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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
Human Resources Department
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DATE:
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May 21, 2010
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BOARD MEETING DATE:
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June 8, 2010
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SPECIAL NOTICE/HEARING:
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None
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VOTE REQUIRED:
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Majority
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TO:
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Honorable Board of Supervisors
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FROM:
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Donna J. Vaillancourt, Human Resources Director
Scott Johnson, Risk Manager
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SUBJECT:
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Agreement with Workers’ Compensation Third Party Administrator
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RECOMMENDATION:
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Adopt a Resolution authorizing the:
A) Human Resources Director to execute a three-year agreement, with two year options to extend, with Northern Claims Management to provide a Workers’ Compensation claims processing including accounts payable and Medicare set aside programs for the term of June 1, 2010 through May 31, 2013 in an amount not to exceed $2,308,186; and
B) Human Resources Director or the Director's designee to execute contract amendments which modify the County's maximum fiscal obligation by no more than $25,000 (in aggregate), and/or modify the contract term and/or services so long as the modified term or services is/are within the current or revised fiscal provisions.
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BACKGROUND:
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Northern Claims Management (NCM) has served as the County’s third party administrator since June 1, 2000. NCM has effectively administered the program including the implementation of Workers Compensations’ reform, Medicare set aside developments, litigation management, cooperation with fraud prosecutions, bill review, utilization review and medical provider network management. A Request for Proposal (RFP) process was conducted this year and included a posting to our website, direct mailings, and other direct contact. Nine companies expressed interest, and finally five companies responded with formal proposals. A committee of five subject matter experts selected NCM based on price, staffing levels, public entity expertise, and services provided. While there was a lower bid, it did not include acceptable staffing levels, guaranteeing only 3.5 FTEs versus the current 9 FTEs provided by NCM. Also, none of the 3.5 FTEs were hired or trained as of the proposal date.
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DISCUSSION:
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The administration of a public entity’s program requires: creating claim files, determining compensation by investigation, providing payment of all benefits required under law, coordinating litigation, rehabilitation, and managing medical provider network. NCM oversees the bill review, litigation review, and required reporting. They communicate with the supervisor, employee and medical provider to ensure a successful treatment of industrial related injury.
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The contractor has assured compliance with the County's Contractor Employee Jury Service Ordinance, as well as all other contract provisions that are required by County ordinance and administrative memoranda, including but not limited to insurance, hold harmless, non-discrimination and equal benefits.
County Counsel has reviewed and approved the Resolution as to form. The insurance has been reviewed and approved by Risk Management.
Approval of this Agreement contributes to Shared Vision 2025 of a Prosperous Community by providing a comprehensive Workers’ Administration Program that will increase administrative efficiency and help to effectively manage the County’s costs.
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Performance Measure(s):
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Measure
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FY 2009-10
Projected
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FY 2010-11
Projected
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Number of claims
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649
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629
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Number of claims per 100 Employees
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12
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11
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FISCAL IMPACT:
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There is no Net County Cost impact. Funding for NCM costs are offset by the Risk Management Workers’ Compensation Trust Fund. The fee of $754,704 represents a 2% increase over last year’s fee. Years two and three will increase 2% annually to $769,298 and $784,184, respectively, for a three-year total of $2,308,186.
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