling of all open clain-is as provided herein, subject to all the terms and conditions of this Agreement. 2. Require the CONSULTANT to return all open files at the termination of the Agreement and the CONSULTANT" shall be entitled to payment for all undisputed services rendered up to that time according to the terms of this Agreement. Any time and expense incurred by the CONSUL'iANT in the return of such .-files will be. billed to the CITY, with supporting documentation for such billing, and the CITY shall pay such billing to the CONSULTANT within thirty (30) days from billing date 13. ASSIGNMI N'r ,AND I)1,� 1:,1 CTATION This Agreement is a personal service contract and the work hereunder shalt not be assigned, delegated or subcontracted by CONSULTANT to any other person or entity without the prior express written consent of CITY. If an assignment, delegation or subcontract is approved, all approved assignees, delegates and subconsultants must satisfy the insurance requirements as set forth in Sections P and 10 hereinabove. 14. QOPYRIGI-I'I'S/PA'T'I N'I'S CITY shall own all rights to any patent or copyright on any work, item or material produced as a result of this Agreement, 15. CITY I MPLOYI,,ES AND OFFICIALS CONSULTANT shall employ no CH'Y official nor any regular CI'l'Y employee in the work: performed pursuant to this Agreement. No officer or employee of CITY shall have Page g of 17 1I1-2.616152S57 u�y'{'lI'1d111C1M inWrest in this Audemcf t,,in vio ation 0.0 lical)le pisions o tic Calr on is C.Tovernmcnt Code, 16. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to CONSULTANT's agent (as designated in Section I herelnabove) or to CITY as the situation shall warrant, or by enclosing the same in a sealed envelope, hostage prepaid, and depositing the same in the United States .Postal Service, to the addresses specified below. CITY and CONSULTANT may designate different addresses to which subsequent notices, certificates or other communications will be sent by notifying the other patty via personal delivery, a reputable overnight carrier or U. S. certified mail -return receipt requested: TO CITY: City of Huntington Beach ATTN: Director of Huntan Resources 2000 Main Street Huntington Beach, CA 92648 17. CONSENT TO CONSULTANT: Acclamation Insurance Management Services 10445 Old PIacerville Road Sacramento, CA 95827 Attn: President When CITY's consent/approval is required under this Agreement, its consent/approval for one transaction or event shall not be deemed to be a consent/approval to any subsequent occurrence of the same or any other transaction or event. 18. CONFIDENTIALITY CONSULTANT shall hold any information deemed confidential by the CITY and all proprietary information of the CITY received directly or indirectly (whether or not identified as trade secrets) to be confidential both during and after the term of this Agreement, except as compelled by force of law. CONSCJLFANT shall notify the CITY immediately of any demand Pate 10 of 17 14-2616/52557 lox `i:ri oz�x�a:tit�zi der claiixi 6f::la so the`'C:I1 'CITY, may— `falcc timely legal action to prevent unauthorized disclosure, CONS UI. TANT shall not advertise, publicize or otherwise divulge, except as expressly permitted below, any aspect of its commercial relationship with the CITY except as necessitated in the performance of services under this Agreement and 1.or the benefit or use of the CITY or any claimants and insures, and their representatives, under the policies for Which CONSULTANT shall provide its contractual services. Without limiting the generality of the foregoing, the CONSUUFANI' shall not represent, directly or indirectly, that it has received either expressly or implicitly the endorsement of approval of the CITY, its officers, employees or agents, but without violating the terms of this Agreement, CQNSULTANI may truthfully represent the existence of its commercial relationship with the CITY. Any other exception to this Agreement of confidentiality shall require the prior, written consent offthe CITY. 19. MODIFICATION No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 20. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded ffroni such provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement. Page I I of 17 10-2616/52557 OF THIS AGRI._I,M) NT The language of all parts of this Agreement shall in all cases be construed as a whole, according; to its fair meaning, and not strictly for or against any of the parties. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be un.eriforceable, void., illegal or invalid, such holding; shall not invalidate or affect the remaining covenants and provisions of this Aggrcement. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this ,Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to bring; it within the requirements of the law. 22. DUPLICATE ORIGINAL The original of this Aggeernent and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it. 23. IMM It:. RA'FION CONSULTAM' shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. Page 12 of 17 10-2610/S2557 2�1: I. r C;nl. firRVIC l S, ;71I3CCNTIt ACT INC'r rn7I31T]WT) CONSULTANT and CITY agree that CITY is not liable for payment of ally subcontractor work. involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. CONSULTANT understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for CITY; and CITY shall not be liable for payment of any legal services expenses incurred by CONSULTANT'. 25. ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performance hereof', each party shall bear its own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's fees from the nonprevailing party. 26, SURVIVAL. 'ITernis and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement, shall so survive. 27. CIO VBRNINCx j.,AW This Agreement shall be governed and construed in accordance Nvith the laws of the State of California. 