ASC - Adm. Services Fee Renewal
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MEMORANDUM
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November 20, 2006
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT: Administrative Service Concepts (ASC) Fee Renewal - Workers'
Compensation
Personnel Manager Randy Peck is recommending City Council approval of the renewal
rates for Alternative Service Concepts, the City's workers' compensation claims
administrator. Their fee for medical claims increased from $145 to $155 per claimant;
their fee for indemnity claims increased from $690 to $715 per claimant; and the
managed medical stayed at $208. Their per claimant fees for run-in claims will remain
the same. The account administration fee will remain at $3,000. The minimum claims
fee will decrease from $25,325 to $22,725.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
(l1~j ~1./JL
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Randy Peck, Personnel Manager
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Memorandum
November 17, 2006
FROM:
Michael C. Van Milligen
City Manager 0
Randy Peck ~
Personnel Manager
TO:
SUBJECT:
Administrative Service Concepts (ASC) 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:
Current Rate Renewal Rate
Service per Claimant Fee per Claimant Fee Increase/Decrease
Workers' Compensation
. Medical Only $145 $155 +$10
. Indemnity $690 $715 +$25
. Managed Medical Only $208 $208 $0
Run-in Claims
. Indemnity $450 $450 $0
. Medical Only $50 $50 $0
I ncident Reports $40 $40 $0
Catastrophic Claims Time and Expense Time and Expense
Estimated Claims Fee $22,325 $19,725 -$2,600
Account Administration Fee $3,000 $3,000 $0
Minimum and Deposit Claims $25,325 $22,725 -$2,600
Fee
Maintenance Fee for Claims
Open after 24 Months $450 $450 $0
The fee for medical cost management services will increase from 15% of savings to 17% of
savings and the fee for PPO usage will increase from 28% of savings to 30% of savings. I am
working with ASC to finalize the terms of the Administrative Services Agreement. I will present
it to you as soon as the document is finalized.
The renewal rates are in effect from October 1, 2006 through September 30, 2007. 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:tlb
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alternative Service Concepts, L.L.C.
City of Dubuque, Iowa
October 1, 2006-0ctober 1, 2007
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Service Estomated Number Per-Claimant Estimated
Of Claimants Fee Total Fee
Workers' Compensation
Medical Only 35 $155 $5,425
Indemnity 20 $715 $14,300
Managed Medical Only TBD $208 ---
Run-In Ciaims
Indemnity TBD $450 ---
Medical Only TBD $50 ---
Incident Reports 1 TBD $ 40 ---
Catastrophic Claims2 TBD Time & Expense ---
Estimated Claims Fee $19,725
Account Administration Fee $3,000
Minimum & Deposit Claims Fee $22,725
Claims will be handled for two years from the date the loss is reported to ase 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 ase's prevailing rates
. Claims returned to client
J 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.
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Subroqation
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.
Additional Services and Fees3
Client Data Transmission...................................................................$295 Per Release
Carrier Data Transmission .................................................................$400 Per Release
State-Mandated EDI ..........................................................................$3 Per ReporVBiII
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 Manaqement4
I-ee Scheduling .......................................................................17% of Savings
PPO Usage............................................................................. 30% of Savings
Field Medical Case Management ...........................................$68 Per Hour
Invoicinq and Pavment 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
. 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.
. 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
J As required or requested. Most services are optionaL
4 Pricing for additional managed care services is available upon request.
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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.