Workers' Compensation Claim Administration_ASCMasterpiece on the Mississippi
Dubuque
httri
All-America City
'
1
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Acceptance of Worker's Compensation Claims Administrative Services
Agreement
DATE: October 31, 2011
Personnel Manager Randy Peck recommends City Council approval of the Agreement
between the City of Dubuque and Alternative Services Concepts (ASC) for services
related to the administration of the City's Worker's Compensation Program. The
effective date of the Agreement is October 1, 2011 through September 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.
I C. Van Milli
Micha gen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Randy Peck, Personnel Manager
Masterpiece on the Mississippi
Dubuque
All- AmedcaCity
2007
TO: Michael C. Van Milligen, City Manager ?e
FROM: Randy Peck, Personnel Manager I `�
SUBJECT: Acceptance of Worker's Compensation claims Administrative Services
Agreement
DATE: October 27, 2011
I received the attached Agreement between the City of Dubuque and Alternative Services Concepts
(ASC) for services related to the administration of the City's Worker's Compensation Program. The
effective date of the Agreement is October 1, 2011. On October 17, 2011, the City Council
approved the renewal rates for Worker's Compensation Claims Services effective October 1, 2011
through September 30, 2012. 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 Agreement has been reviewed by City Attorney Barry Lindahl and he found the terms
to be acceptable. I request that the City Council pass a motion approving the Agreement
and authorizing you to sign the Agreement.
RP:jmh
2
ASC
Alternative Service Concepts, LLC
CLAIMS SERVICE CONTRACT
THIS AGREEMENT is made and entered into with an effective date of October 1,
2011 between ALTERNATIVE SERVICE CONCEPTS, LLC, formed in Delaware, with
principal offices at 2501 McGavock Pike, Suite 802, P.O. Box 305148 Nashville,
Tennessee 37214 -1213, hereinafter referred to as "ASC ", and CITY OF DUBUQUE,
IOWA with principal offices in Dubuque, Iowa, hereinafter referred to as "Client ".
WITNESS:
WHEREAS, "ASC" is in the claims service business; and
WHEREAS, "Client" desires to contract with "ASC" as its claims service company
to service the workers' compensation claims of "Client's" arising out of their facilities
located in Dubuque, Iowa.
NOW, THEREFORE, "ASC" and "Client" contract as follows:
"ASC" AGREES:
1. (a) To review all claims and /or losses reported during the term of this Contract
which involve workers' compensation claims against "Client ".
(b) To investigate, adjust, settle or resist all such losses and /or claims within the
agreed payment authority limit of Two Thousand Five Hundred Dollars
($2,500).
(c) To investigate, adjust, settle or resist all such losses and /or claims as are in
excess of the agreed payment authority limit of Two Thousand Five Hundred
Dollars ($2,500) only with specific prior approval of "Client ".
(d) To report excess claims to "Client's" excess carrier only if "Client" fulfills its
obligations under "Client Agrees" Section, 4c.
2. To furnish all claim forms necessary for proper claims administration.
3. To establish claim and /or loss files for each reported claim and /or loss. Such files
shall be the exclusive property of "Client ". Such files are available for review by
"Client" at any reasonable time, with notice.
4. To maintain adequate Automobile Liability, Errors and Omissions, Fidelity Bond,
General Liability, and Workers' Compensation insurance coverage and to maintain
insurance as set forth in the attached Insurance Schedule for Professional Services.
5. To indemnify, defend and hold harmless "Client" with respect to any claims asserted
as a result of any errors, omissions, torts, intentional torts or other negligence on the
Dubuque /1011 Page1 07269
ASC
Alternative Service Concepts, LLC
part of "ASC" and /or its employees, unless the complained of actions of "ASC" were
taken at the specific direction of "Client ".
"CLIENT" AGREES:
1. To make funds available that "ASC" may draw from at any time and from time to
time for claim and /or loss payments and for associated allocated expense within the
payment authority limit of Two Thousand Five Hundred Dollars ($2,500) and for
claim and /or loss payments in excess of the payment authority limit of Two
Thousand Five Hundred Dollars ($2,500) with the prior approval of "Client ".
2. To pay "ASC" fees in accordance with the Fee Schedule attached to this Contract.
3. To pay "ASC" within thirty (30) days of the effective date of all invoices. All past due
invoices are subject to an interest penalty of one and one -half percent (1 1/2 %) per
month. In the event "ASC" brings any action or proceeding to recover any part or all
of an outstanding indebtedness, "ASC" shall be entitled to recover as additional
damages any reasonable attorney fees not to exceed twenty percent (20 %) of the
outstanding indebtedness.
4. (a) To pay all Allocated Loss Expenses in addition to the claim service fee to be
paid to "ASC" as prescribed in this Contract.
(b) "Allocated Loss Expenses" shall include but not be limited to attorneys' fees;
experts' fees (i.e. engineering, physicians, chemists, etc.); fees for independent
medical examinations; witnesses' fees; witnesses' travel expenses; court
reporters' fees; transcript fees; the cost of obtaining public records; commercial
photographers' fees; automobile appraisal or property appraisal fees; medical
cost containment services, such as utilization review, provider bill audit,
preadmission authorization, hospital bill audit, and medical case management;
all outside expense items; extraordinary travel expenses incurred by "ASC" at
the request of "Client "; and any other similar fee, cost or expenses associated
with the investigation, negotiation, settlement or defense of any claim
hereunder or as required for the collection of subrogation on behalf of "Client ".
