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HomeMy WebLinkAboutCC Resolution 8255 (Workers Compensation)RESOLUTION NO. 8255 A RESOLUTION AUTHORIZING THE SIGNING OF A CONTRACT, LEASE OR AGREEMENT THE CITY COUNCIL OF THE CITY OF SAN RAFAEL RESOLVES as follows: The VICE -MAYOR and CITY CLERK are authorized to execute, on behalf of the City of San Rafael, a contract, lease or agreement with ComCo Management, Inc., as the City's Workers' Compensation Administrator from November 1, 1990 to October 31, 1992. I, JEANNE M. LEONCINI, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of said City held on MONDAY , the 15th day of OCTOBER , 1990, by the following vote to wit: AYES: COUNCILMEMBERS: BORO, SHIPPEY, THAYER & VICE -MAYOR BREINER NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: MAYOR MULRYAN JEAUEN,M. LEONCIN , City Clerk AGREEMENT This agreement is entered into this 1st day of November 1990, between ComCo Management, Inc., hereinafter called "ComCo" and the City of San Rafael, hereinafter called the "Client". Whereas Comco represents itself as being capable and qualified to provide Workers' Compensation claims administration services in a manner commensurate with the Division of Industrial Accidents, the parties agree as follows: I. ComCo shall perform the following services on behalf of the Client: A. Program Development 1. Consult with the Client's personnel and assist in developing the necessary procedures, procedures manual, practices, and coordination to implement the Client's Workers' Compensation Program and to meet legal requirements of the State. B. Claims Administration 1. Review and process all claims for Workers' Compensation benefits in accordance with the requirements of the Department of Industrial Relations for reporting and notification. 2. Determine compensability of claimed injuries and illnesses in accordance with the State's Workers' Compensation laws. 3. Monitor treatment programs for injured employees, including the review of all "Doctor's First Report of Work Injury" to assure that treatment is related to a compensatory injury or illness. 4. Schedule medical appointments as needed and maintain case liaison with treating and/or evaluating physicians or other medical providers to ensure that employees receive proper care and to avoid over -treatment situations. 5. Review and make recommendations to the Client in its utilization of a medical expert panel. 6. Consult with the Client's personnel and provide guidance and evaluation of the physical capabilities of injured employees to return to work. 7. Determine eligibility for and authorize payments of medical benefits, and authorize examinations to determine the nature and extent of disability when appropriate. 8. Determine eligibility for and authorize payment of temporary disability compensation in coordination with medical advice and rehabilitation efforts. 9. Determine the degree of permanent disability, if any, of injured workers --utilizing, as necessary and advisable --advisory rating of the Disability Evaluation Bureau. 10. Authorize the payment of permanent disability compensation and death benefits in accordance with advisory ratings, Orders of the Workers' Compensation Appeals Board, or Compromise and Release Agreements. 11. With prior Client approval of attorney assignment, refer litigated cases, negotiations of Compromise and Release Agreements and subrogation actions. 12. Maintain current estimates of costs of all anticipated benefits and related expenses on each case. 13. Investigate or arrange for investigation of, as necessary and appropriate, questionable cases, and the status of disabled employees, in order to adjust all cases and to assist in the trial or settlement of litigated cases. 14. Participate in an initial orientation and subsequent Workers' Compensation. C. Employee Services 1. Provide information and guidance to the Client's employees regarding Workers' Compensation benefits, injuries, and permanent disability ratings, in accordance with the Client's policies. 2. Assist in resolving employee problems relating to an injury in non -litigated cases. 3. When medically appropriate, develop rehabilitation programs for injured employees for approval by the Client, the employee, and other agencies, in order to provide rehabilitation, retraining, or reassignment for employees with physical or 2 II. performance limitations resulting from industrial injuries. The Client shall be consulted prior to assignment to a specific vocational rehabilitation vendor. 4. Consult with employee associations and unions on problem cases in accordance with the Clients policies and approval, within a reasonable scope. 5. Develop and recommend policies and procedures to ensure that the employee's ability to work is consistent with the findings of the Workers' Compensation Appeals Board. D. Fiscal and Claims Analysis 1. Provide the Client's administration with continuing information on the progress of individual claims, including periodic meetings and reporting. 