REPORT TO COUNCIL
SUBJECT
Title
Action on Amendment No. 1 to the Agreement with Sedgwick Claims Management Services, Inc., for Third Party Administrator (TPA) Services in Support of the City's Self-Insured Workers' Compensation Program
Report
BACKGROUND
In December 2016, the City Council authorized the City Manager to execute an agreement with Sedgwick Claims Management Services, Inc. to provide workers' compensation third party administrator (TPA) services for a three-year period. This agreement is set to expire on June 30, 2019.
Sedgwick is the successor organization to Gates McDonald and Cambridge and has been providing TPA services to the City since 1977. The service component consists of basic claims administration services and ancillary services designed to assist in managing claims and claims costs. These ancillary services include bill review, utilization review and nurse case management.
DISCUSSION
Staff is proposing a one-year amendment to the agreement with Sedgwick in order to provide sufficient time to properly evaluate the relationship with Sedgwick relative to service delivery and cost structure considerations. The amendment will extend the current three-year agreement through June 30, 2020 and update ancillary service unit costs[KN1][GB2] (Attachment 1). The amendment also increases the notice period that either party must provide for termination from 30 days to 180 days. The nature of the services rendered necessitates an extensive period to convert and transition claims data if a new TPA were required due to either party terminating the service agreement prior to normal expiration.
The current agreement has a not-to-exceed compensation amount of $450,000 per year. While there are some changes to unit pricing in the ancillary services, it is anticipated that costs will remain within this not-to-exceed amount. Therefore, no changes were made to this annual maximum compensation amount in the amendment.
ENVIRONMENTAL REVIEW
The action being ...
Click here for full text