City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca. gov
@SantaClaraCity
20- 508 Agenda Date: 6/ 23/ 2020
REPORT TO COUNCIL
SUBJECT
Action on Agreement with Sedgwick Claims Management Services, Inc., for Third Party Administrator TPA) Services in Support of the City's Self -Insured Workers' Compensation Program [ Council Pillar:
Manage Strategically Our Workforce Capacity and Resources]
BACKGROUND
Sedgwick Claims Management Services, Inc ( Sedgwick) is the successor organization to Gates McDonald and Cambridge and has been providing Workers' Compensation TPA services to the City since 1977. The service components consist of basic claims administration services and ancillary services designed to assist in managing employee workers' compensation claims, claims costs, and claims outcomes in accordance with the State Labor Code. The ancillary services include bill review, utilization review and nurse case management. Council approved an amendment to the current agreement with Sedgwick extending the term an additional year through June 30, 2020 in order to provide sufficient time to administer a Request for Proposals ( RFP) process to ensure that the City was getting the best services and value. This procurement process was to also evaluate the relationship with Sedgwick relative to service delivery, cost structure and best -practice claims administration considerations.
DISCUSSION
As TPA services were being reviewed, Sedgwick acquired one of the largest public entity TPA providers in California, York Risk Services Group (York) in September 2019. This acquisition significantly changed the marketplace, as York has the largest public entity practice in this market and was a potential successor to Sedgwick. Additionally, York has been a key provider of TPA services to the California State Association of Governments Excess Insurance Authority ( CSAC- EIA), the risk pool the City participates in to buy its excess lines and specialty insurance coverage, including Workers' Compensation. York has been an integral partner with the EIA on their first -dollar primary workers' compensation program and serves a large number of public member entities in the EIA's excess workers' compensation program and is recognized for providing best -practice TPA claims management services to CSAC- EIA members. Sedgwick' s acquisition of York makes them a preferred provider with the EIA, which is one of the largest public risk pooling organizations in the United States.
While the City was evaluating these changes and their potential impact to the City's services, pricing and an RFP, the Human Resources department was unexpectedly impacted by the COVID- 19 global pandemic and immediately needed to redirect its resources to addressing the broad and complex impact on city-wide operations and City employees. Staffing changes/ vacancies within Human Resources further impacted the City 's ability to complete an RFP and the decision was made to leverage the Sedgwick acquisition of York in the short term and extend the agreement for two years.
This extension provides city staff time to prepare a Request for Proposal, to focus on the impacts of City of Santa Clara Page 1 of 3 Printed on 6/ 19/ 2020
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Agenda Date: 6/ 23/ 2020
COVID-19, includingbudgetaryimpacts, toaddressprioritiesaswellaslookatstaffingandresource efforts.
Staffisproposingabasetwo-yearagreement, beginningJuly1, 2020throughJune30, 2022, and threeone-yearoptiontermswithSedgwick. Thenewpricingstructureofthisagreementprovides pricestabilitytotheCityfortheTPAandbillreviewelementsoftheagreementwhileensuring continuedqualityserviceisdeliveredbySedgwick. Thispricingstructureavoidsunpredictablecost spikesforthe Citythatwereexperiencedin thecurrentvolume -basedpricingstructure, avoiding fluctuations of as much as $ 127,000year -over -year. Thenot -to -exceedcompensationamountfor the two-year term of this agreement is $687, 754. This is $ 11,186 more per year than the average actualexpensewas for the priorfive-year periodand representsa 3.3% increase.
ThisAgreementrequiresthat all Sedgwickpersonnelactingas examinerson City claimspossessa currentWorkersCompensationClaimsAdministration (WCCA) certificationfrom the Stateof California; this Agreementthereforefalls within the purviewof SCCC 2.105.330(e)(1) ["contracts for specialized services from licensed professionals19
ENVIRONMENTAL REVIEW
Theactionbeingconsidereddoesnotconstitutea "project" withinthemeaningoftheCalifornia Environmental Quality Act (" CEQA") pursuantto CEQAGuidelinessection15378(a) as it hasno potentialforresultingineithera directphysicalchangeintheenvironment, ora reasonably foreseeable indirect physical change in the environment. Furthermore, the action being considered doesnotconstitutea "project" withinthemeaningoftheCaliforniaEnvironmentalQualityAct CEQA") pursuanttoCEQAGuidelinessection15378(b)(5) inthatit isagovernmental organizationalor administrativeactivitythatwill notresultindirector indirectchangesinthe environment.
FISCAL IMPACT
Thetermof this agreementwill beginonJuly 1, 2020andterminateonJune30, 2022, withan option to renewforthreeadditionalone-yearperiods. Themaximumcompensationunderthisagreementis 1,854, 579, subject to the appropriation of funds. Appropriations for these services are included in the Workers' CompensationFund ContractualServicesaccountas part of the FY 2020/21 Operating budget. Appropriationsinfutureyearswill beincorporatedaspartof thebudgetdevelopment process.
COORDINATION
This report has been coordinated with the City Attorneys Office.
PUBLIC CONTACT
PubliccontactwasmadebypostingtheCouncilagendaontheCity's official -noticebulletinboard outsideCityHallCouncilChambers. A completeagendapacketisavailableontheCity'swebsite andintheCityClerk's Officeatleast72hourspriortoa RegularMeetingand24hourspriortoa SpecialMeeting. A hardcopyofanyagendareportmayberequestedbycontactingtheCityClerk's Office at ( 408) 615- 2220, email clerk( p santaclaraca. gov< mailto: clerk( santaclaraca. gov>.
RECOMMENDATION
ApproveandauthorizetheCityManagerto executetheAgreementforTPAservicessupportingthe City of Santa Clara Page 2 of 3 Printed on 6/ 19/ 2020
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20w508 Agenda Date: 6/ 23/ 2020
City'sSelf -InsuredWorkers' CompensationProgramwithSedgwickClaimsManagementServices, Inc. for the not4o-exceed compensation amount of $1,854,579.
Reviewedby: AracelyAzevedo, Directorof HumanResources
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Agreement with Sedgwick Claims Management Services, Inc.
City of Santa Clara Page 3 of 3 Printed on 6/ 19/ 2020
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EBIX Insurance No, 0200002506
AGREEMENT FOR SERVICES
BETWEEN THE
CITY OF SANTA CLARA, CALIFORNIA,
AND
SEDGWICK CLAIMS MANAGEMENT SERVICES, INC.
PREAMBLE
ThisAgreementis enteredintobetweentheCityof SantaClara, California, a chartered Californiamunicipalcorporation (City) andSedgwickClaimsManagementServices, Inc., an Illinois corporation, ( Contractor). Cityand Contractormay be referredto individuallyasa "Party" orcollectivelyasthe "Parties" orthe "PartiestothisAgreement."
RECITALS
A. CitydesirestosecuretheservicesmorefullydescribedinthisAgreement, at Exhibit A, entitled " Scope of Services";
B. Contractorrepresentsthat it, andits subcontractors, if any, havethe professional qualifications, expertise, necessarylicensesanddesireto providecertaingoods and/or requiredservicesof thequalityandtypewhichmeetobjectivesand requirements of City; and,
C. The Parties have specifiedhereinthe terms and conditionsunder which such services will be provided and paid for.
The Parties agree as follows:
AGREEMENT TERMS AND CONDITIONS
1. AGREEMENT DOCUMENTS
ThedocumentsformingtheentireAgreementbetweenCityandContractorshall consist of these Terms and Conons and the following Exhibits, which are herebyincorporatedintothisAgreementbythis reference:
Exhibit A — Scope of Services
Exhibit B — Schedule of Fees
Exhibit C — Insurance Requirements
Exhibit D — CSAC-EIA Workers' Compensation Claims Administration Guidelines ThisAgreement, includingthe Exhibitssetforth above, containsallthe agreements, representationsand understandings of the Parties, and supersedes andreplacesanypreviousagreements, representationsand understandings, Agreement with Sedgwick Claims Management Services, Inc. Page 1 Rev. 07- 01- 18
whether oral or written. In the event of any inconsistency between the provisions of anyoftheExhibitsandtheTermsandConditions, theTermsandConditions shall govern and control
2. TERM OF AGREEMENT
Unless otherwise set forth in this Agreement or unless this paragraph is subsequentlymodifiedbyawrittenamendmenttothisAgreement, thetermof this Agreementshallbeginon July1, 2020andterminateon June30, 2022. This Agreementshallautomaticallyrenewfor upto three (3) additionalone (1) year optionperiodsexceptwhenwrittennoticeof non -renewalisdeliveredbyeither party to the other. Such notice must be delivered a minimum of one hundred and eighty (180) dayspriorto thenextexpirationdateofthisAgreement. All such renewalperiodsshallcomplywiththecompensationallocationparametersset forth in Section 6 of this Agreement.
3. SCOPE OF SERVICES & PERFORMANCE SCHEDULE
ContractorshallperformthoseServicesspecifiedinExhibitA. Timeisofthe essence.
