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HomeMy WebLinkAbout13852 RESOLUTION NO. 13852 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 2018 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 2018, 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 December 26, 2017 BY: Ed Brown City Clerk’s Office Item # M-2 BACKGROUND PAPER FOR PROPOSED RESOLUTION COUNCIL MEETING DATE: December 26, 2017 TO: President Stephen G. Nawrocki and Members of City Council CC: Sam Azad, City Manager VIA: Brenda Armijo, Acting City Clerk FROM: Marisa L. 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 2018 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 27, 2016, Resolution No. 13582 was approved by City Council. This Resolution accepted the service agreement with FCC Services for Fiscal Year 2017. 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 2018 for the annual fee of $83,472.52 for management of the claims, payable monthly. The Medicare reporting fee will be $2,750. This is a 4% increase in the contract to cover increasing administrative costs and cost of living increases for the provider. FINANCIAL IMPLICATIONS: The total cost for the service agreement in 2018 is $86,222.52, which is an increase of $3,210.50 annually over 2017 costs. BOARD/COMMISSION RECOMMENDATION: None. STAKEHOLDER PROCESS: None. ALTERNATIVES: There 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 and claims administration services. RECOMMENDATION: Approval of the Resolution. 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 "Client", as follows: 1. Appointment: Client hereby appoints FCCS, and FCCS hereby agrees to serve, as Third Party Administrator("Administrator")of Client's Worker's Compensation program. 2. Term& Termination: A. Term: The initial term of this Service Agreement shall be for one(1) year commencing January 1, 2018 through December 31,2018. Unless otherwise terminated as provided in this Agreement,this Agreement shall automatically renew on a calendar year basis subject to annual appropriation of funds by Client; provided, however, FCCS may serve written notice to Client of its intent to renegotiate any provision of the Agreement no later than September 1 of the then current year of the Agreement. If the parties are unable to reach agreement after timely receipt of such notice,the Agreement shall terminate upon expiration of the then current year of the Agreement. Any amendment shall be reduced to writing and approved by the parties. B. Termination. This Agreement may be terminated: i. By mutual agreement of the parties hereto; ii. Upon expiration of the then current year of this Agreement if either party has given the other party written notice of its intent to terminate at least(60) sixty days prior to the expiration of the then current year of the Agreement. Such termination may be without cause and shall be treated as a non-renewal under the provisions of this Agreement. iii. Upon dissolution of Client's self-insurance program whether voluntary or due to cessation of 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 (30)thirty days of receipt of written notice specifying the material breach. v. No Multi-year Fiscal Obligation on Client. This Agreement is expressly made subject to the limitations of the Colorado Constitution. Nothing herein shall constitute, nor deemed to Page 1ofl3 constitute, the creation of a debt or multi-year fiscal obligation or an obligation of future appropriations by Client,contrary to Article X, § 20 Colorado Constitution or any other constitutional, statutory or charter debt limitation. In the event Client determines not to appropriate funds for another term upon the expiration of the current term of this Agreement, Client shall immediately notify FCCS and the contract shall be terminated at the end of the current term. FCCS shall finalize the current term's obligations and submit a final invoice and Client shall pay the invoice upon receipt, pursuant to the terms agreed to herein. C. Services Following Termination: Should this Agreement be terminated or non-renewed for any reason, FCCS will cease providing services, terminate Client access to the claims management system, and turn over to Client all physical claim files in FCCS's possession, which shall include all open and closed files. Any electronic claim file Client wishes to have reproduced to a physical claim file shall incur copying fees commensurate to the fee schedule in Rule 18 of the Colorado Worker's Compensation Rules of Procedure. ii. Upon 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 after termination 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 under 9.A. 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. iii. Should this Agreement be terminated or non-renewed for any reason, and regardless of whether or not Continuation is requested by Client, FCCS shall cooperate with any successor administrator in the orderly transfer of all functions, including providing a runoff list of open claim files and a(6)six month history of medical bills reviewed, if desired by Client and any other records reasonable and necessary for a successor administrator. With respect to such records requested by Client, Client will reimburse FCCS all direct costs to its vendors to extract claim and medical bill records from its claim management, Medicare reporting vendor, and medical bill review systems. Page 2 of 13 3. FCCS Responsibilities: During the term of this Agreement, the regular functions of FCCS as Client's Administrator shall include the following: A. Claims Administration: In compliance with Client's Quality Service Plan, internal written protocols,and all applicable laws, rules and regulations, FCCS will administer all Worker's Compensation claims received from Client. FCCS will act on behalf of Client to adjust all such actual and alleged claims on a Life of Service basis, defined as for the duration of the Terms of this Service Agreement and all prior consecutive Service Agreements between Client and FCCS. 