Honorable Mayor and Members of the City Council. Submitted by: Jane Micallef, Acting Director, Department of Health Services

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1 Office of the City Manager CONSENT CALENDAR December 6, 2011 To: From: Honorable Mayor and Members of the City Council Christine Daniel, Interim City Manager Submitted by: Jane Micallef, Acting Director, Department of Health Services Subject: Agreement: County Supervisors Association of California Excess Insurance Authority for Medical Malpractice Insurance RECOMMENDATION Adopt a Resolution authorizing the City Manager to execute the documents necessary to join the County Supervisors Association of California Excess Insurance Authority Joint Powers Authority ( CSAC EIA ), including the Joint Powers Agreement and Memorandum of Understanding, to obtain Medical Malpractice Insurance for City employees in the Public Health and Mental Health Divisions of the Department of Health Services beginning December 31, 2011, and continuing with annual renewal thereafter, in an amount not to exceed $42,000 for the initial term through June 30, FISCAL IMPACTS OF RECOMMENDATION The City s general liability coverage is provided through its membership in the Bay Cities Joint Powers Insurance Authority ( BCJPIA ). However, BCJPIA excludes medical malpractice as a covered risk, so additional coverage must be purchased. The annual premium for the first year of coverage from CSAC will be $22,355 and carries a $5,000 deductible. Since the City would be joining the CSAC EIA in the middle of the fiscal year, the premium amount is prorated and the cost for fiscal year 2012 should not exceed $11,180. For the subsequent five (5) years, the cost will increase in increments to a maximum annual amount of approximately $31,036 subject to experience and market conditions for excess insurance. CSAC EIA s proposal is valid until December 31, Funding for the premium for the remainder of FY 2012 has been identified in the Public Health and Mental Health division operating budgets in the following accounts: ($5,590) and ($5,590). Funding is available to cover the cost of this insurance in the adopted FY 2013 Public Health and Mental Health operating budgets. This Agreement has been entered into the City s Contract Management System and assigned CMS No. XI1U6. CURRENT SITUATION AND ITS EFFECTS The City does not carry medical malpractice insurance, nor does it require employees in health classifications or those providing health or mental health services in the course of their regular duties to maintain private medical malpractice insurance. The City has 2180 Milvia Street, Berkeley, CA Tel: (510) TDD: (510) Fax: (510) manager@cityofberkeley.info Website:

authorizing the City Manager to execute the documents necessary to join the County Supervisors Association of California Excess Insurance Authority Joint Powers Authority ( CSAC EIA ), including the

2 Agreement: County Supervisors Association of California Excess CONSENT CALENDAR Insurance Authority for Medical Malpractice Insurance December 6, 2011 general liability coverage through BCJPIA but the Memorandum of Coverage for liability specifically excludes medical malpractice as a covered risk. However, the definition of medical malpractice does not include emergency medical services or first aid administered by employees nor does it include advice or services rendered by a 911 emergency dispatcher. Pursuant to California Government Code, Section 825, the City of Berkeley is obligated to defend and indemnify all licensed health professionals, non-licensed paraprofessionals and volunteers in any claim or lawsuit that arises out of the course and scope of his/her employment with the City. This coverage protects the City from medical malpractice claims arising from acts of staff, volunteers, interns and contract professionals in the course of performing their normal and customary duties. BACKGROUND In May 2011, at the request of the former Director of Health, the Director of Human Resources submitted an application to Alliant Insurance Services ( Alliant ), the third party insurance administrator to obtain quotes for medical malpractice coverage. The intent of the application was to determine the cost of obtaining medical malpractice coverage for employees of the City of Berkeley s Health Services Department. Alliant solicited insurance quotes for medical malpractice coverage to about a dozen insurance companies in addition to CSAC EIA. The City received three substantive quotes for medical malpractice coverage. Staff from Human Resources, Health Services and the City Attorney s office met to discuss the quotes with Alliant. After careful analysis of the quotes and scope of coverage, staff determined that the quote from CSAC EIA provides the most extensive and appropriate coverage for the City s needs. The CSAC EIA is a Joint Powers Excess Insurance Authority consisting of over 250 public entities, including Alameda County, Berkeley Unified School District, and the cities of Alameda, Concord, Oakland, Richmond and Sacramento. The medical malpractice coverage from CSAC EIA will provide blanket coverage for employee doctors, nurses, mid-level practitioners, clinicians, psychologists, psychiatrists, and other health staff including current and former students, interns, and volunteers. The insurance will also cover contract professionals while working for the City, and/or at a City facility, who the City has agreed to cover through written contract. The CSAC EIA will provide coverage through a pool of member agencies for the first $1.5 million of any loss on a claims made basis after coverage is established. Claims exceeding $1.5 million up to $50 million are provided through excess insurance on an occurrence basis. RATIONALE FOR RECOMMENDATION The City is required to defend its employees in any action arising from the discharge of the employee s normal and customary duties and pay any outstanding claims or judgments for injuries or death arising from the discharge of those duties. However, because the City provides Health and Mental Health services and currently has no medical malpractice insurance, the City is at some risk for financial loss in the event of a medical claim against the City arising from actions of staff, interns and volunteers. The Page 2

