Fontana City Council
February 14, 2023

RESOLUTION NO. 2023 -

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

FONTANA AWARDING THE CONTRACT FOR THIRD PARTY
ADMINISTRATOR SERVICES.

WHEREAS, The City of Fontana is self -insured for Workers ’ Compensation and the previous Third Party Administr ator contract with JT2 Integrated Resources has expired,

WHEREAS, the Purchasing Office has opened and re ceived submitted proposals for Th ird Party Administrator Services for the City ’s Workers ’ Compensation Program,

WHEREAS, The Evaluation Committee has reviewed the proposals and recommended JT2 Integrated Resources be awarded the contract for Third Party Administrator Services for the City’s Workers’ Compensation Program,

NOW, THEREFORE, BE IT RESO LVED, by the City Council of the City of Fontana has awarded the service contract to JT2 Integrated Resources for Third Party Administrator for the City’s Workers’ Compensation Program.

EFFECTIVE DATE: February 14, 2023

PASSED AND ADOPTED: February 14, 2023

ATTEST: CITY OF FONTANA

Germaine Key Acquanetta Warner
City Clerk Mayor

APPROVED AS TO FORM:

Ruben Duran,
City Attorney

197
Firms Rank
JT2 Integrated Resources
Oakland, CA 1
Innovative Claim Solutions
San Ramon, CA 2
Pegasus Risk Management
Modesto, CA 3
Third Party Administrator
SP-90-HR-22
Final - Review
198
Firms Total Score
JT2 Integrated Resources
Oakland, CA 96%
Innovative Claim Solutions
San Ramon, CA 81%
Pegasus Risk Management
Modesto, CA 50%
Third Party Administrator
SP-90-HR-22
Final - Review
199

FACTOR WEIGHT SCORE
(0-4)

WEIGHT SCORE

1. QUALIFICATIONS OF

COMPANY/CONSULTANT
Relevant Experience of Firm
20% 4.0 20%
Reputation of Firm (Based on
references) 10% 4.0 10%
Qualifications of Personnel
(Experience, training, etc.) 10% 3.3 8%

2. TECHNICAL APPROACH
Responsiveness to meet or
exceed scope of services 15% 3.3 13%
Ability to communicate service
in an organized, clear, and
concise manner
15% 4.0 15%

3. SERVICE SCHEDULE
List of Ancillary Services they
Provided are Disclosed 30% 4.0 30%
TOTAL 100% 3.8 96%
JT2 integrated Resources
Please rate the proposal for each criterion below, using a scale of 0 through 4, where 0=unacceptable; 1=poor; 2=fair; 3=good; 4=excellent. Provide details on each criterion scored 0 or 1.

SCORE: 0=Unacceptable 1=Poor 2=Fair 3=Good 4= Excellent

SCORING MATRIX
Third Party Administator
SP-90-HR-22
200

FACTOR WEIGHT SCORE
(0-4)

WEIGHT SCORE

1. QUALIFICATIONS OF

COMPANY/CONSULTANT
Relevant Experience of Firm
20% 3.3 17%
Reputation of Firm (Based on
references) 10% 3.3 8%
Qualifications of Personnel
(Experience, training, etc.) 10% 3.3 8%

2. TECHNICAL APPROACH
Responsiveness to meet or
exceed scope of services 15% 3.3 13%
Ability to communicate service
in an organized, clear, and
concise manner
15% 3.3 13%

3. SERVICE SCHEDULE
List of Ancillary Services they
Provided are Disclosed 30% 3.0 23%
TOTAL 100% 3.3 81%
Innovative Claim Solutions
Please rate the proposal for each criterion below, using a scale of 0 through 4, where 0=unacceptable; 1=poor; 2=fair; 3=good; 4=excellent. Provide details on each criterion scored 0 or 1.

SCORE: 0=Unacceptable 1=Poor 2=Fair 3=Good 4= Excellent

SCORING MATRIX
Third Party Administator
SP-90-HR-22
201

FACTOR WEIGHT SCORE
(0-4)

WEIGHT SCORE

1. QUALIFICATIONS OF

COMPANY/CONSULTANT
Relevant Experience of Firm
20% 2.3 12%
Reputation of Firm (Based on
references) 10% 2.3 6%
Qualifications of Personnel
(Experience, training, etc.) 10% 2.0 5%

2. TECHNICAL APPROACH
Responsiveness to meet or
exceed scope of services 15% 1.7 6%
Ability to communicate service
in an organized, clear, and
concise manner
15% 1.7 6%

3. SERVICE SCHEDULE
List of Ancillary Services they
Provided are Disclosed 30% 2.0 15%
TOTAL 100% 2.0 50%
Pegasus Risk Management
Please rate the proposal for each criterion below, using a scale of 0 through 4, where 0=unacceptable; 1=poor; 2=fair; 3=good; 4=excellent. Provide details on each criterion scored 0 or 1.

SCORE: 0=Unacceptable 1=Poor 2=Fair 3=Good 4= Excellent

SCORING MATRIX
Third Party Administator
SP-90-HR-22
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Section 2 – Delivering Scope of Work
Section 2.1 – JT2’s Unique Approach
JT2’S UNIQUE APPROACH TO WORKERS’ COMPENSATION MANAGEMENT JT2 claims management is based on strict adherence to industry guidelines. JT2’s consistent use of its more highly skilled professional employees is unique and addresses the specialized demands of clients’ cases. JT2 has consistently ranked high in state, client, excess and independent audits .

JT2 Integrated Resources is distinguished from its competitors due to a number of significant accomplishments for which JT2 employees take great pride:
 JT2’s services and revenue stream are focused on third party claims administration and complementary bill review. We do not offer JT2 services that might introduce conflicts of interest.

Thus, we do not sell insurance nor provide nurse case management, utilization review, investigative services, and hearing representatives… potential revenue generators that could benefit JT2 while burdening clients with avoidable costs.
 Year after year the State of California’s Department of Industrial Relations (DIR) publishes DWC audits which rate the effectiveness of insurers, self -insured’s and third -party administrators in the provision of benefits to injured California employees. In a candidate pool numbering over 130, JT2 ‘owns’ the top 10%, achieving such ranking more frequently th an any other firm. Recently the DIR released its 2018 annual report, ranking JT2 as number 1 in the latest sampling.  JT2 is the only TPA selected by Insurance Commissioners Dave Jones and John Garamendi for inclusion in task forces aimed at leading insuran ce reform. In the case of Commissioner Jones, the target was for increased insurance carrier utilization of underrepresented groups in contracting and as members of their boards of directors. In the case of Commissioner Garamendi, a task force of the ‘top 40 California business representatives’ was established to implement workers’ compensation reform – a success achieved in the early 2000’s. --- The criteria for TPA selection included the company’s consistent ranking in the top 10% of DWC audits, a client base representing multiple California regions, and executive representatives involved in both claims management and significant community service. JT2 is the only TPA qualifying. John Casas, JT2 President and CEO, served on each team.
 For over twenty years, JT2 has been the only TPA committing its executive team to serving clients’ communities. Mr. Casas has served on various boards and community organizations including the Board of Directors for the California Hispanic Chambers of Commerce, the Spanish Spe aking Unity Council, and community advisory councils for Merrill Lynch and Pacific Gas and Electric and as a mayoral appointee to Oakland’s Work Investment Board. Mr. Casas frequently challenges competitors to make a similar investment of personal time and not just during periods where a local employer has a request for proposal open for consideration.  Finally, JT2 is the rare business entity that has grown from a size that is today characterized as a Small Local Emerging Business, certified as a minority -owned business, and also qualifying as a prime bidder.

JT2 AS VALUE-ADDED
Over its 22 -year history JT2 has learned that unique value -added services complementing the standard or ‘canned approach’ grows out of continuous dialog with clients centered on the c lient’s vision or charter. The JT2 executives and professionals make themselves available to the clients’ leadership team as business partner s.

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THE JT2 CLIENT INCLUDES … THE INJURED WORKER
The mission of JT2 is to deliver to the injured worker accurate and timely benefits , when appropriate .

While every administrator commits to this mission, the Division of Workers’ Compensation audit rankings confirm that no other administrator matches the JT2 level of accuracy and effectiveness .

THE JT2 CLIENT INCLUDES … THE CITY
As emphasized throughout this Request for Proposal, the City demands that its personnel and subcontractors demonstrate sound fiscal management of public dollars . Year-over-year financial results must show positive trends . Programs with significant funding - like workers compensation - must deliver consistent and sustained savings.

THE JT2 CLIENT INCLUDES … CITY STAFF
Staff is held accountable for more than Labor -Code-related issues . While staff manages an expansive menu of (workers’ compensation) ben efits, expectations are that the number of claims filed will not over - tax available dollars . The workers’ compensation staff must coordinate with or manage a safety program, must craft alternative work assignments, and must secure Union agreement on interi m assignments. On a broader scope, staff is expected to demonstrate sound business management, labor relations effectiveness, public relations effectiveness, sophisticated crisis management, and much more. JT2 recognizes this and makes its executive team a vailable to craft strategies tailored to unique client needs. These may include:
 program management and administration reflecting client’s business realities;  providing advice on claims issues of compensability and payments which take into account client financials;
 scheduling and/or participating in meetings with client stakeholders concerning current experience, high-profile cases, results, and/or the need for revised strategy and program direction;  providing the necessary administrative services mandated by law.

With this approach, JT2 and the City are more apt to identify services or strategies of unique value to the City … exactly as expected by upper management and elected officials.

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DEFINITION OF A SUCCESSFULLY ADMINISTERED CLAIM
A successfully adm inistered claim will have a focus on communication. The JT2 team, including experienced claims examiners, assistants, management staff , and executive s, are charged with expediting the delivery of all workers’ compensation benefit entitlements and services to the injured workers without unnecessary litigation, delays , or increased costs. This communication course, during the various claim events, must be initiated and flow as a continual progression of collaborative efforts amongst all associated claim parti es; i.e., JT2, the City, Unions, treating medical facilities/doctors and managed cost containment partners. The goal is to provide timely, highest quality care to City employees, to appropriately support and compensate them while unable to work and to aggr essively return them to work at a time and in a capacity consistent with their medical conditions. Thereafter, continued medical management is crucial – not to simply “monitor” medical treatment, but to actively participate and direct the activities. This direction is crucial to achieve Maximum Medical Improvement (MMI) at the earliest medically appropriate time, promptly identifying permanent impairment issues, apportionment, and resultant future medical needs; i.e. effectively and timely managing the clai m to resolution and beyond.

PROCEDURE FOR HANDLING QUESTIONABLE CLAIMS

PROMPT REPORTING
Immediate reporting of all questionable Workers’ Compensation claims from the City to JT2 is essential.

Reports should contain as much information as possible and ques tionable aspects outlined by separate correspondence. California Law requires specific notification procedures to the injured employee and the State if benefits are not provided within 14 days of disability.

DELAY OF BENEFITS NOTIFICATION
JT2 will provide necessary notification to the injured employee, the City and the State of California of the delay of benefits and the reason. This notification must indicate the date a decision will be made and when further notification will be made.

IMMEDIATE INVESTIGA TION
JT2 will initiate an immediate investigation to develop additional details and facts. Such investigation will be tailored to the individual case needs and will include additional contact with the appropriate City personnel.

DECISION PROCESS
The resul ts of the investigation and recommendations regarding further handling of the claim will then be discussed with appropriate City personnel and the future course of action agreed upon.

NOTIFICATION OF DECISION
Notification of acceptance or denial of the cl aim will be provided to the injured employee, the State, and the City in accordance with California Law.

SPECIAL CASES
Those individual cases necessitating legal review and recommendations will be referred to Defense Counsel, and their advice will be incl uded in the Decision Process, above.

SALARY ACTION BY CITY – 4850 & OTHER SALARY CONTINUATION PROGRAMS During the period between disability and final decision of a questionable claim, the City should use the employee’s sick leave until acceptance of the cl aim. At that time, the City and JT2 work to gether to reclassify the lost time from sick leave to 4850 or salary continuation (Industrial Accident Leave), if applicable.
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ANCILLARY QUESTIONS
Any questions/inquiries/problems that develop during the temporary delay period of a quest ionable claim should be immediately referred to JT2.

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Section 2.2 – Work Flow
JT2 Workers’ Compensation Steps to the Claims Administration Process Flowchart 1) Employee reports injury to supervisor

2) Supervisor/employee notifies department pers onnel

3) Employee sent to de signated facility for treatment

4) Department personnel Site secretary completes Injury Report and submits to Administrator

5) Administrator receives claim and enters data in RMIS , sets reserves, prepares plan of action a nd processes the claim.

Accepted Claim Delayed Claim
Requiring Further Investigation

Medical-Only
(no lost time from work)

1. Treatment provided & medical bills
paid

2. Direct & control level of treatment
towards conclusion.

3. When treatment ends, claim is
closed.

Lost Time Claim

1. Applicable benefits are provided:

2. Sent to Medical Panel facility for treatment.

3. If modified work available, EE returns to work-
possible medical only at this point. If no
modified work available, temporary disability
paid upon medical verification

4. Discuss with client & phone call to EE.

5. Treatment continues until discharged. Referral
to specialists as necessary.

6. If unable to RTW and when qualifies for
rehabilitation, then vocational benefits
provided-supplemental job displacement
voucher.

7. When condition stabilizes (permanent and
stationary), permanent residuals are
determined.

8. If no permanent disability (P.D.) treatment
continues until discharged. Claim subsequently
closes. If future medical deemed necessary.

Stipulated Award provisions to include future
treatment as it relates to injury only or
Compromise & Release if no longer employed.

EE has option to select Qualified Medical
Evaluator (QME) panel from State if disagrees.

Follows process through conclusion.

9. If P.D. exists, either benefits will be provided
according to treating doctor, or claim resolved
through QME process. PD payments to
commence only after Award is approved at
WCAB.

10. Claim is either closed (no P.D. & no further
treatment) or Settled based on treating/QME
report(s) depending on level of P.D. & opinion
regarding necessity for future treatment.

1. Notice of delay sent to EE & phone
call to explain.

2. Further claim detail is requested; i.e.
statements, prior and current med.
records, etc.

3. Upon receipt (if necessary to
determine status), all information
sent to administrator -selected
doctor for opinion per QME process.

4. Have 90 days from ER claim
knowledge to make decision. If no
decision or letter is sent to
employee & 90 day period has
elapsed, claim deemed
compensable.

5. If investigation is not fully completed
just prior to 90-day period, send EE
initial denial pending receipt of
completed investigation details
and/or exam.

6. If claim accepted, follows
appropriate sections under
"Accepted Claim."

7. If claim denied, EE claim options are
sent to EE— discuss claim scenario
with State-appointed information
and Assistance Officer or select
attorney representation or nothing
more if no action by employee.
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INDEMNITY CLAIM PROCESS FLOWCHART

New claim paperwork rec'd by JT2, submitted to
DP for new claim entry same day (if before
2pm).

DP enters claim into ClaimsXPress system,
assigned and diaried to claims assistant, adds
docs to ATTACHMENTS, forwards to supervior
via email with documentation provided.

Supervisor reviews for delay, subrogation, red
flags and lost time. If IND and delay/denial not
warranted, claim reassigned to appropriate
examiner and claim type updated to TD.

Supervisor completes SUPERVISOR INITIAL NEW
SETUP REVIEW notepad, sets diary at 12 & 30
days for completion, sets dairy for assistant at 12
days for benefits and notices, forwards docs to
examiner.

Examiner reviews new claim docs and CLAIMS
MANTENENCE module, completes employee
contact in 3-PT CONTACT module within 24
hours of receipt of loss. Forwards to assistant
for completion of remaining 3-pt contact.

Assistant completes ER and DR contact in 3-PT
CONTACT module within 24 hours of receipt of
loss, requests 5020, DWC-1, 5021 and wage
statement (if applicable), sets diary for receipt of
wage statement.

