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Resolution No. 2010-156
RESOLUTION NO. 2010-156 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A SERVICE AGREEMENT WITH ATHENS ADMINISTRATORS TO PROVIDE FOR THE ADMINISTRATION OF A WORKERS' COMPENSATION AND GENERAL LIABILITY CLAIMS PROGRAMS WHEREAS, the City of Vernon is self -insured in its workers' compensation program and its general liability program; and WHEREAS, on December 3, 2007, the City Council of the City of Vernon adopted Resolution No. 9492 approving the Service Agreement with York Insurance Service Group, Inc.("PORK"), formerly known as Southern California Risk Management Associates, Inc., to provide for the administration of workers' compensation and general liability claims; and WHEREAS, the Service Agreement with YORK will expire on December 31, 2010; and WHEREAS, the Risk Manager has solicited proposals for the administration of said programs effective January 1, 2011; and WHEREAS, Athens Administrators ("Athens") has submitted proposals which the Risk Manager has recommended as being fair and reasonable to administer the programs for the City of Vernon;.and WHEREAS, the Athens workers' compensation claims administration fees shall be as follows: $69,378.00 for the period of January 1, 2010 through December 31, 2010, $71,806.00 for the period of January 1, 2011 through December 31, 2011, and $74,320.00 for the period of January 1, 2012 through December 31, 2012; and WHEREAS, the administrative cost for general liability cases shall be a flat rate of $75.00 per claim filed; and WHEREAS, a set-up fee for workers compensation and general liability shall be compensated at a one time charge of $7,500. 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 the Service Agreement with Athens Administrators, in substantially the form attached hereto as Exhibit A and authorizes the City Administrator, or his designee, to make modifications to the Agreement that are requested by the Interim City Attorney and agreed to by Athens. SECTION 3: The City Council of the City of Vernon hereby authorizes the Mayor or Mayor Pro-Tem to execute said Agreement for, and .on behalf of, the City of Vernon and the City Clerk, or Deputy City Clerk, is hereby authorized to attest thereto. SECTION 4: The City Council of the City of Vernon hereby authorizes the City Administrator, or his designee, to take whatever actions are deemed necessary or desirable for the purpose of implementing and carrying out the purposes of this Resolution and the transactions herein approved or authorized. SECTION 5: The City Council of the City of Vernon herby directs the City Clerk, or the City Clerk's designee, to send one executed Service Agreement to: Athens Administrators Attn. Michael Landa, Director of Business Development P.O. Box 696 Concord, CA 94522 2 SECTION 6: The City Clerk of the City of Vernon shall certify to the passage, approval and adoption of this resolution, and the City Clerk of the City of Vernon shall cause this resolution and the City Clerk's certification to be entered in the File of Resolutions of the Council of this City. APPROVED AND ADOPTED this 1st day of November, 2010. ATTEh : Name: Hilario Gonzales Title: Mayor / 3 STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, Willard G. Yamaguchi, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 2010-156, was duly passed, approved and adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Monday, November 1, 2010, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. Executed this 4- day of November, 2010, at Vernon, California. Willard G Y mag c i, City Clerk (SEAL) WORKERS' COMPENSATION SERVICE AGREEMENT Whereas, the City of Vernon ("Employer") and Athens Insurance Service, Inc. dba Athens Administrators ("Administrator") have agreed to enter into a Workers Compensation Service Agreement ("Agreement") for claims administration services effective January 1, 2011. RECITALS WHEREAS, Administrator provides claims administration services to California employers subjecttothe California Workers' Compensation Laws; and WHEREAS, Employer desires to purchase Claims Administration Services from Administrator; NOW THEREFORE, it is agreed: This Agreement is between the Employer and the Administrator to provide third party workers' compensation and liability claim administration services for Employer in the State of California, subject to the terms stated below: I. TERM AND TERMINATION 1.01 Term: The term of this agreement shall consist of three (3) years. The term shall start on January 1, 2011. 1.02 Termination: a. Either party may terminate this Agreement, With or without cause and without penalty, upon sixty (60) days prior written notice. b. Upon termination of this Agreement for any reason, a final accounting agreeable to both parties will be made of fees payable to Administrator and a final accounting of any funds belonging to Employer then in the possession of Administrator, and any balance due either party will be promptly paid over to the party entitled thereto. c. All claim files, records, reports and other material pertainingto the employee claims subjectto this Agreement shall be the property of Employer and shall be made available promptly to Employer upon termination of this Agreement. d. Upon the effective date of any termination of this Agreement, all rights and obligations of the parties under this Agreement shall cease except with respect to rights and obligations, which have accrued or expressly survive termination. e. In the event Employer terminates this contract but desires Administrator to handle the remaining claims to a conclusion, a service charge will be agreed upon between the partiesfor Administrator's handling of these claims. Employer agreesto provide Administrator with funds sufficient to pay all benefits and Allocated Loss Expenses on these remaining claims. City of Vernon Claim Service Agreement II. SERVICE FEES 2.01. Employer agrees to pay to Administrator Service Fees as follows: Contract Period Total Annual January 1, 2011 thru December 31, 2011 $69,378.00 January 1, 2012 thru December 31, 2012. $71,806.00 January 1, 2013 thru December 31, 2013 $74,320.00 Workers' Compensation Program: Employer's fixed annual fee for Program Year 2011 will be paid in twelve equal installments of $5781.50 and is due and payable at the end of each month during the period this Agreement is in force. Employer's fixed annual fee for Program Year 2012 will be paid in twelve equal installments of $5983.83 and is due and payable at the end of each month during the period this Agreement is in force. Employer's fixed annual fee for Program Year 2013 will be paid in twelve equal installments of $6193.33 and is due and payable at the end of each month during the period this Agreement is in force. Liability Program: Please see attached Pricing Proposal. 2.02. Employer agrees to pay to Bill/Utilization Review Service Fees as follows (additional services and fees are listed in the attached Pricing Proposal): Standard Medical Bill Review $8.50 Hospital In Patient and Outpatient Fee Schedule Reductions $600.00 PPO Network Discounts 22% of Savings Duplicate Bills No Charge Duplicate Line Items No Charge Administration fees are due and payable at the end of each month during the period this Agreement is, in force. III. ADMINISTRATOR DUTIES AND SERVICES 3.01 • Administrator agrees to meet on a regular basis with Employer to: a. Develop procedures, forms, instructions, schedules and other materials related to claim management, including a procedure manual for Employer's use, within thirty (30) days of the effective date of this Agreement and update such materials as needed. b. Provide claim reporting kits including, but not limited to, claim and accident report forms, required notices, and procedural instructions, for distribution by Employer to Employer'sstaff on or before the effective date of this Agreement, and as needed thereafter. City of Vernon Claim Service Agreement c. Provide group education for Employer's management personnel regarding claim management as requested. d. Assist Employer's personnel in the development of directives, notices, and other program communication to employees as requested. e. Provide all forms and supplies necessary for the efficient operation of the Workers' Compensation insurance program, including customized benefit checks bearing Employer's name and logo, and to prepare all legally required forms and documents including but not limited to, 1099 reports to the I.R.S. and any and all other documents and reports now or in the future required by the state or federal government or any other agency associated with Employer's Workers' Compensation program. 3.02. Administrator agrees to administer all claims as follows: a. Establish and maintain a claim file, with a diary date not to exceed thirty (30) days, on each active claim upon which indemnity benefits are being paid; A diary system not to exceed sixty (60) days on all other open, active Indemnity claims; and a supervisory review diary not to exceed one -hundred -twenty (120) days, or more often when needed. b. Manage timely receipt of all pertinent claim information from Employer providers and other sources. c. Determine, on behalf of Employer for each reported employee injury or illness, those benefits, if anythat should be paid or rendered under the California Workers' Compensation Laws. Such determination shall include an estimate of future claim payment. Retain outside services with prior approval of Employer, for the investigation and management of the claims. Outside services include but are not limited to: • AOE/COE Investigators • Activities Check/Sub-rosa Investigator; • Medical Case Management and Rehabilitation Nurses/Consultants • Subrogation Investigators and Experts d. Exhibit in each Indemnity claim file good faith efforts to contact all injured workers by telephone within at least twenty-four hours of receipt of claim,.and in no event any later than forty-eight hours of receipt of claim, excluding weekends and holidays. Establish phone contact with appropriate Employer department for initial discussion of claims, as needed, within three (3) working days of receipt of claim. e. Initiate investigations, subject to approval by Employer, to determine compensability of reported and actual claim status. Employer shall have prior approval of the selection of any investigator used to investigate Employer's claims of industrial injury or illness. Take necessary statements and investigate facts of the case within thirty (30) days receipt of claim, when warranted. Prepare documentation of cases for .litigation and continue to monitor legal counsel representing Employer in legal action(s) and assist counsel as necessary in preparation of City of Vernon Claim Service Agreement litigation. Employer shall select and approve counsel prior to each referral. In addition, Administrator shall promptly provide Employer with copies of all correspondence generated on