City Council
Report
City Council Meeting: November 14, 2023
Agenda Item: 5.I
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To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department, Risk Management Subject: Award Agreement to Lien On Me, Inc. for Workers’ Compensation Medical Bill Review Services
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
2. Award RFP# 367 to Lien On Me Inc. (Lien On Me) for workers’ compensation medical bill review services for the Finance Department;
3. Authorize the City Manager to negotiate and execute an agreement with Lien On Me, in an amount not to exceed $485,000 over a five-year period, with future year funding contingent on Council budget approval.
Summary
The City has an ongoing need for workers’ compensation medical bill review services.
As part of administering the City’s workers’ compensation claims, staff annually processes approximately 8,200 bills for medical care provided to injured workers. Each medical bill received must be reviewed for compliance and reconciled with the California Division of Workers’ Compensation fee schedule for medical services. With the current agreement for workers’ compensation medical bill review services set to expire, staff solicited proposals in accordance with procurement policies and received responses from ten vendors. A panel of City staff subsequently evaluated each firm’s proposal and determined that Lien On Me was the best qualified vendor. The Evaluation Committee recommends the City pursue a five-year agreement with Lien On Me at a cost of $485,000.
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Discussion
The Risk Management Division is responsible for managing the City’s Workers’ Compensation Program, and in this capacity, ensures that the program operates costeffectively and in compliance with State law and regulations. The bill review service is a critical cost containment component of the program as the State’s fee schedule for medical services is substantially lower than usual and customary fees charged by health care providers. In addition, medical bill reviewers have an ability to reduce the fees even further through Preferred Provider Organizations (PPOs) that the health care providers are contracted with. In FY 2022-23, the workers’ compensation bill review process saved the City $496,431.
Risk Management has historically contracted out workers’ compensation medical bill review services due to its very specialized technical nature which requires a separate bill review system. The contractor is responsible for reviewing and repricing all medical bills submitted to the City in compliance with State mandated timeframes to ensure that duplicate payments are not made and that charges reflect medical services approved by Workers’ Compensation staff. Since 2012, the City has utilized Intermed Cost Containment Services for these services. The contract with Intermed is set to expire on December 12, 2023.
Vendor Selection
Bidder Recommendation
Best Qualified Person/Firm Lien on Me, Inc
Evaluation Criteria Training/credentials/experience, quality of work/technical capabilities, cost, references, and presentation/demonstration.
Municipal Code SMMC 2.24.190
RFPs Received
Accuro Solutions Allied Managed Care, Inc. CostFirst Corp.
Diamond Bill Review EK Health Services Inc. Innovative Claims Strategies InterMed Cost Containment
Services, Inc.
Johnson's Medical Billing Collection
Services
Lien On Me, Inc.
USIS, Inc. dba/AmeriSys
RFP Data
Posted On Posted On
Advertised In
(City Charter & SMMC)
Vendors
Downloaded
Date Publicly
Opened
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08/04/2023 City's Online
Bidding Site Santa Monica Daily Press 28 09/07/2023
Justification to Award
Staff evaluated the RFP submissions from the ten firms and shortlisted three firms for interviews. Based on the evaluation criteria established in the RFP and criteria in SMMC
2.24.190, staff recommends Lien On Me, Inc. as the best qualified firm to provide workers’ compensation medical bill review services based on their extensive experience with workers’ compensation medical bill review services for municipal clients, the quality of their presentation/demonstration, and a competitively priced proposal.
Environmental Review
The award of an agreement for workers’ compensation medical bill review services would have no possibility of significant effect on the environment, and therefore, is exempt pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the Self-Insurance, Workers’ Compensation Fund to award an agreement with Lien On Me Inc. for workers’ compensation medical review bill review services.
Agreement Request
Current Year
Request Amount
Amount for
Future Years
FY 2023-24 Budget
Department Account #
Total Contract
Amount
$49,000 $436,000 74800002.534510 $485,000
Future year funding is contingent on Council budget approval. 4 of 4
Prepared By: Oles Gordeev, Acting Director of Human Resources Approved Forwarded to Council
Attachments:
A. Oaks_Initiative_Form_Signed