CITY OF SIMI VALLEY
MEMORANDUM
A
pril 22, 2024
TO
: City Council
Board of Directors, Ventura County Waterworks District No. 8 F
ROM: Office of the City Manager
SUBJECT: CONSIDERATION OF A CONTRACT WITH INNOVATIVE CLAIM SOLUTIONS FOR WORKERS’ COMPENSATION THIRD-P ARTY
CLAIMS ADMINISTRATION AND ASSOCIATED POSITION
CHANGE AND AUTHORIZE THE CITY MANAGER TO EXECUTE
ALL NECESSARY DOCUMENTATION
STAFF RECOMMENDATION
I
t is recommended that the City Council a pprove a five- year Professional Services Agreement with Innovative Claim Solutions (ICS) (page 4) for Third Party Workers’ Compensation Claims Administration Services (TPA); April 22, 2024 , through April 22, 2029; for an amount not-to-exceed $590,646, plus any managed care fees and authorize the City Manager to execute all necessary documentation.
BACKGROUND AND OVERVIEW
T
he City is a self-insured entity that has been self-administered for the purpose of managing and adjusting workers’ compensation claims. The City now desires to utilize the services of a Third-Party Claims Administrator (TPA) to adjust workers’ compensation claims. The City has considered the utilization of a TPA in the past due to the specialized nature of claims administration , the constantly changing legal landscape, and the increasing complexity of claims. With the recent retirement of the City’s Workers’ Compensation Supervisor in January 2024, the City felt it was again a good time to explore the applicability of TPA services. As a result of the City’s review, and the favorable bids recei ved from potential contractors, it was determined that a change would result in financial savings for the City and the potential for improved claims handling. Therefore, staff recommends that the City Council approve this change.
FINDINGS AND ALTERNATIVES
D
ue to the volume of work and complexity involved with administering workers’ compensation claims, which includes claim handling, investigations, litigation defense , and medical management, most cities and public agencies utilize an outside third- party claims administrator (TPA) to assist in managing the workers’ compensation program.
AGENDA ITEM NO.
Consent (2)
2 TPA services for workers’ compensation consist of the administration and adjustment of tracking, controlling, and resolving claims for injuries to City employees occurring on the job. This may include but is not limited to, the payment of expenses (medical, legal, temporary and permanent disability payments, and future medical payments), creation of claim files, investigations, litigation coordination, effective return- to-work programs and procedures, and claims resolution and settlement.
In January 2024, a Request for Proposal s (RFP) was issued for workers’ compensation TPA services. Following the RFP submission period, staff reviewed three written qualifying proposals and selected Innovative Claim Solutions (ICS), based on pricing, experience, and qualifications. In addition to claims administration services, ICS will provide a robust system to track claim activity, preserve records, track reserves, and provide loss data to the City’s auditors and the City’s actuary.
The proposed cost of the five-year agreement with ICS totals $590,646, which includes a one-time conversion fee of $15,000 for the transfer of existing claim records. The fees for each year of the agreement have reasonable increases of 3.6% on average. The fees will be paid over the course of the five years in monthly installments. There will be a transition period of approximately sixty (60) days to transfer claim records to ICS.
Summary of TPA Fees
TPA Fees Percent Increase
Year 1 $107,580
Year 2 $110,283 2.51%
Year 3 $114,654 3.96%
Year 4 $119,200 3.96%
Year 5 $123,929 3.97%
Conversion Fee $15,000
Total $590,646
Average $115,129 3.60%
In addition to contracting with ICS, the proposal includes unfunding the Workers’ Compensation Supervisor position, which was vacated due to retirement.
The current annual cost for the Workers’ Compensation Supervisor is $150,851. With the elimination of this position and the addition of the ICS contract, the City would recognize a cost savings of over $163,600 over the five-year proposed contract.
Rather than enter into the contract with ICS and make the associated position elimination, the City could stay self -administered for the administration of workers’ compensation claims. To take advantage of cost savings and process workers' compensation claims more efficiently, staff recommends approval of the position change and entering into a contract ICS for claims services.
The following alternatives are available to the City Council:
3 1. Approve the five- year professional services agreement with Innovative Claim Solutions (ICS) for an amount not -to-exceed $590,646 for Third- Party Claims Administration services in conjunction with the City’s workers’ compensation program and and authorize the City Manager to execute all necessary documentation;.
2. Make no changes and the City will stay self-administered for the management and adjustment of workers’ compensation claims and staffing will remain unchanged;
3. Provide staff with other direction.
Staff recommends Alternative No. 1.
SUGGESTED CITY COUNCIL MOTION
I move to authorize the approval of a five- year professional services agreement with Innovative Claim Solutions (ICS) for an amount not -to-exceed $590,646 for Third- Party Claims Administration services in conjunction with the City’s workers ’ compensation program and authorize the City Manager to execute all necessary documentation..
SUMMARY
In summary, a Third- Party Administrator (TPA) will provide dedicated resources to improve the management of the City’s workers’ compensation program, w ith full transparency.
____________________________________
Jennifer Gutierres
Deputy Human Resources Director
Prepared by: Trevor Earle, Risk Manager
INDEX Page
ICS Agreement ................................................................................. 4 City of Simi Valley
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AGREEMENT
NO. 3240134
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
THE CITY OF SIMI VALLEY AND
INNOVATIVE CLAIM SOLUTIONS (ICS)
This AGREEMENT is entered into this 22nd day of April 2024 by and between the CITY OF SIMI VALLEY, a municipa l corporation and general law ci ty (“CITY”) and Innovative Claim Solutions (ICS), a California Corporation (“CONSULTANT”).