If lost time, assistant to calculate benefits due,
prepares/inputs priority payment, completes
appropriate benefit notice(s), updates LOST
TIME module for WP and/or mod duty , enters
OSHA info and sets diary to monitor for RTW.

Assistant obtains approval for priority payment
from examiner, submits to supervisor for
approval to ensure IND payment made within 14
days.

Assistant prepares and sends out Introduction
Letter, Mileage Form, Medical Release, Medical
History Form and RX First Fill Letter with Initial
benefit notice.

Supervisor approves priority payment document
and approves payment in ClaimsXPress system.

Within 3 days, Examiner completes reserve
worksheet,sets reserves, creates/publishes PLAN
OF ACTION (POA) and sets diaries to contact
doctor for earliest return to modified or regular
work. Ultimately, if EE is deemed QIW,
Examiner works with ER to ensure ADA
conversations & written communications are
provided to EE by ER along with pursuing
entitlements to service -connected retirement
(IDR) as may be applicable.

Examiner follows claim to promote MMI status
as soon as is medically appropriate. Once MMI
report is received, within 48 hourss, ER is
contacted to discuss PD & FM needs. If EE is
discharged, claim is closed; otherwise approval
from ER is requested to settle claim . Once
received, EE is contacted to discuss settlement
provisions and processes. Settlement docs are
sent to EE for signature.

Examiner sets recurring diaries for EE contact
while the claimant continues to receive TD
benefits-no longer than every 30 days. Examiner
sets diary for claim activity, progress, and POA
updates every 30 days. Applicable subrogation
is pursued and continued to finalization.

Medical bills are reviewed for appropriateness &
paid within 30 days of receipt. Regular ER
reviews take place along with medical
management.

Supervisor completes SUPERVISOR COMPLETED
NEW SETUP notepad within 30 days of receipt
ensuring all functions above have been
completed, sets recurring supervisor diary every
90 days (120 for FM claims). Delayed claim
diaries are set every 30 days to ensure claim
decisions are made at earliest opportunity ,but
in no event longer than 90 days.

Once settlement docs are received, they are sent
to WCAB for approval. Within 10 days from
WCAB approval, Stips or C&R payments begin.

All FM needs are addressed and monitored for
appropriateness with UR or IMR initiated as
needed.

Medical and/or PD disputes are managed via
QME/AME/IME exams. If litigation occurs,
examiner continues to handle claim without
defense counsel unless absolutely necessary. All
defense referrals are first discussed with ER to
review reasoning and obtain approval. Claim
continues to be aggressively managed to
conclusion.
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Section 2.3 – Program Management Delivering the City’s Scope of Services Claim Setup and Initial Steps
JT2 has a dedicated team monitoring incoming emails and faxes for information related to new claims.

As the information arrives, the team enters the data into the claims management system and immediately notifies the client’s JT2 supervisor.

JT2 is flexible in how information for a new claim is received. While the DWC-1 claim reporting form is available online at the JT2 website and as a PDF that can be filled out on a computer, scanned DWC -1 forms filled out by hand are also commonly r eceived and processed by JT2. In addition to the JT2 800 - number for reporting claims, claims examiners and supervisors are also available to clients to receive reports of new claims. The information gather ed is sent to the data entry team and entered into the claims management system.

Entering a claim into the claims management system initiates a series of timers and alerts, to ensure that communications happen between the claims examiner and the injured worker, the client, and the medical care provider. T his three -point contact process along with set plans of action are monitored by the claims management system and alerts are sent to examiners and supervisors as the deadline for its completion approaches.

Reserving
JT2’s reserving philosophy is consistent with CCR Labor Code section 15300. This extensive section details the specifics relating to how and what must be reserved. In essence, this requirement states that the Administrator shall set realistic estimates of future liability which reflects the proba ble total future cost of compensation and medical benefits due or that can reasonably be expected to be due over the life of the claim. Reserves include the best estimate of what can be expected to be paid outside of indemnity and medical benefits which in cludes, but is not limited to, any allocated expenses (investigations, legal expenses, interpreters, record retrieval, etc.).

Reserves are adjusted at various stages throughout the course of the claim as new information is received that warrants a change ( increase or decrease) until the claim ultimately closes. Estimates of future liability are not decreased based on projected third -party recoveries or projected reimbursements from aggregate excess insurances. Outstanding medical reserves will be reduced by one-half value on Future Medical Claims with no claim payments made for a 6 -month period. The likelihood of reopening treatment is minimal at that point and can always be readjusted upon further review.

It is JT2’s philosophy that reserving is reviewed at each milestone as a claim progresses . We reserve cases based on best available information and ultimate probable cost. We understand the impact that reserving has on the City’s budget and we understand the necessity for accurate and reliable information. Reserves are reviewed at every 90 days during each quarterly written file review process , and reviewed every 45 days during the claim’s initial stages .

JT2’s staff understands that establishing proper reserves ensures that funds will be available to meet our clients’ financial obligations. Funds available to pay claims and expenses incurred during the period of self-insurance. It also allows our clients to have sufficient and timely information available for financial planning purposes.

The supervisor revie ws all claims at setup then track s claim reserves on a monthly basis. Reserves for indemnity cases are reviewed at least every three months after setup and when new information is received that may impact the claims value.
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JT2’s supervisor reviews and appr oves reserving worksheets prepared by the examiners. Detailed reviews are conducted by the examiners at least every 60 days, although interval reviews prior to the 60-day mark also take place due to claim bill approvals or when requests for approval of med ical treatment are made for physical therapy and/or surgery, or any other specific receipt of information that may justify adjustments. Reviews are also initiated when potential reserve reductions are warranted, such as claim settlements or where all indem nity future liabilities have been satisfied. Indemnity reserves can be zeroed out to reflect the change in claim status. The supervisor reviews all claim reserves at a 120 -day mark diary.

JT2 provides a monthly report that lists all reserve changes. The cl ient has access to review reserves through our online claims database. Both the supervisor and Manager review the Account’s outstanding claim reserves on a monthly basis to track any adverse trending. Any continuous four (4) month period of increased outst anding claim liabilities require s closer scrutiny and review. The review may determine if the changes are consistent with increased claims frequency during that same period or if there’s an actual adverse loss development. If the reserve changes are determ ined to be as a result of adverse loss development, JT2 would discuss the findings with the City and offer solutions on how to manage the increased risk.

Claim Investigation
OUR CLIENTS CAN BENEF IT FROM THE MISSION STATEMENT S OF JT2’S SIU SERVICES  Protect our clients’ assets
 Establish a reputation in the Workers' Compensation Industry as a company who will aggressively pursue all fraudulent activity, and one that strives to eliminate all facets of Workers' Compensation fraud.
 Develop potentially fraudulen t cases for referral to the Department of Insurance and the local District Attorney's office for prosecution
 Work closely with prosecutors, licensing agencies and clients.  Be a resource for the training and education of all client personnel to collaborate on preliminary investigations of questionable claims. For added cost containment, JT2 prefers having the claims examiner initially interview the claimant and take statements unless some unique risk exists or the client has expertise in the area of fraud recognition.
 Keep current with possible trends and legal updates , with the ultimate goal of eliminating Workers' Compensation fraud.

FULL S.I.U. SERVICES ARE PROVID ED AS AN ALLOCATED E XPENSE TO THE FILE I N QUESTION .

Fraud is taken very seriously at JT2. We regularly train staff to communicate the goal that all potentially fraudulent claims are to be monitored and supervised by the claims supervisor or claims manager assigned to each client. We will always seek City approval prior to moving forward with these sensitive claims. We have been successful in having the District Attorneys in various Counties review and initiate proceedings. We provide a fraud hotline to all of our clients along with bold informational posters to post at all employer work locations wi th the fraud hotline information/directions. Once we have identified by a fraud situation, it is immediately log ged and an FD1 is filed with the Department of Insurance. When necessary, JT2 partners with APEX Investigations (due to their successful relatio nship with varies DA’s in multiple counties), who work with examiners and management staff to clearly present a strong case to the Department of Insurance and to the District Attorney. Fraud issues are continually monitored by the APEX fraud investigator, who communicates any important developments to key client contacts as necessary and provides direction.
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JT2 is required to report any claim to the Fraud Bureau and local DA’s office when “we know or reasonably believe we know the identity of a person or en tity that we have reason to believe committed a fraudulent act relating to workers’ compensation insurance .” Fraud claims are reported on the prescribed form FD1 – “Suspected Fraudulent Claims Report”, and we obtain releases from claimants to obtain medica l records and to perform ISO searches . These actions serve as “notice” and must contain the basis of the suspected fraud . It will ultimately be up to the local DA’s office to decide whether or not criminal filing or action will be taken . JT2 examiners and supervisors work very closely with the local DA offices to assist those offices in every way possible . Once the required form/report is filed, JT2 contacts the local DA and arranges a meeting with the DA’s investigator to put a plan of action in place and to ensure that they have and will continue to receive all required documents . Thereafter, follow -up statuses requests by JT2 will be obtained from the local DA’s office at a minimum of every 60 days until a decision is made for those to either prosecute or not. It is ultimately their decision, not JT2’s. There are a number of components required for a possible criminal filing by the local DA; i.e., identification and background, requested charges, witness lists, interviews to verify evidence, detailed inves tigation, document lists or inventory of evidence proving that a crime was committed . A suspicion of fraud does not automatically mean there is fraud -- abuse, malingering and embellishment are not fraud . It must be proven that a lie was knowingly made wit h intent to obtain compensation for which there was no entitlement. There are also various types of fraud; however, the only types applicable for JT2 to report pertain to claimant or health care provider fraud . For c laimant fraud, there may be a number of “indicators” (or “red flags”) , but they do not necessarily mean a claim must be reported . One example of an indicator would be a newly hired worker or one that was recently disciplined filing a workers’ compensation claim. On its own, this indicator would not result in a fraud report being filed. Some examples of claimant fraud could be, claiming an injury which did not occur ( the burden of proof is on JT2/Client to prove), lying about symptoms to collect benefits otherwise not entitled to, knowingly providing inaccurate medical history to the provider to gain compensation . The JT2 reporting and pursuit process is initiated by either the examiner or supervisor; however, the supervisor takes the main role in pursuing the case to conclusion .

Another material c ost-control step: JT2 and the City will work together in determining whether an internal or external investigation is needed. Some of the factors to consider include the following “Red Flags”: Questionable claims that are off premises, reported late; where injuries/illnesses are unknown; continuous trauma or specific claims involving stress, high blood, heart, hearing loss, exposure to hazardous substances, some carpal tunnel, psychiatric, strokes, paralysis, pre -existing conditions, various illnesses, deat h; possible fraud suspicion; could include claims with statutory defense criteria; serious claims or those involving subrogation.

An outside investigator may need to be assigned to take statements of witnesses and/or the injured worker, obtain past medical history releases and records or take surveillance, the City and JT2 will jointly determine whether an internal or external investigation is needed.

Additionally, JT2 has cost containment approaches to work with the investigation firm once the City approves their use. They are given parameters and direction within which to perform their duties without incurring unnecessary costs. Examiner audits all bills for accuracy. Final reports must be received within 2 weeks of case assignment to mitigate claim delay.

Any questionable claim rising to the level of suspected fraud will be timely reported to the local DA’s office. JT2 will work closely with them in providing initial and ongoing materials to maximize fraudulent claim prosecution.

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JT2 INVESTIGATES & DOCUMEN TS FRAUD TIPS & RED FLAGS

RED FLAG OR

ALLEGATION

INVESTIGATION

DOCUMENTATION

DISPOSITION
• Claims Examiner observes a red flag
• Department contacts Claims Examiner with a red flag or tip . • Workers' Compensation receives a tip telephone or via Citywide Fraud Hotline . • Claims Adjuster discusses with Supervisor and develops a plan to review the tip or red flag.
• Claims Adjuster reviews documentation , contacts department and /or medical provider , and reviews witness statements (if any).
• Workers Compensation hires private investigator for depositions , social media investigations , background checks , and/or observations , if necessary . • For Citywide Fraud Hotline referrals, Program Manager conducts investigation or assigns to Claims Adjuster as appropriate.
• Claims documents investigation in claims management system • For Citywide Fraud Hotline referrals , Program Manager documents investigation in claims management system and on shared drive with limited access . Program Manager tracks complaints and investigations on spreadsheet in shared drive . • Workers' Compensation determines if a red flag or tip is substantiated • If substantiated , Workers Compensation refers claim to City Attorney s Office potential prosecution .
• For Citywide Fraud Hotline referrals , Risk Management provides a resolution document to the City Auditor with details of disposition .

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City of Fontana

Compensability Determination
The initial claim is reviewed by the examiner. If there are no “ red flags”, and the claim facts meet the AOE/COE (both arising out of employment and during the course of employment) standards, the claim is considered to be compensable . In addition, the claim is reviewed to identify if affirmative defenses can be investigated and developed ; i.e. an altercation where the injured employee was the initial physical aggressor, i ntentionally self -inflicted injuries, those that could be caused by intoxication, “going and coming” rule issues, etc. After these considerations , the examiner determines whether compensability is appropriate and whether to accept the claim following all J T2 and City performance standards. All claims received by JT2 are reviewed by the supervisor as part of the setup procedure.

During the r eview prior to assignment for compensability , JT2 coordinates with the client. We delay and investigate any claim regar ding its compensability if we feel that the facts merit a delay and an , investigation . This process is initiated after approval from the client . Generally , the statement of the injured worker and any witnesses/supervisor is warranted. If medical issues nee d to be addressed, the Qualified Medical Examination process will be initiated. Simultaneously, appropriate records are ordered. The City is notified of JT2's recommendation to deny or accept the claim to ensure that proper notification is properly mailed no later than the 90th day. Complex claims requiring outside investigators are assigned to client -approved vendors. All assignments are limited and specific. The costs are paid via the allocated expense on the claim file .

Benefit Notices and Injured Worker Communication
3-point contacts will continue to be conducted with the injured worker, employer/client representative and treating physician within 2 working days of receipt of the claim. If a nurse case manager is assigned to the claim, initial physician contact may be conducted by either the claims examiner or the nurse case manager. In the event a party is nonresponsive, there will be evidence of at least three documented attempts to reach all three parties: the injured worker, the employer/client and th e treating physician.

The initial indemnity payment will continue to be issued to the injured worker, OR the City in the event of salary continuation via check or voucher payment agreement with the City, within 14 calendar days of knowledge of the injury a nd disability. In the event JT2 is not notified of the injury and disability within 14 calendar days of the employer’s knowledge, JT2 shall make payment within 5 working days of notification.

The properly completed DWC Benefit Notice is mailed to the emplo yee within 14 calendar days of the first day of disability. In the event JT2 is not notified of the first day of disability until after 14 calendar days, the DWC Benefit Notice is mailed within 5 calendar days of notification.

The JT2 claims team is experi enced in administering Code 30 benefits as described in Section 12 Industrial Accident Leave.

Self-imposed penalties shall be paid on late payments in accordance with Labor Code requirements and, if necessity to pay is the result of JT2 error/oversight, th e City will be notified and reimbursed within 5 days.

Eligibility for indemnity payments subsequent to the first payment shall be verified, except for established long -term disability.

If there are any adjustments needing to be made either to any subsequen t temporary or permanent disability payment, this will require that the appropriate DWC Benefit Notice, outlining and explaining the adjustment, be sent to the employee within 5 working days of JT2’s knowledge. 213
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Excess payments of Code 30 benefits are reimb ursed to the City on a dollar -for-dollar basis. In addition, customizations have been made to the check template for these reimbursements to ensure they are recognized upon receipt and payments for multiple claimants are not combined on a single check.

All final indemnity payments shall be issued timely and the appropriate DWC benefit notices sent.

