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HomeMy WebLinkAboutR-1997-126 1997-1998 Workers Compensation Programc' • • RESOLUTION NO. R-9712 6 A RESOLUTION authorizing the City Manager and City Clerk of the City of Yakima to execute Workers' Compensation Third Party Administrators Agreement with Scott Wetzel Services, Inc. for workers' compensation services. WHEREAS, the City of Yakima and Scott Wetzel Services, Inc. entered into an agreement entitled "Workers' Compensation Third Party Administrators Agreement" on or about September 20, 1988, whereby Scott Wetzel Services, Inc. agreed to investigate, settle, and otherwise administer the City's workers' compensation claims; and WHEREAS, the parties have previously amended the aforementioned Agreement in 1989, 1990, 1991, 1992, 1993, 1994, 1995,.and 1996 by resolution of the City Council; and WHEREAS, said 1988 Agreement and the subsequent amendments have now expired; and WHEREAS, the City desires to enter into a new agreement with Scott Wetzel Services, Inc. whereby Scott Wetzel Services, Inc. agrees to investigate, settle, and otherwise administer the City's workers' compensation claims in accordance with the terms and conditions of the attached Workers' Compensation Third Party Administrators Agreement ; and WHEREAS, the City Council deems it to be in the best interest of the City of Yakima to enter into the proposed and attached Workers' Compensation Third Party Administrators Agreement with Scott Wetzel Services, Inc. for the administration of the City's workers' compensation claims, now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager and City Clerk of the City of Yakima are hereby authorized and directed to execute the attached and incorporated Workers' Compensation Third Party Administrators Agreement with Scott Wetzel Services,iTtr Inc. ADOPTED BY THE CITY COUNCIL this 7 day of 00%z .i , 1997. ATTEST: Joh ` Puccinel if Mayor Pro Tem ,J %C.6,-'eLe City Clerk (1k)res/97 wetzel amendment/pm WORKERS' COMPENSATION THIRD PARTY ADMINISTRATOR'S AGREEMENT THIS AGREEMENT is made and entered into by and between SCOTT WETZEL SERVICES, INC., a Washington corporation, with its principal place of business at 101 East Kennedy Boulevard, Suite 2980, Tampa, Florida 33602 (hereinafter referred to as "SWS") and the CITY OF YAKIMA, with its principal place of business at 129 North Second Street, Yakima, Washington 98901 (hereinafter referred to as "City"). WHEREAS, the City maintains a self-insured plan to cover its workers' compensation liabilities in the State of Washington; and SWS has agreed to perform certain services in connection therewith, as herein set forth: NOW, THEREFORE, in consideration of the mutual covenants, promises, and conditions set forth herein, it is agreed by and between the City and SWS as follows: 1. Scope of Services. During the period of this Agreement, SWS shall represent and act for City in matters pertaining to the liability of City for claims based on events which occur during the term of this Agreement under the Workers' Compensation Act of the State of Washington. During the term hereof, SWS shall devote its best efforts in the conduct of its duties hereunder. Such duties shall include the following: (a) Receive notice of and create files on each claim reported and maintain these files for City. (b) Investigate all claims as required to determine their validity and compensability. (c) Determine proper benefits due on compensable cases. In no event will SWS propose a settlement of a disputed claim or compromise the rights of City without its prior consent following a review of the complete file maintained on the claim by SWS. (d) Make timely payment of benefits due, in accord with payment procedures as established from funds provided by City. City will be wholly responsible for providing such funds as may be required for these payments. (e) Prepare documentation and defenses of cases considered non -compensable and assist selected legal Page p lof 8 counsel in preparation of cases for hearings, appeals, and/or trial. (f) Maintain and provide City pertinent data on all claim payments. (g) Provide monthly and/or quarterly computerized loss reports in a tailored format, as mutually agreed at inception of the program, showing descriptive data, details of each month's payments, total payments, reserves and total experience for each claim. Data reporting services, in accordance with this Agreement, are limited to the reporting format, content and number of copies specified in the attached and incorporated Addendum One. (h) Provide excess insurers such reports as they may reasonably require within specific excess coverage reporting requirements. (i) Provide information and assistance as may be reasonably required for preparation and filing of all reports required by any state agency in connection with City's approved self-insured status. (j) File with the appropriate state administrative departments such information as is required on each claim. (k) Provide managed care services as described in the attached and incorporated Addendum Two. (1) Provide loss control services as mutually agreed. 