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HomeMy WebLinkAbout08 - Workers' Compensation Claims AdministratorQ �EwP0 cq<iF�P TO: FROM CITY OF NEWPORT BEACH City Council Staff Report PREPARED BY: TITLE: ABSTRACT: November 5, 2019 Agenda Item No. 8 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL Barbara J. Salvini, Human Resources Director - 949-644-3300, bsalvini@newportbeachca.gov Marissa Sur, Human Resources Analyst — 949-644-3302, msur@newportbeachca.gov Workers' Compensation Claims Administrator — Approval of Professional Services Agreement with AdminSure, Inc. The term "workers' compensation" refers to a system of laws which provide covered employees with medical and wage replacement benefits that arise from workplace injuries. As a self-insured public entity, the City contracts with a third party administrator (TPA) for workers' compensation claims adjusting services. The TPA is charged with providing overall program administration of the workers' compensation claims. The TPA works directly with the injured employees, medical providers, consultants and attorneys to administer workers' compensation benefits on behalf of the City. With the City's current agreement expiring on December 31, 2019, staff initiated a Request for Proposal process to review the TPA options available to the City. RECOMMENDATION: a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; and b) Approve a five-year Professional Services Agreement with AdminSure, Inc. for Third Party Workers' Compensation Claims Administration Services at a not -to -exceed amount of $1,705,506.79, and authorize the Mayor and City Clerk to execute the Agreement. FUNDING REQUIREMENTS: There are sufficient appropriations in the current budget to fund this agreement. :31 Workers' Compensation Claims Administrator — Approval of Professional Services Agreement with AdminSure, Inc. November 5, 2019 Page 2 DISCUSSION: The City's current five-year agreement with AdminSure, Inc. (AdminSure) for workers' compensation claims administration services expires on December 31, 2019. In anticipation of the current agreement's expiration, staff issued a Request for Proposal solicitation. RFP Process Using specifications provided by the Human Resources Department, the City's Purchasing staff issued a formal Request for Proposal ("RFP") solicitation for Workers' Compensation Third Party Administration (TPA) services. The RFP was posted on the City's public procurement system (PlanetBids) and distributed directly to known providers of these services. The City received six proposals in response to the RFP. Phase 1: Technical Evaluation This RFP was evaluated in two phases. Phase 1, the Technical Evaluation, involved an evaluation panel reviewing the six proposals and rating them on technical factors such as: • Experience in providing Workers' Compensation TPA services; • Relevant project history and service to other governmental clients; • Demonstrated expertise in reporting; • Qualifications of the proposer and the project team; and • Project approach and subject matter expertise. Four of the six proposals met the minimum requirement by earning 70% of the available Technical Evaluation points, and were invited to participate in an interview. During the interview, each group was given an opportunity to provide the panel with additional detail regarding the services to be performed and their suitability for award. The interviews were scored by the same evaluation panel that reviewed the proposals, and those scores contributed toward the overall technical assessment of each proposer. During the interviews, one of the four proposers elaborated on their project approach, which was different than the City's scope of services as listed in the RFP. The evaluation panel decided to remove this proposer from consideration for award, as the proposed approach did not meet the City's service needs and made it impossible to compare pricing from all finalists on an even basis. The three remaining proposers qualified to advance to Phase 2, and have their proposed costs considered by the City. The results of the Technical Evaluation are listed in Table A. Workers' Compensation Claims Administrator — Approval of Professional Services Agreement with AdminSure, Inc. November 5, 2019 Page 3 Phase 2: Cost Evaluation Proposers were asked to provide a fixed annual fee for performance of the requested Workers' Compensation services, as well as a five-year cost, to reflect the proposed term of the contract. The basis used for comparison was each proposer's five-year cost, factoring in one-time costs such as transition fees (if applicable) and setup fees as well as annual rate increases over the proposed five- year term. These costs are included in Table A. TABLE A - RFP EVALUATION RESULTS Phase of Max Adminsure, Inc. Intercare Holdings JT2 Integrated RFP Pts. Insurance Resources Services Technical 180.00 161.10 138.12 121.23 Score (Proposal & Interview) Cost Score 120.00 120.00 104.76 93.00 (5 -Year Proposed ($1,705,506.79) ($1,953,509.24) ($2,200,500.00) Cost) Total Score 300.00 281.10 242.88 214.23 Rank 1 2 3 Conclusion of RFP Process and Panel Recommendation Following this procurement evaluation and review process, the evaluation panel identified AdminSure as the highest -qualified proposer and most effective provider for Workers' Compensation Third Party Administration services. With respect to the technical evaluation, AdminSure offers extensive experience working with Orange County public entities and medical providers, which helps facilitate a seamless claims process for the City and its employees. Additionally, AdminSure's familiarity with processing workers' compensation claims for sworn public safety employees is impressive. Because certain workers' compensation benefits for sworn employees differ significantly and tend to be more complex than those provided to non -sworn employees, claims adjusters must stay abreast of laws which specifically relate to sworn employees' workers' compensation benefits. Workers' Compensation Claims Administrator — Approval of Professional Services Agreement with AdminSure, Inc. November 5, 2019 Page 4 Since the City has sworn public safety employees (police, fire and certain lifeguards), the evaluation panel was particularly impressed with Adminsure's familiarity handling these types of claims. Approximately 87% of Adminsure's municipal clients have public safety departments with sworn personnel. AdminSure's wealth of experience in this area is especially valuable when handling these more complex claims. With respect to cost, AdminSure proposed the lowest cost for services including, but not limited to, overall claims administration, on-line access for risk management staff to review claims, the ability to customize reports, and preparation of the Public Self -Insured Annual Report for the Department of Industrial Relations, Office of Self -Insured Plans. A flat annual administration/management fee is proposed starting at $321,240 for the first year, with a three percent (3%) increase each year thereafter. Additionally, AdminSure has a positive track record with the City. Employee feedback indicates a high level of "customer satisfaction". The designated indemnity claims adjuster has established a strong rapport with employees by being responsive and comprehensive in her claims oversight. