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.