CONTRACT 3882B CLOSEDSECOND AMENDMENT TO
PROFESSIONAL SERVICES AGREEMENT NO. 3882 BETWEEN
THE CITY OF EL SEGUNDO AND
YORK RISK SERVICES GROUP, INC.
THIS 2ND AMENDMENT ( "Amendment ") is made and entered into this 31 st day of December,
2012, 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. 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 1 't day of
January, 2009, the term of the agreement is extended until December 31, 2013.
2. Section 1(C) shall be revised to provide that the annual fee for the period January 1, 2013
through December 31, 2013 shall be $95,365.00.
3. 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.
4. 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.
ATTEST:
Taxpayer ID No. 13- 1963636
Cifv Clerk
APPROVED AS TO FORM:
MARK D. HENSLEY, City Attorney
By.
Karl H. Berger, As ita t. City Attorney
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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 File 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.
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5. Emolover 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 Duman 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
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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.
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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. Investigation: 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. Subseguent 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.
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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 Disability: 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 Appeal. 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,
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estimate of permanent disability, and the defense counsel's comments
and recommendations.
22. Subro-gation: 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.
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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 7th calendar day of the following month to the
City of El Segundo.
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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. Record 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.
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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, materiels 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 arlse 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 18t.
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.
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