HomeMy WebLinkAboutR-2008-143 Workers Comp Intermountain ClaimsRESOLUTION NO. R-2008-143
A RESOLUTION authorizing and ratifying the action of the City Manager of the City of
Yakima to execute a Workers' Compensation Third Party Administrator's
Claim Services Agreement with Intermountain Claims, Inc., for
administration of the City's workers' compensation claims.
WHEREAS, the City of Yakima requires professional services to investigate, settle, and
otherwise administer the City's workers' compensation claims, which services include on-line
data services to assist with the administration of the claims; and
WHEREAS, the City does not have the staffing levels necessary to investigate, settle
and otherwise administrate the claims arising from the City of Yakima's self-insured workers'
compensat on programs; and
WHEREAS, the fees for the services provided by Intermountain Claims, Inc., include all
claims handling fees and administrative services associated with both the existing open take-
over claims pending as of September 15, 2008, and all newly incurred losses beginning on
September 15, 2008; and
WHEREAS, Intermountain Claims, Inc., has the experience and expertise to provide
said professional services to the City, and is willing to do so in accordance with the terms and
conditions of the attached agreement including exhibits A and B to the agreement; and
WHEREAS, because the previous agreement with the City's prior third party
administrator ended on September 15, 2008, the City Manager executed the Claim Services
Agreement with Intermountain Claims, Inc., on October 3, 2008, so that the necessary third
party admi istration services would be provided to the City by Intermountain Claims, Inc., which
services began on September 15, 2008, so that there would be continuous third party
administration services provided to the City on its workers' compensation claims; and
WHEREAS, the City Council deems it to be in the best interest of the City of Yakima to
authorize and ratify the executed attached agreement with Intermountain Claims, Inc., for
administration of the City's workers' compensation claims; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The execution by the City Manager of the City of Yakima of the attached Claim Services
Agreement with Intermountain Claims, Inc., for administration of the City's workers'
compensation claims is hereby authorized and ratified, and the Claim Services Agreement is
hereby authorized and approved.
ADOPTED BY THE CITY COUNCIL this 7th • - of Octob:
avid dier, Mayor
CLAIM SERVICES: AGREEMENT
THIS AGREEMENT ("Agreement") is entered into by and between the City of Yakima,
its subsidiaries and affiliates, hereinafter referred to as "the City", and Intermountain
Claims, Inc., hereinafter referred to as "Intermountain".
PURPOSE AND SCOPE. The City and Intermountain desire to enter into an
Agreementfor the City to acquire workers' compensation claims services from
Intermountain. This Agreement will apply solely to claims arising from the City of
Yakima's self-insured workers' compensation programs in the State of Washington.
Intermountain is qualified to, and desires to, provide the services for the City, more
particularly described in applicable Exhibit "A", Workers' Compensation Claims Service
Specifications.
1. TERM
This Agreement is effective upon signature and the term of the Agreement begins on
September 15, 2008, and shall continue until terminated by either party in
accordance with the terms of this Agreement. Annual negotiation of rates and
prices and other details shall commence no later than June 15th for the following
calendar year and conclude no later than July 15th. In the event the parties have
not formally executed a contract reflecting new rates and prices by the time of the
expiration for this or subsequent contracts, the terms and conditions of this contract
shall remain in full force and effect until such time as the subsequent contract is
formally executed.
2. GENERAL CONDITIONS
2.1 Files and Records. Intermountain will maintain a complete physical file on
every claim handled. These files will be the property of the City and will be
available for review at the City's request. Intermountain shall maintain at its
principle administrative office, adequate records of transactions between
Intermountain and the City. The records shall be maintained as required by
applicable law. Intermountain and the City shall both own the records and
shall each retain the right to access such records for inspection or audit
purposes.
2.2 Audits. Upon notice from the City, Intermountain shall provide such auditors
as the City may designate reasonable access, during normal business days
and hours, to Intermountain's business locations for the purpose of
performing audits or inspections of the processes of Intermountain utilized in
connection with supporting the delivery of Claims Services to the City under
this Agreement.
Intermountain shall also comply with any audit or inspection lawfully required
by any governmental agency with jurisdiction and authority over the City. In
the event access to the City's data or information is required, as part of such
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government audit or inspection, access will be provided to the extent lawfully
required or necessary for the City to fulfill its legal obligations.
2.3 Licensing and Certification. Intermountain shall be responsible for assuring
that all adjusters it assigns to the City's claims are properly licensed and/or
certified. Any medical only claims handler assigned to the account is required
to be actively working towards achieving certification within one year.
2.4 Independent Contractor. It is hereby understood and agreed that
Intermountain and its employees are not employees of the City.
Intermountain and its employees are independent contractors and the City
shall not control Intermountain or its employees as to the means and methods
by which services are provided to the City as set forth in this Agreement.
