Administrative Services FeeMEMORANDUM
October 13, 2003
TO:
FROM:
SUBJECT:
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Administrative Services Fee Renewal
Personnel Manager Randy Peck is recommending City Council approval of the new
administrative services fee submitted by Alternative Service Concepts, our workers'
compensation claims administrator. The account administration fee increased from
$1,789 to $2,500, although the Alternative Service Concepts representative explained
that last year's fee should have been $2,500.
The language is being finalized on the Claim Service Contact with Alternative Service
Concepts, and will be forwarded for City Council approval when complete.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Randy Peck, Personnel Manager
CITY OF DUBUQUE, IOWA
MEMORANDUM
October 13, 2003
TO:
FROM:
SUBJECT:
Michael C. Van Milligen
City Manager
Randy Peck (~
Personnel Manager
Administrative Services Fee Renewal
I received the renewal rates from Alternative Service Concepts (ASC), our
workers' compensation claims administrator. Their per claim fees for medical,
indemnity, managed medical only and run-in will remain the same as last year. Due to
a reduction in the number of claims, our minimum claims fee will be reduced from
$25,639 to $23,650. It appeared that the account administration fee increased from
$1,789 to $2,500. In discussing the administration fee with ASC representatives, they
explained to me that last years account administration fee should have been $2,500.
The renewal rates are in effect from October 1, 2003 to September 30, 2004. I
recommend that the renewal rates be approved. The requested action is for the City
Council to approve a motion approving the new administrative services fee submitted by
Alternative Service Concepts. I am working with ASC to finalize the language of their
Claim Service Contract. As soon as the contract is complete, I will forward it to you for
City Council approval.
If you have any questions, please feel free to call.
RP:bf
Enclosures
Renewal Rates
alternative service concepts, L.L.C.
City of Dubuque, Iowa
October 1, 2003-October 1, 2004
Two-Year Claims Handling
Workers' Compensation
Medical Only 25 $115 $ 2,875
Indemnity 25 $635 $15,875
Managed Medical Only TBD $195 --
Run-In Claims
Indemnity 5 $450 $2,250
Medical Only 3 $50 $150
Incident Reports~ TBD $ 40 --
Catastrophic Claims2 TBD Time & Expense --
Estimated Claims Fee $21,150
Account Administration Fee $2,500
Minimum & Deposit Claims Fee
i $23,650
Claims will be handled/'or 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 $400.00
Notes
The account administration fee will be 7.5% of the claims fee or $2,500, whichever is
greater. The administration fee includes:
· Account Setup
· New Claim Setup
Recorded in claims s),stem only. Must be specified as ~ncident at time of reporting.
Any event resulnng tn 10 or more clatmants and/or property losses over $~0,000 wtll be treated as a catastroph~
· Client Meetings (Frequency to be Determined)
· Excess Reporting
· State Reporting
At the conclusion of the contract, the following options are available for continued
handling of open claims:
· Negotiated annual fee per claim
· Time and expense at a$c's prevailing rates
· Claims returned to client
Sub_~ation
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.
Additional Services and Fees3
Client Data Transmission ................................................................... $295 Per Release
Carrier Data Transmission ................................................................. $400 Per Release
Data Conversion From Pdor Administrator ........................................ At Cost
On-Line Access (One User) ............................................................... No Charge
Additional Users ........................................................................... $60 Per User Per
................................................. ; .............................................. Month
Standard/Customized Reports Produced by Cent ........................... No Charge
Standard/Customized Reports Produced by asc .............................. $50 Per Copy
~, ~,~, T,~ininn ............ T&E ($85 Per Hour)
z ........ '.-_ = ............................................. $180 Per Hour
ustomizea ~'rogramm~ng ................................. iii~iiii ........................
Index Bureau Reporting ..................................................................... $6 Per Report
Actuarial Data Requests .................................................................... $50 Per Hour
Trave, Over 100 Mi,es ...................... : ................... : ............................. ( 85 Per Hour
Outside Investigation and Litigation Managemenz ............................. ($85 Per Hour)
Medical Cost Manaqement4
F~.¢. Rchedulino 15% of Savings
:-:-~"';; a e ~' ....................................................... 28%of Savings
I~l~U us g .............................................................................
Field Medical Case Management ..........................~, $68 Per Hour
Invoicin.q and Payment Terms
Fees will be invoiced annually. Fees are payab e upon receipt Of the invoice, asc
reserves the right to charge 1~% per month or the maximum legal rate on unpa d
balances after 30 days.