28. NON-COMPS",11 'ION The CITY recognizes that the employees of CONSULTANT and its sub- contractors have substantial information regarding the rates, customer policies and procedures of (lie CONSULTANT which are CONSULTANI''s trade secrets and are very valuable to CONSULTANT and its other clients. "I'he CITY also recognizes that, if an employee of CONSULTANT leaves CONSUL"I'ANT to wort: for the CITY, its subsidiaries, agents, or Page 13 of 17 10-7616/52557 ettapfl ds `CONS U T,ANT na'y`bc srSb'Stan ially dam aged`I)y Its e ip oy6.ds' rase oftI i,bso trade secrets. Furthermore, the CITY recognizes that proof of the misuse of trade secrets is difficult even in the most: egregious cases and is always expensive. 'Therefore, to avoid any potential of riiisuse of those trade secrets, the CITY agrees durinl; [lie terns of this agreement, and for a period of one year following its termination, that it will not employ any person employed by CONSI. L TANT or its sub -contractors without prior written consent of CONSULTAN]". 29, REPORTS AND RECORDS A. The CON'SUL'T'ANT shall keep accurate, complete and separate records of all claims handled pursuant to this Agreement on a timely basis and for the duration set forth herein or as required by law and/or regulation. The claims files and records shall be established and maintained in accordance with the terms of this Agreement and any applicable law and/or regulation, including the California Confidentiality of Medical Information Act and California Labor Code Section 3762, and shall at a ininlmum. contain all documents, notes, and work. papers (include copies of all correspondence) that reasonably pertain to each claim in such detail that pertinent events and the dates of the events can be reconstructed and the CONSULTANT'S actions pertaining to the claim, can be ascertained. The open claim files shall be maintained in the CONSUIXANT's offices. If the CITY chooses to have claims files shipped to a different location, costs of such shipping, photocopying of open claim files and return shipping will be borne by the CITY. "flie administrator will tile, all necessary affidavits and reports as may be required by applicable laws and/or regulations. 13. The CITY, or its duly authorized representative, and any state regulatory official who has legal authority may at all reasonable times inspect and copy any and all tiles, records, books, and bank account records maintained by the CONSULTANT pursuant to this Page 14 of 17 10-2616/52557 Agreirix>ent:'`Thts i�lg t to `inspect and copy records; books and bziii]< ac*66unt records shrill survive the cancellation, suspension or termination of this Agreement and shall continue until all claims under this Agreement shall have been closed. C. The CONSULTANT shall furnish the CITY and/or its designee(s) with certain reports on a periodic and timely basis. The reports shall contain such information, in such form, and on such schedule as 1s reflected in Schedule " 13" attached to this Agreement. D. The CONSULTANT shall also provide the CITY with any reports or computer data that may be required by the CITY to satisfy various boards, bureaus, and state: regulatory reporting requirements. L. The CONSULTANT shall provide the CITY with financial statements as may be requested periodically. 30. COMPLIANCE, WITHS'TATE lN_SUR.ANQE' CODES. A. "I'lie CONSULTANT agrees to operate at all times in compliance with the terns of this Agreement, including all Schedules attached hereto, and with all applicable slate insurance codes and regulations, including those applicable to unfair trade and claim practices, complaint handling, and records retention pertaining to the insurance covered by this Agreement. B. The CONSULTANT further agrees that, in the event the CITY is in violation of any state code, statute, or regulation, due to the acts or omissions of the C'ONSULTANI', the CONSULTANTshall clefend, indemnify and hold the CITY harmless from all expenses (including attorney's fees), Fines, or other fees incurred by the CITY as a result of such action or omission, provided, however, that such acts or omissions of the CONSULTANT were not at the request of the ary. Page IS of 17 10-2616/52S57 'SIGNi1TOIZTCS Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. CONSULTANT's initials 32. ENTIRETY The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation, and that each has had the opportunity to consult with legal counsel prior to executing this Agreement. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting oil that party's behalf, which are not embodied in this Agreement, and that: that party has not executed this Agreement in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement, and supersede all prior understandings and agreements whether oral or in writing; between the parties respecting the subject matter hereof Page 16 of 17 10-2016/52557 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. This Agreement shall be effective on the date of its approval by the City Attorney. This Agreement shall expire when terminated as provided herein. ACCLAMATION INSURANCE CITY OF HUNTINGTON BEACH, a MANAGEMENT SERVICES, a California municipal oration of the State of corporation California . n d co1P print name V di (circle one) Chairman/Presiden CicP,,i)nt d, _ ND AP O)�,' By' �AND irector of HumSn—R print name ITS: (circle one) Secreta hiefinancial Office " sst. PROVED AS TO FORM: Secretary - Treasurer City Attoiiiey (� ) Page 17 of 17 10-2616/52557 Scope of Services A. Subject to the express limitations of authority set forth herein and in accordance with the provisions of the Professional Services Contract (the "Agreement"), the City retains the Consultant to adjust and administer its workers compensation claims, and the Consultant agrees to perform said services, as set forth herein. B. In executing the claims services contemplated under the Agreement, the Consultant agrees and is hereby authorized onl with the prior approval of the City: To investigate, adjust, resist or otherwise process all submitted claims, pursuant to the procedures and within the authority granted by the City. To investigate, adjust, resist, or otherwise handle all submitted. 