2.5 Contingent Fees. Intermountain shall not receive fees that are contingent on
claims experience. Intermountain may receive compensation based on the
number of claims received or handled, or on a time and expense basis, as
expressly set forth herein or agreed to by the City.
2.6 Fiduciary Capacity. Intermountain shall not collect charges or premiums on
behalf of or for the City, or return premiums received from the City to the
City's employees. Accordingly, Intermountain shall not be required to hold
amounts received by it from the City in a fiduciary capacity. In the event
Intermountain begins collecting such charges or premiums on behalf of or for
the City, Intermountain shall hold such amounts in a fiduciary capacity as
required by the laws of the State of Washington.
2.7 Claims Handling and Service Instructions. In the event the City provides to
Intermountain specific instructions for handling worker's compensation claims
and/or administrative service instruction ("Instructions") such instructions shall
accommodate sound claims handling procedures, and comply with relevant
state laws and regulation. The City will assume responsibility for any legal
actions, judgments, fines, penalties or bad faith, etc, specifically related to the
City's instructions that are determined by a court of competent jurisdiction not
to comply with sound claims handling procedures and relevant state laws and
regulations.
3: FORM AND PAYMENT OF CLAIMS
Intermountain will issue checks from an account established by the City for payment
of all workers' compensation benefits and expenses related to the claims, including
but not limited to medical, indemnity and reasonable allocated loss adjustment
expenses, which shall be paid by the City. The City shall have the right to audit and
challenge all payments made by Intermountain.
Allocated Loss Adjustment Expenses are defined as follows:
1. fees to independent loss adjusters, claims investigators, and damage adjusters;
2. fees to attorneys for Claims in suit and for representation at hearings or pretrial
conferences;
3. fees to court reporters;
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4. all court costs, court fees and court expenses;
5. pre- and post -judgment interest paid as a result of litigation;
6. fees for service of process;
7. costs of undercover operative and detective services and surveillance;
8. cost for nurse case management services
9. costs of employing experts for the preparation of maps, professional photographs,
accountings, chemical or physical analysis, and diagrams;
10. costs of employing experts for their advice, opinions or testimony concerning
Claims under investigation or in litigation;
11. costs of independent medical examination or evaluation for rehabilitation to
determine the extent of the self-insured employer's liability;
12. costs of medical bill adjudication and medical management expenses related to
medical cost containment efforts;
13. costs of legal transcripts of testimony taken at coroner's inquests, criminal or civil
proceedings;
14. costs of copies of any public records or medical records;
15. costs of depositions and court -reported statements and/or statement transcription;.
16. costs and expenses of subrogation when referred to outside attorneys;
17. costs of engineers, handwriting experts or any other type of expert used in the
preparation of litigation or used to resolve disputes;
18. fees for attendance at administrative hearings, when warranted, in those
jurisdictions that permit or require adjusters or hearing representatives to attend
pre -hearing conferences or informal hearings.
19. any other similar cost, fee or expense reasonably chargeable to the investigation,
negotiation, settlement or defense of a Claim or alleged loss or to the protection or
perfection of the subrogation rights of the Insurer and/or the Insured.
Allocated Loss Adjustment Expenses shall not include any fee, cost or expense
included in the Claims Administration Fees agreed to herein, including but not limited
to overhead or office expenses of the Third Party Administrator, such as, but without
limitation, the wages, salaries, benefits, fees or other expenses.
4. SERVICE FEES
The City agrees to pay Intermountain for services within thirty (30) days of receipt of
an invoice, in accordance with the prices set forth in the terms of this Agreement.
Intermountain agrees it will provide a monthly invoice with detail showing evidence
of each claim or expense incurring a service charge. The services fees and pricing is
outlined in Exhibit "B" of this Agreement.
5. NON -DISCLOSURE OF INFORMATION
The City and Intermountain acknowledge that much, if not all of the material and
information, which has or will come into the City's and Intermountain's possession or
knowledge in connection with the performance of this Agreement, consists of
confidential and proprietary information or "Confidential Information". The City and
Intermountain agree to hold such Confidential Information in strictest confidence and
agrees not to release such information to any individual or entity, including
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employees, unless such individuals or entities are necessarily involved in the
provisions of Claim Services hereunder or are entitled to the information by law.
Intermountain further agrees not to make use of Confidential Information for its own
benefit or for the benefit of any third party, other than for performance of this
Agreement, and not to release or disclose it to any other party either during the term
or after the termination of this agreement. Each party to this Agreement shall be
solely responsible for maintaining the security of such Confidential Information and
for complying with all federal, state and local laws, regulations, or other requirements
governing the privacy and disclosure of such information.
The foregoing obligations shall not apply to any information which: a) is or becomes
known publicly through no fault of the receiving party; or b) is learned by the
receiving party from a third party entitled to disclose it; or c) is already known to the
receiving party before receipt from the disclosing party as shown by the receiving
party's written records; or d) is independently developed by the receiving party, as
shown by the receivingparty's written records; or e) must be disclosed by law.