Specialized Medical Treatments
JT2 either arranges or assists with specialist referrals for applicable medical treatment needed. If appropriate, JT2 will author ize a specialist referral from either a client Medical Panel, client MPN or from the initial treating facility. Authorization from the treating facility will be made only if the specialist is known to JT2 as one that will offer the most suitable treatment towards getting the injured worker the care needed in an expeditious manner and one that will work towards not only a speedy recovery, but have a willingness to outline abilities towards working in a modified capacity. Depending on the situation, the speci alist appointments will either be made by the referring treating facility, the JT2 examiner or the injured worker. If a specialist is chosen by the injured worker from an MPN, then discussions would take place with the examiner to best determine who would set the initial appointment :
the examiner or the injured worker. If the injured worker wants to schedule the appointment, then the examiner must be notified in order to send the specialist information relating to all of the reporting requirements along wit h JT2/examiner information for billing and communication purposes.

Disability Tracking and Management
Getting the injured worker back to work is not only beneficial to the City, but also helps the injured worker. It gives the injured worker meaningful work while allowing them the necessary time to heal. JT2 will work with the City to identify sustainable work opportunities by helping to develop bridge jobs in a search of all departments to seek and determine availability of needed jobs and functions. JT2 ha s found that often times, injured workers can successfully fill temporary vacancies or perform functions/tasks that have been neglected in the natural course of business. These opportunities will be identified by looking at the following:
 Accommodations within the original job by adjusting certain job functions  Reassignment to an equivalent vacant position that the employee is qualified to perform providing reasonable accommodation
 Reassignment to a temporary lower-graded vacant position  Temporary assignment of tasks that the employee can perform

JT2 works proactively to obtain work restrictions and/or a release to full duty on all cases. We notify the City representative immediately upon receipt of temporary work restrictions or a release to full duty, and work closely with you in the above areas to establish a return to transitional/modified work to full duty as soon as possible.

We understand that there will be some challenges that need to be overcome or worked through in terms of returning injured employ ees to transitional and then regular work. Therefore, it is imperative we do the following:
 Constant communication with the medical facilities to insure they are working towards the same goal of getting the injured employee back to a modified duty that is medically feasible and appropriate. Eliminate any facilities that are consistently out of compliance.  Work with the City’s various departments to establish some sort of “bridge” jobs that can be performed by industrially injured employees. An employee does not have to be placed in the same department where they normally work. Scenarios of assigned work could include the following:
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Within the same work area, restricted duties
Within the same work area, different duties
Different work area, different duties

Claim file balances are also performed on a regular basis along with automated tracking of disability benefits to ensure expiration dates are not overlooked and overpayments or underpayments are minimized.

Processing Medical Bills
Medical treatment bills ( physician, pharmacy, hospital, physical therapist, etc.) are entered into the claims system within one business day of receipt. The claims examiner then reviews the bills for correctness, approves for bill review or objects well within 30 days of receipt.

The medical provider is notified in writing within 30 days of receipt of an itemized bill if a medical bill is contested, denied or incomplete.

The bill review process is central to the medical payment workflow and includes PPO participation and discounts as applicable.

Temporary Disability and Coordination with the City
JT2 coordinates all disability with the City to ensure that temporary disability payments are made to the appropriate party; e.g to the City via vouchers for 4850 or other salary continuati on benefit s, or to the injured worker as a check if no salary will be continued. JT2 maintains a Client Profile for the City that includes instructions specific to the City, that are based on how temporary disability payments should be made.

Medical Treatment Management
JT2 will coordinate with the City to maintain a panel of medical practitioners for the initial treatment of injured employees , or we will abide by an existing MPN . JT2 will return employees to some sort of modified work as soon as is medical ly feasible, understanding that it will be the City’s decision regarding abilities to accommodate. JT2 is not swayed by injured workers’ desires to remain off work, but rather we make appropriate independent medical decisions about work capabilities and act on reports of work restrictions at the earliest opportunity. Any facilities that seem hesitant to comply will be reviewed with the City for possible replacement.

SPOTLIGHTED VENDORS
Urgent Care Clinics
Kaiser Occupational
West Point

In our experience , West Point is used by the City for employment pre -testing, offers b etter hours than many other clinics, and injured workers generally experience lower wait time s.

JT2 will work with the managed care provider(s) to assure appropriateness of treatment and follow utilization review procedures, American College of Occupational and Environmental Medicine (ACOEM) guidelines, and Official Disability Guidelines (ODG). JT2 will manage medical treatment for the $10,000 cap on all delayed claims. JT2 will authorize medical case management and nurses per agreed -upon criteria and monitor their use for necessity and reasonableness. Before any nurse assignments, JT2 will 215
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communicate with the City to review recommended assignments and to obtain authority for those assignments.

In reference to utilization review, it is JT2’s philosophy that our skilled examiners can approve many specific treatment modalities and services that would be reasonably expected to be approved based on examiner medical expertise and experience. The injured worker benefits from faster scheduling and treatment, and recovery time is reduced and return -to-work scenarios are explored, earlier. In addition, the client saves unnecessary UR costs. The indiscriminate use of UR creates many delays that are often compounded by avoidable office visits , employee dissatisfaction, hindered recoveries, late return - to-work decisions, postponed permanent & stationary (MMI) statuses , and paying more in UR costs than should be necessary.

Workers’ compensation industry r esearch and development agencies (such as CWCI) cite unnecessary reliance on UR referrals. Overuse of the service may stem from claims examiners and/or supervisors having inadequate experience or confidence in making certain medical decisions; or examiners who are burdened by a backlogged claims load choosing to forward a certain number of claims to UR and freeing up time for the remainder of their cases; or instances where TPA firms dictate that every possible claim that can be justified be referred to in -house UR to generate additional TPA revenue. The JT2 service model has the less -complicated decisions handled by the examiner, appropriately and timelier. JT2 streamlined its UR protocols, allowing the examiner (with supervisor review), to approve treatments which are clearly required or which would be automatically approved by software applied by UR service providers. As a result, referrals to UR --- and their associated fees --- are reduced by more than 20% ... and are consistent with protocols that will be adopted by the industry in Year 2018 due to the previous passage of SB 1160. The DWC conducted a random utilization review audit in 2017 from a sampling of all JT2 clients. They scored JT2’s performance at 98.2% compliance with no penalty assessments.

JT2 will be responsible for handling Independent Medical Review (IMR) requests as may be applicable.

JT2 will pay bills in accordance with the California Labor Code. Medical bills shall be reviewed by the Claims Adjuster for relation to injury before being transmitted to the bill review team. Prompt and appropriate notice to providers will be sent regarding any medical charges that are questionable and/or disputed. Uncontested medical bills shall be paid in accordance with the Labor Code.

JT2 will provide co mplete claims administration and processing of all lifetime medical cases awarded or ordered by WCAB in accordance with current laws and utilization review. JT2 will document the file specific as to the body parts(s) and/or specific condition for which fut ure care has been awarded.

Coverage parameters outlined on the P&S/MMI report should be stated in file notes and referenced prior to authorization of future medical treatment.

JT2 will work hand -in-hand with the C ity to attain the following:
 Medical verification of disability will be obtained in a timely manner and maintained in the claim file to document the need for continuing indemnity benefits. Any lengthened disability periods outside the “norm” for each type of injury, considering the injured worker’s age and occupation, will be discussed with the treating physician to develop a plan to expedite some sort of return -to-work options. Subsequently, if the physician does not or is not willing to follow the agreed -upon plan and no effective improvements are realized, a treatment objection letter will be sent and an independent medical evaluation will be obtained.
 Injured workers on Temporary Total Disability should be medically evaluated e very two weeks to review progress, abilities and status until released to acceptable modified/transitional work or full duty.
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 Independent medical reviews via QMEs, AMEs or IMEs will be initiated when needed to address necessity or reasonableness of care within the scope of the law.  Medical treatment provided will be reviewed for necessity, reasonableness and relationship to the industrial injury per UR and IMR guides.
 Catastrophic, complex injuries and extended lost-time claims will be reviewed by a qualified medical management provider approved by the city. Claims referred f or outside medical management services will reflect the intent, scope of services requested/to be provided with an outline of proposed costs.
 Ensure specialist referrals are appropriate and to those that will adequately serve the needs of the injured worker towards expeditious medical recovery and return to work as applicable.  Recommendations for surgery shall be confirmed through medical management treatment protocols and either approved by the examiner within approved UR protocols or submitted to the UR Organization for decision.
 Pre-existing medical conditions and medical records will be explored/obtained on all indemnity claims with potential permanent disability liabilities.  Treatment recommendations for care such as physical therapy, chiropractic manipulations, etc., will be verified with the physician as to duration, frequency and anticipated results prior to authorization.  Medical bills submitted without a supporting medical report shall not be paid until a medical report verifying services, is obtain ed. All bills will be adjusted according to the fee schedule or PPO arrangement, whichever is lower, and paid or objected to according to the law.  Medical-legal costs will be reviewed for appropriateness and necessity. Bills which do not qualify as valid medical-legal expenses will be objected to on a timely basis. Liens will be properly processed, negotiated or adjudicated in accordance with labor code provisions.  Recommendations will be provided to the C ity in those instances where medical providers are not complying with JT2 and City goals.

Permanent Disability
JT2 conducts periodic training on labor code, case law development, changes in legislation, medical case management, (including ACOEM) with our claims staff. The training sessions are led by JT2 claims management and upon request by specialists in the fields of ACOEM, medical case management, litigation , permanent disability and investigation. The examiners are also required to take certified courses in order to meet State mandated continuing educ ation requirements. The examiners are trained on the most recent sweeping legislative change, Senate Bill 863, and are kept up to date on precedent setting interpretations of the AMA Guides and challenges to the four corners of the AMA Guides to rating Per manent Impairment. The examiners are trained on how to recognize and apply legal apportionment to preexisting disability.

On unrepresented claims, when an MMI (Maximum Medical Improvement) report is received and rated, after discussions with the client for verbal approval, the examiner calls the injured employee to review the report. The purpose is to explain the permanent disability rating system, how their rating was determined and any future medical treatment rights they may have. This facilitates the pr ocess of settling the claim prior to mailing them settlement documents; i.e., either Stipulated Request for Award or Compromise & Release Agreements. The employee has advanced knowledge and a better understanding of the process rather than just simply rece iving documents in the mail, not knowing what they mean or who determines whether they are correct. This system alleviates questions, concerns and misunderstandings, maximizes early claim resolutions and minimizes litigation. Permanent disability advances are made as the law regulates . Any advances made will be deducted from the final settlement once the case resolves.
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JT2’s process for the settlement of all claims, including the resolution of future medical provisions with or without permanent impairment i s reviewed in accordance with the following steps prior to settlement:
 A specified form will be used to obtain authorization and documentation (current JT2 Settlement Authority form or City form).
 Initial verbal approval will first be obtained from the City with subsequent written approval submitted on the form. The verbal approval may or may not be sufficient to contact the injured worker, applicant attorney, defense attorney as applicable to commence settlement processes. This depends on the City’s specific criteria.
 The fully endorsed form will be maintained in the claim file and may be produced as may be required at City meetings.
 The supervisor or manager will review and approve all forms. Settlement amounts will be compared to the claim data and paymen t history to ensure accuracy. Future medical provisions will be specifically addressed to avoid paying for services either not related to the injury or not originally agreed upon.

Litigation Management and Cost Containment
JT2 will continue to work with t he City to develop a preferred Legal Defense Panel in the event that claims require defense counsel referral. JT2 staff is trained that litigation control and avoidance is essential for cost containment. We have developed a set of protocols that ensure tha t litigated claims costs are appropriate. This is attained through open communication between client, defense counsel and examiner and limited direct assignment to defense counsel, defense counsel referrals to specific attorneys in the firms selected by JT 2 and the City along with a full review of all charges to confirm appropriateness.

The quality of legal work is monitored by the examiner in regards to what is expected to be achieved at specific time intervals which are placed on diary . These legal diarie s are set based on the latest activity and the direction that has been given to the defense counsel for completion. Delays in activity result in phone call followups being made to the attorney with the intent of agreeing to a plan of action. The claim is r eviewed with the supervisor for additional action if any further delays with no activity result; i.e., discussions with the legal firm manager, written outlines of expectations with mandated direction and a notice of unacceptable performance, etc.

Cost of legal work is monitored by the examiner upon receipt of each billing to ensure that the hourly fee is correct. If work was performed by an attorney that included work that could be done by a paralegal or a lower position within the firm, JT2 meets with the firm’s billing department to adjust the bill and e nsure that work is delegated to appropriate staff going forward . As h ourly rates are less for the services provided by paralegals and clerks, those rates are expected to be billed accordingly.

JT2 takes a team approach when working on litigated claims. JT2, the City, and the defense attorneys create discovery plans to keep everyone on the same page and to keep claims moving towards prompt resolution. The process result s from the discovery plan that JT2 foll ows varies depending upon whether or not a claim is accepted or denied. For accepted claims, JT2 works to maintain medical control combined with sensible utilization, securing an MMI report that is substantial medical evidence, reviewing whether or not a m edical-legal evaluation is needed, the interactive process/offer of work, and settlement documentation. On a denied claim, the discovery plan include s an outline of key facts for the denial and necessary steps to develop evidence required to support the de nial. All medical reports are forwarded to the defense attorney within 10 working days of receipt. Within 10 days of receiving any P&S/MMI report or Declaration of Readiness to Proceed, a written evaluation are prepared and copies are sent to both the defe nse attorney and the City.
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Although the City selects the defense attorneys, JT2 assess es the following and provide s feedback to the City as needed:
 Timeliness of initial report with review of recommendations.  No automatic approval of deposition requests wi ll be given. These should only be performed in certain cases involving a multitude of issues, allegations, etc. Therefore, defense attorneys assigned to the City will have specific instructions in this regard.  Once a plan of action is adopted by JT2 and de fense attorney, JT2 communicates with the defense attorney at regular intervals to ensure timely progress is made.  Billings will be reviewed to ensure that charges are consistent with hours estimated, work performed and to ensure that no carry -overs exist from previous billing periods (duplications). JT2 will also be proactive in instances where work can be performed by the claims examiner, rather than assigned to the attorney (e.g. negotiating liens).

SPOTLIGHTED VENDORS

ATTORNEY FIRM
Ron Homan* Homan, Stone & Rossi
Sam Khajenoori Hanna Brophy
Joseph Volpe Famiglietti & Volpe
David Chou Chou Law Group
* Ron Homan of Homan, Stone & Rossi is the City’s preferred attorney, and is the attorney receiving all new referrals
Vocational Rehabilitation
When situations arise where medically the employee cannot perform the job with or without accommodations, therefore never being able to return to work , JT2 notifies the City representative immediately upon receipt of an employee’s permanent work restrictions so th at the City can assess whether they need to address appropriate ADA requirements.

The client must have a process for complying with laws preventing disability discrimination, including Government Code Section 12926.1 which requires an interactive process w ith the injured worker when addressing a return to work, particularly with permanent work restrictions. JT2 shall cooperate with the City to the fullest extent, in providing medical and other information the Client deems necessary to meet its obligations u nder federal and state disability laws. JT2 assisted the Client in this area of navigating worker’s compensation laws with those of Federal and State disability rights by reviewing or researching the following:
 Client job descriptions – differentiating between essential and non-essential duties  Physical therapy facilities willing to evaluate work sites for ergonomic recommendations and/or agility testing performance as applicable
 Researching part-time positions within the Client’s operations.  Within 75 days of aggregate total disability, the City will be notified of potential Qualified Injured Worker statuses. If needed, a Qualified Rehabilitation Representative will be assigned within 90 days of aggregated temporary total disability. Within 10 days of receip t of a physician’s report indicating the employee is medically eligible for vocational rehabilitation, the employee will be notified of his or her potential eligibility for services. This notification timeframe will also apply if the employee has been off work/disabled for an aggregate of 365 days. 219
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WCAB Hearing Attendance
Senior examiners at JT2 routinely attend WCAB hearings . Examiners work in partnership with and serve as a resource to defense attorneys ensuring that all aspects of complex claims are con sidered as legal strategies are developed.