3. To make payment on claims approved for settlement in accordance with the procedures set forth in the Agreement. 4. To process all submitted claims according to the requirements of the City and any appropriate legislative and/or regulatory authority. 5. To file any reports, maintain any licenses or any other authorization necessary or required by law to carry out the Consultant's obligations and duties under the Agreement. 6. Incident Reporting: All incident reports, including, first aid claims, as defined in California Labor Code, Section 5401(a) will be taken by the Consultant. A copy of all incident reports will be sent to the City. The Consultant shall set up incident reports and process any medical care related thereto for payment. C. Subject to the limitations herein, the Consultant has the authority to do whatever is reasonably necessary, legal and proper to administer claims within the Consultant's authority and in accordance with the procedures established under the Agreement. The Consultant shall, in connection with such claims, exercise its own judgment unless the City specifically advises otherwise. The City, however, reserves the right to take over the handling and control of any claim at the time for any reason upon notice to the Consultant. D. The Consultant warrants that it and its claims administrator and examiners have all licenses/certifications Necessary to conduct the business described herein and agree to maintain all licenses/ certifications during the term of the Agreement. In the event that any such license expires or terminates, for any reason, the Consultant shall immediately notify the City and Consultant will be considered in material breach of the Agreement, unless within one week from the date the City receives notice of the license expiration or termination from the Consultant, the City agrees, in writing, at its sole discretion, to modify the provisions set forth in this Paragraph. E. The Consultant agrees to provide, where permitted by law, written notice to the City of any known potential sale, transfer, merger, or consolidation involving the Consultant or a majority of its assets, within one month prior to the transaction's effective date. F. The Consultant shall keep accurate, complete and separate records of all claims handled pursuant to the Agreement on a timely basis and for the duration set forth herein or as required by law and/or Page 1 of 10 10-2616/AIMS - Scope of Nvork with changes 7-14-11 rcgulatiorr The.:claians. Siles:and.re cords.shall be..establislied.. aaad:.imaintained :in.accordance..with.tbe terms of the Agreement and any applicable law and/or regulation and shall at a ininimu n contain all documents, notes, and work papers (include copies of all correspondence) that reasonably pertain to each claim in such detail that pertinent events and the dates of the events can be reconstructed and the Consultant's actions pertaining to the claim can be ascertained. The open claim files shall be maintained in the Consultant's offices. If the City chooses to have claim files shipped to a different location, costs of such shipping and/or photocopying of open claim files and return shipping will be borne by the City. The administrator will file all necessary affidavits and reports as may be required by applicable laws and/or regulations. G. The City, or its duly authorized representative, and any state insurance regulatory official may at all reasonable times inspect and copy any and all tiles, records, books, and bank account records maintained by the Consultant pursuant to the Agreement. This right to inspect and copy records, books and bank account records shall survive the cancellation, suspension or termination of the Agreement and shall continue until all claims under the Agreement shall have been closed and/or resolved. H. The Consultant shall furnish the City certain reports on a periodic and timely basis. The reports shall contain such information, in such form, and on such schedule as is reflected in Schedule "B" attached to this Exhibit. I. The Consultant shall also provide the City with any reports or computer data that may be required by the City to satisfy various boards, bureaus, and state regulatory report requirements. J. The Consultant shall provide the City with financial statements as may be requested periodically. Page 2 of 10 1 U-2G10/AIMS - Scope of work with changes 7-14-11 SCOPE OF SERVICES The Consultant will provide the following services as described more specifically below. I. COMPUTER PROGRAMMING & SYSTEMS I. The Consultant will perform the initial programming requirements for the interface between the Consultant and the City's claims management system - initial programming is included at no charge. 2. Prior to commencing any additional work requested by the City, the City and the Consultant shall agree, in a written document signed by both parties, on the scope of the work to be performed and the estimated number of hours required for completion. 3. The Consultant agrees to allow the City access to the Consultant's system for status and inquiry purposes. City access to the Consultant's system will secured by password. 4. The Consultant will scan all medical bills, check claims history, and index the medical bills with the appropriate claim number prior to processing through bill review. In addition, the Consultant will check the provider identification number and date of service to prevent duplicate payment. Further, the Consultant will link two or more claim numbers together because they are claims of the same employee. The Consultant will link the multiple claim numbers in the Consultant's system and will cross-check for duplicates on the claim numbers as so linked. II. REPORTING A. STANDARD REPORTS 1. The Consultant will be responsible to provide any required reporting on behalf of The City. This includes, but is not limited to mandatory reporting to the State of California, Excess Insurance Carrier, Department of Self -Insured Plans and any other required reporting. The Consultant also agrees to produce and provide the City with standard written reports as set forth in the Agreement. 