City of Danville Virginia 427 Patton Street Danville, VA 24541 Phone (434) 799-6528 J. Gary Via, CPPO Fax (434) 799-5102 Director of Purchasing e-mail: viajg@ci.danville.va.us Request for Proposals RFP 13/14-107 Summary: The City of Danville is self-insured for workers compensation and is requesting proposals from experienced and qualified third party administrator (TPA) for claims administration, excess stop loss coverage, medical cost containment, medical bill review, and claim reporting. It is the City s intent to contract with one TPA to provide the services outlined in this RFP. The City may pursue all or one of the services listed. Finalist are required to give a finalist presentation onsite at the City of Danville. The claims administrator(s) that would be assigned to the City must be present at this meeting. Danville, Virginia: Danville is a council-manager, Commonwealth of Virginia charter city comprising approximately forty-five (45) square miles located in central southern Virginia bordering the State of North Carolina. The City has a population of approximately 46,000. Approximately 1,400 City and Constitutional employees will be covered under the plan. Scope of Work: Claims Administration 1. Accept injury reports 24 hours a day with trained professionals, and forward the appropriate information within a reasonable amount of time to a claims representative. 2. Make contact with the injured employee when necessary or requested within twenty-four hours of claim reporting. 3. Return emails, calls, and other contact from the City, injured worker, and other individuals related to a workers compensation case within twenty-four hours. 4. Determine liability for claimed injuries and illnesses in accordance with Virginia s Workers' Compensation Act. 5. Review and process all claims in accordance with rules and regulations established by the Virginia s Workers Compensation Act.
6. Evaluate any open claim and make recommendations to the City as to their proper disposition in accordance with the Workers ' Compensation Act. 7. Establish files containing medical and factual information on each reported claim together with complete accounting records and maintain same in accordance with statutory time requirements. Act as custodians on behalf of the City. 8. Compute and pay disability benefits to injured or ill employees based on earnings information and authorized disability periods in a timely manner. 9. Determine nature and extent of permanent disability and arrange for informal disability rating whenever possible to avoid Workers ' Compensation Appeals Board litigation. 10. Explain to and assist employee in completing necessary forms for permanent disability ratings. 11. Review, compute and pay all informal ratings, findings and awards, life pensions or compromise and release settlements. 12. Maintain and establish reserve estimates for each reported claim. 13. Arrange for and supervise all necessary investigations to determine eligibility for compensation benefits and/or liability of negligent third parties. 14. If the City purchases excess reinsurance, then the TPA is responsible for reporting excess claims. 15. Arrange and supervise rehabilitation services where indicated. 16. Arrange for and set up system for payment of benefits and allocated expenses in accordance with City of Danville s needs. 17. Attend monthly case management discussions along with the case managers to review cases of a complex nature and/or cases which require team decisions and thought. 18. Provide access to Computer Based Claim System to HR Consultant and other staff as designated by the Human Resources Director. 19. Work with the HR Consultant to track and monitor trends relating to types of injuries, locations of injuries, length/severity of injuries in order to provide a safe work environment for the City of Danville employees. 20. Provide the Human Resources Director or her designee, program performance on a quarterly basis outlining key performance indicators as required by this agreement. 21. Meet with the Human Resources Director or her designee, and provide 2
program and contract costs to include medical expenses, _ program costs (i.e. IME), and administrative costs (i.e. deposition, surveillance, court reports, case managers, etc.). Medical Management 1. Select, with City of Danville's approval, a panel of general practitioners, specialists, hospitals and emergency treatment facilities to which injured employees should be referred. Review and update panel on a regular basis. 2. Provide the City with a predictable Workers ' Compensation budget and continue to contain the City's costs. 3. Authorize, review and monitor all medical treatment required on injury or illness claims. Audit and pay all medical expenses. 4. Maintain close contact with treating physicians to ensure employees receive proper medical treatment and are returned to full employment at earliest date. 5. Arrange for medical-legal counsel where indicated. 6. Arrange for medical case management as applicable. 7. Consult frequently with City of Danville in cases where injury residual might involve restriction and/or retirement potential. Legal Administration 1. Refer litigated cases to attorneys recommended by TPA and approved by City of Danville for purposes of defending City of Danville's interests before Workers ' Compensation Appeals Board and the court. 2. Work closely with counsel in preparing defense of litigated cases. 3. Obtain City of Danville's authorization on all settlements or stipulations when required. 4. Work closely with applicant's attorney and legal counsel in informal dispositions of litigated cases. 5. Attend, when required, Workers' Compensation Appeals Board hearings. 6. Discharge on behalf of City of Danville, all legal obligations to its injured employees imposed by Workers' Compensation Appears Board and higher courts. 7. Protect and preserve City of Danville's interests in all potential subrogation cases. Employee Services 1. Develop with City of Danville, materials which will provide information and guidance to employees regarding Workers' Compensation Claims 3