File Reviews and City Meetings Attendance
JT2 has clients throughout the State of California and regularly attends in -person and onsite meetings , at no additional charge . For short and informal meetings, JT2 uses teleconferencing software such as Zoom to attend via video and to present documents and presentation slides.

Subrogation
Quality assurance and consistency of service is assured by aggressive supervision by management personnel. All files are reviewed prior to examining assignment by trained management personnel to identify those difficult, severe claims that require immediate supervision and investigation including recognizing subrogation possibilities. The supervisor maintains tracking for subrogation clai ms and diary maintenance. The claims supervisor reviews every new report for contributory opportunities and these are revisited at each 90 -day written file review. The claims examiner sends all initial subrogation letters and requests Police reports. Subro gation attorneys are used with client authority.

All claims are initially reviewed the by supervisor to insure proper identification of potential subrogation claims. On applicable claims, the examiner will proceed to put all parties on notice and follo w through for recovery of benefits paid . The supervisor will continue to maintain every subrogation claim on diary to review activity, progress and to protect City rights of recovery . Subrogation defense will only be assigned upon City approval; i.e., norm ally on larger claims, when statutes need to be legally preserved or on high exposure or multiple party situations . Assignments will be made to attorneys that specialize in this area of expertise . Every attempt will be made to retain services on a continge ncy-fee basis to be negotiated by JT2.

Excess Insurance Reporting and Recovery
JT2 promptly reports all appropriate claims to the City’s excess carrier. Quality assurance and tracking are performed in a manner similar to the subrogation process. Reporting criteria generally follow the below protocols; however, there could be slight differences pursuant to unique Excess carrier specifications:

Any claim, suit or proceeding that appears to involve indemnity by the Excess carrie r or as indicated below:
 Any occurrence, claim, award, or proceeding judgment for which the incurred has reached 50% of the self-insured retention level (SIR);
 Any occurrence which causes serious injury to two or more employees;  Any case involving:
 Amputation of major extremity;
 Brain or spinal cord injury;
 Death;
 Permanent total disability as defined in the Workers’ Compensation Labor Code applicable to the state named in the Declarations;
 Any second or third degree burns of 25% or more of the body; 220
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 Multiple or serious fracture
 Loss of sight or hearing
 Crushing or massive internal injury
 The reopening of any case in which further award might involve Excess liability; and  Any case where the claimant has been on temporary total disability (TTD) for a period of one year.  Hospitalization of more than one (1) month.

If there are any differences, additions, or deletions within client-specific Excess reporting requirements other than what has been identified above, those requirements will be followed. Once a claim has pierced the self -insured retention (SIR) level and reimbursements are requested, subsequent reimbursements will be requested on a quarterly basis.

Settlement Authority
JT2 will fully comply with the City’s requirement as it relates to settlements and c atastrophic claims.

JT2 will also abide by all requests for written status reports whenever any City claim exceeds the total incurred values indicated. JT2 examiners and supervisors have no settlement authority in the absence of Client verbal/written conse nt. If the City desires to establish settlement authority amounts and procedures for the dedicated examiners and supervisors this is entirely acceptable; however, it is not necessary.

JT2’s current standard for the settlement of all claims, including the resolut ion of future medical provisions with or without permanent impairment has previously been reviewed under the Permanent Disability section, above.

With regards to catastrophic or serious claims, the City would immediately be notified upon receipt of claim information. However, JT2 also performs the following functions on these types of claims:
 Contacts the treating facility and confirm the patient’s name, birth date and social security card number.
 Acquires and confirms the contact information for the person in charge of Utilization Review for the patient. Ensures that the facility has the correct contact information for JT2.  Obtains the current diagnosis and treatment plan.
 Ensures that the patient is provided with appropriate care from the appropriate specialists.  Contacts the City and reports on the current case status.  Obtains authorization for immediate assignment of Medical Nurse Case Manager.  Establishes a claim file.
 Reports to Excess.

SETTLEMENT PAYMENTS VERIFICATION STEPS:

Each supervisor within the ir respective units are the first to review all settlements, including liens and reserve amounts that exceed specified authority levels once the examiner submits and discusses recommendations and/or changes. Each must be approved in writing by the appropri ate supervisor prior to submission to the City. Once the supervisor approves, then the applicable settlement, lien settlement and/or reserve amount/change can be discussed/submitted to the client for approval. Once approved by the client, the examiner proc eeds to make the changes or settle the claim/lien in accordance with the recommendations. JT2 has system -generated dollar amount caps or limits, whether they be reserves or settlements, that flag the supervisor at certain levels beyond examiner limits and then onto the Manager for those levels beyond supervisor limits. These dollar amount caps either separately reference 221
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reserves under that tab or payments within certain codes reflecting payment types. If entries are entered beyond certain established autho rity levels, either the reserve change or payment will not execute unless approved at the appropriate supervisor or Manager level.

Claim Closures
JT2 prides itself in actively managing claims towards early resolution. This has a huge effect on the administration of the City’s claims in terms of overall costs. Future Medical claims are administratively closed if there is no active treatment for a period of 2 years in accordance with Labor Code and PRISM excess requirements , assuming that there are no outstan ding indemnity payments due.

The most recent information below comparing Fontana to all statewide cities reveals positive results in all areas reviewed . The significantly lower number of open Fontana claims compared to statewide city totals demonstrates JT 2’s proactive results in successfully closing claims at the earliest opportunity .

Fontana’s results are 3 ½ times lower than the state.

City of Fontana Compared to Statewide City Totals from FY2020-21 Public Entity Reports # CLAIMS

REPORTED PER
100 EES
# OPEN IND

CLAIMS PER
100 EES

TOTAL PAID
PER $100

PAYROLL

TOTAL EFL
PER $100

PAYROLL

AVERAGE

COST PER
CLAIM

TOTAL PAID
PER

EMPLOYEE
Fontana 8.0 6.8 $ 3.55 $ 8.55 $ 7,727 $ 1,360
Statewide Cities 13.5 24.2 $ 4.22 $ 14.73 $ 8,842 $ 3,765

*EFL = Estimated Future Liabilities

Workplace Safety Considerations
JT2 partners with the City to assist in the coordination of safety considerations . The first step in this process include a periodic review of the City’s current Injury & Illness Prevention Program (IIPP ), an OSHA-required employer plan . JT2 partners with clients to review , ev aluate, and im prove the main aspects of safety programs:
 Establishing roles and responsibilities for departments in the process of implementing, maintaining, and monitoring department-specific Injury and Illness Prevention Programs (IIPP).  Providing annual notifications to all City employees on how to report safety concerns.  Establishing safety goals and performance indicators for operating departments that include both leading and lagging safety indicators.
 Implementing a process for the collection and analysis of safety data and outlining the roles and responsibilities departments in this process.
 Developing, documenting, and implementing a Citywide safety incident investigation program that includes trainings for supervisors and other relevant personnel.  Updating the Workers’ Compensation Division’s procedures for monitoring all fraud red flags and tips in a central document and analyzing and reporting results.

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Although safety programs require ongoing improvement , JT2’s partnership with the City of Fontana has resulted in a well-controlled operation, based on comparing the City’s performance and trends to those of similarly-sized cities:

City of Fontana Comparisons Based on Cities of Comparable Payroll Size # CLAIMS

REPORTED
PER 100 EES

TOTAL PAID

PER EMPLOYEE
Fontana 8.0 $ 1,360
Concord 9.8 $ 4,341
Daly City 9.8 $ 4,134
Simi Valley 8.5 $ 8,428
Fullerton 13.2 $ 1,945
Downey 7.5 $ 2,565
Redlands 12.7 $ 3,024
Costa Mesa 6.9 $ 4,009

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CITY OF FONTANA

PROFESSIONAL SERVICES AGREEMENT
SP-90-HR-22

This Agreement is made and entered into as of February 14, 2023 by and between the City of Fontana, a public agency organized and operating under the laws of the State of California with its principal place of business at 8353 Sierra Avenue, Fontana, California 92335 (“City”), and JT2 Integrated Resources, a Corporation with its principal place of business at 333 Hegenberger Road, Suite 650, O akland, California 94621 (hereinafter referred to as “Consultant”). City and Consultant are sometimes individually referred to as “Party” and collectively as “Parties” in this Agreement.

RECITALS
A. City is a public agency of the State of California and is in need of professional services for the following project:

Third Party Administrator (hereinafter referred to as “the Project”).

B. Consultant is duly licensed and has the necessary qualifications to provide such services.

C. The Parties desire by this Agreement to establish the terms for City to retain Consultant to provide the services described herein.

AGREEMENT
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

1. Services.

Consultant shall provide the City with the services described in the Scope of Services attached hereto as Exhibit “A.”

2. Compensation.
a. Subject to paragraph 2(b) below, the City shall pay for such services in accordance with the Schedule of Charges set forth in Exhibit “B.” b. In no event shall the total amount paid for services rendered by Consultant under this Agreement exceed the sum of annual fee in accordance with Schedule of Charges set forth in Exhibit “B.” This amount is to cover all Claim Administration and Medical Bill Review, and the City will not pay any additional fees for printing expenses. Periodic payments shall be made within 30 days of receipt of an invoice which includes a detailed description of the work performed.

Payments to Consultant for work performed will be made on a monthly billing basis.

3. Additional Work.

If changes in the work seem merited by Consultant or the City, and informal consultations with the other party indicate t hat a change is warranted, it shall be processed in the following manner: a letter outlining the changes shall be forwarded to the City by Consultant with a statement of estimated changes in fee or time schedule. An amendment to this Agreement shall 224

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be prepared by the City and executed by both Parties before performance of such services, or the City will not be required to pay for the changes in the scope of work. Such amendment shall not render ineffective or invalidate unaffected portions of this Agreement.

4. Maintenance of Records.

Books, documents, papers, accounting records, and other evidence pertaining to costs incurred shall be maintained by Consultant and made available at all reasonable times during the contract period and for four (4) years fr om the date of final payment under the contract for inspection by City.

5. Term .

The term of this Agreement shall be from February 14, 2023 to February 13, 2028, unless earlier terminated as provided herein. The Parties may, by mutual, written consent, extend the term of this Agreement if necessary to complete the Project. Consultant shall perform its services in a prompt and timely manner within the term of th is Agreement and shall commence performance upon receipt of written notice from the City to proceed (“Notice to Proceed ”). The Notice to Proceed shall set forth the date of commencement of work.

6. Delays in Performance.
a. Neither City nor Consultant shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the non - performing party. For purposes of this Agreement, such circumstances include but are not limited to, abnormal weather conditions; floods; earthquakes; fire; epidemics; war; riots and other civil disturbances; strikes, lockouts, work slowdowns, and other labor disturbances; sabotage or judicial restraint.
b. Should such circumstances occur, the non -performing party shall, within a reasonable time of being prevented from performing, give written notice to the other party describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement.

7. Compliance with Law.
a. Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local government, including Cal/OSHA requirements. b. If required, Consultant shall assist the City, as requested, in obtaining and maintaining all permits required of Consultant by federal, state and local regulatory agencies. c. If applicable, Consultant is responsible for all costs of clean up and/ or removal of hazardous and toxic substances spilled as a result of his or her services or operations performed under this Agreement.

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8. Standard of Care
Consultant’s services will be performed in accordance with generally accepted professional practices and principles and in a manner consistent with the level of care and skill ordinarily exercised by members of the profession currently practicing under similar conditions.

9. Assignment and Subconsultant
Consultant shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of the City, which may be withheld for any reason. Any attempt to so assign or so transfer without such consent shall be void and without legal effect and shall constitute grounds for termination. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. Nothing contained herein shall prevent Consultant from employing independent associates, and subconsultants as Consultant may deem appropriate to assist in the performance of services hereunder.

10. Independent Contractor
Consultant is retained as an independent contractor and is not an employee of City. No employee or agent of Consultant shall become an employee of City. The work to be performed shall be in accordance with the work described in this Agreement, subject to such directions and amendments from City as herein provided.

11. Insurance. Consultant shall not commence work for the City until it has provided evidence satisfactory to the City it has secured all insurance required under this section. In addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has secured all insurance required under this section. a. Commercial General Liability
(i) The Consultant shall take out and maintain, during the performance of all work under this Agreement, in amounts not less than specified herein, Commercial General Liability Insurance, in a form and with insurance companies acceptable to the City. (ii) Coverage for Commercial General Liability insurance shall be at least as broad as the following:
(1) Insurance Services Office Commercial General Liability coverage (Occurrence Form CG 00 01) or exact equivalent. (iii) Commercial General Liability Insurance mu st include coverage for the following:
(1) Bodily Injury and Property Damage
(2) Personal Injury/Advertising Injury
(3) Premises/Operations Liability
(4) Products/Completed Operations Liability
(5) Aggregate Limits that Apply per Project
(6) Explosion, Col lapse and Underground (UCX) exclusion deleted
(7) Contractual Liability with respect to this Agreement (8) Property Damage
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(9) Independent Contractors Coverage
(iv) The policy shall contain no endorsements or provisions limiting coverage for (1) contractual liability; (2) cross liability exclusion for claims or suits by one insured against another; (3) products/completed operations liability; or (4 ) contain any other exclusion contrary to the Agreement.
(v) The policy shall give City, its officials, officers, employees, agents and City designated volunteers additional insured status using ISO endorsement forms CG 20 10 10 01 and 20 37 10 01, or endorsements providing the exact same coverage. (vi) The general liability program may utilize either deductibles or provide coverage excess of a self -insured retention, subject to written approval by the City, and provided that such deductibles shall not apply to the City as an additional insured. b. Automobile Liability
(i) At all times during the performance of the work under this Agreement, the Consultant shall maintain Automobile Liability Insurance for bodily injury and property damage including coverage for owned, non-owned and hired vehicles, in a form and with insurance companies acceptable to the City.
(ii) Coverage for automobile liability insurance shall be at least as broad as Insurance Services Office Form Number CA 00 01 covering automobile liability (Coverage Symbol 1, any auto).
(iii) The policy shall give City, its officials, officers, employees, agents and City designated volunteers additional insured status. (iv) Subject to written approval by the City, the automobile liability program may utilize deductibles, provided that such deductibles shall not apply to the City as an additional insured, but not a self-insured retention.
c. Workers’ Compensation/Employer’s Liability
(i) Consultant certifies that he/she is aware of the provisions of Section 3700 of the California Labor Code which requires e very employer to be insured against liability for workers’ compensation or to undertake self -insurance in accordance with the provisions of that code, and he/she will comply with such provisions before commencing work under this Agreement.

(ii) To the extent Consultant has employees at any time during the term of this Agreement, at all times during the performance of the work under this Agreement, the Consultant shall maintain full compensation insurance for all persons employed directly by him/her to carry out the work contemplated under this Agreement, all in accordance with the “Workers’ Compensation and Insurance Act,” Division IV of the Labor Code of the State of California and any acts amendatory thereof, and Employer’s Liability Coverage in amounts indicated herein. Consultant shall require all subconsultants to obtain and maintain, for the period required by this Agreement, workers’ compensation coverage of the same type and limits as specified in this section.

d. Professional Liability (Errors and Omissions)
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At all times during the performance of the work under this Agreement the Consultant shall maintain professional liability or Errors and Omissions insurance appropriate to its profession, in a form and with insurance companies acceptable to the City and in an amount indicated herein.