those claim files which are litigated and shall immediately notify Employer in writing and shall keep Employer closely informed on those claims involving allegations of Serious and Willful Misconduct or alleged violation(s) of California Labor Code Section 132(a). At time of case referral to defense counsel administrator shall prepare a letter of direction to defense counsel outlining work to be done, by whom, and in what time frame. All assignments, instructions and communication with defense counsel must be documented in the claim file and computer note pads. Administrator shall manage defense counsel on an ongoing basis and obtain status reports from defense counsel every sixty (60) days. Administrator shall actively manage litigated files and not perform functions and shall not require defense counsel to perform activities which can be accomplished effectively by claims staff. Examples of required examiner activity on litigated files include by are not limited to: • Scheduling medical appointments • Writing cover letters to doctors • Subpoenaing medical records • Answering applications • Filing and serving requisite documents Administrator shall obtain defense counsels' written evaluation within sixty (60) days of submission, including evaluation of liability, verdict potential, settlement value, and case strategy. g. Disburse payment on behalf of Employer out of the bank trust account funded by Employer, all "Allocated Loss Expenses", which is defined to include all costs incurred on behalf of Employer specifically related to an individual claim, including but not limited to, attorneys, independent adjusters or investigators, expert witnesses, copying records or transcripts, court costs or Appeals Board fees or other costs deemed proper and necessary to represent Employer. h. Use best efforts to achieve an average monthly closure ratio of one hundred percent (100%) over the term of this Agreement. i. Examine on behalf of Employer all reports of industrial injury or illness relating to Employer's employees or former employees and reported to Administrator and to conduct investigations on such cases by Administrator's salaried employees as in Administrator's judgment is deemed necessary. j. Pay compensation, medical expense, "Allocated Loss Expense", and all other benefits as prescribed by law out of funds provided by Employer. Payments made by Administrator without Employer approval, where approval is required elsewhere in this Agreement, shall be the responsibility of the Administrator. k. Maintain a claim file on each reported claim which shall be available to Employer at all times for inspection and to conduct, at a time and frequency to be determined by Employer, claim file reviews with Employer at either Employer's or Administrator's offices. I. Subscribe to on Employer's behalf, enrollment in the Index Bureau System and to reporttothe City of Vernon Claim Service Agreement Index Bureau on each and every Indemnity Claim. The cost of Index Filings will be allocated to each individual claim file. m. Create, reserve and enter required claim data into Administrator's computer system within five (5) working days of receipt of notice of claim from Employer. Enter all payments, reserved revisions, and file closings into the information system within three (3) working days. n. Review employer's medical bills and other medical charges and treatment relating to Employer's claims of industrial injury or illness, for causal relationship to all claims of injuries/illness, and reasonableness of treatment prior to payment. Solicit all medical bills, medical reports and records, and documentation of alleged wage loss prior to settlement negotiations. o. Make all disability payments and send all notices in a timely manner, abiding by all applicable provisions of the California Labor Code and California Workers' Compensation Laws, Rules and Regulations. P. Make payments of bills within thirty (30) days of receipt, and assure timely review and payment of all medical bills in accordance with statutory deadlines and requirements. q. Acknowledge to Employer all claims reported to Administrator within three (3) working days of receipt of the notice of claim and to notify Employer and injured workers within five (5) working days of the notice of claim to Employer, whether the claim has been accepted, delayed for further investigation, or denied. r. Convert all Medical Only Claims to Indemnity Claims status when -the-paid amount reaches two -thousand -five -hundred ($2,500) dollars or when the claim remains open in excess of one (1) year. s. Recognize and where appropriate investigate all subrogation and/or contribution possibilities, preserving evidence and utilizing appropriate investigators and experts, as needed, after first obtaining Employers permission to engage such investigators/experts. As for subrogation and contribution cases, any compromise settlements or lien reductions will be discussed with the Employer. t. Administrator has developed specific programs related to the claim process with a select grou,p of service providers. The implementation and on -going facilitation of these programs requires investments in technology and personnel for Administrator. Administrator may receive compensation from service providers to cover the expenses associated with managing these programs on Employers behalf. u. SCHIP Reporting - Administrator has contracted with Gould & Lamb, LLP as our preferred provider for Medicare Set Aside Allocations. Gould & Lamb, LLP is also our preferred partner in all SCHIP reporting efforts. Unless specifically approved in advance by Employer, Administrator will exclusively utilize the services of Gould & Lamb, LLP to satisfy and comply with all SCHIP reporting requirements. v. .Administrator agrees to provide claims service for Employers Workers' Compensation and general liability exposure in the State of California as required by the regulatory bodies of City of Vernon Claim Service Agreement said State and at a level acceptable to Employer. 3.03 Administrator agrees to monitor relevancy of medical treatment by the following: a. Maintain continual contact with medical practitioners in orderto monitor claimanttreatment process and a timely return to work. Administrator shall make a good faith effort to establish contact with attending physician within twenty-four (24) hours of receipt of injury report and shall make contact with attending physician's office within forty-eight (48) hours of receipt of injury report and shall document such contact in the claim file. b. Review and discuss Vocational Rehabilitation Program(s) with Employer prior to its initiation for an individual claimant. c. Monitor individual vocational rehabilitation programs to determine appropriateness and progress. 3.04. Administrator agrees to the following record keeping and reporting requirements: a. Provide Employer with monthly reports consisting of: (1) Check Registers including all claim disbursements made on behalf of Employer. (2) Computerized loss reports in an acceptable format as mutually agreed upon at the effective date of this Agreement, showing descriptive data, details of each month's payments, total payments, reserves and total experience and incurred loss values for each claim. (3) Any and all other reports as required by Employer. b. Provide oral claims reports on demand, special specific -focus loss run reports within twenty- four (24) hours and larger or major computer analysis reports within seven (7) working days, excluding weekends and holidays. It is further agreed and understood that should Employer require that Administrator prepare for Employer special reports, which require additional programming costs there may an additional charge for said reports. c. Maintain all records and statistical data on each employee claim of injury or illness, including, but not limited to, a record of each denial, delay, litigated claim and loss, which records and data shall be available upon request by Employer. Employer, at Employer's discretion, may audit all records maintained by Administrator including, but not limited to, all payments made on behalf of Employer. Such audit may incorporate random sampling or other audit procedures suitable to Employer. d. Prepare and submit Federal Information Return (Form 1099) by statutory deadline for applicable payments made by Administrator on Employer's behalf, during the term of this Agreement and as specified under Section 1.02. (e) of this Agreement. e. Prepare all other reports as necessary to remain in compliance with all Workers' Compensation Laws and other state and federal laws, rules and regulations. City of Vernon Claim Service Agreement 6 f. Provide report to Accounting Department of Employer of all payments when made and any other information necessaryfor Employer to adequately fund the bank trust account. All such payments shall be supported with check payment detail and monthly summary report showing all payees, payment amounts and dates of payment. g. Provide for Employer the ability to be on-line with Administrator's computer system. This system will provide Employer with all financial and statistical data relating to Employer's workers' compensation claims, together with narrative topical "notepad" reports, on each individual claim. This system will also include electronic mail service between Administrator and Employer; the ability to electronically transmit 5020's (Employer's First Reportof Industrial Injury/Illness); OSHA Log generation; and complete report generation capabilities. IV. EMPLOYER'S DUTIES 4.01. Employer agrees to perform as follows: a. Promptly report to Administrator as they shall occur and become known to Employer, the employee claims of occupational injury, disease, illness, or death. b. Promptly forward to Administrator all applications, notices of claims, notices of hearings or other legal notices pertaining to claims against Employer for occupational injury, disease, illness, or death, and all other correspondence or information received by Employerwhich is or could be relevant to the efficient and proper handling of any reported claim of industrial injury, disease, illness, or death. c. Provide Ad min istrator with all necessary data required for Ad min istratorto perform underthis Agreement and cooperate fully with Administrator in the performance of this Agreement. d. Make available to Administrator funds for the payment of benefits or services to or for occupational injury, disease, illness, death, or vocational rehabilitation and medical treatment of employees of Employer, or their dependents in the event of death, and "Allocated Loss Expense Administrator shall administer said funds in accordance with the terms of this Agreement as Trustee of Employer. e. Pay promptly to Administrator the service fees as prescribed and included in this Agreement. The Service Fees are not included in and do not include "Allocated Loss Expenses" V. ELECTRONIC CLAIM FILES STORAGE. AND TRANSFER OF FILES 5.01 Files Administrator shall record and maintain an electronic file of all industrial injuries reported: Files may be maintained electronically, in hard copy, or in other media, at Administrator's discretion. Such files shall be made available to Employer or its designated representative for inspection upon request. 