2. Submit monthly statistical summaries and narrative reports to assist in the evaluation of the Client's progress. Fee to $46,800.00 per year for the Administration of Workers' Compensation. Fee Terms of Agreement: Twelve equal installments of $3,900.00 for a total of $46,800.00 This fee covers all services included in Item I of this agreement and the following services: A. All monthly Loss Analysis Reports, as agreed to by the Client, as well as the Loss Control Summaries. B. Internal management of all aspects of your Program in compliance with the legal requirements of the State of California. The monthly fee quoted excludes all allocated claim services which are defined as the costs incurred outside of the scope of normal administrative adjustment services, such as: 1. Attorney fees and records. 2. Court depositions. 3. Costs and materials for expert witnesses. 4. Subrosa or other outside professional investigation services. 5. Outside professional assistance in matters of mandatory vocational rehabilitation. 6. Any special charges for work which may result from 3 a State audit of the prior administrator's errors. 7. Costs for printed checks, and printing charges of specialized forms not elsewhere used by ComCo. III. Renewal of Agreement This Agreement is for a period of two (2) years, commencing on November 1, 1990, and ending on October 31, 1992. After the initial contract period, this Agreement may be renewed from year to year by mutual consent and fee as agreed upon, provided however, that any proposed revisions to the Agreement by either party be submitted in writing no later than sixty (60) days preceding the expiration of the contract. Any proposed fee increase for the second year of this agreement shall not exceed ten percent (10%) of the first year fee. IV. Additional Conditions A. While performing service independent contractor and employee of the Client. hereunder, ComCo is an not an officer, agent or B. Neither party shall assign this Agreement or any part hereof without the written consent of the other party. C. The services to be performed by ComCo shall specifically exclude any which now or in the future are deemed to be the practice of law. All claim file records, reports and other documents and material pertaining to the Client's claims shall be the property of the Client and shall be delivered to the Client or its designee by ComCo upon termination of this Agreement. Client agrees to cooperate with Administrator with respect to its duties hereunder including, but not limited to, responding to Administrator's requests for information promptly; meeting with Administrator and/or third parties, as may be needed; making decisions on matters which, in the professional opinion of the Administrator, should be made by Client; performance by Client of all other obligations of this Agreement. Administrator and Client hereby mutually agree to indemnify and hold free and harmless each other for their acts or failure of pursuant to Labor Code 129.5 from any and all losses, liability, damages, costs or expense to which Client may be subjected as a result of failure to pay benefits as required by Labor Code 129.5 enacted and effective 1-1-90. Administrator hereby agrees to indemnify and hold free and harmless Client from any and all loss 4 costs, expense, damages and liability arising from willful misconduct, negligent acts or any error or omission of Administrator, its officers, agents and employees in connection with fulfilling its obligations under this Agreement, except liability arising out of the sole negligence, willful misconduct or specific instructions by Client, and its representatives in direct violation of any Workers' Compensation law or regulation under Self Insurance Plans, State of California. Client and ComCo hereby expressly understand and agree that ComCo is not, and will not be, liable or responsible for any losses, liability, or damages to Client which are proximately caused by the performance or non-performance of the predecessor third party administrator from whom ComCo receives the claim files which are the subject of this contract. This contract for service is predicated upon our company's usual and customary business procedures in administrating the claims of a permissibly self-insured employer. This includes responsibility for staffing and the assignment of appropriate staff for the administration and adjusting of the employer's claims. In the event that there is a change in the Claims Examiner assigned to the City of San Rafael's account, the Client shall have the right to approve such staff changes prior to implementation, if desired. This also includes, where necessary, the assignment of outside services including, but not limited to, legal counsel, vocational rehabilitation specialists, and investigators, with prior Client approval. If the employer, or the agents of the employer, wish to designate the number of personnel required to staff for the administration of the employer's claims, then the employer must share the responsibility for the manner in which the employer's claims are administered and will be responsible for the actions of such designated administrative and claims personnel. It is also acknowledged that any designation of outside services provider to be utilized by the administrator in the adjustment of claims will render the employer and/or the employer's agents responsible for the actions of such designated service providers in all regards. Such service providers will include legal counsel, rehabilitation specialists, investigators, medical facilities and physicians. The above policy is the policy of this administrator who will be responsible for the administration of claims consistent with the authority extended by the employer. Any alteration in the authority of the administrator