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Title:
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Approval of a Professional Services Agreement with California Claims Management Services (CCMS) to Provide Workers Compensation Administration Services.
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City of Culver City, California
Agenda Item Report
RECOMMENDATION:
Staff recommends that the City Council approve a professional services agreement
with California Claims Management Services (CCMS) 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 service 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 California
Claims Management Services Inc. (CCMS) was selected as the City’s Third Party
Administrator (TPA). Prior to CCMS being awarded the contract, workers
compensation claims administration services were provided by York Insurance
Services [formerly known as Southern California Risk Management Associates
(SCRMA)] from 2007 – 2009 and prior to that Colen and Lee provided this service
from 1986 – 2007.
Meeting Date: 10/08/12 Item Number: C-1
CITY COUNCIL AGENDA ITEM: Approval of a Professional Services Agreement
with California Claims Management Services (CCMS) to Provide Workers
Compensation Administration Services
Contact Person/Dept.: Serena Wright Phone Number: (310) 253-5640
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [] Attachments: []
Public Notification: (E-Mail) Meetings and Agendas – City Council (10/04/12)
Department Approval:
Serena Wright (10/03/12)
City Attorney Approval:
Carol Schwab (by H. Baker) (10/02/12)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller) (10/04/12)
City Manager Approval:
John M. Nachbar (10/04/12) City of Culver City, California
Agenda Item Report
DISCUSSION:
CCMS Workers Compensation Program Approach
Over the past three years, CCMS has partnered with the City in building a strong
team to provide excellent claims service to those employees injured on the job.
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 the claims for the City.
All of the claims administrators are certified by the State of California Self-Insurance
Programs. CCMS’ approach to handling claims is to always “think outside the box”.
Although workers compensation benefits are mandated by the State, CCMS is
careful to address all issues and develop 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.
Claims History
When CCMS received Culver City’s account in November 2009 there were 278 open
claims. Over the last three years CCMS, working collaboratively with City staff, have
been able to reduce the number of open claims to 194, of which only 131 are open
“active” claims. Although there may be an upfront cost to settling claims, it is less
expensive in the long term; greatly minimizing potential future costs.
Audit Results
ICRMA conducts annual audits of member cities’ TPA’s to ensure that they meet or
exceed 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 2012 yielded an overall average score of 99%.
Culver City Municipal Code Bid Requirements
Culver City Municipal Code § 3.07.085 provides an exception to the formal bid
requirements for professional services provided that the contract is based upon
competitive quotations whenever practical. Because of the complexity of TPA
services, the limited number of firms that can provide those services, and the fact
the City undertook a competitive process in 2009, the City Manager has determined
that obtaining competitive quotations in this case is not practical.
City of Culver City, California
Agenda Item Report
Staff is recommending that City Council approve a three-year agreement with
CCMS. Continuing this partnership will allow the City to continue moving the workers
compensation program in a positive direction.
FISCAL ANALYSIS:
In light of the City’s current fiscal situation, CCMS has agreed to an upfront decrease
of 7% from their current contract and guarantees that reduced cost over the term of
the agreement. The City Council Adopted Budget for Fiscal Year 2012/2013
includes sufficient funding for this contract.
CCMS
City of Culver City
Current Agreement 2009-2012
Annual
Increase
Contract
Amount
Year 1 (11/1/09 –
10/31/10)
$291,900
Year 2 (11/1/10 –
10/31/11) 5%
$300,657
Year 3 (11/1/11 –
10/31/12) 5%
$309,676
ATTACHMENTS:
N/A
MOTION:
That the City Council:
1. Approve a Professional Services Agreement with California Claims
Management Services to Continue to Provide Workers Compensation
Administration Services for a not-to-exceed amount of $288,000 per year for
each year of the agreement; 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.
CCMS
City of Culver City
Proposed Agreement for 2012-2015
Annual
Decrease
Contract
Amount
Year 1 (11/1/12
– 10/31/13) 7%
$288,000
Year 2 (11/1/13
– 10/31/14) 0%
$288,000
Year 3 (11/1/14
– 10/31/15) 0%
$288,000