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Alternative Services Concepts_Worker's Compensation Renewal Rates 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 DATE: October 15, 2012 Personnel Manager Randy Peck recommends City Council approval of the renewal rates from Alternative Services Concepts for services related to the administration of the City's Worker's Compensation Program for the period October 1, 2012, through October 30, 2013. The minimum and deposit claims fee will decrease from $26,240 to $25,590. The decrease is due to the fact that the estimated number of medical only claims has been lowered from ten to seven. 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 Teri Goodmann, Assistant City Manager Randy Peck, Personnel Manager Masterpiece on the Mississippi Dubuque All- AmerIcaCIly '111I' 2007 TO: Michael C. Van Milligen, City Manage FROM: Randy Peck, Personnel Manager SUBJECT: Acceptance of the Renewal Rates for Worker's Compensation Claims Administration DATE: October 8, 2012 On October 2, 2012, 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, 2012. The following is a comparison between the current rates and the renewal rates: Service Workers' Compensation • Medical Only • Indemnity Run-in Claims • Indemnity • Medical Only Incident Reports Catastrophic Claims Estimated Claims Fee Current Rate Renewal Rate per Claimant Fee per Claimant Fee $170 $770 Account Administration Fee $40 Time and Expense Litigation Fee Subrogation Fee $18,640 $3,000 $300 Plus Base Fee Fee 15% of Recovery 15% of Recovery No Change $2,500 $0 $170 $780 $450 $50 $40 Time and Expense $18,350 $3,000 $300 Plus Base Increase /Decrease $0 $10 $0 Time and Expense -$290 $0 Systems Fee $2,500 Maintenance Fee for Claims Open after 24 Months MMSEA — Annual Transmission Fees (includes query and submissions) Minimum and Deposit Claims Fee $450 $450 $2,100 $2,100 $26,240 $25,590 $0 +$0 -$650 The minimum and deposit claims fee will decrease from $26,240 to $25,590. The decrease is due to the fact that the estimated number of medical only claims has been lowered from ten to seven. 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, 2012 through October 30, 2013. I will send you the Administrative Services Agreement as soon as it is available. RP:Imh 2 alternative service concepts, L.L.C. City of Dubuque, Iowa October 1, 2012 - October 1, 2013 Two -Year Claims Handling Service Estimated Number Of Claimants Per - Claimant Fee Estimated Total Fee Workers' Compensation Medical Only 7 $170 $1,190 Indemnity 22 $780 $17,160 Litigation fee TBD $300 + base fee Run -In Claims Indemnity TBD $450 Medical Only TBD $50 - -- Incident Reports' TBD $ 90 Catastrophic Claims2 TBD Time & Expense - -- Estimated Minimum Claims Fee $18,350 MMSEA- AnnualTransmission Fees(includes query & submissions) $2,100 Account Administration Fee $3,000 Systems Fee $2,500 Minimum & Deposit Claims Fee $25,590 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. I 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 1-ee 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%% 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. 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.