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Alternative Services Concepts Fee Renewal_Workers' CompensationDubuque THE CITY ©F ~~ }. Mr~sterpi~ce on the Mississippi r, 2007 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Alternative Service Concepts (ASC) Fee Renewal -Workers' Compensation DATE: September 28, 2009 Personnel Manager Randy Peck is recommending City Council approval of the renewal rates for Alternative Services Concepts (ASC), the City's Worker's Compensation Claims Administrator. Their fee for indemnity claims increased from $750 to $760 per claim, and the minimum claims fee will increase from $23,880 in 2009 to $25,520 in 2010. The reason for the increase in the minimum claims fee is because we anticipate more indemnity claims next year, based upon claims history. This year's agreement contains two new fees. The fees are related to the Medicare, Medicaid and SCHIP Extension Act of 2007 that require the City to report all settlements, judgments, awards or other payments made to Medicare/Medicaid/SCHIP beneficiaries under liability, worker's compensation and no fault insurance. The charges per client for these services are: • $920 - $1,000 -one time implementation/programming fee • $1,920 - $2,000 -annual transmissions/submission fee beginning on the date of first transmission ASC will pass these fees on to us with no additional charges. Total expenses for worker's compensation claims administration services were $27,420 in 2008 and $32,569.14 in 2009. Randy Peck anticipates that the administrative services fee for 2010 will be approximately $36,000, based on the new fee schedule and the new fees associated with the implementation of the Medicare, Medicaid and SCHIP Extension Act of 2007. The renewal rates are in effect from October 1, 2009 through September 30, 2010 I concur with the recommendation and respectfully request Mayor and City Council approval. 1~~~_. Michael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Randy Peck, Personnel Manager THE CTTY OF Dubuque I~UB E ~'-~~ Masterpiece on the Mississippi ,~ 2007 TO: Michael C. Van Milligen, City Manager FROM: Randy Peck, Personnel Manager ~Q SUBJECT: Alternative Service Concepts (ASC) Fee Renewal -Workers' Compensation DATE: September 28, 2009 I received the renewal rates from Alternative Service Concepts (ASC), our workers' compensation claims administrator. The following is a comparison between the currents rates and the renewal rates: Current Rate: Renewal .Rate Service per Claimant Fee per Claimant. Fee Workers' Compensation • Medical Only $165 $165 • Indemnity $750 $760 Run-in Claims • Indemnity $450 $450 • Medical Only $50 $50 Incident Reports $40 $40 Catastrophic Claims Time and Expense Time and Expense Estimated Claims Fee $18,300 $20,020 Account Administration Fee $3,000 $3,000 Litigation Fee $250 Plus Base Fee $250 Plus Base Fee Subrogation Fee 15°fo of Recovery, 15% of Recovery Systems Fee $2,500 $2,500 Maintenance Fee for Claims ,Open after 24' Months -$450 $450 Increase/Decrease $0 $10 $0, $0 $0 +$1,700 $0 $0 No Change $0 $0 Minimum and Deposit Claims Fee $23,880 $25,520 +$1,640 Indemnity only claims will increase from $750 per claim to $760 per claim. Under the renewal proposal, the minimum claims fee will increase from $23,880 in 2009 to $25,520 in 2010. The reason for the increase in the minimum claims fee is because we anticipate more indemnity claims next year, based upon claims history. This year's agreement contains two new fees. The fees are related to the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA). The Act has mandatory reporting requirements for liability insurance (including self insurance, no fault insurance and worker's compensation). Additionally, the Act imposes an obligation on primary payers to identify claimants entitled to Medicare, Medicaid or SCHIP and to notify the centers Medicare and Medicaid Services electronically of such entitlement. We are a Responsible Reporting Entity (RRE) under the Act. Consequently, the City has the overall responsibility for reporting all settlements, judgments, awards or other payments made to Medicare/Medicaid/SCHIP beneficiaries- under liability, worker's compensation and no fault insurance. Alternative Services Concepts (ASC), through their system provider, CS Stars, has contracted with Gould and Lamb, L.L.C., for Medicare/Medicaid and SCHIP Extension Act queries and transmissions. The charges to ASC per client for these services are: • $920 - $1,000 -one time implementation/programming fee • $1,920 - $2,000 -annual transmission/submission fee beginning on the date of first transmission ASC will pass these fees on to us with no additional charges. Total expenses for worker's compensation claims administration services were $27,420 in 2008 and $32,569.14 in 2009. I anticipate that the administrative service fee for 2010 will be approximately $36,000, based on the new fee schedule and the new fees associated with the implementation of the Medicare, Medicaid and SCHIP Extension Act of 2007. The renewal rates are in effect from October 1, 2009 through September 30, 2010. 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 (ASC). If you have any questions, please feel free to call. RP:tlb s lternative ervice oncepts, L.L.C. City of Dubuque, Iowa October 1, 2009 -October 1, 2010 Two-Year Claims Handling -. .• • •~ Workers' Compensation Medical Only 20 $165 $3,300 Indemnity 22 $760 $16,720 Litigation fee TBD $250 + base fee Run-In Claims Indemnity TBD $450 --- Medical Only TBD $50 --- Incident Reports' TBD $ 40 --- Catastrophic Claimsz TBD Time & Expense --- Estimated Minimum Claims Fee $20,020 Account Administration Fee $3,000 Systems Fee $2500 Minimum & Deposit Claims Fee $25,520 MMSEA - * Pass Through 1 time Implementation Fee ....................................... $1,000 * Annual Transmission Fees (includes query & submissions)......... $2,000 *Actual costs will be passed through to the client, current estimate is $920 - $1,000 implementation and $1920 - $2,000 annual. Actual cost will be billed to the clients when (1) implementation begins and (2) the first quarter of transmission 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 1 Recorded in claims system only. Must be specified as "Incident" at time of reporting. z Any event resulting in 10 or more claimants and/or property losses over $50,000 will be treated as a catastrophe. ASC will handle the number of claims indicated for the minimum claims fee. If the fee for the actual number of claims is more than the minimum claims 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 • 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 .................................................................. .$2500 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 e~~ e u ing ....................................................................... 25% of Savings PPO Usage ............................................................................. 30% of Savings Field Medical Case Management ........................................... $68 Per Hour Invoicing and Payment Terms j As required or requested. Most services are optional. ~ Pricing for additional managed care services is available upon request. .~ 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 • Architects, contractors • Engineers, chemists • Police, fire, coroner, weather reports • Expert witness statements • Surveillance • Official documents and transcripts • Extraordinary travel at client's request • Court reporters • Independent medical examinations, • Managed care MRIs, etc. Workers' Compensation Definitions 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 Indemnity Claims -Work-related claims that involve disability or payment of medical and other expenses in excess of $2,500. 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.