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 in compliance with Section 3.B. below,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 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 Client as documented in the Quality Service Plan(QSP). B. Subrogation: FCCS will file a Notice of Lien or any other notice required by law to put a third party on notice of possible subrogation,make initial contact with a third party's insurance company and provide the third party insurer's contact information to Client. Asset reviews will be conducted when appropriate or upon Client request. It is Client's responsibility to notify FCCS of their desire to pursue subrogation. If Client requests FCCS to continue subrogation, additional fees will apply to hire outside counsel to complete subrogation. C. Client Access to FCCS's Claims Management System: FCCS will provide to Client(2)two limited security accesses to the claims management system. One of them will allow data entry of new claims, and read-only access to the claims data. The second will provide read-only access to the claims management system for the use of Client's broker. D. Bank Account: Maintain an escrow account on 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 Client. Client is liable for any fees, fines, or penalties resulting from any delays in providing funds to FCCS. Page 3 of 13 E. 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 Client's program. Notwithstanding the foregoing, ALAE will include all expenses incurred in connection with the investigation, adjustment, settlement, or defense of 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. F. Provision of Reports: FCCS agrees to provide standard reports to Client as needed and specified by Client. FCCS will provide custom/special reports at the request of 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 Client. G. Medicare Reporting: Provide a comprehensive Medicare reporting solution utilizing vendor partners who specialize in facilitating 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 A. FCCS shall be responsible for any fines imposed by CMS resulting from a failure to meet its responsibilities as outlined in Appendix A. H. Tax Reporting: By the third Friday of each January following the term of this Agreement, FCCS shall provide Client the necessary information for Client to issue 1099s to vendors that FCCS uses for the administration and medical care of claims handled under this agreement.The information FCCS shall provide to Client includes the vendor name, FEIN, address and total payment amounts for the taxable year relevant to the 1099. FCCS shall also retain all documentation evidencing that the information it provides to Client was supplied by the vendor, including copies of all W-9s related to each vendor. FCCS shall provide copies of such documentation within five (5) days of a request by Client. I . 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 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. Page 4 of 13 4. Client Responsibilities. Client agrees to: 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$100,000 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 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. .Client is responsible for providing RRE ID information to FCCS and it's CMS reporting vendor partners as outlined in Appendix A. G. Ensure that the CMS Data Elements have been provided to FCCS for all data elements/fields required by the CMS Section 1 l 1 guidelines in a timely manner, not greater than (4) four days after requested, for accurate reporting to CMS. Client shall be responsible for any fines imposed by CMS resulting from failure to provide to FCCS any data elements/fields required by CMS Section 111 guidelines within(4)four days after request. 5. Oneratine Expenses. 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; f. All applicable regulatory fees, fines, and taxes; Page 5 of 13 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 Client. 6. Books and Records. A. FCCS shall maintain all claim information relating specifically to 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 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 Client's. The items specified in this paragraph shall at all times be and remain the sole and exclusive property of FCCS. C. Unless this Agreement is terminated, FCCS will maintain all closed files on behalf of Client for a period of(7) seven years after the month of closure, or for as long as necessary to protect the applicable statute of limitations, whichever is longer. At the end of this time period, all physical files will be destroyed. It is the sole responsibility of Client to advise FCCS if files are not to be destroyed per this policy and to instruct FCCS how they wish such files to be transmitted elsewhere at Client's expense. D. During the term of this Agreement, FCCS shall provide Client with copies of the Records, if so requested by Client. All reasonable costs of reproduction of the Records shall be borne by Client. In the event this Agreement is terminated or non-renewed,Client Records will be turned over to Client or to a successor administrator designated by Client. In the event this contract is terminated or non-renewed, Electronic Data Transfer to Client or a successor administrator designated by Client, shall be accomplished upon receipt of a $1,000.00 fee plus reasonable out of pocket costs necessarily incurred by FCCS to accomplish such Electronic Data Transfer. Page 6of'13 E. FCCS shall make the Records available for inspection by any duly authorized representative of Client, or any governmental or regulatory authority having jurisdiction over FCCS or Client. 