COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Employee and Public Services Department

DATE:

April 13, 2003

BOARD MEETING DATE:

May 13, 2003

TO:

Honorable Board of Supervisors

FROM:

Mary Welch, Director of Employee and Public Services
Priscilla Morse, Risk Manager

SUBJECT:

Amendment to Contract with Northern Claims Management

Recommendation

Adopt a resolution authorizing the Risk Manager to execute a two - year amendment to the contract with Northern Claims Management, Inc. to provide workers' compensation claims administration services.

Background

Northern Claims Management (NCM) has been the workers' compensation claims administrator for the County workers' compensation claims since June 1, 2000. They were initially awarded the contract through a Request For Proposal (RFP) process. Risk Management prepared and sent out a Request For Proposal for workers' compensation claims administration services to six firms. Three responses were received. After interviewing each firm, doing site visits and checking references, Northern Claims Management was chosen. Northern Claims Management fees were 51% lower that the other two respondents.

Discussion

A two-year extension to the agreement with NCM is being recommended for several reasons including their expertise and experience working with public agencies; their management information systems; their customer service, excellent feedback from County management and cost.

In administering the claims, NCM creates the claims file, determines compensability, provides all benefits required under law, coordinates litigation and rehabilitation, and communicates with the County on an on-going basis. Public sector workers' compensation laws require special experience and knowledge that NCM possesses. Although the number of workers' compensation claims remains relatively steady, the complexity and severity of the cases continue to increase. New workers' compensation laws require additional documentation and administrative duties.

Fiscal Impact/Term

The fees in the present year are $557,810. The fees for the contract will increase to $612,700 per year. The cost of the services will continue to be paid out of the workers' compensation trust fund.

Vision Statement

This item keeps the commitment of responsive, effective and collaborative government through goal number 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.