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HomeMy WebLinkAbout7. Manager's Report 12/21/2010 Mount Prospect Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM .$b. TO: MICHAEL E. JANONIS, VILLAGE MANAGER ' 1 FROM: FINANCE DIRECTOR DATE: DECEMBER 14, 2010 SUBJECT: WORKERS' COMPENSATION THIRD -PARTY CLAIMS ADMINI : RAT PURPOSE: To present a recommendation for renewal of the annual service agreement for third -party claims administration for the year beginning January 1, 2011 and ending December 31, 2011. BACKGROUND: To assist in the administration of claims the Village has contracted out the service to a third - party administrator. The Village's current agreement for claims administration is set to expire on December 31, 2010. A new agreement is needed at this time to have the current provider continue to service the Village. DISCUSSION: Cannon Cochran Management Services, Inc. (CCMSI) is the current service provider for workers' compensation claims administration. Their proposed agreement for 2011 is attached. There were no changes to the terms or conditions in the agreement. The fee for indemnity and medical only claims remains unchanged from the prior year. Service 2010 Rates 2011 Rates Claims Administration $ 10,000 $ 10,000 Annual Administration 2,500 2,500 Internet Claims Access 1,000 1,000 Per Claim Fee Indemnity 795 795 Medical Only 130 130 Incident Only 30 30 In addition to the fees related to new claims there is an annual fee for CCMSI to handle run -off claims through to their closure. The fee for run -off claims in 2011 is $200 per claim. There were 32 indemnity claims and 1 medical only claim that were carried over from the previous service provider. Through 2010 we have been successful in closing 30 of these run -off claims (29 indemnity and 1 medical only). The total cost for run -off claims for 2011 will be $600. Workers' Compensation Third -Party Claims Administration December 14, 2010 Page 2 Our experience with CCMSI continues to be very positive. Troublesome claims continue to be handled efficiently and the interaction between the Village and CCMSI staff is excellent. The Village holds a semi - annual claims review with CCMSI and our WC attorney that has proven beneficial in a timely settling of claims and reducing costs to the Village. The internet reporting tool that is utilized for submitting and tracking progress on claims has also proven to be invaluable. I recommend we continue our relationship with CCMSI. RECOMMENDATION: It is recommended we approve the agreement for CCMSI to provide workers' compensation claims administration services during 2011 based on the Fee and Payment Schedule Addendum attached. The base fee for 2011 is $14,100. DOE/ Attachment I: \Risk Management \CCMSI \2011 Renewal.docx Village of Mount Prospect — Addendum to Service Agreement Page 1 of 3 ADDENDUM TO SERVICE AGREEMENT BETWEEN VILLAGE OF MOUNT PROSPECT AND CANNON COCHRAN MANAGEMENT SERVICES, INC. THIS ADDENDUM is made and entered into this 1st day of January 2011, by and between Village of Mount Prospect (the "Client "), and Cannon Cochran Management Services, Inc., ( "CCMSI "), a Delaware corporation. By this Addendum, the January 1, 2008, to December 31, 2008, Service Agreement is automatically continued with the pricing provisions outlined below. This pricing is effective on January 1, 2011, and terminates on December 31, 2011. Section H. 3. (c) under "Term and Termination" has been amended to read as follows: (c) Provide an electronic transfer of data if such is feasible, with the cost of providing such borne by the Client. The electronic transfer of data will be subject to a flat fee of $2,500. FEE AND PAYMENT SCHEDULE Life of Contract: 1 Year — 111/11 — 12131112 Clahi s , Whinis' CCMSI will manage all workers' compensation claims for the life of this contract for an annual fee as follows: Claims will be analyzed by the number and type of claim on an on -going basis and priced on a per claim fee as outlined below. Workers' Compensation * Indemnity claims @ $795 / per claim Medical only claims @ $130 / per claim Incident/record only @ $30 / per incident Claims will be analyzed by the number of claims as well as the type of claim on an on -going basis and priced on a per claim fee as outlined above. Any additional charges over the $10,000 minimum claim fee will be billed at the expiration of the policy term and quarterly thereafter. The flat rate unit prices include: • Prompt and courteous customer service • Timely investigation and