(c) To provide "ASC" with complete copies of all excess policies which apply to the
claims reported during the Contract period.
5. To relinquish authority to "ASC" in all matters relating to claims service within the
agreed payment authority limit of Two Thousand Five Hundred Dollars ($2,500).
Dubuque /1011 Page 2 07269
ASC
Alternative Service Concepts, LLC
6. To indemnify, defend and hold harmless "ASC" with respect to any claims asserted
as a result of anterrors, omissions, torts, intentional torts, or other negligence on the
part of the "City" and /or its employees, unless the complained of actions of "City"
were taken at the specific direction of "ASC ".
"ASC" AND "CLIENT" MUTUALLY AGREE AS FOLLOWS:
1. (a) The term of this Contract is continuous from its effective date for one (1) year.
This Contract may be terminated by either "ASC" or "Client" with cause by
providing sixty (60) days' prior written notice by certified mail.
(b) In the event that this Contract terminates or expires for any reason "Client" shall
have the option:
(i) to have "ASC" handle open files which have been reported for an
additional fee based on our prevailing annual rate per file.
(ii) to have "ASC" return the files to the client.
2. This Contract covers Claim Service for "Client" in the United States of America.
3. In the event any one or more of the provisions of this Contract shall be determined to
be invalid or unenforceable by any court or other appropriate authority, the
remainder of this Contract shall continue in full force and effect, as if said invalid and
unenforceable portion had not been included in this Contract.
4. This Contract shall be, construed and interpreted in accordance with the laws of the
state of Iowa.
5. This Contract represents the entire understanding of "ASC" and "Client" and
supersedes all prior oral and written communications between "ASC" and "Client" as
to the subject matter. Neither this Contract nor any provisions of it may be
amended, modified or waived except in writing signed by a duly authorized
representative of "ASC" and "Client ".
6. The failure or delay of either "ASC" or "Client" to take action with respect to any
failure of the other party to observe or perform any of the terms or provisions of this
Contract, or with respect to any default hereunder by such other party, shall not be
construed as a waiver or operate as a waiver of any rights or remedies of either
"ASC" or "Client" or operate to deprive either "ASC" or "Client" of its right to institute
and maintain any action or proceeding which it may deem necessary to protect,
assert or enforce any such rights or remedies.
Dubuque /1011 Page 3 07269
ASC
Alternative Service Concepts, LLC
7. To not employ a person who has been employed by the other party at any time
during the term of this Contract, unless the person to be employed shall not have
been employed by the other party during the immediately preceding six (6) months
or unless the hiring party shall have the other party's prior written consent. This
provision shall survive the termination of this Contract for a period of one (1) year.
8. During the term of this Contract, "ASC" will store closed files for a period of three (3)
years from the date of closure, the date of the last payment of benefits, or the
retention requirements of "Client's" carrier. The storage cost is included in the
administrative fees. After the three (3) year period, files will either be returned to
"Client" or destroyed if permitted by Statute.
9. "ASC" will query and transmit information under MMSEA requirements to CMS.
IN WITNESS WHEREOF, "ASC" and "Client" have caused this Contract to be
executed by the person authorized to act in their respective names.
ALTERNATIVE SERVICE CONCEPTS, LLC
WITNESS: / -(14
WITNESS:
BY Robert Bennett
TITLE: CEO
DATE: 10/13/11
CITY OF DUBUQUE, IOWA
I/2...N
BY:
Michae C. Van Milligen
TITLE: City Manager
DATE:
Dubuque /1011 Page 4 07269
ASC
Alternative Service Concepts, LLC
Alternative Service Concepts, LLC
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- Annual Transmission
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 Toss 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.
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)
1 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.
Dubuque /1011 Page 5 07269
• ASC
Alternative Service Concepts, LLC
• 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
Computer Compatible Checks & Electronic Transfers
Data Conversion From Prior Administrator
On -Line Access (One User)
Additional Users
$2,500 Per Release
$400 Per Release
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 1'/z% per month or the maximum legal rate on unpaid
balances after 30 days.
Allocated Expenses
Allocated expenses will be charged to the
• 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.
claim file and include fees for:
• Professional photographs
• Experts' / rehabilitation services
• Accident reconstruction
• Engineers, chemists
• Expert witness statements
• Official documents and transcripts
• Court reporters
• Managed care
• State - Mandated EDI
3 As required or requested. Most services are optional.
° Pricing for additional managed care services is available upon request.
Dubuque /1011 Page 6
07269
ASC
Alternative Service Concepts, LLC
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.
ALTERNATIVE SERVICE CONCEPTS, LLC
WITNESS: /ij ,V.
