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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