determination of compensability in accordance with CCMSI Best Practices • Strict adherence to state workers compensation statutes and regulations, attendance at hearings, as required. • Preparation for and compliance with and response to regulatory audits • Timely payment of all legitimate claims • Fraud detection and prevention • Litigation Management Note: These prices do not include those costs typically identified and expense as allocated loss expenses. Please see the attached roster that details those typical allocated loss expense items. (ex. Field investigation & adjusting) Claim charges are based on a per claim, not per occurrence basis. Any occurrence resulting in 10 or more claims will be considered a catastrophic claim. All resulting claims will be handled on a time and expense basis. Any claim which falls under the catastrophic definition in the reinsurance contract, e.g., brain damage, death, etc., will also be handled on a time and expense basis. Village of Mount Prospect — Addendum to Service Agreement Page2of3 Annual Administration $2,500 Annual Account Management Fee includes: • Designated Account Manager • Client Specific Service Instructions • Preparation and participation in Semi - Annual claims reviews • Set up and Maintenance of the loss fund account • Monthly loss runs and loss fund activities reports • Filing of all required state forms including state mandated assessments • Reporting to excess/fronting carrier • Computer set -up, training and client specific special analysis codes Internet Clelrh;bccess" $1,000 Internet claims system access which includes: • Viewing access to all claims data • Risk Management statistical analysis • Comprehensive and complete access to claims management process • On -line reports • On -line reporting capability via the internet • Ability to generate OSHA Log, OSHA 301 Form and Illinois First Report of Injury (Illinois Form 45) Managed Care SerVices 3 S+ae <Ust of Services Provider Bill Re- pricing Service Fee Fee schedule re- pricing $9.00 per bill Usual and Customary re- pricing $9.00 per bill PPO Re pricing Bills with additional PPO discount opportunities below the Fee Schedule will be billed at 30% of savings. Pharmacy Network Services Pharmacy Network services are priced at 33% of savings. Field Case Management CCMSI does not offer proprietary field case management or vocational rehabilitation services. These are available from third party providers at market price and the cost of these services would be captured as an allocated loss expense to the referral file. Run - Off Claims TB() • 1st year /12months commencing with the start of the TPA contract or any portion there of $450 per claim • 2nd year or any portion thereof $300 per claim • 3rd and each subsequent year $200 per claim We would propose to bill a deposit fee for the 1st 12 months based on the number of claims we actually take over and then adjust it at the end of 12 months based on any additional claims that needed to be handled or reopened. Village of Mount Prospect — Addendum to Service Agreement Page3of3 Loss Control (Optional) , As Outlined CCMSI can provide the Client with loss control services. The Client shall remain fully responsible for the implementation and operation of its own safety programs and for the detection and elimination of any unsafe conditions or practices. The fee for services will be available for rate of $950 per day plus expenses or priced per project. $25�Ber Claim MMSEA ; Section 111 Reporting A Hit CCMSI in conjunction with our reporting agent will comply with MMSEA Section 111 Reporting on behalf of Illinois Community College Risk Management Consortium. • All injury claims will be queried to CMS for Medicare eligibility (no charge). • CCMSI will collect additional mandatory data on claims where Medicare eligibility has been verified. CCMSI along with our reporting agent will report all claims meeting the reporting guidelines as set forth by CMS. (one -time $25 per claim fee) GRANp TQT 114400 Fee 8 Payrrten t'Schedule • The total fee of $13,500 will be billed in quarterly installments of $3,375.00 due on the first day of January 2011; April 2011; July 2011 and November 2011. Run -off claims: An additional fee will be billed for the third 12 months based on the number of claims that remain open and then adjusted at the end of 12 months based on any additional claims that need to be handled or reopened. Executed this day of , 200 CANNON COCHRAN MANAGEMENT SERVICES, INC. By: Rodney J. Golden Its: Chief Operating Officer /Executive Vice President VILLAGE OF MOUNT PROSPECT By: Its: Mount prospect Mount Prospect Public Works Department INTEROFFICE MEMORANDUM TO: VILLAGE MANAGER MICHAEL E. JANONIS 1 ? 