HomeMy WebLinkAbout25 - Workers Comp 3rd Party AdministratorCITY OF
F NEWPORT REACH
" City Council Staff Report
November 25, 2014
Agenda Item No. 25
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Terri L. Cassidy, Deputy City Manager /Human Resources Director -(949) 644 -3303,
tcassidy @newportbeachca.gov
PREPARED BY: Sheri Anderson, HR Supervisor, and Leslie Campbell, HR Specialist II
PHONE: (949) 644 -3307, canderson @newportbeachca.gov, and (949) 644 -3294,
Icampbell @newportbeachca.gov
TITLE: Approval of a New Third Party Administrator for Workers' Compensation
Administration - AdminSure, Inc.
ABSTRACT:
On September 3, 2014, the City published Request for Proposal (RFP) No. 15 -08 for Workers'
Compensation Claims Administration services. The RFP was posted on the City website for public review
and distributed directly to known service providers through current and previous business interactions.
Potential respondents were also identified through the City's Vendor Database and sent a copy of the
solicitation.
By the RFP deadline of September 30, 2014, the City received 10 proposals: Acclamation Insurance
Management Services (AIMS); ACME Administrators, Inc.; AdminSure, Inc.; Carl Warren and Company;
CCMS, Inc.; Hazelrigg Claims Management Services; Intercare Holdings, Inc.; Pacific Claims
Management; Tristar Insurance Group and Corvel Corporation (current vendor).
All 10 proposers met the City's minimum submittal standards with regard to responsiveness and were
forwarded to the evaluation panel for review.
RECOMMENDATION:
Staff recommends approval of AdminSure, Inc. for Workers' Compensation Third Party Claims
Administration with an annual expenditure of $260,784.00, effective January 1, 2015, with a total not -to-
exceed cost of $1.35M over five years through December 31, 2019.
FUNDING REQUIREMENTS:
The Fiscal Year 14/15 budget account for Workers' Compensation Third Party Claims Administration is
sufficient to cover the first year's cost of $260,784.
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DISCUSSION:
The City of Newport Beach has been authorized by the State of California to be a self- insured public entity
for workers compensation since 1993. This status requires the City to contract with a qualified third party
administrator (TPA) to perform its workers compensation claims function. From 1993 to present the City
has had three (3) different administrators. These long term claim administration relationships have been
effective in stabilizing cost for the program which is frequently subject to legislative change, new case law
and rising medical costs. A partnership with the best qualified and reasonably priced administrator ensures
experienced claims adjusting with the highest level of internal customer satisfaction for employees, and
managers alike. This is a difficult benefit to administer even with excellent service.
The current contract was issued for a five (5) year period and expires December 31, 2014. The RFP
process for a successor produced ten (10) qualified companies for evaluation panel review. The
evaluation panel consisted of two members of outside agencies: City of Irvine and City of Santa Ana,
subject matter experts in Workers' Compensation Administration and one from our Risk Management
Division in Human Resources. The top six (6) ranked proposers advanced to the next step of the
evaluation process to participate in panel interviews and presentations.
Table A summarizes the findings of the evaluation panel, following proposal evaluations, panel interviews
and cost analysis:
Table A — Aggregate Scores
Proposer
Step 1: Step 2: Step 3: Cost
Total lOverall
Proposal Panel Ratio
Score Rank
Evaluation Interviews Analysis
(Out of 120)
(Out of
Out of 120 (Out of 60 )
300
dminSure, Inc.
98.00
103.20
58.45
259.65
1
Intercare Holdings, Inc.
91.00
109.20
45.59
245.79
7
Acclamation Insurance
87.34
90.00
60.00
237.34
3
Management Services
AIMS
ACME Administrators,
93.00
96.00
47.58
236.58
4
Inc.
ristar Insurance Group
93.34
87.60
54.87
235.81
5
CorVel Corporation
97.00
72.40
46.70
216.10
6
AdminSure, Inc. was the top -rated proposer following the three -step evaluation and selection process.
Their proposal and panel interview revealed ample resources to handle the City's caseload and a very
favorable public agency referenced - checked work history to successfully provide these services.
AdminSure's commitment to provide timely contact with injured employees, plus continuous employee
outreach through a dedicated contact line, digitize communications and literature provides a service level
the City seeks to maintain for its employees, supervisors and managers from its chosen Workers
Compensation Claims Administrator.
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AdminSure's first year contract rate provides a $73,559 annual savings with the overall five (5) year rate
savings of approximately $314,000. The cost analysis for all ten (10) vendors included an industry wide
annual rate adjustment for this type of professional service agreement (PSA). It would cover any
fluctuations in operating costs such as salaries, required insurance coverage premium increases, private
sector mandated employee benefits and training compliance to maintain required state claims adjusting
certification. AdminSure's projected escalator at 2% was the lowest of the increases. Per the request of
the City Council at its November 12, 2014 meeting, we have worked with AdminSure to modify the
escalator clause so any increase requested may be adjusted not more than the change in the Consumer
Price Index (LA -OC- Riverside, All Urban Consumers) or 2 %, whichever is less and subject to City
approval upon receipt of the required justification for the basis of the increase.
Upon conclusion of this RFP evaluation process, the evaluation panel recommends award of any resultant
agreement for Workers' Compensation Claims Administration services to AdminSure, Inc. Copies of all
proposals are available for your review, upon request.
ENVIRONMENTAL REVIEW:
This action is not subject to the California Environmental Quality Act (CEQX) 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).
ATTACHMENTS:
Description
Attachment A - Professional Services Agreement with AdminSure. Inc.
