RTC#03-185

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RTC#03-185 June 3, 2003

SUBJECT:

Award of Contract for Workers' Compensation Claim Administration Services (F0203-78)(RTC#03-185)

REPORT IN BRIEF

Approval is requested for the award of a twelve-month contract to Claims Management, Inc., of Sacramento for Worker's Compensation claim administration services for the Department of Human Resources Risk and Insurance Division.

BACKGROUND

Since becoming an authorized self-insured entity for Workers' Compensation, the City has contracted with a third-party claims administrator because of the complexities and administrative requirements of the California State Labor Code. Typically, there are approximately 250 active claim files in various stages of processing at any given time.

In September 1999, staff issued a Request for Proposals for claims administration services. Ten proposals were received which were evaluated, based upon a number of criteria in addition to cost. At that time, public entity experience, including public safety expertise, and a high level of automation were considered the most important evaluation criteria. Claims Management, Inc., was unanimously selected by the evaluation team as the firm offering the best value to the City.

On October 26, 1999, Council awarded a three-year contract to Claims Management, Inc. (RTC 99-454).

DISCUSSION

Staff now recommends the continuation of the City's working relationship with Claims Management, Inc., by the award of a new twelve-month contract.

Claims Management, Inc. has provided acceptable service to the City in the area of claims adjusting; however, recently, there has been significant personnel changes. Staff recommends approval of a one-year contract to give the City time to evaluate the impact of these personnel changes on the agreed-upon service levels. Historically, the strength of this firm has been in its sophisticated data capabilities and its responsiveness to changes requested by City management.

FISCAL IMPACT

Claims Management has agreed to hold its pricing firm for this new contract. Therefore, the cost will remain at $16,667 per month, making a total cost $200,004 for the twelve-month contract. Funds are budgeted in Department of Human Resources Program 785 - Workers' Compensation.

RECOMMENDATION

It is recommended that Council award a twelve-month contract, in substantially the same form as the attached draft and in an amount not to exceed $200,004, to Claims Management, Inc., for Workers' Compensation claim administration services.

Prepared by:
Elaine Wesely
Purchasing Officer

Reviewed by:
Mary Bradley
Director, Finance

Mark Gregersen
Director, Human Resources

Approved by:
Robert S. LaSala
City Manager

Attachments

Draft Service Agreement

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