This insurance shall be endorsed to include contractual liability applicable to this Agreement and shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of the Consultant. “Covered Professional Services” as designated in the policy must specifically include work performed under this Agreement. The policy must “pay on behalf of” the insured and must include a provision establishing the insurer's duty to defend. e. Minimum Policy Limits Required
(i) The following insurance limits are required for the Agreement:

Combined Single Limit
Commercial General Liability $1,000,000 per occurrence/ $2,000,000 aggregate for bodily injury, personal injury, and property
damage

Automobile Liability $1,000,000 combined single limit Employer’s Liability $1,000,000 per accident or disease Professional Liability $1,000,000 per claim and aggregate (errors and omissions)

(ii) Defense costs shall be payable in addition to the limits. (iii) Requirements of specific coverage or limits contained in this section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. Any available coverage shall be provided to the parties required to be named as Additional Insured pursuant to this Agreement. f. Evidence Required
Prior to execution of the Agreement, the Consultant shall file with the City evidence of insurance from an insurer or insurers certifying to the coverage of all insurance required herein. Such evidence shall include original copies of the ISO CG 00 01 (or insurer’s equivalent) signed by the insurer’s representative and Certificate of Insurance (Acord Form 25 -S or equivalent), together with required endorsements. All evidence of insurance shall be signed by a properly authorized officer, agent, or qualified representative of the insurer and shall certify the names of the insured, any additional insureds, where appropriate, the type and amount of the insurance, the location and operations to which the insurance applies, and the expiration date of such insurance.
g. Policy Provisions Required
(i) Consultant shall provide the City at least thirty (30) days prior written notice of cancellation of any policy required by this Agreement, except that the Consultant shall provide at least ten (10) days prior writte n notice of cancellation of any such policy due to non-payment of premium. If any of the required coverage is cancelled or expires during the term of this Agreement, the Consultant shall deliver renewal certificate(s) including the General 228

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Liability Additional Insured Endorsement to the City at least ten (10) days prior to the effective date of cancellation or expiration.
(ii) The Commercial General Liability Policy and Automobile Policy shall each contain a provision stating that Consultant’s policy is primary insurance and that any insurance, self-insurance or other coverage maintained by the City or any named insureds shall not be called upon to contribute to any loss.
(iii) The retroactive date (if any) of each policy is to be no later than the effective date of this Agreement. Consultant shall maintain such coverage continuously for a period of at least three years after the completion of the work under this Agreement. Consultant shall purchase a one (1) year extended reporting period A) if the retroa ctive date is advanced past the effective date of this Agreement; B) if the policy is cancelled or not renewed; or C) if the policy is replaced by another claims -made policy with a retroactive date subsequent to the effective date of this Agreement.
(iv) All required insurance coverages , except for the professional liability coverage, shall contain or be endorsed to provide a waiver of subrogation in favor of the City, its officials, officers, employees, agents, and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subconsultants.
(v) The limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability.

Further the limits set forth herein shall not be construed to relieve the Consultant from liability in excess of such coverage, nor shall it limit the Consultant’s indemnification obligations to the City and shall not preclude the City from taking such other actions available to the City under other provisions of the Agreement or law.
h. Qualifying Insurers
(i) All policies required shall be issued by acceptable insurance companies, as determined by the City, which satisfy the following minimum requirements:
(1) Each such policy shall be f rom a company or companies with a current A.M. Best's rating of no less than A:VII and admitted to transact in the business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.
i. Additional Insurance Provisions
(i) The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by the City, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including but not limited to, the provisions concerning indemnification.
(ii) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is 229

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canceled and not replaced, City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Consultant or City will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may cancel this Agreement.
(iii) The City may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project. (iv) Neither the City nor any of its officials, officers, employees, agents or volunteers shall be personally responsible for any liability arising under or by virtue o f this Agreement.
j. Subconsultant Insurance Requirements . Consultant shall not allow any subcontractors or subconsultants to commence work on any subcontract until they have provided evidence satisfactory to the City that they have secured all insurance required under this section.

Policies of commercial general liability insurance provided by such subcontractors or subconsultants shall be endorsed to name the City as an additional insured using ISO form CG 20 38 04 13 or an endorsement providing the exact same coverage. If requested by Consultant, City may approve different scopes or minimum limits of insurance for particular subcontractors or subconsultants.

12. Indemnification.
a. To the fullest extent permitted by law, Consultant shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Consul tant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by Consultant, the City, its officials, officers, employees, agents, or volunteers.

b. If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’s performance of “design professional” services (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code secti on 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtain ing a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault.

13. California Labor Code Requirements.
a. Consultant is aware of the requirements of California Labor Code Sections 1720 et seq. and 1770 et seq., which require the payment of prevailing wage rates and the performance of other requirements on certain “public works” and “maintenance” projects (“Prevailing Wage Laws”). If the services are being performed as part of an applicable “public works” or “maintenance” project, as defined by the Prevailing Wage Laws, and if the total 230

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compensation is $1,000 or more, Consultant agrees to fully comply with such Prevail ing Wage Laws. Consultant shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or alleged failure to comply with th e Prevailing Wage Laws . It shall be mandatory upon the Consultant and all subconsultants to comply with all California Labor Code provisions, which include but are not limited to prevailing wages (Labor Code Sections 1771, 1774 and 1775), employment of apprentices (Labor Code Section 1777.5), certified payroll records (Labor Code Sections 1771.4 and 1776), hours of labor (Labor Code Sections 1813 and 1815) and debarment of contractors and subcontractors (Labor Code Section 1777.1) . The requirement to submit certified payroll records directly to the Labor Commissioner under Labor Code section 1771.4 shall not apply to work performed on a public works project that is exempt pursuant to the small project exemption specified in Labor Code Section 1771.4. b. If the services are being performed as part of an applicable “public works” or “maintenance” project, then pursuant to Labor Code Sections 1725.5 and 1771.1, the Consultant and all subconsultants performing such services must be register ed with the Department of Industrial Relations. Consultant shall maintain registration for the duration of the Project and require the same of any subconsultants, as applicable. Notwithstanding the foregoing, the contractor registration requirements mandated by Labor Code Sections 1725.5 and 1771.1 shall not apply to work performed on a public works project that is exempt pursuant to the small project exemption specified in Labor Code Sections 1725.5 and 1771.1. c. This Agreement may also be subject to compliance monitoring and enforcement by the Department of Industrial Relations. It shall be Consultant’s sole responsibility to comply with all applicable registration and labor compliance requirements. Any stop orders issued by the Department of Indust rial Relations against Consultant or any subcontractor that affect Consultant’s performance of services, including any delay, shall be Consultant’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Consultant caused delay and shall not be compensable by the City. Consultant shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the Departme nt of Industrial Relations against Consultant or any subcontractor.

14. Verification of Employment Eligibility.

By executing this Agreement, Consultant verifies that it fully complies with all requirements and restrictions of state and federal law respec ting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time, and shall require all subconsultants and sub-subconsultants to comply with the same.

15. Reserved.

16. Laws and Venue.

This Agreement shall be interpreted in accordance with the laws of the State of California.

If any action is brought to interpret or enforce any term of this Agreement, the action shall be brought in a state or federal court situated in the County of San Bernardino, State of California.

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17 Termination or Abandonment
a. City has the right to termin ate or abandon any portion or all of the work under this Agreement by giving ten (10) calendar days written notice to Consultant. In such event, City shall be immediately given title and possession to all original field notes, drawings and specifications, written reports and other documents produced or developed for that portion of the work completed and/or being abandoned. City shall pay Consultant the reasonable value of services rendered for any portion of the work completed prior to termination. If s aid termination occurs prior to completion of any task for the Project for which a payment request has not been received, the charge for services performed during such task shall be the reasonable value of such services, based on an amount mutually agreed to by City and Consultant of the portion of such task completed but not paid prior to said termination. City shall not be liable for any costs other than the charges or portions thereof which are specified herein. Consultant shall not be entitled to paym ent for unperformed services, and shall not be entitled to damages or compensation for termination of work.
b. Consultant may terminate its obligation to provide further services under this Agreement upon thirty (30) calendar days’ written notice to City only in the event of substantial failure by City to perform in accordance with the terms of this Agreement through no fault of Consultant.
18 Documents. Except as otherwise provided in “Termination or Abandonment,” above, all original field notes, written reports, Drawings and Specifications and other documents, produced or developed for the Project shall, upon payment in full for the services described in this Agreement, be furnished to and become the property of the City.

19. Organization
Consultant shall assign John Casas as Project Manager. The Project Manager shall not be removed from the Project or reassigned without the prior written consent of the City.

20. Limitation of Agreement.

This Agreement is limited to and includes only the work included in the Project described above.

21. Notice

Any notice or instrument required to be given or delivered by this Agreement may be given or delivered by depositing the same in any United States Post Office, certified mail, return receipt requested, postage prepaid, addressed to:

CITY:

City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Attn: Rakesha Thomas
CONSULTANT:

JT2 Integrated Resources
333 Hegenberger Road, Suite 650
Oakland, California 94621
Attn: John T. Casas

and shall be effective upon receipt thereof.
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22. Third Party Rights
Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than the City and the Consultant.

23. Equal Opportunity Employment.

Consultant represents that it is an equal opportunity employer and that it shall not discriminate against any employee or applicant for employment because of race, religion, color, national origin, ancestry, sex, age or other interests protected by the State or Federal Constitutions. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination.

24. Entire Agreement
This Agreement, with its exhibits, represents the entire understanding of City and Consultant as to those matters contained herein, and supersedes and cancels any prior or contemporaneous oral or written understanding, promises or representations with resp ect to those ma tters covered hereunder. Each P arty acknowledges that no representations, inducements, promises or agreements have been made by any person which are not incorporated herein, and that any other agreements shall be void. This Agreement may n ot be modified or altered except in writing signed by both Parties hereto. This is an integrated Agreement.

25. Severability
The unenforceability, invalidity or illegality of any provision(s) of this Agreement shall not render the remaining provisions unenforceable, invalid or illegal.

26. Successors and Assigns
This Agreement shall be binding upon and shall inure to the benefit of the successors in interest, executors, admi nistrators and assigns of each P arty to this Agreement. However, Consultant shall not assign or transfer by operation of law or otherwise any or all of its rights, burdens, duties or obligations without the prior written consent of City. Any attempted assignment without such consent shall be invalid and void.

27. Non-Waiver
None of the provisions of this Agreement shall be considered waived by either P arty, unless such waiver is specifically specified in writing.

28. Time of Essence
Time is of the essence for each and every provision of this Agreement.

29. City’s Right to Employ Other Consultants
City reserves its right to employ other consultants, including engineers, in connection with this Project or other projects.

30. Prohibited Interests
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Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warra nts that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no director, official, officer or employee of City, during the term of his or he r service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

[SIGNATURES ON FOLLOWING PAGE]
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SIGNATURE PAGE FOR PROFESSIONAL SERVICES AGREEMENT

CITY OF FONTANA

By:

Matthew C. Ballantyne
City Manager
JT2 INTEGRATED RESOURCES

By:

John T. Casas
Chief Operating Officer

Attest:

By:

Germaine McClellan Key
City Clerk

By:

Ramon Ebert
Deputy City Manager

Approved as to form:

Best Best & Krieger LLP
City Attorney

By: _____________________________
Rakesha Thomas
Human Resources & Risk Management Dircector

IN COMPLIANCE WITH CONTRACT INSURANCE REQUIREMENTS

By: ______________________________
Rakesha Thomas
Human Resources & Risk Management Director

IN COMPLIANCE WITH PURCHASING AND CONTRACT ADMINISTRATION POLICIES/PROCEDURES

___________________________________
Chief Financial Officer

Purchasing Office

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EXHIBIT A
Scope of Services
236
Workers’ Compensation Third Party Administration Services Request for Proposals SP-90-HR-22
City of Fontana

Section 2 – Delivering Scope of Work
Section 2.1 – JT2’s Unique Approach
JT2’S UNIQUE APPROACH TO WORKERS’ COMPENSATION MANAGEMENT JT2 claims management is based on strict adherence to industry guidelines. JT2’s consistent use of its more highly skilled professional employees is unique and addresses the specialized demands of clients’ cases. JT2 has consistently ranked high in state, client, excess and independent audits .

JT2 Integrated Resources is distinguished from its competitors due to a number of significant accomplishments for which JT2 employees take great pride:
 JT2’s services and revenue stream are focused on third party claims administration and complementary bill review. We do not offer JT2 services that might introduce conflicts of interest.

Thus, we do not sell insurance nor provide nurse case management, utilization review, investigative services, and hearing representatives… potential revenue generators that could benefit JT2 while burdening clients with avoidable costs.
 Year after year the State of California’s Department of Industrial Relations (DIR) publishes DWC audits which rate the effectiveness of insurers, self -insured’s and third -party administrators in the provision of benefits to injured California employees. In a candidate pool numbering over 130, JT2 ‘owns’ the top 10%, achieving such ranking more frequently th an any other firm. Recently the DIR released its 2018 annual report, ranking JT2 as number 1 in the latest sampling.  JT2 is the only TPA selected by Insurance Commissioners Dave Jones and John Garamendi for inclusion in task forces aimed at leading insuran ce reform. In the case of Commissioner Jones, the target was for increased insurance carrier utilization of underrepresented groups in contracting and as members of their boards of directors. In the case of Commissioner Garamendi, a task force of the ‘top 40 California business representatives’ was established to implement workers’ compensation reform – a success achieved in the early 2000’s. --- The criteria for TPA selection included the company’s consistent ranking in the top 10% of DWC audits, a client base representing multiple California regions, and executive representatives involved in both claims management and significant community service. JT2 is the only TPA qualifying. John Casas, JT2 President and CEO, served on each team.
 For over twenty years, JT2 has been the only TPA committing its executive team to serving clients’ communities. Mr. Casas has served on various boards and community organizations including the Board of Directors for the California Hispanic Chambers of Commerce, the Spanish Spe aking Unity Council, and community advisory councils for Merrill Lynch and Pacific Gas and Electric and as a mayoral appointee to Oakland’s Work Investment Board. Mr. Casas frequently challenges competitors to make a similar investment of personal time and not just during periods where a local employer has a request for proposal open for consideration.  Finally, JT2 is the rare business entity that has grown from a size that is today characterized as a Small Local Emerging Business, certified as a minority -owned business, and also qualifying as a prime bidder.

JT2 AS VALUE-ADDED
Over its 22 -year history JT2 has learned that unique value -added services complementing the standard or ‘canned approach’ grows out of continuous dialog with clients centered on the c lient’s vision or charter. The JT2 executives and professionals make themselves available to the clients’ leadership team as business partner s.
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Workers’ Compensation Third Party Administration Services Request for Proposals SP-90-HR-22
City of Fontana

THE JT2 CLIENT INCLUDES … THE INJURED WORKER
The mission of JT2 is to deliver to the injured worker accurate and timely benefits , when appropriate .

While every administrator commits to this mission, the Division of Workers’ Compensation audit rankings confirm that no other administrator matches the JT2 level of accuracy and effectiveness .

THE JT2 CLIENT INCLUDES … THE CITY
As emphasized throughout this Request for Proposal, the City demands that its personnel and subcontractors demonstrate sound fiscal management of public dollars . Year-over-year financial results must show positive trends . Programs with significant funding - like workers compensation - must deliver consistent and sustained savings.

THE JT2 CLIENT INCLUDES … CITY STAFF
Staff is held accountable for more than Labor -Code-related issues . While staff manages an expansive menu of (workers’ compensation) ben efits, expectations are that the number of claims filed will not over - tax available dollars . The workers’ compensation staff must coordinate with or manage a safety program, must craft alternative work assignments, and must secure Union agreement on interi m assignments. On a broader scope, staff is expected to demonstrate sound business management, labor relations effectiveness, public relations effectiveness, sophisticated crisis management, and much more. JT2 recognizes this and makes its executive team a vailable to craft strategies tailored to unique client needs. These may include:
 program management and administration reflecting client’s business realities;  providing advice on claims issues of compensability and payments which take into account client financials;
 scheduling and/or participating in meetings with client stakeholders concerning current experience, high-profile cases, results, and/or the need for revised strategy and program direction;  providing the necessary administrative services mandated by law.