6. WARRANTY AND CAPACITY TO EXECUTE
Each individual executing this Agreement represents and warrants that he or she
has the authority to execute this Agreement by and on behalf of the party for whom
he or she is signing and to so bind such party.
7. INDEMNIFICATION
Intermountain agrees to indemnify, defend, and hold harmless the City and their
employees and agents from any penalties, claims, losses, costs, and expenses,
including but not limited to attorney's fees, arising out of any errors, omissions,
intentional torts, or other negligence on the part of Intermountain or its employees
and agents. Intermountain shall have no duty to indemnify, defend, and hold
harmless the City or its employees and agents from claims arising out of (i) actions
of Intermountain or its authorized employees and agents taken at the specific
direction of the City or its employees and agents, or (ii) the negligence or fault of the
City or its employees and agents.
The City agrees to indemnify, defend, and hold harmless Intermountain, and its
employees -and agents, from any penalties, claims, losses, and expenses, including
but not limited to attorney's fees, arising out of (i) actions of Intermountain or its
employees, taken at the specific direction of the City or its agents, or (ii) the
negligence or fault of the City or its employees and agents.
8. TERMINATION
Either party may terminate this Agreement immediately for a breach by the other
party, which is not cured within fifteen (15) days of notification of the breach by the
non -breaching party.
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Either party may terminate this Agreement by providing ninety (90) days' prior
written notice of its intent to terminate. In the event this Agreement terminates,
claims open or reopened after contract termination will either be transferred to the
new Third Party Administrator or self-insured employer, or be handled by
Intermountain for an additional annual or per claim fee. Additional post termination
claims handling fees and terms will be negotiated upon notice of termination and will
be based on the claims volume and scope of services requested. If such terms are
not agreeable, Intermountain will provide the client's claim data to the new Third
Party Administrator, or the City, along with physical claim files.
In the event this Agreement is terminated by the City or after 24 months,
Intermountain agrees to cooperate with the City and assist in the transition of claims
to a replacement Third Party Administrator and to assist said replacement to the
extent necessary to protect the interests of the City. All costs associated with data
conversion or transfer to another third party administrator, insurer, or directly to the
City or any other party will be at the City's cost at Intermountain's prevailing time and
expense rates. Transfer costs and/or shipping or mailing costs of any and all files in
active or closed storage will be the City's responsibility.
In the event this Agreement is terminated by Intermountain before 24 months of
service, Intermountain agrees to cooperate with the City and assist in the transition
of claims to a replacement Third Party Administrator and to assist said replacement
to the extent necessary to protect the interests of the City. Intermountain and the
City will negotiate, what costs, if any, Intermountain shall share associated with
transfer of the electronic data and the physical claims files to another third party
administrator, insurer, or directly to the City or any other party.
9. INSURANCE COVERAGE
During the term of this Agreement, Intermountain shall maintain the following
insurance coverage:
a. Professional liability insurance with limits of not less than $2,000,000 per
claim and $2,000,000 in the aggregate.
b. General liability insurance with limits of not less than $1,000,000 per claim
and $2,000,000 in the aggregate for bodily injury and property damage.
c. Workers' compensation coverage and employers liability insurance, as
required by the laws of Washington State, covering persons employed by
Intermountain.
d. A Fidelity Bond in the amount of $1,000,000 shall be maintained by
Intermountain to cover it in the performance of its obligations under this
Agreement.
e. Automobile liability insurance for all owned, non -owned and hired automobiles
in the amount of $1,000,000 combined single limit.
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10. DISPUTE RESOLUTION
10.1 Executive Management. Initially, all disputes shall be referred jointly to a
representative designated by each party with authority to resolve the dispute.
If the designated representative(s) are unable to resolve the dispute within
seven (7) business days after referral of the matter to them, the parties shall
submit the dispute to a senior executive from each party for resolution.
10.2 If the parties are unable to resolve disputes informally through the process set
forth in the preceding paragraph, either party may at its option pursue final
resolution of said dispute by commencing an action in the Superior Court of
Yakima County, Washington.
11. MISCELLANEOUS
11.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington.
11.2 Notice. Any notice to be given hereunder shall be in writing and shall either
be served upon a party personally, or served by registered or certified mail,
return receipt requested, directed tothe party to be served at the address of
the party set forth on the signature page of this Agreement. A party wishing to
change its designated address shall do so by notice in writing to the other
party. Notice served by mail shall be deemed complete when deposited in the
United States Mail. Rejection or other refusal to accept or the inability to
deliver because of changed address of which no notice was given shall be
deemed to be receipt of the notice.
11.3 No Waiver. The failure of either party to insist upon a strict performance of
the terms of this Agreement or to exercise any right, remedy or election set
forth herein or permitted by law shall not constitute nor be construed as a
waiver or relinquishment of such term, condition, right, remedy or election.
11.4 Assignment. This Agreement may not be assigned or subcontracted by
Intermountain without the written consent of the City.
