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RESOLUTION NO. 13167
A RESOLUTION APPROVING A SERVICE AGREEMENT
BETWEEN THE CITY OF PUEBLO AND FARM CREDIT
COUNCIL SERVICES, INC., DBA FCC SERVICES, INC.,
RELATING TO WORKERS’ COMPENSATION FOR FISCAL
YEAR 2015
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The Service Agreement between the City of Pueblo and Farm Credit Council Services,
Inc., DBA FCC Services, Inc., relating to third-party administration for the City’s self-insured
workers’ compensation program and Medicare reporting requirement for the year 2015, a copy
of which is attached hereto, having been approved as to form by the City Attorney, is hereby
approved.
SECTION 2.
The President of the City Council is authorized to execute and deliver the Service
Agreement in the name of the City and the City Clerk is directed to affix the seal of the City
thereto and attest same.
SECTION 3.
The officers and staff of the City are directed and authorized to perform any and all acts
consistent with the intent of this Resolution and the attached agreement to effectuate the
transactions described therein.
SECTION 4.
This Resolution shall become effective upon passage and approval.
INTRODUCED: _ February 9, 2015
BY: Ed Brown
City Clerk’s Office Item # M-5
BACKGROUND PAPER FOR PROPOSED
RESOLUTION
COUNCIL MEETING DATE:
February 9, 2015
TO: President Stephen G. Nawrocki and Members of City Council
CC: Sam Azad, City Manager
VIA: Gina Dutcher, City Clerk
FROM: Marisa Pacheco – Human Resources Director
SUBJECT: A RESOLUTION APPROVING A SERVICE AGREEMENT BETWEEN THE CITY
OF PUEBLO AND FARM CREDIT COUNCIL SERVICES, INC., DBA FCC
SERVICES, INC., RELATING TO WORKERS’ COMPENSATION FOR FISCAL
YEAR 2015
SUMMARY:
Attached is a Resolution accepting an agreement between the City of Pueblo and FCC
Services, Inc., relating to Workers’ Compensation.
PREVIOUS COUNCIL ACTION:
On December 23, 2013, Resolution No. 12854 was approved by City Council. This Resolution
accepted the service agreement with FCC Services for Fiscal Year 2014.
BACKGROUND:
FCC Services, Inc., will continue to act as third-party administrator for the City’s self-insured
workers’ compensation program and Medicare reporting requirement for 2015 for the annual fee
of $73,500 for management of the claims, payable monthly. The Medicare reporting fee will be
$2,500. This is a minor 3% increase in the contract to cover cost of living increases for the
provider, but follows the 2014 zero cost increase contract granted last year.
FINANCIAL IMPLICATIONS:
The total cost for the service agreement is $76,000.
BOARD/COMMISSION RECOMMENDATION:
None.
STAKEHOLDER PROCESS:
None.
ALTERNATIVES:
The is no alternative to this request as the City of Pueblo is required to have a service
agreement in order to work with FCC Services, Inc., to perform Workers’ Compensation
consultation services.
RECOMMENDATION:
Approval of the Ordinance.
Attachments:
FCC Services Agreement
SERVICE AGREEMENT
Between City of Pueblo and FCC Services
In consideration of the mutual covenants herein contained, FCC Services, an independent
contractor, hereinafter referred to as "FCCS", does hereby contract and agree with City of
Pueblo, hereinafter referred to as the "Client", as follows:
1. Appointment: The Client hereby appoints FCCS, and FCCS hereby agrees to
serve, as Third Party Administrator("Administrator") of the Client's Worker's
Compensation program.
2. Term & Termination:
A. Term. Subject to earlier termination as provided herein, the first term of this
Service Agreement shall be for(1) year beginning 12:00 a.m. January 1, 2015
and terminating 11:59 p.m. December 31, 2015. Unless this Agreement is
terminated as set forth in paragraph 2.B, it will automatically renew for a
successive one (1) year term with a negotiated fee increase to the Annual
Service Fee in paragraph 9.A.; provided, however, this Agreement will not
automatically renew unless FCCS notifies Client no later than (60) days prior
to January 1 that the Agreement will expire. After Client receives notification
from FCCS of the pending expiration of the term of this Agreement, the
parties may enter into good-faith negotiations regarding any proposed change
in the Agreement terms or fees. Any renewal will be formalized in a written
Amendment to this Agreement.