2. Consideration. In consideration of the satisfactory performance by SWS of the services required hereunder, City shall pay to SWS: (a) An annual minimum deposit fee of twenty-five thousand one hundred dollars ($25,100), payable quarterly in advance. The first payment will be due within thirty (30) calendar days of commencement of this Agreement, and subsequent payments will be due within thirty (30) calendar days of the beginning of each quarter thereafter. The minimum fee will be subject to adjustment by performance of claim count audits on the basis of SWS claim data and application of the following per claimant fees: Page 2 of 8 (Ik)agrze workers'mmp/uetrzl/pm • One hundred dollars ($100) for each workers' compensation medical only; • Four hundred seventy-five dollars ($475) for each workers' compensation indemnity. The annual minimum deposit fee shall include an administrative fee of two thousand three hundred dollars ($2,300) and a loss control fee of seven thousand one hundred twenty-five dollars ($7,125). The $7,125 loss control fee is for the provision of up to 75 hours of scheduled loss control services at the rate of ninety-five dollars ($95) per hour. Loss control hours in excess of 75 hours will be additionally chargeable at the rate of one hundred five dollars ($105) per hour. (b) Costs for Managed Care Services as outlined in Addendum Two. (c) Additional services requested by City will be compensated at such fee and payment terms as mutually agreed by both parties. (d) To pay all allocated loss expense, as hereinafter defined, in addition to the fees to be paid to SWS. Allocated loss expense is defined as all attorney's fees, court and/or hearing costs, costs of depositions, documents and exhibits, witness and expert fees, medical and engineering appraisal, surveillance, independent adjusting, managed care, photography and other incidental and special costs incurred to evaluate compensability of claims. Not included in the above fees are services for: SWS staff attendance at Workers' Compensation hearings, pretrials, trials or benefit conferences; and Fraud/Special Investigation Unit (SIU) services beyond initial reporting mandates to authorities, agencies or excess carriers. These services will be billed to the City on a quarterly basis as incurred at the rate of sixty-five dollars ($65) per technical hour plus expenses (inclusive of all clerical support and SWS in -office operating overhead). The City shall make sufficient and timely funds available to SWS to be used by SWS to pay claims and allocated loss expense. The City shall also advise SWS on a timely basis of all pertinent excess insurance reporting requirements and/or reporting modifications for all annual periods for which claim administration services are provided. Page 3 of 8 pklagice xorkcm'comp/woad/pm 3. Term of Agreement. Unless sooner teiniinated by either party in accordance with Section 4 and/or Section 8 of this Agreement, the term of this Agreement shall be for a period of one (1) year commencing July 1, 1997 and terminating at 12:00 p.m. on June 30, 1998; provided, however, that the parties may agree to extend this Agreement for two (2) additional one (1) year periods. In no event shall this Agreement extend beyond 12:00 p.m. on June 30, 2000. 4. Termination. The City or SWS may terminate this Agreement, with or without cause, by either party giving not less than sixty (60) calendar days written notice of teiiuination; provided, however, that SWS may terminate this Agreement, at its option, after providing the City with ten (10) calendar days written notice of termination in the event that the City fails to pay SWS for a valid SWS invoice within sixty (60) calendar days of receipt by the City of said invoice. 5. Payment. Except as otherwise provided in Section 2 of this Agreement, SWS shall submit satisfactory documentation/invoice evidencing services provided pursuant to this Agreement to the City Personnel Officer at the end of each quarter in which such services are provided to the City. The City shall make payment to SWS within sixty (60) calendar days of receipt of each monthly billing. All payments are expressly conditioned upon SWS providing services hereunder that are satisfactory to the City. 6. Renegotiation of Fee. This Agreement is entered into with the understanding that existing federal, state, or other jurisdictional regulations will remain in effect for the duration of this Agreement. The City agrees that should administrative or other costs of service provided hereunder be substantially increased as a result of modifications in existing law, enactment of new legislation, or promulgation of new administrative guidelines, SWS service fees may be renegotiated during the Agreement term. If revised fee agreements cannot be reached, either party may terminate this Agreement, at its option, after thirty (30) calendar days written notice to the other party. 