WITNESS:
BY: Robert Bennett
TITLE: CEO
DATE: 10/13/11
CITY OF DUBUQUE, IOWA
BY:
Michael C. Van Milligen
TITLE: City Manager
DATE: 4 C
Dubuque /1011 Page 7 07269
City of Dubuque Insurance Requirements for Professional Services '
Insurance Schedule C
1. shall furnish a signed Certificate of Insurance to the City of Dubuque, Iowa for the
coverage required in Exhibit I prior to commencing work and at the end of the project if the term of work'
is longer than 60 days. Providers presenting annual certificates shall present a Certificate at the end of
each project with the final billing. Each Certificate shall be prepared on'the most current ACORD form
approved by the Iowa Department of Insurance or an equiv-alent.
2. AH policies of Insurance required hereunder shall be with a carrier authorized to do business in Iowa and
all carriers shall have a rating of A or better in the current A.M. Best's Rating Guide.
3. Each -Certificate shall be furnished to the contracting department ofthe City of Dubuque.
4. Failure to provide minimum coverage shall not be deemed a waiver of these requirements by the City of
Dubuque. Failure to obtain or maintain the required insurance shall be considered a material breach of
this agreement.
5. Subcontractors and sub subcontractor performing work or service shall provide a Certificate of Insurance
in accord with Exhibit I.
6. All required endorsements to various policies shall be attached to Certificate of insurance.
7. Whenever a specific 150 form is listed, an equivalent form may be substituted subject to the provider
identifying and listing in writing all deviations and exclusions that differ from the 150 form.
8. Providershall be required to carry the minimum coverage/limits, or greater if required by law or other
legal agreement, in Exhibit I.
Page 1 of 3 Schedule C, August, 2011.Doc
City of Dubuque Insurance Requirements for Professional Services
• Insurance Schedule C (continued)
Exhibit I
A) COMMERCIAL GENERAL LIABILITY
General Aggregate Limit $2,000,000
Products -Completed Operations Aggregate Limit $1,000,000
Personal and Advertising Injury Limit $1,00cL000
Each Occurrence $1,000,000
Fire Damage Limit (any one occurrence) $ 50,000
Medical Payments $ 5,000
Coverage shall be written on an occurrence, not claims made, form. All deviations from the
standard ISO commercial general liability form CG 0001, or Business owners form BP 0002,
shall be clearly identified.
b) Include150 endorsement form CG 25 04 "Designated Location(s) General Aggregate Limit"
or CG 25 03 "Designated Construction Project (s) General Aggregate Limit' as appropriate.
c) Include endorsement indicating that coverage is -primary and non-contributory.
d) Include endorsement to preserve GoVernmental Immunity. (Sample attached).
e) Include additional insured endorsement for:
The City of Dubuque, including all its elected and appointed officials, all its employees
and volunteers, all its boards, commissions and/or authorities and their board members,
employees and volunteers.
using 50 form CG 20 10. Ongoing operations.
B) AUTOMOBILE LIABILITY $1,000,000 (Combined Single Limit)
C) WORKERS' COMPENSATION & EMPLOYERS LIABILITY
Coverage A
Coverage B
a)
b)
Statutory—State of Iowa
Employers Liability
Each Accident $100,000
Each Employee -Disease $100,000
Policy Limit -Disease $500,000
Policy shall include an endorsement providing a waiver of subrogation to the City of
Dubuque.
Coverage B limits shall be greater if required by.Umbreila Carrier.
0) UMBRELLA LIABILITY
E) PROFESSIONAL LIABILITY
Page 2of 3
$1,000,000
$1,000,000
Schedule C, August, 2011.Doc
(
City of Dubuque Jnsurance Requirements for Professional Services
Preservation of Governmental Immunities Endorsement
I. NonwaiverofGovernmental Immunity. The insurance carrier expressly agrees and states that the
purchase.ofthis policy and the including ofthe City ofDubuque, Iowa asanAdditional Insured does
not waive any of the defenses of governmental immunity available to the City of Dubuque, Iowa
under Code of>owa Section 670.4 as it now exists and as it may be amended from time to time:
Z. Claims Coverage. The insurance carrier further agrees that this policy of insurance shall cover oniy
those claims not subject to the defense of governmental,immunity under the Code of [owe Section
670.4 as it now exists and asasit may beamended from time to tim. Those claims not subjct to
Code of Iowa5ection 670.4 shall be covered by the terms and conditions tf this insurance policy.
3. Assertion of Government Immunity. Fhe City of Dubuque, lowa shall be responsiblefOr assertingany
defense ofgovernmental immunfty, end may do so at anytime and shall do so upon the timely
written request ofthe insurance carrier.
4. Nson-Denial of Coverage. The insurance carrier shall not deny coverage under this policy and the
insurance carrier shall not deny any of the rights and benefits accruing to the City of Dubuque, Iowa
under this policy for reasons ofgovernmental immunity unless and until acourt ofcompetent
jurisdiction has ruled in favor of the defense(s) of governmental immunity asserted by the City of
Dubuque, lowa.
NoOther Change inPolicy. The above prese�ationofgovernmental immunities shall not otherWise
change or aiter the coverage avaflable under the policy.
SPECIMEN
Page 3 of 3 Schedule 2Ol1'poc