Administration. 2. Meet and confer with City of Danville to review and update them on Workers Compensation benefits. 3. Meet with and assist injured employees in resolving problems that arise from injury or illness claims. 4. Develop and recommend policies and procedures in areas such as preemployment physicals, work restrictions, return to work programs and disability retirement. Statistical 1. Report to City of Danville, monthly status of claim payments and reserves on an individual claim basis and in the aggregate. 2. Report to City of Danville, quarterly loss analysis of claims filed by frequency and severity. 3. Assist in the preparation of all reports required by the State of Virginia or other Governmental agencies relating to Workers' Compensation claims. 4. Provide the following reports on a monthly basis at minimal at City of Danville's discretion: Claim Logs Claim Activity Claim Cost Detail Claim Cost Summary Claim Cost Summary by Year Examiner Activity Examiner Case Log Frequency Reports Location Summary Management Summary Multiple Claims Listing Occurrence Cost OSHA Reporting/Requirements Payment Type Totals Vendor Payments Detail Vendor Payments Summary State Annual Report 5. Ad-hoc reports as requested within 24 hours of request unless programming is required and then within a reasonable time. Transition To ensure an orderly transition, the City may require the following: 1. As part of the response, TPA must submit an Implementation Plan which the City can immediately implement after vendor selection, describing all requirements for the City to change its panel of providers. 4
2. At the inception of the contract, the TPA will assume medical management responsibilities for all open claims and any new or reopened claims. The City will provide assistance in gathering required information and documentation. The plan for managing closed cases shall be included. 3. Additional cost incurred by the TPA for the transition of existing medical care records and cases during the transition period must be quoted separately and should not be included in the annual fee quoted by the TPA. A detailed description of any such additional costs must be provided to the City. Proposal Questionnaire General 1. Please describe the governing structure of the program. 2. How are policy decisions and other operational matters determined for the program? 3. How many years has the Proposer been in the business of workers' compensation administration? In Virginia? 4. Does the Proposer have its own staff, or are services provided by a broker or other third party vendors? List all providers associated with the Proposer and any associated relationships. 5. How many public entities does the Proposer serve? Of those public entities, how many Virginia municipalities does the Proposer serve? 6. Describe termination provisions and criteria. 7. Does the Proposer have legal counsel available for general legal questions regarding workers' compensation? If yes, what is the charge for this service? (i.e. per call, per hour) 8. Does the Proposer anticipate any mergers, transfer of company ownership, sale, management reorganization, or departure of key personnel within the next twelve-eighteen months that might affect the ability to carry out proposal obligations, if it results in a contract with the City of Danville? 9. What is the Proposer s timeline for implementation? Claims Administration 1. List the address and phone number of the claims office that will provide the administration of claims for City of Danville. 2. Does the Proposer have the capability to answer general questions concerning workers' compensation claims outside of normal business hours? If yes, what are the methods of communication and hours of availability? 5
3. What is the fee for claims administration? Please describe the unit pricing for this fee. 4. What services are included in the claims administration fee? What services incur additional charges? 5. Are the fees quoted for claims investigation and management for the life of the claim? If not, then please explain what length of time the fee covers and what additional fees can be expected. 6. List all items which the Proposer allocated to the claims file and provide unit pricing, as well as, an annual estimated cost (i.e. pre-authorizations, investigations, copies, subrogation, case management, etc.). 7. Describe the quality control process provided for the administration of claims. Provide a description of the quality controls, checks and balances currently in place, including the approach to and frequency of internal audits. 8. Describe the Proposer s claims management philosophy, processes, and approach. 9. Describe the Proposer s investigative procedures. Provide information on criteria used, and type of experts used in the management of a claim. 10. Describe the Proposer s claim reserving practices. 11. Provide the qualifications and experience of Claims Adjusters, Supervisors, and Staff who will be assigned to our account. Also describe the qualifications of the person designated to represent the City of Danville in matters before the Virginia Workers Compensation Commission. 