Alternative Services Concepts Fee RenewalTILE CITY OF
Dubuque
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TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Alternative Services Concepts (ASC) Fee Renewal -Workers'
Compensation
DATE: December 27, 2007
Personnel Manager Randy Peck is recommending City Council approval of the renewal
rates for Alternative Service Concepts, the City's workers' compensation claims
administrator. Their fee for medical claims increased from $155 to $160 per claimant;
their fee for indemnity claims increased from $715 to $736 per claimant; and the
managed medical stayed at $208. Their per claimant fees for run-in claims will remain
the same. The account administration fee will remain at $3,000. The minimum claims
fee will increase from $22,725 to $24,220. The renewal rates are in effect from
October 1, 2007, through September 30, 2008.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Randy Peck, Personnel Manager
THE CITY OF
DuB E
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Memorandum
December 20, 2007
TO: Michael C. Van Milligen
City Manager
FROM: Randy Peck
Personnel Manager '
SUBJECT: Alternative Service Concepts (ASC) Fee Renewal -Workers' Compensation
I received the renewal rates from Alternative Service Concepts (ASC), our workers'
compensation claims administrator. The following is a comparison between their currents rates:
Current Rate Renewal Rate
Service per Claimant Fee per Claimant Fee Increase/Decrease
Workers' Compensation
• Medical Only $155 $160 +$5
• Indemnity $715 $736 +$21
• Managed Medical Only $208 $208 $0
Run-in Claims
Indemnity $450 $450 $0
• Medical Only- $50 $50 $0
Incident Resorts $40 $40 $0
Catastrophic Claims Time and Expense Time and Expense
Estimated Claims Fee $19,725 $18,720 -$1,105
Account Administration Fee $3,000 .$3,000. $0
Litigation Fee N/A $1,800 +$1,800
($300 Plus Base Fee)
Subrogation Fee N/A $107 $107
(15% of Recovery)
Systems Fee N/A $2,500 $2,500
Maintenance Fee for Claims.
Open after 24 Months $450 $450 $0
Minimum and Deposit Claims Fee $22,725 $24,220 +$1,495
As indicated, ASC has proposed three new fees as part of their renewal. They are as follows:
Litigation Fee
The rate is $200 for each litigated claim, plus the base fee. The average number of
litigated claims over the last three years is six per year for an estimated additional
annual cost of $1,200.
Subrogation Fee
Their proposed fee is 15% of any recovery. Since January 6, 2005, there have been
three recoveries for a total of $710.57. 15% of this amount is $106.59.
Systems Fee
This is an annual $2,500 fee to offset the cost of computer upgrades.
These new fees apply to claims filed after October 1, 2007.
The fee for medical cost management services will increase from 17% of savings to 22% of
savings. I am working with ASC to finalize the terms of the Administrative Services Agreement.
I will present it to you as soon as the document is finalized.
The renewal rates are in effect from October 1, 2007 through September 30, 2008. I
recommend that the renewal rates be approved. The requested action is for the City Council to
pass a motion approving the new administrative services fees submitted by Alternative Service
Concepts.
If you have any questions, please feel free to call.
RP:tlb
alternative Service Concepts, L.L.C.
City of Dubuque, Iowa
October 1, 2007-October 1, 2008
Two-Year Claims Handling
-. .•
• -.
Workers' Compensation
Medical Only 25 $160 $4,000
Indemnity 20 $736 $14,720
Managed Medical Only TBD $208 ---
Litigation fee TBD $200 + base fee
Run-In Claims
Indemnity TBD $450 ---
Medical Only TBD $50 ---
Incident Reports' TBD $ 40 ---
Catastrophic Claims2 TBD Time & Expense ---
Estimated Claims Fee $18,720
Account Administration Fee $3,000
Systems Fee $2500
Minimum & Deposit Claims Fee $24,220
Claims will be handled for two years from the date the loss is reported to asc with
no additional per claim fee. Any claim remaining open after 24 months will be subject
to an annual maintenance fee of $450.00
Notes
ASC will handle the number of claims indicated for the minimum fee. If the fee for the
actual number of claims is more than the minimum & deposit fee, ASC will invoice the
client for the difference.