11.5 Captions. The captions are for convenience and in no way define, limit or
enlarge the scope of this Agreement or any of its sections.
11.6 Severability. Invalidity of any term of this Agreement, in whole or in part, will
not affect the validity of any other term. The parties further agree that in the
event such provision is an essential part of this Agreement, they will
immediately begin negotiations for a suitable replacement provision.
11.7 Advertising. Intermountain may only use suchadvertising pertaining to the
business underwritten by the City as has been approved in writing by the City
in advance of its use.
11.8 The Americans with Disabilities Act. Intermountain agrees to comply with the
Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq. (ADA), and
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its implementing regulations, and Washington State's anti -discrimination law
as contained in RCW Chapter 49.60 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; erid telecommunications.
11.9 Compliance with Law. Intermountain 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 governmental
agency or regulatory body, whether federal, state, local or otherwise.
12. ENTIRE AGREEMENT
This Agreement executed by both parties, and its Amendments constitute the entire
Agreement between the parties and supersede any and all previous representations,
understandings, discussions or agreements between the City and Intermountain as
to the subject matter hereof. An instrument in writing signed by the City and
Intermountain may only amend this Agreement.
IN WITNESS WHEREOF, the duly authorized representatives of the parties hereto
have caused this Agreement to be executed and acknowledge that they have read
and understood this Agreement.
THE CITY OF YAKIMA
INTERMOUNTAIN CLAIMS, INC
Signature\�
Signature:Le__,Z
rt n
Name: E� PC��Iu-- l�°`
i�
. i- Cu3,J .
Name: Dave Ward
Title: Cl NI ,
,: OA�
Title: President
Date: if) 3 •.
Date: 1 0 ___-;,2002
Address for Notices:
The City of Yakima
129 N. Second Street
Yakima, WA 98901
Attention: Sheryl Smith
Human Resources Manager
Phone: 509.575.6090
Fax: 509.576.6358
CITY CONTRAC f NO: aeof'a-4
RESOLUTION NO: Agdar-ir,
C
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Address for Notices:
Intermountain Claims, Inc..
PO Box 4367
Boise, ID 83711
Attention: Dave Ward
President
Phone: 208.323.7571
Fax: 208.375.8905
Exhibit "A"
Workers' Compensation Claims Service Specifications
I. GENERAL REQUIREMENTS
The Workers' Compensation Claims Service Specifications and the Agreement
address the process for the handling of claims assigned to Intermountain by the
City of Yakima, resulting from Worker's Compensation claims filed in
Washington.
Domestic Geographic Coverage
Intermountain will provide complete adjusting and administrative services for all
workers' compensation claims in Washington.
Intermountain will provide the City of Yakima a current listing of its office
locations and personnel assigned to the City of Yakima account in Washington. If
change occurs, Intermountain will provide an updated list to the City of Yakima
within five business days of the effective date of the change.
Personnel Assigned to Provide Services to Client
Intermountain adjusters must be competent in adjusting workers' compensation
claims. Intermountain adjusters must be licensed and/or certified in the
jurisdiction in which they are handling claims.
Intermountain Point of Contact
Intermountainwill provide an Account Executive as a central point of contact for
the City of Yakima. Intermountain's point of contact will have a toll free telephone
number and fax number assigned for the City of Yakima's use. Intermountain will
provide additional or alternative point of contacts as agreed upon with the City of
Yakima, to meet any changes in the City of Yakima's needs.
II. CLAIM TYPE DEFINITIONS
"NOTIFICATION ONLY CLAIM": A claim that is filed in which the claimant does
not seek medical treatment, involves no payments of any type, and requires no
contact with any party, except with the City of Yakima when clarification of the
claim type is required.
"MEDICAL ONLY CLAIM": A Medical Only claim refers to a work-related claim
involving medical treatment only. These are claims in which typically no personal
or telephonic contact is necessary with the injured worker. Other distinguishing
characteristics of a Medical Only incident include:
• There are no issues requiring in-depth investigation or recorded
statements
• Lost workdays do not exceed statutory waiting period.
• No need for disability management and/or medical case management.
• No captioned reports, client meetings or claims reviews are requested
or performed.
• Medical treatment does not exceed $3500.00 total paid.
• An attorney does not represent the injured worker.
• No issues of medical causal relationship or compensability.
• No subrogation issues exist.
• No issues of permanency or scarring are involved.
• The claim does not include alleged hearing loss.
"INDEMNITY CLAIM": Any claim that is not otherwise defined as a Medical Only
Claim or Notification Only Claim.
III. ADJUSTING SPECIFICATIONS
Initial Receipt of Claim
The employers' First Report of Injury (FROI) can be received via e-mail, fax,
regular mail, overnight mail, or telephone. Timeframes and claims handling
processes apply once the FROI is obtained. The FROI will be directed to the
claims manager, or an approved Senior Adjuster, to be assigned to the
appropriate time loss or medical only adjuster. File folders will be created and
the information will be input into the appropriate claims and administrative system
by the set up clerk or claims assistant, typically within 24 hours, but not later than
48 hours. Adjusters are to begin working the claims immediately, before a file
folder is created.
