Worker's Comp Adm Services Fee
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MEMORANDUM
November 15,2005
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 $135 to
$145 per claimant; their fee for indemnity claims increased from $645 to $690 per
claimant; and the managed medical only increased from $195 to $208. Their per
claimant fees for run-in claims will remain the same. The account administration fee will
increase from $2,500 to 3,000. The minimum claims fee will increase from $24,400 to
$25,325.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
(lkJ ~/ltL
Micnael C. Van Milligen
MCVM/ksf
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Randy Peck, Personnel Manager
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Memorandum
November 8, 2005
TO: Michael C. Van Milligen
City Manager
FROM: Randy Peck to f
Personnel Manager U'
SUBJECT: Administrative Services Fee Renewal - Workers' Compensation
I received the renewal rates from Alternative Service Concepts (ASC), our workers'
compensation claims administrator. The following is a comparison between their currents rates:
Service
Current Rate
per Claimant Fee
Renewal Rate
per Claimant Fee
Workers' Compensation
. Medical Only $135 $145
. Indemnity $645 $690
. Managed Medical Only $195 $208
Run-in Claims
. Indemnity $450 $450
. Medical Only $50 $50
Incident Reports $40 $40
Catastrophic Claims Time and Expense Time and Expense
Estimated Claims Fee $21,900 $22,325
Account Administration Fee $2,500 $3,000
Minimum and Deposit Claims Fee $24,400 $25,325
Maintenance Fee for Claims
Open after 24 Months $400 $450
Increase
$10
$45
$13
$0
$0
$0
$425
$500
$925
$50
The Fiscal Year 2006 budget for workers' compensation claims administrative services is
$25,034. The renewal rates are in effect from October 1, 2005 through September 30, 2006. 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 Alternative Service
Concepts.
If you have any questions, please feel free to call.
RP:bf
11/08/05 TUB 11:42 FAX 15633555935
ASC
19J002
alternative Service Concepts, L.L.C.
City of Dubuque, Iowa
October 1, 2005-0ctober 1, 2006
Workers' Compensation
Medical Only
Indemnity
Managed Medical Only
Run-In Claims
Indemnity
Medical Only
. Incident Reports 1
Catastrophic Claims'
35
25
TBD
$145
$690
$208
$5,075
$17,250
TBD
TBD
TBD
TBD
$460
$50
$ 40
Time & Expense
Estimated Claims Fee
Account Administration Fee
$22,325
$3,000
Minimum & Deposit Claims Fee
$25,325
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
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
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
I Recorded in claims sY!ftenz only. Must he spec!fied (u "Incident" at lime Q{reporting.
' Any event re.I'lIlting in 10 or m"re cl"imanls alUllor proper~v I"s"es OVer $50,()OO will be trealetl a.' It cCltlt..lrophe.
11/08/05 TUE 11:43 FAX 15633555935
ASC
141003
SUbro~ation
All pa les 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~
CllenlLJata rransmlsslon...................................................................$295 Per Release
Carrier Data Transmission.................................................................$400 Per Release
State-Mandated EDI..........................................................................$3 Per Report/Bill
Data Conversion From Prior Administrator........................................At Cost
On-Line Access (One User)...............................................................No Charge
Additional Users ...........................................................................$60 Per User Per
..................................................................................................... Month
Reports Produced by Client..............................................................No Charge
Reports Produced by asc ..................................................................$50 Per Copy
Systems Training ............................................................................T&E ($85 Per Hour)
Customized Programming ................................................................. T&E ($/Hour)
Index Bureau Reporting..................................................................... $6.25 Per Report
Actuarial Data Requests.................................................................... $50 Per Hour
Travel Over 100 Miles .......................................................................T&E ($85 Per Hour)
Outside Investigation and Litigation Management.............................T&E ($85 Per Hour)
Medical Cost Management~
t-ee ::;cneaullng....................................................................... 15% of Savings
PPO Usage............................................................................. 28% of Savings
Field Medical Case Management...........................................$68 Per Hour
Allocated Expenses
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
. Architects, contractors . Engineers, chemists
. Police, fire, coroner, weather reports . Expert witness statements
. Surveillance . Official documents and transcripts
. Extraordinary travel at client's request . Court reporters
. Independent medical examinations, . Managed care
MRls, etc.
Workers' Compensation Definitions
Medical Only Claims - Work-related claims that require medical treatment only.
o 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
3 A.5' I"equirect tlr requested. Most ,\'ervi.ces are optional.
" Pricing for Ullditional numaged care ,\'ervices i... aVlIilable upon reque.'it.
11/08/05 TUE 11:43 FAX 15633555935
ASC
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. 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.