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TO:
FROM
CITY OF
NEWPORT BEACH
City Council Staff Report
PREPARED BY:
TITLE:
ABSTRACT:
November 5, 2019
Agenda Item No. 8
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
Barbara J. Salvini, Human Resources Director - 949-644-3300,
bsalvini@newportbeachca.gov
Marissa Sur, Human Resources Analyst — 949-644-3302,
msur@newportbeachca.gov
Workers' Compensation Claims Administrator — Approval of
Professional Services Agreement with AdminSure, Inc.
The term "workers' compensation" refers to a system of laws which provide covered
employees with medical and wage replacement benefits that arise from workplace
injuries. As a self-insured public entity, the City contracts with a third party administrator
(TPA) for workers' compensation claims adjusting services. The TPA is charged with
providing overall program administration of the workers' compensation claims. The TPA
works directly with the injured employees, medical providers, consultants and attorneys
to administer workers' compensation benefits on behalf of the City. With the City's current
agreement expiring on December 31, 2019, staff initiated a Request for Proposal process
to review the TPA options available to the City.
RECOMMENDATION:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Approve a five-year Professional Services Agreement with AdminSure, Inc. for Third
Party Workers' Compensation Claims Administration Services at a not -to -exceed
amount of $1,705,506.79, and authorize the Mayor and City Clerk to execute the
Agreement.
FUNDING REQUIREMENTS:
There are sufficient appropriations in the current budget to fund this agreement.
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Workers' Compensation Claims Administrator — Approval of
Professional Services Agreement with AdminSure, Inc.
November 5, 2019
Page 2
DISCUSSION:
The City's current five-year agreement with AdminSure, Inc. (AdminSure) for workers'
compensation claims administration services expires on December 31, 2019. In
anticipation of the current agreement's expiration, staff issued a Request for Proposal
solicitation.
RFP Process
Using specifications provided by the Human Resources Department, the City's
Purchasing staff issued a formal Request for Proposal ("RFP") solicitation for Workers'
Compensation Third Party Administration (TPA) services. The RFP was posted on the
City's public procurement system (PlanetBids) and distributed directly to known
providers of these services. The City received six proposals in response to the RFP.
Phase 1: Technical Evaluation
This RFP was evaluated in two phases. Phase 1, the Technical Evaluation, involved an
evaluation panel reviewing the six proposals and rating them on technical factors such
as:
• Experience in providing Workers' Compensation TPA services;
• Relevant project history and service to other governmental clients;
• Demonstrated expertise in reporting;
• Qualifications of the proposer and the project team; and
• Project approach and subject matter expertise.
Four of the six proposals met the minimum requirement by earning 70% of the available
Technical Evaluation points, and were invited to participate in an interview. During the
interview, each group was given an opportunity to provide the panel with additional detail
regarding the services to be performed and their suitability for award. The interviews
were scored by the same evaluation panel that reviewed the proposals, and those
scores contributed toward the overall technical assessment of each proposer. During
the interviews, one of the four proposers elaborated on their project approach, which
was different than the City's scope of services as listed in the RFP. The evaluation panel
decided to remove this proposer from consideration for award, as the proposed
approach did not meet the City's service needs and made it impossible to compare
pricing from all finalists on an even basis. The three remaining proposers qualified to
advance to Phase 2, and have their proposed costs considered by the City. The results
of the Technical Evaluation are listed in Table A.
Workers' Compensation Claims Administrator — Approval of
Professional Services Agreement with AdminSure, Inc.
November 5, 2019
Page 3
Phase 2: Cost Evaluation
Proposers were asked to provide a fixed annual fee for performance of the
requested Workers' Compensation services, as well as a five-year cost, to reflect
the proposed term of the contract. The basis used for comparison was each
proposer's five-year cost, factoring in one-time costs such as transition fees (if
applicable) and setup fees as well as annual rate increases over the proposed five-
year term. These costs are included in Table A.
TABLE A - RFP EVALUATION RESULTS
Phase of
Max
Adminsure, Inc.
Intercare Holdings
JT2 Integrated
RFP
Pts.
Insurance
Resources
Services
Technical
180.00
161.10
138.12
121.23
Score
(Proposal &
Interview)
Cost Score
120.00
120.00
104.76
93.00
(5 -Year
Proposed
($1,705,506.79)
($1,953,509.24)
($2,200,500.00)
Cost)
Total Score
300.00
281.10
242.88
214.23
Rank
1
2
3
Conclusion of RFP Process and Panel Recommendation
Following this procurement evaluation and review process, the evaluation panel identified
AdminSure as the highest -qualified proposer and most effective provider for Workers'
Compensation Third Party Administration services.
With respect to the technical evaluation, AdminSure offers extensive experience working
with Orange County public entities and medical providers, which helps facilitate a
seamless claims process for the City and its employees. Additionally, AdminSure's
familiarity with processing workers' compensation claims for sworn public safety
employees is impressive. Because certain workers' compensation benefits for sworn
employees differ significantly and tend to be more complex than those provided to
non -sworn employees, claims adjusters must stay abreast of laws which specifically
relate to sworn employees' workers' compensation benefits.
Workers' Compensation Claims Administrator — Approval of
Professional Services Agreement with AdminSure, Inc.
November 5, 2019
Page 4
Since the City has sworn public safety employees (police, fire and certain lifeguards), the
evaluation panel was particularly impressed with Adminsure's familiarity handling these
types of claims. Approximately 87% of Adminsure's municipal clients have public safety
departments with sworn personnel. AdminSure's wealth of experience in this area is
especially valuable when handling these more complex claims.