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ATTACHMENT A
PROFESSIONAL SERVICES AGREEMENT
WITH ADMINSURE, INC. FOR
WORKERS COMPENSATION CLAIMS ADMINISTRATION SERVICES
THIS PROFESSIONAL SERVICES AGREEMENT ( "Agreement') is made and
entered into as of this 26th day of November, 2014 ( "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 1470 South Valley Vista Drive, Suite #230, Diamond Bar, California 91765, 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 claims
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, 2019, 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
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performed to completion in a diligent and timely manner. The failure by Consultant to
strictly adhere to 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
Three Hundred Fifty Seven Thousand One Hundred Thirty One Dollars and 00/100
($1,357,131.00), 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 Upon the first anniversary of the Effective Date of this Agreement and
upon each anniversary of the Effective Date thereafter, the Billing Rate set forth in
Exhibit B may be adjusted in proportion to changes in the Consumer Price Index
pursuant to a written request by the Consultant, subject to the conditions set forth in this
Section. The maximum adjustment increase to the Billing Rates, for any year where an
adjustment is made pursuant to this Section, shall not exceed 2% of the Billing Rates in
effect immediately preceding such adjustment. Requests for adjustment to the Billing
Rate shall be made in writing to the City from the Consultant. Such requests shall
include an explanation and demonstration of increased costs incurred by the Consultant
related to this Agreement. Requests shall be reviewed by the Human Resources
Director for validity, and the City reserves the right to accept or reject requests for
adjustment.
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4.3 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.
4.4 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.
4.5 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.
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 Risk Manager 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.
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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 the highest professional
standards. For purposes of this Agreement, the phrase "highest professional
standards" shall mean those standards of practice recognized by one (1) or more first -
class firms performing similar work under similar circumstances.
8.2 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 requirements of this Agreement, all applicable federal, state
and local laws, and the highest professional standard.
8.3 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.
8.4 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.
9.1 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,
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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 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.
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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.
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
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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.
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.
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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.
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 "), which (1) requires such persons to
disclose any financial interest that may foreseeably be materially affected by the Work
performed under this Agreement, and (2) prohibits such persons from making, or
participating in making, decisions that will foreseeably financially affect such interest.
24.2 If subject to the Act, Consultant shall conform to all requirements of the
Act. 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.
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25.2 All notices, demands, requests or approvals from Consultant to City shall
be addressed to City at:
Attn: Lauren Farley, Risk Manager
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.
1470 South Valley Vista Drive, Suite #230
Diamond Bar, CA 91765
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 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
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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.
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
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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 of race, religion, color, national origin, handicap,
ancestry, sex, 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.
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P&ME,
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the dates written below.
APPROVED AS TO FORM:
CITY ATT R Y'S OFFICE
Date:
CITY OF NEWPORT BEACH,
a California municipal corporation
By: By:
Aa on . Harp (AM W y Rush N. Hill, II
Cit torney Mayor
ATTEST:
Date:
M
Leilani I. Brown
City Clerk
CONSULTANT: Adminsure, Inc., a
California corporation
Date:
By:
Gary Lee
CEO
Date:
Alithia Vargas - Flores
CFO
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
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EXHIBIT A
SCOPE OF 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.
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2.3 All claim files, within the laws regarding medical information, are to be
made available for review by the City anytime during the administrators
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.
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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.
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.
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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 using a listing of legal firms provided by
City.
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 Reports
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.
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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:
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
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MKO,
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.
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EXHIBIT B
SCHEDULE OF BILLING RATES
For the Scope of Services described in this Agreement, Consultant shall be
compensated a flat annual Billing Rate in the amount of Two Hundred Sixty Thousand
Seven Hundred Eighty Four Dollars and no /100 ($260,784.00).
Upon the first anniversary of the Effective Date of this Agreement and upon each
anniversary of the Effective Date thereafter, the Billing Rate set forth in Exhibit B may
be adjusted in proportion to changes in the Consumer Price Index pursuant to a written
request by the Consultant, subject to the conditions set forth in Section 4 of this
Agreement. The maximum adjustment increase to the Billing Rates, for any year where
an adjustment is made pursuant to Section 4 of this Agreement, shall not exceed 2% of
the Billing Rates in effect immediately preceding such adjustment.
Requests for adjustment to the Billing Rate shall be made in writing to the City from the
Consultant. Such requests shall include an explanation and demonstration of increased
costs incurred by the Consultant related to this Agreement. Requests shall be reviewed
by the Human Resources Director for validity, and the City reserves the right to accept
or reject requests for adjustment.
The following table below illustrates the maximum compensation amount to Consultant,
per Agreement year:
Year
Not -to- Exceed Compensation Amount
Year 1
$260,784.00
Year 2
$266,000.00
Year 3
$271,320.00
Year 4
$276,746.00
Year 5
$282,281.00
MAXIMUM AGREEMENT
COMPENSATION
$1,357,131.00
Additional Services
The following services shall be provided to the City on an as- requested basis at no
additional charge:
• Transition and Implementation
• Online Access of All Data and Reports
• Generation of All Reports and Ad -Hoc Reports
• MMSEA, WSIC, ISO /DEX and 1099's
• Training and Development of Special Account Instructions /Procedures; and
• All Meetings, Claim Reviews, Forms, Posters, Pamphlets and Checks.
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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 officers, agents,
employees and volunteers.
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.
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D. Professional Liability (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. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Agreement shall be endorsed to waive subrogation
against City, its elected or appointed officers, agents, officials, employees
and volunteers 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 and its officers, officials, employees, and agents 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. 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. City reserves the right to require complete, certified copies of
all required insurance policies, at any time.
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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.
G. Timely Notice of Claims. Contractor shall give City prompt and timely
notice of claims made or suits instituted that arise out of or result from
Contractor's performance under this Contract, 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
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judgment may be necessary for its proper protection and prosecution of
the Work.
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