CITY COUNCIL: Resolution Amending Tristar Risk managment Agreement for Workers Compensation Claims

Meeting Date: July 7, 2009
Prepared by: Joyce Giuffre, Admin Services Director

City Council
Agenda Item Summary

Name: Consideration of a Resolution amending the agreement with Tristar Risk Management for processing workers compensation claims.

Description: Effective July 1, 2006, the City entered into an agreement with Tristar Risk Management for processing workers compensation claims related to the City’s self-insured policy. The City’s self-insured policy ended June 30, 2006. Tristar Risk Management continues to process the run-out claims related to this policy.

Due to lower claims activity, the agreement with Tristar was amended on July 1, 2008, and the annual claims administration fee was lowered. Effective July 1, 2009, the City wishes to execute a third amendment, per the attached Exhibit “A”, which will further lower the cost of the annual clams administration fees from $25,200 to $22,800 payable in 12 monthly installments. This fee is premised on an estimated average annual (open) indemnity claims volume of 12 files. The case management fees remain the same. The amended agreement will continue in full force and effect until June 30, 2010.

In fiscal year 2010/2011, the terms of the agreement would further lower the cost of the annual claims administration fees from $22,800 to $21,660. These also will be payable in 12 monthly installments. This fee is premised on an estimated average annual (open) indemnity claims volume of 10 files. The case management fees would remain the same.

Overall Cost: City Funds: FY 2009/10 annual cost of $22,800, FY 2010/11 annual cost of $21,660 funded by Workers Compensation Insurance departmental accounts ending in “019”, plus case management fees, if necessary.

Staff Recommendation: Approve the Resolution.

Important Considerations: The amended agreement will result in FY 2009/10 annual savings of $2,400 and FY 2010/11 annual savings of $1,140 in claims administration fees, due to decreased claims volume.

Decision Record: Resolution 2008-41, approved by City Council on July 1, 2008.

Reviewed by:

______________________________ _________________
Rich Guillen, City Administrator Date

CITY COUNCIL
CITY OF CARMEL-BY-THE-SEA
RESOLUTION 2009 -
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA AMENDING THE AGREEMENT WITH TRISTAR RISK MANAGEMENT FOR PROCESSING WORKERS COMPENSATION CLAIMS
__________________________________________________________________________
WHEREAS, the City entered into an agreement with Tristar Risk Management, effective
July 1, 2006, for processing workers compensation run-out claims associated with the City’s prior self-insured policy; and

WHEREAS, the City amended that agreement with Tristar Risk Management, effective July 1, 2008, for processing workers compensation run-out claims associated with the City’s prior self-insured policy; and

WHEREAS, the City desires to amend the agreement effective July 1, 2009 through June 30, 2011, per the attached Exhibit “A”, which will result in lower claims administration fees for the City.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES:

1. Authorize the City Administrator to amend the agreement with Tristar Risk Management effective July 1, 2009 through June 30, 2011, per the attached Exhibit “A”.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 7th day of July 2009, by the following roll call vote:

AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:

SIGNED,

_________________________
Heidi Burch, City Clerk


_________________________
ATTEST: SUE McCLOUD, MAYOR


THIRD AMENDMENT TO AGREEMENT
That certain Two Party Claims Servicing Agreement effective July 1, 2006, by and between Tristar Risk Management, (hereinafter referred to as “TRISTAR”) and City of Carmel-by-the-Sea, (hereinafter collectively referred to as “Client”) for the period July 1, 2006 through June 30, 2007, is amended herein by deleting in its entirety Article II and EXHIBIT A, such amendment to be effective July 1, 2009. All other terms and conditions of the above referenced Agreement remain unchanged.

II. EFFECTIVE DATE/TERM
2.1 This Agreement shall be effective as of July 1, 2009, and shall continue in full force and effect until June 30, 2011 or until termination in accordance with the provisions of Article Fourteen.

EXHIBIT “A”
COMPENSATION
This Exhibit, effective July 1, 2009, is attached to and made part of the Two Party Claims Servicing Agreement between TRISTAR Risk Management (“TRISTAR”) and City of Carmel-by- the-Sea (“Client”) effective July 1, 2006.

Claims Administration Fees
For services rendered pursuant to the attached Agreement, for the period of July 1, 2009 to June 30, 2010, Client will pay TRISTAR an annual Claims Administration Fee of $22,800.00, payable, in advance, in twelve (12) monthly installments of $1,900.00. This fee is premised on an estimated average annual (open) indemnity claims volume of 12 files.

For services rendered pursuant to the attached Agreement, for the period of July 1, 2010 to June 30, 2011, Client will pay TRISTAR an annual Claims Administration Fee of $21,660.00, payable, in advance, in twelve (12) monthly installments of $1,805.00. This fee is premised on an estimated average annual (open) indemnity claims volume of 10 files.

Should the actual claim volumes be less than or exceed these estimates by 15%, then both parties will agree to negotiate in good faith, as reasonable fee adjustment. Bill Review Fees TRISTAR shall utilize TRISTAR Managed Care (TMC) for Medical Bill Review and PPO Network Access. TMC fees for such services will be paid against individual claim files. The following TMC fees have been agreed to:
a) For medical treatment and pharmacy bills reviewed to the Official Medical Fee Schedule or Usual and Customary database:
The fee is fifteen percent (15%) of savings
b) For medical treatment and pharmacy bills that belong to the PPO:
The fee is thirty percent (30%) of the PPO savings.
c) For IMFS (Inpatient Medical Fee Schedule):
The fee is fifteen percent (15%) of savings.
d) For Specialty Bill Review reductions:
The fee is thirty percent (30%) of savings.

Case Management Fees
For nurse case management services provided by TRISTAR Managed Care, the fees will be as follows:
Utilization Review: In Patient - $95.00 per hour (includes review of treatment guidelines for appropriateness of care including length of stay and need for assistant surgeon; directing into PPO and confirmation letters)
Out Patient - $95.00 per hour (includes review of treatment guidelines for appropriateness of care, directing into PPO and confirmation letters)
Telephonic Case Management: $95.00 per hour
Field Case Management: $105.00 per hour, plus expenses
Peer Review: $200.00 per hour for record review without MD discussion $250.00 per hour for record review with MD discussion

In consideration of such compensation, TRISTAR shall handle all claims for the period of the Agreement.

TRISTAR RISK MANAGEMENT
Date: By:
Thomas J. Veale
Title: President

CARMEL-BY-THE-SEA
Date: By:
Rich Guillen
Title: City Administrator