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CONTRACT 3882A CLOSEDFIRST AMENDMENT TO AGREEMENT NO. 3882 BETWEEN THE CITY OF EL SEGUNDO AND YORK RISK SERVICES GROUP, INC. THIS 1 ST AMENDMENT ( "Amendment ") is made and entered into this 31 st day of December, 2011, by and between the CITY OF EL SEGUNDO, a general law city and municipal corporation existing under the laws of California ( "CITY "), and YORK RISK SERVICES GROUP, INC. (as assignee of YORK INSURANCE SERVICES GROUP, INC.- CALIFORNIA (as assignee by merger with SOUTHERN CALIFORNIA RISK MANAGEMENT ASSOCIATES, INC.)), incorporated under the laws of the State of New York and qualified to do business in the State of California ( "CONTRACTOR "). Pursuant to Section 8 of Agreement No. 3882 ( "Agreement "), entered into the 1St day of January, 2009, the term of the agreement is extended until December 31, 2012. 2. Section 1(C) shall be revised to provide that the annual fee for the period January 1, 2012 through December 31, 2012 shall be $92,140.00. 3. CONTRACTOR represents that it is the parent company of York Insurance Services Group, Inc.- California, which merged with its affiliate, Southern California Risk Management Associates, Inc. CONTRACTOR further represents that it unconditionally assumes all obligations of its subsidiary company under the Agreement and that York Insurance Services Group, Inc.- California agrees to remain liable for all of its obligations under the Agreement. 4. This Amendment may be executed in any number of counterparts, each of which will be an original, but all of which together constitute one instrument executed on the same date. (The remainder of this bane has been left blank intentionally) w. M A N 5, Except as modified by this Amendment, all other terms and conditions, including all Exhibits, of Agreement No. 3882 remain the same. IN WITNESS WHEREOF the parties hereto have executed this contract the day and year first hereinabove written. CITY OF EL SEGUNDO Douglas Willmore, City Manager ATTEST: Cilc c�,M Cit Clerk APPROVED AS' M MARK D, l fl-,1 L i to ,,y By: Kar H. Berger, As ant City A YORK RISK SERVICES GROUP, INC. Jody Irp Senior Vice President Taxpayer ID No. 13- 1963636 YORK Compensation Schedule City of E1 Segundo August 15, 2011 Claims Services Administration Service Calendar Year 2012 Claims Administration $92,140.00 (Invoiced Quarterly in advance) Online Access Software /Support None Attachment A Scope of Services — Claims Administration The City of El Segundo is interested in obtaining a TPA who will be able to favorably respond to the following performance objectives and be contractually committed to comply with the following, but not limited to, performance standards: Caseload: Each examiner shall have an average caseload not to exceed 150 open indemnity claims. Open indemnity claims include future medical claims. Each claims assistant shall have a caseload not to exceed 150 open medical only claims. The supervisor shall have a caseload not to exceed 30 open indemnity claims. The TPA shall provide a computer generated monthly caseload report to the City of El Segundo's Director of Human Resources for all examiners handling El Segundo claims. 2. Forms: The TPA shall provide all forms necessary for the processing of benefits or claims information including the Employer's Report of Injury, DWC Form 1, Return to Work Slips, vouchers, checks, and other related forms. These forms shall be provided electronically if requested. The cost of providing these forms shall be included within the contract price. 3, Claim FLIP Set Up and Diary Review: Upon receipt of the Employer's Report of Injury, the TPA will prepare an individual claim file within two (2) working days for each claim. Preparation of the claim file shall include entering each new claim into the computer system and establishing appropriate reserves. All claim files shall be reviewed at least every forty -five (45) calendar days for active claims and at least every six (6) months for claims that have settled but are open for future medical care. The examiner shall distinguish the regular diary review from routine file documentation in the computer notepad. A plan of action will be included and separately labeled in the file notes during a diary review. The supervisor shall monitor the diary reviews by printing a "No Activity" report each month to identify any files that have fallen off the diary system. 