7. Indemnification. A. Indemnification of Client. FCCS agrees that it will indemnify and hold harmless Client and 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 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. B. Third Party Errors. FCCS shall not be responsible for any CMS, Client, 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 it's CMS reporting vendor partners. 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 a CMS reporting vendor partner if Client does not respond within (4)four 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. S. 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 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. Page 7of13 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 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 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: [f 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. Page 8 of 13 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 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: Mike Layman L. 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 M. Non-Solicitation of Employees. During the term of this Agreement and for six (6)months thereafter, 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. N. 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- 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 Page 9of13 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 Client 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.Client may terminate this Agreement for a breach of this paragraph. O. Force Majeure. Each party will be excused from performance for any period during which, and to the extent that, it is prevented from performing any obligation or service, in whole or in part, as a result of causes beyond its reasonable control, and without its fault or negligence, including without limitation, acts of God, riots, and acts of war. Any such excuse for delay shall last only as long as the event remains beyond the reasonable control of the delayed party. However,the delayed party shall use commercially reasonable efforts to minimize the delays caused by any such event. This section shall not apply to those performances required by each party in accordance with CMS reporting requirements as outlined herein or to any statutory filing requirements with the Colorado Department of Labor and Employment. P. Authority of Signers. Each person signing this Agreement on behalf of a party represents and warrants that he or she has the requisite power and authority to enter into, execute, and deliver this Agreement on behalf of such party and that this Agreement is a valid and legally binding obligation of such party enforceable against it in accordance with its terms. 9. Compensation. A. Annual Service Fee: $83,472.50 for management of the claims on a Life of Service basis, access to the claims database,and reporting capabilities. 1. The above pricing assumes Client shall enter all First Reports of Injury (FROI) directly into the claims management system using the webtool. A $25.00 fee per FROI entered by FCCS into the claims management system shall be billed to the claim file as an Unallocated Loss Adjustment Expense(ULAE)cost for any such data entry that occurs when the claims management system and webtool are both operational. 2. Whenever a claim involves subrogation actions, an additional fee of 10% of the recovery shall be billed to the claim file as Allocated Loss Adjustment Expense Page 10 of 13 (ALAE), not to exceed$1,150.00 per claim. 3. Any Tenn in which the total claims received during the Service Agreement Term increases by greater than 10% compared to the average yearly claim count shall incur a$650.00 fee per claim above that average. FCCS shall provide an invoice and documentation of this additional fee within 90 days of the end of the Term. The average yearly claim count shall be defined as 121 for this year. B. Annual Medicare/Medicaid Reporting Fee: $2,750 fee for the license. C. Billing Cycle: i. Items 9.A.1. and 9.B shall be billed to Client monthly in one collective invoice in the amount of$7,185.21 ii. Bank fees shall be billed to Client monthly in a separate invoice. iii. Items 9.A.2. & 9.A.3. shall be billed as they are incurred. iv. Whenever check stock costs are incurred, they shall be billed to Client in a separate invoice. v. Payment of all invoices by Client are due upon receipt. REST OF PAGE LEFT INTENTIONALLY BLANK Page 11 of 13 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 on behalf of Client with vendor partners who specialize in providing 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. • REST OF PAGE LEFT INTENTIONALLY BLANK Page 12 of 13 Executed this 26th day of December , 2017. FCC Services: 9774(// ----- B � //- / /7 Mike Layman, C ims Manager DATE City of Pueblo, a Municipal Corporation 4.- ..---- , Attest: B : L ` Rain() City Clerk President of the City Council Date: December 26, 2017 Date: December 26, 2017 Page 13 of 13