to perform its duties and discharge its obligations under this agreement must result in a corresponding retention of responsibility by the employer for such changes in the administrator's usual business practices. It is acknowledged that this is obviously a fair and equitable policy, allowing for an employer's coordination for the administration of such employer's claims, but clearly delineating the responsibility assumed by such 5 coordination. This agreement and all exhibits shall constitute the entire Agreement of the parties. No modification or amendment of this Agreement shall be valid unless it is in writing and executed by both parties. ComCo and Client agree to submit any claims arising under this Agreement, or any disputes concerning the terms and provisions of this Agreement, to binding arbitration pursuant to the current provisions of the California Code of Civil Procedure and any successor statutes. V. OBAE Penalty Assessments Any penalties or assessments incurred as a result of an OBAE audit will be the responsibility and paid by the party at fault, as determined by Addendum A. VI. Termination of Agreement Either ComCo or Client shall have the right to terminate this Agreement by notifying their intent to cancel, in writing and delivered via registered mail, 60 days prior to such requested cancellation, without penalty. Witness the parties hereto the day and year first above written COMCO MANAGEMENT, INC. By J TITLE—�/, 7/,- : ; - - L CITY OF SAN RAFAEL By Af GY SA,6G V DOROTHY L A REINER TITLE VICE -MAYOR ATTEST: JEAEANNE M. LEONCINI, City Clerk ADDENDUM A Under the guidelines of the new legislation regarding Workers' Compensation in the State of California effective January 1, 1990 there are procedures for the assessment of penalties in varying amounts for specific violations of either claim practices or the timely, accurate, and effective provision of benefits to the injured employees as determined through the audit process of the Office of Benefit Assistance and Enforcement (OBAE). It has been clearly stated by OBAE that in the case of a self- insured employer whose claims are administered by a third party administrator (TPA) that "the penalty imposed shall be joint and several, and shall be served upon both the self-insured and third party administrator." This is to say that both parties will have the obligation to resolve the payment of the assessment, pay the penalty assessed or to lodge the appropriate defense against such payment if the penalty is felt to be either inappropriate or unreasonable under the specific circumstances that have given rise to the assessment of the penalty in question. In the event that the penalty assessed is for work done or not done properly by a prior administrator, where there has been a subsequent change in third party administrators the penalty again will be issued as a joint and several document with notice being served upon both the self-insured and the prior administrator. The schedule of penalties has once again been refined and it is possible that it will be further refined as OBAE continues to draft its procedure manual for the conduction of an audit and the deter- mination of penalty assessment. Attached is a copy of the current schedule of penalties as presented in the draft of procedures issued May 1990. This draft is not expected to be in final format and content until late July, 1990 or early August, 1990. In order to determine in an orderly manner who should be responsible for the payment of any penalties assessed the following guidelines will be utilized by ComCo Management, Inc. NATURE OF VIOLATION RESPONSIBLE PARTY Failure to pay full 10% As this would appear to be a self-imposed penalty calculation error, and there- fore the responsibility of the claims examiner the penalty would be paid by the TPA. 7 Self-imposed penalty not paid Failure to advance permanent disability when due No employer date received on employee claim form 8 However, in the event that the calculation error was based on incorrect information provided by the employer, the penalty would appear appropriate for payment by the employer. If the penalty was not paid because the employer had not notified the TPA of the return of the claim form from the employee then this penalty would be paid by the employer. Where the failure to pay the self-imposed penalty is a calculation error by the claims examiner and all information has been timely provided the examiner the payment of the assessment would be the responsibility of the TPA. Where the file is clearly documented and the failure to pay is an examiner error then the penalty assessed is the TPA responsibility. If the knowledge of permanent disability is withheld from the examiner by either the employer or a doctor specifically se- lected by the employer the penalty is the employer responsibility. It should be noted that for this assessment to apply the claim form must have been returned to the employer and the employer in sending the Carrier/TPA copy of the form will have neglected to complete the appropriate information required. This penalty would be appropriate for employer payment. Failure to respond to written employee request for treatment within 20 days Failure to pay requested and uncontested medical mileage E Additionally, it should be noted that .from time to time the TPA may receive a claim form from sources other than the employer (i.e. Doctors