AgdaPkt 2002-07-01 - Laserfiche WebLink

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-/., -/-.2' From the City Manager July 1,2002 Subject Third Party Administrator (TPA) for worker's compensation administration services. Recommendation Authorize staff to enter into an agreement with Claims Management Inc. (CMl) to act as third party administrator for the City's sel~-insured worker's compensation program effective July 1,2002. Background The City cf Redwood City is a self-insured employer under the Workers' Compensation laws of the State of California. In order to fulfill our obligations as a self-insured employer, the City retains the services of a third party administrator (TPA) to ensure the City is in compliance with the various laws and procedures that govern the Worker's Compensation Program. In January of 2002, due to ABAG, the City's long time TPA, terminating their TPA services rather suddenly, staff came to you with a recommendation to enter into an interim contract with Claims Management Inc. (CMl). We entered into a five month contract to ensure claims management continued without disruption, that a successful conversion frorn ABAG's data system could .occur and finally, so that staff could in a more thorough manner evaluate the value-added of the TPA. Over the !ast several months CMl has proven to be a far more effective TPA. At the end of January, CMl took over the City's 183 claims. By the end of May the City's total open claims had dropped to 134. We hope for the total claims to go down to 120 by the end of the fiscal year! The Human Resources Department, management, and employees have expressed their satisfaction with CMI's performance. Additionally, the department of Human resources participated on a review panel of various TPA's for Bay Cities Joint Powers Authority. CMl was among the vendors reviewed. In this process, CMl ranked number one for service delivery, cost, and case management. Given the city's current track record with CMl and their standing with Bay Cities and other references, staff.is recommending that we enter into twelve month agreement with CMl effective July 1,2002. Alternative Conduct an RFP for alternative vendors. Fiscal impact The City is self-insured for Worker's Compensation; hence, a $100,000 trust is established for purposes of paying claims costs. CMI's annual contract cost is $129,000, payable in monthly installments of $10,750. These funds have been appropriated in the Human Resources Worker's Cpm~ensation FY 200~-2003 b ~ua~et. Human Resources Director City Manager Attachment Agreement for TPA services between the City and CMl.