1 ,:b • tAlt FROM: DEPUTY DIRECTOR OF PUBLIC WORKS r 2.1 DATE: DECEMBER 15, 2010 SUBJ: PUBLIC WORKS UNIFORM RENTAL AND CLEANING CONT' ($10,490.481 YEAR FOR 3 YEARS) 4110, Background For many years, the labor agreement for the Public Works Department bargaining unit employees has stipulated that the Village must supply 100% cotton work uniforms. In an effort to comply with this requirement, staff has routinely let bids for a contract to supply and launder industrial work uniforms. The current uniform rental and cleaning contract was initiated in 2008 and is due to expire at the end of 2010. Bids for this proposed contract were originally received on November 8, 2010. Unfortunately, only one (1) bid was received. Due to the non - competitive nature of this result, the bid was rejected at the November 16, 2010 regular meeting of the Village Board. Subsequently, the specifications for this proposed contract were modified; extending the term from 24- months to 36- months. Follow -up conversations with uniform vendors after the first bid letting indicated a strong preference for a longer contract term. Bids for this work were re -let on November 23, 2010. Bid Results At 1:00 PM on Monday, December 13, 2010 sealed bids were opened for the weekly rental and cleaning of uniforms worn by Public Works Department maintenance personnel, electricians, and mechanics. A legal notice was placed in the Daily Herald and five (5) invitational bids were distributed to local vendors. Four (4) bids were received. The results are listed below: Bidder Cost /Year Cintas Corporation, Schaumburg, IL $10,490.48 Aramark Uniform Services, Arlington Heights, IL $11,590.28 Lechner & Sons, Mount Prospect, IL $11,811.80 G &K Services, Lombard, IL $17,333.68 Unifirst, Melrose Park, IL No Bid Page 2of2 August 8, 2006 Public Works Uniform Rental and Cleaning Contract Discussion The lowest cost bid for this proposed contract was submitted by Cintas Corporation of Arlington Heights, Illinois in an amount of $10,490.48 per year. Cintas Corporation (Cintas) is a publicly traded (NASDAQ: CTAS) international company that provides uniform rental, laundry, and brand identification solutions to a wide range of industries. The company is headquartered in Cincinnati, Ohio and employs over 30,000 workers at 420 facilities throughout the world. The local facility (Arlington Heights) is wholly owned and operated by the international company. Cintas held the Public Works uniform rental and cleaning contract during the 1990s, They have not held any recent contracts. However, Public Works Department records indicate that they performed satisfactorily as our uniform provider. In addition, Public Works has also recently purchased cold- weather gear and safety gear from Cintas. Both the products and services rendered have been satisfactory. Based on these experiences, as well as their extensive list of references and facilities, staff believes that Cintas is well qualified to fulfill this proposed contract. Cintas' proposed annual cost ($10,490.48) is approximately 18% lower than the rate currently, paid for uniform rental and cleaning services (2008 through 2010 contract). Recommendation I recommend that the Village Board award the Public Works Uniform Rental and Cleaning contract to Cintas Corporation of Arlington Heights, Illinois at a cost not to exceed $10,490.48 per year for a 3 -year term. Sufficient funds for this proposed expenditure have been included in the 2011 proposed budget. Expenditures in subsequent contract years will be limited to approved budget amounts. I SPD /spd C:\Documenls and Settingslsdorsey\My Documents \PERSONNEL\UNIFORMS12010 UNIFORM BIDWVVARD RECOMMENDATION.doc Cc: Director of Public Works Glen R. Andler Streets Foreman Dan Jones Mount Prospect Village of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM b ► TO: MICHAEL E. JANONIS, VILLAGE MANAGER 41111111111111 izipi FROM: FINANCE DIRECTOR te. DATE: DECEMBER 14, 2010 ' . SUBJECT: GENERAL AND AUTO LIABILITY THIRD -PARTY CLAIMS ' ADMINISTRATION PURPOSE: To present a recommendation for renewal of the annual service agreement for third - party claims administration for the year beginning January 1, 2011 and ending December 31, 2011. BACKGROUND: To assist in the administration of general and auto liability claims the Village has