2. The Consultant will accumulate data, prepare and mail 1099 forms for all providers of service who are paid during the calendar year, as required by the Internal Revenue Code. 3. The Consultant will maintain current OSHA 300 logs and deliver immediately to the City upon request. The Consultant will prepare the annual OSHA 300A Summary log and any other reporting required by the Division of Workers' Compensation, Self -Insured Plan and any other involved entity. Page 3 of 10 10-2616/AIMS - Scope of work with changes 7-14-11 4. The Consultant will prepare the Public Self -Insurer's Annual Report and transmit to the City for signature four weeks in advance of the deadline for submission to the State of California. 5. The Consultant will prepare on behalf of and submit to the City for signature the annual Workers' Compensation Self -Insured Report as required by the State of California. The written or electronic report will be prepared and submitted to the County thirty (30) days prior to the State of California's due date., b. The Consultant will provide reporting and tracking services to the City that comply with the requirements of Medicare Section I I I Mandatory Reporting Requirements. The Consultant will also be responsible for costs of this service and will pay any penalties for late or improper reporting. 7. The Consultant will have a formal plan in place to comply with the mandatory reporting requirements of Section I I I ("Medicare Secondary Payer" of "MSP") or the Medicare, Medicaid and SCRIP Extension Act of 2007 (MMSEA) effective July 1, 2009, 8. The Consultant will provide annual loss data reports to CSAC or upon request. 1. Consultant agrees to provide ad hoc written reports containing data captured in Consultant's UR and Case Management SmartNotes database at no charge. Bill Review database ad hoc reporting will require a pass thru charge of $1.50/hour when requested by the City. III. REPORTING REQUIREMENTS A. The Consultant shall furnish to the City, and/or its designee, on a monthly basis an Open Claims Report The term "Open Claims" means a computer generated report showing for each claim, the City's claim number, insured's name, claimant's name, examiner, claim number, date of loss, loss location, claim type, indemnity reserve, indemnity paid, expense reserve, expense paid, status of claim (open or closed) and open reserve on a weekly basis. It shall include information for losses for the year to date covered by the report that has been posted to the Consultant's statistical claims system. This report will also show claims closed since the previous report, including detail of payments and date of closure. . B. These reports may contain additional information to enable the City to meet all applicable laws and regulatory requirements. Page 4 of 10 10-2616/AIMS - Scope of work with dianges 7-14-11 C.'&'-ProVide the.4C-it-y-With Claim. reports outli n-ing, the .loss :details -- The:- Consultant : wi background and injury or darnage information for each claimant, liability and case evaluation, suggested reserves or settlement values (if applicable) and proposed disposition plan. City inquiries should be responded to within seven days. ])age 5 of 10 10-2616/AIMS - Scopr ofxvork- with changes 7-14-11 IV CLAIM ADMINISTRATION A. The Consultant will accept the new reporting of claims directly from the City and will handle all claims as set forth herein. 1. The Consultant shall designate by name in writing to the City a program coordinator. 2. The Consultant's designated Program Coordinator will receive notice of all new claims. 3. The Program Coordinator will assign the loss to the appropriate examiner (if applicable), 4. The Program Coordinator will act as a liaison between the City and the examiners appointed by the Consultant. 5. The Consultant shall provide a toll free telephone number and facsimile number for claim reporting by insures and the Program Administrator. G. The City is currently reviewing the use of an Alternative Dispute Resolution (ADR) program, specifically for the Huntington Beach Police Officers Association (POA),)1`lun1ingt0n Beach Fire Association (HBFA), Fire Management Association (FMA) and Police Management (PMA) employees. TPA agrees to administer claims and provide services in compliance with the terms of this program if implemented. 7. In select cases, recommend and coordinate medical and disability case management utilizing the services of a Nurse Case Manager and/or a Disability Consultant. Prior approval for these assignments and vendors must be obtained from the City. 8. The Consultant will assign two dedicated experienced claims examiners which will ensure an average indemnity caseload of no more than 175 claims per examiner and provide superior claims management for the City. In addition, future medical claims will count as half or .5 of an active indemnity claim and will not exceed 350 future medical claims per examiner, The examiners that will fill the position will have a minimum of five (5) years experience in adjusting, and will be certified by the State of California to administer a self -insured workers' compensation program. The Examiners will be dedicated (assigned solely) to the C ity's account. The Consultant agrees to allow the City of Huntington Beach to actively participate in the selection of claims examiners hired to perform claims administration. The Consultant will assign one (1) dedicated claims assistant to provide full administrative support to the examiners and to handle medical only claims. Page 6of10 W-261 O/AIMS - Scohe dwork with changes 7-14-11 In addition,:. the:. Consultant ,will ..:Assign .rr designated clerical assistant -to. provide support to claims staff. B. The Consultant shall investigate, adjust, resist or otherwise handle all reported claims within the authority granted (see Section IV). 