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Renewal Rates for Worker's Compensation Claims Administration Copyright 2014 City of Dubuque Consent Items # 9. ITEM TITLE: Renewal Rates for Worker's Compensation Claims Administration SUMMARY: City Manager recommending acceptance of the renewal rates from Alternative Services Concepts for services related to the administration of the City's Worker's Compensation Program. SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Approve ATTACHMENTS: Description Type ❑ Acceptance of Worker's Compensation Administration Renewal Rates- City Manager Memo MVM Memo ❑ Memo-Acceptance of ASC Renewal Staff Memo ❑ ASC Renewal Rates Supporting Documentation THE CITY OF Dubuque UBE I erica .i Masterpiece on the Mississippi 2007-2012-2013 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 Administration DATE: August 24, 2015 Personnel Manager Randy Peck recommends City Council acceptance of the renewal rates from Alternative Services Concepts for services related to the administration of the City's Worker's Compensation Program. Alternative Services Concepts is proposing no increase in their fees for the contract period October 1, 2015 to September 30, 2016. The only change from the existing fee structure is the definition of catastrophic claims. Currently a catastrophe is any event resulting in ten or more claimants and/or property losses over $50,000. Catastrophic claims are currently billed as time and expense. Under the renewal proposal any event resulting in ten or more claimant/suffixes will be treated as a catastrophe and billed the quoted per claim rate for the first ten claimants/suffixes and any claim/suffix over ten will be billed at a claim rate of $350 per claim. I concur with the recommendation and respectfully request Mayor and City Council approval. Micliael 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 THE CITY OF Dubuque U .LE Ap Artaca City Masterpiece on, the. Mississippi 2007•quiz•zun TO: Michael C. Van Milligen, City Manager( FROM: Randy Peck, Personnel Manager 1� SUBJECT: Acceptance of the Renewal Rates for Worker's Compensation Claims Administration DATE: August 18, 2015 1 received the renewal rates from Alternative Services Concepts (ASC) for services related to the administration of the City's Worker's Compensation Program. ASC is proposing no increase in their fees for the contract period of October 1 , 2015 to September 30, 2016. The only change from the existing fee structure is the definition of catastrophic claims. Currently a catastrophe is any event resulting in ten or more claimants and/or property losses over $50,000. Catastrophic claims are currently billed as time and expense. Under the renewal proposal any event resulting in ten or more claimant/suffixes will be treated as a catastrophe and billed the quoted per claim rate for the first ten claimants/suffixes and any claim/suffix over ten will be billed at a claim rate of $350 per claim. 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, 2015 through September 30, 2016. 1 will send you the Administrative Services Agreement as soon as it is available. RP:Imh Alternative Service Concepts, LLC City of Dubuque, Iowa October 1, 2015 -October 1, 2016 Two-Year Claims Handling New Claims Service Estimated Number Per-Claimant Estimated Of Claimants Fee Total Fee Workers' Compensation Medical Only 6 $170 $1,020 Indemnity 20 $780 $15,600 Litigation fee TBD $300 + base fee Run-In Claims Indemnity TBD $450 --- Medical Only TBD $50 --- Incident Reports' TBD $40 --- Catastrophic Claimsz TBD --- --- Estimated Minimum Claims Fee $16,620 MMSEA-Annual Transmission Fees(includes query& submissions) $2,100 Account Administration Fee $3,000 Systems Fee $2,500 Minimum & Deposit Claims Fee $24,220 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 1 Recorded in claifns.tirstein only. ?Llrr.ct he speeifred its "Invident"at time nf'reporting. 'Catastrophic claims—.1 it ?event resulting in 10 or more clainia,rts/suf/ixes will he treated as a catastrophe and billed the quoted per claim rate for the first 10 claimants1stiff tes and anti,elainilsliff v over 10 will he billed at it per claim rate of'$350 per claim, 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. 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 Pursuit and Recovery 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...................................................................$2500 Per Release Carrier Data Transmission.................................................................$400 Per Release State-Mandated EDI ..........................................................................$3 Per Report/Bill Computer Compatible Checks & Electronic Transfers.....................At Cost 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) Actuarial Data Requests ....................................................................$50 Per Hour Travel Over 100 Miles........................................................................T&E ($85 Per Hour) Outside Investigation ........................................................................T&E ($85 Per Hour) Medical Cost Management4 Fee Scheduling.......................................................................28% of Savings PPO Usage.............................................................................30% of Savings .f As required or requester. Most services are optional. 4 Pricing for additional managed care services is available upon request. Invoicing and Payment Terms Fees will be invoiced annually. Fees are payable upon receipt of the invoice. asc reserves the right to charge 1'/2% 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 MRIs, 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 • 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.