or Applicant's Attorney). Where that happens the TPA will document the file that the claim form was originally re- ceived from a source other than the employer, forward a copy of the claim form completed by the employee to the employer for completion of the appropriated information for return to the TPA. If the form is not returned to the TPA with the required information the em- ployer will be responsible for payment of the assessment. If the written request is re- ceived by the TPA the payment of this penalty will be paid by the TPA. However, if the writ- ten request is received by the employer and is not communi- cated and sent to the TPA on the date of employer receipt the penalty should be paid by the employer. If the mileage request is sent by the employee directly to the TPA rather than to any other party the TPA will pay the pe- nalty assessment. If the mile- age request is sent first to the employer and that employer does not communicate and send the mileage request to the TPA on the date of the employer re- ceipt of the mileage the penalty should be paid by the employer. Payment at less than maximum T.D. rate without documentation in addition to the employer's report Failure to pay first T.D. payment within 14 days of date of knowledge of injury and disability Failure to comply with any rule or regulation of the A.D. 10 This penalty assumes that there is not ample documentation to support such a payment. It is ComCo Management, Inc. 's proce- dure to pay all temporary dis- ability benefits at maximum unless an adequate wage state- ment has been provided and in our possession at the time that any indemnity benefit is paid. In light of this policy the payment of the penalty assessed is the responsibility of the TPA unless the wage information provided by the employer is in- accurate and in that case the employer would be responsible for the payment of the assessment. This date of knowledge is deter- mined to be the employer's date of knowledge. Where the infor- mation has been provided the TPA by the fifth day following the employer date of knowledge the penalty assessed by OBAE will be paid by the TPA. Where the TPA is not provided notice and sufficient information within five days of the em- ployer's date of knowledge, or where it is determined after investigation or discovery that the employer's date of know- ledge was actually earlier than stated this penalty will be the responsibility of the employer. This is the catch-all penalty. It is certain to be the area of most discussion in any penalty assessment. Often the TPA's ability to control the receipt of much of the information identified is difficult if not impossible. In light of the ambiguous nature of this penal- ty often the determination of who is responsible for payment will have to be determined on a No employee Claim Form, or document is given to employee by employer, or sent by claims administrator. Untimely provision of the Claim Form to the employee by the employer 11 case by case basis. The fol- lowing guidelines on specific areas identified on the at- tached will be the starting point for determining responsibility. The legal obligation to provide the Claim Form to the injured employee has been placed on the employer. ComCo Management, Inc. has provided guidelines for the documentation of provision of the Claim Form by use of both the Claim Form Log and the six part Claim Form. It will not be ComCo Manage- ment, Inc.'s policy to provide the Claim Form except on spe- cific request by the employee or the employee representative and even then it is felt that the appropriate procedure would be for the claims examiner to advise the requesting party to notify the employer while at the same time the claims examiner will call the employer identifying the request so that documentation of provision of the Claim Form can be main- tained at the employer premises. If trie employer utilizes the suggested procedures then all files should have appropriate documentation of provision of the Claim Form and no penalty should arise. If the employer is not following the suggested procedures or has not provided the TPA with any proof that the Claim Form has been provided for the claim file this penalty will be paid by the employer. Penalty assessment will be the employer's responsibility. No employer report No, or missing, medical reports Penalty assessment will be the employer's responsibility. This will be a difficult penalty for which to determine responsibility. In many cases obtaining medical reports from doctors can only be achieved after it is made absolutely clear that there will be no payment for medical services unless the appropriate reports are provided. Even then some doctors resist the obligation. Where the offending medical facility is one selected by the employer, if a penalty is assessed, the responsibility for payment will be the employer's. If the medical provider has been selected by the TPA, the TPA will be responsible. Incomplete or no record of This function is the responsi- payment (includes missing bility of the TPA and, except bills) where the employer has main- tained the responsibility for production of the checks and disbursement of payments, the TPA will provide payment of the assessment. Where the employer has maintained control over the issuance of checks the penalty will be paid by the employer. No copy of W.C.A.B. Order and Award No copy of Application