1. CONSIDERATION.
A. As partial consideration, CON SULTANT agrees to perform the w ork listed in the SCOPE OF SERVICES listed in the attached Exhibit “A;” B. As additional consideration, CONSULTANT and CITY agree to ab ide by the terms and conditions contained in this Agreement;
C. As additional consideration, CITY agrees to pay CONSULTANT a sum not to exceed five hundred ninety thousand six hundred forty-six an d no/100 Dollars, ($590,646) for CONSULTANT’s services and will be bille d on the rate and basis set forth in Exhibit “B”, which is incorporated by reference.
2. SCOPE OF SERVICES.
A. CONSULTANT will perform services listed in the attached Exhi bit “A,” which is incorporated by reference.
B. CONSULTANT will, in a profe ssional manner, furnish all of the labor, technical, administrative, professional and other personnel, all supplies and materials, equipment, printing, v ehicles, transportation, offic e space and facilities, and all tests, testing and analyses, calculation, and all other means whatsoever, except as herein otherwise expressly specified to be furnished by CITY, necessary or proper to perform and complete the work and provide the professional services required of CONSULTANT by this Agreement.
3. PERFORMANCE STANDARDS. While performing this Agreement, CONSULTANT will use the appropriate generally accepted professional standards of practice existing at the time of performance utilized by persons engaged in providin g similar services. CITY will continuously monitor CONSUL TANT’s services. CITY will notify CONSULTANT of any deficiencies and CONSULTANT w ill have fifteen (15) days aft er such notification to cure any shortcomings to CITY’s satisfaction. Costs associated with curing the deficiencies will be borne by CONSULTANT.
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4. PAYMENTS. For CITY to pay CONSULTANT as specified by this Agreement, CONSULTANT must submit a monthly invoice to CITY which lists the services provided for the period referenced on the invoice.
5. NON-APPROPRIATION OF FUNDS. Payments due and payable to CONSULTANT for current services are withi n the current budget and within a n available, unexhausted and unencumbered appropriation of the CITY. In the event the CITY has not appropriated sufficient funds for payment of CONSULTANT services beyond the current fiscal year, this Agreement will cover only those costs incurred up to the c onclusion of the current fiscal year.
6. ADDITIONAL WORK.
A. CITY’s City Manager, or designee, (“Manager”) may determine, at the Manager’s sole discretion that CONSULTANT must perform additional work (“Additional Work”) to complete the Scope of Work. If Additiona l Work is needed, the Manager will give written authorization to CONSULTA NT to perform such Additional Work.
B. If CONSULTANT believes Additional Work is needed to complete the Scope of Work, CONSULTANT will provi de the Manager with written notif ication that contains a specific descr iption of the proposed Additional Work, reasons for such Additional Work, and a detailed proposal regarding cost.
7. FAMILIARITY WITH WORK.
A. By executing this Agreemen t, CONSULTANT agrees that it has:
i. Carefully investigated and c onsidered the scope of services to be performed;
ii. Carefully considered how the services should be performed; and
iii. Understands the facilities, difficulties, and restrictions attending performance of the services under this Agreement.
B. If services involve work upon any site, CONSULTANT agrees th at CONSULTANT has or will investigate the site and is or will be f ully acquainted with the conditions t here existing, before commencin g the services hereunder. Should CONSULTANT discover any latent or unknown conditions that may materially affect the performance of the services, CONSULTANT will immediately inform CITY of such fact and will n ot proceed except at CONSULTANT’s o wn risk until written instructi ons are received from CITY.
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8. TERM. The Parties intend that the te rm of this Agreement be effective from April 22, 2024and will remain in effect for five (5) years until April 22, 2029.
9. TIME FOR PERFORMANCE.
A. CONSULTANT will not perform a ny work under this Agreement until:
i. CONSULTANT furnishes proof of insurance as required under Section 23 of this Agreement; and
ii. CITY gives CONSULTANT a written notice to proceed.
B. Should CONSULTANT begin work o n any phase in advance of rece iving written authorization to proceed, any such professional service s are at CONSULTANT’s own risk.
10. TIME EXTENSIONS . Should CONSULTANT be delayed by causes beyond CONSULTANT’s control, CITY may gr ant a time extension for the c ompletion of the contracted services. If delay occurs, CONSULTANT must notify the Manager within forty- eight hours (48 hours), in writing, of the cause and the extent of the delay and how such delay interferes with the Agreement’s schedule. The Manager will extend the completion time, when appropriate, for the completion of the contracted services.
11. CONSISTENCY. In interpreting this Agreement and resolving any ambiguities, t h e main body of this Agreement takes precedence over the attached Exhibits; this Agreement supersedes any conflicting provisions.
12. CHANGES. CITY may order changes in the services within the general scope of this Agreement, consisting of additions, deletions, or other revisio ns, and the contract sum and the contract time will be adjus ted accordingly. All such changes must be authorized in writing, executed by CONSULTANT and CITY. The cost or credit to CITY resulting from changes in the services will be determined in accordance with written agreement between the parties.
13. TAXPAYER IDENTIFICATION NUMBER. CONSULTANT will provide CITY with a Taxpayer Identification Number.
14. PERMITS AND LICENSES . CONSULTANT, at its sole expense, will obtain and maintain during the term of this Agreement, all necessary permi ts, licenses, and certificates that may be require d in connection with the perfor mance of services under this Agreement.
15. WAIVER. CITY’s review or acceptance of, or payment for, work product prepared by CONSULTANT under this Agreement will not be construed to operate as a waiver of any rights CITY may have under this Agreement or of any cause of ac tion arising from CONSULTANT’s performance. A waiver by CITY of any breach of any term, covenant, or 6 City of Simi Valley
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condition contained in this Agr eement will not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or c ondition contained in this Agreement, whether of the same or different character.
16. TERMINATION.
A. Except as otherwise provided, CITY may terminate this Agreem ent at any time with or without cause.
B. CONSULTANT may terminate this Agreement at any time with CIT Y’s mutual consent. Notice will be in writing at least ninety (90) days before the effective termination date.
C. Upon receiving a termination notice, CONSULTANT will immedia tely cease performance under this Agreement unless otherwise provided in t he termination notice. Except as otherwise provided in the termination notice, any additional work performed by CONSULTANT after receiving a termination notice will be performed at CONSULTANT'’ own cost; CITY will not be obligated to compensate CONSULTANT for such work.
D. Should termination occur, all finished or unfinished documen ts, data, studies, surveys, drawings, maps, reports and other materials prepared by CONSULTANT will, at CITY’s option, become CITY’s property, and CONSULTANT will receive just and equitable compensation for any work satisfactorily completed up to the effective date of notice of termination, not to exceed the total costs under Section 1(C).
E. Should termination occur within 30 months from the date of t he signed agreement, the CITY agrees to pay a fee of $7,500 for the date transfer to a new entity.
F. Should the Agreement be term inated pursuant to this Section, CITY may procure on its own terms services similar to those terminated.
G. By executing this document, CONSULTANT waives any and all cl aims for damages that might otherwise aris e from CITY’s termination unde r this Section.
17. OWNERSHIP OF DOCUMENTS; EXCEPTIONS; WARRANTY. Except as otherwise provided below, all documents, data, studies, drawings, maps, models, photographs and reports prepared by CONSULTANT (collectively, “Documents”) under this Agreement are CITY’s property. CONSULTANT may retain copies of such Documents as desired but will deliver all original materials to CITY upon CITY’s written notice. CITY agrees that use of CONSULTANT’s completed work pr oduct, for purposes other than identified in this Agreement, or use of incomplete work product, is at CITY’s own risk. CONSULTANT warrants that all Documents it drafts and completes pursuant to this Agreement 7 City of Simi Valley
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constitutes original work. Specifically, CONSULTANT understands and agrees that use of artificial intelligence (AI) t ools including, without limitation, ChatGPT, Microsoft’s Bing Chat, Google’s Bard, and Meta’s LLaMA (Large Language Model Met a AI), in the performance of this Agreement does not constitute an original work, i.e., submitting Documents generated by such AI tools to CITY and representing i t as CONSULTANT’s original work constitutes a material breach of this Agreement, constitutes a false claim, and may also violate applicable i ntellectual property right law s including, without limitation, United States Copyright Law. Accordingly, and notwithstanding any other provision of this Agreement as to ownership, CITY specifically rejects ownership of such Documents. CONSULTANT is required to indemnify and defend CITY to the fullest extent allowed by applicable law should it violate this Section.
18. SECURITY AND PRIVACY RULES.
A. This Agreement is executed pur suant to the requirements of t he Security Regulations promulgated under the Health Insurance Portability and Accountability Act of 1996 (Security Rule) found at 45. C.F.R. Part 164.
B. CONSULTANT agrees to assume the following obligations regard ing electronic Protected Health Information (e-PHI):
i. CONSULTANT agrees to implement administrative, physical, and technical safeguards that reasonab ly and appropriately protect the confidentiality, integrity, and av ailability of e-PHI that it c reates, receives, maintains or transmits on behalf of the CITY, if any.
ii. CONSULTANT will ensure that any agent, including a subcontr actor, to whom it provides e-PHI that was created, received, maintained, or transmitted on behalf of the CITY agrees to implement reasonabl e and appropriate safeguards to prot ect the confidentiality, security and integrity of e-PHI.
iii. CONSULTANT agrees to alert the City, through the Manager, of any security incident (as defined by HIPPAA Security Rule) of which it becomes aware and the steps it has taken to mitigate any potent ial security compromise that may have occurred and to provide a report to the Manager of any loss of data or other information system compromise as a result of the incident.
iv. CONSULTANT authorizes termi nation of this Agreement if City reasonably determines that CONSULTANT has violated a material term of this Agreement.
C. CONSULTANT must comply with privacy regulations pursuant to Title 1 of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), for the protection and confidential handling of patients and their records. This 8 City of Simi Valley
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pertains to all forms of Patient Health Information, including paper, oral, and electronic, etc. Furthermore, only the minimum health informati on necessary to conduct business is to be used or shared. In addition:
i. CONSULTANT agrees to notify the CITY, via the Manager, when a breach of PHI is discovered;
ii. CONSULTANT agrees to the obligation that it must report any non- compliance of HIPAA by the City;
iii. CONSULTANT authorizes termination of the contractual relat ionship with the CITY if the CITY reasonably determines that the CONSULTANT has violated a material term of this Agreement.
iv. CONSULTANT authorizes termination of the contractual relationship between CONSULTANT and the CI TY, if the city reasonably determines that the CONSULTANT has violated a material term of the Agreement.
v. The services provided by CONSULTANT under this Agreement are also protected by California law including, without limitation, medical records of minors whose records are protected from disclosure b y various provisions of California law (including, without limita tion, Welfare and Institutions Code § 827). Accordingly, CONSULTANT agrees that it will use its best efforts to secure all patient records and prevent their disclosure to the extent provided applicable law.