With respect to cost, AdminSure proposed the lowest cost for services including, but not
limited to, overall claims administration, on-line access for risk management staff to
review claims, the ability to customize reports, and preparation of the Public Self -Insured
Annual Report for the Department of Industrial Relations, Office of Self -Insured Plans. A
flat annual administration/management fee is proposed starting at $321,240 for the first
year, with a three percent (3%) increase each year thereafter.
Additionally, AdminSure has a positive track record with the City. Employee feedback
indicates a high level of "customer satisfaction". The designated indemnity claims adjuster
has established a strong rapport with employees by being responsive and comprehensive
in her claims oversight.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENT:
Attachment A — Professional Services Agreement with AdminSure, Inc.
WE
ATTACHMENT A
PROFESSIONAL SERVICES AGREEMENT
WITH ADMINSURE, INC. FOR
WORKERS' COMPENSATION THIRD PARTY ADMINISTRATION SERVICES
THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement") is made and
entered into as of this 1st day of January, 2020 ("Effective Date"), by and between the
CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"),
and ADMINSURE, INC., a California corporation ("Consultant"), whose address is 3380
Shelby Street, Ontario, CA 91764, and is made with reference to the following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under the laws
of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of City.
B. City desires to engage Consultant to provide Workers' Compensation Third Party
Administration Services ("Project").
C. Consultant possesses the skill, experience, ability, background, certification and
knowledge to provide the professional services described in this Agreement.
D. City has solicited and received a proposal from Consultant, has reviewed the
previous experience and evaluated the expertise of Consultant, and desires to
retain Consultant to render professional services under the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties
as follows:
1. TERM
The term of this Agreement shall commence on the Effective Date, and shall
terminate on December 31, 2024, unless terminated earlier as set forth herein.
2. SERVICES TO BE PERFORMED
Consultant shall diligently perform all the services described in the Scope of
Services attached hereto as Exhibit A and incorporated herein by reference ("Services"
or "Work"). City may elect to delete certain Services within the Scope of Services at its
sole discretion.
3. TIME OF PERFORMANCE
3.1 Time is of the essence in the performance of Services under this Agreement
and Consultant shall perform the Services in accordance with the schedule included in
Exhibit A. In the absence of a specific schedule, the Services shall be performed to
completion in a diligent and timely manner. The failure by Consultant to strictly adhere to
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the schedule set forth in Exhibit A, if any, or perform the Services in a diligent and timely
manner may result in termination of this Agreement by City.
3.2 Notwithstanding the foregoing, Consultant shall not be responsible for
delays due to causes beyond Consultant's reasonable control. However, in the case of
any such delay in the Services to be provided for the Project, each party hereby agrees
to provide notice within two (2) calendar days of the occurrence causing the delay to the
other party so that all delays can be addressed.
3.3 Consultant shall submit all requests for extensions of time for performance
in writing to the Project Administrator as defined herein not later than ten (10) calendar
days after the start of the condition that purportedly causes a delay. The Project
Administrator shall review all such requests and may grant reasonable time extensions
for unforeseeable delays that are beyond Consultant's control.
3.4 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the circumstances, by
hand -delivery or mail.
4. COMPENSATION TO CONSULTANT
4.1 City shall pay Consultant for the Services on a time and expense not -to -
exceed basis in accordance with the provisions of this Section and the Schedule of Billing
Rates attached hereto as Exhibit B and incorporated herein by reference. Consultant's
compensation for all Work performed in accordance with this Agreement, including all
reimbursable items and subconsultant fees, shall not exceed One Million Seven
Hundred Five Thousand Five Hundred Six Dollars and 79/100 ($1,705,506.79),
without prior written authorization from City. No billing rate changes shall be made during
the term of this Agreement without the prior written approval of City.
4.2 Consultant shall submit monthly invoices to City describing the Work
performed the preceding month. Consultant's bills shall include the name of the person
who performed the Work, a brief description of the Services performed and/or the specific
task in the Scope of Services to which it relates, the date the Services were performed,
the number of hours spent on all Work billed on an hourly basis, and a description of any
reimbursable expenditures. City shall pay Consultant no later than thirty (30) calendar
days after approval of the monthly invoice by City staff.
4.3 City shall reimburse Consultant only for those costs or expenses specifically
identified in Exhibit B to this Agreement or specifically approved in writing in advance by
City.
4.4 Consultant shall not receive any compensation for Extra Work performed
without the prior written authorization of City. As used herein, "Extra Work" means any
Work that is determined by City to be necessary for the proper completion of the Project,
but which is not included within the Scope of Services and which the parties did not
reasonably anticipate would be necessary at the execution of this Agreement.
Adminsure, Inc. Page 2
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Compensation for any authorized Extra Work shall be paid in accordance with the
Schedule of Billing Rates as set forth in Exhibit B.
5. PROJECT MANAGER
5.1 Consultant shall designate a Project Manager, who shall coordinate all
phases of the Project. This Project Manager shall be available to City at all reasonable
times during the Agreement term. Consultant has designated Alithia Vargas -Flores to be
its Project Manager. Consultant shall not remove or reassign the Project Manager or any
personnel listed in Exhibit A or assign any new or replacement personnel to the Project
without the prior written consent of City. City's approval shall not be unreasonably
withheld with respect to the removal or assignment of non -key personnel.
5.2 Consultant, at the sole discretion of City, shall remove from the Project any
of its personnel assigned to the performance of Services upon written request of City.
Consultant warrants that it will continuously furnish the necessary personnel to complete
the Project on a timely basis as contemplated by this Agreement.
5.3 If Consultant is performing inspection services for City, the Project Manager
and any other assigned staff shall be equipped with a cellular phone to communicate with
City staff. The Project Manager's cellular phone number shall be provided to City.