File Set Up
Intermountain will assign new claims to its adjusters the same business day on
which the City of Yakima assigns the claim to Intermountain. Files must be
maintained to ensure clear and concise documentation of claim processing. All
correspondence from third parties must be stamped with the date received. All
claims will be thoroughly investigated with concise documentation of investigative
activities and findings. Claims investigations will be completed as soon as
possible considering the scope of work and complexities of the case.
Reserving
The adjuster will set the initial reserve within 14 days of the receipt of the claim.
Reserves will at all times reflect the expected, on a more probable than not basis,
ultimate payout value of the claim. All assumptions used in reserving are
supported by factual information or industry and/or professional experience
handling similar or like claims. Intermountain adjusters are required to consider a
number of factors including the claimant's injury, education, age, work
experience, attitude and general physical condition as well as the employer's
attitude, quality of medical care and any other outside influences which may
affect the claim, either positively or negatively. We understand the importance of
adequate reserving practices. We expect clients, carriers and consultants will be
reviewing and monitoring our reserving practices and we strive to justify our
reserve practices accordingly.
Reserve Worksheet
Time loss files with greater than $5000.00 total incurred must contain reserve
worksheets. Initial reserve worksheets are to be completed prior to the reserve
being recommended or established. If for any reason the reserve cannot be
established within the client specific timeframe, an explanation will be provided in
the file or claim notes. Subsequent reserve changes also require completion of
the reserve worksheet. Once the known facts no longer justify a reserve, the
reserve is reevaluated and adjusted up or down. Reserve changes will be
updated as soon as possible, but no later than 30 days after pertinent information
is received which justifies a reserve change. Step reserving is not acceptable.
Supervisor approval is required prior to input, based on the experience of the
adjuster or the client specific account instructions.
Medical Only Reserving
A reserve worksheet is not required on a medical only claim with a reserve
reflecting total incurred exposure under $3,500. The medical only adjuster will
review claims with a senior adjuster or supervisor when the exposure is expected
to exceed the $3,500.00 level, and/or if the claim remains active after 90 days.
The senior adjuster or supervisor will determine whether the claim qualifies for
criteria to establish it as an Indemnity claim.
Claim Type Classification
Upon assignment, Intermountain adjusters will classify the claim as Medical Only
or Indemnity, as appropriate.
Claim Type Reclassification
If during the course of handling a claim, the adjuster determines that
circumstances occurring subsequent to the opening and initial classification of
the claim dictate that the file initially was incorrectly classified by type of claim,
the adjuster will change the classification in the electronic claims system (ERIC)
and in Intermountain's administrative claims management program. The adjuster
will also complete any additional contacts or investigation, within the appropriate
timeframes, required to match the claim type classification.
Initial Contact/Investigation - Indemnity Claims
Contactor attempted contact, with reasonable attempts made thereafter, with the
injured worker or attorney if represented, employer and treating physician, will
occur within 24 hours of receipt of the employer's First Notice of Injury in the
claims office. We provide full disclosure of the claims handling process, benefits
and payments, where necessary. Acceptance or denial of compensability will be
communicated at the earliest possible time to the injured worker and employer.
Recorded Statements
Recorded statements from injured workers are to be taken on the following types
of cases and should be obtained as soon as possible.
1) Knowledge of prior claim or injury to affected body part
2) Serious catastrophic injury
3) Third party involvement -subrogation potential
4) Questionable compensability/possible denial
5) At the discretion of the employer/client or the examiner
Employer and/or witness statements are obtained on questionable claims, when
necessary, where the credibility of the injured worker's claim or testimony is at
issue. Recorded statements need not be transcribed. A copy of the statement
tape will be provided to the person interviewed when requested. Original
statement tapes must be maintained in the file at all times. If transcription is
required, the costs will be charged to the file as an allocated expense.
Disability Verification
On time loss claims disability will be verified by contacting the medical provider(s)
and employer before issuing a time loss benefit check. The verification of this
contact should be noted in the claim notes or file. This information must be
documented prior to issuance of all time loss benefits.
On -Line Reporting
On Indemnity files, Intermountain requires that claims action taken and pertinent
conversations or information regarding the file to be documented in the electronic
file. This includes discussion or correspondence with the client, claimant,
attorneys, doctors etc., and posting target dates, explaining reserve changes,
and updates of meaningful legal, medical and other events. Furthermore, we
require the file notes include a current plan of action geared toward file
disposition.
Our minimum requirement for Medical Only claims includes the Medical Only
adjuster inputting a note confirming the facts of the accident, injury and
treatment, compensability determination, and disposition plan. A final note is
input at closing.