1, Investigation Reduiren-ients: a. Verify policy information within 24 hours. b. Initiate insured and/or claimant contacts within 24 hours. C. The initial investigation should be completed within twenty business days and the appropriate reserve recommended or established. d. The additional investigation proposed in the initial report should be completed and cases should be disposed of promptly. 2. Reserves: a. Consultant shall determine the individual reserves for each claimant's damage/injury according to the values established. b. After 90 days from filing a claim, a loss reserve evaluation shall be completed by the Consultant and shall consider the insured's liability, extent of coverage, the severity of the injuries or damages, .jurisdiction, plaintiff's counsel, investigation and administration and should represent the ultimate cost of disposition of the claim. c. 'I'lle Consultant must obtain approval from the City prior to establishing a reserve $30,000.00 or greater. 3. Litigation Management: a. The City shall be notified in writing on new litigation on a weekly basis b. Litigation status reports will be provided to the City on a monthly basis. V. CLAIM PAYMENTS A. For purposes of settling claims and paying claim -related expenses related to the self - insured workers' compensation program, the City shall hand a separate bank account from which the Consultant may draw funds as hereinafter set forth ("the Claim Bank Account"). The Consultant shall not draw on the Claim Bank Account for any purpose other than lawful necessary payments necessary to provide proper handling; of workers' compensation claims. ]"age 7 of 10 10-20WAIMS -Scope 01'work xvith changes 7-14-1 I willprocedures tt' , ensure . -the safeguard of funds in the account and the bank checks. C. Any changes to the Claim Bank Account including, but not limited to the addition, deletion or other modification of use account access; changes in authorized signers; and establishment of closure of bank accounts will require prior written approval from the City. D. Within fifteen (15) days after the close of each month, the Consultant will prepare and send to the City a monthly register of checks drawn on the Claim Bank Account for each loss and loss expense payment ("the Claim Register"). The Claim Register shall include the claim number, the name of payee, the date and check number of the disbursement, and amount of the payment. B. All Claim payments shall be signed by two signatories when in excess of Two Thousand hive Hundred Dollars ($2,500.00). F. All individual payments $10,000.00 or greater issued from the Claim Bank Account will require approval by the City prior to issuance. The following shall be provided to the City for review: Documentation of cost (e.g., copy of billing, invoice(,), attorney correspondence) Documentation outlining the situation including: claim information, current status of the claim, and purpose of payment Special funding Request Invoice (for individual payments exceeding $25,000.00 where additional funding of the Claim Bank Account is required) G. "l'he Consultant shall promptly deposit any net monies collected through deductible recoveries, salvage and subrogation to the Claim Bank Account, and maintain a register, by claim number, of all such collections and deposits (the "Deductible Recovery, Salvage and Subrogation Register"), The Recovery Register shall include the following information: date of deposit, the claim number, the type and amount of payment. H. The Consultant will prepare and send to City a weekly register of checks drawn on the Claitn Bank Account for each loss and loss expense payment ("the Claim Register"). 'The Claim Register shall include the claim number, the name of payee, the date and check number of the disbursement, and amount of the payment. 1. The Consultant shall promptly deposit any net monies collected through deductible recoveries, salvage and subrogation to the Claim Bank Account, and maintain a register, by claim number, of all such collections and deposits (the "Deductible Recovery, Salvage and Subrogation Register"). The Recovery Register shall include the following information: date of deposit, the claim number, the type and amount of payment. J. The Consultant shall reconcile the Claim Register and the Recovery Register to the Claim Bank Account on a monthly basis, and provide City with a copy of it within ten (10) days after the close of each month. Page b of 10 10-26lfiM MS -Scope of work with changes 7-14-11 K: Upori receipt, of ,both: (I) the nionthly< reconciliation>,of the: Claim Register and the Recovery Register to the Claim Bank Account, and (2) the related replenishment request prepared by the Consultant, the City will deposit such funds as needed into the Claim Bank Account in order to maintain the agreed -upon prefunding level of $600,000.00. This funding shall occur within fifteen (15) days of receipt of (1) and (2) above. L. The Consultant is responsible for erroneous payments made from the Claim Bank Account by their error. The amount of any such payments made from the Account shall be reimbursed by the Consultant and deposited into the Claim bank account. M. The City, its authorized designee, and/or the excess carrier is authorized to visit the Consultant's processing and/or storage premises, for the purpose of performing a claims audit or review, and have access to all data, including, but not limited to: paper documents, electronic documents, and magnetically stored data which relates to payments or non -payments made by the Consultant on behalf of the City. The audit(s) will be directed to, including (but not limited to), the following areas: staffing; examiner case load; reporting; supervision; case reserves; file documentation; medical payments; disability benefit delivery; fines and penalties, diary system; claimant, Consultant and physician contact; case administration and investigation; and contract for claim administration services; application of current Workers' Compensation Appeals Board ("WCAB") rules and regulations and case law. Any assistance or services provided in response to a claims audit described above will be rendered upon reasonable notice provided to the City and at no additional cost to the City. N. 