DATE: MAY 24, 2022
DEPARTMENT: CITY ATTORNEY’S OFFICE
FROM: CHRISTOPHER A. CALLIHAN, CITY ATTORNEY
BY: RHONDA COMBS, ASSISTANT CITY ATTORNEY
TITLE: EXTENSION OF AGREEMENT FOR SERVICES FOR WORKERS’ COMPENSATION THIRD PARTY CLAIMS ADJUSTER RECOMMENDED MOTION:
A motion to approve a Resolution authorizing the City Manager to execute a two-year extension to an agreement for services between the City of Salinas and CorVel Enterprise Comp, Inc. (“Corvel”), in the amount of $216,651 per year, for third party adjusting (“TPA”) services of workers’ compensation claims brought against the City of Salinas.
RECOMMENDATION:
This recommendation is to continue services to the City from Corvel for its provision of TPA workers’ compensation services.
BACKGROUND:
Workers’ compensation coverage is a state law mandated benefit covering employees whose injuries arise out of employment or are caused by employment. Since 2014 the City has contracted with Corvel for workers’ compensation TPA services. Prior to that date the City had received TPA services from various contracted TPAs over the years. TPA administration for the City’s workers’ compensation program includes, by way of example, the following services: Claim Intake and Evaluation; Communication with Injured Employees; Coordination with Medical Providers such as the City’s Contracted Occupational Medical Care Facility, Pinnacle Healthcare; Bill Review; Utilization Review; Nurse Case Management Dispatch and Care; Coordination of Benefits and Payroll Adjustments; and Compliance with Rules and Regulations Established by the State of California Division of Industrial Relations, Department of Self-Insurance Plan. A more detailed description of workers’ compensation services is included at Exhibit A to the original agreement by and between the City and CorVel. A copy of the same is also attached to this Report for ease of reference.
CorVel staffs the City’s account with two full-time, City of Salinas-dedicated claims adjusters and additional account personnel that service the City, including an account supervisor, an account manager, a bill review specialist, the vice president of claims, and a case management and utilization review manager, among others. This CorVel team produces detailed monthly reports by department of open claims and communicates daily with City staff, including the City Attorney’s Office which oversees the City’s workers’ compensation program as a whole, as well as departmentally with injured employees and their supervisors. On a quarterly basis, CorVel spends a full day providing a verbal presentation to the City respecting open claims, employee welfare and return to work status, litigation updates, and reviewing losses and projected losses. Annually, CorVel provides in-person training to City of Salinas employees about the City’s workers’ compensation program, and annually CorVel and the City’s actuary meet with the City for 2 days reviewing the City’s workers’ compensation information as a whole to accord with effective program stewardship and best practices in workers’ compensation claims management and provision of benefits.
The most recent contract amendment with CorVel is nearing expiration except that its terms permit an amendment upon 30 (thirty) days’ written notice. The proposed agreement is to begin no later than July 1, 2022, for a 2-year term extension to next end on June 30, 2024, with a set annual price of $216,651.00. This is the same price currently paid annually, in other words, City staff successfully negotiated a flat renewal price with CorVel for 2 additional years.
CEQA CONSIDERATION:
Not a Project. The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (“CEQA”). (CEQA Guidelines Section 15378). In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Because the matter does not cause a direct or foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.
STRATEGIC PLAN INITIATIVE:
This item relates to the City Council’s Strategic Goal of providing effective and culturally responsive government.
DEPARTMENTAL COORDINATION:
A workers’ compensation liability claims adjusting firm works directly with the City departments which are affected by claims to gather information, facilitate communication, evaluate responsibility/liability or defenses, and to promptly respond to individuals bringing claims against the City.
FISCAL AND SUSTAINABILITY IMPACT:
Funds are appropriated and available in the City Attorney’s Office budget fund (account #7103.14.1247-64.4610).
ATTACHMENTS:
Exhibit A
Resolution
RESOLUTION NO. (N.C.S.)
A RESOLUTION EXENDING THE AGREEMENT FOR WORKERS’ COMPENSATION CLAIMS THIRD PARTY ADMINISTRATION SERVICES WHEREAS, City of Salinas contracted with CorVel Enterprise Comp, Inc. (“CorVel”) in 2014 for third party adjusting services of workers’ compensation claims, upon the due diligence and recommendation by a City of Salinas Request for Proposal Evaluation Committee; and WHEREAS, CorVel continues to perform services well and to meet the City’s workers’ compensation claims adjusting needs; and WHEREAS, the existing agreement, unless renewed, expires June 30, 2022, and to prevent expiration City staff and CorVel have negotiated, and CorVel has offered an extension of two years at the same rate as the expiring contract, $216,651.00, annually; and NOW, THEREFORE, BE IT RESOLVED that the Salinas City Council hereby awards a contract extension for workers’ compensation claims administration services to CorVel; and BE IT FURTHER RESOLVED that the City Manager is authorized to sign an agreement with CorVel to provide such services to the City.
PASSED AND APPROVED this 24th day of May 2022, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED:
_______________________
Kimbley Craig, Mayor
ATTEST:
_________________________
Patricia M. Barajas, City Clerk
Page | 3
Page | 1
CITY OF SALINASCOUNCIL STAFF REPORTCITY OF SALINASCOUNCIL STAFF REPORT
CITY OF SALINAS
COUNCIL STAFF REPORT
CITY OF SALINAS
COUNCIL STAFF REPORT