Disposition Plan
If applicable, Intermountain's adjuster must document the Plan of Action in file
notes on the ERIC Plan of Action Screen. Intermountain's adjusters establish the
Plan of Action in order to assist in setting goals and target dates to move the
claim to resolution in the most effective and expedient way. Intermountain's
Supervisor/Manager will review Indemnity claims periodically to determine if the
Plan of Action is being executed and updated as the claim dictates.
Correspondence
All correspondence received will be date stamped on the day of receipt. Form
letters may be used for transmittal or request for routine information. They are
not to be used when specific, detailed information is transmitted or requested. All
written communication with outside sources such as clients, employer, claimants,
medical providers and attorneys should be typed.
Obtaining Medical Reports
At the time the first contact is made to the medical provider(s), medical reports
are requested. Requests may be made by telephone, fax, mail, or e-mail.
Current or updated medical reports must be obtained regularly. Written requests
should be generated for reports that have not been received within 30 days. A
final medical report must be obtained prior to claim closure. Final reports should
indicate medical stability, any degree of permanent impairment/disability, and
closing medical information. Intermountain adjusters are to obtain all relevant
medical records from the treating medical provider(s) prior to payment of medical
bills.
Prior Medical Reports
Intermountain does not require adjusters to obtain prior medical reports on all
claims. However, prior medical records are requested on claims where such
records impact the management of the workers' compensation claim. We
investigate to determine medical causation, pre-existing conditions and
apportionment, and non -industrial factors which are not compensable or that
might impede recovery or resolution of a claim. Signed Medical Authorization
forms are requested from claimants and prior medical records are obtained as
needed by our adjusters.
Independent Medical Examinations
Independent Medical Examinations are considered valuable tools that
Intermountain adjusters utilize in conjunction to the employer's right to obtain an
IME in a specific jurisdiction. The examination is scheduled and the adjuster
sends a letter to the IME physician(s) setting forth a description of the accident
and previous medical developments, issues and extent of time loss, along with
any other pertinent information and an explanation as to the purpose of the
examination. The IME provider should be provided with copies of all pertinent
medical, accident and injury information. These examinations are typically
conducted to determine the claimant's ability to return to work, maximum medical
improvement and extent of permanent impairment/disability and/or need for and
type of additional medical treatment.
Medical and Expense Payments
Once a medical, legal or other service bill is received and determined to be
proper, the examiner circles the amount to be paid and initials and dates it for
payment. The adjuster is required to make a check of the prior payments to the
provider to eliminate duplicate payments. Proper verification of services is
necessary before payment is made. Bills are to be paid no later than 30 calendar
days from receipt. IRS numbers are to be used with all payments except as
otherwise approved by management.
Time Loss and Permanent Disability Payments
Lost time and permanent disability payments are paid in accordance with State
requirements as to amount and timing. Documentation of the average weekly
wage and weekly benefit rates are to be maintained in each file. Injured workers
are to be paid timely and any late payments require an explanation be posted in
the file. Typically, time loss payments are paid every 14 days and permanent
disability on a monthly schedule. On long-term time loss and permanent
disability claims, an automatic payment schedule can be established but must be
reviewed by the adjuster at a minimum of every 90 days.
Cost Containment/Medical Bill Review
Intermountain has partnered with medical cost containment vendors to provide
our primary bill review service and reduce medical bills to the statutory state fee
schedules or usual and customary standard. Our cost containment vendors
review . the appropriateness of the services rendered and look to achieve
maximum savings by "down coding" the level of service if the medical reports do
not support the level of service indicated on the provider bill(s). Our vendors also
give our clients access to a large Preferred Provider Organization (PPO) that
includes contracted discounts on medical services, often below the fee schedule
or usual and customary allowable charges. Intermountain has an established
electronic data interface (EDI) process that facilitates prompt payments of
medical bills after audit, typically within one week. Adjusters can use an
approved utilization management firm to certify the admission and determine the
length of hospital stay when they have knowledge the injured employee is going
to the hospital or is already in the hospital, with client approval.
Legal Management
We understand the City of Yakima may have preferred vendors in place and we
will work with vendors recommended by the City of Yakima. No vendor will be
retained without permission from the City of Yakima, and such permission will be
documented in the file. Intermountain will work with the client to ensure continued
management and direction of all litigated claims. The assigned adjuster will, at
all times, directly manage litigated claims. Intermountain will make timely referral
to client approved defense counsel when a claim moves into litigation. Updated
information is provided to defense counsel upon receipt by the claims adjuster.
Referrals to defense counsel will include copies of pertinent portions of the file
and a typed cover letter indicating the primary issues as we see them. The letter
will also include instructions for handling, and a break down of payments made
when necessary. Hand written notes or memos are not acceptable.
Intermountain adjusters will keep counsel advised of all pertinent developments
on a claim as well as our concerns and desires for continued handling. Prompt
response to defense counsel is essential. Necessary investigation, information
gathering, IME scheduling, etc will be handled by the adjuster whenever
possible. Counsel must be advised of any client specific guidelines that apply. If
specific guidelines are not provided, the adjuster will request an initial opinion
letter. Periodic status reports are provided by counsel as needed or requested
by the adjuster.