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENT: Attachment A — Professional Services Agreement with AdminSure, Inc. WE ATTACHMENT A PROFESSIONAL SERVICES AGREEMENT WITH ADMINSURE, INC. FOR WORKERS' COMPENSATION THIRD PARTY ADMINISTRATION SERVICES THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement") is made and entered into as of this 1st day of January, 2020 ("Effective Date"), by and between the CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"), and ADMINSURE, INC., a California corporation ("Consultant"), whose address is 3380 Shelby Street, Ontario, CA 91764, and is made with reference to the following: RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. City desires to engage Consultant to provide Workers' Compensation Third Party Administration Services ("Project"). C. Consultant possesses the skill, experience, ability, background, certification and knowledge to provide the professional services described in this Agreement. D. City has solicited and received a proposal from Consultant, has reviewed the previous experience and evaluated the expertise of Consultant, and desires to retain Consultant to render professional services under the terms and conditions set forth in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. TERM The term of this Agreement shall commence on the Effective Date, and shall terminate on December 31, 2024, unless terminated earlier as set forth herein. 2. SERVICES TO BE PERFORMED Consultant shall diligently perform all the services described in the Scope of Services attached hereto as Exhibit A and incorporated herein by reference ("Services" or "Work"). City may elect to delete certain Services within the Scope of Services at its sole discretion. 3. TIME OF PERFORMANCE 3.1 Time is of the essence in the performance of Services under this Agreement and Consultant shall perform the Services in accordance with the schedule included in Exhibit A. In the absence of a specific schedule, the Services shall be performed to completion in a diligent and timely manner. The failure by Consultant to strictly adhere to 8-5 the schedule set forth in Exhibit A, if any, or perform the Services in a diligent and timely manner may result in termination of this Agreement by City. 3.2 Notwithstanding the foregoing, Consultant shall not be responsible for delays due to causes beyond Consultant's reasonable control. However, in the case of any such delay in the Services to be provided for the Project, each party hereby agrees to provide notice within two (2) calendar days of the occurrence causing the delay to the other party so that all delays can be addressed. 3.3 Consultant shall submit all requests for extensions of time for performance in writing to the Project Administrator as defined herein not later than ten (10) calendar days after the start of the condition that purportedly causes a delay. The Project Administrator shall review all such requests and may grant reasonable time extensions for unforeseeable delays that are beyond Consultant's control. 3.4 For all time periods not specifically set forth herein, Consultant shall respond in the most expedient and appropriate manner under the circumstances, by hand -delivery or mail. 4. COMPENSATION TO CONSULTANT 4.1 City shall pay Consultant for the Services on a time and expense not -to - exceed basis in accordance with the provisions of this Section and the Schedule of Billing Rates attached hereto as Exhibit B and incorporated herein by reference. Consultant's compensation for all Work performed in accordance with this Agreement, including all reimbursable items and subconsultant fees, shall not exceed One Million Seven Hundred Five Thousand Five Hundred Six Dollars and 79/100 ($1,705,506.79), without prior written authorization from City. No billing rate changes shall be made during the term of this Agreement without the prior written approval of City. 4.2 Consultant shall submit monthly invoices to City describing the Work performed the preceding month. Consultant's bills shall include the name of the person who performed the Work, a brief description of the Services performed and/or the specific task in the Scope of Services to which it relates, the date the Services were performed, the number of hours spent on all Work billed on an hourly basis, and a description of any reimbursable expenditures. City shall pay Consultant no later than thirty (30) calendar days after approval of the monthly invoice by City staff. 4.3 City shall reimburse Consultant only for those costs or expenses specifically identified in Exhibit B to this Agreement or specifically approved in writing in advance by City. 4.4 Consultant shall not receive any compensation for Extra Work performed without the prior written authorization of City. As used herein, "Extra Work" means any Work that is determined by City to be necessary for the proper completion of the Project, but which is not included within the Scope of Services and which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. Adminsure, Inc. Page 2 :. Compensation for any authorized Extra Work shall be paid in accordance with the Schedule of Billing Rates as set forth in Exhibit B. 5. PROJECT MANAGER 5.1 Consultant shall designate a Project Manager, who shall coordinate all phases of the Project. This Project Manager shall be available to City at all reasonable times during the Agreement term. Consultant has designated Alithia Vargas -Flores to be its Project Manager. Consultant shall not remove or reassign the Project Manager or any personnel listed in Exhibit A or assign any new or replacement personnel to the Project without the prior written consent of City. City's approval shall not be unreasonably withheld with respect to the removal or assignment of non -key personnel. 