7. Audits. Audit adjustments will be submitted at the end of the annual term and quarterly thereafter based upon the cumulative claim count as contained in the computer reports required by Section 1 of the Agreement. A final adjustment of fee will be made as of eighteen (18) months following the end of the contract term. Any claims occurring during the teiiii of this Agreement which are reported more than eighteen (18) months following the end of the contract term will be subject to additional fees for administration to be agreed upon by the parties. 8. File/Records Retention. All claims and related files generated by SWS as a result of its activity under this Agreement shall remain at all times the property of the City with the exception of any supporting data required by SWS to make such accountings to the City or excess insurers Page 4 of 8 Pklayvee kera comp/webei/pm as are required in this Agreement. SWS will retain claim files for one year following date of closure. Thereafter, files will be returned to the City or forwarded to such location as may be designated by the City for continued storage at City expense. Upon SWS's request, closed claim files will be returned for additional administration as may be required. In the event of termination or non -renewal of SWS services, and assumption of continuing administration of claims by the City, SWS will transfer all open and retained closed claim files for all service years to the City, or its designee, as of the effective date of termination, at City expense. 9. Handling of Claims after Termination of Agreement. This Agreement is for the period provided for in Section 1. Any continuation or renewal of this Agreement shall be the subject of further negotiation between the parties. Upon termination of this Agreement, in whole or in part, in accordance with Section 1, and/or non -renewal, in entirety or of any major operating subsidiary, entity or portion thereof, City shall have the option to: (a) Assume all open claims pending for the terminated or non -renewal portion of the program as of the effective date of tee niination or non -renewal, provided, however, that SWS shall be entitled to receive its full fee for all claims entered into its data files prior to the effective date of termination or non -renewal; or (b) Upon agreement by both parties of a rate of compensation, require SWS to continue administration to conclusion, all open claims associated with that portion of the program terminated or non -renewed. Such rate of compensation shall thereafter be reviewed by the parties on an annual basis and shall be the subject of mutual agreement between the parties. Sufficient and timely funds shall continue to be made available by City for the payment of claims and allocated loss expense until all claims are liquidated. The obligation of SWS to perform its duties hereunder is conditioned upon the City's cooperation with SWS with respect to the activities of SWS including, but not limited to, responding to SWS's requests for information promptly; providing excess carrier reporting requirements; meeting with SWS and/or third parties, as may be needed; making decisions on matters which, in the professional opinion of SWS, should be made by the City; the provision of funds referred to in Section 2; and performance by the City of all other obligations of this Agreement. Page 5 of 8 Okk@ee worke.s' comp /we tel/pm 10. Taxes. The City shall pay any sales or use taxes or other taxes or government assessments or duties relating to this Agreement or to payments or services to be rendered under this Agreement in addition to all other payments set forth in this Agreement. If SWS makes payment of any such taxes or government assessments or duties, the City shall promptly reimburse SWS. This paragraph does not apply to federal or state taxes based upon net income which are imposed on SWS. 11. Status of SWS. SWS and the City understand and expressly agree that SWS is an independent contractor in the performance of each and every part of this Agreement. SWS and its employees shall make no claim of City employment nor shall claim any related employment benefits, social security, and/or retirement. 12. Indemnification. SWS will indemnify and Hold Harmless the City from any and all loss, cost, fines, assessments, penalties or expense to which the City may be subjected solely as a consequence of the willful misconduct or negligent acts or omissions of SWS and/or its employees in connection with fulfilling its obligations under this Agreement. The City will Indemnify and Hold Harmless SWS from any and all loss, cost, fines, assessments, penalties or expense to which SWS may be subjected solely as a consequence of the willful misconduct or negligent acts/omissions of the City and/or its elected officials, officers, employees, and/or agents in connection with fulfilling its obligations under this Agreement. 