With this approach, JT2 and the City are more apt to identify services or strategies of unique value to the City … exactly as expected by upper management and elected officials.

238
Workers’ Compensation Third Party Administration Services Request for Proposals SP-90-HR-22
City of Fontana

DEFINITION OF A SUCCESSFULLY ADMINISTERED CLAIM
A successfully adm inistered claim will have a focus on communication. The JT2 team, including experienced claims examiners, assistants, management staff , and executive s, are charged with expediting the delivery of all workers’ compensation benefit entitlements and services to the injured workers without unnecessary litigation, delays , or increased costs. This communication course, during the various claim events, must be initiated and flow as a continual progression of collaborative efforts amongst all associated claim parti es; i.e., JT2, the City, Unions, treating medical facilities/doctors and managed cost containment partners. The goal is to provide timely, highest quality care to City employees, to appropriately support and compensate them while unable to work and to aggr essively return them to work at a time and in a capacity consistent with their medical conditions. Thereafter, continued medical management is crucial – not to simply “monitor” medical treatment, but to actively participate and direct the activities. This direction is crucial to achieve Maximum Medical Improvement (MMI) at the earliest medically appropriate time, promptly identifying permanent impairment issues, apportionment, and resultant future medical needs; i.e. effectively and timely managing the clai m to resolution and beyond.

PROCEDURE FOR HANDLING QUESTIONABLE CLAIMS

PROMPT REPORTING
Immediate reporting of all questionable Workers’ Compensation claims from the City to JT2 is essential.

Reports should contain as much information as possible and ques tionable aspects outlined by separate correspondence. California Law requires specific notification procedures to the injured employee and the State if benefits are not provided within 14 days of disability.

DELAY OF BENEFITS NOTIFICATION
JT2 will provide necessary notification to the injured employee, the City and the State of California of the delay of benefits and the reason. This notification must indicate the date a decision will be made and when further notification will be made.

IMMEDIATE INVESTIGA TION
JT2 will initiate an immediate investigation to develop additional details and facts. Such investigation will be tailored to the individual case needs and will include additional contact with the appropriate City personnel.

DECISION PROCESS
The resul ts of the investigation and recommendations regarding further handling of the claim will then be discussed with appropriate City personnel and the future course of action agreed upon.

NOTIFICATION OF DECISION
Notification of acceptance or denial of the cl aim will be provided to the injured employee, the State, and the City in accordance with California Law.

SPECIAL CASES
Those individual cases necessitating legal review and recommendations will be referred to Defense Counsel, and their advice will be incl uded in the Decision Process, above.

SALARY ACTION BY CITY – 4850 & OTHER SALARY CONTINUATION PROGRAMS During the period between disability and final decision of a questionable claim, the City should use the employee’s sick leave until acceptance of the cl aim. At that time, the City and JT2 work to gether to reclassify the lost time from sick leave to 4850 or salary continuation (Industrial Accident Leave), if applicable.
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Workers’ Compensation Third Party Administration Services Request for Proposals SP-90-HR-22
City of Fontana

ANCILLARY QUESTIONS
Any questions/inquiries/problems that develop during the temporary delay period of a quest ionable claim should be immediately referred to JT2.

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Workers’ Compensation Third Party Administration Services Request for Proposals SP-90-HR-22
City of Fontana

Section 2.2 – Work Flow
JT2 Workers’ Compensation Steps to the Claims Administration Process Flowchart 1) Employee reports injury to supervisor

2) Supervisor/employee notifies department pers onnel

3) Employee sent to de signated facility for treatment

4) Department personnel Site secretary completes Injury Report and submits to Administrator

5) Administrator receives claim and enters data in RMIS , sets reserves, prepares plan of action a nd processes the claim.

Accepted Claim Delayed Claim
Requiring Further Investigation

Medical-Only
(no lost time from work)

1. Treatment provided & medical bills
paid

2. Direct & control level of treatment
towards conclusion.

3. When treatment ends, claim is
closed.

Lost Time Claim

1. Applicable benefits are provided:

2. Sent to Medical Panel facility for treatment.

3. If modified work available, EE returns to work-
possible medical only at this point. If no
modified work available, temporary disability
paid upon medical verification

4. Discuss with client & phone call to EE.

5. Treatment continues until discharged. Referral
to specialists as necessary.

6. If unable to RTW and when qualifies for
rehabilitation, then vocational benefits
provided-supplemental job displacement
voucher.

7. When condition stabilizes (permanent and
stationary), permanent residuals are
determined.

8. If no permanent disability (P.D.) treatment
continues until discharged. Claim subsequently
closes. If future medical deemed necessary.

Stipulated Award provisions to include future
treatment as it relates to injury only or
Compromise & Release if no longer employed.

EE has option to select Qualified Medical
Evaluator (QME) panel from State if disagrees.

Follows process through conclusion.

9. If P.D. exists, either benefits will be provided
according to treating doctor, or claim resolved
through QME process. PD payments to
commence only after Award is approved at
WCAB.

10. Claim is either closed (no P.D. & no further
treatment) or Settled based on treating/QME
report(s) depending on level of P.D. & opinion
regarding necessity for future treatment.

1. Notice of delay sent to EE & phone
call to explain.

2. Further claim detail is requested; i.e.
statements, prior and current med.
records, etc.

3. Upon receipt (if necessary to
determine status), all information
sent to administrator -selected
doctor for opinion per QME process.

4. Have 90 days from ER claim
knowledge to make decision. If no
decision or letter is sent to
employee & 90 day period has
elapsed, claim deemed
compensable.

5. If investigation is not fully completed
just prior to 90-day period, send EE
initial denial pending receipt of
completed investigation details
and/or exam.

6. If claim accepted, follows
appropriate sections under
"Accepted Claim."

7. If claim denied, EE claim options are
sent to EE— discuss claim scenario
with State-appointed information
and Assistance Officer or select
attorney representation or nothing
more if no action by employee.
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INDEMNITY CLAIM PROCESS FLOWCHART

New claim paperwork rec'd by JT2, submitted to
DP for new claim entry same day (if before
2pm).

DP enters claim into ClaimsXPress system,
assigned and diaried to claims assistant, adds
docs to ATTACHMENTS, forwards to supervior
via email with documentation provided.

Supervisor reviews for delay, subrogation, red
flags and lost time. If IND and delay/denial not
warranted, claim reassigned to appropriate
examiner and claim type updated to TD.

Supervisor completes SUPERVISOR INITIAL NEW
SETUP REVIEW notepad, sets diary at 12 & 30
days for completion, sets dairy for assistant at 12
days for benefits and notices, forwards docs to
examiner.

Examiner reviews new claim docs and CLAIMS
MANTENENCE module, completes employee
contact in 3-PT CONTACT module within 24
hours of receipt of loss. Forwards to assistant
for completion of remaining 3-pt contact.

Assistant completes ER and DR contact in 3-PT
CONTACT module within 24 hours of receipt of
loss, requests 5020, DWC-1, 5021 and wage
statement (if applicable), sets diary for receipt of
wage statement.

If lost time, assistant to calculate benefits due,
prepares/inputs priority payment, completes
appropriate benefit notice(s), updates LOST
TIME module for WP and/or mod duty , enters
OSHA info and sets diary to monitor for RTW.

Assistant obtains approval for priority payment
from examiner, submits to supervisor for
approval to ensure IND payment made within 14
days.

Assistant prepares and sends out Introduction
Letter, Mileage Form, Medical Release, Medical
History Form and RX First Fill Letter with Initial
benefit notice.

Supervisor approves priority payment document
and approves payment in ClaimsXPress system.

Within 3 days, Examiner completes reserve
worksheet,sets reserves, creates/publishes PLAN
OF ACTION (POA) and sets diaries to contact
doctor for earliest return to modified or regular
work. Ultimately, if EE is deemed QIW,
Examiner works with ER to ensure ADA
conversations & written communications are
provided to EE by ER along with pursuing
entitlements to service -connected retirement
(IDR) as may be applicable.

Examiner follows claim to promote MMI status
as soon as is medically appropriate. Once MMI
report is received, within 48 hourss, ER is
contacted to discuss PD & FM needs. If EE is
discharged, claim is closed; otherwise approval
from ER is requested to settle claim . Once
received, EE is contacted to discuss settlement
provisions and processes. Settlement docs are
sent to EE for signature.

Examiner sets recurring diaries for EE contact
while the claimant continues to receive TD
benefits-no longer than every 30 days. Examiner
sets diary for claim activity, progress, and POA
updates every 30 days. Applicable subrogation
is pursued and continued to finalization.

Medical bills are reviewed for appropriateness &
paid within 30 days of receipt. Regular ER
reviews take place along with medical
management.

Supervisor completes SUPERVISOR COMPLETED
NEW SETUP notepad within 30 days of receipt
ensuring all functions above have been
completed, sets recurring supervisor diary every
90 days (120 for FM claims). Delayed claim
diaries are set every 30 days to ensure claim
decisions are made at earliest opportunity ,but
in no event longer than 90 days.

Once settlement docs are received, they are sent
to WCAB for approval. Within 10 days from
WCAB approval, Stips or C&R payments begin.

All FM needs are addressed and monitored for
appropriateness with UR or IMR initiated as
needed.

Medical and/or PD disputes are managed via
QME/AME/IME exams. If litigation occurs,
examiner continues to handle claim without
defense counsel unless absolutely necessary. All
defense referrals are first discussed with ER to
review reasoning and obtain approval. Claim
continues to be aggressively managed to
conclusion.
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Section 2.3 – Program Management Delivering the City’s Scope of Services Claim Setup and Initial Steps
JT2 has a dedicated team monitoring incoming emails and faxes for information related to new claims.

As the information arrives, the team enters the data into the claims management system and immediately notifies the client’s JT2 supervisor.

JT2 is flexible in how information for a new claim is received. While the DWC-1 claim reporting form is available online at the JT2 website and as a PDF that can be filled out on a computer, scanned DWC -1 forms filled out by hand are also commonly r eceived and processed by JT2. In addition to the JT2 800 - number for reporting claims, claims examiners and supervisors are also available to clients to receive reports of new claims. The information gather ed is sent to the data entry team and entered into the claims management system.

Entering a claim into the claims management system initiates a series of timers and alerts, to ensure that communications happen between the claims examiner and the injured worker, the client, and the medical care provider. T his three -point contact process along with set plans of action are monitored by the claims management system and alerts are sent to examiners and supervisors as the deadline for its completion approaches.

Reserving
JT2’s reserving philosophy is consistent with CCR Labor Code section 15300. This extensive section details the specifics relating to how and what must be reserved. In essence, this requirement states that the Administrator shall set realistic estimates of future liability which reflects the proba ble total future cost of compensation and medical benefits due or that can reasonably be expected to be due over the life of the claim. Reserves include the best estimate of what can be expected to be paid outside of indemnity and medical benefits which in cludes, but is not limited to, any allocated expenses (investigations, legal expenses, interpreters, record retrieval, etc.).

Reserves are adjusted at various stages throughout the course of the claim as new information is received that warrants a change ( increase or decrease) until the claim ultimately closes. Estimates of future liability are not decreased based on projected third -party recoveries or projected reimbursements from aggregate excess insurances. Outstanding medical reserves will be reduced by one-half value on Future Medical Claims with no claim payments made for a 6 -month period. The likelihood of reopening treatment is minimal at that point and can always be readjusted upon further review.

It is JT2’s philosophy that reserving is reviewed at each milestone as a claim progresses . We reserve cases based on best available information and ultimate probable cost. We understand the impact that reserving has on the City’s budget and we understand the necessity for accurate and reliable information. Reserves are reviewed at every 90 days during each quarterly written file review process , and reviewed every 45 days during the claim’s initial stages .

JT2’s staff understands that establishing proper reserves ensures that funds will be available to meet our clients’ financial obligations. Funds available to pay claims and expenses incurred during the period of self-insurance. It also allows our clients to have sufficient and timely information available for financial planning purposes.

The supervisor revie ws all claims at setup then track s claim reserves on a monthly basis. Reserves for indemnity cases are reviewed at least every three months after setup and when new information is received that may impact the claims value.
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JT2’s supervisor reviews and appr oves reserving worksheets prepared by the examiners. Detailed reviews are conducted by the examiners at least every 60 days, although interval reviews prior to the 60-day mark also take place due to claim bill approvals or when requests for approval of med ical treatment are made for physical therapy and/or surgery, or any other specific receipt of information that may justify adjustments. Reviews are also initiated when potential reserve reductions are warranted, such as claim settlements or where all indem nity future liabilities have been satisfied. Indemnity reserves can be zeroed out to reflect the change in claim status. The supervisor reviews all claim reserves at a 120 -day mark diary.

JT2 provides a monthly report that lists all reserve changes. The cl ient has access to review reserves through our online claims database. Both the supervisor and Manager review the Account’s outstanding claim reserves on a monthly basis to track any adverse trending. Any continuous four (4) month period of increased outst anding claim liabilities require s closer scrutiny and review. The review may determine if the changes are consistent with increased claims frequency during that same period or if there’s an actual adverse loss development. If the reserve changes are determ ined to be as a result of adverse loss development, JT2 would discuss the findings with the City and offer solutions on how to manage the increased risk.

Claim Investigation
OUR CLIENTS CAN BENEF IT FROM THE MISSION STATEMENT S OF JT2’S SIU SERVICES  Protect our clients’ assets
 Establish a reputation in the Workers' Compensation Industry as a company who will aggressively pursue all fraudulent activity, and one that strives to eliminate all facets of Workers' Compensation fraud.
 Develop potentially fraudulen t cases for referral to the Department of Insurance and the local District Attorney's office for prosecution
 Work closely with prosecutors, licensing agencies and clients.  Be a resource for the training and education of all client personnel to collaborate on preliminary investigations of questionable claims. For added cost containment, JT2 prefers having the claims examiner initially interview the claimant and take statements unless some unique risk exists or the client has expertise in the area of fraud recognition.
 Keep current with possible trends and legal updates , with the ultimate goal of eliminating Workers' Compensation fraud.

FULL S.I.U. SERVICES ARE PROVID ED AS AN ALLOCATED E XPENSE TO THE FILE I N QUESTION .

Fraud is taken very seriously at JT2. We regularly train staff to communicate the goal that all potentially fraudulent claims are to be monitored and supervised by the claims supervisor or claims manager assigned to each client. We will always seek City approval prior to moving forward with these sensitive claims. We have been successful in having the District Attorneys in various Counties review and initiate proceedings. We provide a fraud hotline to all of our clients along with bold informational posters to post at all employer work locations wi th the fraud hotline information/directions. Once we have identified by a fraud situation, it is immediately log ged and an FD1 is filed with the Department of Insurance. When necessary, JT2 partners with APEX Investigations (due to their successful relatio nship with varies DA’s in multiple counties), who work with examiners and management staff to clearly present a strong case to the Department of Insurance and to the District Attorney. Fraud issues are continually monitored by the APEX fraud investigator, who communicates any important developments to key client contacts as necessary and provides direction.
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JT2 is required to report any claim to the Fraud Bureau and local DA’s office when “we know or reasonably believe we know the identity of a person or en tity that we have reason to believe committed a fraudulent act relating to workers’ compensation insurance .” Fraud claims are reported on the prescribed form FD1 – “Suspected Fraudulent Claims Report”, and we obtain releases from claimants to obtain medica l records and to perform ISO searches . These actions serve as “notice” and must contain the basis of the suspected fraud . It will ultimately be up to the local DA’s office to decide whether or not criminal filing or action will be taken . JT2 examiners and supervisors work very closely with the local DA offices to assist those offices in every way possible . Once the required form/report is filed, JT2 contacts the local DA and arranges a meeting with the DA’s investigator to put a plan of action in place and to ensure that they have and will continue to receive all required documents . Thereafter, follow -up statuses requests by JT2 will be obtained from the local DA’s office at a minimum of every 60 days until a decision is made for those to either prosecute or not. It is ultimately their decision, not JT2’s. There are a number of components required for a possible criminal filing by the local DA; i.e., identification and background, requested charges, witness lists, interviews to verify evidence, detailed inves tigation, document lists or inventory of evidence proving that a crime was committed . A suspicion of fraud does not automatically mean there is fraud -- abuse, malingering and embellishment are not fraud . It must be proven that a lie was knowingly made wit h intent to obtain compensation for which there was no entitlement. There are also various types of fraud; however, the only types applicable for JT2 to report pertain to claimant or health care provider fraud . For c laimant fraud, there may be a number of “indicators” (or “red flags”) , but they do not necessarily mean a claim must be reported . One example of an indicator would be a newly hired worker or one that was recently disciplined filing a workers’ compensation claim. On its own, this indicator would not result in a fraud report being filed. Some examples of claimant fraud could be, claiming an injury which did not occur ( the burden of proof is on JT2/Client to prove), lying about symptoms to collect benefits otherwise not entitled to, knowingly providing inaccurate medical history to the provider to gain compensation . The JT2 reporting and pursuit process is initiated by either the examiner or supervisor; however, the supervisor takes the main role in pursuing the case to conclusion .