B. Termination. This Agreement may be terminated:
i. By mutual agreement of the parties hereto;
ii. Upon expiration of the current term of this Agreement if either
party has given the other at least thirty (60) days written notice of
its intention to terminate or in the event the parties do not reach an
agreement following notice as provided in Paragraph 2.A., above;
iii. Upon dissolution of the Client's self-insurance program whether
voluntary or due to cessation of the Client's authority to self-
insure;
iv. Either party may immediately terminate at any time for material
breach of contract, gross negligence, wanton misconduct, or fraud.
Such termination for cause shall be by written notice specifying the
grounds for termination. Said notice shall be effective when
received except in the case of material breach of contract. In the
case of material breach of contract, said notice shall be effective if
the breach is not cured within thirty (30) days of receipt of written
notice specifying the material breach.
C. Services Following Termination:
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Should this Agreement be terminated or non-renewed for any reason, FCCS
will cease providing services (including Client access to the claims
management system), turn over to the Client all physical claim files in
FCCS's possession, which shall include all open and closed files.
Upon the Client's request FCCS shall provide for continued claims
administration(hereinafter referred to as "Continuation") of all claims for a
period of time not to exceed 6 months and at a fee equal to a pro rata share of
the Annual Service Fee under 9.A. that is currently in effect if termination
occurred during the Term of an ongoing Agreement; if termination is instead
due to a non-renewal then the Annual Service Fee in effect for that prior
Agreement shall be used. Client shall also pay any and all ongoing Annual
Medicare/Medicaid Reporting Fee, bank fees, and check stock fees under
paragraphs 9.B. & 9.C. that occur as a result of Continuation. All paragraphs
other than 2.A. & 2.B. of this Service Agreement shall apply for this
Continuation period.
Should this Agreement be terminated or non-renewed for any reason, and
regardless of whether or not Continuation is requested by the Client, FCCS
shall cooperate with any successor administrator in the orderly transfer of all
functions, including providing a runoff list of open claim files if desired by the
Employer and any other records reasonable and necessary for a successor
administrator. Client will reimburse FCCS all direct costs to its vendors to
extract claim and medical bill records from its claim management and medical
bill review system.
3. FCCS Responsibilities: During the term of this Agreement, the regular functions
of FCCS as the Client's Administrator shall include the following:
A. Claims Administration: In compliance with best practices and all applicable
laws, rules and regulations, FCCS will administer all Worker's Compensation
claims received from the Client. FCCS will act on behalf of the Client to
adjust all such actual and alleged claims. This includes, but is not limited to,
managing the following: investigations, determination of compensability,
claim reserves, payments of all claim benefits and expenses, litigation, pursuit
of subrogation, settlement negotiations, filing of all appropriate forms with
any agency either required by law or recommended by industry best practices,
documentation of activity, nurse case management, reporting to the Client's
Excess insurer, and other claim functions as needed. Parameters for limits of
authority as well as contact protocols shall be established with and agreed to
by the Client as documented in the Quality Service Plan (QSP).
B. Client Access to FCCS's Claims Management System: FCCS will provide to
the Client one (1) read-only security access to the claims management system.
This security may be extended to include access to enter new claims and
incidents into the database.
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C. Bank Account: Maintain an escrow account on the Client's behalf to pay
claims losses and Allocated Loss Adjustment Expenses as outlined in this
Agreement. FCCS shall provide to Client a monthly bank statement of this
escrow account. It is expressly understood that FCCS shall not be required to
advance its own funds to pay for any obligation of the Client. The Client is
liable for any fees, fines, or penalties resulting from any delays in providing
funds to FCCS.
D. Allocated Loss Adjustment Expenses (ALAE): ALAE are charges for
services provided in connection with specific claims by persons or firms other
than FCCS which are eligible claim expenses under the Client's program.
Notwithstanding the foregoing, ALAE will include all expenses incurred in
connection with the investigation, adjustment, settlement, or defense of the
Client's claims, even if such expenses are incurred by FCCS. These shall be
paid out of the escrow account and charged against the claim file(s)to which
they pertain.
E. Provision of Reports: FCCS agrees to provide standard reports to the Client
as needed and specified by the Client. FCCS will provide custom/special
reports at the request of the Client for a fee of$150.00 per hour if generated
by FCCS and $225.00 per hour if generated by the claims management system
provider due to special customization requirements. No non-standard reports
will be generated and charged without the prior approval of the Client.
