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Workers Comp. Administrative Fe D"G~@;E ~ck~ MEMORANDUM September 13, 2004 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Administrative Services Fee Renewal - Workers' Compensation 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. Their fee for medical claims increased from $115 to $135 per claim and their fee for indemnity claims increased from $635 to $645 per claim. Their per claim fees for managed medical only and run-in claims will remain the same and the account administration fee will remain at $2,500. The minimum claims fee will increase from $23,650 to $24,400. 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. --ØJJ :~;JJI~ Michael C. Van Milligen . , MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager Randy Peck, Personnel Manager ì . ! -- (,1 . i5~~WuE ~c/k.~ Memorandum September 3, 2004 TO: FROM: Michael C. Van Milligen City Manager Randy Peck m{} Personnel Manager YíJ SUBJECT: Administrative Services Fee Renewal - Workers' Compensation I received the renewal rate from Alternative Services Concepts (ASC), our workers' compensation claims administrator. Their fee for medical claims increased from $115 to $135 per claim and their fee for indemnity claims increased from $635 to $645 per claim. Their per claim fees for managed medical only and run-in claims will remain the same and the account administration fee will remain at $2,500. Due to a new State requirement, workers' compensation reports have to be electronically filed. The administrative service fee will include a cost of $3.00 per required report. In addition, the fee for Index Bureau Reporting was increased from $6.00 per report to $6.25 per report. There are approximately ten Index Bureau Reports filed each year. Our minimum claims fee will increase from $23,650 to $24,400. The Fiscal Year 2005 budget for workers' compensation claims administration services is $29,933. The renewal rates are in effect from October 1, 2004 through September 30, 2005. 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 ASC. 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 ~ ~ alternative service concepts, L.L.C. City of Dubuque, Iowa October 1, 2004-0ctober 1, 2005 Two-Year Claims Handling S,',",irr Estimatr!! :"lImhrl" P"f-Claimant Estimat"!! Of Claimants Frr Tlltal Fee Workers' Compensation Medical Only 25 $135 $3,375 Indemnity 25 $645 $16,125 Managed Medical Only THD $195 --- Run-In Claims Indemnity 5 $450 $2,250 Medical Omy 3 $50 $150 Incident Reports! THD $ 40 --- Catastrophic Claims' THD Time & Expense --- Estimated Claims Fee $21,900 Account Administration Fee $2,500 Minimum & Deposit Claims Fee $24,400 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 $400.00 Notes The account administration fee will be 7.5% oftbe claims fee or $2,500, whichever is greater. The administration fee includes: 1 Recorded in claims system only. Must be specified as "Incident" at time of reporting. 2 Any event resul1ing in 10 or more claimants and/or property losses over $50,000 will be treated as a catastrophe. " . Account Setup . New Claim Setup . 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 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. Additional Services and Fees' Client Data Transmission .... Carrier Data Transmission... State-Mandated EDI....................................... Data Conversion From Prior Administrator... On-Line Access (One User).. Additional Users............ Reports Produced by Client.. Reports Produced by asc.. Systems Training .............. Customized Programming.. Index Bureau Reporting... Actuarial Data Requests... Travel Over 100 Miles............................................. Outside Investigation and Litigation Management.. Medical Cost Management' ..$295 Per Release ..$.4.00 Per Release ..$3.00 Per Report/Bill ...At Cost ..,No Charge ...$60 PerUser Per Month ..N.o Charge ..$.5.0 Per Copy ..T&E ($85 Per Hour) ...T&E ($180 Per Hour) ..$6.25 Per Report ..$50 Per Hour ..T&E ($85 Per Hour) ..T&E ($85 Per Hour) Fee Scheduling.. PPO Usage..................................... Field Medical Case Management.. ...15% of Savings ..28% of Savings .. .$68 Per Hour Invoicing and Paymeot Terms Fees will be invoiced annually. Fees are payable upon receipt of the invoice. asc reserves the right to charge I y,% 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 . Medical records . Index Bureau reporting . Professional photographs . Experts' / rehabilitation services . Accident reconstruction J As required or requested. Most services are optionaL 4 Pricing for addiJional managed care services is available upon request - . ," . Architects, contractors . Police, fife, coroner, weather reports . Surveillance . Extraordinary travel at client's request . Independent medical examinations, MRls, 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 reqnired . Investigation sufficient to determine claim type and compeosability . 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 omy, 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.