6. ADMINISTRATION
This Agreement will be administered by the Human Resources Department. City's
Human Resources Director or designee shall be the Project Administrator and shall have
the authority to act for City under this Agreement. The Project Administrator shall
represent City in all matters pertaining to the Services to be rendered pursuant to this
Agreement.
7. CITY'S RESPONSIBILITIES
To assist Consultant in the execution of its responsibilities under this Agreement,
City agrees to provide access to and upon request of Consultant, one copy of all existing
relevant information on file at City. City will provide all such materials in a timely manner
so as not to cause delays in Consultant's Work schedule.
8. STANDARD OF CARE
8.1 All of the Services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and technical
personnel required to perform the Services required by this Agreement, and that it will
perform all Services in a manner commensurate with community professional standards
and with the ordinary degree of skill and care that would be used by other reasonably
competent practitioners of the same discipline under similar circumstances. All Services
shall be performed by qualified and experienced personnel who are not employed by City.
By delivery of completed Work, Consultant certifies that the Work conforms to the
Adminsure, Inc. Page 3
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requirements of this Agreement, all applicable federal, state and local laws, and legally
recognized professional standards.
8.2 Consultant represents and warrants to City that it has, shall obtain, and shall
keep in full force and effect during the term hereof, at its sole cost and expense, all
licenses, permits, qualifications, insurance and approvals of whatsoever nature that is
legally required of Consultant to practice its profession. Consultant shall maintain a City
of Newport Beach business license during the term of this Agreement.
8.3 Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by reason of strikes,
lockouts, accidents, acts of God, or the failure of City to furnish timely information or to
approve or disapprove Consultant's Work promptly, or delay or faulty performance by
City, contractors, or governmental agencies.
9. HOLD HARMLESS
9.1 To the fullest extent permitted by law, Consultant shall indemnify, defend
and hold harmless City, its City Council, boards and commissions, officers, agents,
volunteers and employees (collectively, the "Indemnified Parties") from and against any
and all claims (including, without limitation, claims for bodily injury, death or damage to
property), demands, obligations, damages, actions, causes of action, suits, losses,
judgments, fines, penalties, liabilities, costs and expenses (including, without limitation,
attorneys' fees, disbursements and court costs) of every kind and nature whatsoever
(individually, a Claim; collectively, "Claims"), which may arise from or in any manner relate
(directly or indirectly) to any breach of the terms and conditions of this Agreement, any
Work performed or Services provided under this Agreement including, without limitation,
defects in workmanship or materials or Consultant's presence or activities conducted on
the Project (including the negligent, reckless, and/or willful acts, errors and/or omissions
of Consultant, its principals, officers, agents, employees, vendors, suppliers, consultants,
subcontractors, anyone employed directly or indirectly by any of them or for whose acts
they may be liable, or any or all of them).
9.2 Notwithstanding the foregoing, nothing herein shall be construed to require
Consultant to indemnify the Indemnified Parties from any Claim arising from the sole
negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall
be construed as authorizing any award of attorneys' fees in any action on or to enforce
the terms of this Agreement. This indemnity shall apply to all claims and liability
regardless of whether any insurance policies are applicable. The policy limits do not act
as a limitation upon the amount of indemnification to be provided by Consultant.
10. INDEPENDENT CONTRACTOR
It is understood that City retains Consultant on an independent contractor basis
and Consultant is not an agent or employee of City. The manner and means of
conducting the Work are under the control of Consultant, except to the extent they are
limited by statute, rule or regulation and the expressed terms of this Agreement. No civil
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service status or other right of employment shall accrue to Consultant or its employees.
Nothing in this Agreement shall be deemed to constitute approval for Consultant or any
of Consultant's employees or agents, to be the agents or employees of City. Consultant
shall have the responsibility for and control over the means of performing the Work,
provided that Consultant is in compliance with the terms of this Agreement. Anything in
this Agreement that may appear to give City the right to direct Consultant as to the details
of the performance of the Work or to exercise a measure of control over Consultant shall
mean only that Consultant shall follow the desires of City with respect to the results of the
Services.
11. COOPERATION
Consultant agrees to work closely and cooperate fully with City's designated
Project Administrator and any other agencies that may have jurisdiction or interest in the
Work to be performed. City agrees to cooperate with the Consultant on the Project.
12. CITY POLICY
Consultant shall discuss and review all matters relating to policy and Project
direction with City's Project Administrator in advance of all critical decision points in order
to ensure the Project proceeds in a manner consistent with City goals and policies.
13. PROGRESS
Consultant is responsible for keeping the Project Administrator informed on a
regular basis regarding the status and progress of the Project, activities performed and
planned, and any meetings that have been scheduled or are desired.
14. INSURANCE
Without limiting Consultant's indemnification of City, and prior to commencement
of Work, Consultant shall obtain, provide and maintain at its own expense during the term
of this Agreement or for other periods as specified in this Agreement, policies of insurance
of the type, amounts, terms and conditions described in the Insurance Requirements
attached hereto as Exhibit C, and incorporated herein by reference.
15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, the Services to be
provided under this Agreement shall not be assigned, transferred contracted or
subcontracted out without the prior written approval of City. Any of the following shall be
construed as an assignment: The sale, assignment, transfer or other disposition of any
of the issued and outstanding capital stock of Consultant, or of the interest of any general
partner or joint venturer or syndicate member or cotenant if Consultant is a partnership or
joint -venture or syndicate or co -tenancy, which shall result in changing the control of
Consultant. Control means fifty percent (50%) or more of the voting power or twenty-five
percent (25%) or more of the assets of the corporation, partnership or joint -venture.