4. Future Medical Claims: Future medical claims shall remain open for two (2) years from the last payment of benefit. Reviews shall be documented in the claim notes to include settlement information, future medical care outline, last date and type of treatment, name of excess carrier, excess carrier reporting level, and excess carrier reporting history. u A 5. Employer Contact: The TPA shall contact the City of El Segundo within one (1) working day of receipt of notice of a lost time claim by any source. Such contact shall be documented in the computer notepad after the claim has been created in the system. The TPA shall request the Employer's Report of Injury form when or if notification of an injury or incident by any source is received first (i.e., Application of Adjudication, notice of legal representation, Doctor's First Report of Injury, etc.). The TPA will confirm the DWC Form 1 was given to the employee within one (1) working day of knowledge of the injury. If there is no evidence the form was provided, the TPA will provide the form with the initial contact letter to the employee within three (3) business days of receiving the claim. When a claim reaches or exceeds one half of the member's SIR in total incurred value, the TPA shall report to the City of El Segundo's Director of Human Resources, every ninety (90) days regarding the status of the claim. Such information shall be reported in an approved Status Report form and include the examiner's plan of action for the future handling of the claim. The examiner will provide on -site file reviews quarterly unless otherwise requested. Other periodic on -site file reviews will be scheduled based upon the needs of the City of El Segundo. 6, Employee Contact: In all non - litigated, lost time cases where the employee has not returned to work, telephone or personal contact will be established with the injured employee within one (1) working day of receipt of notice of claim. Such contact will continue as often as necessary, but at least monthly until the employee returns to work. Such contact with the employee shall be documented in the computer notepad. Return phone calls to employees will be accomplished within one (1) working day. All correspondence from employees will be responded to within five (5) days of receipt. 7. Reserves: Reserves shall be established based upon the ultimate probable cost of each claim. All reserve categories shall be reviewed on a regular basis but at least every ninety (90) days. Such review shall be indicated in the computer notepad. Any changes to reserves shall include an explanation for the change. A claims assistant shall have authority to establish reserves not to exceed $3,000. An examiner shall have authority to establish reserves not to exceed $50,000. A senior examiner shall have authority to establish reserves not to exceed $75,000. The supervisor shall have -2- 4 authority to establish reserves not to exceed $150,000. A claims manager, vice president, or president of the TPA shall review and approve all reserves in excess of $150,000. 8.. Payments: The City of El Segundo has established a positive pay sweep account, which shall at all times contain sufficient funds to enable the TPA to make timely payments of claims, allocated loss expenses, and other amounts the TPA is authorized or required to make on behalf of the City of El Segundo. The TPA shall electronically submit the information required by the City of El Segundo's financial institution on a daily, weekly, or monthly basis. The submissions will be at no additional cost to the City of El Segundo. 9, Medical Administration: Absent a Medical Provider Network, the TPA shall assist in the selection of a panel of general practitioners, specialists, hospitals, and emergency treatment facilities to which injured employees should be referred, as approved by the City of El Segundo, and the TPA shall regularly review and update the panel. The physician's office will be contacted within five (5) days of notice of all new indemnity claims. Such contact will continue as needed during the continuation of temporary disability to assure that treatment is related to a compensable injury or illness. All contact shall be documented in the computer notepad. The TPA shall maintain contact with treating physicians to ensure employees receive proper medical treatment and are returned to full or modified employment at the earliest possible date. The TPA shall maintain direct contact with medical service providers to ensure their reports are received in a timely manner. The TPA shall arrange medical evaluations when needed, reasonable, and /or requested in compliance with the current Labor Code. The TPA shall ensure that medical bills are reduced to the recommended rates established by the Administrative Director of Workers' Compensation. The use of a service contractor must be approved by the City of El Segundo. The City of El Segundo shall pay for the use and benefits of the services provided. The TPA shall ensure that utilization review and /or professional managed care services will be provided on an as- needed basis to injured employees by providers approved by the City of El Segundo. 10. Medical Payments: Medical bills will be reviewed for correctness, approved for payment, and paid within time limits established by Labor Code section 4603.2. If all or part of the bill is being disputed, the TPA will notify the medical provider, on the appropriate form letter, within time limits established by Labor Code 4603.2. -3 - taw' Sw 11. Plan of Action: Each claim file shall contain the examiner's plan of action for the future handling of that claim. Such plan of action shall be clearly stated including the reasoning for the plan. The plan of action will be updated at least every forty -five (45) calendar days and clearly identified in the computer notepad. 