'rhe Consultant shall maintain and make available to the City upon request any and all ledgers, invoices, vouchers, cancelled checks, and other records or documents evidencing or relating; to charges to services or expenditures and disbursements charged to the City throughout the life of the Agreement and for a miniznunr of five (5) years, or for any longer period required by law, from the date of final payment to the Consultant for this agreement. This section shall survive expiration or termination of the agreement. VI. CONSULTANT AUTHORITY LEVELS A. The Consultant agrees to obtain the approval of the City before establishing reserves of $30,000.00 or greater or making any payments of $10,000.00 or greater per this Agreement. B. Consultant shall have no settlement authority whatsoever to resolve any claim. C. Consultant must report to the City and excess carrier the following situations regardless of the amount at issue: Page 9 of 10 10-261 G/AiMS - Scope of tivork with clumges 7-14-11 1.... A1].:caiastrophic injury.type:clairns ,including but not: lirriited:to! . a) Any occurrence for which total incurred (total paid to date plus remaining reserves) exceed 50% of the member's SIR. b) Death, spinal cord injuries resulting in paraplegia or quadriplegia, amputation of a major extremity, serious head injury, brain damage affecting mentality, including; but not limited to such conditions as permanent disorientation, behavior disorder, personality change, seizure, motor deficit, aphasia, or unconsciousness, severe burns, permanent total disability as defined by law or an occurrence involving serious injury to two (2) or more employees. c) The reopening of any claim in which further award might exceed 50% of' the member's SIR. 2. Litigation seeking punitive and/or exemplary damages. 3. Insurance Department complaints and/or inquiries. 4. Suits; arbitrations or mediation narning the City as defendant. 5. Sexual harassment abuse or molestation claims; 6. Requests by any state insurance department or other regulatory body; 7. Claims involving; toxic tort or class actions; S. Claims involving cumulative trauma; 9. Claims alleging violations of the Americans and Disabilities Act (ADA); 10. Claims made against the Program. VII. EXCESS INSURANCE A. Administrator must work with the City's Excess Insurance Carrier, reporting claims in accordance with policy requirements. Claims examiners should be aware of the self - insured retention (SIR) level; systems should exist that identify excess insurance claims; claims should be promptly reported; regular updates should be provided to excess insurance carrier; and recovery should be properly documented in the claims files. Page 10 of 10 10-26161AIMS - Scope ofwork with changes 7-14-11 )R,X 1131'F 13 ADDENDUM Service Feesand Expenses A. SubJect to compliance by the Claim Administrator with the terms and conditions of this Agreement, the City will pay and the Claim Administrator will accept as full compensation for claim services provided under- this Agreement the claim service fees a set out in t11e Statement of Work attached to this Agreement. i3. The City shall also be responsible for and shall pay all "Allocated Expenses," as defined herein, in addition to the claim service fees as provided for in this Agreement. For the purposes of this contract, "Allocated Expenses" include but are not limited to the following: 1. fees for medical examinations of claimants, including the reasonable and necessary transportation expenses of claimants. 2. Costs of reports from attending or examining physicians. 3. The costs of private investigators. 4. Medical or vocational rehabilitation costs. 5. Charges for medical costs containment: services, i.e., utilization review, pre -admission authorization, hospital bill audit, provider bill audit and medical case management incurred at the request of the City. G. lµxtraordinary claim investigation and/or travel expense incurred at the request of the City. 7. The costs of any similar service related to the investigation and defense of a particular claim, or the protection of and collection of the subrogation r•ight:s of the City, i'or which the City slialI have given prior approval. 8. All fees, excluding membership fees, for indexing bodily injury claimants. 9. All fees associated with field adjuster activities where personal contact, investigation and/or litigation involvement is necessary. Such Allocated Fxpenses are limited to reasonable, customary and necessary expenses incurred by the Claim Administrator in the course of the performance of its duties under this agreement. Claims Administration and Transition Tees AIMS guarantees the transition costs and claims administration fees as for three (3) years as follows. Year One Cost Year Two Cost Year Three Cost Total Transition Cost $10,000 -- $10,000 Claims Administration $301,800 310,854 $320,180 932,834 'l'U"I'AI, g311,800._.w..,. �31{J,854 -_-• �,32(J,1.K0.__.._._ _._...___. �942,834._._._.