4. WARRANTY
Contractorexpresslywarrantsthatallmaterialsandservicescoveredbythis Agreementshallbefit for the purposeintended, shallbefreefromdefectand shall conform to the specifications, requirements and instructions upon which this Agreement is based. Contractor agrees to promptly replace or correct any incomplete, inaccurate or defective Services at no further cost to City when defects are due to the negligence, errors, or omissions of Contractor. If Contractor failsto promptlycorrector replacematerialsor services, Citymaymake corrections or replace materials or services and charge Contractor forthe cost incurred by City.
5. QUALIFICATIONS OF CONTRACTOR - STANDARD OF CARE
Contractorrepresentsand maintainsthat it hasthe expertise in the professional callingnecessaryto performtheServices, anditsdutiesandobligations, expressed and implied, contained herein, and City expressly relies upon Contractor's representationsregardingitsskillsandknowledge. Contractorshall performsuchServicesanddutiesinconformanceto andconsistentwiththe professionalstandardsofaspecialistinthesamedisciplineintheStateof California.
6. COMPENSATION AND PAYMENT
In considerationfor Contractor's completeperformanceof Services, Cityshall payContractorforallmaterialsprovidedandServicesrenderedbyContractorin accordance with Exhibit B, entitled " SCHEDULE OF FEES." The maximum Agreement with SedgvvickClaims Management Services, Inc. Page 2 Rev. 07- 01- 18
compensationof this Agreementfor third -party administrationand bill review services, to includeoptionsyears, is OneMillionEightHundredFifty -Four Thousand Five Hundred Seventy Nine dollars ($ 1,854, 579. 00), subject to budget appropriations, whichincludesallpaymentsthat maybe authorizedfor Services and for expenses, supplies, materials and equipment required to perform the Services. RatesforotherancillaryservicesinExhibitBshallbepaidasneeded as a claimfile expense not associatedwith this maximumcompensation. All otherworkperformedor materialsprovidedin excessofthe maximum compensation not included in Exhibit B shall be at Contractor' s expense.
Contractor shall not be entitled to any payment above the maximum compensation accordingto these terms and conditions under any circumstance.
7. TERMINATION
A. Terminationfor Convenience. City shall havethe rightto terminatethis Agreement, withoutcauseorpenalty, bygivingnotlessthanonehundred andeighty (180) days' priorwrittennoticeto Contractor.
B. Terminationfor Default. If Contractorfails to performany of its material obligations under this Agreement, in addition to all other remedies providedbylaw, CitymayterminatethisAgreementimmediatelyupon written notice to Contractor.
C. Upontermination, each Partyshall assist the other in arrangingan orderly transfer and close-out of services. As soon as possible following the notice of termination, but no laterthan thirty (30) days afterthe noticeof termination, Contractorwill deliverto Cityall City informationor material that Contractor has in its possession.
D. Upon notice of termination of this agreement, Contractor shall cooperate and assist in the transitionto a newvendor in a mannerthat is usualand customary in the industry. This includes accurate and timely transition of all claimssystemdataas instructedby the Cityto the newvendorand maintainingallclaimsadministrationactivitiesinaccordancewiththis agreement and with industry standards. Failure to comply with this Section 7(D) will be considered a breach of contract and Contractor agreestheywillberesponsiblefor allcostsincurredbyCity, whether direct or indirect, for curing such deficiencies. Any legal costs incurredby theCityinenforcingthisSection7(D) shallbebornebytheContractor.
8. ASSIGNMENT AND SUBCONTRACTING
CityandContractorbindthemselves, theirsuccessorsandassignstoall covenants of this Agreement. This Agreement shall not be assigned or transferredwithoutthepriorwrittenapprovalofCity. Contractorshallnothire subcontractors without express written permission from City.
Agreement with Sedgwick Claims Management Services, Inc. Page 3 Rev. 07- 01- 18
Contractorshallbe asfully responsibleto Cityfor the acts andomissionsof its subcontractors, andof personseitherdirectlyor indirectlyemployedbythem, as Contractor is for the acts and omissions of persons directly employed by it.
9. NO THIRD - PARTY BENEFICIARY
This Agreement shall not be construed to be an agreement for the benefit of any third -partyorpartiesandnothird -partyor partiesshallhaveanyclaimor rightof action under this Agreement for any cause whatsoever.
10. INDEPENDENT CONTRACTOR
Contractorandall persons) employedbyor contractedwithContractorto furnish labor and/or materials under this Agreement are independent contractors and do not act as agent(s) or employee(s) of City. Contractor has full rights to manage its employees in their performanceof Services underthis Agreement.
11. CONFIDENTIALITY OFMATERIAL
All ideas, memoranda, specifications, plans, manufacturingprocedures, data, drawings, descriptions, documents, discussions or other information developed or receivedbyor for Contractorandall otherwritteninformationsubmittedto Contractorin connectionwith the performanceof thisAgreementshall be held confidentialbyContractorandshallnot, withoutthepriorwrittenconsentofCity, be usedforanypurposesotherthanthe performanceoftheServicesnorbe disclosedto an entitynotconnectedwith performanceof the Services. Nothing furnished to Contractor which is otherwise known to Contractor or becomes generallyknowntotherelatedindustryshallbedeemedconfidential.
12. OWNERSHIP OF MATERIAL
All material, which shall include, but not be limited to, data, sketches, tracings, drawings, plans, diagrams, quantities, estimates, specifications, proposals, tests, maps, calculations, photographs, reports, designs, technology, programming, worksof authorshipandothermaterialdeveloped, collected, preparedorcaused to be preparedunderthisAgreementshallbethepropertyof CitybutContractor mayretainandusecopiesthereof. Cityshallnotbelimitedin anywayorat any time in its use of said material. However, Contractor shall not be responsible for damagesresultingfromthe useof said materialfor work otherthan Project, including, but not limitedto, the releaseof this materialto thirdparties.
13. RIGHT OF CITY TO INSPECT RECORDS OF CONTRACTOR
City, throughitsauthorizedemployees, representativesor agentsshallhavethe rightduringthetermofthisAgreementandfor four (4) yearsfromthedateof final paymentfor goodsor servicesprovidedunderthisAgreement, to auditthe books and records of Contractorfor the purpose of verifying any and all charges madeby Contractorin connectionwith Contractorcompensationunderthis Agreement with Sedgwick Claims Management Services, Inc. Page 4 Rev. 07- 01- 18
Agreement, includingterminationof Contractor. Contractoragreesto maintain sufficient books and records in accordance with generally accepted accounting principlestoestablishthecorrectnessofallchargessubmittedtoCity. Any expensesnot so recordedshall be disallowedby City. Contractorshall bearthe cost of the audit if the audit determinesthat there has beena substantialbilling deviationin excess of five (5) percentadverseto the City.
Contractorshall submitto City any andall reportsconcerningits performance underthisAgreementthat maybe requestedby City inwriting. Contractoragrees to assistCityinmeetingCity's reportingrequirementstotheStateandother agencies with respect to Contractor' s Services hereunder.
14. HOLD HARMLESS/ INDEMNIFICATION
A. Totheextentpermittedbylaw, Contractoragreesto protect, defend, hold harmlessand indemnifyCity, its City Council, commissions, officers, employees, volunteers and agents from and against any claim, injury, liability, loss, cost, and/orexpenseordamage, includingallcostsand attorney's feesin providingadefensetoanysuchclaimorotheraction, andwhethersoundingin law, contract, tort, or equity, in any manner arisingfrom, orallegedtoariseinwholeor in partfrom, orinanyway connectedwiththeServicesperformedbyContractorpursuanttothis Agreement — includingclaims of any kind by Contractor's employeesor personscontractingwithContractortoperformanyportionoftheScopeof Services — andshallexpresslyincludepassiveor activenegligenceby CityconnectedwiththeServices. However, theobligationto indemnify shallnotapplyif suchliabilityis ultimatelyadjudicatedto havearisen through the sole active negligence or sole willful misconduct of City; the obligation to defend is not similarly limited.
B. Contractor's obligationto protect, defend, indemnify, andholdharmlessin fullCityandCity'semployees, shallspecificallyextendtoanyandall employment -related claims of any type brought by employees, contractors, subcontractorsor other agents of Contractor, against City either alone, or jointly with Contractor), regardless of venue/jurisdiction in which the claim is brought and the manner of relief sought.
C. To the extent Contractor is obligated to provide health insurance coverage to its employeespursuantto the AffordableCareAct ("Act") and/or any other similar federal or state law, Contractor warrants that it is meeting its obligationsundertheAct andwill fully indemnifyand holdharmlessCity foranypenalties, fines, adverserulings, ortaxpaymentsassociatedwith Contractor' s responsibilities under the Act.
D. Workers' Compensation Acts not Limiting. Contractor' s indemnifications and obligations under this Section 14, or any other provision of this Agreement, shall not be limited by the provisions of any workers' Agreement with Sedgwick Claims Management Services, Inc. Page 5 Rev. 07- 01- 18
compensation act or similar act. Contractor expressly waives its statutory immunityundersuchstatutesor lawsasto City, itsofficers, agents, employees and volunteers.
E. Insurance Requirements not Limiting. City does not, and shall not, waive anyrightsthatit maypossessagainstContractorbecauseofthe acceptanceby City, or the depositwith City, of any insurancepolicyor certificate required pursuantto this Agreement. The indemnities in this Section14shallapplyregardlessof whetheror notanyinsurancepolicies are determined to be applicable to the liabilities, tax, assessment, penalty or interest asserted against City.