5.02 Storage of Scanned Documents City of Vernon Claim Service Agreement Administrator shall store all scanned documents separate from other employers. If Administrator decides to destroy or otherwise dispose of any documents that it has received from Employer or from third parties in relation to Employer's files, or that it has generated in relation to Employer's files, Administrator will give prior written notice to Employer and Employer can request that the documents betransferred to it ratherthan be disposed of by Administrator. If Employerdoesnot advise Administrator within 30 days of receiving such notice, Administrator can destroy or otherwise dispose of the documents and will have no further obligation or liabilityto Employer in relation thereto. 5.03 Transfer of Electronic Files Administrator will provide Employer's files to Employer, or an entity designated by Employer, within 20 business days of the agreed upon transfer date of. the files to the new Administrator. The electronic files will be in the electronic -form used by Administrator to provide the services to Employer under this Agreement. Employer may request that the files be provided in a different format or that the hard copies of the files be provided to. it, provided that Employer pays Administrator for all costs associated with such request. Notwithstanding the foregoing, Administrator will not be obligated to provide the files to Employer or an entity designated by Employer, unless Employer has paid Administrator for all amounts owed pursuant to the Agreement. Employer agrees to comply, and to require any recipient of the files designated byitto comply, with all applicable laws and regulations relating to the storage, transmission, use and confidentiality of the files and to hold Administrator harmless in relation thereto. 5.04 Copies of Files Administrator may, at its discretion keep a copy of Employer's files if it deems it necessary to comply with or defend itself in relation to any obligation or rights that it has under this Agreement, applicable laws or regulations. VI. FINES, PENALTIES AND STANDARDS 6.01. All services as described in this Agreement shall be performed in accordancewith all applicable laws, rules and regulations of any and all governmental authorities and applicable standards, and specifically performed in accordance with all applicable Workers' Compensation Laws of the State of California. 6.02. Administrator and Employer acknowledge the obligations and penalties contained in the California Workers' Compensation Reform Act of 1989 that maybe imposed on both employers and claim administrators and agree to the following: a. Penalties for errors or omissions caused by Employer's failure to act or timely report claims or issues to Administrator that create a delay in payment of benefits, incorrect payment of benefits, or administrative fine(s).or penalty(s) shall be the responsibility of Employer. Penalties for errors or omissions caused by Administrator's performance of services underthis contract that create.a delay in payment of benefits, incorrect payment of benefits, or administrative fine(s) or penalty(s) shall be the responsibility of Administrator. b. Administrator shall provide Employer with a quarterly accounting of penalties paid by Administrator on behalf of Employer including a description and detailed listing ofeach penalty payment and the specific claim file to which the penalty payment was charged. Penalties, City of Vernon Claim Service Agreement which are computed by Administrator, shall be paid out of Employer's benefit account and Administrator shall then reimburse Employer quarterly for those penalties, which are the responsibility of Administrator under the terms and conditions of this Agreement, with pro- rated interest at the prevailing prime interest rate. c. Without limiting the provisions set forth in the above two paragraphs it is agreed that upon receipt by Administrator of a notice of claim from Employer, upon which indemnity benefits shall be paid or notice given promptly to the employee in order to avoid late payment or notice of benefit penalties, Administrator shall have ten working days (excluding weekends and holidays) from the date of receipt of the claim from Employer; to investigate and pay the temporary disability or send the required wage continuation notice, and that failure on the part of Administrator to do so within this time frame shall be the financial responsibility of Administrator for any fine imposed for late notice or payment of benefits. Any fines or penalties for late payment or notice of benefits on claims, which are received from Employer by Administrator on or, after the ninth day following the date Employer knew or should have known about the claim(s) shall be the responsibility of Employer. Administrator will be responsible for any fines or penalties associated with questionable or controverted claims which Administrator denies without first consulting and obtaining approval by Employer for denial of the claim(s) Administrator will not be responsible for any fines or penalties levied by the Division of Workers' Compensation or any other judicial or quasi-judicial organization for improper denial of a claim(s) if, over the written objections of Administrator, Administrator has denied said claim(s) at the express written direction of Employer. e. Any controversy between the parties to this Agreement involving the construction or application of the terms, provisions, or conditions of this Agreement relating to the payment of penalties orfines shall be submitted to arbitration upon the written requestof one party, after service of that request upon the other party. f. Arbitration and controversies relating to the payment of penalties or fines under this Agreement shall comply with and be governed by the provisions of the California Arbitration Act, as set forth at sections 1280 et. seq. of the California Code of Civil Procedure. g. Failing informal efforts between the parties to this Agreement to resolve disputes regardingthe payment of penalties or fines, each party shall appoint one person to hear and resolve the dispute.. These arbitrators, one appointed by each.party, shall be known forthe purposes of this Agreement as "initial arbitrators". If the "initial arbitrators" are unable to agree on a resolution of the dispute they shall then choose a third independent and impartial arbitrator whose decision shall be final and conclusive on both parties. h. If a dispute or arbitration under this Agreement is pending at a time when payment of the disputed penalty(s) or fine(s) is either statutorily mandated or when failure to effect payment will result in an increase in the fine or penalty, or an additional fine or penalty, each partyshall bear liability for one-half of the penalty(s) or fine(s) in dispute until such time as the arbitration is concluded and liability for payment of the fine or penalty is finally determined. Once determined, the party adjudged to be liable for the penalty(s) or fine(s) shall reimburse the non -liable party for any portion of the penalty(s) or fine(s) the non -liable party may have City of Vernon Claim Service Agreement paid during the pendency of the arbitration. 6.03 Excess Coveraee or Other Insurance: Administrator, as a part of the regular claims administration process, shall comply with the reporting provisions, guidelines, and requirements imposed by the Employer's Excess Workers' Compensation Insurance Carrier(s) and other carriers that may be involved in -the administration of the Employer's Workers' Compensation Program. However, Employer as policyholder shall continue to be liable for all the duties, requirements, obligations, and penalties imposed by Employer's Carrier(s). VII. MATERIAL CHANGE 7.01. In the event of material change to Employer's operations, Section II, "Service Fees", to this Agreement shall be subject to renegotiation. "Material Change" shall be defined as the acquisition, merger, or divestiture by Employer of or with another company or business entity, the creation of new business operations not directly related to Employer's current California operations, or the elimination of business operations within the State of California, which could result in a materially significant increase or decrease in employee population and workers' compensation claims filed in the State of California. Vill. DEFINITION OF "MEDICAL ONLY" AND "INDEMNITY" CLAIM 8.01. The definition of an "Indemnity Claim" shall be: a. Any alleged work -related claim for which any of the following is claimed: (1) Temporary Disability (2) Permanent Disability (3) Vocational Rehabilitation (4) Life Pension (5) Death 8.02. The definition of a "Medical Only" claim shall be: a. Any alleged work -related injury or illness for which medical treatment is sought, the claimant is not hospitalized, temporary disability does not exceed the waiting period as defined by the Workers' Compensation Laws of California, and no other Indemnity benefits are claimed. IX. GENERAL PROVISIONS 9.01. Neither party shall assign this Agreement or any part hereof withoutthe written consent ofthe other party. 9.02. Each party agrees to indemnify, defend, and hold harmless the other against all actions, claims or demands, and against all costs, expenses and attorneys' fees, arising directly or indirectly out of an actual or alleged injuryto a person orto property as an actual or alleged result of an act or omission of the party or any of its shareholders, directors, officers, employees, oragents and each party's obligation to so indemnify, defend and hold harmless the other shall survive the expiration or earlier termination of this Agreement. City of Vernon Claim Service Agreement - 10 9.03. All notices or other communications under this Agreement shall be sent to the parties at the addresses set forth below: Employer: City of Vernon, 4305 South Santa Fe Avenue Vernon, California 90058-1714 Attn: Willard Yamaguchi, City Clerk & Risk Manager Administrator: Athens Administrators PO Box 696 Concord,_ Ca. 94522 Attn: Michael Landa, Director of Business Development 9.04. In the event either party hereto shall institute formal legal action, the prevailing partyshall be entitled to its reasonable attorneys' fees. 9.05. This Agreement may be amended at any time by mutual agreement of the parties, but any such amendment must be in writing, dated, signed by the parties and attached hereto. 9.06. Any failure of a party to insist upon strict compliance with any term, undertaking or condition of this Agreement shall not be deemed to be a waiver of such term, undertaking, or condition. To be effective, a waiver must be in writing, and signed by the parties hereto. 