However, the definition of medical malpractice does not include emergency medical services or first aid administered by employees nor does it include advice or services rendered by a 911 emergency

3 Agreement: County Supervisors Association of California Excess CONSENT CALENDAR Insurance Authority for Medical Malpractice Insurance December 6, 2011 proposed action will provide coverage against potential claims of medical malpractice. While the risk of loss is minor, in light of the reasonable amount of the premiums, it is prudent to obtain this coverage to protect against a medical malpractice claim and is part of an overall risk management strategy to transfer risk when prudent and cost effective. ALTERNATIVE ACTIONS CONSIDERED The City can continue to provide its Health Services without having any coverage for medical malpractice. While the City has not had a reported claim in the last ten years and the risk of having one is relatively minor, since it is difficult to predict when a claim can arise, it is prudent to obtain medical malpractice coverage when the premiums are reasonable. CONTACT PERSON Jane Micallef, Acting Director of Health, Attachments: 1) Resolution 2) Medical Malpractice Memorandum of Understanding 3) Joint Powers Agreement Page 3

While the risk of loss is minor, in light of the reasonable amount of the premiums, it is prudent to obtain this coverage to protect against a medical malpractice claim and is part of an overall risk

4 RESOLUTION NO. --N.S. AGREEMENT: COUNTY SUPERVISORS ASSOCIATION OF CALIFORNIA EXCESS INSURANCE AUTHORITY FOR MEDICAL MALPRACTICE INSURANCE WHEREAS, Article 1, Chapter 5, Division 7, Title 1 of the California Government Code (Section 6500 et seq.) permits two or more public agencies by agreement to exercise jointly powers common to the contracting parties; and WHEREAS, the City of Berkeley desires to join together with the members of the CSAC Excess Insurance Authority (Authority) for the purpose of jointly funding and/or establishing excess and other insurance programs as determined; and WHEREAS, the Authority has determined that it is necessary for each member of the Authority to delegate to a person[s] or position[s] authority to act on the member s behalf in matters relating to the member and the Authority. NOW THEREFORE, BE IT RESOLVED by the Council of the City of Berkeley that becoming a member of the CSAC Excess Insurance Authority is hereby approved and authorizes execution of the CSAC Excess Insurance Authority Joint Powers Agreement, and except as to actions that must be approved by the City Council, the City Manager or his or her designee is hereby appointed to act in all matters relating to the member and the Authority.

) permits two or more public agencies by agreement to exercise jointly powers common to the contracting parties; and WHEREAS, the City of Berkeley desires to join together with the members of the

Honorable Mayor and Members of the City Council. Submitted by: David W. Hodgkins, Director of Human Resources

Office of the City Manager CONSENT CALENDAR January 18, 2011 To: From: Honorable Mayor and Members of the City Council Phil Kamlarz, City Manager Submitted by: David W. Hodgkins, Director of Human Resources