__.._ Unless the Agreement is terminated, payment for services defined herein will be made by the City to the Consultant in twelve (12) equal installments paid monthly, totaling the annual cost agreed upon. Page 1 of I ACCLAMATION! INSURANCE MANACENIENT SERVICES City of Huntington Beach Santa Clarita Claims Team: Jeff Head Claim Manager Phone: 661 705-2909 Fax: 81.8-707-0249 Meadp_aims4claims.com Debbie Edmiston Norma Salcedo Claims Examiner Phone: 661-705-2983 Fax: 818-707-0249 NSalcedo _aims4claims.com Jennifer Valdez Senior Claims Examiner Claims Assistant Phone: 661-705-2974 Phone: 661-705-2956 Fax: 818-707-0249 Fax: 818-707-0249 DEdmiston(a-)`aims4claims.com JValdez@,aims4claims.com Mailing address: AIMS P.O. Box 802108 Santa Clarita, Ca 91380 Council/Agency Meeting Held _ Deferred/Continued to � �ov d Co d tionally Approved enied it Clerks Sig ure Council Meeting Date August 16 2010 Department ID Number HR10-013 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO Honorable Mayor and City Council Members SUBMITTED BY Fred A Wilson, City Administrator PREPARED BY Michele Carr Director of Human Resources SUBJECT Approve the implementation of Third Party Claims Administration for the City's Workers' Compensation Program and award and authorize the City Administrator to execute a contract and all related documents with Acclamation Insurance Management Services (AIMS) Statement of Issue The city currently is self administered for workers compensation program services In an effort to streamline processes and improve program efficiency the City desires to utilize third -party administration services for the workers compensation program Financial Impact If the Council approves this action there will be a net reduction of General Fund projected expenditures in 2010-11 totaling $145 651 Recommended Action Motion to Approve implementation of third -party administration services for the City s workers compensation program including award of the contract to Acclamation Insurance Management Services (AIMS) and authorize the City Administrator to execute all related documents in furtherance thereof in a form acceptable to the City Attorney Alternative Action(s) Continue to self-administer the City s workers compensation program Select another vendor to administer the City s workers compensation program -63- Item 8 - Page 1 REQUEST FOR COUNCIL ACTION MEETING DATE 8/16/2010 DEPARTMENT ID NUMBER HR10-013 Analysis The City presently administers workers compensation claims internally Due to the constantly changing and increasingly complex nature of state workers compensation regulations and the increased costs of claims administration software required to comply with state program regulations the City issued -an RFP for third -party administration services Utilizing a third -party administrator would build service capacity and lower overall operational costs The City issued the RFP in mid -February Sixteen proposals were received, however only twelve of the sixteen proposals met the City s minimum qualification criteria The remaining twelve proposals were further reviewed and eight respondents meeting the City s evaluative criteria were invited for oral interviews (A panel of four (4) raters experienced in workers compensation evaluated the twelve (12) qualified respondents and rated the proposals ) The top eight (8) vendors were invited for oral interviews with the panel The panel was comprised of two (2) representatives of the City and two (2) representatives from other Orange County public agencies All are professionals with extensive workers compensation program knowledge and experience Overall the evaluating panel s collective working knowledge of the State of California workers compensation program exceeds 75 years The proposals were rated in the following areas ■ Project Understanding ■ Knowledge & Experience with Similar Projects ■ Staff Experience ■ Compliance with RFP requirements ■ Price/Cost of Services ■ References After the oral interviews four (4) finalists were evaluated further including reference checks and service structure cost considerations AIMS was identified as the most responsible bidder AIMS (Acclamation Insurance Management Services) has been in the business of third -party claims administration since 1973 Headquartered in Sacramento with branch offices throughout California and Hawaii AIMS third party claims administration experience demonstrates the ability to handle the City s workers compensation program with efficiency and professionalism AIMS has significant public entity claims administration experience including but not limited to service to the County of Madera County of Santa Clara City and County of San Francisco County of Los Angeles and the City of Bakersfield AIMS is qualified to handle a full compliment of workers compensation claims including public safety claims and complex litigated claims In addition to basic claims administrative services AIMS offers other ancillary services such as Medical Bill Review Medical Case Management Utilization Review and Peer Review These ancillary services were mandated by State of California workers compensation program legislative reform in 2004 The City currently uses Stratacare and RWI Inc to provide these services The City s account will be serviced from the branch office in Valencia Item 8 - Page 2 -64- REQUEST FOR COUNCIL ACTION MEETING DATE 8/16/2010 DEPARTMENT ID NUMBER HR10-013 There are three budgeted staff positions in the 2009-2010 budget (Senior Workers Compensation Claims Examiners) Two of the three incumbents will be retiring by September 30 2010 This would create the need to recruit to replace the staff if the workers compensation program continued to be administered in-house Outsourcing the workers compensation unit to a third -party administrator would involve the displacement of one Senior Workers Compensation Claims Examiner (Staff will work with the Association to explore all appropriate options with respect to this item ) The 2009-2010 direct costs to the City for self -administration of Workers Compensation claims are approximately $444 951 Following are the submitted rates for claims administration by the final four Third Party Administrators Firm Year 1 Year 2 Year 3 Current AIMS $299,300 -30% -$308,279 $317,527 InterCare $399 