F. Survival of Terms. Contractor' s indemnifications and obligations under this Section 14 shall survive the expiration or termination of this Agreement.
15. INSURANCE REQUIREMENTS
DuringthetermofthisAgreement, andforanytimeperiodsetforthinExhibitC, Contractorshallprovideandmaintaininfullforceandeffect, atnocosttoCity, insurancepoliciesas set forth in ExhibitC.
16. WAIVER
ContractoragreesthatwaiverbyCityof anyoneor moreof theconditionsof performanceunderthisAgreementshallnotbeconstruedaswaivers) ofany otherconditionof performanceunderthisAgreement. NeitherCity's review, acceptancenorpaymentsforanyoftheServicesrequiredunderthisAgreement shall be constructedto operateas a waiver of any rights under this Agreementor of anycauseofactionarisingoutoftheperformanceofthisAgreement.
17. NOTICES
All notices to the Parties shall, unless otherwise requested in writing, be sent to City addressed as follows:
City of Santa Clara
Attention: Human Resources
1500 Warburton Avenue
Santa Clara, CA 95050
Email1: humanresources( d,)santaclaraca. gov
Email2: manager _ santaclaraca. gov
Phone: 408- 615- 2080
Fax: 408- 985- 0667
And to Contractor addressed as follows:
Sedgwick Claims Management Services, Inc.
Agreement with SedgvvickClaims Management Services, Inc. Page 6 Rev. 07- 01- 18
8125 Sedgwick Way
Memphis, TN 38125
Email:
Phone: 901- 415- 7400
Fax: 901- 415- 7409
Theworkdaythea -mailwassentshallcontrolthedatenoticewasdeemedgiven.
An e-mailtransmittedafter1:00 p.m. on a Fridayshallbe deemedto havebeen transmitted on the following business day.
18. COMPLIANCE WITH LAWS
Contractorshallcomplywithallapplicablelawsandregulationsofthefederal, stateandlocalgovernment, includingbutnotlimitedto "TheCodeoftheCityof Santa Clara, California" (" SCCC"). In particular, Contractor's attentionis called to the regulationsregardingCampaignContributions (SCCCChapter2.130), Lobbying (SCCC Chapter 2.155), Minimum Wage ( SCCC Chapter 3.20), Business Tax Certificate ( SCCC section 3.40.060), and Food and Beverage Service Worker Retention ( SCCC Chapter 9.60), as such Chapters or Sections maybeamendedfromtimetotimeorrenumbered. Additionally, Contractorhas read and agrees to comply with City's Ethical Standards http://santaclaraca.gov/home/showdocument?id=58299)
m
19. CONFLICTS OF INTEREST
Contractor certifies that to the best of its knowledge, no City officer, employee or authorizedrepresentativehasanyfinancialinterestin the businessof Contractor andthatnopersonassociatedwithContractorhasanyinterest, director indirect, whichcouldconflictwiththefaithfulperformanceof thisAgreement. Contractoris familiarwiththeprovisionsof CaliforniaGovernmentCodesection87100and following, andcertifiesthatit doesnotknowofanyfactswhichwouldviolate thesecode provisions. Contractorwill adviseCity if a conflictarises.
20. FAIR EMPLOYMENT
Contractorshall not discriminateagainst any employee or applicantfor employment because of race, sex, color, religion, religious creed, national origin, ancestry, age, gender, maritalstatus, physicaldisability, mentaldisability, medicalcondition, genetic information, sexual orientation, gender expression, genderidentity, militaryandveteranstatus, orethnicbackground, inviolationof federal, state or local law.
21. NO USE OF CITY NAME OR EMBLEM
Contractorshall not use City's name, insignia, or emblem, or distributeany information related to services under this Agreement in any magazine, trade paper, newspaperorothermediumwithoutexpresswrittenconsentofCity.
Agreement with Sedgwick Claims Management Services, Inc. Page 7 Rev. 07- 01- 18
22. GOVERNING LAW AND VENUE
ThisAgreementshallbegovernedandconstruedin accordancewiththe statutes andlawsoftheStateof California. ThevenueofanysuitfiledbyeitherParty shall be vested in the state courtsof the County of Santa Clara, or if appropriate, in the United States District Court, Northern District of California, San Jose, California.
23. SEVERABILITY CLAUSE
Incaseanyoneor moreoftheprovisionsinthisAgreementshall, foranyreason, be held invalid, illegal or unenforceable in any respect, it shall not affect the validityoftheotherprovisions, whichshallremaininfullforceandeffect.
24. AMENDMENTS
ThisAgreementmayonlybemodifiedbyawrittenamendmentdulyauthorized and executed by the Partiesto this Agreement.
25. COUNTERPARTS
ThisAgreementmaybeexecutedin counterparts, eachofwhichshallbe deemed to be an original, but both of which shall constitute one and the same instrument.
Agreement with Sedgwick Claims Management Services, Inc. Page 8 Rev. 07- 01- 18
The Parties acknowledge and accept the terms and conditions of this Agreement as evidencedbythefollowingsignaturesof theirdulyauthorizedrepresentatives.
CITY OF SANTA CLARA, CALIFORNIA
a chartered California municipal corporation
roved as to Form: Dated: 1 It
V /
RIAN DOYLE EANNAJ, SANTANA
12 ity Attorney City Manager
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: ( 408) 615- 2210
Fax: ( 408) 241- 6771
C ITY"
SEDGWICK CLAIMS MANAGEMENT SERVICES, INC.
an Illinois corporation
Dated
By (Signature):
Name:
Title:
Principal Place of
Business Address:
Email Address:
June 15, 2020
Vice - President
8125 Sedgwick Way
Memphis, TN 38125
Telephone: ( 901) 415- 7400
Fax: ( 901) 415- 7409
CONTRACTOR"
Agreement with Sedgwick Claims Management Services, Inc. Page 9 Rev. 07- 01- 18
EXHIBIT A
SCOPE OF SERVICES
The Servicesto be performedfor the City by the Contractorunderthis Agreementare set forth below for each service element to be delivered. It is expected that adjustments to services will be required if new laws and/or regulations are enacted that affect the deliveryof benefitsundertheState's workers' compensationstatutoryconstruct. Asthe Contractor is a sophisticated operator in the field it is expected that these types of changeswere contemplatedin the processof submitting a proposalforthese services and pricing included anticipation of such statutory/regulatory changes. The City requiresthat all TPAservicesbe providedin a mannerthat is customaryin the industry as a minimum. The particularrequirementsincludedin this Scope of Servicesare very specificto the City's requirementsand philosophyfor effectiveworkers' compensation programmanagement, butmaynotincludeallelementsthatarisedueto changesinthe statutory/regulatoryschemeandmaynotincludeeveryelementthatis consideredan appropriate standard of care in the business. Following is a listing of the primary service elements required along with basic expectations. It is expected that Contractor will providequality servicethat is customaryin the business.
A. Third -party Administrator ( TPA)
Thefollowingserviceelementsarethe minimumrequirementsof the CityforTPA services.
1. All claims, Cl records, reports and supporting documentation related to City claims are the property of the City.
2. The Contractorand any sub -contractors must maintain insurance coverages consistent with those included in Exhibit C of this Agreement.
3. The Contractor must have a claims office that houses the City claims examining team in a locationin the BayArea to ensureaccessibilityfor vendorstaff and City staff to easily meet.
4. The Contractor must conform to the then - current claims administration guidelinesoftheCSAC-ExcessInsuranceAuthority, orsuccessoragency, that are in effect at any given point in time. The current specifications are included in Exhibit D of this Agreement. Of particular importance are the sections dealingwithcasereviewanddocumentation, three-point contact, resolutionof claim, case closure, and staffing levels.
5. Administrationof all Cityclaimsmustbe performedunderthe managementand supervision of an individual with an extensive public entity examiner/ adjuster backgroundthat possessesand maintainsa current certificate to administer workers' compensation claims from the State of California. A certificate in Self - Insurance Plan administration is preferred.
Agreement with Sedgwick Claims Management Services, Inc /Exhibit A-Scopeof Services Page 1 Rev. 07- 01- 18
6. All Examinersassignedto the City's account must possessand maintaina current certificateto administerworkers' compensationclaimsin the State of California. A certificate in Self -Insurance Plan administration is preferred.
7. The Contractormustpreparein a timelymannerthe informationnecessaryto issue Federalform 1099noticesto vendorspaid throughthe Contractorand providetheinformationtotheCityFinanceDepartmentinaformacceptableto the Finance Department. Conversely, the ContractormusttimelyprovideForm W-9 and Form CA590 to the Finance Department as required by statute.
8. The Contractormusttimelynotifythe City's excesscarrierof all claimsthat meet the criteriacontainedin ExhibitD of this Agreementand anyfuture revisionsof Exhibit D.