13. No Insurance. It is understood the City does not maintain liability insurance for SWS and/or its employees. 14. Nondiscrimination Provision. During the performance of this Agreement, SWS shall not discriminate on the basis of race, age, color, sex, religion, national origin, creed, marital status, political affiliation, or the presence of any sensory, mental or physical handicap. This provision shall include but not be limited to the following: employment, upgrading, demotion, transfer, recruitment, advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training. 15. The Americans With Disabilities Act. SWS agrees to comply with the Americans With Disabilities Act of 1990, 42 U.S.C. § 12101 et seq. (ADA), and its implementing regulations. The ADA provides comprehensive civil rights to individuals with disabilities in the area of employment, public accommodations, state and local government services, and telecommunications. 16. Compliance With Law. SWS agrees to perform those services under and pursuant to this Agreement in full compliance with any and all applicable laws, rules, and regulations adopted or promulgated by any Page 6 of 8 Nr)agree worker' comp/webei/pm governmental agency or regulatory body, whether federal, state, local, or otherwise. 17. Non -Waiver. The waiver by SWS or the City of the breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by either party or prevent either party thereafter enforcing any such provision. 18. Assignment. This Agreement may not be assigned by either party without the prior written consent of the other party; provided, however, this provision shall not prohibit SWS from subcontracting for any of the activities to be perfoi ined by SWS without any requirement of obtaining the approval of the City provided, however, that any such subcontracting shall not relieve SWS of its obligations to City under this Agreement. 19. Severability. If any portion of this Agreement is changed per mutual agreement or any portion is held invalid, the remainder of the Agreement shall remain in full force and effect. 20. Arbitration. Any unresolved dispute between the City and SWS which may arise from the obligations of either party as set forth herein, will be resolved by arbitration. Such arbitration shall be binding upon the City and SWS. Each party will select an arbitrator. The two arbitrators will select a third. If they cannot agree within thirty (30) days, either party may request that selection be made by a judge of a court having competent jurisdiction. Each party will pay the expenses it incurs and bear the expenses of the third arbitrator equally. The arbitration shall be held at a mutually agreed location in Yakima, Yakima County, Washington. 21. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. 22. Notices. Unless stated otherwise herein, all notices and demands shall be in writing and sent to the parties to their addresses as follows: TO CITY: TO SWS: Personnel Officer City of Yakima 129 North Second Street Yakima, WA 98902 akek Gretytkews (,), SCOTT 1 V./Era-1 f°i 1VltAA ljtlYa. 101 E. Knnrieci'y 1 Suite 2980 Tampa, Ft 33602 or to such other addresses as the parties may hereafter designate in writing. Notices and/or demands shall be sent by registered or certified Page 7 of 8 Ndase kem'mmp/wetrl/pm mail, postage prepaid. Such notices shall be deemed effective when mailed or hand delivered at the addresses specified above. 23. Integration and Supersession. This Agreement sets forth all of the terms, conditions, and agreements of the parties relative to the subject matter hereof and supersedes any and all such former agreements which are hereby declared terminated and of no further force and effect upon the execution and delivery hereof. There are no terms, conditions, or agreements with respect thereto, except as herein provided and no amendment or modification of this Agreement shall be effective unless reduced to writing and executed by the parties. CITY OF YAKIMA SCO '1'1WETZEL SERVICES, INC. By: R. A. Zais Jr. City Manager Date: /OP (//c/ `% Al1'EST: By: Title: Date: ATTEST: City Clerk stb ''),•4:,„4`T111.0 � Resolution No. (<-97.-I ) Contract No. Ci/4 Page 8 of 8 flk xvrkers mmp/uebd/pm REPORT ADDENDUM ONE TO THE AGREEMENT BETWEEN CITY OB YAKIMA ("CL, H;NT") AND SCOTT WETZEL SERVICES, INC. ("SWS") EFFECTIVE: JULY 1, 1997 - JUNE 30, 1998 FREQUENCY DISTRIBUTION Loss Experience Summary City Overall - Per Division Workers' Compensation Claims Loss Experience Per Claim By Division Workers' Compensation Claims Current Month Payment Request - City Overall Workers' Compensation Claims Monthly Monthly Monthly 1 - Client 2 - Broker 1 - Client 2 - Broker 1 - Client 2 - Broker Current Month Bordereaux Monthly 1 - Client By Bank Reference Number 2 - Broker All Lines Of Coverage Comparative Stat Analysis Quarterly 1 - Client Overall Per Category 3, 6, 9, 12 1 - Broker Workers' Compensation Claims Report of Repeated Injuries Quarterly 1 - Client