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CC - Approval of a Professional Services Agreement with California Claims Management Services (CCMS) in an Amount Not-to-Exceed $288,000 Annually for a Three-Year Term Ending on June 30, 2018 to Provide Workers Compensation Administration Services
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Contact Person/Dept: Serena Wright
Phone Number: (310) 253-5640
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [] Attachments: Yes [] No [X]
Commission Action Required: Yes [] No [X] Date:
Commission Name:
Public Notification: (E-Mail) Meetings and Agendas - City Council (09/23/15)
Department Approval: Serena Wright, Human Resources Director (09/22/15)
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RECOMMENDATION
Staff recommends that the City Council approve a professional services agreement with California Claims Management Services (CCMS) in an amount not-to-exceed $288,000 annually for a three-year term ending on June 30, 2018 to provide workers compensation administration services.
BACKGROUND
The City is self-insured for its worker’s compensation program up to $1 million per claim. The City participates in a Joint Powers Authority, Independent Cities Risk Management Authority (ICRMA), for the purposes of purchasing pooled insurance coverage for claims between $1 million and $5 million and for excess insurance above $5 million up to $25 million.
In July 2009, Risk Management staff sent out an informal proposal to four full service third-party administrator firms for professional services in the following three key areas: 1) claims administration, 2) medical bill review services, and 3) utilization review services. Based on the evaluation of the submitted proposals, CCMS was selected as the City’s Third Party Administrator (TPA). The contract with CCMS was renewed on October 8, 2012 for three-years and is due to expire on October 31, 2015.
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DISCUSSION
CCMS Workers Compensation Program Approach
Over the past six years, CCMS has partnered with the City in building a strong team to provide excellent claims administration service to our injured employees. Some of the primary duties include consulting and conferring with Risk Management staff regarding recommended courses of action; setting initial claim reserve amounts; reviewing medical treatment plans for injured employees; acting as a liaison between employees, doctors, attorneys, and the City; generating and mailing statutorily required notices to employees; and paying claims-related costs on behalf of the City.
CCMS has a dedicated unit assigned specifically to handle claims for the City. All of the claims administrators are certified by the State of California Self-Insurance Programs. Although workers compensation benefits are mandated by the State, CCMS addresses each claim individually and develops a plan to handle each claim in the most cost effective manner, while still abiding by the rules and regulations set forth by the State. It is a credit to the CCMS organization that several City employees have written letters of appreciation to express gratitude with the level of care and attention that was provided in relation to his/her claim. These practices ultimately reduce the City’s overall claims costs by eliminating the need for litigation.
Claims History
When CCMS received Culver City’s account in November 2009 there were 278 open claims. Over the last six years CCMS, working collaboratively with City staff, has been able to reduce the number of open claims to 170. CCMS consistently closes more claims on an annual basis than are opened in the same time period. For example, in Fiscal Year 2014/2015 there were 89 new claims filed and116 closed.
Audit Results
ICRMA conducts annual independent audits of member cities TPAs to ensure that the TPA meets or exceeds the ICRMA approved performance standards as well as acceptable industry practices in providing claims administration services. There are 7 key areas that are evaluated to ensure that the TPA’s are providing proper oversight and handling of claims. Over the three-year contract period, CCMS has passed the review. The most recent score for 2015 yielded an overall average score of 100%.
Culver City Municipal Code Bid Requirements
Culver City Municipal Code §3.07.085 provides the City may award purchase orders and contracts in any amount for professional or personal services without complying with the formal bidding process; provided, the purchase order or contract shall be based upon competitive quotations, whenever practical, as determined by the City Manager. As noted above, competitive quotations were requested from four qualified firms.
FISCAL ANALYSIS
CCMS has agreed to keep the same contract cost of $288,000 annually throughout the proposed three-year agreement with the same level of dedicated service. The City Council may recall that in the last contract presented in 2012 CCMS reduced the annual cost by 7% and guarantee that reduced cost over the term of the agreement.
Sufficient funds are available in the City Council Adopted Budget for Fiscal Year 2015/2016 to fund the first year of the proposed agreement. Should the City Council approve the professional services agreement this evening, future budget requests will include funding for the second and third year of the agreement.
ATTACHMENTS
None.
RECOMMENDED MOTION
That the City Council:
1. Approve a Professional Services Agreement with California Claims Management Services in an amount not-to-exceed $288,000 annually for a three-year term ending on June 30, 2018 to provide Workers Compensation Administration Services; and,
2. Authorize the City Attorney to review/prepare the necessary documents; and,
3. Authorize the City Manager to execute such documents on behalf of the City.