contracted out the service to a third -party administrator. The Village's current agreement for claims administration expired on December 31, 2010. A new agreement is needed at this time for the current provider to continue to service the Village. DISCUSSION: GAB Robins (GAB) is the current service provider for general and auto liability claims administration. GAB has provided this service to the Village since 1997. The agreement for 2011 contains no changes to the terms and conditions or minimum annual fee from the prior year. Below is a summary of fees for the prior year and 2011. Service 2010 Rates 2011 Rates Claims Administration $ 1,000 $ 1,000 ACT Charge 1,009 1,009 Minimum Annual Fee 8,000 8,000 Total Fee $ 10,009 $ 10,009 The claims administration fee is a flat fee assessed annually for utilizing GAB services. The ACT (automated cash transfer) charge is also an annual flat fee assessed for maintaining the escrow and processing and making payment on claims. This service relieves the Village from having to process payments internally. General and Auto Liability Third -Party Claims Administration December 14, 2010 Page 2 The Village is also subject to an $8,000 minimum annual fee. Time and expense charges are invoiced against the annual fee until the balance is exhausted. See the attached fee schedule for more information. When the entire annual fee is depleted, the Village will begin making payments for charges incurred in managing the open claims. Our liability ends when all the claims for a particular period are closed. Our experience with GAB has been very positive. Communication between the Finance Department, Corporation Counsel and GAB continues to be strong which helps in controlling overall claims costs. Based on our satisfaction with the service provided and no changes to the funding schedule I recommend we continue our relationship with GAB. RECOMMENDATION: It is recommended we approve the agreement for GAB to provide general and auto liability claims administration services during 2011 according to the proposed funding and fee schedule. DOE/ Attachment I : \Insurance \GAB \Renewal - 2011. docx GAB Robins North America, Inc. VILLAGE OF MOUNT PROSPECT GAB ROBINS CUSTOMER NUMBER: 453061 CONTRACT PERIOD: 01/01/2011 THROUGH 12/31/2011 QUOTE PREPARED: 10/20/2010 CLAIMS ADMINISTRATION PRICING QUOTATION $0 REPORTING & AUTHORITY LEVEL AUTO /GENERAL/ LIABILITY Time & Expense at standard published rates AUTO PHYSICAL DAMAGE Time & Expense at standard published rates Flat Administration Fee: $ 1,000 ACIS Minimum Annual Contract Fee: $ 8,000 Minimum Annual Contract Value: $ 9,000 Your organization currently utilizes our ACT (Automated Cash Transfer) program for the funding of paid claims. Based upon your current ACT option, your charge will be $1,009. The appropriate charge will be invoiced to you in one lump sum at the inception of your renewed contract. If you would like to explore alternative funding options, please contact the Treasurer's Department at (973) 993 -3785. NOTES: The twelve (12) month contract period is subject to an $8,000.00 minimum annual fee, to be invoiced on the inception date of this agreement. The Administration Fee is billed at contract inception and is $1,000.00. This fee is not part of the $8,000.00 minimum annual fee. Our quotation includes a "Control Office" feature through GAB Robins North America's Chicago, IL location. The above fees include GAB Robins' Claims/Financial Reports package which is delivered to our clients via the Internet utilizing our EYE AdvisorTM Express claims management and reporting system. EYE Advisor Express is provided to our clients and their designees without charge, as part of our overall claims management program. "Hard copy" loss runs are available for an additional fee per release. If requested, GAB Robins will accept and record "Incident Reports" for display in the Claims /Financial Reports and the EYE Advisor Express system. Incident Reports must be identified as such upon presentation to GAB Robins and no investigation will be performed. The fee will be $48.00 per report. GAB Robins will perform an accounting at the end of the contract year, at which time the deposits and Administration Fee will be reconciled to the actual volume of claims handled. MEDI NSIGNTS ® A GAB Robins® Company 2011 MEDINSIGHTS SERVICE PRICING FIRST REPORT INCIDENT • First Report of Loss $28.00 Methods: Toll Free Call -In, Email, Fax and Web Reporting. Includes: Electronic State Transmissions as available, Adjuster