12. Investiqation: The TPA shall promptly initiate investigation of issues identified as material to potential litigation. The member shall be alerted to the need for an outside investigation as soon as possible and the examiner shall appoint an investigator who is acceptable to the member. The member shall be kept informed on the scope and results of all investigations. The TPA shall subscribe to the Index Bureau. Costs to subscribe to this Index Bureau shall be included in proposed pricing structure. The examiner shall request a report from the Index Bureau on all new indemnity claims. Subsequent requests should be made every six (6) to twelve (12) months thereafter on all active indemnity claims. 13. Compensability: The compensability determination (accept claim, deny claim, or delay acceptance pending the results of additional investigation) and the reasons for such determination will be made and clearly documented in the computer notepad within five (5) working days of the receipt of the notification of the loss. Delay or denial of benefit letters shall be mailed in compliance with the Division of Industrial Relations' guidelines. The TPA shall notify the member of delay or denial of any claim. In no case shall a final compensability decision be extended beyond ninety (90) days from the member city's knowledge of the claim. 14. Provision of Benefits: The TPA shall provide all compensation and medical benefits in a timely manner and in compliance with the statutory requirements of the California Labor Code. The TPA shall compute and pay temporary disability benefits to injured employees based upon earnings information and authorized disability periods. The TPA shall review, compute, and pay all informal ratings, death benefits, Findings and Awards, life pensions, or Compromise and Release settlements. 15. Initial Indemnity Payment: The initial indemnity payment or voucher will be issued and mailed to the injured employee together with properly completed DWC notices within fourteen (14) days of the first day of disability. Late payments must include the 10% self- imposed penalty in accordance with Labor Code section 4650. Penalties must be reported to the City of El Segundo's Director of Human Resources. 16. Subsequent Indemnity Payments: All indemnity payments or vouchers subsequent to the first payment will be verified, except for obvious long- term disability, and issued in compliance with Labor Code section 4651. I� Late payments must include the 10% self- imposed penalty in accordance with Labor Code section 4650. 17. Return to Work: The TPA shall provide assistance to the City of El Segundo in returning injured employees to modified duty while recovering and prior to their return to regular duties. The TPA shall consult frequently with the Director of Human Resources in those cases where the injury residuals might involve permanent work restrictions and /or retirement potential. 18. Transportation Expense: Transportation reimbursement will be mailed within five (5) days of the receipt of the claim for reimbursement. Advance travel expense payments will be mailed to the injured employee ten (10) days prior to the anticipated date of travel. 19. Permanent Disabilitv: The TPA shall explain and assist injured employees in completing the necessary forms to obtain a permanent disability rating. The TPA shall determine the nature and extent of permanent disability and arrange for an informal disability rating whenever possible to avoid Workers' Compensation Appeals Board litigation. All permanent disability benefit notices shall be sent to the employee as required by the Labor Code. 20. Litigated Cases: The City of El Segundo shall be alerted to the need for an outside counsel as soon as possible, and the examiner shall appoint an attorney who is acceptable to the City of El Segundo. When defense counsel is not necessary, the TPA shall work closely with the applicant's attorney in informal disposition of litigated cases. Settlement proposals directed to the City of El Segundo shall be forwarded by the TPA or defense counsel in a concise and clear written form with a reason(s) for such recommendation. All preparation for a trial shall involve the City of El Segundo so that all material evidence and witnesses are utilized to obtain a favorable result for the defense. The manager, supervisor, or examiner shall attend Workers' Compensation Appeals Board hearings, rehabilitation hearings, meetings with defense counsel, and meetings with member's staff, departments, and employee groups as necessary and as requested to do so. 21. Settlements: The TPA shall obtain the City of El Segundo's written authorization on all settlements. All requests for settlement authority shall include a written claim summary, current financial information, -5- estimate of permanent disability, and the defense counsel's comments and recommendations. 