Intermountain adjusters work with the City to report on legal proceedings and the
plan of action for claims disposition. Adjusters will discuss requirements for
attending legal proceedings including hearings, mediations, depositions, etc. with
the specific client. Intermountain may have special billing arrangements made
with the client if their presence is requested at legal proceedings. Intermountain
adjusters will provide independent settlement evaluations and their opinions
regarding defense counsel's evaluation of a case. Counsel will be required to
advise of all settlement demands along with their recommendations on each.
Defense counsel will obtain settlement authorization directly from Intermountain
personnel in conjunction with the client and, when appropriate, the primary or
excess carrier.
The adjusters will review attorney billings. The bill must be itemized and contain
a description of each activity charge, the date of service and the time allocated
for each activity. The bill must indicate the total time spent, hourly rate, and total
charge.
Utilizing Vendors and Experts
Intermountain utilizes outside vendors in the fields of ergonomics, vocational
rehabilitation, investigation or surveillance, and legal assistance when claims
demand those services. All of our vendors have the required credentials and
expertise, and are approved by our clients before being retained. We understand
the City of Yakima may have preferred vendors in place and we will work with
vendors recommended by the City of Yakima. No vendor will be retained without
permission from the City of Yakima, and such permission will be documented in
the file.
Utilizing Medical Case Management
Intermountain adjusters will make evaluations as to the necessity of nurse case
management and advise the City of Yakima accordingly. Intermountain utilizes
both our in-house nurse case managers and approved outside nurse case
managers. If nurse case management is utilized, prior approval must be
obtained from the City of Yakima.
Utilizing Vocational Rehabilitation.
Vocational Rehabilitation is governed in part by the applicable State law.
Intermountain adjusters are responsible to initiate, coordinate and direct
rehabilitation efforts, as required. Typically, State and private agencies are
available to assist in this area and consideration for utilizing either or both must
be made. If outside vocational rehabilitation is utilized, prior approval must be
obtained from the City of Yakima.
Subrogation
Every claim involving potential subrogation must be investigated. Before pursuing
a subrogation recovery the assigned adjuster will obtain the approval of the
client. Clients may have valid reasons for not wishing to pursue a third party
recovery. Once a decision is made to pursue a third party subrogation recovery,
notice letters must be sent by the adjuster to the appropriate third party,
insurance carrier, and/or attorney. In addition, the injured worker must be
advised that you are subrogated to his rights of recovery and are pursuing a
claim as well. Intermountain encourages assertive and pro -active pursuit of
subrogation recovery. All developments, or lack of, must be documented in the
file.
Adjusters must recognize the appropriate Statute of Limitations on subrogation.
Approval to refer cases to outside investigators or legal counsel for review must
be obtained from the client. No settlement or lien compromise is made without
client approval. Intermountain Adjusters do not sign third party releases. We
forward them to the client for consideration
Settlement
Intermountain adjusters will obtain settlement authority directly from the City of
Yakima and will not make offers of settlement without express authorization of
the City. Intermountain requires that the settlement evaluation be completed and
maintained in the file prior to obtaining settlement authorization. Once a
settlement evaluation is approved, the adjuster will request settlement authority
from the authorized client contact. These procedures are to be clearly
documented in the file.
Excess Reporting Requirements
Intermountain will handle the excess reporting requirements on behalf of the City
of Yakima. The excess carrier will outline specific protocols and procedures, and
the City of Yakima will need to keep Intermountain fully appraised of the excess
carrier names and requirements.
Denials
Adjusters are required to obtain approval from the City of Yakima before denial of
any claim. Such approval or authorization will be documented in the file notes.
Denial letters should specifically indicate whom Intermountain represents and the
reason for the denial. Each file involving a denial will have written documentation
of the client approval prior to mailing of the denial letter.
IV. PROCEDURES OF ISSUANCE OF CHECKS AND ACCOUNT
RECONCILIATION
A checking account will be maintained and adequately funded by the City of
Yakima on a regular and ongoing basis during the period of the Agreement. This
checking account will be used to pay all workers' compensation benefits and
expenses related to the City of Yakima's Washington self-insured workers'
compensation claims. Intermountain will issue and sign checks on behalf of the
City of Yakima. Intermountain will make timely payment of benefits due in
accordance with statutory requirements or administrative or judicial. orders. The
City of Yakima shall be wholly responsible for all claim payments or claims costs
including but not limited to medical, indemnity, vocational rehabilitation, and
allocated expenses, benefits, payments, costs, etc
Intermountain will provide the City of Yakima with check register information to
reimburse and/or audit the payments made from the account.
Checks will be issued, signed and disbursed by Intermountain.