The account administration fee will be 7.5% of the claims fee or $3,000, whichever is
greater. The administration fee includes:
• Account Setup
1 Recorded in claims system only. Must be specified as "Incident" at time of reporting.
z Any event resulting in IO or more claimants and/or property losses over $50,000 will be treated as a catastrophe.
• New Claim Setup
• Client Meetings (Frequency to be Determined)
• Excess Reporting
• State Reporting
• Storage Fees
At the conclusion of the contract, the following options are available for continued
handling of open claims:
• Negotiated annual fee per claim
• Time and expense at asc's prevailing rates
• Claims returned to client
Subrogation
All parties will automatically be placed on notice if the potential for subrogation exists.
Pursuit of subrogation will be performed at the client's request. Pursuit of recovery fee
is 15% of recovery.
Additional Services and Fees3
Client Data Transmission ................................................................... $295 Per Release
Carrier Data Transmission ................................................................. $400 Per Release
State-Mandated EDI .......................................................................... $3 Per Report/Bill
Computer Compatible Checks & Electronic Transfers .....................At Cost
Data Conversion From Prior Administrator ........................................ At Cost
On-Line Access (One User) ............................................................... No Charge
Additional Users ........................................................................... $60 Per User Per
..................................................................................................... Month
Reports Produced by Client ............................................................... No Charge
Reports Produced by asc .................................................................. $50 Per Copy
Systems Training ............................................................................. T&E ($85 Per Hour)
Customized Programming ................................................................. T&E ($/Hour)
Index Bureau Reporting ..................................................................... $6.25 Per Report
Actuarial Data Requests .................................................................... $50 Per Hour
Travel Over 100 Miles ........................................................................ T&E ($85 Per Hour)
Outside Investigation ........................................................................ T&E ($85 Per Hour)
Medical Cost Mana ement4
ee c e u ing .......................................................................22% of Savings
PPO Usage .............................................................................30% of Savings
Field Medical Case Management ...........................................$68 Per Hour
Invoicing and Payment Terms
Fees will be invoiced annually. Fees are payable upon receipt of the invoice. asc
reserves the right to charge 1'/2% per month or the maximum legal rate on unpaid
balances after 30 days.
Allocated Expenses
Allocated expenses will be charged to the claim file and include fees for:
• Legal services • Professional photographs
• Medical records • Experts' /rehabilitation services
• Index Bureau reporting • Accident reconstruction
3 As required or requested. Most services are optional
° Pricing for additional managed care services is available upon request.
• Architects, contractors
• Police, fire, coroner, weather reports
• Surveillance
• Extraordinary travel at client's request
• Independent medical examinations,
MRIs, etc.
Workers' Compensation Definitions
• Engineers, chemists
• Expert witness statements
• Official documents and transcripts
• Court reporters
• Managed care
Medical Only Claims -Work-related claims that require medical treatment only.
• Subrogation not required
• Investigation sufficient to determine claim type and compensability
• Lost days do not exceed statutory waiting period
• No loss notices, captioned reports, client meetings, or settlement authority required
• Payments do not exceed $2,500
• Two-point contact made
Claims requiring services beyond these guidelines will be classified as Managed
Medical or Indemnity.
Managed Medical Claims -Work-related claims that require medical treatment only,
exceed $2,500 in total payments, and are not indemnity claims.
Indemnity Claims -Work-related claims that involve disability or payment of medical and
other expenses. Claims that require investigation for subrogation and settlement
negotiations.
All claims, regardless of type, will be investigated, evaluated, and adjudicated in
accordance with state statutory requirements and corporate guidelines.