600 -10% $411 588 $423,836 York $479 813 +7% $491 808 $504 103 AdminSure $534 000 +16% $539 340 $544 740 (City of HB) 1 1 ($444 951) Staff recommends council approval of the resolution and contract for services with AIMS Environmental Status N/A Strategic Plan Goal Maintain financial viability and our reserves Attachment(s) -65- Item 8 - Page 3 ATTACHMENT #1 Item 8 - Page 4 -66- f y � CITY OF HUNTINGTON BEACH Professional Service Approval Form PART I Date 1/2912010 Protect Manager Name Patti Williams Requested by Name if different from Protect Manager Department Human Resources PARTS I OF THE PROFESSIONAL SERVICES CONTRACTS APPROVAL FORM MUST BE COMPLETED BY THE REQUESTING DEPARTMENT AND SIGNED BY THE CITY ADMINISTRATOR, FOR APPROVAL, BEFORE PROCEEDING WITH THE SOLICITATION OR CONTRACT PROCESS PART 1 MUST BE FILED WITH ALL APPROVED CONTRACTS 1) Briefly provide the purpose for the agreement To seek the services of a Third Party Administrator for the Workers Compensation Program 2) Estimated cost of the services being sought $ 450 000 00 (This is an estimate) 3) Are sufficient funds available to fund this contract? ❑ Yes [S] No 4) Is this contract generally described on the list of professional service contracts approved by the City Council? If the answer to this question is No the contract will require approval from the City Council ) ❑ Yes® No 5) Business Unit and Object Code where funds are budgeted 100 30 503 (Will be budgeted) 6) Check below how the services will be obtained H A Bid solicitation pro s in accordance to the MC 3 03 060 procedures will be conducted ❑ MC 3 03 08(b) then Interag iy greement procedure will be utilized ❑ MC 3 03 08<'- Contract Limi f 3O 000 or less exempt procedure will be utilized r` µ Department l4sad Signa ure f ate i ---• s r` , � r � strator's Signature j Director of Finances Initials pate Vt- Deputy City Administrator's Initials Date Date Item 8 - Page 5 Esparza, Patty From Surf City Pipeline [noreply@user govoutreach com] Sent Thursday August 12 2010 10 07 AM To CITY COUNCIL agendaalerts@surfcity hb org Subject Surf City Pipeline Comment on an Agenda Item (notification) Request # 6133 from the Government Outreach System has been assigned to Johanna Stephenson Request type Comment Request area City Council - Comment on an Agenda Item Citizen name Michael Kelly Description As a retired police sergeant with the HBPD and one that has had extensive dealings with workers comp issues, I am very concerned that the HB City Council and Staff have moved to terminate the City's own Risk Management office and farm the services out to a 3rd party agency called Acclamation Insurance Management Services (AIMS) Aside from my own concerns about being forced to deal with an impersonal 3rd party with my ongoing medical issues, I have talked with people familiar with this company The objective anticipation is that service to the employees will suffer substantially and litigation costs to the City will increase That doesn't include the costs associated with extrapolated consequences of conflict and friction due to employee disenfranchisement and animosity I understand that this decision is tied to the current offer the City has made to veteran employees to exp edite their retirement I believe the City's offer to the employees is fine and I wish all well who will take advantage of it But, as always, there's a problem when the City wants to facilitate a good thing with a bad thing Some people have suggested that a 3rd party just might provide a superior service, because that's all they do with a larger staff That sounds good, but I think the reality is that a 3rd party will strive to maintain their contract by giving the City what they want cost savings Like any insurance administrator, they will do that by spending less of the City's money I'm in favor of that, except that will naturally become the priority and will be achieved by denying coverage or making it difficult for employees to get the medical services they need, despite agreements to do otherwise As a 3rd party, that will be easier to do due to their impersonal relationship with employees and limited accountability The City's Risk Management employees answer directly to City Staff and you if there's a problem (no matter how small) Typically, the private sector is interested in staying in business and making money not necessarily serving the people With the current anti-publi c employee wave sweeping public opinion via conservative politics, I dare say the only ones who will complain will be the City employees themselves and their representatives, especially when negotiating future contracts I recently had a problem obtaining a prescription Janice Gannon resolved this relatively small problem in an hour or two It would have taken a 3rd party at least a week or more That's a week or more of frustation and delayed medical treatment I've encouraged numerous others with similar concerns to contact you This is my effort to do so Based on the "done deal" attitude surrounding the agenda item, I don't think merely showing up at the meeting at the last minute will do If nothing else, I feel the Council should acknowledge the shortcomings of this move and make preparations for Y 116 /,-� 0 / o t:> l47 3 F COM M U 0✓rcfrna.J � the negative consequences Here's a short list of Pro's and Con's I put together with very little thought Pro s Potential savings Fewer people to supervise/manage Con's Permanent loss of City jobs Contract negations w/ 3rd party Lack of accountability Impersonal service Prolonged resolution of conflicts Breakdown in communication Increased employee animosity Need for future HBPOA intervention Added political strife Complications in future negotiations Respectfully yours Mike Kelly Expected Close Date 08/13/2010 Click here to access the request Note This message is for notification purposes only Please do not reply to this email Email replies are not monitored and will be ignored