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16. SUBCONTRACTING
The subcontractors authorized by City, if any, to perform Work on this Project are
identified in Exhibit A. Consultant shall be fully responsible to City for all acts and
omissions of any subcontractor. Nothing in this Agreement shall create any contractual
relationship between City and any subcontractor nor shall it create any obligation on the
part of City to pay or to see to the payment of any monies due to any such subcontractor
other than as otherwise required by law. City is an intended beneficiary of any Work
performed by the subcontractor for purposes of establishing a duty of care between the
subcontractor and City. Except as specifically authorized herein, the Services to be
provided under this Agreement shall not be otherwise assigned, transferred, contracted
or subcontracted out without the prior written approval of City.
17. OWNERSHIP OF DOCUMENTS
17.1 Each and every report, draft, map, record, plan, document and other writing
produced, including but not limited to, websites, blogs, social media accounts and
applications (hereinafter "Documents"), prepared or caused to be prepared by Consultant,
its officers, employees, agents and subcontractors, in the course of implementing this
Agreement, shall become the exclusive property of City, and City shall have the sole right
to use such materials in its discretion without further compensation to Consultant or any
other party. Additionally, all material posted in cyberspace by Consultant, its officers,
employees, agents and subcontractors, in the course of implementing this Agreement,
shall become the exclusive property of City, and City shall have the sole right to use such
materials in its discretion without further compensation to Consultant or any other party.
Consultant shall, at Consultant's expense, provide such Documents, including all logins
and password information to City upon prior written request.
17.2 Documents, including drawings and specifications, prepared by Consultant
pursuant to this Agreement are not intended or represented to be suitable for reuse by
City or others on any other project. Any use of completed Documents for other projects
and any use of incomplete Documents without specific written authorization from
Consultant will be at City's sole risk and without liability to Consultant. Further, any and
all liability arising out of changes made to Consultant's deliverables under this Agreement
by City or persons other than Consultant is waived against Consultant, and City assumes
full responsibility for such changes unless City has given Consultant prior notice and has
received from Consultant written consent for such changes.
17.3 All written documents shall be transmitted to City in formats compatible with
Microsoft Office and/or viewable with Adobe Acrobat.
18. CONFIDENTIALITY
All Documents, including drafts, preliminary drawings or plans, notes and
communications that result from the Services in this Agreement, shall be kept confidential
unless City expressly authorizes in writing the release of information.
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19. INTELLECTUAL PROPERTY INDEMNITY
Consultant shall defend and indemnify City, its agents, officers, representatives
and employees against any and all liability, including costs, for infringement or alleged
infringement of any United States' letters patent, trademark, or copyright, including costs,
contained in Consultant's Documents provided under this Agreement.
20. RECORDS
Consultant shall keep records and invoices in connection with the Services to be
performed under this Agreement. Consultant shall maintain complete and accurate
records with respect to the costs incurred under this Agreement and any Services,
expenditures and disbursements charged to City, for a minimum period of three (3) years,
or for any longer period required by law, from the date of final payment to Consultant
under this Agreement. All such records and invoices shall be clearly identifiable.
Consultant shall allow a representative of City to examine, audit and make transcripts or
copies of such records and invoices during regular business hours. Consultant shall allow
inspection of all Work, data, Documents, proceedings and activities related to the
Agreement for a period of three (3) years from the date of final payment to Consultant
under this Agreement.
21. WITHHOLDINGS
City may withhold payment to Consultant of any disputed sums until satisfaction of
the dispute with respect to such payment. Such withholding shall not be deemed to
constitute a failure to pay according to the terms of this Agreement. Consultant shall not
discontinue Work as a result of such withholding. Consultant shall have an immediate
right to appeal to the City Manager or designee with respect to such disputed sums.
Consultant shall be entitled to receive interest on any withheld sums at the rate of return
that City earned on its investments during the time period, from the date of withholding of
any amounts found to have been improperly withheld.
22. ERRORS AND OMISSIONS
In the event of errors or omissions that are due to the negligence or professional
inexperience of Consultant which result in expense to City greater than what would have
resulted if there were not errors or omissions in the Work accomplished by Consultant,
the additional design, construction and/or restoration expense shall be borne by
Consultant. Nothing in this Section is intended to limit City's rights under the law or any
other sections of this Agreement.
23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the Project.
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24. CONFLICTS OF INTEREST
24.1 Consultant or its employees may be subject to the provisions of the
California Political Reform Act of 1974 (the "Act") and/or Government Code §§ 1090 et
seq., which (1) require such persons to disclose any financial interest that may
foreseeably be materially affected by the Work performed under this Agreement, and (2)
prohibit such persons from making, or participating in making, decisions that will
foreseeably financially affect such interest.
24.2 If subject to the Act and/or Government Code §§ 1090 et seq., Consultant
shall conform to all requirements therein. Failure to do so constitutes a material breach
and is grounds for immediate termination of this Agreement by City. Consultant shall
indemnify and hold harmless City for any and all claims for damages resulting from
Consultant's violation of this Section.
25. NOTICES
25.1 All notices, demands, requests or approvals, including any change in
mailing address, to be given under the terms of this Agreement shall be given in writing,
and conclusively shall be deemed served when delivered personally, or on the third
business day after the deposit thereof in the United States mail, postage prepaid, first-
class mail, addressed as hereinafter provided.
25.2 All notices, demands, requests or approvals from Consultant to City shall
be addressed to City at:
Attn: Human Resources Director
Human Resources Department
City of Newport Beach
100 Civic Center Drive
PO Box 1768
Newport Beach, CA 92658
25.3 All notices, demands, requests or approvals from City to Consultant shall
be addressed to Consultant at:
Attn: Alithia Vargas -Flores
Adminsure, Inc.
