HomeMy WebLinkAboutR-1997-126 1997-1998 Workers Compensation Programc'
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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
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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:
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• 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.
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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
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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.
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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
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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
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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
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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
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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
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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-
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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.)