19. PUBLIC RECORDS ACT . The parties acknowledge that CITY is a public entity subject to the Public Records Act (Government Code §§ 7920.000- 7930.215) and that this Agreement, and documents ancillary to this Agreement, must generally be disclosed upon request. However, the Parties agree that patient records d rafted pursuant to the terms of this Agreement are specifically excluded from disclosure under Government Code §§ 7927.700, 7927.705, and 7930.18 5. Accordingly, the Part ies agree that such records will not be released except as otherwise provided by law.
20. PUBLICATION OF DOCUMENTS. Except as necessary for performance of service under this Agreement, no copies, sketches, or graphs of materia ls, including graphic art work, prepared pursuant to this Agreement, will be released by CONSULTANT to any other person or public CITY wit hout CITY’s prior written approv al. All press releases, including graphic display information to be published in newspa pers or magazines, will be approved and distributed solely by CITY, unless otherwise pr ovided by written agreement between the parties.
21. INDEMNIFICATION.
A. CONSULTANT agrees to the following:
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i. Indemnification for Professional Services . CONSULTANT will save harmless and indemnify and at CITY’s request reimburse defense costs for CITY and all its officers, volunteers, employees and representatives fr om and against any and all suits, actions, or claims, of any character whatever, brought for, or on account of, any injuries or damages sustained by any person or property resulting or arising from any negligent or wrongful act, error or omission by CONSULTANT or any of CONSULTANT’s officers, agents, employees, or
representatives, in the performance of this Agreement, except for such loss or damage arising from CITY’s sole negligence or willful misconduct.
ii. Indemnification for other Damages. CONSULTANT indemnifies and holds CITY harmless from and against any claim, action, damages, costs (including, wit hout limitation, attorney’s fees) , injuries, or liability, arising out of this Agreement, or its performance, except for such loss or damage arising from CITY’s sole negligence or willful misconduct. Should CITY be named in any suit, or should any claim be brought against it by suit or otherwise, whether the same be groundless or not, arising out of this Agreement, or its performance,
CONSULTANT will defend CITY (at CITY’s request and with counsel satisfactory to CITY) and will indemnify CITY for any judgment rendered against it or any sums paid out in settlement or otherwise.
B. For purposes of this section “CITY” includes CITY’s officers , officials, employees, agents, representatives, and certified volunteers.
C. It is expressly understood and agreed that the foregoing pro visions will survive termination of this Agreement.
D. The requirements as to the ty pes and limits of insurance cov erage to be maintained by CONSULTANT as required by Section 25, and any approval of said insurance by CITY, are not intended to and will not in any manner limit or qualify the liabilities and obligations otherwise assu med by CONSULTANT pursuant to this Agreement, including, without limitation, to the provisions concerning indemnification.
22. ASSIGNABILITY. This Agreement is for CONSULTANT’s professional services.
CONSULTANT’s attempts to assi gn the benefits or burdens of this Agreement without CITY’s written approval are prohibited and will be null and void.
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23. INDEPENDENT CONTRACTOR. CITY and CONSULTANT agree that CONSULTANT will act as an independent contractor and will have control of all work and the manner in which is it perfo rmed. CONSULTANT will be free to contract for similar service to be performed for other e m p l o y e r s w h i l e u n d e r c o n t r a ct with CITY.
CONSULTANT is not an agent or em ployee of CITY and is not entit led to participate in any pension plan, insurance, bonus or similar benefits CITY pro vides for its employees.
Any provision in this Agreement that may appear to give CITY th e right to direct CONSULTANT as to the details of doing the work or to exercise a measure of control over the work means that CONSULTANT will follow the direction o f the CITY as to end results of the work only.
24. AUDIT OF RECORDS. CONSULTANT will maintain full and accurate records with respect to all services and matte rs covered under this Agreement. CITY will have free access at all reasonable times to such records, and the right t o examine and audit the same and to make transcript therefrom, and to inspect all progr am data, documents, proceedings and activities. CONSULTANT will retain such financial and program service records for at least seven (7) years after termination or final payment under this Agreement.
25. INSURANCE. At consultant’s sole cost and expense, Consultant will procur e and maintain for the duration of the contract insurance against cla ims for injuries to persons or damages to property which may arise from or in connection wi th the performance of the work hereunder by the Consul tant, its agents, representativ es, or employees.
CONSULTANT will not commence work on the Services to be performed, until it submits proof of all insurance coverage requirements.