22. Subrogation: In all cases where a third party is responsible for the injury to the employee, the TPA shall contact the member indicating they will pursue subrogation unless instructed otherwise by the City of El Segundo. When subrogation is to be pursued, the third party shall be contacted within ten (10) days of identification, with notification of the City of El Segundo's right to subrogation and the recovery of certain claim expenses. If the third party is a governmental entity, a claim shall be filed with the governing board within six (6) months of the injury or notice of injury. Periodic contact shall be made with the responsible party and /or insurer to provide notification of the amount of the estimated recovery to which the member will be entitled. If the injured worker brings a civil action against the party responsible for the injury, the TPA shall consult with the City of El Segundo about the value of the subrogation claim and other considerations. Upon the City of El Segundo's authorization, subrogation counsel shall be assigned to file a Lien or a Complaint in Intervention in the civil action. Whenever practical, the TPA should take advantage of any settlement in a civil action by attempting to settle the Workers' Compensation Claim by means of a Third Party Compromise and Release. If such attempt does not succeed, then every effort should be made through the Workers' Compensation Appeals Board to offset claim expenses through a credit against the proceeds from the injured worker's civil action. 23. Vocational Rehabilitation: In accordance with all applicable California laws in place at the date of injury, the TPA shall: 1. Determine the Qualified Injured Worker /Non Qualified Injured Worker status; 2. Advise the injured worker of his /her right to rehabilitation benefits; 3. Provide appropriate vocational rehabilitation benefits; 4. Control rehabilitation costs; and 5. Attempt to secure the prompt conclusion of vocational rehabilitation benefits. 24. Claim Reconciliation: All claim files shall be reconciled to ensure all indemnity payments have been made correctly. The reconciliation should verify that payment amounts were correct, paid on the appropriate claim file, and all benefit notices were issued accordingly. The physical file should be verified with the computer information. All open claim files shall be reconciled at the time of a request for settlement authorization and at the time of submission for closure. Proof of the reconciliation should remain in the claim file. III 25. Excess Insurance: Cases that have the potential to exceed or have reached 50% of the City of El Segundo's self- insured retention level should be reported to the City of El Segundo's Director of Human Resources. Any case that has the potential to exceed or have reached 50% of the City of El Segundo's self- insured retention shall be reported to the City of El Segundo and the excess insurer in accordance with the reporting criteria established by the excess insurer. All cases that meet the established reporting criteria are to be reported within five (5) days of the day on which it is known the criterion is met. 26. Award Payment: Payments on awards, computations, or Compromise and Release agreements will be issued within ten (10) days or sooner if necessary to ensure payment within twenty (20) days of the Workers' Compensation Appeals Board approval date, following receipt of the appropriate document. 27. Penalties: Late payment of all benefits must include the self- imposed penalty in accordance with California law. The City of El Segundo will be provided a listing of any administrative penalties paid during the month, which were the responsibility of the TPA, and a check from the TPA payable to the City of El Segundo for reimbursement. The check and report shall be submitted to the City of El Segundo by the 20th of the following month. 28. Case Closure: The supervisor must review all medical only claims open beyond ninety (90) days from the date of entry by the TPA, for potential closure or conversion to indemnity claim status. Claims with $3,000 or more paid to date and any claim open beyond one hundred eighty days (180) from date of entry must be converted to indemnity status and a reasonable, precautionary indemnity reserve placed on the claim(s). All indemnity cases where permanent disability is not an issue will be closed within sixty (60) days of the final financial transaction or final correspondence to the injured worker as required by law. All indemnity claims where permanent disability is an issue will remain open for two (2) years from the last payment of benefit and then closed within sixty (60) days of that date. The TPA will monitor stipulated cases with future medical provisions. Reserves for future medical will be reviewed semi - annually and adjusted according to use. 29. Status Reports: Special claim status reports requested by members outside the regular ninety (90) day status reports shall be provided by the TPA to the City of El Segundo within ten (10) business days. Verbal status reports requested by members shall be provided by the TPA to the respective member within two (2) business days. Special computer generated loss data reports requested by members shall be provided within seven (7) business days. 30. Loss Runs and Check Runs: The TPA shall provide the applicable computer reports by the 7 th calendar day of the following month to the City of El Segundo. -7- 8 r, , r ,w 31. Claims Reporting: The TPA shall maintain all loss information as required by the Workers' Compensation Insurance Rating Bureau. The TPA shall assist in the preparation of all reports that are now, or will be required by the State of California or other government agencies with respect to self- insurance programs. The TPA will also assist in the preparation of all reports or databases required by the California Institute for Public Risk Analysis (CIPRA) or other statistical database organizations as requested by the City of El Segundo. 