9. The Contractorshall within 90 days of a claim opening provide information to the Cityconcerningallclaimswithsubrogationpotential. The Contractor shall respondto the first requestfor informationby acknowledgingthat the claim has beenpresentedandprovidinga briefprognosisfor theclaim. The Contractor shall respondto subsequentstatusrequestsby providingthe currentstatusof the claimand a printoutof the paymentsmadeto date. Once the claim is closed, the Contractormust forward copies of all bills paid along with a printout of the payments. The Contractor must have the ability to provide an acceptable report to Human ResourcesStaff on a recurring and per request basis.
10. TheContractormustpreparethe PublicSelf -Insurer's AnnualReportand transmittotheCityforsignaturefourweeksinadvanceofthedeadlinefor submission to the State of California.
11. The Contractormust coordinate all return to work related issues with Human ResourcesStaff. This includessupporting the interactive process in applicable circumstances.
12. The Contractormust make available examiners and supervisors for participation in claims reviewswith representativesof City Departmentsand Human Resources Department as scheduled/ requested.
13. The Contractormust have appropriate staff available to participate in periodic meetingswith, ortrainingof, Citystaffwithregardto issuesassociatedwith workers' compensation.
14.The Cityrequiresstatisticalinformationto analyzeitsworkerscompensation programfor costcontainmentandactuarialpurposes. The Contractor shall have data support/reporting capabilities that provide recurring monthly claims reports specifiedbytheCity, andanabilityto providegraphsofclaimsdata, ata minimum, by department. These reports should include the ability to feature types of injuries, causes of injuries, costs per claim, etc. It is preferable that the Contractorhas a meansof archivingrecurringreportsin a locationaccessibleto City HumanResourcesDepartmentStaff.
AgreementwithSedgwickClaimsManagementServices, Inc /ExhibitA-Scopeof Services Page 2 Rev. 07- 01- 18
15. The datasupport/reportingofferedby theContractormustallowCitystaffto access all claims information in an ad -hoc, on -demand fashion that permits some level of real time report creation/generation by City staff.
Thefollowinglistis anexemplarandnotconclusivelist ofthe type %J lossrun informationthe Citywill requireon an automatic, recurringbasis. Other reports may be required periodically.
a. Monthlyloss runsfor all open and closedclaims. The Contractor' s program shouldhavetheabilityto capturethis informationat anytimeduringthe year. Thislossrunmustincludetheclaimnumber, thedateoftheloss, date reported, cause of loss, type of loss, description of loss, body part affected (this item should have the ability to be updated if other body parts are later added), department and division, as well as amount paid, reserved, and total amounts incurred for all species of payments. TD, PD and 4850 benefits should be captured in this report.
b. Provider summaries to include individual claims, number of visits, visit intervals and dollars amounts.
c. Expense loss runs, which should have the ability to separate legal expenses, investigative expenses, medical legal expenses, and other expenses.
d. Incurredclaimsrunon monthlyor quarterlybasisshowingnewclaimsfiled within a specified time period.
e. Openclaims runshowing all claims open as of a specifieddate. f. Theabilitytofacilitateaccurateandtimelyreportingandtrackingforall claimants meeting mandatory Medicare reporting requirements per Medicare Secondary Payer and related statutes. The reporting requirementsincludeproperreportingto Medicareand in providing associated data to the City.
g. Monthly Stadium Claim costs reports.
h. Other customized reports as deemed necessary for program administration.
The reportingrequirementsdiscussed above, and any other reporting requirementsthat may be required/developed, must be available in an Excel spreadsheet format.
16.The Contractormustprovide HumanResourcesStaff accessto the Contractor's claim and reporting system. It is estimated that a minimum of two Staff members will need access to the system. However, there could be more.
17. It is preferredthattheContractoris ableto provideanonlineForm5020entry system that is accessible to designated City staff in each department at some point during the courseof this agreement. This system must generate a hardcopy of the form as. well as populate the Contractor's claim system database.
Agreement with SedgwickClaimsManagementServices, Inc /ExhibitA-Scopeof Services Page 3 Rev. 07- 01- 18
18. TheCitymaintainsa checkingaccountat a bankwithwhichto payallworkers compensation - related costs. The account was initiated with funds from the City's Workers' CompensationInternalServiceFundandisreplenished regularlyuponpresentationbytheContractorof proofof issuanceof checks.
The Contractorwill be requiredto work with the City's Finance Departmentstaff for accounting, bank reconciliation, and to provide electronic data to the bank in support of a Positive Pay system.
19. The Contractormust maintainits own checking accountfor paying self-imposed penaltiesandanyotherfees, costsorchargesthataretheresponsibilityofthe administrator. The Contractormust provide monthly reports to track penalty payment activities.
20.The Contractormustprovidereportingand trackingservicesto the City that complywiththe requirementsof MedicareSection111MandatoryReporting requirements.
21. TheContractorshallproperlysecureandmaintainthehighestlevelofprivacyand confidentialityofanyandallclaiminformationtowhichthe Contractoris privyunder this Agreement, unless and until the Contractorobtains the express written consent from the Human Resources Department to release such information. All claim informationoranyrelatedinformationshallbeconsideredtobeconfidentialand shallbeprotectedassuch. Thisappliestoanyandallclaimsdatainanyform oral, hardcopy, orelectronic) thatthe Contractorcomesincontactwithinthe courseof executingthisAgreement, including, butnot limitedto, Cityworkers' compensationclaims, health and fiscal data, or any other personallyidentifiable datathat shouldbe reasonablyunderstoodto be confidentialandnotgenerally knownorsubjectto publicdisclosure, or otherwiseexemptfrompublicdisclosure under the law. Public disclosure shall mean disclosure to anyone (including City departments and employees not designated to the Contractorby City as being authorizedto assistin administeringclaimsactivitieswithina givendepartment) outside of the Human ResourcesDepartmentand its authorized personneland/or designee( s). Theonlyexceptiontothisrequirementrelatestoanyinformationthat theContractorisrequiredbystatuteandor regulationto provideto otherthird parties, toincludetheStateofCalifornia. TheContractorshallnotifyCityabout releases of information under these circumstances.
22. The Contractormust have a robust electronic claims management system that providesefficientusebyTPAstaffanddesignatedHumanResourcesStaff.
B. Bill Review
Thefollowingserviceelementsarethe minimumrequirementsfor BillReviewservices provided to the City.
1. Bill Reviewis primarilya functionintendedto ensurepaymentof medical billings at the State mandated Official Medical Fee Schedule ( OMFS) rate.
Agreement with Sedgwick Claims ManagementServices, Inc /Exhibit A-Scopeof Services Page 4 Rev. 07- 01- 18
Vendor -negotiated or other existing networksavings belowthe OMFSare also a benefit of the Bill Review process.
2. BillReviewshallbeperformedonall billingsrelatedto theadministrationofthe City's workers' compensation program.
3. The Contractor shall be responsible for facating the Bill Review process through all available electronic and manual means to provide maximum efficacy as is customary in the business.
4. It is expected that savings .will be realized from a combination of the charging of an appropriate administrative fee for activities related to the Bill Review process, ensuringappropriateservicecodescompatiblewithservicesrendered aresubmittedbyprovidersforpayment, thepaymentoftheappropriateOMFS rate for these services, and any negotiatednetworkfee savings below the OMFS.
5. Reportingmust be providedon a recurringbasisthat indicatesappropriate rates for services are enforced via the process for all billings.
6. TheCitymaycontractwithanunaffiliatedthird -partyvendorto performmedical management consultation services. The Contractor will be required to work withanysuchmedicalmanagementconsultantto obtainanyidentified additionalsavingsfortheCitythatshouldhavebeenfoundbythe Contractor andmayberequiredto reimbursefor anysavingsverifiedbythemedical management consultant that are not otherwise recoverable by the Contractor.
C. Utilization Review ( UR)
Thefollowingserviceelementsarethe minimumrequirementsfor URservices provided to the City.
1. UtilizationReviewis necessaryin consideringtheefficacyof variousmedical procedures during the claim process. The City's philosophy is that basic medical Requests for Authorization ( RFA' s) should be resolved at the lowest possiblelevelandURisonlynecessaryincircumstanceswherecomplicated medical issues are involved.
2. UR is intendedto be a mechanism for ensuring appropriatetreatment is renderedto Cityemployeeswhile maximizingcosteffectiveness, nota mechanism to deny treatment or generate revenue.
3. Reportingmustbeprovidedina recurringmannerthatshowsthelevelatwhich UR decisions are made, an assignment of costs to these activities, as well as efficacyof referralsrelativeto provisionofservicesto injuredemployees, good claim management principals, and cost impacts.
4. TheCitymaycontractwithanunaffiliatedthird -partyvendorto performmedical management consultation services. The Contractor will be required to work Agreement with SedgvvickClaimsManagementServices, Inc /ExhibitA-Scopeof Services Page 5 Rev. 07- 01- 18
with any such medicalmanagementconsultantto obtainany identified additional savings for the City that should have been found by the Contractor and may be requiredto reimbursefor any savingsverified by the medical management consultant that are not otherwise recoverable by the Contractor.
Agreement with Sedgwick Claims Management Services, Inc / Exhibit A- Scopeof Services Page 6 Rev. 07- 01- 18
EXHIBIT B
SCHEDULE OF FEES
Pricingfor subparagraphsA and B of this ExhibitB is basedon the estimatedclaim volumes outlined above and the estimated required staffing to service those claims.
