Claims Audit for Third Party Administrato_Health PlanTHE CITY OF
DUB E
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MEMORANDUM
April 28, 2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Claims Audit for the Third Party Administrator for the Health Insurance
Plan
On May 1, 1995, the City contracted with Health Choices, Inc. of Dubuque to provide
administration services for the health insurance plan. Although our benefit consultant
periodically reviews claim payments to ensure we are receiving the appropriate
discounts, a thorough claims audit has not been conducted.
Personnel Manager Randy Peck recommends City Council approval to retain Gallagher
Benefit Services to assist the City with a Request for Proposal for claims auditing
services and an optional claims office operational review.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Mic ael C. Van illigen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Randy Peck, Personnel Manager
THE CITY OF
DuB E
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Memorandum
April 12, 2007
TO: Michael C. Van Milligen
City Manager
FROM: Randy Peck
Personnel Manager
SUBJECT: Claims Audit of the Third Party Administrator for the Health Insurance Plan
On May 1, 1995, the City contracted with Health Choices, Inc. of Dubuque to provide
administration services for the health insurance plan. Although our benefit consultant
periodically reviews claims payments to ensure we are receiving the appropriate
discounts, a thorough claims audit has not been conducted. $25,000 has been
budgeted to conduct an audit of our third party administrator for the health insurance
plan. The $25,000 includes the cost of having our benefit consultant, Gallagher Benefit
Services, prepare, distribute and analyze the results of a Request for Proposals.
I have attached a proposal submitted by Bill Robinson of Gallagher Benefit Services to
assist the City with a Request for Proposal for claim auditing services and an optional
claims office operational review. Their fee for this service would not exceed $6,500.
Travel expenses would be additional and billed at actual cost. The Healthcare
Committee recommends retaining the services of Gallagher Benefit Services to assist
the City with a Request for Proposal for claims auditing services and an optional claims
office operational review. The requested action is for the City Council pass a motion
approving the agreement and authorizing you to sign the agreement.
If you have any questions, please feel free to call.
RP:tlb
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t~ Gallagher Benefit Services,
~~~.~Memo
To: Randy Peck, City of Dubuque
From: Bill Robinson, Denver Office
Date: November 20, 2006
Re: Claim Audit RFP Proposal
As requested, we are providing this proposal to assist the City with a Request for
Proposal (RFP) for claim auditing services and an optional claim office
operational review. Plan sponsors that have not had a claim audit recently, often
elect to have both an audit and a claim operational review done at the same
time.
Scope of Services
Our proposal contemplates the following services:
• Develop RFP for distribution
• Develop a list of vendors qualified to receive the RFP
• Release RFP
• Respond to written questions submitted by potential respondents
• Analyze responses
• Prepare written report with findings and recommendations
• Assist with interviews of finalists, if desired.
• Review proposed administrative agreement submitted by selected vendor
Timeline
Once we are retained for this project, we would expect it to take 90-120 days to
complete the entire scope of services described above.
Project Team
The project team for this engagement would consist of the three individuals that
presently provide most ongoing services for the City's benefit plans:
• William (Bill) F. Robinson, Jr., Area Vice President and Project Manager
• Barbara (Barb) Batt, Account Executive
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Randy Peck
November 20, 2006
Page Two
• Shawn Adkins, CPA and CEBS, Underwriting Manager
Fees
To provide the scope of services described above, we anticipate that it will take
20-25 hours of our staff time. At our average billing rate of $225/hr., this
equates to $4,500 to $5,625. We are willing to cap our fee at $5,000.
To expand our services to include the optional claim office operational review,- an.
additional 5-10 staff hours would be required. We are willing to cap our fee for
this optional service at $1,500.
Travel expenses would be additional and billed at actual costs. As always, we
would make every. effort to coordinate needed travel with other client meetings in
the area to permit sharing of expenses.
Please let me know if we can provide any additional information on .this subject.
We hope to have the opportunity to assist the City with this impor#ant project. If
our proposal is acceptable, please indicate below and return a copy to my
attention.
Regards,
Accepted on Behalf of the City of Dubuque:
Claim audit only
_~/ Claim audit and claim operational review
Signature
Title
Date
Michael C, Van Milligen City Manager
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K:Wcus-a-1\Dubuque -City Ot\2006\iNarkelingWudil RfP Proposal 11.O6.doc