5.2 Consultant, at the sole discretion of City, shall remove from the Project any of its personnel assigned to the performance of Services upon written request of City. Consultant warrants that it will continuously furnish the necessary personnel to complete the Project on a timely basis as contemplated by this Agreement. 5.3 If Consultant is performing inspection services for City, the Project Manager and any other assigned staff shall be equipped with a cellular phone to communicate with City staff. The Project Manager's cellular phone number shall be provided to City. 6. ADMINISTRATION This Agreement will be administered by the Human Resources Department. City's Human Resources Director or designee shall be the Project Administrator and shall have the authority to act for City under this Agreement. The Project Administrator shall represent City in all matters pertaining to the Services to be rendered pursuant to this Agreement. 7. CITY'S RESPONSIBILITIES To assist Consultant in the execution of its responsibilities under this Agreement, City agrees to provide access to and upon request of Consultant, one copy of all existing relevant information on file at City. City will provide all such materials in a timely manner so as not to cause delays in Consultant's Work schedule. 8. STANDARD OF CARE 8.1 All of the Services shall be performed by Consultant or under Consultant's supervision. Consultant represents that it possesses the professional and technical personnel required to perform the Services required by this Agreement, and that it will perform all Services in a manner commensurate with community professional standards and with the ordinary degree of skill and care that would be used by other reasonably competent practitioners of the same discipline under similar circumstances. All Services shall be performed by qualified and experienced personnel who are not employed by City. By delivery of completed Work, Consultant certifies that the Work conforms to the Adminsure, Inc. Page 3 8-7 requirements of this Agreement, all applicable federal, state and local laws, and legally recognized professional standards. 8.2 Consultant represents and warrants to City that it has, shall obtain, and shall keep in full force and effect during the term hereof, at its sole cost and expense, all licenses, permits, qualifications, insurance and approvals of whatsoever nature that is legally required of Consultant to practice its profession. Consultant shall maintain a City of Newport Beach business license during the term of this Agreement. 8.3 Consultant shall not be responsible for delay, nor shall Consultant be responsible for damages or be in default or deemed to be in default by reason of strikes, lockouts, accidents, acts of God, or the failure of City to furnish timely information or to approve or disapprove Consultant's Work promptly, or delay or faulty performance by City, contractors, or governmental agencies. 9. HOLD HARMLESS 9.1 To the fullest extent permitted by law, Consultant shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, agents, volunteers and employees (collectively, the "Indemnified Parties") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys' fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims"), which may arise from or in any manner relate (directly or indirectly) to any breach of the terms and conditions of this Agreement, any Work performed or Services provided under this Agreement including, without limitation, defects in workmanship or materials or Consultant's presence or activities conducted on the Project (including the negligent, reckless, and/or willful acts, errors and/or omissions of Consultant, its principals, officers, agents, employees, vendors, suppliers, consultants, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable, or any or all of them). 9.2 Notwithstanding the foregoing, nothing herein shall be construed to require Consultant to indemnify the Indemnified Parties from any Claim arising from the sole negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall be construed as authorizing any award of attorneys' fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by Consultant. 10. INDEPENDENT CONTRACTOR It is understood that City retains Consultant on an independent contractor basis and Consultant is not an agent or employee of City. The manner and means of conducting the Work are under the control of Consultant, except to the extent they are limited by statute, rule or regulation and the expressed terms of this Agreement. No civil Adminsure, Inc. Page 4 :: service status or other right of employment shall accrue to Consultant or its employees. Nothing in this Agreement shall be deemed to constitute approval for Consultant or any of Consultant's employees or agents, to be the agents or employees of City. Consultant shall have the responsibility for and control over the means of performing the Work, provided that Consultant is in compliance with the terms of this Agreement. Anything in this Agreement that may appear to give City the right to direct Consultant as to the details of the performance of the Work or to exercise a measure of control over Consultant shall mean only that Consultant shall follow the desires of City with respect to the results of the Services. 11. COOPERATION Consultant agrees to work closely and cooperate fully with City's designated Project Administrator and any other agencies that may have jurisdiction or interest in the Work to be performed. City agrees to cooperate with the Consultant on the Project. 12. CITY POLICY Consultant shall discuss and review all matters relating to policy and Project direction with City's Project Administrator in advance of all critical decision points in order to ensure the Project proceeds in a manner consistent with City goals and policies. 13. PROGRESS Consultant is responsible for keeping the Project Administrator informed on a regular basis regarding the status and progress of the Project, activities performed and planned, and any meetings that have been scheduled or are desired. 14. INSURANCE Without limiting Consultant's indemnification of City, and prior to commencement of Work, Consultant shall obtain, provide and maintain at its own expense during the term of this Agreement or for other periods as specified in this Agreement, policies of insurance of the type, amounts, terms and conditions described in the Insurance Requirements attached hereto as Exhibit C, and incorporated herein by reference. 