AGENDA
ITEM
14 AGENDA
ITEM
CALEXICO California
14 CITY COUNCIL
AGENDA STAFF REPORT
DATE: December 18, 2024
TO: Mayor and City Council
APPROVED BY: Juan A. Contreras, Acting City Manager/AL
PREPARED BY: Sandra L. Fonseca, Interim Finance Director SUBJECT: Authorize City Manager to sign the Service Agreement for Administration of Claims with Sedgwick Claims Management Services, Inc. and the City of Calexico
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Recommendation:
Staff recommends that the City Council authorize City Manager to sign the Service Agreement between the City of Calexico and Sedgwick Claims Management Services, Inc. for the term beginning January 1, 2025 to December 31, 2029.
Background:
As a certified self-insured employer, the City retains the services of a Third-Party Administrator to ensure its workers' compensation meets the complex administration requirements of the State. The City has worked with Sedgwick Claims Management Services, Inc., for many years.
The current contract expires on December 31, 2024.
Discussion & Analysis:
Under the terms of this agreement Sedgwick will continue to review and process claims in accordance with applicable statutory, PRISM, and administrative regulations.
Fiscal Impact:
Funds for this agreement are available under Internal Service Funds/Workers Compensationin the existing budget.
Coordinated with:
City Manager's Office
Finance Department
Attachments(s):
1. Sedgwick Claims Management Service Agreement
2 Attachment 1
ADDENDUM TO EXTEND AGREEMENT TERM FOR AN ADDITIONAL PERIOD This Addendum to Extend Agreement Term for an Additional Period dated December 2, 2024 (the "Addendum"), is entered into by and between the City of Calexico (the "Client"), and Sedgwick Claims Management Services, Inc. ("Sedgwick") (Client and Sedgwick together the "Parties"), and shall modify and amend and be attached to and made a part of the Service Agreement for Administration of a Claims Program dated January 1, 2021 (the "Agreement").
In consideration of the Agreement recitals and the mutual covenants and conditions contained herein, the Parties acknowledge that the Agreement is hereby modify and amended as follows:
1. Section 5A of the Agreement is hereby modified and amended to provide that the Agreement term shall be extended for an additional period commencing January 1, 2025 and ending December 31, 2029.
2. Exhibit B to the Agreement is hereby modified and amended to provide that Client shall pay Sedgwick the following fees on a life of contract basis for services provided during this additional period:
1. Per Claim Fees:
Client shall pay the following fees for claims received by Sedgwick during the period beginning January 1, 2025 and ending December 31, 2025:
Workers' Compensation
Indemnity Claim (CA) $2,250.00
Medical Only Claim $300.00
Takeover Workers' Compensation
Indemnity Claim $950.00
Program Management: $12,500.00
Client shall pay the following fees for claims received by Sedgwick during the period beginning January 1, 2026 and ending December 31, 2026:
Workers' Compensation
Indemnity Claim (CA) $2,340.00
Medical Only Claim $312.00
Takeover Workers' Compensation
Indemnity Claim $988.00
Program Management: $13,000.00
Client shall pay the following fees for claims received by Sedgwick during the period beginning January 1, 2027 and ending December 31, 2027:
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Workers' Compensation
Indemnity Claim (CA) $2,434.00
Medical Only Claim $324.00
Takeover Workers' Compensation
Indemnity Claim $1,028.00
Program Management: $13,520.00
Client shall pay the following fees for claims received by Sedgwick during the period beginning January 1, 2028 and ending December 31, 2028:
Workers' Compensation
Indemnity Claim (CA) $2,531.00
Medical Only Claim $337.00
Takeover Workers' Compensation
Indemnity Claim $1,069.00
Program Management: $14,061.00
Client shall pay the following fees for claims received by Sedgwick during the period beginning January 1, 2029 and ending December 31, 2029:
Workers' Compensation
Indemnity Claim (CA) $2,632.00
Medical Only Claim $350.00
Takeover Workers' Compensation
Indemnity Claim $1,112.00
Program Management: $14,623.00
B. For purposes of this Agreement, an "Indemnity Claim" shall mean any workers" compensation Qualified Claim:
• For which a payment is made or reserve is posted under the indemnity portion (i.e. not medical and not expense) of the Qualified Claim or there is time lost from work;
• For which an application for adjudication of a claim or hearing notice is received or otherwise involves litigation or communication from or to a petitioner's attorney;
Where incurred medical costs exceed $3,000;
That is denied;
For which Client requests to be investigated or classified as an Indemnity Claim; 35953 2
• That Sedgwick determines additional investigation is necessary to determine compensability, to comply with applicable laws, or both; • For which subrogation is investigated or pursued; or
• That is open longer than twelve months.
C. For purposes of this Agreement, a "Medical Only Claim" shall mean any workers' compensation Qualified Claim which is not an Indemnity Claim or an Incident Only.
D. For purposes of this Agreement, an "Incident Only" shall mean claims reported by Client that require no payment or activity other than generating a record in the data management system. These claims carry no reserves and no contacts are made by Sedgwick. If contacts are required on incident only cases, additional fees will apply.