3380 Shelby Street
Ontario, CA 91764
26. CLAIMS
Unless a shorter time is specified elsewhere in this Agreement, before making its
final request for payment under this Agreement, Consultant shall submit to City, in writing,
all claims for compensation under or arising out of this Agreement. Consultant's
acceptance of the final payment shall constitute a waiver of all claims for compensation
under or arising out of this Agreement except those previously made in writing and
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identified by Consultant in writing as unsettled at the time of its final request for payment.
Consultant and City expressly agree that in addition to any claims filing requirements set
forth in the Agreement, Consultant shall be required to file any claim Consultant may have
against City in strict conformance with the Government Claims Act (Government Code
sections 900 et seq.).
27. TERMINATION
27.1 In the event that either party fails or refuses to perform any of the provisions
of this Agreement at the time and in the manner required, that party shall be deemed in
default in the performance of this Agreement. If such default is not cured within a period
of two (2) calendar days, or if more than two (2) calendar days are reasonably required
to cure the default and the defaulting party fails to give adequate assurance of due
performance within two (2) calendar days after receipt of written notice of default,
specifying the nature of such default and the steps necessary to cure such default, and
thereafter diligently take steps to cure the default, the non -defaulting party may terminate
the Agreement forthwith by giving to the defaulting party written notice thereof.
27.2 Notwithstanding the above provisions, City shall have the right, at its sole
and absolute discretion and without cause, of terminating this Agreement at any time by
giving no less than seven (7) calendar days' prior written notice to Consultant. In the
event of termination under this Section, City shall pay Consultant for Services
satisfactorily performed and costs incurred up to the effective date of termination for which
Consultant has not been previously paid. On the effective date of termination, Consultant
shall deliver to City all reports, Documents and other information developed or
accumulated in the performance of this Agreement, whether in draft or final form.
28. STANDARD PROVISIONS
28.1 Recitals. City and Consultant acknowledge that the above Recitals are true
and correct and are hereby incorporated by reference into this Agreement.
28.2 Compliance with all Laws. Consultant shall, at its own cost and expense,
comply with all statutes, ordinances, regulations and requirements of all governmental
entities, including federal, state, county or municipal, whether now in force or hereinafter
enacted. In addition, all Work prepared by Consultant shall conform to applicable City,
county, state and federal laws, rules, regulations and permit requirements and be subject
to approval of the Project Administrator and City.
28.3 Waiver. A waiver by either party of any breach, of any term, covenant or
condition contained herein shall not be deemed to be a waiver of any subsequent breach
of the same or any other term, covenant or condition contained herein, whether of the
same or a different character.
28.4 Integrated Contract. This Agreement represents the full and complete
understanding of every kind or nature whatsoever between the parties hereto, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged herein.
No verbal agreement or implied covenant shall be held to vary the provisions herein.
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28.5 Conflicts or Inconsistencies. In the event there are any conflicts or
inconsistencies between this Agreement and the Scope of Services or any other
attachments attached hereto, the terms of this Agreement shall govern.
28.6 Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or
against either party by reason of the authorship of the Agreement or any other rule of
construction which might otherwise apply.
28.7 Amendments. This Agreement may be modified or amended only by a
written document executed by both Consultant and City and approved as to form by the
City Attorney.
28.8 Severability. If any term or portion of this Agreement is held to be invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall continue in full force and effect.
28.9 Controlling Law and Venue. The laws of the State of California shall govern
this Agreement and all matters relating to it and any action brought relating to this
Agreement shall be adjudicated in a court of competent jurisdiction in the County of
Orange, State of California.
28.10 Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee
or applicant for employment because race, religious creed, color, national origin,
ancestry, physical handicap, medical condition, marital status, sex, sexual orientation,
age or any other impermissible basis under law.
28.11 No Attorneys' Fees. In the event of any dispute or legal action arising under
this Agreement, the prevailing party shall not be entitled to attorneys' fees.
28.12 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute one (1) and the same instrument.
[SIGNATURES ON NEXT PAGE]
Adminsure, Inc. Page 10
8-14
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:_ i o • 24J. I Ot
By:
City Attorney p°�—
ATTEST:
Date:
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
By:
Diane B
Mayor
Dixon
CONSULTANT: ADMINSURE, INC., a
California corporation
Date:
By:
Alithia Vargas -Flores
Chief Executive Officer
Date:
By:
Ashley C. Sells
Secretary
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
Adminsure, Inc. Page 11
8-15
EXHIBIT A
SCOPE OF SERVICES
Adminsure, Inc. Page A-1 8-16
EXHIBIT A
SCOPE OF SERVICES
Consultant shall provide Third Party Administrator (TPA) services related to the City's Workers'
Compensation program, in accordance with this Scope of Services:
Responsibilities and Provisions
The following is a listing of the minimum required services as they relate to Workers' Compensation
Claims Administration services:
1. Program Administration
Consultant shall:
1.1 Develop policies and procedures relating to the workers' compensation claims program,
as well as provide information and guidance regarding the workers' compensation
program and specified claims.
1.2 Inform the City of current changes or proposed changes in statutes, rules and regulations
and case law affecting the workers' compensation program.
1.3 Represent City in all matters related to the set-up, investigation, adjustment, processing,
negotiation and resolution of workers' compensation claims against the City.
1.4 Facilitate risk management and other related seminars for department heads and/or City
staff at request of City.
1.5 Represent administrator at quarterly meetings with departments on-site at City, including
the preparation of claim narratives for those attending the meetings.
1.6 Provide copies of file correspondence and documentation as requested.
1.7 Maintain and store all hardcopy files for five (5) years after file is closed.
1.8 Destroy any claim records by shredding. There will be no additional cost to City for
destruction of claim records. Provide Certificate of Destruction for all documents.