9.07. This Agreement shall be governed by California law and any action arising out of it shall be instituted and prosecuted only in the municipal or superior court of Contra Costa County, State of California. 9.08. This Agreement instrument constitutes the entire agreement between the parties. Any oral representations or modifications concerning this Agreement shall be of no force and effect. 9.09. This Agreement shall be governed by the laws of the State of California. The parties agree that any and all disputes arising out of or in relation to this Agreement, including without limitation any action in tort, shall be resolved exclusively, finally and conclusively by arbitration in Los Angeles County, California under the auspices of and pursuant to the rules of the Judicial Arbitration & Mediation Services Inc. (JAMS). All decisions of the arbitrators shall be in writing, and the arbitrators shall provide written reasons for their decision. The arbitration decision shall be final and binding on the parties. Notwithstanding the foregoing, the partiesShall_be permitted to access the court system to enforce any arbitration award or to obtain injunctive relief. The exclusive jurisdiction and venue for any such action shall be the Superior Court of California, Los Angeles County. Any and all contracts between Athens Insurance Service, Inc. dba Athens Administrators and any subcontractor shall include the same arbitration clause. X.Insurance 10.01. Blanket Fidelity Bond City of Vernon Claim Service Agreement 11 ATHENS ADMINISTRATORS Administrator shall maintain a blanket fidelity bond or equivalent insurance in an amount not less than Two Million Dollars ($2,000,000.00), with an insured or approved corporate surety covering any and all Employer's, officers and employees involved in performance of the Agreement and the trust fund (imprest) account. 10.02. Errors and Omissions Insurance Administrator shall maintain Errors and Omissions Insurance in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and aggregate. 10.03. Public Liability and Property Damage Insurance Administrator shall maintain commercial general liability insurance in the amount not less than One Million Dollars ($1,000,000.00) which shall be primary over any other insurance carried by Employer. Certificates of insurance shall name Employer as an additional insured. IN WITNESS WHEREOF: The Parties have hereto caused this Agreement to be executed by their duly authorized representatives as of the day and year stated. EMPLOYER Signature Title Dated Signature Title Dated City of Vernon Claim Service Agreement ATHENS ADMINISTRATORS Signature Title Dated Signature Title Dated 12 At AUW" OFFICE OF THE CITY CLERK 4305 Santa Fe Avenue, Vernon, California 90058 Telephone (323) 583-8811 November 9, 2010 Athens Administrators Attn: Michael Landa, Director of Business Development P.O. Box 696 Concord, CA 94522 Re: Service Agreement to Provide for the Administration of a Workers' Compensation and General Liability Claims Programs Dear Mr. Landa: The insurance requirements have been met. Transmitted herewith is an original fully executed agreement, as referenced above, approved by City Council on November 1, 2010, through Resolution No. 2010-156. If you have any questions regarding this matter, please contact me at (323) 583-8811 ext. 175. Ver truly yours, WILLARD GVAAGVCHI City Clerk WGY:dj Enclosure c: Karina Rueda Resolution No. 2010-156 Agreement File No. 10-077 ECcfusively Industriaf WORKERS' COMPENSATION SERVICE AGREEMENT Whereas, the City of Vernon ("Employer") and Athens Insurance Service, Inc. dba Athens Administrators ("Administrator") have agreed to enter into a Workers Compensation Service Agreement ("Agreement") for claims administration services effective January 1, 2011. RECITALS WHEREAS, Administrator provides claims administration services to California employers subject to the California Workers' Compensation Laws; and WHEREAS, Employer desires to purchase Claims Administration Services from Administrator; NOW THEREFORE, it is agreed: This Agreement is between the Employer and the Administrator to provide third party workers' compensation and liability claim administration services for Employer in the State of California, subject to the terms stated below: I. TERM, AND TERMINATION 1.01 The term of this agreement shall consist of three (3) years. The term shall start on January 1, 2011. 1102 Termination a Either party may terminate this Agreement, with or without cause and without penalty, upon sixty (60) days prior written notice. b. Upon termination of this Agreement for any reason, a. final accounting agreeable to both parties will be made of fees payable to Administrator and a final accounting of any funds belonging to Employer then in the possession of AdMinistrater, and any balance due either party will be promptly paid over to the party entitled thereto. c. All claim files, records, reports and other material pertaining to the employee claims subjectt© this Agreement shall be the property of Employer and shall be made available promptly to Employer upon termination of this.Agreement. d. Upon the effective date of any termination of this .Agreement, all rights and obligations of the parties under this Agreement shall cease except with respect to rights and obligations, which have accrued or expressly survive termination. e. In the event Employer terminates this contract but desires Administrator to handle the remaining claims to a conclusion, a service charge will be agreed upon between the pardes;for Administrator's handling of these claims. Employer agrees to provide Adm inistrator with funds sufficient to pay all benefits and Allocated Loss Expenses on these remaining claims. City of Vernon CNIm Service Agreement 1 Contract Period Total Annual 18nuary 1, 2011 thru, December 31, 2011 $69,_37$3 OO January 1, 2012 ,thru December 31, 2012 „ $71,806100 Janua �,, 201�„thru Decamber 31, 2013 $74,320 00 Workers' Compensation Program: Employer's fixed annual fee for Program Year 2011 will be paid In twelve equal installments of $5781.50 and is due and payable at the end of each month during the period this Agreement is in force. Employer's fixed annual fee for Program Year 2012 will be paid In twelve equal installments of $5983.83 and is due and payable at the end of each month during the period this Agreement is in force. Employer's fixed annual fee for Program Year 2013 will be paid in twelve equal Installments of $6193.33 and is due and payable at the end of each month during the period this Agreement Is in force. Liability Program: Please see attached Pricing Proposal. 2.02. Employer agrees to.pay to Bill/Utilization Review Service Fees as follows (additional services and fees are listed in the attached Pricing Proposal): Standard Medgal Bill Review,, $i3.$0 Hospital In Patient and Out atient Fee Schedule Reductions $600.00 PPO Network Discounts 22% of Savings Duplicate Bills No charge Duplicate Line Items No Charge Administration fees are due and payable at the end of each month during the period this Agreement is in force. III.. ADMINISTRATOR D.UT.IES.AND SERVICES 3.01 Administrator agrees to meet on a regular basis with Employer to: a, Develop procedures, forms, instructions, schedules and other materials related to claim management, including a procedure manual for Employer's use, within thirty (30) days of the effective date of this Agreement and update such materials as needed. b. Provide claim reporting kits including, but not limited to, claim and accident report forms, required notices, and procedural instructions, for distribution by Employer to Employer'sstaff on or before the effective date of.this Agreement, and as needed; thereafter. City, of Vernon Claim Service Agreement 2 c. Provide group education for Employer's management personnel regarding claim management as requested: d. Assist Employer's personnel in the development of directives, notices, and other program communication to employees as requested. e. Provide all forms and supplies necessary for the efficient operation of the Workers' Compensation insurance program, including customized benefit checks bearing Employer's name and logo, and to prepare all legally required forms and documents including but not limited to,1099 reports to the I.R.S. and any and all other documents and reports now or in the future required by the state or federal government or any other agency associated with Employer's Workers' Compensation program, 3.02. Administrator agrees to administer all claims as follows: a. Establish and maintain a claim file, with a diary date not to exceed thirty (30) days, on each active claim upon which indemnity benefits are being paid; A diary system not to exceed sixty (60) days on all other open, active Indemnity claims; and a supervisory review diary not to exceed one -hundred -twenty (120) days, or more often when needed. b. Manage timely receipt of all pertinent claim information from Employer providers and other sources. c. Determine, on behalf of Employer for each reported employee injury or illness, those benefits, if any that should be paid or rendered under the California Workers' Compensation haws. Such determination shall Include an estimate of future claim payment. Retain outside services with prior approval of Employer, for the investigation and management of the claims. Outside services include but are not limited to: • AOE/COE Investigators • Activities Check/Sub-rosa Investigator; • Medical Case Management and Rehabilitation Nurses/Consultants • Subrogation Investigators and Experts d. Exhibit in each Indemnity claim file good faith efforts to contact all injured workers by telephone within at least twenty-four hours of receipt of claim, and in no event any later than forty-eight hours of receipt of claim, excluding weekends and holidays. Establish phone contact with appropriate Employer department for initial discussion of claims, as needed, within three (3) working days of receipt of claim. e. Initiate investigations, subject to approval by Employer, to determine compensability of reported and actual claim status. Employer shall have prior approval of the selection of any Investigator used to investigate Employer's claims of industrial injury or illness. Take necessary statements and investigate facts of the case within.thirty (30) days receipt of claim, when warranted.: f. Prepare documentation of cases for litigation and continue to monitor legal counsel representing Employer in legal action(s) and assist counsel as necessary in preparation of City of Vernon Claim Service Agreement 3 El @1111 litigation. Employer shall select and approve counsel prior to each referral, In addition, Administrator shall promptly provide Employer with copies of all correspondence generated on those- claim files which are litigated and shall immediately notify Employer in writing and shall keep Employer Closely informed on those claims Involving allegations of Serious and Willful Misconduct or alleged violation(s) of California Labor Code Section 132(a). At time of case referral to defense counsel administrator shall prepare a letter of direction to defense counsel outlining work to be done, by whom, and in what time frame. All assignments, instructions and communication with defense counsel must be documented In the claim file'and computer notepads. Administrator shall manage defense counsel on an ongoing basis and obtain status reports from defense counsel every sixty (6;0) days. Administrator shall actively manage litigated files and not perform functions and shall not require defense counsel to perform activities which can be accomplished effectively by claims staff. Examples of required examiner activity on litigated files Include by are not limited to: • Scheduling medical appointments • Writing cover letters to doctors • Subpoenaing medical records • Answering applications • Filing and serving requisite documents Administrator shall obtain defense counsels' written evaluation within sixty (60) days of submission, Including evaluation of liability, verdict potential, settlement value, and case strategy. g. Disbursepaymenton behalf of Employer Gut -of the bank trust account funded by Employer, all "Allocated Loss Expenses", which is defined to include all costs incurred on behalf of Employer specifically related to an individual claim, including but not limited to, attorneys, independent adjusters or investigators, expert witnesses, copying records or transcripts, court costs or Appeals Board fees or other costs. deemed proper and necessary to represent Employer. h. Use best efforts to achieve an average monthly closure ratio of one hundred percent (100%) over the term of this Agreement. I. Examine on behalf of Employer all reports of industrial injury or illness relating to Employer's employees or former employees and reported to Administrator and to conduct investigations on such Cases by Administrator's salaried employees as in Administrator's judgment is deemed necessary. j. Pay compensation, medical expense, "Allocated Loss Expense", and all other benefits as prescribed by law out of funds provided by Employer. Payments made by Administrator without Employer approval, where approval is required elsewhere In this A reement, shall be the responsibility of the Administrator. k. Maintain a claim file on each reported claim which shall be available to Employer at all times for inspection and to conduct, at a time and frequency to be determined by Employer, claim file reviews with Employer at either Employer's or Administrator's offices. I. Subscribe to on Employer's behalf, enrollment in the Index Bureau System and to report tothe City of Vernon Claim Service Agreement 4 Index Bureau on each and every indemnity Claim. The cost of Index Filings will be allocated to each individual claim file. m. Create, reserve and enter required claim data into Administrator's computersystem within five (5) working days of receipt of notice of claim from Employer. Enter, all payments, reserved revisions, and file closings into the information system within three (3) working days. n. Review employer's medical bills and other medical charges and treatment relating to Employer's claims of industrial injury or illness, for causal relationship to all claims of injuries/illness, and reasonableness of treatment prior to payment. Solicit all medical bills, medical reports and records, :and documentation of alleged wage loss prior to settlement negotiations. o. Make all disability payments and send all notices in timely manner, abiding by all applicable 1 provisions of the California Labor Code and California Workers' Compensation Laws, Rulesand Regulations. p, Make payments of bills within thirty (30) days of receipt, and assure timely review and payment of all medical bills in accordance with statutory deadlines and requirements. q. Acknowledge to Employer all, claims reported to Administrator within three (3) working days of receipt of the notice of claim and to notify Employer and injured workers within five (5) working days of the notice of claim to Employer, whether the claim has been accepted, delayed for further investigation, or denied. r. Convert all Medical Only Claims to Indemnity Claims status when the paid amount reaches two -thousand -five -hundred ($2,500) dollars or when the claim remains open in excess of one (1) year. s. Recognize and where appropriate investigate all subrogation and/or contribution possibilities, preserving evidence and utilizing appropriate investigators and experts, as needed, after first obtaining Employers permission to engage such investigators/experts. As for subrogation and contribution cases, any compromise settlements or lien reductions will be discussed with the Employer. t. Administrator has developed specific programs related to the claim process with a seiectgroup of service providers. The implementation and on -going facilitation of these programs requires investments in technology and personnel for Administrator. Administrator may receive compensation from service providers to cover the expenses associated with managing these programs on Employers behalf. u. SCHIP Reporting - Administrator has contracted with Gould & Lamb, LLP:as our preferred provider for Medicare Set Aside Allocations. Gould & Lamb, LLP is also our preferred partner in all .:SCHIP reporting efforts. Unless specifically approved in advance by Employer, Administrator will exclusively utilize the services of Gould & Lamb, iLP to satisfy and comply with all SCHIP.reporting requirements. v. Administrator agrees to provide claims service for Employer's Workers' Compensation and general liability exposure in the State of California as required by the regulatory bodies of city of Vernon Claim Service Agreement 5 HENS said State and at a level acceptable to Employer. 3.03 Administrator agrees to monitor relevancy of medical treatment by the following: a. Maintain continual contact with medical practitioners in order to monitor claimant treatment process and a timely return to work. Administrator shall make a good faith effort to establish contact with attending physician within twenty-four (24) hours of receipt of injury report and shall make contact with attending physician's office within forty-eight (48) hours of receipt of injury report and shall document such contact in the claim file. b. Review and discuss Vocational Rehabilitation Program(s) with Employer prior to its initiation for an individual claimant. c. Monitor individual vocational rehabilitation programs to determine appropriateness and progress. 3.04. Administrator agrees to the following record keeping and reporting requirements: a: Provide Employer with monthly reports consisting of: (1) Check Registers including all claim disbursements made on behalf of Employer, (2) Computerized loss reports in an acceptable format as mutually agreed upon at the effective date of this Agreement, showing descriptive data, details of each month's payments, total payments, reserves and total experience and incurred loss values for each claim. (3) Any and all other reports as required by Employer. b. Provide oral claims reports on demand, special specific -focus loss run reports within twenty- four (24) hours and larger or major computer analysis reports within seven (7) working days, excluding weekends and holidays. It is further agreed and understood that should Employer require that Administrator prepare for Employer special reports, which require additional programming costs there may be an additional charge for said reports. c: Maintain all records and statistical data on each employee claim of injury or illness, including, but not limited to, a record of each denial, delay, litigated claim and loss, which records and data shall be available upon request by Employer. Employer, at Employer's discretion, may . audit all records maintained by Administrator including, but not limited to, all payments made on behalf of Employer. Such audit may incorporate random sampling or otheraudit procedures suitable to Employer. d. Prepare and submit Federal Information 'Return (Form 1099) by statutory deadline for applicable payments made by Administrator on Employer's behalf, during the term of this Agreement and as specified under Section 1.62. (e) of this Agreement. e. Prepare all other reports as necessary to remain in compliance with all Workers' Compensation Laws and other state and federal laws, rules and regulations. City of Vernon Claim Service Agreement 6 �' f. Provide report to Accounting Department of Employer of all payments when made and any other information necessary for Employer to adequately fund the bank trust account. All such payments shall be supported with check payment detail and monthly summary report showing all payees, payment amounts and dates of payment. g. Provide for Employer the ability to be on-line with Administrator's computer system. This system will provide Employer with all financial and statistical data relating to Employer's workers' compensation claims, together with narrative topical "notepad" reports, on each individual claim. This system will also include electronic mail service between Administrator and Employer; the ability to electronically transmit 5020s (Employer's First Reportof Industrial Injury/Illness.); OSHA Log generation; and complete report generation capabilities. IV. EMPLOYER'S.DUTIES 4.01. Employer agrees to perform as follows: a. Promptly report to Administrator as they shall occur and become known to Employer, the employee claims of occupational injury, disease, illness, or death. b. Promptly forward to Administrator all applications, notices of claims, notices of hearings or other legal notices pertaining to claims against Employer for occupational injury, disease, illness, or death, and all other correspondence or information received by Employer which is or could be relevant to the efficient and proper handling of any reported claim of industrial injury, disease, illness, or death. c. Provide Administrator with all necessary data required for Administrator to perform under this Agreement and cooperate fully with Administrator in the performance of this Agreement. d. Make available to Administrator funds for the payment of benefits or services to or for occupational injury, disease, illness, death, or vocational rehabilitation and medical treatment. of employees of Employer, or their dependents in the event of death, and "Allocated Loss Expense". Administrator shall administer said funds in accordance with :the terms of this Agreement as Trustee of Employer. e. ' Pay promptly to Administrator the service fees as prescribed and included in this Agreement. The Service Fees are not included in and do not include "Allocated Loss Expenses V. ELECTRONIC CLAIM FILES, STORAGE AND TRANSFER OF FILES 5.01 Files Administrator shall record and maintain an electronic file of all industrial injuries reported. Files may be maintained electronically, in hard copy, or in other media, at Administrator's discretion. Such files shall be made available to Employer orits designated representative for inspection upon request. 