HomeMy WebLinkAbout10 - Renewal of Agreement with Hazelrigg Risk Management Services, Inc. (HRMS) for Worker's Compensation (WC) Claims Administration ServicesCITY OF NEWPORT BEACH
ADMINISTRATIVE SERVICES DEPART
HUMAN RESOURCES DIVISION
JUNE 24, 1996
June 24, 1996
Council Agenda
BY THE CITY COUNCIL
CITY OF NEWPORT BEACH
JUN 2 4
TO: Honorable Mayor Hedges and Members of the Newport Beach City Council
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FROM: Lauren Farley, Risk Manager LC
RE: Renewal of Agreement with Hazelrigg Risk Management Services, Inc.
(HRMS) for Worker's Compensation (WC) Claims Administration
Services.
Recommended Action:
AA6 Approve renewal of the agreement for July 1, 1996 - June 30, 1997 at a
cost of $127,500, and authorize the City Manager to execute the addendum
to the existing agreement.
Back ound:
During the fiscal year 1994 - 1995, the City of Newport Beach undertook a
partnership with the City of Costa Mesa to perform a joint Request for
Proposal (RFP) process for Worker's Compensation claims administration
services. That process resulted in both Cities entering into an agreement
with HRMS effective 5/1/95.
Discussion:
HRMS, at the City's request, assembled a dedicated claims unit of four
claims professionals to work exclusively on the City's claims. All open
cases, carried forward from our previous administrators, have been
reviewed with closure of approximately 158 claims for the City of Newport
Beach.
HRMS has developed an efficient system for processing new claims and
providing Worker's Compensation benefits and assistance to employees on
a timely basis. In addition, HRMS is continuously working with City staff
to review and improve claim procedures, medical/claims service providers,
and other cost containment measures.
The fee paid to HRMS during the 1995/1996 contract year was $245,000.
(HRMS was the lowest qualified bidder in the RFP process.) This fee was
split 50/50 between Newport Beach and Costa Mesa, with each City paying
$122,500. (This was a reduction of $9,500 from the previous
administrator's annual fee of $132,000.) HRMS has proposed $255,000
(+4%) for a second year contract fee. This is $127,500 per City. (Still a
$4,500 reduction from our previous administrator's annual fee.) Staff finds
this fee increase to be reasonable compared to our previous claims
administrator's fees and still lower than the first year fees submitted by the
other firms in the RFP process.
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Conclusion:
The City of Newport Beach is receiving above average service from
HRMS. It is recommended that the agreement be renewed with them at an
annual fee of $127,500 which is a 4% increase over the current fee of
$122,500.
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