A. Minimum Scope and Limit of Insurance
Coverage will be at least as broad as:
Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injur y with limits no less than $2,000,000 per occurrence. If a general aggregate limit ap plies, either the general aggregate limit will apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit will be twice the required occurrence limit. Automobile Liability: Insurance Services Office Form Number CA 0001 covering, Code 1 (any auto), or if Consultant has no owned autos, Code 8 (hired) and 9 (non-owned), with limit no less than $1,000,000 per accident for bodily injury and property damage. Workers’ Compensation insurance as required by the State of Ca lifornia, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease. Consultant hereby certifies that it is aware of the provisions of Section 3700 et seq., of the Labor Code which require every employer to be insured against liability for Workers' Compensation. Professional Liability (Errors and Omissions) Insurance approp riate to the Consultant’s profession, with limits no less than $3,000,000 pe r occurrence or claim, and $3,000,000 policy aggregate.
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Cyber Liability Insurance, wit h limits not less than $2,000,000 per occurrence or claim, $2,000,000 aggregate. Coverage will be sufficiently broad to re spond to the duties and obligations as is undertaken by Vendor in this agreement and will include, but not be limited to, claims involving infringement of intellectual property, including but not limited to infringement of copyright, trademark, trade dress, i nvasion of privacy violations, information theft, d amage to or destruction of elec tronic information, release of private information, a lteration of electronic inform ation, extortion and network security. The policy will provide coverage for breach r esponse costs as well as regulatory fines and penalties as well as credit monitoring expenses with limits sufficient to respond to these obligations.
If the Consultant maintains b roader coverage and/or higher limi ts than the minimums shown above, the City requires and will be entitled to the broa der coverage and/or the higher limits maintained by the consultant. Any available insur ance proceeds in excess of the specified minimum limits of insurance and coverage will be available to the City.
B. Other Insurance Provisions - The insurance policies are to contain, or be endorsed to contain, the following provisions:
1. Additional Insured Status
The City of Simi Valley, its Boards, Officers, Agents, Officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Consultant including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the C onsultant’s insurance (at least as broad as ISO Form CG 20 10 11 85 or both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 forms if later revisions used).
D. Primary Coverage
For any claims related to this project/contract, the Consultant ’s insurance coverage will be primary insurance coverage at least as broad as ISO CG 20 01 04 13 as respects the City, its Boards, Officers, Agents, Officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its Boards, Officers, Agents, Officials, employees, and volunteers will be excess of the Consultant’s insurance and will not contribute with it.
E. Notice of Cancellation
Each insurance policy required above will state that coverage will not be canceled, except with notice to the City.
F. Waiver of Subrogation
Consultant hereby grants to City a waiver of any right to subrogation which any insurer of said Consultant may acquire against City by virtue of the payment of any loss under such insurance. Consultant agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation but this provision applies regardless of whether or not the City has received a waiver of subrogat ion endorsement from the insur er. The Workers’ Compensation policy will be endorsed with a waiver of subrogation in favor of the City for all work performed by the Consultant, its employees, agents and subcontractors.
G. Self-Insured Retentions
Self-insured retentions must be declared to and approved by the City. The City may require the Consultant to provide proof of ability to pay losses and related investigations, 12 City of Simi Valley
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claim administration, and defense expenses within the retention. The policy language will provide, or be endorsed to provide, that the self-insured reten tion may be satisfied by either the named insured or City.
H. Acceptability of Insurers
Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best’s rating of no less than A:VII, unless otherwise acceptable to the City.
I. Claims Made Policies
If any of the required policies provide coverage on a claims-made basis:
1. The Retroactive Date must be shown, and this date must be before the execution date of the contract or the beginning of contract work.
2. Insurance must be maintained and evidence of insurance must be provided for at least five (5) y ears after completion of the co ntract of work.
3. If coverage is canceled or non-renewed, and not replaced wit h another claims-made policy form with a Retroactive Date prior to the co ntract effective, or start of work date, the Consultant must purchase extended reporting period coverage for a minimum of five (5) years after completion of contract work.
4. A copy of the claims reporting requirements must be submitte d to the City for review.
J. Verification of Coverage
Consultant will furnish the City with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy lan guage effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of the CGL policy listing all policy endorsements to City befor e work begins. However, failure to obtain the required do cuments prior to the work begi nning will not waive the Consultant’s obligation to provide them. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.
K. Subcontractors
Consultant will require and verify that all subcontractors main tain insurance meeting all the requirements stated herein, and Consultant will ensure that the City is an additional insured on insurance required fr om subcontractors. For CGL cove rage, subcontractors will provide coverage with a form at least as broad as CG 20 38 04 13.
L. Special Risks or Circumstances
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.
26. USE OF SUBCONTRACTORS. CONSULTANT must obtain CITY’s prior written approval to use any consultants while performing any portion of this Agreement. Such approval must approve of the proposed consultant and the terms of compensation.
27. INCIDENTAL TASKS. CONSULTANT will meet with CITY monthly to provide the status on the project, which will include a schedule update and a s h o r t n a r r a t i v e 13 City of Simi Valley
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description of progress during the past month for each major ta sk, a description of the work remaining and a description of the work to be done before the next schedule update.
28. NOTICES. All communications to either party by the other party will be deemed made when received by such party at its respective name and address as follows:
If to CONSULTANT:
If to CITY:
Attention: Dan Greco Attention: Trevor Earle
Innovative Claim Solutions (ICS) City of Simi Valley
P.O. Box 5128 2929 Tapo Can yon Road
San Ramon, CA 94583 Simi Valle y, CA 93063
[email protected] [email protected]
Any such written communications by mail will be conclusively de emed to have been received by the addressee upon deposit thereof in the United St ates Mail, postage prepaid and properly addressed as noted above. In all other ins tances, notices will be deemed given at the time of actual delivery. Changes may be made in the names or addresses of persons to whom not ices are to be given by giving notice in the manner prescribed in this paragraph.