15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS Except as specifically authorized under this Agreement, the Services to be provided under this Agreement shall not be assigned, transferred contracted or subcontracted out without the prior written approval of City. Any of the following shall be construed as an assignment: The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Consultant, or of the interest of any general partner or joint venturer or syndicate member or cotenant if Consultant is a partnership or joint -venture or syndicate or co -tenancy, which shall result in changing the control of Consultant. Control means fifty percent (50%) or more of the voting power or twenty-five percent (25%) or more of the assets of the corporation, partnership or joint -venture. Adminsure, Inc. Page 5 i • 16. SUBCONTRACTING The subcontractors authorized by City, if any, to perform Work on this Project are identified in Exhibit A. Consultant shall be fully responsible to City for all acts and omissions of any subcontractor. Nothing in this Agreement shall create any contractual relationship between City and any subcontractor nor shall it create any obligation on the part of City to pay or to see to the payment of any monies due to any such subcontractor other than as otherwise required by law. City is an intended beneficiary of any Work performed by the subcontractor for purposes of establishing a duty of care between the subcontractor and City. Except as specifically authorized herein, the Services to be provided under this Agreement shall not be otherwise assigned, transferred, contracted or subcontracted out without the prior written approval of City. 17. OWNERSHIP OF DOCUMENTS 17.1 Each and every report, draft, map, record, plan, document and other writing produced, including but not limited to, websites, blogs, social media accounts and applications (hereinafter "Documents"), prepared or caused to be prepared by Consultant, its officers, employees, agents and subcontractors, in the course of implementing this Agreement, shall become the exclusive property of City, and City shall have the sole right to use such materials in its discretion without further compensation to Consultant or any other party. Additionally, all material posted in cyberspace by Consultant, its officers, employees, agents and subcontractors, in the course of implementing this Agreement, shall become the exclusive property of City, and City shall have the sole right to use such materials in its discretion without further compensation to Consultant or any other party. Consultant shall, at Consultant's expense, provide such Documents, including all logins and password information to City upon prior written request. 17.2 Documents, including drawings and specifications, prepared by Consultant pursuant to this Agreement are not intended or represented to be suitable for reuse by City or others on any other project. Any use of completed Documents for other projects and any use of incomplete Documents without specific written authorization from Consultant will be at City's sole risk and without liability to Consultant. Further, any and all liability arising out of changes made to Consultant's deliverables under this Agreement by City or persons other than Consultant is waived against Consultant, and City assumes full responsibility for such changes unless City has given Consultant prior notice and has received from Consultant written consent for such changes. 17.3 All written documents shall be transmitted to City in formats compatible with Microsoft Office and/or viewable with Adobe Acrobat. 18. CONFIDENTIALITY All Documents, including drafts, preliminary drawings or plans, notes and communications that result from the Services in this Agreement, shall be kept confidential unless City expressly authorizes in writing the release of information. Adminsure, Inc. Page 6 8-10 19. INTELLECTUAL PROPERTY INDEMNITY Consultant shall defend and indemnify City, its agents, officers, representatives and employees against any and all liability, including costs, for infringement or alleged infringement of any United States' letters patent, trademark, or copyright, including costs, contained in Consultant's Documents provided under this Agreement. 20. RECORDS Consultant shall keep records and invoices in connection with the Services to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any Services, expenditures and disbursements charged to City, for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant under this Agreement. All such records and invoices shall be clearly identifiable. Consultant shall allow a representative of City to examine, audit and make transcripts or copies of such records and invoices during regular business hours. Consultant shall allow inspection of all Work, data, Documents, proceedings and activities related to the Agreement for a period of three (3) years from the date of final payment to Consultant under this Agreement. 21. WITHHOLDINGS City may withhold payment to Consultant of any disputed sums until satisfaction of the dispute with respect to such payment. Such withholding shall not be deemed to constitute a failure to pay according to the terms of this Agreement. Consultant shall not discontinue Work as a result of such withholding. Consultant shall have an immediate right to appeal to the City Manager or designee with respect to such disputed sums. Consultant shall be entitled to receive interest on any withheld sums at the rate of return that City earned on its investments during the time period, from the date of withholding of any amounts found to have been improperly withheld. 22. ERRORS AND OMISSIONS In the event of errors or omissions that are due to the negligence or professional inexperience of Consultant which result in expense to City greater than what would have resulted if there were not errors or omissions in the Work accomplished by Consultant, the additional design, construction and/or restoration expense shall be borne by Consultant. Nothing in this Section is intended to limit City's rights under the law or any other sections of this Agreement. 23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS City reserves the right to employ other Consultants in connection with the Project. Adminsure, Inc. Page 7 8-11 24. CONFLICTS OF INTEREST 24.1 Consultant or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act") and/or Government Code §§ 1090 et seq., which (1) require such persons to disclose any financial interest that may foreseeably be materially affected by the Work performed under this Agreement, and (2) prohibit such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. 