The City of Yakima will be responsible to fund the account on a regular basis to
ensure funds are available to pay the related claims payments, expenses and
costs. The City of Yakima is responsible for any fees and costs associated with
the checking account.
All workers' compensation benefit checks will be printed by Intermountain and
mailed promptly.
V. INFORMATION SYSTEM AND LOSS RUN REPORTING
Intermountain Claims, Inc. utilizes the ERIC Risk Manager System. The system
allows us to customize your hierarchy or organizational structure. Therefore, it is
not a problem to provide itemized Toss information to separate subsidiaries,
facility managers, product groups, or safety directors. We can set up reinsurance
levels, which generate a statistical report for the reinsurance carrier or broker.
The system allows quick and efficient transaction processing for users including
reserving, making payments or entering detailed file notes. The system has all of
the necessary fields to extract detailed demographic and financial reports, and to
be fully compliant with the IAIABC national EDI standards, which are mandatory
in some states. The loss run reports can be customized to cover the entire
employer, specific departments or other organizational units. The data can be
sorted by claimant name, date of injury and by any particular time period
specified.
The standard open claim or monthly loss run includes the claim number,
claimant's name, social security number, date of injury, cause action, type of
injury, body part, and organizational unit. The claims are listed as medical only
or indemnity and identify if the claim is open or closed. The report includes the
paid medical, indemnity, and allocated amounts as well as the current
outstanding reserves. A complete summary of the financial totals is indicated at
the bottom of the report. Loss runs are provided to our clients on a monthly
basis. However, various loss data reports can be supplied on demand. Many
clients require the data be shared with brokers or via an EDI exchange. We have
sophisticated client specific data reporting options and process in place, and are
confident in our abilities to meet your needs in this regard.
Client Access to the ERIC System
Our clients can opt to have access to our claims management system. Our
clients gain access to our system though a web based Citrix application. We can
allow clients access to both the claims management screens and to the reports
or loss run reporting module. We encourage client access to enhance the claims
management process. We are available to provide support and training to the
City of Yakima as needed.
Exhibit B, Intermountain Claims Service Fees and Pricing
FEES FOR SERVICES
Fees include all claims handling fees and administrative services associated with
both the existing open take-over claims and all newly incurred losses beginning
September 15, 2008:
• One time Implementation Fee $11,800 (this includes data conversion, a
finalization of the state audit, and transfer of the open and closed physical
files).
• A flat fee of $5050.00 per month
• If more than 90 claims are received in a contract year, the City of Yakima
shall also pay Intermountain $500.00 for each additional new claim
received.
Included:
Services as outlined in Exhibit A, Workers' Compensation Claims Service
Specifications are included in the fees above. Also included:
• Telephonic quarterly claim reviews, as well as an in-person claim review
to take place during the first year of the program
• 8 hours per year of ERIC System training
The below services are not anticipated to be utilized by the City of Yakima.
However, they may be incurred on an as -needed basis at the City's request.
Such items not included in the service fees are:
• Intermountain staff attendance at workers' compensation hearings, legal
proceedings, mediations, or on-site accident investigation or special
circumstance travel requested by the City ($150.00/half day and
$300.00/full per person plus mileage and/or expenses)
• City requested computer programming or ad-hoc reporting ($150.00/hour
paid to IT vendor)
• City requested ERIC System training exceeding 8 hours/year ($50.00/hour
paid to Intermountain)
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. d Z
For Meeting Of 9/5/06
ITEM TITLE: Legislation Authorizing the Execution of a Contract with
Intermountain Claims, Inc. for Workers Compensation Claims
Management
SUBMITTED BY: Sheryl M. Smith, Human Resources Manager
CONTACT PERSON/TELEPHONE: Sheryl M. Smith, 575-6090
SUMMARY EXPLANATION:
The City of Yakima is self insured for worker's compensation benefits and the attached
resolution authorizes the execution of a contract ratification with Intermountain Claims,
Inc. as third party administrator for continued worker's compensation management
services. The City's previous third party administrator, NovaPro Risk Solutions notified
the City of Yakima on August 15, 2008 that they would be terminating their contract with
the City of Yakima on September 15, 2008 as they were closing their Washington office.
The contract period shall be effective September 15, 2008 and the contract shall
automatically renew unless either party provides the other with written notice of least
ninety (90) days. Compensation for these services shall be (a) a one time
implementation fee for data conversion, a finalization of the state audit and transfer of
the open and closed physical files; (b) a flat fee of $5,050.00 per month and (c) $500
fee per claim over 90 per year. The monthly fee will subject to negotiation annually.
Intermountain Claims, Inc. will be responsible for account management, claims
administration, benefit eligibility, and representation at hearings as needed.
Resolution X Ordinance Contract X Other (Specify)
Funding Source Worker's Compensation Program 514
APPROVED FOR SUBMITTAL:
•
City Manager
STAFF RECOMMENDATION: Adopt resolution authorizing the execution of the
contract with Intermountain Claims, Inc.
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION: