Resolution No. 91162
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RESOLUTION NO. 9116
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND RATIFYING THE EXECUTION OF A
LETTER OF UNDERSTANDING AMENDING AGREEMENT WITH
UNITED OF OMAHA LIFE INSURANCE COMPANY REGARDING
PLAN COVERAGE FOR EMPLOYEE
WHEREAS, the City of Vernon has agreements with United of
Omaha Life Insurance Company ("Omaha") for administering the City's
employee health care plan; and
WHEREAS, on August 22, 1989, the City Council of the City of
Vernon adopted Resolution No. 5657 approving an Administrative
Services Agreement with United of Omaha Life Insurance Company
("Omaha") that was effective September 1, 1989 (the "Agreement"); and
WHEREAS, Omaha denied the claim of Aberdeen Medical
Services, Inc. for services rendered to Paul Zook, concerning the use
of an electrically controlled thermal therapy unit ("ECTT") after
shoulder surgery (Claim No. 064006270800); and
WHEREAS, Omaha based its denial of the claim upon a
determination that the service was experimental/investigational and
not covered under the Agreement; and
WHEREAS, under the terms of the Agreement, the City makes
all final decisions on plan claims; and
WHEREAS, the Acting Risk Manager reviewed the appeal of Paul
Zook and suggested that the City allow the one time only claim of
approximately $510.00 based upon the fact that Mr. Zook did not have a
choice in the service rendered; and
WHEREAS, in accordance with the direction of the Finance
Committee Section of the City Council on June 27, 2006, the Acting
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Risk Manager executed an ASO Appeal Review Request dated June 29,
2006, subject to the City Council's approval of a Letter of
Understanding; and
WHEREAS, in order to avoid a delay in the processing of the
claim, the Acting Risk Manager executed a Letter of Understanding with
Omaha on August 23, 2006, to allow benefit coverage for the ECTT for
Mr. Zook, subject to ratification by the City Council; and
WHEREAS, the Letter of Understanding was executed with the
understanding that any benefit allowed pursuant to the Letter of
Understanding will not apply under the specific and aggregate stop
loss provisions under policy G0002R05; and
WHEREAS, the City Council desires to approve and ratify the
actions of the Acting Risk Manager in executing the Letter of
Understanding respecting Paul Zook.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon hereby
approves and ratifies the execution of a Letter of Understanding with
United of Omaha Life Insurance Company by the Acting Risk Manager on
August 23, 2006, a copy of which is attached hereto as Exhibit A and
incorporated herein by reference.
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SECTION 3: The Acting City Clerk of the City of Vernon
shall certify to the passage of this resolution, and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 5th day of September, 2006.
ATTEST:
BRUCE V. MALKENHORST, JR.
Acting City Clerk
C %-��'?�LLz.1_-��,' y�7 � L"L• ova-/ '
EONIS C. MAL URG, M yor
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, BRUCE V. MALKENHORST, JR., Acting City Clerk of the City of
Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. 9116, was duly adopted by the City Council of the City
of Vernon at an adjourned regular meeting of the City Council duly held
on Tuesday, September 5, 2006, and thereafter was duly signed by the
Mayor of the City of Vernon.
(SEAL)
=e�b
BRUCE V. MALKENHORST, JR.
Acting City Clerk
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Vni-inu uJ vinnn........
Woodward Health Care : ervice Center
P.O. Box 9
Woodward, OK 73802
July 10, 2006
City of Vernon
Attn: Cindy Calza&
4305 S. Santa Fe Ave
Vernon, CA 85004.2202
Re: Plan Coverags for Paul Zook
Dear Ms. Calzada:
RECEIYED
'06 AUG 22 A10 :5 3
®CITY ;1i=.Fri
RISK MA NAG BENT
4).
MoudLefomamia
COPY
This letter serves a an amendment to the Administrative Services Agreement of September 1, 1989,
between United of Omaha Life Insurance Company ("Company") and City of Vernon (the
"Agreement"). The terms of this letter are made a part of the Agreement and are subject to all
provisions of the Agreement not in conflict with the provisions of this letter.
City of Vernon and Company agree as follows:
Company shall, as an exception to the terms of City of Vernon's self -funded group health plan
(Group Plan G0002R05), agree to allow benefit coverage for the electrically controlled thermal
therapy (ECTT) unit rendered in claim 064006270800 for member Paul Zook. Services were
rendered from January 14, 2006, through January 27, 2006, by Aberdeen Medical Services, Inc.
Medical Review has deemed the services as experimental/investigational and not covered per the
plan provisions,. The City of Vernon feels that the patient did not have a choice in the service
administered and feels it should be considered. Aberdeen Medical Services, Inc. is a non-
participating provider. Therefore, services will be processed per the out -of -network level of
benefits subject to the usual and customary allowance. City of Vernon agrees that benefits paid
pursuant to thi 3 letter, approximately $510.00, will not apply under the specific and aggregate
stop loss provisions under policy G0002R05.
Notwithstanding anything to the contrary in the Agreement, City of Vernon agrees that it shall
indemnify, defend and hold Company harmless from any liability, loss, costs, expenses or
damages (incl iding, without limitation, attorneys' fees, court costs and extra -contractual and
punitive damages) incurred by Company arising out of or resulting from this letter or any act or
omission of Company in the performance of its duties under this letter. This obligation to
indemnify, defend and hold Company harmless shall be in addition to, and shall not replace, any
other obligaticn of Employer in the Agreement to indemnify, defend and hold Company harmless.
3. Company ass Imes no responsibility for any tax or legal consequences that City of Vernon, the
plan sponsor or any person covered under City of Vernon's plan may incur under any state or
federal law as a result of this letter.
4. Company anc City of Vernon acknowledge and agree that Company only provides ministerial
claims processing services for City of Vernon's self -funded group health plan and that Company
has no authority to act, and does not act, as a fiduciary for the plan in any manner whatsoever.
5. The terms of this letter shall be read together and construed as one document with the
Agreement, but to the extent of any inconsistency or ambiguity, this letter shall govern.
6. Except as expressly provided in this letter, all of the provisions of the Agreement shall remain in
full force and ef'ect.
7. Where the prov sions of this letter and those of the group health plan conflict, the provisions of
this letter will apply.
8. The terms of th s letter may be modified or amended only by an instrument in writing, duly
executed and delivered by the parties hereto.
9. Any number of counterparts of this letter may be executed and each such executed counterpart
shall be deemed an original.
Cory Michel
Vice President, Underwriting
Date: RL- J&
cc: Gallagher Benefit Services, Inc.
Southern California Group Office
Group Premium Administration
Group Clams
Contract 1 ide of Master Contract File
i
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CITY CLERK'S OFFICE
INTEROFFICE MEMORANDUM
DATE: September 27, 2006
TO: Willard Yamaguchi, Chief Deputy City Attorney/Acting Risk Manager
FROM Nelly Giron, Deputy City Clerk
RE: Resolution No. 9116 - A Resolution of the City Council
of the City of Vernon Approving and Ratifying the
Execution of a Letter of Understanding Amending
Agreement with United of Omaha Life Insurance Company
Regarding Plan Coverage for Employee
Transmitted herewith is a copy of Resolution No. 9116 referenced
above, which was approved by City Council on September 5, 2006.
Thank you.
NG:dr
c: Cindy Calzada
Resolution No. 9116