29. CONFLICT OF INTEREST. CONSULTANT will comply with all conflict of interest laws and regulations including, without limitation, CITY’s conflict of interest regulations.
30. SOLICITATION. CONSULTANT maintains and warrants that it has not employed nor retained any company or person, o ther than CONSULTANT’s bona fi de employee, to solicit or secure this Agreement. Further, CONSULTANT warrants that it has not paid nor has it agreed to pay any company or person, other than CONSULTA NT’s bona fide employee, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this A greement. Should CONSULTANT breach or violate this warranty, CITY may rescind this Agreement without liability.
31. THIRD PARTY BENEFICIARIES . This Agreement and every provision herein is generally for the exclusive benefit of CONSULTANT and CITY and not for the benefit of any other party. There will be no incidental or other beneficia ries of any of CONSULTANT’s or CITY’s obligations under this Agreement.
32. INTERPRETATION. This Agreement was drafted in, and will be construed in accordance with the laws of the State of California, and exclusive venue for any action involving this agreement will be in Ventura County.
33. COMPLIANCE WITH LAW. CONSULTANT agrees to comply with all federal, state, and local laws applicable to this Agreement.
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34. ENTIRE AGREEMENT. This Agreement, and its Attachments, sets forth the entire understanding of the parties. T here are no other understandings , terms or other agreements expressed or implied, oral or written. There are two ( 2 ) E x h i b i t s t o t h i s Agreement. This Agreement will bind and inure to the benefit of the parties to this Agreement and any subsequent successors and assigns.
35. RULES OF CONSTRUCTION. Each Party had the opportunity to independently review this Agreement with legal counsel. Accordingly, this Agreement will be construed simply, as a whole, and in accordance with its fair meaning; it will not be interpreted strictly for or against either Party.
36. SEVERABILITY. If any portion of this Agreement is declared by a court of competent jurisdiction to be invalid or unenforceable, then such portion will be deemed modified to the extent necessary in the opinion of the court to render such portion enforceable and, as so modified, such portion and the balance of this Agreement will continue in full force and effect.
37. AUTHORITY/MODIFICATION. The Parties represent and warrant that all necessary action has been taken by the Parties to authorize the undersign ed to execute this Agreement and to engage in the actions described herein. This Agreement may be modified by written amendment. CITY’s executive manager, or designee, may execute any such amendment on behalf of CITY.
38. ACCEPTANCE OF FACSIMILE SIGNATURES. The Parties agree that this Agreement, agreements ancillary to this Agreement, and related documents to be entered into in connection with this Agreement will be considered signed when the signature of a party is delivered by facsimile transmission. Such facsimile signature will be treated in all respects as having the same effect as an original signature.
39. CAPTIONS. The captions of the paragraphs of this Agreement are for convenience of reference only and will not affect the interpretation of this Agreement.
40. TIME IS OF ESSENCE. Time is of the essence for each and every provision of this Agreement.
41. FORCE MAJEURE. Should performance of this Agreement be prevented due to fire, flood, explosion, acts of terrorism, war, embargo, government a ction, civil or military authority, the natural elements, or other similar causes beyond the Parties’ reasonable control, then the Agreement will immediately terminate without obligation of either party to the other.
42. STATEMENT OF EXPERIENCE. By executing this Agreement, CONSULTANT represents that it has demonstr ated trustworthiness and possesses the quality, fitness and capacity to perform the Agreement in a manner satisfactory to CITY. CONSULTANT represents that its financial re sources, surety and insurance e xperience, service experience, completion ability, personnel, current workload, experience in dealing with 15 City of Simi Valley
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private consultants, and experie nce in dealing with public agen cies all suggest that CONSULTANT is capable of performing the proposed contract and has a demonstrated capacity to deal fairly and effectively with and to satisfy a public CITY.
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed the day and year first above written.
Attest: City of Simi Valley, A Municipal Corporation
B y :
Lucy Blanco, City Clerk Fred D. Thomas, Mayor of the City of Simi Valley, California
Approved as to Form: INNOVATIVE CLAIMS SOLUTIONS, INC.
B y :
Algeria R. Ford, City Attorney
Print Name: Click or tap here to enter text.
Approved as to Content: T i t l e : Click or tap here to enter text.
B y :
Brian Paul Gabler, City Manager
Print Name: Click or tap here to enter text.
Title: Click or tap here to enter text.
Johanna Medrano,
Deputy Administrative Services Director/
Budget & Purchasing
Jennifer Gutierres, Deputy Human Resources Director
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EXHIBIT “A”
SCOPE OF WORK
AGREEMENT NO. 3240134
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
THE CITY OF SIMI VALLEY AND
INNOVATIVE CLAIM SOLUTIONS (ICS)
1. Services of Consultant (“Provider”). Provider agrees to perform program development services (“Program”) necessary to provide savings t o the City and full benefits to the employees as required by the Labor Code. These services will include the following:
a. Analyze with personnel of Cit y of Simi Valley need for implementation of procedures to meet requirements of the State of California and the needs of City of Simi Valley.
b. Develop procedures for reporting industrial injuries, medica l referral, personnel-payroll responsibilities in processing industrial injuries and employee consultative services.