1.9 Administrator shall provide to City, at no additional cost, within five (5) business days of
the date of termination of this Agreement, all claims, reports, files and electronic data of
City self-insured workers' compensation annual reports.
2. Claims Administration
Consultant shall:
2.1 Administer worker's compensation benefits in accordance with the California State Labor
Code.
2.2 Within 24 hours of receipt of the Employer's First Report of Injury the claims administrator
will make initial contact with the injured employee and establish a claims file.
8-17
EXHIBIT A
SCOPE OF SERVICES
2.3 All claim files, within the laws regarding medical information, are to be made available for
review by the City anytime during the administrator's regular business hours.
2.4 Maintain Utilization Review process as governed by Labor Code section 4610 to review
treatment recommended by physicians to determine if it is medically necessary, either in-
house or with the City's contracted vendor.
2.5 Monitor treatment programs for injured employees to ensure that they receive proper care
and to avoid over treatment situations.
2.6 Investigate and recommend special, outside independent investigations for questionable
claims with the consent, coordination and assistance of the City.
2.7 Serve all medical reports on interested parties to a claim and file with the appropriate
State agency within five (5) days of receipt.
2.8 Complete a thorough analysis of relevant factors and coordinate recommendations with
the City for settlement/disposition of claims. Final settlement authority shall rest with the
City.
2.9 Respond to City staff inquiries within twenty-four (24) hours and on the same day
involving critical issues.
2.10 Provide Medicare Agent Services and the required reporting (including Section 111 of the
Medicare, Medicaid & SCHIP Extension Act (MMSEA) of 2007).
2.11 Comply with CSAC's (the City's excess insurance carrier/authority) Claims Administration
and/or other reporting requirements by City excess insurance carriers.
3. Medical Service and Expenditures
Consultant shall:
3.1 Continue the development of and recommend, as requested by City, a panel of
physicians for the first treatment of employee injury or illness and recommend a panel of
medical specialists for treatment requiring long-term or specialty care, utilizing those that
are approved by the City.
3.2 Monitor treatment programs for injured or ill employees including review of all doctors'
reports, referring as necessary to a State -approved and City -approved utilization review
management program for required determinations.
3.3 Recommend referral and with the consent of City, submit a claim for nurse case
management services for assistance in medical control of the claim or for consultation to
a City -approved nurse case management company.
3.4 Maintain close liaison with treating physicians.
8-18
EXHIBIT A
SCOPE OF SERVICES
3.5 Provide guidance in the evaluation of physical capacity of injured employees and their
ability to return to work.
3.6 Determine eligibility for and authorize payment of medical benefits, and arrange and
authorize examinations to determine the nature and extent of disability.
3.7 Arrange and advise all interested parties to a claim of all medical appointments, including
Agreed or Independent Medical Evaluations, using the panel list agreed upon between
Administrator and City or as required by the State agency.
3.8 File and serve all medical reports on interested parties of a claim and with the appropriate
State agency within five (5) days of receipt.
3.9 Review all billings for reasonableness using the State Medical Fee Schedules and submit
for medical auditing as necessary to a City -approved bill review service.
4. Consultation
Consultant shall:
4.1 Provide information and guidance to injured employees regarding the benefits they will
receive in accordance with City' policies.
4.2 Staff members to attend appointments, including but not limited to meetings, conferences,
court appearances, and scene investigations at the request of City staff.
4.3 Provide information, guidance and assistance to injured employees regarding permanent
disability ratings, Qualified Medical and Agreed Medical Examiner process, delay
process, conditional denial process and settlement of claims.
4.4 Assist City in solving employee non -legal problems arising out of industrial injury cases.
4.5 Work with the injured employees, City' personnel and other agencies to provide
rehabilitation, retraining or reassignment of employees with physical or performance
limitations arising out of industrial injuries.
4.6 Assist in developing policies and procedures to insure that the return to work by, or
reassignment of, injured employees is consistent with the medical findings.
4.7 Assist City, as requested, with cost containment and incentive programs.
5. Litigation Management
Consultant shall:
5.1 Refer litigated cases to attorneys approved by City.
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EXHIBIT A
SCOPE OF SERVICES
5.2 Assist in the preparation of litigated cases.
5.3 Assist in negotiation of Compromise and Release settlements.
5.4 Monitor all cases for potential subrogation recoveries, prepare correspondence to effect
collection, and assist legal counsel where litigation is required to affect recovery.
5.5 Ensure that, for employees who are represented by legal counsel, their attorneys receive
copies of reports and correspondence as appropriate/required.
5.6 Maintain a litigation management budget for each litigated file and provide litigation status
reports on a monthly basis for each litigation file.
5.7 Cooperate fully with all attorneys chosen by City, including City Attorneys.
6. Information Management and Records
Consultant shall:
6.1 Provide City management with computerized reports at specified intervals on new claims,
closed claims, paid losses, incurred costs, the progress of individual claims and the
effectiveness of safety and other cost control programs.
6.2 Administer and provide a comprehensive annual statistical summary survey customized
to meet the City needs, and if requested by the City, a narrative report to serve as the
basis for evaluation of City's programs.
6.3 Prepare the City's the annual Public Entities Self -Insurers Report as required by the
Department of Industrial Relations, Self Insurance Plans. Reports are to be submitted to
the City no later than 30 days prior to the due date.
6.4 Provide a written status of cases, as selected by the City, and meet with the City to
discuss these cases at established intervals.
6.5 Upon request by the City, Administrator shall provide on-line usage of Administrator's
computer system at designated staff workstations.
6.6 Upon request by the City, Administrator shall provide secure, electronic reports to allow
performance of certain routine data analysis by City.