32. ecord Retention: All claim files shall be maintained in accordance with statutory time requirements and the City of El Segundo shall be notified prior to any destruction of files. 33. Claim Supervision: The TPA shall provide supervisory staff that will regularly review the work product of the claims examiners. The supervisor shall review at least 10% of each examiner's caseload each month to ensure each examiner is following the performance standards outlined in this document. Such reviews shall be labeled as "Supervisor Review" and clearly documented in the claim notepad. In addition, the supervisor shall conduct a regular quarterly review of all open indemnity claims with reserves in excess of $100,000 and all problem or complex claims. 34. Availability of Personnel: The TPA shall ensure at least one (1) or more of the examiners assigned to the City of El Segundo are on -site and available to the City of El Segundo and its members every business day (excluding holidays) between the hours of 7:30 a.m. and 5:30 p.m. throughout the term of the approved contract between the City of El Segundo and the TPA. The TPA shall provide a toll -free telephone number. 35. Examiner Training: The TPA shall annually certify to the City of El Segundo that each claims examiner handling the members' claims is in compliance with all legal and regulatory licensing and continuing educational requirements as presently or in the future shall be promulgated and required by the State of California. Where required by law or regulation, copies of all such certifications shall be provided at least annually by the TPA to the City of El Segundo. 36, Member Services: The TPA shall provide special on -site training services when requested by the City of El Segundo to ensure the city's supervisory staff process workers' compensation claims effectively, carrying out the procedures required for a successful program. The TPA shall require one of the dedicated unit examiners to meet with the City of El Segundo's personnel, at the member's location, at least once annually to review program procedures regarding workers' compensation reporting requirements and other program matters that require the timely participation of the city's personnel. ,, ` The TPA shall require an examiner to be available and readily respond to a member's request for assistance with problem cases, including on- site visits to the City of El Segundo. The TPA shall provide the City of El Segundo with information regarding statutes, proposed changes to statutes, and changes to the rules and regulations affecting the City of El Segundo and its responsibility as a legally self- insured workers' compensation public entity. 37. Computer Access: The TPA shall provide online access at no additional charge for the City of El Segundo, as well as additional access for selected vendors providing services to the City of El Segundo. The TPA shall provide training for use of the computer system at no additional charge. 38. Employee Services: As required, the TPA will develop, for review by the City of El Segundo, materials which will provide information and guidance to the City of El Segundo Director of Human Resources regarding workers' compensation and the self- insurance program. As required, the TPA will assist injured employees in resolving problems that arise from injury or illness claims. 39. Conflict of Interest: The TPA shall avoid all conflicts of interest or appearance of conflicts of interest in performance of this document. If the TPA receives compensation from the City of El Segundo for services not included in this document, such as bill review services, managed care, or investigations, the TPA shall disclose all fees received from the City of El Segundo. Such disclosure shall be in the form of a letter and shall be received by the City of El Segundo each April 1St 40. Bill Review Services. Provide for comprehensive medical bill review, in- patient hospital and outpatient facility bill reviews, negotiated bills, professional surgical fees, line audit bills, duplicate bills, in addition to re- evaluation /provider inquiries, expert testimony in defense of reviews, EDI (Electronic Date Interface), on -line access to the system and monthly reports, and resolution to disputes by providers. 41. Utilization Review Services. Provide comprehensive utilization review services, identified in an approved Utilization Review Plan, in compliance with Labor Code Section 4610, defined Utilization Review Regulations and Timelines, and all directives from the Administrative Director of the Division of Workers' Compensation. M - 10- 2A.