24.2 If subject to the Act and/or Government Code §§ 1090 et seq., Consultant shall conform to all requirements therein. Failure to do so constitutes a material breach and is grounds for immediate termination of this Agreement by City. Consultant shall indemnify and hold harmless City for any and all claims for damages resulting from Consultant's violation of this Section. 25. NOTICES 25.1 All notices, demands, requests or approvals, including any change in mailing address, to be given under the terms of this Agreement shall be given in writing, and conclusively shall be deemed served when delivered personally, or on the third business day after the deposit thereof in the United States mail, postage prepaid, first- class mail, addressed as hereinafter provided. 25.2 All notices, demands, requests or approvals from Consultant to City shall be addressed to City at: Attn: Human Resources Director Human Resources Department City of Newport Beach 100 Civic Center Drive PO Box 1768 Newport Beach, CA 92658 25.3 All notices, demands, requests or approvals from City to Consultant shall be addressed to Consultant at: Attn: Alithia Vargas -Flores Adminsure, Inc. 3380 Shelby Street Ontario, CA 91764 26. CLAIMS Unless a shorter time is specified elsewhere in this Agreement, before making its final request for payment under this Agreement, Consultant shall submit to City, in writing, all claims for compensation under or arising out of this Agreement. Consultant's acceptance of the final payment shall constitute a waiver of all claims for compensation under or arising out of this Agreement except those previously made in writing and Adminsure, Inc. Page 8 8-12 identified by Consultant in writing as unsettled at the time of its final request for payment. Consultant and City expressly agree that in addition to any claims filing requirements set forth in the Agreement, Consultant shall be required to file any claim Consultant may have against City in strict conformance with the Government Claims Act (Government Code sections 900 et seq.). 27. TERMINATION 27.1 In the event that either party fails or refuses to perform any of the provisions of this Agreement at the time and in the manner required, that party shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of two (2) calendar days, or if more than two (2) calendar days are reasonably required to cure the default and the defaulting party fails to give adequate assurance of due performance within two (2) calendar days after receipt of written notice of default, specifying the nature of such default and the steps necessary to cure such default, and thereafter diligently take steps to cure the default, the non -defaulting party may terminate the Agreement forthwith by giving to the defaulting party written notice thereof. 27.2 Notwithstanding the above provisions, City shall have the right, at its sole and absolute discretion and without cause, of terminating this Agreement at any time by giving no less than seven (7) calendar days' prior written notice to Consultant. In the event of termination under this Section, City shall pay Consultant for Services satisfactorily performed and costs incurred up to the effective date of termination for which Consultant has not been previously paid. On the effective date of termination, Consultant shall deliver to City all reports, Documents and other information developed or accumulated in the performance of this Agreement, whether in draft or final form. 28. STANDARD PROVISIONS 28.1 Recitals. City and Consultant acknowledge that the above Recitals are true and correct and are hereby incorporated by reference into this Agreement. 28.2 Compliance with all Laws. Consultant shall, at its own cost and expense, comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. In addition, all Work prepared by Consultant shall conform to applicable City, county, state and federal laws, rules, regulations and permit requirements and be subject to approval of the Project Administrator and City. 28.3 Waiver. A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 28.4 Integrated Contract. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. Adminsure, Inc. Page 9 8-13 28.5 Conflicts or Inconsistencies. In the event there are any conflicts or inconsistencies between this Agreement and the Scope of Services or any other attachments attached hereto, the terms of this Agreement shall govern. 28.6 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of the Agreement or any other rule of construction which might otherwise apply. 28.7 Amendments. This Agreement may be modified or amended only by a written document executed by both Consultant and City and approved as to form by the City Attorney. 28.8 Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 28.9 Controlling Law and Venue. The laws of the State of California shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange, State of California. 28.10 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because race, religious creed, color, national origin, ancestry, physical handicap, medical condition, marital status, sex, sexual orientation, age or any other impermissible basis under law. 28.11 No Attorneys' Fees. In the event of any dispute or legal action arising under this Agreement, the prevailing party shall not be entitled to attorneys' fees. 28.12 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute one (1) and the same instrument. [SIGNATURES ON NEXT PAGE] Adminsure, Inc. Page 10 8-14 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the dates written below. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Date:_ i o • 24J. I Ot By: City Attorney p°�— ATTEST: Date: Leilani I. Brown City Clerk CITY OF NEWPORT BEACH, a California municipal corporation Date: By: Diane B Mayor Dixon CONSULTANT: ADMINSURE, INC., a California corporation Date: By: Alithia Vargas -Flores Chief Executive Officer Date: By: Ashley C. Sells Secretary [END OF SIGNATURES] Attachments: Exhibit A — Scope of Services Exhibit B — Schedule of Billing Rates Exhibit C — Insurance Requirements Adminsure, Inc. Page 11 8-15 EXHIBIT A SCOPE OF SERVICES Adminsure, Inc. Page A-1 8-16 EXHIBIT A SCOPE OF SERVICES Consultant shall provide Third Party Administrator (TPA) services related to the City's Workers' Compensation program, in accordance with this Scope of Services: Responsibilities and Provisions The following is a listing of the minimum required services as they relate to Workers' Compensation Claims Administration services: 1. Program Administration Consultant shall: 1.1 Develop policies and procedures relating to the workers' compensation claims program, as well as provide information and guidance regarding the workers' compensation program and specified claims. 