5.02 Storage of Scanned Documents City of Vernon Claim Service Agreement 7 LIMMOM Administrator shall store all scanned documents separate from other employers. If Administrator decides to destroy or otherwise dispose of any documents that it has received from Employer or from third parties in relation to Employer's files, or that it has generated in relation to Employer's files, Administrator will give prior written notice to Employer and Employer can request that the documents be transferred to it rather than be disposed of by Administrator. If Employer does not advise Administrator within 30 days of receiving such notice, Administrator can destroy or otherwise dispose of the documents and will have no further obligation or liability to Employer in relation thereto. 5.03 Transfer of Electronic Files Administrator will provide Employer's files to Employer, or an entity designated by Employer, within 20 business days of the agreed upon transfer date of the files to the new Administrator. The electronic files will be in the electronic form used by Administrator to provide the services to Employer under this Agreement. Employer may request that the files be provided in a different format or that the hard copies of the files be provided to it, provided that Employer pays Administrator for all costs associated with such request. Notwithstanding the foregoing, Administrator will not be obligated to provide the files to Employer or an entity designated by Employer, unless Employer has paid Administrator for all amounts owed pursuant to the Agreement. Employer agrees to comply, and to require any recipient of the files designated byitto comply, with all applicable laws and regulations relating to the storage, transmission, use and confidentiality of the files and to hold Administrator harmless in relation thereto. 5.04 Copies of Files Administrator may, at its discretion keep a copy of Employer's files if it deems it necessary to comply with or defend itself in relation to any obligation or rights that it has. under this Agreement, applicable laws or regulations. VI. FINES, PENALTIES AND STANDARDS 6.01. All services as described in this Agreement shall be performed in accordancewith all applicable laws, rules and regulations of any and all governmental authorities and applicable standards, and specifically performed in accordance with all applicable Workers' Compensation Laws of the State of California. 6.02. Administrator and Employer acknowledge the obligations and penalties contained in the California Workers' Compensation Reform Act of 1989 that maybe imposed on both employers and claim administrators and agree to the following; a. Penalties for errors or omissions caused by Employer's failure to actor timely report claims or issues to Administrator that create a delay in payment of benefits, incorrect payment of benefits, or administrative fines) or penalty(s) shall be the responsibility of Employer. Penalties for errors or omissions caused by Administrator's performance of services under this contract that create a delay in payment of benefits, incorrect payment of benefits, or administrative fine(s)-or penalty(s) shall be the responsibility of Administrator. b. Administrator shall provide Employer with a quarterly accounting of penalties paid by Administrator on behalf of Employer including a description and detailed listing of each penalty payment and the specific claim file to which the penalty payment was charged Penalties, City of Vernon Claim Service Agreement 8 HENS which are computed by Administrator, shall be paid out of Employer's benefit account and Administrator shall then reimburse Employer quarterly for those penalties, which are the responsibility of Administrator under the terms and.conditions of this Agreement, with pro- rated interest at the prevailing prime interest rate. c. Without limiting the provisions set forth in the above two paragraphs it is agreed that upon receipt by Administrator of a notice of claim from Employer, upon which indemnity benefits shall be paid or notice given promptly to the employee in order to avoid late payment or notice of benefit penalties, Administrator shall have ten working days (excluding weekends and holidays) from the date of receipt of the claim from Employer, to Investigate and pay the temporary disability or send the required wage continuation notice, and that failure on the part of Administrator to do so within this time frame shall be the financial responsibility of Administrator for any fine imposed for late notice or payment of benefits. Any fines or penalties for late payment or notice of benefits on claims, which are received from Employer by Administrator on or, after the ninth day following the date Employer knew or should have known about the claim(s) shall be the responsibility of Employer. d. Administrator will be responsible for any fines or penalties associated with questionable or controverted claims which Administrator denies without first consulting and obtaining approval by Employer for denial of the claim(s) Administrator will not be responsible for any fines or penalties levied by the Division of Workers' Compensation or, any other judicial or quasi-judicial organization for improper denial of a claim(s) if, over the written objections of Administrator, Administrator has denied said claim(s) at the express written direction of Employer, e. Any controversy between the parties to this Agreement involving the construction or application of the terms, provisions, or conditions of this Agreement relatingto the payment of penalties or fines shall be submitted to arbitration upon the written request of one party, after service of that request upon the other party. f. Arbitration and controversies relating to the payment of penalties or fines under this Agreement shall comply with and be governed by the provisions of the California Arbitration Act, asset forth at sections 1280 et. seq. of the California Code of Civil Procedure. g. Failing informal efforts between the parties to this Agreementto resolve disputes regardingthe payment of penalties or fines, each, party shall appoint one person to hear and resolve the dispute, these arbitrators, one appointed by each party, shall be known for the purposes of this Agreement as 'Initial arbitrators". If the "Initial arbitrators" are unable to agree on a resolution of the dispute they shall then choose a third independent and impartial arbitrator whose decision shall be final and conclusive on both parties. h. If a dispute or arbitration under this Agreement is pending at a time when payment of the disputed penalty(s) or fine(s) is either statutorily mandated or when failure to effect payment will result in an increase in the fine or penalty, or an additional fine or penalty, each partyshall bear liability for one-half of the penalty(s) or fine(s) in dispute until such time as the arbitration is concluded and liability for payment of the fine or penalty is finally determined. Once determined, the party adjudged to be liable for the penalty(s) or fine(s) shall reimburse the non -liable party for any portion of the penalty(s) or fine(s) the non -liable party may have City of Vernon Claim Service Agreement 9 paid during the pendency of the arbitration. 6.03 Excess ..Coverage or Other ,Insurance: Administrator, as a part of the regular.. claims administration process, shall comply with the reporting provisions, guidelines, and requirements imposed by the Employer's Excess Workers' Compensation Insurance Carrier(s) and other carriers that may be involved in the administration of the Employer's Workers' Compensation Program. However, Employer as policyholder shall continue to be liable for all the duties, requirements, obligations, and penalties imposed by Employer's Carrier(s). VII. MATERIAL.CHANGE 7.01. In the event of material change to Employer's operations, Section 11, "Service Pees", to this Agreement shall be subject to renegotiation. "Material Change" shall be defined as the acquisition, merger, or divestiture by Employer of or with another company or business entity, the creation of new business operations not directly related to Employer's current California operations, or the elimination of business operations within the State of California, which could result in a materially significant Increase or decrease in employee population and workers' compensation claims filed in the State of California. Vill. DEFINITION OF "MEDICAL ONLY" AND "INDEMNITY" CLAIM 8.01. The definition of an "Indemnity Claim" shall be: a. Any alleged work -related claim for which any of the following is claimed: -(1) Temporary Disability (2) Permanent Disability (3) Vocational Rehabilitation (4) Life Pension. (5) Death 8.02. The definition of a "Medical Only" claim shall be: a. Any alleged work -related injury or illness for which medical treatment is sought, the claimant is not hospitalized, temporary disability does not exceed the waiting period as defined by the Workers' Compensation Laws of California, and no other Indemnity benefits are claimed. IX. GENERAL PROVISIONS 9.01. Neither party shall assign this Agreement or any part hereof without the written consent ofthe other party. 9.02. Each party agrees to indemnify, defend, and hold harmless the other against all actions, claims or demands, and against all costs, expenses.and attorneys' fees, arising directly or indirectly out of an actual or alleged injuryto a person or to property as an actual or alleged result of an act or omission of the partyor any of its shareholders, directors, officers, employees, or agents and each party's obligation to so indemnify, defend and hold harmless the other shall survive the expiration or earlier termination of this Agreement: City of Vernon Claim Service Agreement 10 9.03. All notices or other communications under this Agreement shall be sent to the parties at the addresses set forth below: o: e .: City of Vernon 4305 South Santa Fe Avenue Vernon, California 90058-1714 Attn: Willard Yamaguchi, City Clerk & Risk Manager Admin.i.strator; Athens Administrators PO Box 696 Concord, Ca. 94522 Attn: Michael Landa, Director of Business Development 9.04. In the event either party hereto shall institute formal legal action, the prevailing party shall be entitled to its reasonable attorneys' fees. 9.05. This Agreement may be amended at any time by mutual agreement of the parties, but any such amendment must be in writing, dated, signed by the parties and attached hereto. 9.06. Any failure of a party to insist upon strict compliance with any term, undertaking or condition of this Agreement shall not be deemed to be a waiver of such term, undertaking, or condition. To be effective, a waiver must be in writing, and signed by the parties hereto. 