COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Employee and Public Services

DATE:

May 3, 2005

BOARD MEETING DATE:

May 24, 2005

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Mary Welch, Director, Employee and Public Services

Steve Rossi, Risk Manager, Employee and Public Services

SUBJECT:

Workers’ Compensation Third Party Administrator

RECOMMENDATION:

Adopt a resolution authorizing the President of the Board to execute a three-year contract with two additional one-year renewal options at the County’s sole discretion, with Northern Claims Management, Inc. to provide workers’ compensation claims administration services.

VISION ALIGNMENT:

Commitment: Responsive, effective, and collaborative government

Goal 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.

Performance Measures:

Measure

FY 2004-05
Estimated

FY 2005-06
Projected

Number of Claims

650

650

Percentage of Claims with lost work time

19.2%

19.2%

BACKGROUND:

Northern Claims Management, Inc. (NCM) was selected by the Board on April 25, 2000 as the County’s workers’ compensation claims administrator for a period of three years pursuant to a Request for Proposal (RFP). Thereafter, on April 13, 2003 the Board extended the contract for an additional two years. The current contract expires on May 31, 2005.

In administering workers’ compensation claims, a third party administrator creates claim files, determines compensability, provides all benefits required under law, coordinates litigation and rehabilitation, and communicates with the County on an on-going basis.

DISCUSSION:

On January 31, 2005 the Risk Management Division issued a new RFP for a workers’ compensation administrator for the next three to five year period. The RFP was advertised and eight potential vendors were mailed notifications.

Four proposals were received. An RFP Committee composed of Risk Management staff and the Lieutenant in charge of Sheriff personnel issues identified Northern Claims Management, Inc. (NCM) as best meeting the County’s needs. NCM was selected based on the following:

• Expertise

• Experience

• Customer service record

• Lowest pricing schedule.

We recommend that the new contract be for three years (from June 1, 2005 through May 31, 2008), with the option to renew at the County’s sole discretion for two additional one-year terms.

FISCAL IMPACT:

The fees for the contract are as follows: $660,912 for year 1; $674,130 for year two; $687,612 for year three; $701,364 for year four (at the County’s sole option); and $715,392 for year five (at the County’s sole option). The year-to-year increases are set at 2% or less and NCM assumes all responsibility for market increases in wages, overhead and other cost of living factors above that amount. The cost of the contract is paid out of the workers’ compensation trust fund.

1.

General Description of RFP

Administrative services for the County’s self-insured workers’ compensation program.

2.

List key evaluation criteria

(a) Qualifications of claims examiners

(b) Demonstrated ability

(c) Customer service philosophy

(d) Cost and availability of services

(e) References

(f) Ability to meet County terms and conditions

(g) Conformance to the RFP

3.

Where advertised

San Mateo County Times

4.

In addition to any advertisement, list others to whom RFP was sent

Athens Administrators, Concord, Ca

Cambridge Integrated Services Group, Inc.,

Pasadena, Ca

Claims Management, Inc, Sacramento, Ca

Crawford & Company, Burlingame, CA

ESIS, Inc., Sunnyvale, Ca

GatesMcDonald, Concord, CA

Gregory B. Bragg & Associates, Inc., Roseville, Ca

Northern Claims Management, LLC, Santa Rosa, Ca

5.

Total number sent to prospective proposers

Eight

6.

Number of proposals received

Four

7.

Who evaluated the proposals

Steve Rossi, Risk Manager

Priscilla Morse, former Risk Manager (retired)

Janine Keller, Workers’ Compensation Coordinator

Lt. Victoria O’Brien, Sheriff’s Personnel Division

8.

In alphabetical order, names of proposers (or finalists, if applicable) and location

Claims Management, Inc., P.O. Box 3042, Sacramento, Ca 95812-3042

Gates McDonald, 2300 Clayton Road, Suite 900, Concord, Ca. 94520

Gregory B. Bragg & associates, Inc, P.O. Box 2216, Granite Bay, CA 95746-2216

Northern Claims Management, LLC, P.O. Box 6385, Santa Rosa, Ca 95406-6385