c. Provide orientation to City of Simi Valley departments direc tly involving the processing of indu strial cases regarding procedur es, which have been prepared by the Provider.
d. Design all forms necessary f or the efficient operation of the Program. e. Inform City of Simi Valley of the adoption, amendment or repeal of all statutes, rules and regulations and decisions of administra tive agencies, which could directly affect the Program.
f. Provider will attend board m eetings, when requested, to provide status reports on program or claim cases as requested by City o f Simi Valley.
g. Provider will provide virtual quarterly file reviews which will include a written report of all open claims . Provider will also provide semiannual program reviews which will include a written report of all open and closed claims. Claim files to be reviewed will be designated by the City of Simi Valley unless otherwise requested.
h. Provider will provide in-service presentations and/or traini ng on various topics as requested by City of Simi Valley
2. Claims Administration : The Provider agrees to:
a. Administer the Program in fu ll compliance with all the laws, rules and regulations governing the administration of self-insurance pursuant to the Labor Code and City of Simi Valley and PRISM Claim Protocols. 17 City of Simi Valley
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b. Review and process all repor ts of industrial injury or illne ss in accordance with the requirements of the appropriate State Agencies. c. Determine the compensability of injuries and illnesses in accordance with California workers’ compensation laws and decide what benefits, if any, should be rendered or paid in case.
d. Make timely payments of valid claims for compensation, rehabilitation, and other required benefits payable under appli cable insurance laws, together with Al located Loss Adjustment Expense s, out of funds provided by the City of Simi Valley subject to the limitations and requirements of t his Agreement. For the purpose of this Agreement, “Allocated Loss Adjustment Expenses” will be defined as and include all out-of-pocket expense items such as fees for attorneys retained on behalf of City of Simi Valley, expert witness fees, fees for independent medical examinations, witness fees, extraordinary travel expense incu rred by Provider at the reques t of City of Simi Valley, court repor ters’ fees, transcript fees, th e cost of obtaining public records and other similar fees, costs or expen ses associated with the investigat ion, negotiation, and settlement of subrogation on behalf of City of S imi Valley. Allocated Loss Adjustment Expense will include prejudgment interest and other interest penalties. Allocated Lo ss Adjustment Expense will not include any part of the salaries of employees of Provider, its overhead, ordinary travel expen ses, or other normal and ordinar y costs incurred in connection with the services provided under this Agreement or its business as a whole.
e. Arrange and authorize medical examinations to determine the nature and extent of disability.
f. Determine eligibility for te mporary disability compensation, i n coordination with medical advic e, rehabilitation efforts and 48 50 salary continuation.
g. Determine the extent and degree of permanent disability utilizing, as necessary and desirable, any medical sources or advisory bodies available, provided; however, t hat all findings be reported to the designated City representative before any action is taken. h. Effect payment, by either check or voucher, of permanent dis ability compensation and death benefits i n accordance with Advisory Ratings, Findings and Award or settlement agreements.
i. Maintain on each claim current estimates of the future antic ipated costs of all claims, current estimates of the future anticipated costs of all benefits and expenses, i.e., reserves.
j. Establish and maintain, for a minimum of seven (7) years, cl aim files which will be the property of City of Simi Valley.
k. Notify excess insurance carri ers in accordance with policy terms and collect
reimbursements on behalf o f the City of Simi Valley where a loss exceeds the self-insurance retention.
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l. Provider will provide copies of current service agreements, if they exist, but in any event will prov ide a complete list of active providers of service such as medical panel s, legal defense firms, investigative agencies, copy services, court reporters, etc.
m. Provider has no settlement authority. All settlements author ity requests will be made in writing to the City with final authority required in writing from the City of Simi Valley.
3. Medical Management: Provider agrees to arrange the medical c ontrol services necessary to ensure high quality tr eatment for injured employees, and to obtain prompt and complete medical reports necessary to determine the appropriateness of providing benefits. These services will include the following:
a. Establish a panel of physician s specializing in the treatmen t of industrial injuries. This panel will be reviewed by Providers periodically for quality and cost of medical treatment. b. Monitor treatment of injured employees through review of medical reports, copies of which will be sent to City of Simi Valley. c. Work closely with doctors to return employees either to full o r modified duty.
d. Audit all medical bills prior to payment to determine whether they are reasonable, necessary and directly related to the injury or illness. e. Establish standards to determine the physical capacity of th e employee to return to work.
f. Make all necessary arrangements for consultation and examina tions by qualified physicians for the review of the employee’s medica l problem in the event the employee files for disability retirement. g. Administer and process a ll lifetime medical cases.
4. Investigation: Provider agrees to arrange for all claims inv estigative services necessary to conduct a thorough investigation of any claim or d ispute arising out of or related to the Program. These services will include the following:
a. Arrange investigation, with approval from City of Simi Valle y, to confirm whether or not the injury arose out of and occurred dur ing the course and scope of employment.
b. Perform tasks requested by legal counsel when a claim is in litigation. c. Monitor all cases for potential recoveries and arrange for subrogation investigations as necessary.
5. Counseling: Provider agrees to provide consultative services necessary to supply employees with full and complete information and guidance regarding their rights and benefits. These services will include the following:
a. Send an injured employee an acceptance letter explaining wor kers’ compensation benefits.
b. Arrange informal permanent disability ratings.