Another material c ost-control step: JT2 and the City will work together in determining whether an internal or external investigation is needed. Some of the factors to consider include the following “Red Flags”: Questionable claims that are off premises, reported late; where injuries/illnesses are unknown; continuous trauma or specific claims involving stress, high blood, heart, hearing loss, exposure to hazardous substances, some carpal tunnel, psychiatric, strokes, paralysis, pre -existing conditions, various illnesses, deat h; possible fraud suspicion; could include claims with statutory defense criteria; serious claims or those involving subrogation.

An outside investigator may need to be assigned to take statements of witnesses and/or the injured worker, obtain past medical history releases and records or take surveillance, the City and JT2 will jointly determine whether an internal or external investigation is needed.

Additionally, JT2 has cost containment approaches to work with the investigation firm once the City approves their use. They are given parameters and direction within which to perform their duties without incurring unnecessary costs. Examiner audits all bills for accuracy. Final reports must be received within 2 weeks of case assignment to mitigate claim delay.

Any questionable claim rising to the level of suspected fraud will be timely reported to the local DA’s office. JT2 will work closely with them in providing initial and ongoing materials to maximize fraudulent claim prosecution.

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JT2 INVESTIGATES & DOCUMEN TS FRAUD TIPS & RED FLAGS

RED FLAG OR

ALLEGATION

INVESTIGATION

DOCUMENTATION

DISPOSITION
• Claims Examiner observes a red flag
• Department contacts Claims Examiner with a red flag or tip . • Workers' Compensation receives a tip telephone or via Citywide Fraud Hotline . • Claims Adjuster discusses with Supervisor and develops a plan to review the tip or red flag.
• Claims Adjuster reviews documentation , contacts department and /or medical provider , and reviews witness statements (if any).
• Workers Compensation hires private investigator for depositions , social media investigations , background checks , and/or observations , if necessary . • For Citywide Fraud Hotline referrals, Program Manager conducts investigation or assigns to Claims Adjuster as appropriate.
• Claims documents investigation in claims management system • For Citywide Fraud Hotline referrals , Program Manager documents investigation in claims management system and on shared drive with limited access . Program Manager tracks complaints and investigations on spreadsheet in shared drive . • Workers' Compensation determines if a red flag or tip is substantiated • If substantiated , Workers Compensation refers claim to City Attorney s Office potential prosecution .
• For Citywide Fraud Hotline referrals , Risk Management provides a resolution document to the City Auditor with details of disposition .

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Compensability Determination
The initial claim is reviewed by the examiner. If there are no “ red flags”, and the claim facts meet the AOE/COE (both arising out of employment and during the course of employment) standards, the claim is considered to be compensable . In addition, the claim is reviewed to identify if affirmative defenses can be investigated and developed ; i.e. an altercation where the injured employee was the initial physical aggressor, i ntentionally self -inflicted injuries, those that could be caused by intoxication, “going and coming” rule issues, etc. After these considerations , the examiner determines whether compensability is appropriate and whether to accept the claim following all J T2 and City performance standards. All claims received by JT2 are reviewed by the supervisor as part of the setup procedure.

During the r eview prior to assignment for compensability , JT2 coordinates with the client. We delay and investigate any claim regar ding its compensability if we feel that the facts merit a delay and an , investigation . This process is initiated after approval from the client . Generally , the statement of the injured worker and any witnesses/supervisor is warranted. If medical issues nee d to be addressed, the Qualified Medical Examination process will be initiated. Simultaneously, appropriate records are ordered. The City is notified of JT2's recommendation to deny or accept the claim to ensure that proper notification is properly mailed no later than the 90th day. Complex claims requiring outside investigators are assigned to client -approved vendors. All assignments are limited and specific. The costs are paid via the allocated expense on the claim file .

Benefit Notices and Injured Worker Communication
3-point contacts will continue to be conducted with the injured worker, employer/client representative and treating physician within 2 working days of receipt of the claim. If a nurse case manager is assigned to the claim, initial physician contact may be conducted by either the claims examiner or the nurse case manager. In the event a party is nonresponsive, there will be evidence of at least three documented attempts to reach all three parties: the injured worker, the employer/client and th e treating physician.

The initial indemnity payment will continue to be issued to the injured worker, OR the City in the event of salary continuation via check or voucher payment agreement with the City, within 14 calendar days of knowledge of the injury a nd disability. In the event JT2 is not notified of the injury and disability within 14 calendar days of the employer’s knowledge, JT2 shall make payment within 5 working days of notification.

The properly completed DWC Benefit Notice is mailed to the emplo yee within 14 calendar days of the first day of disability. In the event JT2 is not notified of the first day of disability until after 14 calendar days, the DWC Benefit Notice is mailed within 5 calendar days of notification.

The JT2 claims team is experi enced in administering Code 30 benefits as described in Section 12 Industrial Accident Leave.

Self-imposed penalties shall be paid on late payments in accordance with Labor Code requirements and, if necessity to pay is the result of JT2 error/oversight, th e City will be notified and reimbursed within 5 days.

Eligibility for indemnity payments subsequent to the first payment shall be verified, except for established long -term disability.

If there are any adjustments needing to be made either to any subsequen t temporary or permanent disability payment, this will require that the appropriate DWC Benefit Notice, outlining and explaining the adjustment, be sent to the employee within 5 working days of JT2’s knowledge. 247
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Excess payments of Code 30 benefits are reimb ursed to the City on a dollar -for-dollar basis. In addition, customizations have been made to the check template for these reimbursements to ensure they are recognized upon receipt and payments for multiple claimants are not combined on a single check.

All final indemnity payments shall be issued timely and the appropriate DWC benefit notices sent.

Specialized Medical Treatments
JT2 either arranges or assists with specialist referrals for applicable medical treatment needed. If appropriate, JT2 will author ize a specialist referral from either a client Medical Panel, client MPN or from the initial treating facility. Authorization from the treating facility will be made only if the specialist is known to JT2 as one that will offer the most suitable treatment towards getting the injured worker the care needed in an expeditious manner and one that will work towards not only a speedy recovery, but have a willingness to outline abilities towards working in a modified capacity. Depending on the situation, the speci alist appointments will either be made by the referring treating facility, the JT2 examiner or the injured worker. If a specialist is chosen by the injured worker from an MPN, then discussions would take place with the examiner to best determine who would set the initial appointment :
the examiner or the injured worker. If the injured worker wants to schedule the appointment, then the examiner must be notified in order to send the specialist information relating to all of the reporting requirements along wit h JT2/examiner information for billing and communication purposes.

Disability Tracking and Management
Getting the injured worker back to work is not only beneficial to the City, but also helps the injured worker. It gives the injured worker meaningful work while allowing them the necessary time to heal. JT2 will work with the City to identify sustainable work opportunities by helping to develop bridge jobs in a search of all departments to seek and determine availability of needed jobs and functions. JT2 ha s found that often times, injured workers can successfully fill temporary vacancies or perform functions/tasks that have been neglected in the natural course of business. These opportunities will be identified by looking at the following:
 Accommodations within the original job by adjusting certain job functions  Reassignment to an equivalent vacant position that the employee is qualified to perform providing reasonable accommodation
 Reassignment to a temporary lower-graded vacant position  Temporary assignment of tasks that the employee can perform

JT2 works proactively to obtain work restrictions and/or a release to full duty on all cases. We notify the City representative immediately upon receipt of temporary work restrictions or a release to full duty, and work closely with you in the above areas to establish a return to transitional/modified work to full duty as soon as possible.

We understand that there will be some challenges that need to be overcome or worked through in terms of returning injured employ ees to transitional and then regular work. Therefore, it is imperative we do the following:
 Constant communication with the medical facilities to insure they are working towards the same goal of getting the injured employee back to a modified duty that is medically feasible and appropriate. Eliminate any facilities that are consistently out of compliance.  Work with the City’s various departments to establish some sort of “bridge” jobs that can be performed by industrially injured employees. An employee does not have to be placed in the same department where they normally work. Scenarios of assigned work could include the following:
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Within the same work area, restricted duties
Within the same work area, different duties
Different work area, different duties

Claim file balances are also performed on a regular basis along with automated tracking of disability benefits to ensure expiration dates are not overlooked and overpayments or underpayments are minimized.

Processing Medical Bills
Medical treatment bills ( physician, pharmacy, hospital, physical therapist, etc.) are entered into the claims system within one business day of receipt. The claims examiner then reviews the bills for correctness, approves for bill review or objects well within 30 days of receipt.

The medical provider is notified in writing within 30 days of receipt of an itemized bill if a medical bill is contested, denied or incomplete.

The bill review process is central to the medical payment workflow and includes PPO participation and discounts as applicable.

Temporary Disability and Coordination with the City
JT2 coordinates all disability with the City to ensure that temporary disability payments are made to the appropriate party; e.g to the City via vouchers for 4850 or other salary continuati on benefit s, or to the injured worker as a check if no salary will be continued. JT2 maintains a Client Profile for the City that includes instructions specific to the City, that are based on how temporary disability payments should be made.

Medical Treatment Management
JT2 will coordinate with the City to maintain a panel of medical practitioners for the initial treatment of injured employees , or we will abide by an existing MPN . JT2 will return employees to some sort of modified work as soon as is medical ly feasible, understanding that it will be the City’s decision regarding abilities to accommodate. JT2 is not swayed by injured workers’ desires to remain off work, but rather we make appropriate independent medical decisions about work capabilities and act on reports of work restrictions at the earliest opportunity. Any facilities that seem hesitant to comply will be reviewed with the City for possible replacement.

SPOTLIGHTED VENDORS
Urgent Care Clinics
Kaiser Occupational
West Point

In our experience , West Point is used by the City for employment pre -testing, offers b etter hours than many other clinics, and injured workers generally experience lower wait time s.

JT2 will work with the managed care provider(s) to assure appropriateness of treatment and follow utilization review procedures, American College of Occupational and Environmental Medicine (ACOEM) guidelines, and Official Disability Guidelines (ODG). JT2 will manage medical treatment for the $10,000 cap on all delayed claims. JT2 will authorize medical case management and nurses per agreed -upon criteria and monitor their use for necessity and reasonableness. Before any nurse assignments, JT2 will 249
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communicate with the City to review recommended assignments and to obtain authority for those assignments.

In reference to utilization review, it is JT2’s philosophy that our skilled examiners can approve many specific treatment modalities and services that would be reasonably expected to be approved based on examiner medical expertise and experience. The injured worker benefits from faster scheduling and treatment, and recovery time is reduced and return -to-work scenarios are explored, earlier. In addition, the client saves unnecessary UR costs. The indiscriminate use of UR creates many delays that are often compounded by avoidable office visits , employee dissatisfaction, hindered recoveries, late return - to-work decisions, postponed permanent & stationary (MMI) statuses , and paying more in UR costs than should be necessary.

Workers’ compensation industry r esearch and development agencies (such as CWCI) cite unnecessary reliance on UR referrals. Overuse of the service may stem from claims examiners and/or supervisors having inadequate experience or confidence in making certain medical decisions; or examiners who are burdened by a backlogged claims load choosing to forward a certain number of claims to UR and freeing up time for the remainder of their cases; or instances where TPA firms dictate that every possible claim that can be justified be referred to in -house UR to generate additional TPA revenue. The JT2 service model has the less -complicated decisions handled by the examiner, appropriately and timelier. JT2 streamlined its UR protocols, allowing the examiner (with supervisor review), to approve treatments which are clearly required or which would be automatically approved by software applied by UR service providers. As a result, referrals to UR --- and their associated fees --- are reduced by more than 20% ... and are consistent with protocols that will be adopted by the industry in Year 2018 due to the previous passage of SB 1160. The DWC conducted a random utilization review audit in 2017 from a sampling of all JT2 clients. They scored JT2’s performance at 98.2% compliance with no penalty assessments.

JT2 will be responsible for handling Independent Medical Review (IMR) requests as may be applicable.

JT2 will pay bills in accordance with the California Labor Code. Medical bills shall be reviewed by the Claims Adjuster for relation to injury before being transmitted to the bill review team. Prompt and appropriate notice to providers will be sent regarding any medical charges that are questionable and/or disputed. Uncontested medical bills shall be paid in accordance with the Labor Code.

JT2 will provide co mplete claims administration and processing of all lifetime medical cases awarded or ordered by WCAB in accordance with current laws and utilization review. JT2 will document the file specific as to the body parts(s) and/or specific condition for which fut ure care has been awarded.

Coverage parameters outlined on the P&S/MMI report should be stated in file notes and referenced prior to authorization of future medical treatment.

JT2 will work hand -in-hand with the C ity to attain the following:
 Medical verification of disability will be obtained in a timely manner and maintained in the claim file to document the need for continuing indemnity benefits. Any lengthened disability periods outside the “norm” for each type of injury, considering the injured worker’s age and occupation, will be discussed with the treating physician to develop a plan to expedite some sort of return -to-work options. Subsequently, if the physician does not or is not willing to follow the agreed -upon plan and no effective improvements are realized, a treatment objection letter will be sent and an independent medical evaluation will be obtained.
 Injured workers on Temporary Total Disability should be medically evaluated e very two weeks to review progress, abilities and status until released to acceptable modified/transitional work or full duty.
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 Independent medical reviews via QMEs, AMEs or IMEs will be initiated when needed to address necessity or reasonableness of care within the scope of the law.  Medical treatment provided will be reviewed for necessity, reasonableness and relationship to the industrial injury per UR and IMR guides.
 Catastrophic, complex injuries and extended lost-time claims will be reviewed by a qualified medical management provider approved by the city. Claims referred f or outside medical management services will reflect the intent, scope of services requested/to be provided with an outline of proposed costs.
 Ensure specialist referrals are appropriate and to those that will adequately serve the needs of the injured worker towards expeditious medical recovery and return to work as applicable.  Recommendations for surgery shall be confirmed through medical management treatment protocols and either approved by the examiner within approved UR protocols or submitted to the UR Organization for decision.
 Pre-existing medical conditions and medical records will be explored/obtained on all indemnity claims with potential permanent disability liabilities.  Treatment recommendations for care such as physical therapy, chiropractic manipulations, etc., will be verified with the physician as to duration, frequency and anticipated results prior to authorization.  Medical bills submitted without a supporting medical report shall not be paid until a medical report verifying services, is obtain ed. All bills will be adjusted according to the fee schedule or PPO arrangement, whichever is lower, and paid or objected to according to the law.  Medical-legal costs will be reviewed for appropriateness and necessity. Bills which do not qualify as valid medical-legal expenses will be objected to on a timely basis. Liens will be properly processed, negotiated or adjudicated in accordance with labor code provisions.  Recommendations will be provided to the C ity in those instances where medical providers are not complying with JT2 and City goals.