E. For purposes of this Agreement, a "Takeover Claim" shall mean any claim opened prior to December 31, 2024. Takeover Claims are charged the annual per claim fee shown in the pricing section for claims that are open as of the effective date of this Agreement, open at the beginning of any subsequent contract year, or are reopened during any contract year.
F. Client acknowledges that if an Incident Only Claim is converted to another claim type, then Client shall pay the difference in the per claim fee between the per claim fee already paid and the applicable per claim fee after the claim's conversion.
G. Client acknowledges that the per claim fees set forth in this section 1 are based on the assumption that Client will forward to Sedgwick all claims arising under the Program within the applicable time period in a covered jurisdiction. In the event that Client does not forward to Sedgwick all such claims, Sedgwick may in its discretion adjust the per claim fees accordingly.
2. Miscellaneous Charges:
Client shall pay the following fees for services provided during the period beginning on January 1, 2025 and ending on December 31, 2029:
A. via One access, which includes four (4) users, is provided for a fee of $0.00. Additional access is available for a fee of $896 per user per year. Sedgwick will make available, through Sedgwick's proprietary claims system, claim-related data with "web-enabled" access. Client will have "view only" access to the system for the term specified or as contemplated in Section 5(C) of this Agreement. Client will bear responsibility for its own hardware, software, connection and similar costs for accessing the electronic claims management system. User pricing to increase 4% annually.
B. $26,525 per data source converted for up to 100,000 records in the source.
C. Sedgwick's pricing includes the use of telephonic reporting with a Sedgwick standard script through Sedgwick's Call Center and/or web reporting technology. Any other 35953 3
method of intake (i.e. fax, e-mail, land mail, customized telephonic script, or additional services outside of standard intake scope) will incur a fee of $25 per reported incident.
D. Client shall pay for storage of claim files which were closed at the time that Sedgwick obtained the Program. Sedgwick's liability for such files shall be subject to the same limitations as contained in its written agreements with storage service providers, if any.
Invoicing:
All one-time implementation and data conversion fees are billed upon notification of award.
All recurring fees such as claims service, program management and information technology fees are billed on actuals on a monthly basis in arrears. If a budget-based or flat fee pricing option is selected, all recurring fees are billed on a quarterly basis in advance based on annual estimates. The estimates are subject to audit thirty (30) days after the conclusion of each contract year.
Takeover Claims (if applicable) are billed annually based on the number of takeover claims open at the beginning of each contract year or reopened during the year.
4. Care Management Fee Schedule:
All claims administration fees and services contemplate the deployment of Sedgwick's managed care services for all bill review, case management services, and ancillary network services (i.e.
DME, home health, diagnostics, etc.). The rates shall increase each year over the expiring rates by 4%.
Rate
Medical bill review
State fee scheduling/usual, customary and reasonable;
state reporting $9.23 per bill
Provider networks
Enhanced Savings 29% of savings
PPO networks/out-of-network services 29% of savings
Surgical Implants 29% of savings
Enhanced Services 28% of savings
Telephonic clinical services
Telephonic case management (TCM): Evaluation and recommendation: $160 Telephonic nurse case manager 1 - 30 days: $412
Surgery nurse case manager Every 30 days thereafter: $309 Behavioral health specialist $116 per hour (!)
Customized nurse services (eg. assessment nurse) $116 per hour () Utilization review (UR) and physician advisor
UR and Pharmacy UR $153 per review
Physician advisor/peer review $283 per review
Physician review of records $283 per hour
Physician advisor appeal $283 per review
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Rate
Pharmacy nurse management/pain coaching: $118 per
hour
Complex pharmacy management
Physician and PharmD management (as needed): $283
per hour
Field case management (FCM)
$116 per hour, plus direct expenses (1)(2)
Medical FCM: Full field
Urgent/catastrophic case management: $139 per hour
Catastrophic/Crisis care management $139 per hour (1)
Countries near US and US Territory (Canada, Mexico,
International medical FCM Puerto Rico, Bahamas, USVI): $139 per hour All other countries: $216 per hour
FCM tasks:
- One visit clinical assessment $762 flat fee
- Limited assignment task $116 per hour (!)
- Specialty task services: life care plan, expert $139 per hour testimony, customized services
Vocational and work placement solutions
Transitional work placement (at not-for-profit) $927 for placement or no-show $116 per hour (!)