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c. Identify and solve employee problems arising out of work-inc urred disabilities.
d. Ensure that the return to work or reassignment of injured em ployees to other jobs is consistent wit h the findings of State administ rative agencies.
6. Draft Authority and Issuance:
Provider will have authority to draw upon a trust account (the “Loss Payment Account”) which will be established for the payment of City of Simi Valley claims.
Such authority may be revoked at any time by the City of Simi Valley upon written notice. The Loss Payment Account will be replenished as needed by the City of Simi Valley to an amount equal to cover losses paid. The City o f Simi Valley may review the adequacy of the account a t any time and increase or decrease the account as necessary.
All checks will be accounted for by Provider as on hand, issued , voided, or canceled. Provider will provide a monthly accounting to the Cit y of Simi Valley within fifteen (15) days after t he end of the month for which t he account is given.
The City of Simi Valley will have the responsibility for balancing the Loss Payment Account.
7. Management Information System: Provider agrees to provide statistical reports to assist City of Simi Valley management in monitoring the Program.
These services will include the following:
a. Provide a monthly loss expens e report on or before the tent h (10) working day of each calendar month for the preceding month containing the following information:
Employee’s name, injury date, closing date, department, location, cause of injury, type of injury, reserves and payments.
b. Provide a weekly transaction report by the assigned day of e ach week containing the following information:
Check or voucher number, trans action date, amount, payee, name of employee and claim number.
c. Prepare the Self-Insurer’s A nnual Report required by the Department of Self-Insurance Plans.
d. Will provide the City of Simi Valley’s claims data to the Re porting Agent of the City of Simi Valley’s choice for worker’s compensa tion claims handled under this Agr eement pursuant to claims data reporting required under Section 111 of the Medicare, Medicaid and SCHIP Act of 2007.
e. Provider will provide management information services to Cit y of Simi Valley as agreed upon by both parties, including access to Provider’s claims adjudication c omputer system for each member 20 City of Simi Valley
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district at no extra charge. H ardware and telephone lines will be supplied by the City of Simi Valley.
f. Provider retains sole right of ownership to its programs. Ho wever, City of Simi Valley has a right to the data and Provider will p rovide an up to date disk or tape stored database that, if necessary, can be converted by City of Simi Valley to a format they desire, but in any event will be converted to ASCII, a universal computer language.
8. Litigation Management: Provi der agrees to provide litigation management services on behalf of City of Simi Valley. These services include the following:
a. Retain attorneys from prefe rred panel of City of Simi Valley w h o specialize in the defense of worke rs’ compensation litigation w hen an employee files an application before the Workers’ Compensation Appeals Board. All attorneys retained are subject to the approv al of the City of Simi Valley.
b. Cooperate fully with the attorn ey of the City of Simi Valley or a ny other attorney engaged by the City of Simi Valley.
c. Review attorney bills and atto rney work to ensure that all legal services rendered are reasonable, necessary and accurately billed.
9. Transition Plan.—Provider wil l deploy sufficient senior staff to ensure a smooth, closely coordinated transition, avoiding a disruption of benefits. Provider will act as facilitator in this process to ensure a successful first contract year.
a. Provider will require a level of cooperation from the City for an optimal transition, and will assist in developing transition instructions with the City, as detailed in the transition plan set forth below.
Activity Timeline Responsible
Begin staff recruitment
Recruitment and selection of
staff in-concert with the
City. ICS to prescreen all
potential new hires and
propose only those we feel are
viable candidates
Upon notice of
contract
award
ICS & City
Meetings with City personnel
Develop City’s specific Workers'
Compensation
Operation Standards
Agree to location and retrieval
process of open and
closed claims.
Review City’s exis ting internal forms
and workflow
No later than
60 days prior
to contract
effective date.
ICS & City
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and discuss possible changes.
Discuss process to notify employees
and vendors of
change in TPA
Arrange for transfer of test claims
data, including all
tables and codes
Assist with notification to Self-
Insurance Plans.
Assist with development of transition
instructions to
current TPA
Review existing City Vendor Panel.
Discuss process to open Bank
Account, or discuss
banking options
Discuss and agree on caseload
division amongst
examiners.
Get test data and begin
conversion of test data
ASAP ICS
Finalize and send Transition
instructions to current
administrator that details cut off
of input and new claims, etc
60 days prior
to start
ICS & City
Submit notification to State of
impending change in
administrators.
60 days prior
to start
City
Finalize any recommended
changes to internal forms
and workflow and develop
orientation/ training/introduction
schedule of meetings for
department supervisors or
mana
gers.
Meetings
should take
place
throughout
timeline
ICS & City
Complete test conversion of data
from prior
administrator
ASAP, but no
later than 30
days prior to
start
ICS
Interview and finalize selection of
staff - Hire Staff
30 Days prior
to start
ICS & City
b. In addition to the above transition processes, Provider wil l create a document entitled “City Profile” to confirm all City specific operational procedures and requirements. This document is integrated into Provider’s claims administrative 22 City of Simi Valley
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standards for the City and into Provider’s firm’s policy and procedures. This document is maintained by the Provider’s Unit Manager, updated regularly, and provided to each Provider team member assigned to the City’s program.
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EXHIBIT “B”
SCHEDULE OF FEES
AGREEMENT NO. 3240134
PROFESSIONAL SERVICES AGREEMENT
BETWEEN
THE CITY OF SIMI VALLEY AND
INNOVATIVE CLAIM SOLUTIONS (ICS)
24