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<br />6. I~-,e <br /> <br />Performance based compensation systems are relatively new in the industry but are <br />intended to focus attention on the major cost drivers in the workers' compensation <br />system. Some of the major cost drivers include medical costs and litigation. Initiating <br />'and maintaining close contact with claimants assist in the quick resolution of claims <br />thereby reducing the overall claim cost. Effective utilization review and bill review <br />processes ensure that the City utilizes medical services when appropriate and that <br />medical facilities are providing the City with all eligible discounts. Raley's Food has <br />had a successful program like this in place for many years and Bay Cities Joint Powers <br />Insurance Authority initiated a similar program in October of 2004 for its member <br />agencies. <br /> <br />Effective worker's compensation claims management is truly a collaborative' effort. <br />Claims Management, Inc. and the City have established an effective partnership in the <br />efficient handling of worker's compensation c.laims. Therefore, we are requesting that <br />Council authorize the agreement with CMI for third-party administrative services for <br />workers' compensation effective July 1, 2005. <br /> <br />Alternative <br />Council could direct the Human Resources Department to enter initiate an RFP process <br />for TPA services. <br /> <br />Fiscal impact <br />The annual cost for the base contract for TPA services provided by CMI is $160,000, <br />these funds have' been budgeted in FY 2005-06 budget. A budget adjustment may be <br />requested in the future based on the outcome of the performance-based compensation <br />program. <br /> <br /> <br />Jill <br />/ !. ~ <br /> <br />Araceli Fierro <br />Management Analyst <br /> <br /> <br />¡/ .,11 , <br />. ".,IY <br />'ru.Æ.-' , <br /> <br />Ed Everett <br />City Manager <br /> <br />Attachment <br />Contract for TPA services between the City and CMI <br />Workers' Compensation Program Performance Standards <br />