Sedgwick reserves the right to request modification of the annual flat fee if changes in programrequirementsor an increasein claimvolumeof greaterthan 10% impacts the staffing requirements of the unit. Any such request must be tendered no later than December31 of any fiscal year in order to afford time for the City to process an amendment and request for additional appropriations to the City Council for approval. Any suchmodificationwill be contingentuponCity Councilapproval. Claim administration services are contingent on Contractor also providing Managed. Care services.
A. Claims Administratiion Services
1. Foryearoneof thisAgreement (July 1, 2020throughJune30, 2021), theCityshallpayContractor $22,655.17 permonthfor TPAservicesperthis Agreement ($ 271, 862. 00 annual cost).
2. Foryeartwoof thisAgreement (July1, 2021throughJune30, 2022), the City shall pay Contractor $24,241.00 per monthfor TPA servicesper thisAgreement 290, 892. 00 annual cost).
3. If optionyearoneis exerciesedin yearthree (July 1, 2022through June 30, 2023), the Cityshallpay Contractor $25,937.83 per monthfor TPAservices per this Agreement ($ 311, 254. 00 annual cost).
4. If optionyeartwoisexercisedin yearfour (July 1, 2023to June30, 2024), the City shall pay Contractor $26,845.67 per month for TPA services per this Agreement ($ 322, 148. 00 annual cost).
5. If optionyearthreeis exercisedinyear five (July 1, 2024to June 30, 2025), theCityshallpayContractor $27,785.25 permonthfor TPAservicesperthis Agreement ($ 333, 423. 00 annual cost).
Be Bill Review Services
1. Foryearoneof thisAgreement (July 1, 2020throughJune30, 2021), theCityshallpayContractor $62,500.00 annualcostannuallyfor BillReview services per the terms of this Agreement.
2. Foryeartwoof thisAgreement (July 1, 2021throughJune30, 2022), the City shall pay Contractor $62,500.00 annual cost annually for Bill Review services per the terms of this Agreement.
Agreement with Sedgwick Claims Management Services, Inc /Exhibit B-Schedule of Fees Page 1 Rev. 07- 01- 18
3. If optionyearone is exercisedin year three (July 1, 2022through June 30, 2023), theCityshallpay Contractor $65,000.00 annualcostannuallyfor Bill Review services per the terms of this Agreement.
4. If optionyeartwo is exercisedin yearfour (July 1, 2023to June30, 2024), the CityshallpayContractor $67,500.00 annualcostannuallyfor BillReview services per the terms of this Agreement.
5. If optionyear three is exercisedinyear five (July 1, 2024to June 30, 2025), theCityshallpayContractor $67,500.00 annualcostannuallyfor BillReview services per the terms of this Agreement.
C. Thefollowingclaimadministrationfees andserviceswill be providedby the Contractor' s managed care services. Managed care fees not set forth above are detailed below and will be charged to the appropriate claim file requiring the service, which is the industry custom. Contractormay updatethesefeesfromtime to timewith 60 days written notice to the City.
SERVICE DESCRIPTION RATE DESCRIPTION
Medical Bill Review and Provider Networks
The annual flat fee for Bill Review set forth above covers upto 3,640billsperyear; Billsexceedingthat threshold
will be charged at $18.55 per bill.
Preferred provider organization ( PPO)
networks/ out of network services Additionally, bills $100,000or greater, will have PPO fees charged at 17% of savings. Surgical implant bills
discounted have 13130fees charged at 27% of savings.
Clinical Services
80 per call
Implementation fee ( one- time)—$ 1, 550
Clinical consultation
Fees to be determined for changes to standard
workflows/ script.
Agreement with SedgvvickClaims Management Services, Inc /Exhibit B-Schedule of Fees Page 2 Rev. 07- 01- 18
105 percall
Clinical consultation with intake ( FROI)
Implementation fee ( one- time) — $ 1, 550
Fees to be determined for changes to standard
workflows/ script.
Telephonic case management Evaluation and recommendation $ 150 1- 30 days: $ 395
Every 30 days thereafter: 295
Surgery nurse servicecharged at sameTCMrates as
outlined above.
Surgery nurse app- $ 75 percase
Nurse advocate 95 per hour
Behavioral health specialist 95 per hour
Utilization review 109 per review
Physician advisor/ peer review 250 per review
Pharmacy nurse management/ pain coaching: $ 115 per
Complex pharmacy management.. hour
Option # 1
First medication $ 375
2 to 4 meds $ 650
5 to 7 meds $ 975
8 to 12 meds $ 1,400
More than 12 meds $ 1,400 + $ 100 per each
additional med (script) with cap of $ 2,200
Option # 2 - Physician and Pharml) management ( as
needed): $ 250 per hour
Work Placement Solutions
Transitional work placement ( at Not -for- 900 for placement Profit) 450 No- show
95 per hour
Custom return to work program design, developmentorVocational expert consultation 95 per hour, plusdirectexpensesExceptionsto standard
rate:( 1)
Agreement with Sedgvuick Claims Management Services, Inc / Exhibit B- Scheduleof Fees Page 3 Rev. 07- 01- 18
Field case management: Full field Catastrophic case management: $ 140 per hour 660: One visit
795: Two visits
Field case management: Clinical assessment
Field case management: Vocational
screening/ testing 695
Field case management: Vocational
assessment 870
Field case management: Job analysis 640
Field case management: Ergonomic
evaluation 710
Field case management: Labor market
survey 580
Field case management: Automated
transferable skill analysis 325
Field case management: Life care plan 145 per hour
Field case management: Expert
witness/ expert testimony 150 per hour
Field case management: Customized RTW
services 145 per hour
Field case management: Limited assignment 95 per hour (1) Field case management: IME
facilitation/ attendance 118 per hour
Sedgwick Managed Care Administrative Services
Sedgwick standard medical card No charge; customization starts at $ 3, 500 Standard provider panel postings Included in Sedgwick Bill Review program fees Agreement with Sedgvick Claims Management Services, Inc / Exhibit B-Schedule of Fees Page 4 Rev. 07- 01- 18
California Lien Resolution
28% of the below fee schedule savings subject to
minimum fee of $125and capof $7,500 per lien.
Expert witness testimony or hearing representation
charged at $125per hour plusdirect expenses
Agreementwith SedgwickClaimsManagementServices, Inc /ExhibitB-Scheduleof Fees Page 5 Rev. 07- 01- 18
EXHIBIT C
INSURANCE REQUIREMENTS
WithoutlimitingtheContractor's indemnificationoftheCity, andpriortocommencingany of the Services required under this Agreement, the Contractor shall provide and maintain in full force and effectduringthe periodof performanceof the Agreementand for twenty- four ( 24) months following acceptance by the City, at its sole cost and expense, the followinginsurancepoliciesfrom insurancecompaniesauthorizedto do businessin the Stateof California. Thesepoliciesshallbeprimaryinsuranceastothe Cityof SantaClara so that any other coverageheld by the City shall not contributeto any loss under Contractor' s insurance. The minimum coverages, provisions and endorsements are as follows:
A. COMMERCIAL GENERAL LIABILITY INSURANCE
1. CommercialGeneral Liability Insurancepolicywhich provides coverageat least as broad as Insurance Services Office form CG 00 01. Policy limits are subject to review, but shall in no event be less than, the following:
1,000, 000 Each Occurrence
27000, 000 General Aggregate
2,000,000 Products/Completed Operations Aggregate
1,000,000 Personal Injury
2. Exactstructureand layeringof the coverageshallbe leftto the discretionof Contractor; however, any excess or umbrella policies used to meet the required limits shall be at least as broad as the underlying coverage and shall otherwise follow form.
3. The following provisions shall apply to the Commercial Liability policy as well asanyumbrellapolicymaintainedbytheContractorto complywiththe insurance requirements of this Agreement:
a. Coverage shall be on a " pay on behalf" basis with defense costs payable in addition to policy limits;
b. There shall be no cross -liability exclusion which precludes coverage for claimsor suits by one insuredagainst another; and
c. Coverage shall apply separately to each insured against whom a claim is made, or a suit is brought, except with respect to the limits of liability.
Agreement with Sedgwick Claims Management Services, Inc /Exhibit C Insurance Provisions Page 1 Rev. 07- 01- 18
B. BUSINESS AUTOMOBILE LIABILITY INSURANCE
Businessautomobileliabilityinsurancepolicywhichprovidescoverageat leastas broadas ISOform CA00 01 with policy limits a minimumlimitof not less than one million dollars ($ 1,000,000) eachaccidentusing, or providingcoverageat least as broad as, Insurance Services Office form CA 00 01. Liability coverage shall apply to all owned ( if any), non - owned and hired autos.
In the event that the Work being performed under this Agreement involves transportingofhazardousorregulatedsubstances, hazardousorregulatedwastes and/ or hazardous or regulated materials, Contractor and/ or its subcontractors involvedin such activitiesshall providecoveragewith a limit of one milliondollars 1,000,000) peraccidentcoveringtransportationof suchmaterialsbytheaddition to the BusinessAuto CoveragePolicyof EnvironmentalImpairmentEndorsement MCS90 or Insurance Services Office endorsement form CA 99 48, which amends the pollutionexclusionin the standardBusinessAutomobilePolicyto cover pollutantsthatarein or upon, beingtransportedor towedby, beingloadedonto, or being unloadedfrom a covered auto.