9.07. This Agreement shall be governed by California law and any action arising out of it shall be instituted and prosecuted only in the municipal or superior court of Contra Costa County, State of California. 9.08. This Agreement instrument constitutes the entire agreement between the parties. Any oral representations or modifications concerning this Agreement shall be of no force andeffect. 9.09. This Agreement shall be governed by the laws of the State of California. The parties agree that any and all disputes arising out of or in relation to this Agreement, including without limitation any action in tort, shall be resolved exclusively, finally and conclusively by arbitration in Los Angeles County, California under the auspices of and pursuant to the rules of the Judicial Arbitration & Mediation Services Inc. (JAMS), All decisions of the arbitrators shall be in writing, and the arbitrators shall provide written reasons for their decision. The. arbitration decision shall be final and binding on the parties. Notwithstanding the foregoing, the parties shall be permitted to access the court system to enforce any:arbitration award or to obtain injunctive relief. The exclusive jurisdiction and venue for any such action shall be the Superior Court of California, Los Angeles County. Any and all contracts between Athens Insurance Service, Inc. dba Athens Administrators and any subcontractor shall include the same arbitration clause. X.-Insurance 10.01. Blanket, Fidellty. Bond City of Vernon Claim Service Agreement ` 11 Staff Report Risk Management DA: September 23, 2010 TO: Honorable Mayor and City Council FR: Willard G. Yamaguchi, Risk Manager RE: Athens Administrators Third Party Administrator for Workers Comp and Liability Cases York Insurance Services Group, Inc. ("York") has been the City's Third Party Administrator for workers comp and liability cases for the past three years. The contract will expire December 31, 2010. York was previously known as Southern California Risk Management Associates, Inc. when the City first contracted with the company and was acquired by York within the past two years. The cost for the current year is approximately $71,780.00. Athens Administrators has proposed to provide the same services for three years at rate following rates: $69,378.00, $71,806.00, and $74,320.00 for workers comp cases and $75.00 per . for liability cases. w Recommendation It is hereby recommended that the City enter into a three,tagreement with Athens Administrators for the administration of workers comp and liability cases. RECEIVED JUN 14 2011 RECEIVED JUN 14 2011 CITY CLERWS OFFICE STAFF REPORT CITY -ADMINISTRATION Risk Management DA: June 13, 2011' TO: Honorable Mayor and City Council FR: Willard G. Yamaguchi, Risk Manager ` RE: Medical Provider Network In an effort to better manage and contain medical and legal costs, Risk Management recommends that the City participate in a medical provider network. A medical provider network (MPN) is an entity or group of health care providers set up by an insurer or self -insured employer (like Vernon) and approved by the California Division of Workers Compensation's (DWC) administrative director to treat workers injured on the job. Thus, when an employee experiences a work related injury, they will be able to have all of their medical needs addressed by doctors and medical facilities within the network for the life of the claim. Under state regulations, each MPN includes a mix of doctors specializing in work -related injuries and doctors with expertise in general areas of medicine. MPN's are required to meet access to care standards for common occupational injuries and work -related illnesses. The regulations also require MPN's to follow all medical treatment guidelines established by the DWC. Athens, Vernon's third party administrator (TPA) for workers' comp cases, has partnered with MEDEX and created their own MPN. In order to participate in the Athens/MEDEX MPN, the city is required to file an application with the California DWC. The cost of the application is approximately $1,800, Recommendation It hereby recommended that Risk Management be authorized to form a medical provider network for the City of Vernon for the administration and management of workers' comp cases. For DWC only: MPN Approval Number Date Application Received: / / Cover Page for Medical Provider Network Application 1. Name of MPN Applicant City of Vernon 2. Address 3. Tax Identification Number: 9 5- 6 0 0 0 8 0 8 4305 Santa Fe Avenue Vernon, CA goo58 4. Type of MPN Applicant {x} Self -Insured Employer { } Group of Self -Insured Employers { } Self -Insurer Security Fund [ } Joint Powers Authority { } State 5. Name of Medical Provider Network(s), if applicable: Athens MPN 6. If the medical provider network one is of the following deemed entities, check the appropriate box: Health Care Organization (HCO) ❑ Health Care Service Plan ❑ Group Disability Insurer ❑ Taft -Hartley Health and Welfare Trust Fund 7. Name of entity, administrator or other third -party who prepared MPN Application on behalf of MPN applicant (if applicable): MedeX Healthcare, Inc. 8. Signature of authorized individual: "I, the undersigned officer or employee of the MPN applicant, have read and signed this application and know the contents thereof, and verify that, to the best of my knowledge and ability, the information included in this application is true and correct." 323-583-8811 Willard G. Yamaguchi Risk Manager wyqmaguchi@ci.vemon.ca.us Name of Authorized Individual Title Phone/Email Signature of Authorized Individual Date Signed 9. Authorized Liaison to DWC: dbalzano Cad medexhco. com l Donald Balzano Legal Counsel Medex Healthcare, Inc. 949 221-1700 Name Title Organization Phone/Email 1201 Dove Street, Suite 300, Newport Beach CA 9266o (949) 221-1701 Address Fax number Submit an original Cover Page for Medical Provider Network Application with original signature, an original Application with the information required by Title 8, California Code of Regulations, section 9767.3 and a copy of the Cover Page and Application to the Division of Workers' Compensation. Mailing address: DWC, MPN Application, P.O. Box 420603, San Francisco, CA 94142. [DWC Mandatory Form - Section 9767.4 — 09/15/05] Juarez, Debbie From: Rueda, Karina Sent: Thursday, June 30, 2011 11:13 AM To: Juarez, Debbie Subject: FW: APPROVED ITEM 06-21-11 MEDICAL PROVIDER NETWORK FYI -----Original Message ----- From: Rueda, Karina Sent: Thursday, June 23, 2011 12:05 PM To: 'David Kim' Subject: RE: APPROVED ITEM 06-21-11 MEDICAL PROVIDER NETWORK David, I'll be sending you the signed copy today letter to the DWC for our files. Thank you, Karina Please forward me a copy of the transmittal -----Original Message ----- From: David Kim [mailto:dkim@medexhco.com] Sent: Thursday, June 23, 2011 8:05 AM To: Rueda, Karina Cc: Michael Landa Subject: APPROVED ITEM 06-21-11 MEDICAL PROVIDER NETWORK Hi Karina, Please send me the signed copy (wet signature) of the MPN cover page (DWC requires signed original) at your convenience. We will submit the documents to the DWC for approval. Please let me know if you have any questions. Thank you. Regards, Dave Managing your Workers' Compensation Medical and Legal Costs.. David Kim I Senior Vice President MEDEX I Healthcare I Managed Care 1201 Dove St. Suite 300 1 Newport Beach, CA 92660 T 877.775.7772 ext. 18 1 F 949.221.1701 C 714.504.3067 dkim@medexhco.com I www.medexhco.com -----Original Message ----- From: Michael Landa [mailto:mlanda@athensadmin.com] Sent: Wednesday, June 22, 2011 6:00 PM To: Rueda, Karina Cc: David Kim Subject: Re: CC APPROVED ITEM 06-21-11 MEDICAL PROVIDER NETWORK Karina: Congratulations! Feel free to send the information/cover sheet to David Kim (on the cover page). He will take good care if you. Thanks Karina. 1 Michael Landa Athens Administrators 909.621.9345 Office 909.451.1710 Cellular On Jun 22, 2011, at 6:28 PM, "Rueda, Karina" <KRueda®ci.vernon.ca.us> wrote: > Hi Michael, > > We got approval from Council to go forward with the MPN. I know we > need to send the original Cover Page to the DWC but not sure if there > are additional documents that also need to be submitted. Please advise. > Karina > -----Original Message----- • From: Juarez, Debbie > Sent: Wednesday, June 22, 2011 9:50 AM > To: Rueda, Karina; Yamaguchi, Willard > Subject: CC APPROVED ITEM 06-21-11 MEDICAL PROVIDER NETWORK > Please send me a copy of the information transmitted to the California > DWC for my file. Thank you. > <<CC APPROVED ITEM 06-21-11 MEDICAL PROVIDER NETWORK.PDF>> > > CONFIDENTIALITY NOTICE: This e-mail transmission, and any documents, files or previous e-mail messages attached to it may contain confidential information that is legally privileged. If you are not the intended recipient, or a person responsible for delivering it to the intended recipient, you are hereby notified that any disclosure, copying, distribution or use of any of the information contained in or attached to this transmission is STRICTLY PROHIBITED. If you have received this transmission in error, please immediately notify the sender. Please destroy the original transmission and its attachments without reading or saving in any manner. > <CC APPROVED ITEM 06-21-11 MEDICAL PROVIDER NETWORK.PDF> This message contains information which may be confidential and privileged. Unless you are the addressee (or authorized to receive for the addressee), you may not use, copy, distribute or disclose to anyone this message or any information contained in or attached to this message. If you have received this message in error, please advise the sender and delete this message along with any attachments or links from your system. 2 To: Teresa Thieben, Division of Workers' Compensation From: Don Balzano, Legal Counsel Date: August 4, 2011 Per your letter of June 19, 2011, enclosed are a re -signed, corrected original and copy of the MPN cover page and application for the City of Vernon (prior MPN Log Number 1861). I sent a completely new application, since (aside from the mistaken Tax I.D.) I also noticed that the prior application was for Medex MPN, and this client is using Athens MPN, Per Mark, we are just submitting as a new application. Also enclosed is the new (original and copy) cover page and material modification for MPN 1318, Insurance Company of the State of Pennsylvania- Medex B, with Michelle Wong as authorized individual and me as liaison. I also sent a complete application with the notice and COC changes we made in March at your request. Thank you for your assistance. Thankyou for all your assistance. 5150 E. Pacific Coast Highway, Suite 500, Long Beach, CA 90804 562.498.6767 877.775,7772 FAX 562.498.2933 A California Workers' Compensation Health Care Organization For DWC only: MPN Approval Number Date Application Received: / Cover Page for Medical Provider Network Application 1. Name of MPN Applicant City of Vernon 2. Address 4305 Santa Fe Vernon, CA 90058 4. Type of MPN Applicant 'Self -Insured Employer o Self -Insurer Security Fund 3. Tax Identification Number ❑ Group of Self -Insured Employers O Joint Powers Authority ❑ State _. 