Workers' Compensation Claims Administration_ACSMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Acceptance of the Renewal Rates for Worker's Compensation
Claims Administration
DATE: October 10, 2011
Dubuque
Iii- AmedcaCity
IIII!
2007
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 effective October 1, 2011 through October 30, 2012. The
Medicare, Medicaid and SCHIP Extension Act (MMSEA) annual transmission fees will
increase from $1,920 to $2,100. The minimum and deposit claims fee will decrease
from $27,760 to $26,240. The decrease is due to the fact that the estimated number of
medical only claims has been lowered from 20 to 10.
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
Masterpiece on the Mississippi
TO: Michael C. Van Milligen, City Manager
FROM: Randy Peck, Personnel Manager
SUBJECT: Acceptance of the Renewal Rates for Worker's Compensation Claims
Administration
DATE: October 10, 2011
Dubuque
Intel
All- Americacily
2007
On October 4, 2011, I received the renewal rates from Alternative Services Concepts (ASC) for
services related to the administration of the City's Worker's Compensation Program. The effective
date of the renewal rates is October 1, 2011. The following is a comparison between the current
rates and the renewal rates:
Service
Current Rate Renewal Rate
per Claimant Fee per Claimant Fee Increase /Decrease
Workers' Compensation
• Medical Only $170 $170 $0
• Indemnity $770 $770 $0
Run -in Claims
• Indemnity $450 $450 $0
• Medical Only $50 $50 $0
Incident Reports $40 $40 $0
Catastrophic Claims Time and Expense Time and Expense Time and Expense
Estimated Claims Fee $20,340 $18,640 - $1,700
Account Administration Fee $3,000 $3,000 $0
Litigation Fee $300 Plus Base Fee $300 Plus Base $0
Fee
Subrogation Fee 15% of Recovery 15% of Recovery No Change
Systems Fee $2,500 $2,500 $0
Maintenance Fee for Claims
Open after 24 Months $450 $450 $0
MMSEA — Annual Transmission Fees
(includes query and submissions) $1,920 $2,100 +$180
Minimum and Deposit Claims Fee $27,760 $26,240 - $1,520
The Medicare, Medicaid and SCHIP Extension Act (MMSEA) annual transmission fees will
increase from $1,920 to $2,100. The minimum and deposit claims fee will decrease from
$27,760 to $26,240. The decrease is due to the fact that the estimated number of medical
only claims has been lowered from 20 to 10. The requested action is for the City Council to
pass a motion approving the renewal rates for our workers compensation claims
administration effective October 1, 2011 through October 30, 2012. I will send you the
Administrative Services Agreement as soon as it is available.
RP:jmh
2
alternative service concepts, L.L.C.
City of Dubuque, Iowa
October 1, 2011 - October 1, 2012
Two -Year Claims Handlin
Service
Estimated Number
Of Claimants
Per - Claimant
Fee
Estimated
Total Fee
Workers' Compensation
Medical Only
10
$170
$1,700
Indemnity
22
$770
$16,940
Litigation fee
TBD
$300 + base fee
Run -In Claims
Indemnity
TBD
$450
- --
Medical Only
TBD
$50
- --
Incident Reports'
TBD
$ 40
- --
Catastrophic Claims2
TBD
Time & Expense
- --
Estimated Minimum Claims Fee
$18,640
MMSEA- AnnualTransmission
Fees(includes query & submissions)
$2,100
Account Administration Fee
$3,000
Systems Fee
$2,500
Minimum & Deposit Claims Fee
$26,240
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 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.
' Recorded in claims system only. Must be specified as `Incident" at time of reporting.
2 Any event resulting in 10 or more claimants and/or property losses over $50,000 will be treated as a catastrophe.
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
• 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
Carrier Data Transmission
State - Mandated EDI
Computer Compatible Checks & Electronic Transfers
Data Conversion From Prior Administrator
On -Line Access (One User)
Additional Users
$2500 Per Release
$400 Per Release
$3 Per Report/Bill
At Cost
At Cost
No Charge
$60 Per User Per
Month
No Charge
$50 Per Copy
T &E ($85 Per Hour)
T &E ($ /Hour)
$50 Per Hour
T &E ($85 Per Hour)
T &E ($85 Per Hour)
Reports Produced by Client
Reports Produced by asc
Systems Training
Customized Programming
Actuarial Data Requests
Travel Over 100 Miles
Outside Investigation
Medical Cost Management4
Fee Scheduling 28% of Savings
PPO Usage 30% of Savings
Invoicing and Payment Terms
Fees will be invoiced annually. Fees are payable upon receipt of the invoice. asc
reserves the right to charge 11/2% 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
3 As required or requested. Most services are optional.
4 Pricing for additional managed care services is available upon request.
• Index Bureau reporting
• Architects, contractors
• Police, fire, coroner, weather reports
• Surveillance
• Extraordinary travel at client's request
• Independent medical examinations,
MRIs, etc.
• 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
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.