C. WORKERS' COMPENSATION
1. Workers' CompensationInsurance Policy as required by statute and employer's liabilitywith limits of at least one milliondollars ($1, 000, 000) policylimit BodilyInjuryby disease, one milliondollars ($1,000, 000). each accident/Bodily Injury and one million dollars ($1,000, 000) each employee Bodily Injury by disease.
2. The indemnification and hold harmless obligations of Contractor included in this Agreement shall not be limited in any way by any limitation on the amount or type of damage, compensation or benefit payable by or for Contractoror anysubcontractorunderanyWorkers' CompensationAct(s), DisabilityBenefitsAct(s) or other employeebenefitsact(s).
3. ThispolicymustincludeaWaiverofSubrogationinfavoroftheCityofSanta Clara, its City Council, commissions, officers, employees, volunteersand agents.
D. PROFESSIONAL LIABILITY
ProfessionalLiabilityor ErrorsandOmissionsInsuranceas appropriateshallbe writtenona policyformcoveragespecificallydesignedto protectagainstnegligent acts, errors or omissions of the Contractor. Covered services as designated in the policymustspecificallyincludeworkperformedunderthisagreement. Coverage shall be in an amount of not less than one million dollars ($ 1,000,000) per claim or two million dollars ($ 2, 000, 000) aggregate. Any coverage containinga deductible or self -retentionmust first be approved in writing by the City Attorney's Office.
Agreement with Sedgwick Claims Management Services, Inc /Exhibit C Insurance Provisions Page 2 Rev. 07- 01- 18
E. COMPLIANCE WITH REQUIREMENTS
All of the following clauses and/or endorsements, or similar provisions, must be part of each commercialgeneral liability policy, and each umbrella or excess policy.
1. Additional Insureds. City %J Santa Clara, its City Council, commissions, officers, employees, volunteers and agents are hereby added as additional insuredsin respectto liabilityarising out of Contractor's work for City, using Insurance Services Office ( ISO) Endorsement CG 20 10 11 85, or the combination of CG 20 10 03 97 and CG 20 37 10 01, or its equivalent.
2. Primary and non-contributing. Each insurance policy provided by Contractor shall contain language or be endorsed to contain wording making it primary insurance as respects to, and not requiring contribution from, any other insurancewhich the indemnitiesmay possess, includingany self-insurance or self -insured retention they may have. Any other insurance indemnities may possessshallbe consideredexcessinsuranceonly and shall not be called upon to contribute with Contractor' s insurance.
3. Cancellation.
a. Each insurance policy shall contain language or be endorsed to reflect that no cancellation or modification of the coverage provided dueto non-paymentof premiumsshall beeffectiveuntilwrittennotice has been given to City at least ten (10) days prior to the effective date of such modification or cancellation. In the event of non - renewal, written notice shall be given at least ten ( 10) days prior to the effective date of non -renewal.
b. Each insurance policy shall contain language or be endorsed to reflect that no cancellation or mocation of the coverage provided for anycausesaveand exceptnon-paymentof premiumsshall be effective until written notice has been given to City at least thirty (30) days prior to the effective date of such modification or cancellation.
In the event of non -renewal, written notice shall be given at least thirty (30) dayspriortotheeffectivedateofnon -renewal.
4. Other Endorsements. Other endorsements may be required for policies other than the commercial general liability policy if specified in the description of required insurance set forth in Sections A through E of this Exhibit C, above.
F. ADDITIONAL INSURANCE RELATED PROVISIONS
Contractor and City agree as follows:
Agreement with Sedgwick Claims Management Services, Inc /Exhibit C Insurance Provisions Page 3 Rev. 07- 01- 18
1. Contractor agrees to ensure that subcontractors, and any other party involved with the Services, who is brought onto or involved in the performanceof the Services by Contractor, provide the same minimum insurance coverage required of Contractor, except as with respect to limits.
Contractor agrees to monitor and review all such coverage and assumes all responsibilityforensuringthatsuchcoverageisprovidedinconformitywith the requirements of this Agreement. Contractor agrees that upon request by City, all agreements with, and insurance compliance documents providedby, suchsubcontractorsandothersengagedintheprojectwillbe submitted to City for review.
2. Contractoragrees to be responsiblefor ensuring that no contract used by anypartyinvolvedinanywaywiththeprojectreservesthe rightto charge CityorContractorforthecostofadditionalinsurancecoveragerequiredby this Agreement. Any suchprovisionsare to be deletedwith referenceto City. It is nottheintentof Cityto reimburseanythird -partyforthe costof complyingwiththeserequirements. Thereshallbenorecourseagainst. City for paymentof premiumsor otheramountswithrespectthereto.
3. TheCityreservestherighttowithholdpaymentsfromtheContractorinthe event of material noncompliance with the insurance requirements set forth in this Agreement.
G. EVIDENCE OF COVERAGE
Priorto commencementof any Servicesunderthis Agreement, Contractor, and eachandeverysubcontractor (of everytier) shall, at its solecostandexpense, provideandmaintainnot lessthanthe minimuminsurancecoveragewiththe endorsements and deductibles indicated in this Agreement. Such insurance coverage shall be maintained with insurers, and under forms of policies, satisfactoryto Cityandasdescribedin thisAgreement. Contractorshallfilewith theCityallcertificatesandendorsementsfortherequiredinsurancepoliciesfor City's approvalas to adequacyof the insuranceprotection.
H. EVIDENCE OF COMPLIANCE
Contractor or its insurance broker shall provide the required proof of insurance compliance, consistingof InsuranceServicesOffice (ISO) endorsementformsor their equivalent and the ACORD form 25-S certificate of insurance ( or its equivalent), evidencingall requiredcoverageshall be deliveredto City, or its representativeas setforth below, at or prior to executionof this Agreement. Upon City' s request, Contractor shall submit to City copies of the actual insurance policies or renewals or replacements. Unless otherwise required by the terms of this Agreement, all certificates, endorsements, coverage verifications and other itemsrequiredto bedeliveredto Citypursuantto thisAgreementshallbe mailed to:
Agreement with SedgwickClaimsManagementServices, Inc /Exhibit C InsuranceProvisions Page 4 Rev. 07- 01- 18
EBIX Inc.
Cityof SantaClaraHumanResourcesDepartment
P. O. Box 100085 — S2
Duluth, GA 30096
Or
EBIX Inc.
Cityof SantaClaraHumanResourcesDepartment
1 Ebix Way
John' s Creek, GA 30097
Telephone number: 951- 766- 2280
Fax number: 770- 325- 0409
Email address: ctsantaclara@ebix. com
QUALIFYING INSURERS
All of theinsurancecompaniesprovidinginsurancefor Contractorshallhave, and providewrittenproofof, anA.M. Bestratingof atleastA 6 (A- VI) orshallbean insurancecompanyof equalfinancialstabilitythatis approvedby theCityor its insurance compliance representatives.
Agreementwith SedgwickClaimsManagementServices, Inc /ExhibitC InsuranceProvisions Page 5 Rev. 07- 01- 18
EXHIBIT D
CSAC-EIAWORKERSCOMPENSATIONCLAIMSADMINISTRATIONSTANDARDS Adopted: December 6, 1985
Last Amended: July 1, 2019
ADDENDUM A
WORKERS' COMPENSATION
CLAIMS ADMINISTRATION STANDARDS
ThefollowingStandardshavebeenadoptedby the CSACExcessInsuranceAuthority hereinafterTheAuthorityortheEIA) inaccordancewithArticle18(b) oftheCSACExcess Insurance Authority Joint Powers Agreement. It is the intent of these Standards to ensure compliancewith all applicableLaborCode and CaliforniaCode of RegulationsSections. In the event thatthereexistsa conflictbetweenthe Standards, the LaborCodeor the Code of Regulations, the most stringent requirement shall apply.
I. CLAIM HANDLING - ADMINISTRATIVE
A. Case Load
1. Each claims examiner assigned to the Member should handle a targeted caseload of 150 but not to exceed 165 claims. In situations where caseloads include future medical and medical only claims, these claims shall be counted as 2:1 in the caseload limit.
2. Supervisorypersonnelshouldnothandlea caseload, althoughthey mayhandlespecificissuesora smallnumberofconflictclaims.
B. Case Review and Documentation
1. Documentationshallreflectanysignificantdevelopmentsin thefile Cl" include a plan of action. Plan of action statements shall be updated at the time of examiner diary review.
2. The examiner shall review indemnity and medical -only files at intervals not to exceed 45 calendar days. Future medical files shall be reviewed at intervals not to exceed 90 calendar days.
3. The supervisor shall review all new claims within 60 calendar days of initialset upandsubsequentlymonitoractivityon indemnityfiles at intervals not to exceed 120 calendar days. Future medical files shallbe reviewedby the supervisorat intervalsnot to exceed180 calendar days.