5. Name of Medical Provider Network(s), if applicable: Athens MPN 6. If the medical provider network one is of the following deemed entities, check the appropriate box: ® Health Care Organization (HCO) ❑ Health Care Service Plan ❑ Group Disability Insurer 0 Taft -Hartley Health and Welfare Trust Fund 7. Name of entity, administrator or other third -party who prepared MPN Application on behalf of MPN applicant (if applicable): Medex Healthcare, Inc. 8. Signature of authorized individual: 1, the undersigned officer or employee of the MPN applicant, have read and signed this application and know the contents thereof., and verify that, to the best of my knowledge and ability, the information included in this application is true and correct" dbalzanona medexhco:com/ Donald Balzano Legal Counsel Medex Healthcare Inc 949-221-1700 X12 Name Title Organization Phone/Email 12o1 Dove St., Suite Roo, Nnmort Beach CA 92660 949-221-1701 _ Address Fax number Submit an original Cover Page for Medical Provider Network Application with original signature, an original Application with the information required by Title 8, California Code of Regulations, section 9767.3 and a copy of the Cover Page and Application to the Division of Workers' Compensation. Mailing address: DWC, MPN Application, P.O. Box 420603, San Francisco, CA 94142. [DWC Mandatory Form - Section 9767.4 - 09/15/051 Page 1 of 1 Detailed Results [Tracking no.: 121116515010848 Seloa time rormaf. Delivered Delivered Signed for by: KPEARLA Shlpmalt Dates DostinaVen Ship dale Oeklend, CA Degvery daleto Au 9, 2p 9, 011 3:25 PM SOneIwO Ploof of Dufflvary at FedEx Location it FedEx Location service is Trot available ror [his aMpment. ------ -._.:..--.-..._._.__u___.__..._._ Shipment Facts ............. ....._.._„_.._._.._.-_._ .... ........ .... _____...,_._...,___.,_..._.._,._.-........._..__.__.. Service type FedEx GroundJU,S. Welghl 1.0lbsy.5 kg Shipment Travel History Select time zone: Loral Scan Time _ All ftment (revel ecllvky Is dleplayed In local time for the loomlon I Daterrime iAcaYiry - I,Locatlon IDelails Aug 9Aug 9, 20118�P1A IDellvarotl 1091dand, CA i ;Aug 9, 2011&W AM Oh FedEx v We for delivery AN LEANDRO, CA :Aug 9, 21M 18:41 AM At local FedEx (edXly SAN LEANDRO. CA Aug 9, 201112:05 AM Depmled FedEx locallon SACRAMENTO, CA Au98. 2011 D.48 PM Departed FedEx tows SACRAMENTO, CA IAug 8. 20118.43 PM IArmodat FW8,IooMrQn ISACRAMENTO.CA i .Aug 8, 2011200 AM Iln Mot %CITY OF INDUSTRY, CA - I � •. ;Ap9e.20111,WAM Left FedEx wMln Facility;ANMEIM.CA Au05,20110:20 PM Arrived at FedEx 1006W 'ANANEIM, CA Aug5,20113,40 PM PI Red up ANANEIM, CA ,Aug 4,20111:48 PM ISMpment Information sent lo Fed& ___-__.._.__.____...,,__...._..__.-......__....__.._._..,_._._ -------- ,_-_.._..._...............-._._. https://www.fedex.con/TrackingfDetail7trackNum=121116515010846%7C%7C2011080... 10/17/2011 To: Teresa Thieben, Division of Workers' Compensation From: Don Balzano, Legal Counsel Date: August 4, 2011 Per your letter of June 19, 2011, enclosed are a re -signed, corrected original and copy of the MPN cover page and application for the City of Vernon (prior MPN Log Number 1861). 1 sent a completely new application, since (aside from the mistaken Tax I.D.) I also noticed that the prior application was for Medex MPN, and this client is using Athens MPN. Per Mark, we are just submitting as a new application. Also enclosed is the new (original and copy) cover page and material modification for MPN 1318, Insurance Company of the State of Pennsylvania- Medex B, with Michelle Wong as authorized individual and me as liaison. I also sent a complete application with the notice and COC changes we made in March at your request. Thank you for your assistance. Thank you for all your assistance. 5150 E. Pacific Coast Highway, Suite 500, Long Beach, CA 90804 562,498,6767 877.775.7772 FAX 662.498,2933 A California Workers' Compensation Health Care Organization For DWC only MPN Approval Number Date Application Received: / / Cover Page for Medical Provider Network Application 1. Name of MPN Applicant City of Vernon 2. Address 4305 Santa re Vernon, CA goo58 4. Type of MPN Applicant Self -Insured Employer ❑ Self -insurer Security Fund 3, Tax Identification Number ❑ Group of Self -Insured Employers ❑ Joint Powers Authority ❑ State 5. Name of Medical Provider Network(s), if applicable: Athens MPN 6. If the medical provider network one is of the following deemed entities, check the appropriate box: ® Health Care Organization (HCO) o Health Care Service Plan ❑ Group Disability insurer ❑ Taft -Hartley Health and Welfare Trust Fund 7. Name of entity; administrator or other third -parry who prepared MPN Application on behalf of MPN applicant (if applicable): Medex Healthcare, Inc. 8. Signature of authorized individual: "I, the undersigned officer or employee of the MPN applicant, have read and signed this application mid know the contents thereof, and verify that, to the best of my knowledge and ability, the information included in this application is true and correct" dbalzano rr medexhco.com/ Donald Balzano Legal Counsel Medex Healthcare Inc P4e-221-1700 x12 Name Title Organization Phone/Email i2oi Dove St. Suitegoo, Newport Beach CA 92660 949-221-1701 Address Fax number Submit an original Cover Page for Medical Provider Network Application with original signature, an original Application with the information required by Title 8, California Code of Regulations, section 9767.3 and a copy of the Cover Page and Application to the Division of Workers' Compensation. Mailing address: DWC, MPN Application, P.O. Box 420603, San Francisco, CA 94142. [DWC Mandatory Form - Section 9767.4 — 09/15/051 Page 1 of 1 0%finum. I domo Detailed Results Tracking no.: 121116615010846. smell ume format: 72H Delivered Delivered Sgnedforby: KPEARLA Shipment Dales Destination Ship date Aup 5, 2011 Oakland, GA Deliverydate Aug 9, 20113:25 PM Slanalwo Proof or Dollvary at FadE%Location aelvko in not avellable for this shipment. ihipmant Facts serviratype FedEx Ground-U.S. Weight 1.0lbat.5 k9 _..-- Shipment Travel Histoiy --------- .._.._...__....__.__.__._...._._.....___.._,-_.._____.____.__.._.._.._._.__—.�._.___...__.... Selectthe zone: Local Scan Time - All shipment travel WMty Is displayed In local time for the location I Datefnme iAcHvity, ILaoellen DMalle I, Aue B, 2D113� 28 PM •DaIt-- Oakland, CA I (A499, 2011 &53 AM On FadE%VBWe for delivery SAN LEANDRO. CA iAu99.20116:41 AM At long Fe Way SAN LEANDRO. CA Pup e, 201112:05 AM jOepartedFodEclocallon SAORAMENTO•CA Au98, 20110:40 PM jDapWWFedExg sn ISACRAMaNTO.CA - IAug8,20113:43PM iArnived at FedEv bcation ISACRAMENTO.CA iAu98,20112:00AM in Vanat - !CITY OF INDUSTRY, CA j �Aug8.20111:8BAM Left FadIN odgln fadW iANAHEIM.CA :AUp 8.20110:20 PM Ndved at FedFx iocall n 'ANAHEIM. CA Aug 5, 20f13:a0 PM PidMd up ANAHEIM. CA , ,Aug 4,20111A8 PM ISNpmem Innervation sent to Face 1 - .____._._.....__—.----- ------ --- _...___.______..---- --- .---- __.0--._............ .......r.._.__._.___....._.__..._............ ..... ...+ https://www.fedex.com/Tracking/Detail7trackNum=121116515010846D/D7CD/D7C2011080... 10/17/2011 RECEIVED JUN 14 2011 CITY CLERK'S OFFICE DA: June 13, 2011 st/o •-e . ;E- STAFF REPORT Risk Management TO: Honorable Mayor and City Council FR: Willard G. Yamaguchi, Risk Manager r l� RE: Medical Provider Network W RECEIVED JUN 14 2011 CITY ADMINISTRATION In an effort to better manage and contain medical and legal costs, Risk Management recommends that the City participate in a medical provider network. A medical provider network (MPN) is an entity or group of health care providers set up by an insurer or self -insured employer (like Vernon) and approved by the California Division of Workers Compensation's (DWC) administrative director to treat workers injured on the job. Thus, when an employee experiences a work related injury, they will be able to have all of their medical needs addressed by doctors and medical facilities within the network for the life of the claim. Under state regulations, each MPN includes a mix of doctors specializing in work -related injuries and doctors with expertise in general areas of medicine. MPN's are required to meet access to care standards for common occupational injuries and work -related illnesses. The regulations also require MPN's to follow all medical treatment guidelines established by the DWC. Athens, Vernon's third party administrator (TPA) for workers' comp cases, has partnered with MEDEX and created their own MPN. In order to participate in the Athens/MEDEX MPN, the city is required to file an application with the California DWC. The cost of the application is approximately $1,800. Recommendation It hereby recommended that Risk Management be authorized to form a medical provider network for the City of Vernon for the administration and management of workers' comp cases. For DWC only: MPN Approval Number Date Application Received: / / Cover Page for Medical Provider Network ADDlication 1. Name of MPN Applicant City of Vernon 2. Address 3. Tax Identification Number: 9 5- 6 0 0 0 8 0 8 4305 Santa Fe Avenue Vernon, CA 90058 4. Type of MPN Applicant {x} Self -Insured Employer { } Group of Self -Insured Employers { } Self -Insurer Security Fund [ } Joint Powers Authority { } State 5. Name of Medical Provider Network(s), if applicable: Athens MPN 6. If the medical provider network one is of the following deemed entities, check the appropriate box: Health Care Organization (HCO) ❑ Health Care Service Plan ❑ Group Disability Insurer ❑ Taft -Hartley Health and Welfare Trust Fund 7. Name of entity, administrator or other third -party who prepared MPN Application on behalf of MPN applicant (if applicable): MedeX Healthcare, Inc. 8. Signature of authorized individual: "I, the undersigned officer or employee of the MPN applicant, have read and signed this application and know the contents thereof, and verify that, to the best of my knowledge and ability, the information included in this application is true and correct." 323-583-8811 Willard G. Yamaguchi Risk Manager wyamaguchigci.vernon.ca.us Name of Authorized Individual Title Phone/Email Signature of Authorized Individual Date Signed 9. Authorized Liaison to DWC: dbalzano@medexhco.com/ Donald Balzano Legal Counsel Medex Healthcare, Inc. 949 221-1700 Name Title Organization Phone/Email 1201 Dove Street, Suite Soo. Newport Beach, CA 9266o (949) 221-1701 Address Fax number Submit an original Cover Page for Medical Provider Network Application with original signature, an original Application with the information required by Title 8, California Code of Regulations, section 9767.3 and a copy of the Cover Page and Application to the Division of Workers' Compensation. Mailing address: DWC, MPN Application, P.O. Box 420603, San Francisco, CA 94142. [DWC Mandatory Form - Section 9767.4 — 09/15/051