Return to work (RTW) specialist
Telephonic RTW
Workplace consultation — program/policy design and
$216 per hour, plus direct expenses
planning
Vocational - full FCM $116 per hour, plus direct expenses (I)2) Vocational field tasks:
- Vocational assessment/testing $1,009 flat fee
- Labor market survey $680 flat fee
- Automated transferable skills analysis $381 flat fee
- Job analysis or ergonomic evaluation $839 flat fee
Clinical consultation services
Standard (24x7x365 access to nurse): $100 per call
Premium (standard plus option of blended intake or
limited customization): $118 per call
Clinical consultation
Advanced (premium plus option to customize
workflows): $130 per call*
*Level of customization may warrant additional fees
Sedgwick administrative services
28% of the below fee schedule savings subject to
minimum fee of $134 and cap of $7,725 per lien
Lien resolution
Expert witness testimony or hearing representation
charged at $129 per hour plus direct expenses
Electronic versions of panel cards will be provided at no additional cost. Physical panel cards will incur pass-thru Mandatory state panel postings costs at current printing and mailing rates to be paid by the Client.
Sedgwick standard medical card No charge; customization starts at $3,605. 35953
5. SIU Service Fees:
The charges set forth below are the current fees for the services listed, and these fees may change from time to time upon sixty days' prior written notice to Client:
Service name Price
Research services
Social media investigation $325
Smart plus investigation $550
Comprehensive background $625
Canvassing services $250
Skip tracing/individual locate $315
Asset check $225
Criminal and civil check $135 plus cost of records
Additional counties or names: $75 (per county or name)
Records request $100 plus cost of records
Social media monitoring $25 per week of monitoring
Other research services Quote upon request
Surveillance services
$ 100 per hour (portal to portal): All states
Mileage charged at IRS standard mileage rate
Additional expenses to hourly rate:
Report writing (up to 1/2 hour per day at standard surveillance Surveillance
rates)
Pre-surveillance investigation: $85 License plate searches: $20 (per search post pre-surveillance)
Vehicle Sightings Report (license plate recognition) - $75 $850 per day (three-day minimum)
Deployment and extraction of stationary device:
Unmanned surveillance $100 per hour: All states
Mileage charged at IRS standard mileage rate
Video copies $100 per additional copy plus shipping
Field services
Alive and well check - in person
$450: All states
Alive and well check - virtual
$125
interview
Activity check $475: All states
AOE/COE
$100 per hour (portal to portal): All states
Recorded statement
Scene investigation Mileage charged at IRS standard mileage rate Trial/deposition
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Service name Price
International investigations Quote upon request
Other field services Quote upon request
Assessment services
Suspect file review $125 per hour
Fraud investigation (includes state $125 per hour
reporting)
Red flag analytics review $125 per hour
Other assessment services Quote upon request
Subrogation and Other Recoveries:
Sedgwick shall pursue recoveries for subrogation, second injury funds, and other applicable special funds such as supplemental state funds, COLA reimbursements, retro funds, and other similar funds. Client shall pay Sedgwick twenty-five percent (25%) of the recovery received. All fees and expenses, including attorneys' fees or investigations, for pursuit of any recovery shall be charged to the appropriate Qualified Claim file as an allocated loss adjustment expense.
As determined by the Parties, Sedgwick shall either:
a. Deposit the recovery funds and issue payment from Sedgwick's accounts payable system to Client for the net recovery (less Sedgwick's fee). Sedgwick will deposit the net recovery check into the Client's loss-funding account or forward it directly to the Client; or
b. Deposit the recovery funds into the Client's loss-funding account and Sedgwick shall receive payment from the claim file or directly from Client.
7. MMSEA/SCHIP Medicare Reporting Fee:
The charges set forth below are the current fees for the services listed, and these fees may change from time to time upon sixty days' prior written notice to Client:
One time $9 charge per claim for claims involving bodily injuries (WC, liability, no fault).
8. Loss Control Service Fees:
The Loss Control services and fees are detailed below. Fees may change from time to time upon sixty (60) days prior written notice to Client.
SERVICE FEE
Analytics services $190.00 per hour
Risk assessments - Safety audits $160.00 per hour
Risk consultative services $170.00 per hour
170.00 per ho
Safety training 280.00 per di
Travel rate for Loss Control services $90.00 per hour
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Available upon request and subject to
Industrial hygiene separate terms and conditions.
Reimbursement of Costs and Expenses:
The following items will be billed "at cost" with no markup, with prior Client approval:
Tolls, Ferries, Parking, Shipping, Meals, Hotels, Airfare, etc.
Custom Programming:
custom import/exports, specialized management reports, etc.
Ergonomic Service Fees:
The ergonomic services and fees are detailed below. Fees may change from time to time upon sixty (60) days prior written notice to Client.
SERVICE RATE
General Ergonomic Services $190.00 per hour
$425.00 for up to 2.5 hous
Remote ergonomic workstation review (office evaluations) 180.00 per hour additional tim Onsite ergonomic workstation review (office evaluations) 775.00 for up to 4.0 hour 190.00 per hour additional tim
Daily rate $1,450.00 per day
All terms and conditions of the Agreement shall otherwise remain the same, except those terms and conditions which have been added, deleted, or modified by the Parties in writing.
IN WITNESS WHEREOF, the Parties have caused this Addendum to be executed on the dates shown below.
City of Calexico Sedgwick Claims Management Services, Inc.
By ByC. Edward Peel
Title Tile Vice President
Date Date December 2, 2024
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