Permanent Disability
JT2 conducts periodic training on labor code, case law development, changes in legislation, medical case management, (including ACOEM) with our claims staff. The training sessions are led by JT2 claims management and upon request by specialists in the fields of ACOEM, medical case management, litigation , permanent disability and investigation. The examiners are also required to take certified courses in order to meet State mandated continuing educ ation requirements. The examiners are trained on the most recent sweeping legislative change, Senate Bill 863, and are kept up to date on precedent setting interpretations of the AMA Guides and challenges to the four corners of the AMA Guides to rating Per manent Impairment. The examiners are trained on how to recognize and apply legal apportionment to preexisting disability.

On unrepresented claims, when an MMI (Maximum Medical Improvement) report is received and rated, after discussions with the client for verbal approval, the examiner calls the injured employee to review the report. The purpose is to explain the permanent disability rating system, how their rating was determined and any future medical treatment rights they may have. This facilitates the pr ocess of settling the claim prior to mailing them settlement documents; i.e., either Stipulated Request for Award or Compromise & Release Agreements. The employee has advanced knowledge and a better understanding of the process rather than just simply rece iving documents in the mail, not knowing what they mean or who determines whether they are correct. This system alleviates questions, concerns and misunderstandings, maximizes early claim resolutions and minimizes litigation. Permanent disability advances are made as the law regulates . Any advances made will be deducted from the final settlement once the case resolves.
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JT2’s process for the settlement of all claims, including the resolution of future medical provisions with or without permanent impairment i s reviewed in accordance with the following steps prior to settlement:
 A specified form will be used to obtain authorization and documentation (current JT2 Settlement Authority form or City form).
 Initial verbal approval will first be obtained from the City with subsequent written approval submitted on the form. The verbal approval may or may not be sufficient to contact the injured worker, applicant attorney, defense attorney as applicable to commence settlement processes. This depends on the City’s specific criteria.
 The fully endorsed form will be maintained in the claim file and may be produced as may be required at City meetings.
 The supervisor or manager will review and approve all forms. Settlement amounts will be compared to the claim data and paymen t history to ensure accuracy. Future medical provisions will be specifically addressed to avoid paying for services either not related to the injury or not originally agreed upon.

Litigation Management and Cost Containment
JT2 will continue to work with t he City to develop a preferred Legal Defense Panel in the event that claims require defense counsel referral. JT2 staff is trained that litigation control and avoidance is essential for cost containment. We have developed a set of protocols that ensure tha t litigated claims costs are appropriate. This is attained through open communication between client, defense counsel and examiner and limited direct assignment to defense counsel, defense counsel referrals to specific attorneys in the firms selected by JT 2 and the City along with a full review of all charges to confirm appropriateness.

The quality of legal work is monitored by the examiner in regards to what is expected to be achieved at specific time intervals which are placed on diary . These legal diarie s are set based on the latest activity and the direction that has been given to the defense counsel for completion. Delays in activity result in phone call followups being made to the attorney with the intent of agreeing to a plan of action. The claim is r eviewed with the supervisor for additional action if any further delays with no activity result; i.e., discussions with the legal firm manager, written outlines of expectations with mandated direction and a notice of unacceptable performance, etc.

Cost of legal work is monitored by the examiner upon receipt of each billing to ensure that the hourly fee is correct. If work was performed by an attorney that included work that could be done by a paralegal or a lower position within the firm, JT2 meets with the firm’s billing department to adjust the bill and e nsure that work is delegated to appropriate staff going forward . As h ourly rates are less for the services provided by paralegals and clerks, those rates are expected to be billed accordingly.

JT2 takes a team approach when working on litigated claims. JT2, the City, and the defense attorneys create discovery plans to keep everyone on the same page and to keep claims moving towards prompt resolution. The process result s from the discovery plan that JT2 foll ows varies depending upon whether or not a claim is accepted or denied. For accepted claims, JT2 works to maintain medical control combined with sensible utilization, securing an MMI report that is substantial medical evidence, reviewing whether or not a m edical-legal evaluation is needed, the interactive process/offer of work, and settlement documentation. On a denied claim, the discovery plan include s an outline of key facts for the denial and necessary steps to develop evidence required to support the de nial. All medical reports are forwarded to the defense attorney within 10 working days of receipt. Within 10 days of receiving any P&S/MMI report or Declaration of Readiness to Proceed, a written evaluation are prepared and copies are sent to both the defe nse attorney and the City.
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Although the City selects the defense attorneys, JT2 assess es the following and provide s feedback to the City as needed:
 Timeliness of initial report with review of recommendations.  No automatic approval of deposition requests wi ll be given. These should only be performed in certain cases involving a multitude of issues, allegations, etc. Therefore, defense attorneys assigned to the City will have specific instructions in this regard.  Once a plan of action is adopted by JT2 and de fense attorney, JT2 communicates with the defense attorney at regular intervals to ensure timely progress is made.  Billings will be reviewed to ensure that charges are consistent with hours estimated, work performed and to ensure that no carry -overs exist from previous billing periods (duplications). JT2 will also be proactive in instances where work can be performed by the claims examiner, rather than assigned to the attorney (e.g. negotiating liens).

SPOTLIGHTED VENDORS

ATTORNEY FIRM
Ron Homan* Homan, Stone & Rossi
Sam Khajenoori Hanna Brophy
Joseph Volpe Famiglietti & Volpe
David Chou Chou Law Group
* Ron Homan of Homan, Stone & Rossi is the City’s preferred attorney, and is the attorney receiving all new referrals
Vocational Rehabilitation
When situations arise where medically the employee cannot perform the job with or without accommodations, therefore never being able to return to work , JT2 notifies the City representative immediately upon receipt of an employee’s permanent work restrictions so th at the City can assess whether they need to address appropriate ADA requirements.

The client must have a process for complying with laws preventing disability discrimination, including Government Code Section 12926.1 which requires an interactive process w ith the injured worker when addressing a return to work, particularly with permanent work restrictions. JT2 shall cooperate with the City to the fullest extent, in providing medical and other information the Client deems necessary to meet its obligations u nder federal and state disability laws. JT2 assisted the Client in this area of navigating worker’s compensation laws with those of Federal and State disability rights by reviewing or researching the following:
 Client job descriptions – differentiating between essential and non-essential duties  Physical therapy facilities willing to evaluate work sites for ergonomic recommendations and/or agility testing performance as applicable
 Researching part-time positions within the Client’s operations.  Within 75 days of aggregate total disability, the City will be notified of potential Qualified Injured Worker statuses. If needed, a Qualified Rehabilitation Representative will be assigned within 90 days of aggregated temporary total disability. Within 10 days of receip t of a physician’s report indicating the employee is medically eligible for vocational rehabilitation, the employee will be notified of his or her potential eligibility for services. This notification timeframe will also apply if the employee has been off work/disabled for an aggregate of 365 days. 253
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WCAB Hearing Attendance
Senior examiners at JT2 routinely attend WCAB hearings . Examiners work in partnership with and serve as a resource to defense attorneys ensuring that all aspects of complex claims are con sidered as legal strategies are developed.

File Reviews and City Meetings Attendance
JT2 has clients throughout the State of California and regularly attends in -person and onsite meetings , at no additional charge . For short and informal meetings, JT2 uses teleconferencing software such as Zoom to attend via video and to present documents and presentation slides.

Subrogation
Quality assurance and consistency of service is assured by aggressive supervision by management personnel. All files are reviewed prior to examining assignment by trained management personnel to identify those difficult, severe claims that require immediate supervision and investigation including recognizing subrogation possibilities. The supervisor maintains tracking for subrogation clai ms and diary maintenance. The claims supervisor reviews every new report for contributory opportunities and these are revisited at each 90 -day written file review. The claims examiner sends all initial subrogation letters and requests Police reports. Subro gation attorneys are used with client authority.

All claims are initially reviewed the by supervisor to insure proper identification of potential subrogation claims. On applicable claims, the examiner will proceed to put all parties on notice and follo w through for recovery of benefits paid . The supervisor will continue to maintain every subrogation claim on diary to review activity, progress and to protect City rights of recovery . Subrogation defense will only be assigned upon City approval; i.e., norm ally on larger claims, when statutes need to be legally preserved or on high exposure or multiple party situations . Assignments will be made to attorneys that specialize in this area of expertise . Every attempt will be made to retain services on a continge ncy-fee basis to be negotiated by JT2.

Excess Insurance Reporting and Recovery
JT2 promptly reports all appropriate claims to the City’s excess carrier. Quality assurance and tracking are performed in a manner similar to the subrogation process. Reporting criteria generally follow the below protocols; however, there could be slight differences pursuant to unique Excess carrier specifications:

Any claim, suit or proceeding that appears to involve indemnity by the Excess carrie r or as indicated below:
 Any occurrence, claim, award, or proceeding judgment for which the incurred has reached 50% of the self-insured retention level (SIR);
 Any occurrence which causes serious injury to two or more employees;  Any case involving:
 Amputation of major extremity;
 Brain or spinal cord injury;
 Death;
 Permanent total disability as defined in the Workers’ Compensation Labor Code applicable to the state named in the Declarations;
 Any second or third degree burns of 25% or more of the body; 254
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 Multiple or serious fracture
 Loss of sight or hearing
 Crushing or massive internal injury
 The reopening of any case in which further award might involve Excess liability; and  Any case where the claimant has been on temporary total disability (TTD) for a period of one year.  Hospitalization of more than one (1) month.

If there are any differences, additions, or deletions within client-specific Excess reporting requirements other than what has been identified above, those requirements will be followed. Once a claim has pierced the self -insured retention (SIR) level and reimbursements are requested, subsequent reimbursements will be requested on a quarterly basis.

Settlement Authority
JT2 will fully comply with the City’s requirement as it relates to settlements and c atastrophic claims.

JT2 will also abide by all requests for written status reports whenever any City claim exceeds the total incurred values indicated. JT2 examiners and supervisors have no settlement authority in the absence of Client verbal/written conse nt. If the City desires to establish settlement authority amounts and procedures for the dedicated examiners and supervisors this is entirely acceptable; however, it is not necessary.

JT2’s current standard for the settlement of all claims, including the resolut ion of future medical provisions with or without permanent impairment has previously been reviewed under the Permanent Disability section, above.

With regards to catastrophic or serious claims, the City would immediately be notified upon receipt of claim information. However, JT2 also performs the following functions on these types of claims:
 Contacts the treating facility and confirm the patient’s name, birth date and social security card number.
 Acquires and confirms the contact information for the person in charge of Utilization Review for the patient. Ensures that the facility has the correct contact information for JT2.  Obtains the current diagnosis and treatment plan.
 Ensures that the patient is provided with appropriate care from the appropriate specialists.  Contacts the City and reports on the current case status.  Obtains authorization for immediate assignment of Medical Nurse Case Manager.  Establishes a claim file.
 Reports to Excess.

SETTLEMENT PAYMENTS VERIFICATION STEPS:

Each supervisor within the ir respective units are the first to review all settlements, including liens and reserve amounts that exceed specified authority levels once the examiner submits and discusses recommendations and/or changes. Each must be approved in writing by the appropri ate supervisor prior to submission to the City. Once the supervisor approves, then the applicable settlement, lien settlement and/or reserve amount/change can be discussed/submitted to the client for approval. Once approved by the client, the examiner proc eeds to make the changes or settle the claim/lien in accordance with the recommendations. JT2 has system -generated dollar amount caps or limits, whether they be reserves or settlements, that flag the supervisor at certain levels beyond examiner limits and then onto the Manager for those levels beyond supervisor limits. These dollar amount caps either separately reference 255
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reserves under that tab or payments within certain codes reflecting payment types. If entries are entered beyond certain established autho rity levels, either the reserve change or payment will not execute unless approved at the appropriate supervisor or Manager level.

Claim Closures
JT2 prides itself in actively managing claims towards early resolution. This has a huge effect on the administration of the City’s claims in terms of overall costs. Future Medical claims are administratively closed if there is no active treatment for a period of 2 years in accordance with Labor Code and PRISM excess requirements , assuming that there are no outstan ding indemnity payments due.

The most recent information below comparing Fontana to all statewide cities reveals positive results in all areas reviewed . The significantly lower number of open Fontana claims compared to statewide city totals demonstrates JT 2’s proactive results in successfully closing claims at the earliest opportunity .

Fontana’s results are 3 ½ times lower than the state.

City of Fontana Compared to Statewide City Totals from FY2020-21 Public Entity Reports # CLAIMS

REPORTED PER
100 EES
# OPEN IND

CLAIMS PER
100 EES

TOTAL PAID
PER $100

PAYROLL

TOTAL EFL
PER $100

PAYROLL

AVERAGE

COST PER
CLAIM

TOTAL PAID
PER

EMPLOYEE
Fontana 8.0 6.8 $ 3.55 $ 8.55 $ 7,727 $ 1,360
Statewide Cities 13.5 24.2 $ 4.22 $ 14.73 $ 8,842 $ 3,765

*EFL = Estimated Future Liabilities

Workplace Safety Considerations
JT2 partners with the City to assist in the coordination of safety considerations . The first step in this process include a periodic review of the City’s current Injury & Illness Prevention Program (IIPP ), an OSHA-required employer plan . JT2 partners with clients to review , ev aluate, and im prove the main aspects of safety programs:
 Establishing roles and responsibilities for departments in the process of implementing, maintaining, and monitoring department-specific Injury and Illness Prevention Programs (IIPP).  Providing annual notifications to all City employees on how to report safety concerns.  Establishing safety goals and performance indicators for operating departments that include both leading and lagging safety indicators.
 Implementing a process for the collection and analysis of safety data and outlining the roles and responsibilities departments in this process.
 Developing, documenting, and implementing a Citywide safety incident investigation program that includes trainings for supervisors and other relevant personnel.  Updating the Workers’ Compensation Division’s procedures for monitoring all fraud red flags and tips in a central document and analyzing and reporting results.

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Although safety programs require ongoing improvement , JT2’s partnership with the City of Fontana has resulted in a well-controlled operation, based on comparing the City’s performance and trends to those of similarly-sized cities:

City of Fontana Comparisons Based on Cities of Comparable Payroll Size # CLAIMS

REPORTED
PER 100 EES

TOTAL PAID

PER EMPLOYEE
Fontana 8.0 $ 1,360
Concord 9.8 $ 4,341
Daly City 9.8 $ 4,134
Simi Valley 8.5 $ 8,428
Fullerton 13.2 $ 1,945
Downey 7.5 $ 2,565
Redlands 12.7 $ 3,024
Costa Mesa 6.9 $ 4,009

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EXHIBIT B
Schedule of Charges/Payments
Consultant will invoice City on a monthly cycle. Consultant will include with each invoice a detailed progress report that indicates the amount of budget spent on each task. Consultant will inform City regarding any out-of-scope work being performed by Consultant. This is a time-and-materials contract.
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Section 4 – Fees
Section 4.1 - JT2 Fees
Unallocated Expenses
Service Fee
Implementation Fee (Not Applicable)
Claim Administration
Year 1 Administration $119,378.69
Year 2 Administration $125,347.62
Year 3 Administration $131,615.00
Year 4 Administration $138,195.75
Year 5 Administration $145,105.54
Medical Bill Review
Year 1 Bill Review $67,521.88
Year 2 Bill Review $70,897.98
Year 3 Bill Review $74,442.87
Year 4 Bill Review $78,165.02
Year 5 Bill Review $82,073.27
Allocated Expenses (Billed to Claims)
Service Fee
Index Reports No Charge
Utilization Review
Basic $100 per review
Doctor $190 per review
Specialty & Complex
(During FY2021-22, the City of Fontana requested 19 reviews under this billing model for a total cost of $3,250)
$300 per review
Nurse Case Management:

Telephonic, Field, Bilingual $69 per hour
Field Investigative Service (Includes Overtime) $80 per hour 259