1.2 Inform the City of current changes or proposed changes in statutes, rules and regulations and case law affecting the workers' compensation program. 1.3 Represent City in all matters related to the set-up, investigation, adjustment, processing, negotiation and resolution of workers' compensation claims against the City. 1.4 Facilitate risk management and other related seminars for department heads and/or City staff at request of City. 1.5 Represent administrator at quarterly meetings with departments on-site at City, including the preparation of claim narratives for those attending the meetings. 1.6 Provide copies of file correspondence and documentation as requested. 1.7 Maintain and store all hardcopy files for five (5) years after file is closed. 1.8 Destroy any claim records by shredding. There will be no additional cost to City for destruction of claim records. Provide Certificate of Destruction for all documents. 1.9 Administrator shall provide to City, at no additional cost, within five (5) business days of the date of termination of this Agreement, all claims, reports, files and electronic data of City self-insured workers' compensation annual reports. 2. Claims Administration Consultant shall: 2.1 Administer worker's compensation benefits in accordance with the California State Labor Code. 2.2 Within 24 hours of receipt of the Employer's First Report of Injury the claims administrator will make initial contact with the injured employee and establish a claims file. 8-17 EXHIBIT A SCOPE OF SERVICES 2.3 All claim files, within the laws regarding medical information, are to be made available for review by the City anytime during the administrator's regular business hours. 2.4 Maintain Utilization Review process as governed by Labor Code section 4610 to review treatment recommended by physicians to determine if it is medically necessary, either in- house or with the City's contracted vendor. 2.5 Monitor treatment programs for injured employees to ensure that they receive proper care and to avoid over treatment situations. 2.6 Investigate and recommend special, outside independent investigations for questionable claims with the consent, coordination and assistance of the City. 2.7 Serve all medical reports on interested parties to a claim and file with the appropriate State agency within five (5) days of receipt. 2.8 Complete a thorough analysis of relevant factors and coordinate recommendations with the City for settlement/disposition of claims. Final settlement authority shall rest with the City. 2.9 Respond to City staff inquiries within twenty-four (24) hours and on the same day involving critical issues. 2.10 Provide Medicare Agent Services and the required reporting (including Section 111 of the Medicare, Medicaid & SCHIP Extension Act (MMSEA) of 2007). 2.11 Comply with CSAC's (the City's excess insurance carrier/authority) Claims Administration and/or other reporting requirements by City excess insurance carriers. 3. Medical Service and Expenditures Consultant shall: 3.1 Continue the development of and recommend, as requested by City, a panel of physicians for the first treatment of employee injury or illness and recommend a panel of medical specialists for treatment requiring long-term or specialty care, utilizing those that are approved by the City. 3.2 Monitor treatment programs for injured or ill employees including review of all doctors' reports, referring as necessary to a State -approved and City -approved utilization review management program for required determinations. 3.3 Recommend referral and with the consent of City, submit a claim for nurse case management services for assistance in medical control of the claim or for consultation to a City -approved nurse case management company. 3.4 Maintain close liaison with treating physicians. 8-18 EXHIBIT A SCOPE OF SERVICES 3.5 Provide guidance in the evaluation of physical capacity of injured employees and their ability to return to work. 3.6 Determine eligibility for and authorize payment of medical benefits, and arrange and authorize examinations to determine the nature and extent of disability. 3.7 Arrange and advise all interested parties to a claim of all medical appointments, including Agreed or Independent Medical Evaluations, using the panel list agreed upon between Administrator and City or as required by the State agency. 3.8 File and serve all medical reports on interested parties of a claim and with the appropriate State agency within five (5) days of receipt. 3.9 Review all billings for reasonableness using the State Medical Fee Schedules and submit for medical auditing as necessary to a City -approved bill review service. 4. Consultation Consultant shall: 4.1 Provide information and guidance to injured employees regarding the benefits they will receive in accordance with City' policies. 4.2 Staff members to attend appointments, including but not limited to meetings, conferences, court appearances, and scene investigations at the request of City staff. 4.3 Provide information, guidance and assistance to injured employees regarding permanent disability ratings, Qualified Medical and Agreed Medical Examiner process, delay process, conditional denial process and settlement of claims. 4.4 Assist City in solving employee non -legal problems arising out of industrial injury cases. 4.5 Work with the injured employees, City' personnel and other agencies to provide rehabilitation, retraining or reassignment of employees with physical or performance limitations arising out of industrial injuries. 4.6 Assist in developing policies and procedures to insure that the return to work by, or reassignment of, injured employees is consistent with the medical findings. 4.7 Assist City, as requested, with cost containment and incentive programs. 5. Litigation Management Consultant shall: 5.1 Refer litigated cases to attorneys approved by City. 8-19 EXHIBIT A SCOPE OF SERVICES 5.2 Assist in the preparation of litigated cases. 5.3 Assist in negotiation of Compromise and Release settlements. 