6.7 Upon request by the City, provide narrative or analytical reports regarding major cases.
6.8 Provide the City with copies of initial and quarterly reporting to Medicare.
7. Financial Management
Consultant shall:
8-20
EXHIBIT A
SCOPE OF SERVICES
7.1 City shall establish a Workers' Compensation Trust Fund, of which the Workers'
Compensation Administrator shall be designated co -trustee. The purpose of this fund
shall be to pay medical/legal and other expenses incurred as a result of accepted
industrial injuries/illnesses, as well as payment of Workers' Compensation benefits to
which eligible employees are entitled.
7.2 Report to the City at least monthly, or as needed, of charges against the fund, and obtain
reimbursement to maintain the fund at an appropriate level determined by the City.
7.3 Manage the Trust Fund in a reasonable and prudent manner and in compliance with City'
policies.
7.4 Issue vouchers to the City from the Trust Fund in those instances where an employee is
paid benefits directly by the City, i.e. Labor Code 4850 pay, temporary total disability
benefits or salary continuation in lieu of temporary disability benefits.
7.5 Actively collect any overpayment of benefits.
7.6 Reimburse the City for any penalties assessed against City which are found to be the
result of Administrator's lack of proper claims handling or the holding of checks due to
insufficient funds in the bank account.
7.7 Establish procedures and necessary documentation enabling the City to write checks for
payment of benefits or to have Administrator draw checks for payment of benefits on an
appropriate account of City.
7.8 Absorb any costs for the printing of any checks. The City's name will appear on the
check, and imprinted on all check copies. All checks shall be printed in numerical order,
locked and controlled by Administrator's accounting department. All checks must be
accounted for as payments, voids, etc.
7.9 Use a separate check register for the City. Daily entries will be made on all checks
disbursed on the account. Credits, if any, shall be entered, as well as all deposits made
on checks, received on reimbursement requests made from Administrator's office.
Administrator shall provide the City with a check register, mailed to the City.
7.10 Provide the City accounting office, if requested, with one (1) copy of each check register,
all voided checks, etc.
7.11 Review periodically all Trustee accounts to determine if initial deposit is adequate for
handling the dollar volume for the month so that the holding of checks waiting for a deposit
does not occur. In such instances where it is determined that deposit is inadequate,
Administrator's accounting office shall submit a report with a recommendation for an
increase to the Trustee account based on this review. Prompt payments on
Administrator's reimbursement requests are a major factor in the efficiency of a Trustee
account. City reimbursement payments should reach Administrator's office within ten
(10) days from the date of Administrator's request in order to maintain a continuous flow
of checks issued throughout the month.
8-21
EXHIBIT B
SCHEDULE OF BILLING RATES
Adminsure, Inc. Page B-1 8-22
EXHIBIT B
SCHEDULE OF BILLING RATES
For the Scope of Services described in this Agreement, Consultant shall be compensated
for the first year at a flat annual fee in the amount of Three Hundred Twenty One Thousand
Two Hundred Forty Dollars and no/100 ($321,240.00). Upon the first anniversary of the
Effective Date of this Agreement, and upon each subsequent anniversary of the Effective
Date thereafter, the annual flat fee shall be as set forth below. Consultant's compensation
for all Work performed in accordance with this Agreement, including all reimbursable items
and subconsultant fees (if any), shall not exceed One Million Seven Hundred Five
Thousand Five Hundred Six Dollars and 79/100 ($1,705,506.79).
Workers' Compensation Third Party Claims Administration Services —
Not -to -Exceed Compensation Amount
Year 1:
$321,240.00
Year 2:
$330,877.20
Year 3:
$340,803.52
Year 4:
$351,027.62
Year 5:
$361,558.45
MAXIMUM AGREEMENT
COMPSENSATION:
$1,705,506.79
Misc. & Ancilla
Services
Program Implementation
Included —
No Additional Fee
Data Conversion
Included —
No Additional Fee
Electronic Processing of 5020's
Included —
No Additional Fee
Online Access
Included —
No Additional Fee
Customization of Reports
Included — No Additional Fee
All Reports & Custom/Ad Hoc Reports
Included —
No Additional Fee
MMSEA Reporting
Included —
No Additional Fee
Preparation of State Annual Report
Included —
No Additional Fee
Preparation of 1099's
Included —
No Additional Fee
Index Bureau Checks
Included —
No Additional Fee
Edex Checks
Included —
No Additional Fee
Storage of Claims
Included —
No Additional Fee
8-23
EXHIBIT C
INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES
1. Provision of Insurance. Without limiting Consultant's indemnification of City, and
prior to commencement of Work, Consultant shall obtain, provide and maintain at
its own expense during the term of this Agreement, policies of insurance of the
type and amounts described below and in a form satisfactory to City. Consultant
agrees to provide insurance in accordance with requirements set forth here. If
Consultant uses existing coverage to comply and that coverage does not meet
these requirements, Consultant agrees to amend, supplement or endorse the
existing coverage.
2. Acceptable Insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders'
Rating of A- (or higher) and Financial Size Category Class VII (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless otherwise
approved by the City's Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. Consultant shall maintain Workers'
Compensation Insurance, statutory limits, and Employer's Liability
Insurance with limits of at least one million dollars ($1,000,000) each
accident for bodily injury by accident and each employee for bodily injury by
disease in accordance with the laws of the State of California, Section 3700
of the Labor Code.
Consultant shall submit to City, along with the certificate of insurance, a
Waiver of Subrogation endorsement in favor of City, its City Council, boards
and commissions, officers, agents, volunteers and employees.
B. General Liability Insurance. Consultant shall maintain commercial general
liability insurance, and if necessary umbrella liability insurance, with
coverage at least as broad as provided by Insurance Services Office form
CG 00 01, in an amount not less than one million dollars ($1,000,000) per
occurrence, two million dollars ($2,000,000) general aggregate. The policy
shall cover liability arising from premises, operations, personal and
advertising injury, and liability assumed under an insured contract (including
the tort liability of another assumed in a business contract).