for Adjudication of Claim No DIA (DWC) 500 sent 12 If there is proof that service of the W.C.A.B. Order and Award was provided the TPA payment of the penalty will be the TPA responsibility. Where there is proof that service of the application was provided the TPA or where employer is served a copy and a copy of that application received by the employer is provided the TPA, TPA will pay the penalty. TPA responsibility. DIA (DWC) 500 sent, but inaccurate DON, DOK, BNU#, periods rates, etc. No DIA (DWC) 510 sent Failure to pay or object to medical/legal expense within 60 days of receipt of billing (must be reasonable objection) Failure to pay or object to medical expenses within 60 days (must be reasonable) Each payment due. Failure to pay within 10 days any indemnity due, which is not specified above. Includes Maintenance Allowance, Interest on Awards, subse- quent to first T.D. payments. No claim log provided within 5 days of request Each denied claim not desig- nated on claim log Each other omission or mis- designation on claim log 13 Where the TPA has access to accurate information and pro- vides inaccurate information TPA will be responsible for penalty. Where date of notice and date of knowledge are not accurately provided the TPA by employer or their representa- tive employer will pay the assessment. Employer responsibility. If first receipt is TPA receipt the TPA will bear the responsibility. If the employer has first receipt and does not immediately provide TPA with the billing employer bears the responsibility for the assessment. See above for medical/legal expense. If all available and accurate information has been provided the TPA then this assessment would be the responsibility of the TPA. Where the required information is within the know- ledge of the employer but has not been provided the TPA the employer will bear the respon- sibility of the assessment. TPA responsibility TPA responsibility TPA responsibility Failure to comply with Rehab time and notice re- quirements. Each occurrence Failure to pay or appeal Notice of Assessment within 15 days of the issue date Failure to comply with or appeal any final order of the W.C.A.B. within 30 days of service 14 TPA responsibility where all re- quired information is available. Where TPA does not have infor- mation that is available to the employer and that information has not been provided to the TPA, employer will bear the responsibility for this assessment. As any penalties that may be assessed will have to be evalu- ated on an individual basis and determination will have to be made both as to appropriateness of the penalty and identifica- tion of the party responsible the need to act promptly is imperative. Any party that delays participation in such determination of liability and need to appeal any notice of assessment will bear the re- sponsibility of this penalty. If liability for the penalty assessment is agreed upon and payment is appropriate the par- ty responsible for the payment of the assessment will pay the penalty for the late payment of the assessment should such payment be made late. If the party that would be responsible for the assessment should it ultimately be upheld after appeal is late with filing of the appeal that party will be responsible for the assessment for late filing of the appeal. If the issue is simply the late payment of an uncontested W.C.A.B. Order or Award this penalty would be the responsi- bility of the TPA if the TPA had the Order within the time frame allowed for payment or compliance of same. If the TPA did not have service of the Failure to produce, on a second request, a legible paper copy of open claims files within 5 days of written notice. Each Claim File Insufficient documentation to support denial of liability for a claim No documentation indicating service of denial on the injured worker or his/her agent Failure to comply with or appeal any lawful written request of the A.D. regarding a claim filed within 30 days 15 Order but the employer did have service of the Order but did not make such Order available to the TPA within the time frame allowed such penalty would be the responsibility of the employer. TPA responsibility if the TPA was provided the file at the time that responsibility for administration of the open claims. If the file was not sent to current TPA then the responsibility for this should be either the employer or the prior TPA. The determination to deny a claim is generally the result of both TPA and employer involvement. Where the TPA act unilaterally in the denial of a claim this penalty would be the TPA's responsibility. Where the employer has participated in the decision the penalty would be a shared responsibility. In the event that the employer insists upon denial of a claim against recommendation of the TPA then the entire penalty would be the employer responsibility. TPA responsibility TPA responsibility provided that the TPA has access to the infor- mation requested. If the in- formation or action requested requires information within the control of the employer and that information is not provi- ded to the TPA in a timely manner so that the written request can be complied with in the time allowed this penalty assessment will be the responsibility of the employer. Failure by a claims admini- TPA responsibility strator, to provide a Claim Form within 24 hours upon request of an injured worker or his/her agent 16