5.4 Monitor all cases for potential subrogation recoveries, prepare correspondence to effect collection, and assist legal counsel where litigation is required to affect recovery. 5.5 Ensure that, for employees who are represented by legal counsel, their attorneys receive copies of reports and correspondence as appropriate/required. 5.6 Maintain a litigation management budget for each litigated file and provide litigation status reports on a monthly basis for each litigation file. 5.7 Cooperate fully with all attorneys chosen by City, including City Attorneys. 6. Information Management and Records Consultant shall: 6.1 Provide City management with computerized reports at specified intervals on new claims, closed claims, paid losses, incurred costs, the progress of individual claims and the effectiveness of safety and other cost control programs. 6.2 Administer and provide a comprehensive annual statistical summary survey customized to meet the City needs, and if requested by the City, a narrative report to serve as the basis for evaluation of City's programs. 6.3 Prepare the City's the annual Public Entities Self -Insurers Report as required by the Department of Industrial Relations, Self Insurance Plans. Reports are to be submitted to the City no later than 30 days prior to the due date. 6.4 Provide a written status of cases, as selected by the City, and meet with the City to discuss these cases at established intervals. 6.5 Upon request by the City, Administrator shall provide on-line usage of Administrator's computer system at designated staff workstations. 6.6 Upon request by the City, Administrator shall provide secure, electronic reports to allow performance of certain routine data analysis by City. 6.7 Upon request by the City, provide narrative or analytical reports regarding major cases. 6.8 Provide the City with copies of initial and quarterly reporting to Medicare. 7. Financial Management Consultant shall: 8-20 EXHIBIT A SCOPE OF SERVICES 7.1 City shall establish a Workers' Compensation Trust Fund, of which the Workers' Compensation Administrator shall be designated co -trustee. The purpose of this fund shall be to pay medical/legal and other expenses incurred as a result of accepted industrial injuries/illnesses, as well as payment of Workers' Compensation benefits to which eligible employees are entitled. 7.2 Report to the City at least monthly, or as needed, of charges against the fund, and obtain reimbursement to maintain the fund at an appropriate level determined by the City. 7.3 Manage the Trust Fund in a reasonable and prudent manner and in compliance with City' policies. 7.4 Issue vouchers to the City from the Trust Fund in those instances where an employee is paid benefits directly by the City, i.e. Labor Code 4850 pay, temporary total disability benefits or salary continuation in lieu of temporary disability benefits. 7.5 Actively collect any overpayment of benefits. 7.6 Reimburse the City for any penalties assessed against City which are found to be the result of Administrator's lack of proper claims handling or the holding of checks due to insufficient funds in the bank account. 7.7 Establish procedures and necessary documentation enabling the City to write checks for payment of benefits or to have Administrator draw checks for payment of benefits on an appropriate account of City. 7.8 Absorb any costs for the printing of any checks. The City's name will appear on the check, and imprinted on all check copies. All checks shall be printed in numerical order, locked and controlled by Administrator's accounting department. All checks must be accounted for as payments, voids, etc. 7.9 Use a separate check register for the City. Daily entries will be made on all checks disbursed on the account. Credits, if any, shall be entered, as well as all deposits made on checks, received on reimbursement requests made from Administrator's office. Administrator shall provide the City with a check register, mailed to the City. 7.10 Provide the City accounting office, if requested, with one (1) copy of each check register, all voided checks, etc. 7.11 Review periodically all Trustee accounts to determine if initial deposit is adequate for handling the dollar volume for the month so that the holding of checks waiting for a deposit does not occur. In such instances where it is determined that deposit is inadequate, Administrator's accounting office shall submit a report with a recommendation for an increase to the Trustee account based on this review. Prompt payments on Administrator's reimbursement requests are a major factor in the efficiency of a Trustee account. City reimbursement payments should reach Administrator's office within ten (10) days from the date of Administrator's request in order to maintain a continuous flow of checks issued throughout the month. 8-21 EXHIBIT B SCHEDULE OF BILLING RATES Adminsure, Inc. Page B-1 8-22 EXHIBIT B SCHEDULE OF BILLING RATES For the Scope of Services described in this Agreement, Consultant shall be compensated for the first year at a flat annual fee in the amount of Three Hundred Twenty One Thousand Two Hundred Forty Dollars and no/100 ($321,240.00). Upon the first anniversary of the Effective Date of this Agreement, and upon each subsequent anniversary of the Effective Date thereafter, the annual flat fee shall be as set forth below. Consultant's compensation for all Work performed in accordance with this Agreement, including all reimbursable items and subconsultant fees (if any), shall not exceed One Million Seven Hundred Five Thousand Five Hundred Six Dollars and 79/100 ($1,705,506.79). Workers' Compensation Third Party Claims Administration Services — Not -to -Exceed Compensation Amount Year 1: $321,240.00 Year 2: $330,877.20 Year 3: $340,803.52 Year 4: $351,027.62 Year 5: $361,558.45 MAXIMUM AGREEMENT COMPSENSATION: $1,705,506.79 Misc. & Ancilla Services Program Implementation Included — No Additional Fee Data Conversion Included — No Additional Fee Electronic Processing of 5020's Included — No Additional Fee Online Access Included — No Additional Fee Customization of Reports Included — No Additional Fee All Reports & Custom/Ad Hoc Reports Included — No Additional Fee MMSEA Reporting Included — No Additional Fee Preparation of State Annual Report Included — No Additional Fee Preparation of 1099's Included — No Additional Fee Index Bureau Checks Included — No Additional Fee Edex Checks Included — No Additional Fee Storage of Claims Included — No Additional Fee 8-23 EXHIBIT C INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES 1. Provision of Insurance. Without limiting Consultant's indemnification of City, and prior to commencement of Work, Consultant shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to City. Consultant agrees to provide insurance in accordance with requirements set forth here. If Consultant uses existing coverage to comply and that coverage does not meet these requirements, Consultant agrees to amend, supplement or endorse the existing coverage. 2. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 3. Coverage Requirements. A. Workers' Compensation Insurance. Consultant shall maintain Workers' Compensation Insurance, statutory limits, and Employer's Liability Insurance with limits of at least one million dollars ($1,000,000) each accident for bodily injury by accident and each employee for bodily injury by disease in accordance with the laws of the State of California, Section 3700 of the Labor Code. Consultant shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its City Council, boards and commissions, officers, agents, volunteers and employees. B. General Liability Insurance. Consultant shall maintain commercial general liability insurance, and if necessary umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01, in an amount not less than one million dollars ($1,000,000) per occurrence, two million dollars ($2,000,000) general aggregate. The policy shall cover liability arising from premises, operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract). C. Automobile Liability Insurance. Consultant shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of Consultant arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non -owned or rented vehicles, in an amount not less than one million dollars ($1,000,000) combined single limit each accident. Adminsure, Inc. Page C-1 8-24 D. Professional Liabilitv (Errors & Omissions) Insurance. Consultant shall maintain professional liability insurance that covers the Services to be performed in connection with this Agreement, in the minimum amount of one million dollars ($1,000,000) per claim and two million dollars ($2,000,000) in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the Effective Date of this Agreement and Consultant agrees to maintain continuous coverage through a period no less than three years after completion of the Services required by this Agreement. 4. Other Insurance Requirements. The policies are to contain, or be endorsed to contain, the following provisions.- A. rovisions: A. Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this Agreement shall be endorsed to waive subrogation against City, its City Council, boards and commissions, officers, agents, volunteers and employees or shall specifically allow Consultant or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, and shall require similar written express waivers from each of its subconsultants. B. Additional Insured Status. All liability policies including general liability, excess liability, pollution liability, and automobile liability, if required, but not including professional liability, shall provide or be endorsed to provide that City, its City Council, boards and commissions, officers, agents, volunteers and employees shall be included as insureds under such policies. C. Primary and Non Contributory. All liability coverage shall apply on a primary basis and shall not require contribution from any insurance or self-insurance maintained by City. D. Notice of Cancellation. All policies shall provide City with thirty (30) calendar days' notice of cancellation (except for nonpayment for which ten (10) calendar days' notice is required) or nonrenewal of coverage for each required coverage. 5. Additional Agreements Between the Parties. The parties hereby agree to the following.- A. ollowing: A. Evidence of Insurance. Consultant shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation and other endorsements as specified herein for each coverage. Insurance certificates and endorsement must be approved by City's Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. At least Adminsure, Inc. Page C-2 8-25 fifteen (15) days prior to the expiration of any such policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or reduced, Consultant shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies. City reserves the right to require complete, certified copies of all required insurance policies, at any time. B. City's Right to Revise Requirements. City reserves the right at any time during the term of the Agreement to change the amounts and types of insurance required by giving Consultant sixty (60) calendar days' advance written notice of such change. If such change results in substantial additional cost to Consultant, City and Consultant may renegotiate Consultant's compensation. C. Enforcement of Agreement Provisions. Consultant acknowledges and agrees that any actual or alleged failure on the part of City to inform Consultant of non-compliance with any requirement imposes no additional obligations on City nor does it waive any rights hereunder. D. Requirements not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Consultant maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for higher limits maintained by the Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. E. Self-insured Retentions. Any self-insured retentions must be declared to and approved by City. City reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self- insurance will not be considered to comply with these requirements unless approved by City. F. City Remedies for Non -Compliance. If Consultant or any subconsultant fails to provide and maintain insurance as required herein, then City shall have the right but not the obligation, to purchase such insurance, to terminate this Agreement, or to suspend Consultant's right to proceed until proper evidence of insurance is provided. Any amounts paid by City shall, at City's sole option, be deducted from amounts payable to Consultant or reimbursed by Consultant upon demand. Adminsure, Inc. Page C-3 8-26 G. Timely Notice of Claims. Consultant shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Consultant's performance under this Agreement, and that involve or may involve coverage under any of the required liability policies. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City. H. Consultant's Insurance. Consultant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Work. Adminsure, Inc. Page C-4 8-27