F. Medicare Reporting: Provide a comprehensive Medicare reporting solution
utilizing CS STARS and its Strategic Service Provider(SSP), Gould and
Lamb, to facilitate the full cycle of reporting Medicare beneficiary data to
Centers for Medicare and Medicaid Services (CMS) on behalf of Client as
more fully outlined in Appendix Al.
G. Tax Reporting: FCCS shall issue to the IRS a 1099 on behalf of the Client for
all payments to vendors made by FCCS on behalf of the Client for the prior
taxable year. FCCS shall also retain all W-9's related to each vendor.
H. Risk Management & Loss Control Services: Provide various loss control
services totaling not more than 24 hours per year such as: on site loss
prevention inspections at locations with excessive loss frequency (as agreed
upon between Client and FCCS), attend safety meetings at no charge to the
Client except for FCCS travel expenses, and advise the Client on internal
procedures and policies to help reduce their risk. Perform such other duties as
requested by the Client to assist in the conduct of the Client's Workers'
Compensation Loss Prevention Program at a rate of$100 per hour.
4. Client Responsibilities. Client agrees to:
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a. Report all claims,
incidents, reports or correspondence relating to potential claims in a timely
manner.
b. Reasonably cooperate
in the disposition of all claims.
c. Respond to reasonable
requests for information in a timely manner.
d. Maintain at Client's
expense an escrow account in the amount of$65,000 with a bank chosen
by FCCS to issue claim settlements, benefits, and Allocated Loss
Adjustment Expenses.
e. Promptly pay FCCS's
fees when billed and replenish its escrow account maintained with FCCS
for payments made on behalf of the Client's claim adjudication and
processing on a weekly basis.
f. Be responsible for
maintaining its registration with the COBSW and designation of the
applicable organization as Reporting Agent (RA) or making any changes
to the designated RA as may be required by CS STARS. Client is
responsible for providing RRE ID information to FCCS, CS STARS and
Gould and Lamb as outlined in Appendix Al.
g. Ensure that the CMS
Data Elements have been provided to FCCS for all data elements/fields
required by the CMS Section 111 guidelines in a timely manner for
accurate reporting to CMS.
5. Operating Expenses. The Client agrees to be responsible for and pay all of its
own operating expenses other than service obligations of FCCS. Such operating
expenses shall include but not be limited to charges for the following:
a. All costs associated with Client meeting its state security and licensing
requirements;
b. Certified Public Accountants;
c. Attorneys, other than provided for in Section 3.D of this Agreement;
d. Outside consultants, actuarial services or studies and state audits;
e. Independent payroll audits;
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f. All applicable regulatory fees, fines, and taxes;
g. Educational and/or promotional material, industry-specific loss control
material, customized forms, checks and/or stationary, supplies and
extraordinary postage, such as bulk mailing, express mail or messenger
service;
h. NCCI (National Council on Compensation Insurance) charges;
i. Excess and other insurance premiums;
j. Other operating costs as normally incurred by the Client.
6. Books and Records.
a. FCCS shall maintain all claim information relating specifically to the
Client which is necessary to the performance of FCCS's obligations under
this Agreement (the "Records"). The Records shall remain at all times the
sole property of the Client.
b. The Records shall not include any manuals, forms, files and reports,
documents, customer lists, rights to solicit renewals, computer records and
tapes, financial and strategic data, or information which documents
FCCS's processes, procedures and methods, or which FCCS employs to
administer programs other than the Client's. The items specified in this
paragraph shall at all times be and remain the sole and exclusive property
of FCCS.
c. During the term of this Agreement, FCCS shall provide the Client with
copies of the Records, if so requested by the Client. All reasonable costs
of reproduction of the Records shall be borne by the Client. In the event
this Agreement is terminated or non-renewed, Client Records will be
turned over to the Client or to a successor administrator designated by the
Client. In the event this contract is terminated or non-renewed, Electronic
Data Transfer to the Client or a successor administrator designated by the
Client, shall be accomplished upon receipt of a $1,000.00 fee plus any out
of pocket costs incurred by FCCS to accomplish such Electronic Data
Transfer.
d. FCCS shall make the Records available for inspection by any duly
authorized representative of the Client, or any governmental or regulatory
authority having jurisdiction over FCCS or the Client.