AIIo cared E_d_~_p~ nses
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 ~ls required or requested. Most services are optional
4 ]~ricingfor additional managed care services is available upon requesL
· Architects, contractors
· Police, fire, coroner, weather reports
· Surveillance
· Extraordinary travel at client's request
· Independent medical examinations,
MRIs, etc.
· Engineers, chemists
· Expert witness statements
· Official documents and transcripts
· Court reporters
· Managed care
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
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.
asc
a ternative Service concepts, L.L-C.
Current Rates
alternative Service Concepts
City of Dubuque, Iowa
October 1, 2002-October 1, 2003
Two-Year Claims Handling
Two-year claims handling covers the handling of all claims that occur within the 12-
month contract period and are reported within 24 months of the contract inception date.
After this period, all new claims reported will be handled on a time-and-expense basis.
Claims will be handled for 24 months from the date reported or until closed, whichever
occurs first. This handling option provides for extended reporting and handling periods
for claims occurring in the contract year.
Workers' Compensation
Medical Only 25 $115
25
Indemnity
$ 2,875
Indemni~
$635 $15,875
Managed Medical Only TBD $195 --
Run-In Claims
11 $450 $4,950
Medical Only 3
Incident Reports~ TBD
Catastrophic Claims2
Estimated Claims Fee
TBD
$50
$ 4O
Time & Expense
7.5% of Claims Fee
$150
-~timated Account Administration
Estimated Total Claims Fee
$23,850
$ 1,789
$25,639
Multi-year contracts are available for an annual 3% per-claim per year increase.
asc's minimum contract fee is $10,000. All claims handled by asc will be credited towards the minimum fee by
multiplying the actual number of claims by the fee per claimant. If the fee for the actual number of claims is less than
$10,000, asc will invoice the client for the difference between the actual fee and $10,000.
Recorded in claims system on!~. Must be speciJ~ed as "Incident" at time of reporting.
Any event resulting in lO or more claimants and/or property losses over $50,000 will be treated as a catastrophe.
Dubuque/1002 Page 6 of 9
asc
alternative Service concepts, L.L.C.
Notes
The estimated claims fee will be reconciled through an annual audit. The estimated
account administration fee is based on a percentage of the estimated claims fee. The
estimated administration fee will be billed at contract inception and adjusted after the
annual audit.
The administration fee includes:
· Account Setup
· Client Meetings
· Account Manager
· Excess Reporting
· Topical Captioned Reports @
$50,0O0
· Intemet Report Package
· New Claim Setup
· Claim Acknowledgements
· Carrier Report Package
· Quality Audit Reports
· Toll-Free Claims Reporting
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
Subro.qation
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.
Optional Services and Fees
Standard Tape Release .......................................................... $295 Per Release
Carrier Tape Release ............................................................. $400 Per Release
Data Conversion (From Pri~ Administrator) ........................... At Cost .
On-Line Access (One User)° ........... : ..................................... $2,500 Per Year
Each Additional User ......................................................... $60 Per Month Per User
Hard Copy Reports ................................................................. $25 Per Report
Safety Analysis Reports .......................................................... $100 Per Report
Medical Cost Mana.qement4
Fee Scheduling ....................................................................... 15% of Savings
PPO Usage ............................................................................. 28% of Savings
Field Medical Case Management ........................................... $68 Per Hour" '
InvoicinR and Payment Terms
Fees will be invoiced annually. Fees are payable upon receipt of the invoice, asc
reserves the right to charge 1%% 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:
Includes on-line inquiry, electronic mail, and ad hoc report writing.
Pricing for additional managed care services is available upon request.
Dubuque/1002 Page 7 of 9
asc
mlternalive serx, ice ¢oncepls, L.L.C.
· Legal services
· Medical records
· Index Bureau reporting
· Architects, contractors
· Police, fire, coroner, weather reports
· Surveillance
· Extraordinary travel at client's request
· Independent medical examinations,
MRIs, etc.
· Professional photographs
· Experts' / rehabilitation services
· Accident reconstruction
· Engineers, chemists
, Expert witness statements
· Official documents and transcripts
· Court reporters
· Managed care
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
Claims requiring services beyond these guidelines will be classified as Managed
Medical or Indemnity.'
Managed Medical Claim~ - 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.
ALTERNATIVE SERVICES CONCEPTS, LLC
DATE: ~ 7..
CITY OF DUBUQUE, IOWA
WITNESS:
BY:
TITLE:
DATE:
Dubuque/1002 Page 8 of 9