C. Automobile Liability Insurance. Consultant shall maintain automobile
insurance at least as broad as Insurance Services Office form CA 00 01
covering bodily injury and property damage for all activities of Consultant
arising out of or in connection with Work to be performed under this
Agreement, including coverage for any owned, hired, non -owned or rented
vehicles, in an amount not less than one million dollars ($1,000,000)
combined single limit each accident.
Adminsure, Inc. Page C-1 8-24
D. Professional Liabilitv (Errors & Omissions) Insurance. Consultant shall
maintain professional liability insurance that covers the Services to be
performed in connection with this Agreement, in the minimum amount of
one million dollars ($1,000,000) per claim and two million dollars
($2,000,000) in the aggregate. Any policy inception date, continuity date,
or retroactive date must be before the Effective Date of this Agreement and
Consultant agrees to maintain continuous coverage through a period no
less than three years after completion of the Services required by this
Agreement.
4. Other Insurance Requirements. The policies are to contain, or be endorsed to
contain, the following provisions.-
A.
rovisions:
A. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Agreement shall be endorsed to waive subrogation against
City, its City Council, boards and commissions, officers, agents, volunteers
and employees or shall specifically allow Consultant or others providing
insurance evidence in compliance with these requirements to waive their
right of recovery prior to a loss. Consultant hereby waives its own right of
recovery against City, and shall require similar written express waivers from
each of its subconsultants.
B. Additional Insured Status. All liability policies including general liability,
excess liability, pollution liability, and automobile liability, if required, but not
including professional liability, shall provide or be endorsed to provide that
City, its City Council, boards and commissions, officers, agents, volunteers
and employees shall be included as insureds under such policies.
C. Primary and Non Contributory. All liability coverage shall apply on a primary
basis and shall not require contribution from any insurance or self-insurance
maintained by City.
D. Notice of Cancellation. All policies shall provide City with thirty (30)
calendar days' notice of cancellation (except for nonpayment for which ten
(10) calendar days' notice is required) or nonrenewal of coverage for each
required coverage.
5. Additional Agreements Between the Parties. The parties hereby agree to the
following.-
A.
ollowing:
A. Evidence of Insurance. Consultant shall provide certificates of insurance to
City as evidence of the insurance coverage required herein, along with a
waiver of subrogation endorsement for workers' compensation and other
endorsements as specified herein for each coverage. Insurance certificates
and endorsement must be approved by City's Risk Manager prior to
commencement of performance. Current certification of insurance shall be
kept on file with City at all times during the term of this Agreement. The
certificates and endorsements for each insurance policy shall be signed by
a person authorized by that insurer to bind coverage on its behalf. At least
Adminsure, Inc. Page C-2 8-25
fifteen (15) days prior to the expiration of any such policy, evidence of
insurance showing that such insurance coverage has been renewed or
extended shall be filed with the City. If such coverage is cancelled or
reduced, Consultant shall, within ten (10) days after receipt of written notice
of such cancellation or reduction of coverage, file with the City evidence of
insurance showing that the required insurance has been reinstated or has
been provided through another insurance company or companies. City
reserves the right to require complete, certified copies of all required
insurance policies, at any time.
B. City's Right to Revise Requirements. City reserves the right at any time
during the term of the Agreement to change the amounts and types of
insurance required by giving Consultant sixty (60) calendar days' advance
written notice of such change. If such change results in substantial
additional cost to Consultant, City and Consultant may renegotiate
Consultant's compensation.
C. Enforcement of Agreement Provisions. Consultant acknowledges and
agrees that any actual or alleged failure on the part of City to inform
Consultant of non-compliance with any requirement imposes no additional
obligations on City nor does it waive any rights hereunder.
D. Requirements not Limiting. Requirements of specific coverage features or
limits contained in this Section are not intended as a limitation on coverage,
limits or other requirements, or a waiver of any coverage normally provided
by any insurance. Specific reference to a given coverage feature is for
purposes of clarification only as it pertains to a given issue and is not
intended by any party or insured to be all inclusive, or to the exclusion of
other coverage, or a waiver of any type. If the Consultant maintains higher
limits than the minimums shown above, the City requires and shall be
entitled to coverage for higher limits maintained by the Consultant. Any
available insurance proceeds in excess of the specified minimum limits of
insurance and coverage shall be available to the City.
E. Self-insured Retentions. Any self-insured retentions must be declared to
and approved by City. City reserves the right to require that self-insured
retentions be eliminated, lowered, or replaced by a deductible. Self-
insurance will not be considered to comply with these requirements unless
approved by City.
F. City Remedies for Non -Compliance. If Consultant or any subconsultant fails
to provide and maintain insurance as required herein, then City shall have
the right but not the obligation, to purchase such insurance, to terminate this
Agreement, or to suspend Consultant's right to proceed until proper
evidence of insurance is provided. Any amounts paid by City shall, at City's
sole option, be deducted from amounts payable to Consultant or reimbursed
by Consultant upon demand.
Adminsure, Inc. Page C-3 8-26
G. Timely Notice of Claims. Consultant shall give City prompt and timely notice
of claims made or suits instituted that arise out of or result from Consultant's
performance under this Agreement, and that involve or may involve
coverage under any of the required liability policies. City assumes no
obligation or liability by such notice, but has the right (but not the duty) to
monitor the handling of any such claim or claims if they are likely to involve
City.
H. Consultant's Insurance. Consultant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own
judgment may be necessary for its proper protection and prosecution of the
Work.
Adminsure, Inc. Page C-4 8-27