Agreementwith SedgwickClaimsManagementServices, Inc /ExhibitDCSAC-EIAClaimAdministration Guidelines Page 1
Rev. 0, - 01- 18
4. FilecontentsshallcomplywithCodeof RegulationsSections10101, 10101.1 and 15400, and be kept in a neat and orderly fashion. If claims are maintainedin a paperlesssystem, documentsshall be clearly identified (e.g., medical report, WCAB Orders, legal, etc.).
5. Medical Only Claims
a.) Ifa medical -onlyclaimisstillopenat90calendardays, itshallbe transferred to an indemnity examiner.
b.) If, at any time, it is anticipatedtherewill be indemnitybenefits paid, theclaimshallbetransferredto an indemnityclaimtype. c.) If the medical -only claim remainsopen at 180 days, the claim I
hall be converted to an indemnity claim type, unless there is documentationshowingthatmedicaltreatmentwillbeendingand the claimantwill be dischargedfrom care within the next 30 days, or the claimant is only seeking treatment for a blood -borne pathogen exposure protocol.
C. Communication
1. Telephone Inquiries
Return calls shall be made within 1 working day of the original telephone inquiry. All documentation shall reflect these efforts.
2. Incoming Correspondence
All correspondence received shall be clearly stamped with the date of receipt.
3. Return Correspondence
All correspondencerequiringa written responseshall have such response completed and transmitted within 5 working days of receipt.
4. Ongoing Claimant Contact
Oncasesinvolvingunrepresentedinjuredworkerswhoareoffwork, telephone contact shall be made at a minimum of once every 30 days and within 3 working days after dischargefrom the hospital or outpatientfacility following a surgical procedure. This is in addition to nurse case management involvement on claims where nurse case managers are assigned.
D. Fiscal Handling
Agreementwith SedgwickClaimsManagementServices, Inc /ExhibitD CSAC-EIAClaimAdministration Guidelines Page 2
Rev. 07- 01- 18
1. Fiscal handlingfor indemnitybenefits on active cases shall be balanced with appropriate file documentation on a semi-annual basis and prior to sending a benefit terminationnotice to verify that statutory benefits are paid appropriately. Balancing is defined as, an accountingof theperiodsandamountsdue in comparisonwith what was actually paid".
2. In cases of multiple losses with the same person, payments shall be made on the appropriate claim file.
E. Medicare Reporting
Mandatoryreportingto the Centerfor MedicaidServices (CMS) shallbe completeddirectlyorthrougha reportingagentin compliancewith Section 111of the Medicare Medicaid and SCHIP Extension Act of2007 (" MMSEA").
Medicare eligibility shall be documented in the claim file at time of settlement evaluation.
II. CLAIM CREATION
A. Three Point Contact
Three-point contact shall be conductedon all claims with the non - represented injured worker, employer representative and treating physician within3 workingdaysof receiptofthe claimbythe third -partyadministrator or self-administered entity. If a nurse case manager is assigned to the claim, initial physician contact may be conductedby either the claims examiner or the nurse case manager. This initial contact should be substantiveand clearlydocumentedin the claimfile. In the event a party is non - responsive, there shall be evidence of at least three documented attempts to reach the individual.
B. compensability
1. The initialcompensabilitydetermination (acceptclaim, deny claimor delayacceptancependingtheresultsofadditionalinvestigation) and the reasons for such a determination shall be made and documented in the file within 14 calendar days of the filing of the claim with the employer. In the event the claim is not received by the third -party administrator or self-administeredentity within 14 calendar days of the filing of the claimwith the employer, the third -party administrator or self-administered entity shall make the initial compensability determination within 7 calendar days of receipt of the claim.
2. Delay of benefit lettersshall be mailed in compliancewith the Division of Workers' Compensation ( DWC) guidelines. In the event the employerdoes not providenotice of lost time to the third -party Agreement with SedgwickClaimsManagementServices, Inc /ExhibitD CSAC-EIAClaim Administration Guidelines Page 3
Rev. 07- 01- 18
administratoror self-administeredentitytimely to comply with DWC guidelines, the third -party administratoror self-administeredentity shall mail the benefit letters within 7 calendar days of notification.
3. The final compensabilitydeterminationshall be made by the claims examiner or supervisor within 90 calendar days of employer receipt of the claim form.
C. AOE/ COE Investigation
If a decisionis madeto delaybenefitson a claim, anAOE/COEinvestigation shall be initiated within 3 working days of the decision to delay. This may include, but is not limited to, assigning out for witness/injured worker statements, initiatingthe W E/AME process, requestingmedical records, etc.
D. Reserves
1. Usingthe informationavailableat claimfileset up, an initialreserve shall be established for the most probable case value.
2. The initial reserve shall be electronically posted to the claim within 14 calendar days of receipt of the claim.
E. Indexing
All claims shall be reported to the Index Bureau at time of initial set up and re - indexed on an as needed basis thereafter. Blood borne pathogen exposure claims are an exception to this requirement.
The PIA maintains membership with the Index Bureau that members can access.
I11. CLAIM HANDLING — TECHNICAL
A. Payments
1. InitialTemporaryand PermanentDisabilityIndemnityPayment a. The initial indemnitypaymentshall be issued to the injured worker within 14 calendar days of knowledge of the injury and disability. In the event the third -party administrator or self- administered entity is not notified of the injury and disability within 14 calendar days of the employer' s knowledge, the Agreement with SedgwickClaimsManagementServices, Inc /ExhibitD CSAC-EIAClaim Administration Guidelines Page 4
Rev. 07- 01- 18
third -partyadministratororself-administeredentityshallmake payment within 7 calendar days of notification. Initial permanentdisabilitypaymentsshall be issuedwithin 14
calendar days after the date of last payment of temporary disability. Effective 1/1/2013, permanent disability payments shall be issued upon approval of an Award pursuant to Labor Code Section 4650( b)( 2). Prior to a PD Award, advances may be due if the employer has not offered the employee a position paying at least 85% of their wages and compensation at time of injuryor the employeeis not employedin a positionpaying at least 100% of their wages and compensation at time of ury. This shall not apply with salary continuation.
b. TheproperlycompletedDWCBenefitNoticeshallbe mailed
to the employee within 14 calendar days of the first day of disability. In the eventthe third -partyadministratoror self- administeredentity is not notifiedof the first day of disability until after 14 calendar days, the DWC Benefit Notice shall be mailed within 7 calendar days of notification.
c. Self-imposed penalty shall be paid on late payments in accordance with Section III. A. 7 of this document.
d. Overpayments shall be identified and reimbursed timely where appropriate. The third -party administrator or seif- administeredentityshall requestreimbursementof overpaid funds from the party that received the funds. If necessary, a credit shall be sought as part of any resolution of the claim.
2. SubsequentTemporaryand PermanentDisabilityPayments
a. Eligibilityfor indemnitypaymentssubsequentto the first paymentshall be verified, exceptfor establishedlong-term disability.
b. Ongoing' indemnitypaymentsshallbe paidinaccordancewith Labor Code Section 4650( c).
c. Subsequent DWC benefit notices shall be issued in
accordance with CCR 9812.
d. Self-imposed penalty shall be paid on late payments in accordance with Section III. A. 7 of this document.
3. Final Temporaryand PermanentDisabilityPayments
Agreement with SedgwickClaimsManagementServices, Inc /ExhibitD CSAC-EIACIaim Administration Guidelines Page 5
Rev. 0, - 01- 18
All final indemnity paymentsshall be issued timely.
The appropriate DWC benefit
accordance with CCR 9812.
notices shall be issued in
c. Self-imposed penalty shall be paid on late payments in accordance with Section III. A. 7. of this document.
4. Award Payments
a. The claim file shall reflect demonstrated efforts to initiate/ batch payments on undisputed Awards,
Commutations, or Compromise and Release agreements
within 10 working days following receipt of the appropriate document, unless the Award indicates payment is due sooner. b. For all claims in the primary workers' compensation program PWC) and/or excess reportable claims, copies of all Awards shall be providedto the Authorityat time of payment.
5. Medical Payments
a. Medical treatment billings ( physician, pharmacy, hospital, physiotherapist, etc.) shall be reviewed for correctness, approvedfor paymentand paidwithin 60 days of receipt.
b. Themedicalprovidershallbenotifiedinwritingwithin30days of receipt of an itemized bill if a medical bill is contested, denied or incomplete.
c. A bill review process should be utilized whenever possible.
Thereshouldbe participationina PPOand/or MPNwhenever
possible.
6. Injured Worker Reimbursement Expense
a. Reimbursements to injured workers shall be issued within 15 workingdaysofthe receiptofthe claimfor reimbursement.
b. Advance travel expense payments shall be issued to the injuredworker10workingdays priorto the anticipateddateof travel.
7. Penalties
Agreement with SedgwickClaimsManagementServices, Inc /ExhibitD CSAC-EIAClaim Administration Guidelines Page 6
Rev. 07- 01- 18
a. Penalties shall be coded so as to be identified as a penalty payment.
b. If the Member utilizes a third -party administrator, the Member shall be advised of the assessment of any penalty for delayed paymentandthe reasonthereof, andthe administrator's plans for paymentof suchpenalty, ona monthlybasis.
c. Ifthe Member utilizesathird-party administrator, the Member, in their contract with the administrator, shall specify who is responsible for specific penalties.