7. Indemnification.
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A. Indemnification of FCCS. To the extent permitted by law but without waiving
any of the provisions of the Colorado Governmental Immunity Act, the Client
agrees that it will indemnify and hold harmless FCCS and FCCS's trustees,
directors, officers, employees, agents, shareholders, subsidiaries, and other
affiliates from and against any and all claims, losses, liability, costs, damages, and
reasonable attorney's fees incurred by FCCS as a result of Client's failure to
provide the necessary data elements to report to the Centers for Medicare and
Medicaid Services (CMS) on behalf of Client as more fully outlined in Appendix
B. Indemnification of Client. FCCS agrees that it will indemnify and hold harmless
the Client and the Client's trustees, directors, officers, employees, agents,
shareholders, subsidiaries, and other affiliates from and against any and all claims,
losses, liability, costs, damages and reasonable attorney's fees incurred by the
Client as a result of breach of this Agreement by FCCS, or misconduct, errors or
omissions by FCCS, or by any of FCCS's trustees, directors, officers, employees,
agents, shareholders, subsidiaries, or other affiliates in connection with the
performance of this Agreement.
C. Third Party Errors. FCCS shall not be responsible for any CMS, Client, CSStars,
SSP or other third party system failures or connectivity issues which may result in
failures to transmit Client's transactions within the CMS required time frames,
unless such failure is a result of FCCS's negligence. FCCS shall not be
responsible for errors or omissions, negligence of, or connectivity issues or delays
by SSP. FCCS shall not be responsible for any claim, damages, fines, losses or
expenses arising in connection with or as a result of any errors, omissions, or
negligence of SSP if Client does not respond within four(4) business days of
receipt of an e-mail notification from FCCS about a CMS response regarding
Client's Claim Input information with any applicable corrected information.
8. Miscellaneous.
A. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the state of Colorado, based on state of
hire, without regard to principles of conflicts of law.
B. Timing of Services. FCCS may exercise its own reasonable judgment, within
the parameters set forth herein and in compliance with state regulations, as to
the time and manner in which it performs the services required hereunder.
Additionally, FCCS will be held to a standard of like administrators
performing like services for customers such as the Client.
C. Successors in Interest. This Agreement shall be binding upon, and inure to
the benefit of, the successors in interest and permitted assigns of the parties
hereto.
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D. Severability. The invalidity or unenforceability of any particular provision of
this Agreement shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects as if the invalid or unenforceable
provision had been revised to the minimum extent necessary to make it valid
and fully enforceable under applicable law.
E. Paragraph Headings. All paragraph headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
F. Waiver. The failure of any party to enforce any provisions of this Agreement
shall not constitute a waiver by such party of any provision. A past waiver of
a provision by either party shall not constitute a course of conduct or a waiver
in the future with respect to that same provision.
G. Entire Agreement/Amendment. This Agreement sets forth the full and final
understanding of the parties hereto with respect to the matters described
herein, and supersedes any and all prior agreements and understandings
between them,whether written or oral. This Agreement may be amended
only by written document executed by the Client and FCCS.
H. Relationship of Parties: With respect to the services provided by FCCS in this
Agreement, FCCS is considered an independent contractor. Nothing in this
Agreement shall be construed to create a relationship of employer/employee,
partners or joint ventures between the Client and FCCS. This Agreement is
non-exclusive, and FCCS shall have the right to perform services on behalf of
other individuals, firms, corporations, and entities.
I. Change in Circumstances: In the event the adoption of any statute, rule or
regulation materially changes the nature of the relationship between the
parties hereto or the legal or economic premises upon which this Agreement is
based, the parties hereto shall undertake good faith negotiations to amend this
Agreement to account for such changes in a reasonable manner.
J. Dispute Resolution: If an irreconcilable difference of opinion or claim should
arise between Client and FCCS as the interpreters of any matter relating to
this Agreement and the parties are unable to resolve the dispute within fifteen
(15) days from the date the dispute arises, either party within fifteen (15) days
thereafter may submit the dispute to mediation before the Judicial Arbiter
Group in Denver, Colorado. This provision shall survive termination of the
Agreement.
K. Notice Provision. All notices, requests, and other communications required
under this Agreement shall be in writing and delivered by hand or mailed,
registered or certified, return receipt requested, postage paid, or sent via a
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nationally recognized overnight courier to the other party at the following
address:
Client: City of Pueblo
301 W. B Street
Pueblo, CO 81003
Attn: Marisa Pacheco
With copy to: HUB International — Pueblo office
FCCS: FCC Services
7951 E. Maplewood Avenue#3-225
Greenwood Village, Co 80111
Attn: Ray Wilber
L. File Destruction Policy. FCCS will maintain all closed files on behalf of the
Client for a period of seven(7) years after the month of closure, or for as long
as necessary to protect the applicable statute of limitations, whichever is
longer. It is the sole responsibility of the Client to advise FCCS if files are not
to be destroyed per this policy.
M. Insurance. FCCS will purchase and maintain insurance coverage for its
performance of the services contemplated in this Agreement. Minimum
policy limits are as follows:
Workers' Compensation—statutory limits
Professional Liability - $5,000,000
General Liability - $1,000,000/$2,000,000
Umbrella- $5,000,000
N. Non-Solicitation of Employees. During the term of this Agreement and for
six (6) months thereafter, the Client and FCCS mutually agree not to recruit,
solicit or hire any employee of the other without written permission; provided,
however, this provision shall have no application to individuals hired through
the Civil Service System of Client.
O. Undocumented Workers. Pursuant to Colorado Revised Statutes ("C.R.S.") §
8-17.5-101, et. seq., FCCS shall not: (a) knowingly employ or contract with
an illegal alien to perform work under this Agreement; or(b) enter into a
contract with a subcontractor that fails to certify to FCCS that the
subcontractor shall not knowingly employ or contract with an illegal alien to
perform work under this Agreement. FCCS further represents, warrants, and
agrees that: (1) FCCS has confirmed the employment eligibility of all
employees who are newly hired for employment in the United States to
perform work under this Agreement, through participation in either the E-
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Verify Program (defined in C.R.S. § 8-17.5-101(3.7)) or the Department
Program established pursuant to C.R.S. § 8-17.5-102(5)(c); (2) FCCS shall not
use either the E-Verify Program or the Department Program procedures to
undertake pre-employment screening of job applicants while this Agreement
is being performed; (3) if FCCS obtains actual knowledge that a subcontractor
performing work under this Agreement knowingly employs or contracts with
an illegal alien, FCCS shall: notify the subcontractor and City of Pueblo
within three days that FCCS has actual knowledge that the subcontractor is
employing or contracting with an illegal alien; and terminate the subcontract
with the subcontractor if within three days of receiving the notice required
pursuant to the previous provision, the subcontractor does not stop employing
or contracting with the illegal alien; except that FCCS shall not terminate the
contract with the subcontractor if, during such three days, the subcontractor
provides information to establish that the subcontractor has not knowingly
employed or contracted with an illegal alien; and (4) FCCS shall comply with
any reasonable request by the Colorado Department of Labor and
Employment made in the course of an investigation under C.R.S. § 8-17.5-
102. If FCCS fails to comply with any requirement of this paragraph or C.R.S.
§ 8-17.5-101 et. seq. City of Pueblo may terminate this Agreement for a
breach of the Agreement.
9. Compensation.
A. Annual Service Fee: $73,500 for management of the claims, access to the
claims database, and reporting capabilities.
B. Annual Medicare/Medicaid Reporting Fee: $2,500 maintenance fee for the
license.
C. Billing Cycle:
i. Items 9.A and 9.B shall be billed to Client monthly in one collective
invoice in the amount of$6,333.33
ii. Bank fees shall be billed to Client monthly in a separate invoice.
iii. Whenever check stock costs are incurred, they shall be billed to Client in a
separate invoice.
iv. Payment of all invoices by the Client are due upon receipt.
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Appendix A
1. FCCS will maintain all required SCHIP ("Act") data elements provided by Client in
FCCS' claims database effective October 1, 2009.
2. FCCS will contract with CSStars and Gould& Lamb on behalf of Client to provide
an automated solution to comply with CMS 111 reporting requirements. This
automated solution will:
a. Verify Medicare eligibility of all claimants every month.
b. Report new or existing claims as required under the Act during the designated
reporting period Client provides.
c. Report closed claims as required under the Act during the designated
reporting period Client provides.
3. FCCS will maintain the Client's RRE ID number supplied by Client in its database.
4. FCCS will update Client's database for any Medicare eligible claim so the automated
solution is launched properly.
5. FCCS will notify Client of any errors in data supplied by Client within 24 hours so
Client can provide correct information to FCCS within four(4) business days to avoid
fines from CMS for data transmission errors.
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Executed this 9th day of February 2015.
FCC Services: /�
/�,,J
By: / �. /( /s
Don Siefd, ice President Risk Management DA E
City of Pueblo, a Municipal Corporation
Attest:
Cit Jerk President of the City Council
Date: 2/9/15 Date: 2/9/15
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