Notification, PPO Directing when all other Medlnsights'services are utilized II. UTILIZATION MANAGEMENT • Pre - Certification Only $121.00 • Pre - Certification and Concurrent $235.00 Includes: Medical Necessity Review, Appropriateness of Setting, Length of Stay • Retrospective $130.00 per hour • Appeal Review $195.00 • Physician/Peer Review Time & Expense III. TELEPHONIC CASE MANAGEMENT • First Assessment $121.00 • Each 30 days of TCM $275.00 IV. MEDICAL BILL MANAGEMENT • Fee Schedule Review/UCR $1.43 Per Line • Header Fee 3 line header @ $1.43 Per line • PPO Discount Reduction 33% of Savings Includes: Non Program Prescription Drug /Diagnostic Review, DME • Discount Negotiations 33% of Savings V. ANCILLARY SERVICES • Diagnostic Network 33% of Savings • Pharmacy Network 33% of Savings VI. FIELD CASE MANAGEMENT • 30 Day Lost Time File Review No Charge • Case Management (Vocational/Medical) $91.00/Hr + Expense Includes all states except CA, NY, DC, AK and HI. • CA (Medical) $120.00/Hr + Expense • NY and DC $101.00/Hr + Expense • HI and AK $130.00/Hr + Expense • Catastrophic Case Management $130.00/Hr + Expense • Life Care Planning $130.00/Hr + Expense • Medical Legal Review $130.00/Hr + Expense • High Reserve Reviews No Charge VII. REPORTING • Standard Reports Included in cost for service • Ad Hoc Reporting/Analysis $150.00/hour VIII. PROVIDER NETWORK • Provider Directories Printing/Postage • Provider Poster Production Printing/Postage • Additions to Provider Posters Printing/Postage MEDINSIGHTS A GAB Robins Company 2011 Medinsights Service pricing Medicare Secondary Payor (MSP) Compliance and Resolution Unit I. COMPLIANCE SERVICES • Social Security Verification $175.00* • Notice of Claim to Medicare $35.00 Includes notice of event to the COB without MSA allocation report • Conditional Payment Search $250.00* • Conditional Payment Lien Negotiations $150.00/Hour • Future Cost Projection Report $1,200.00 Class 111 Settlements Only • MSA Medical Allocation Report WC $2,300.00* Includes initial Medicare category review, compliance report, notice of event, Funding recommendations and annuity quotes from carrier approved brokers. • Medical Allocation Report Liability $1,535.00* Includes initial Medicare category review, compliance report, notice of event, Funding recommendations and annuity quotes from carrier approved brokers. • Rush Fee $450.00 One week turnaround • Revisions $150.00/Hour One free revision within six months of submission • Prescription Drug Review $450.00 Includes initial Medicare identification, review by pharmacy team, recommendations for substitutions and overall decrease in lifetime drug utilization. IfPDR does not prove to reduce lifetime costs by $5, 000, the fee is reduced to $35.00. • WC Submission of MSA Medical Allocation Report to CMS $850.00 • Submission of Settlement Documents to MSPRC $150.00 Without submission of documents to CMS • Rated Age without MSA $25.00 • MMSEA Section 111 Reporting Registration Fee $500.00 • MMSEA Section 111 Reporting Annual Fee $750.00 II. MEDICAL BENEFIT ACCOUNT • Annual account administration initial deposit under $25,000 $750.00 • Annual account administration initial deposit under $25,001- $50,000 $975.00 • Annual account administration initial deposit under $50,001+ $1350.00 III. MEDICARE SET -A -SIDE ALLOCATION ACCOUNT ADMINISTRATION • Set -Up Fee $1,200.00 • Annual Administration 20% of MSA allocation/life expectancy *Additional fees may apply, where mandated by law. =.r Product Pyramid ,M s• .`�`�� 1 e � Is, $4,250* `� 4 Qi � t { ml- , Oz. or, t ` a s e' $2,75O' t ,� , r I $1,750` � r2�� ,r � d � � K`.. 1 4 4 Inclusive °` �„ �' , i s k a � d i S re ,s ^y�}. �. *Base Price for 1St 5 IDs Base Price Discount for Volume IDs #-IDs Discount 6 -25 $250 per ID/Year 26 -50 $500 per ID/Year Over 50 $750 per1D/Year Outside of Product Pyramid ➢Data Download $1,000 per ID /Year ➢ Dashboard & Parameter Driven Reporting $2,000 per ID/Year ➢Dashboard & PowerCube $3,000 per ID/Year Additional Costs /Expenses Security by Hierarchy $ 350 per ID (one time charge) ➢ Report Output Library — Print & Mail $ 180 per Year (Up to 5,000 pages) $ 600 per Year (5,001- 15,000 pages) $1,800 per Year (Over 15,001 pages) >Customized Report Requests $ 150 per Hour Development plus $25 per release ➢Additional Cubes or Parameter Driven Reports $ 500 per Cube or Report ➢Data Conversion /Interfaces $1,200 per Day Offering to Existing Users Only ➢Portfolio $3,500 per ID/Year VtGAB Robh FI•sNcr e; 1'Iflt IR, F.dnap.:n,:ni S ^rvires