B. Medical Treatment
1. EachMembershall have in placea UtilizationReviewprocessas set forth in Labor Code Section 4610.
2. Disputes regarding utilization review determinations shall be resolvedusingthe IndependentMedicalReviewprocesssetforthin Labor Code Section 4610. 5.
3. Nurse case managers shall be utilized where appropriate. Rationale for assignment and continued necessityshall be documented in the claim notes at each regular diary review.
4. If enrolled in a Medical Provider Network, the network shall be utilized whenever appropriate.
C. Apportionment
1. Investigation into the existence of apportionment shall be documented.
2. If potentialapportionmentis identified, all effortsto reduceexposure shall be pursued.
D. Disability Management
1. The third -party administratoror self-administeredentityshallwork proactivelytoobtainworkrestrictionsand/or a releaseto fulldutyon all cases. The TPA or self- administered entity shall notify a designated Member representative immediately upon receipt of temporaryworkrestrictionsora releasetofullduty, andworkclosely with the Member to establish a return to work as soon as possible.
2. Thethird -partyadministratororself-administeredentityshallnotifya designated Member representative immediately upon receipt of an Agreement with SedgwickClaimsManagementServices, Inc /ExhibitD CSAC-EIAClaim Administration Guidelines Page 7
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employee's permanentwork restrictionsso that the Membercan determinethe availabilityof alternative, modifiedor regularwork.
3. If there is no response within 20 calendar days, the third -party administrator or self-administered entity shall follow up with the designated Member representative.
4. Membersshall have in place a process for complyingwith laws preventing disability discrimination, including Government Code Section 12926.1 which requires an interactive process with the injuredworker when addressinga return to work particularlywith permanent work restrictions.
5. Third -partyadministratorsor self-administeredclaimsprofessional shall cooperate with members to the fullest extent, in providing medical and other information the member deems necessary for the member to meet its obligations under federal and state disability laws.
E. Supplemental Job Displacement Benefits
1. Supplemental Job Displacement Benefits — Dates of injury on or after 1/1/04 and before 1/1/13: Benefits pursuant to Labor Code Section 4658.5 shall be timely provided. Dates of injury on or after 1/1/13:
Benefitspursuantto LaborCode4658.7 shallbetimelyprovided.
2. Thethird -partyadministratoror self-administeredentityshallsecure the prompt conclusion of SJDB.
F. Reserving
1. Reserves shall be reviewed at regular diary and at time of any significant event, e.g., surgery, P&S/MMI, return to work, etc., and adjusted accordingly. This review shall be documented in the file regardless of whether a reserve change was made. Where the SIP modeldoesnot apply, claimsshallbe reservedforthe mostprobable value.
2. Indemnityreservesshallreflectactualtemporarydisabilityindemnity exposure with 4850 differential listed separately.
3. Permanentdisability indemnityexposureshall include life pension reserve if appropriate.
4. Future medical claims shall be reserved in compliance with CCR 15300 ( b)( 4) allowing adjustmentfor reductionsin the approved Agreementwith SedgwickClaimsManagementServices, Inc /ExhibitD CSAC-EIAClaimAdministration Guidelines Page 8
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medical fee schedule, undisputed utilization review, medically documented non - recurring treatment costs and medically documented reductions in life expectancy.
5. Allocated expense reserves shall include medical cost containment, legal, investigation, copy serviceandother relatedfees.
6. A reserve worksheet shall be utilized and/or detailed rationale substantiatingreservelevelsshallbedocumentedwithintheclaim file.
G. Resolution of Claim
1. Within 10 workingdays of receivingmedicalinformationindicating that a claim can be finalized, the claims examiner shall begin appropriate action to finalize the claim.
2. Followup finalizationeffortsshallcontinueandbe documentedat regulardiary reviewsuntil resolutionis complete.
3. Settlement value shall be documented appropriately utilizing all relevant information.
4. Where settlement includes resolution of future medical for a Medicare beneficiary or an expected Medicare beneficiary, the settlement shall document the strategy to protect Medicare' s secondary payor status.
5. Pursuant to CCR15400.2, claim files with awards for future benefits shall be reviewed for administrative closure two years after the last provision of benefits.
H. Settlement Authority
1. No agreement shall be authorized involving liability, or potentia I liabilityIof the Authoritywithoutthe advancewrittenconsentof the Authority. The member shall be notified of any settlement request submitted to the EIA.
2. The third -partyadministratorshallobtainthe Member's authorization on all settlements or stipulations in excess of the settlement authority providedin any provisionof the individualcontractbetweenthe Member and the claims administrator.
3. Proof of settlement authorization( s) shall be maintained in the claim file.
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IV. LITIGATED CASES
The third -party administratoror self-administeredentityshall establishwritten guidelinesforthehandlingoflitigatedcases. Theguidelinesshould, ataminimum, includethepointsbelow, whichmaybeadoptedandincorporatedby referenceas the guidelines".
1. The third -party administrator or self- administered entity shall promptlyinitiate investigationof issuesidentifiedas materialto potential litigation. The Member shall be alerted to the need for in- house investigation, or the need for a contract investigator who is acceptable to the Member. The Member shall be kept informed on the scope and results of investigations.
2. The third -party administratoror self-administeredentity shall, in consultation with the Member, assign defense counsel from a list approved by the Member. Initial referral and ongoing litigation management shall be timely and appropriate. The third -party administratoror self-administeredentity shall maintain control of the ongoing claim activities.
3. Settlementproposalsdirectedto theMembershallbeforwardedby the third -party administrator, self-administered entity or defense counsel in a concise and clear written form with a reasoned recommendation. Settlement proposals shall be presented to the Member as directed so as to insure receipt in sufficient time to process the proposal.
4. Knowledgeable Member personnel . shall be involved in the preparationfor medicalexaminationsandtrial, whenappropriateor deemednecessarybytheMembersothatall materialevidenceand witnesses are utilized to obtain a favorable result for the defense.
5. Thethird -partyadministratoror self-administeredentityshallcomply with any reporting requirementof the Member.
V. SUBROGATION
1. In all cases where athird- party (other than a Member employee or agent) is responsible for the injury to the employee, attempts to obtaininformationregardingtheidentityofthe responsiblepartyshall be made within 14 calendar days of recognition of subrogation potential.
2. Once identified, the third -party shall be contactedwithin 14calendar days. with notification of the Member's right to subrogation and the recovery of certain claim expenses.
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3. If the third -partyis a governmentalentity, a claimshallbe filedwith the governingboard (or StateBoardof Controlas to Stateentities) within 6 months of the injury or notice of the injury. If the third -party is a non -governmentalentity, a complaintshallbefiledin civilcourt within2 yearsin orderto preservethe statuteof limitations.
4. Periodic contact shall be made with the responsible party and/or insurerto providenotificationoftheamountoftheestimatedrecovery to which the Member shall be entitled.
5. If the injured worker brings a civil action against the party responsible for theinjury, theclaimsadministratorshallconsultwiththe Member about the value of the subrogation claim and other considerations.
Upon Member authorization, subrogation counsel shall be assigned to file a Lien or a Complaint in Intervention in the civil action.
6. Whenever practical, the claims administrator shall aggressively pursue recovery in any subrogation claim. They should attempt to maximizethe recoveryfor benefitspaid, and asserta credit against the injured worker's net recovery for future benefit payments.
7. Member ( and EIA if applicable) approval is required to waive pursuit of subrogation or agree to a settlement of a third -party recovery. This approval shall be documented in the claim file. In cases of self- administered entities, a process shall be documented noting the authoritylevelswithinthe memberorganizationto waivepursuitof subrogation or agree to a settlement of a third -party recovery.
VI. EXCESS COVERAGE
A. Claims meeting the definition of reportable excess workers' compensation claimsas definedby the Memorandumof CoverageConditionsSection shallbe reportedto the Authoritywithin5 workingdaysof the dayon which it is known the criterion is met. Utilize the Excess Workers' Compensation First Report Form available through the EIA website.
B. Subsequent reports shall be transmitted to the Authority on a quarterly basis on all indemnityclaimsandon asemi-annualbasison all futuremedical claims or sooner if claim activity warrants, or at such other intervals as requestedby the Authority, in accordancewith Underwritingand Claims Administration Standards. Utilize the Excess Workers' Compensation Status Report Form available through the EIA website, or a comparable formto be approvedby the Authority.
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C. Reimbursement requests shall be submitted in accordance with the Authority's reportingandreimbursementproceduresonaquarterlyorsemi- annual basis depending on claims payment activity. Utilize the Excess Workers' Compensation Claim Reporting and ReimbursementProcedures available through the EIA website.
D. A closingreportwith a copyofany settlementdocumentsnotpreviously sent shall be sent to the Authority.
Followingis the historyof prioramendmentsto this document:
Amended: March 4, 1988
Amended: October 7, 1988
Amended: October 6, 1995
Amended: October 1, 1999
Amended: June 6, 2003
Amended: March 2, 2007
Amended: July 1, 2009
Amended: July 1, 2011
Amended: March 2, 2012
Amended: October 4, 2013
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