AgdaPkt 2015-04-27 Interview and Joint SA and PFA

Browse Search

7.1.0. - Page 3 particularly well-qualified to be the City's next TPA. They currently administer claims for several cities in the Bay Area, as well as numerous cities statewide. York's approach emphasizes frequent communication with both the injured worked and City staff which is crucial to the success of the partnership. York is committed to upholding several important performance standards, including appointing a dedicated senior adjuster, conducting quarterly claim file reviews and scheduling individual onsite meetings with injured workers. In addition, York offers several services not provided in the City's current agreement, such as a California State-licensed Special Investigation Unit (SIU) to address suspected fraud, predictive modeling software that analyzes claims data to identify cases that have a greater severity potential and on-site departmental training sessions. The proposed scope of services will maintain transparency and accountability, thus enabling staff to ensure that claims are being properly managed. The combination of York's organizational strength, defined focus on public entities, and seasoned claims adjusters will provide injured workers with highly responsive, customized, fair, and collaborative claims handling. It is anticipated that through this enhanced level of claims management service, the City will experience a reduction in claims cost for its self-insured workers' compensation program and that this will help offset the higher fees for the City's TPA agreement. In 2014, an independent risk management firm conducted a study that found that, over a five year period, York's clients experienced loss rates that were 12.5% below those of other administrators and 8.5% below the experience of all benchmarked public entitiies that do not utilize York. Therefore, staff recommends that the City enter into an agreement with York to act as the City's TPA for workers' compensation services. If this agreement is approved by Council, staff will provide notice as required in the City's current TPA agreement and will plan for the transition to a new provider. ALTERNATIVES Council could direct staff to renew its contract with Athens Administrators or direct staff to provide an alternative recommendation from the proposals received. FISCAL IMPACT The not-to-exceed cost for the proposed agreement with York is $347,463 for the first year (with second and third year costs not to exceed $354,412 and $361,500 respectively). Due to the enhanced level of service provided, this represents a $176,563 increase over the City's current 2014-15 cost for TPA services. First year funds will be included in the recommended FY 2015-16 budget. In order to more cost- effectively manage the City's workers' compensation liability, staff will also be recommending an increase in the City's Self Inurance Retention (SIR) level from $350,000 to $500,000 when the 2015-16 budget is proposed. This will decrease the City's annual worker's compensation insurance premium by $208,000, which will more than offset the increased TPA service fees provided by York. ENVIRONMENTAL REVIEW