Corporate Overall 3, 6, 9, 12 2 - Broker Workers' Compensation Claims IRS 1099s Annual -END- 97-7-9 -9- Scott Wetzel Services, Inc. ADDENDUM TWO MANAGED CARE SERVICES TO THE SERVICE AGREEMENT BETWEEN THE CITY OF YAKIMA ("CLIENT") AND SCOTT WETZEL SERVICES, INC. ("SWS") EkFECTIVE: JULY 1, 1997 - JUNE 30, 1998 I. Services For fees as per the following schedule in Section II, SWS will provide: A. Telephonic Case Management - performed regionally by SWS RN Medical Management Specialists to include: 97-7-9 II • AI Client managed care procedures observance Hospital bills pre-screening Development of treatment/Return to work plans Precertification of outpatient treatment plans Return to Work program support and development Network channeling assistance where jurisdictionally permissible Direction, monitoring and support of on-site case managers Managed care plan recommendations and updates in electronic claim file records B. In-patient and Surgical Care Precertification and concurrent review C. Medical Bills Repricing for Out-patient Services D. Hospital Bills Auditing E. Field Vocational & Medical Case Management -10- Scott Wetzel Services, Inc. F. PPO Network Medical Service Providers G. Other Services as mutually agreed and subject to fees as determined II. Cost Schedule: Managed Care costs are paid from the involved claim files, not additionally billable as fees to Client, and are subject to the prevails vendor rates. 97-7-9 SERVICE ME AND EXPENSE Early Intervention / Telephonic Case Management - SWS RN staff / Medical Management Specialists $70 per hour - CA $62 per hour (all other states) On-site Case Management (medical and vocational) & Cathstrophic Case Management 065 per hour all states except: Alaska - $93.00 per hour Hawaii - $85.00 per hour Utah - $70.00 per hour Vended Utilization Management Services Per Review: Precertification $80 Concurrent Reviews $35 Medical Bills Repricing: a. Outpatient Routine - SWS System b. Hospital - AL, CT, IA, IN, MA, ND - All other states $.95 per line, no minimum fee - Fee schedule states - $1.25/1ine, 2 line minimum - U&C states - 30% of savings, no minimum fee $6.50 per bill, flat rate Preferred Provider Networks 28% of savings Network savings below fee schedule or U & C Physician Peer Review Consults $65 per quarter hour Telephonic Peer Review & Appeals $125 per review/appeal Chart Reviews $65 per quarter hour -END- -11- Scott Wetzel Services, Inc. ITEM TITLE: BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. j L� For Meeting Of i' / t ci 7 Amendment to the 1997-98 Workers Compensation Program, 1997-98 Third Party ' Administrator Agreement, and 1996 Year-end Comparative Statistical Analysis Report SUBMITTED BY: Archie M. Sutton, Personnel Officer Izzy Robinson, Personnel Technician CONTACT PERSON/TELEPHONE: Archie M. Sutton, 575-6090 SUMMARY EXPLANATION: Attached is our 1994-1996, Self -Insurers Workers Compensation annual statistical analysis for your review. The report reflects a dramatic 30% decrease in overall costs (severity) to the City's Workers Compensation Program in 1996 over 1995, in spite of an increase of 6% in accident frequency (experience). This decrease is attributable to the professional working relationship between Human Resources and Scott Wetzel Services Inc., which involves direct PC access, precise loss control measures, accountability and support of our programs. With the successful implementation of Return to Work Program procedures, early intervention/investigation(s), increased workplace safety awareness, and management/injured worker involvement, we have experienced a dramatic decrease in costs experience, which has saved the City of Yakima approximately $81,500 over this period. The attached Resolution authorizes the City Manager to execute an amendment to the service agreement with Scott Wetzel Services, Inc. (SWS), the City's third party administrator for our Self -Insurers Workers Compensation Program. The amendment adjusts the fee structure by increasing the charge to process indemnity (time loss ) claims from $455 to $475 or 4.4% per claim. Rates for medical only claims will remain the same, at $100 per claim. Based on previous claim history, the estimated annual administrative fee to SWS is $25,100. This estimated amount includes $2,300 in administrative expenses, $7,125 for 75 hours of accident prevention training (loss control) and the balance in individual claims cost administration. Any loss control hours in excess of 75 contract hours will be billed at $105 per hour. In the event claims exceed the estimated annual fee, an adjustment per claim will be assessed at the rates shown above. Resolution X Ordinance X Contract Other (Specify) Report Funding Source Workers Compensation Fund APPROVED FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: Enact Resolution and accept report. BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-97-126 (3rd Party Admin.) Resolution adopted. RESOLUTION NO_ R-97-127 (On—Line Data Svc.)