AgdaPkt 2003-06-23 - Laserfiche WebLink

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q.(� REPORT To the Honorable Mayor and City Council From the City Manager June 23, 2003 Subject Contract Renewal with Third Party Administrator (TPA) for worker's compensation administration services, Claims Management Inc. (CMI). Recommendation Authorize staff to renew agreement with Claims Management Inc. (CMI) effective July 1, 2003, to act as third party administrator for the City's self- insured worker's compensation program. Background The City of 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 parry 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, after ABAG, the City's long time TPA, terminated their TPA services rather suddenly, staff came to you with a recommendation to enter into an interim contract with Claims Management Inc. (CMI). We entered into a five month contract to ensure claims management , continued without disruption, that a successful conversion from ABAG's data system could occur and _ ,inally, so that staff could thoroughly evaluate third party administrators in the market. During this evaluation period the City's Human Resources participated in a RFP process for TPA services for workers' compensation, along with various other cities, that was being administered by Bay Cities JPA. Claims Management Inc. was among the vendors reviewed in this process. CMI ranked number one for service delivery, cost, and case management. Given the city's experience with CMI and their standing with Bay Cities and other references, staff recommended that we enter into twelve month agreement with CMI effective July 1, 2002. Over the past year CMI has proven to be very effective in providing workers' compensation administrative services. At the end of January, 2002 CMI took over the City's 183 claims; currently we have 158 open claims (135 Indemnity and 23 Medical only). The Human Resources Department, management, and employees have expressed their satisfaction with CMI's performance. We are therefore requesting that Council authorize the renewal of our contract with CMI for third party administrative services for workers' compensation. Alternative No viable options. Fiscal impact CMI's annual contract cost is $135,000, payable in monthly installments of $11,250; this represents a 4.65% increase from current contract. These funds have been appropriated in the Human Resources Norker's Compensation FY 2003 -2004 budget.