12. What is the Proposer s average claim load per adjuster, supervisor, and manager? Please specify for record only, medical only, and indemnity claims. 13. Will the Proposer s staff, Third Party Claims Adjusters, or Independent Adjusters adjust losses? 14. Clearly state the Proposer s definitions for an Indemnity Claim, a Medical Only Claim and Report Only Claim. 15. Are payments allowed to be made on closed files? If so, are they monitored? 16. What is the average length of time a medical only file and indemnity file is open? 17. Describe the method utilized in tracking medical reports, disability determination and similar areas. 18. Are cost containment services offered (i.e. bill review, utilization management)? If so, please describe. 6
19. Is the Proposer a certified Utilization Review Agent? If the Proposer vends out Utilization Review, is the designated vendor a certified Utilization Review Agent? 20. What are the Proposer s procedures for authorizing hospital admissions and/or medical treatment? 21. Provide information on the Proposer s peer review processes, criteria used for peer review, levels of peer review used, and qualifications/experience of the personnel. 22. Does the bill review staff apply treatment guidelines to the bill? Is every bill specifically audited for relatedness, over-coding, and correct coding? 23. By what method is the bill processing charged (i.e. per bill, per line, % of savings, or combination)? 24. What savings does the Proposer offer on medical bill reimbursements? Are those savings measured from fee schedule dollars or from billed charges? 25. List the services and the name of the sub-contractor that the Proposer anticipates sub-contracting to other firms. 26. In what ways does the Proposer assist the City of Danville in subrogation? Is the service provided in-house or contracted? What is the fee for this service? 27. How does the Proposer identify claims with subrogation potential and what procedures are used for recovery? 28. Does the Proposer have a Pharmacy Benefit Manager (PBM)? If yes, please state the name of the PBM, any additional costs associated with it, a description of the services, and the average annual savings. 29. Does the Proposer utilize a Provider Network (i.e. PPO)? If yes, please state the name of the network, any additional costs associated with it, and a description and the effectiveness of the services. If a percent of savings per bill is charged, what is the average percent of savings? 30. Does the Proposer have procedures in place to assist us with a Return-To-Work Program? If yes, please describe. 31. Please name and describe the Proposer s claims adjudication system. 32. Identify on-line capabilities and any costs or fees related to bringing the City of Danville on-line with the software. 33. Should the City of Danville decide to terminate the plan, would the Proposer handle open claims? Also, please explain any financial obligations related to the termination of the plan. 7
34. Describe the method(s) utilized during the initial transition of moving to the new TPA and in educating City of Danville personnel in regard to changes and/or interpretation of the workers compensation law. 35. Provide the top reasons the Proposer s firm is the best choice and should be selected. Excess Stop Loss Coverage 1. Please indicate the name and address of the excess stop loss carrier. 2. If the Proposer uses a broker, indicate the name and address, as well as, if any commission is charged. 3. List the carrier's financial ratings. If not rated, please explain why. 4. Indicate the terms, limits, and retentions of the proposed excess stop loss coverage. 5. Describe any special benefits or features offered to enhance the coverage. 6. Is the specific retention on a per occurrence or a per claim basis? 7. Describe the process for payment of a claim when the claim is in excess of the specific retention. Does the City of Danville continue to pay and then seek reimbursement? Will the Proposer file the claim with the stop loss carrier for the excess amount? 8. Who is responsible for meeting the claim reporting requirements listed in the stop loss policy? Loss Prevention Services 1. Attach a description of loss prevention services provided. Include a recent example of a loss prevention service completed by the Proposer s firm. 2. Provide the Proposer s experience and professional qualifications. 3. Describe any charges and the unit pricing of these services. 4. Describe the Proposer s philosophy on loss prevention. List the name of the loss prevention representative(s) who will make scheduled appointments to the City of Danville. Indicate the frequency or schedule for these appointments. 5. Where is this loss prevention representative located? 6. Include a biography of the loss prevention representative(s) who would be assigned to our account. 7. Describe the specific risk management materials/resources that are available to the City of Danville. Indicate the additional charges, if any. 8
8. Describe the specific education and training provided to City of Danville personnel. Indicate additional charges, if any. Claim Reports 1. Describe the types of standard reports that are available to City of Danville for analyzing claims. Attach samples and list any additional charges for these reports. 2. Please describe the frequency of these reports. 3. Are customized reports available on request? Is there a charge for customized reports? 4. What is the turnaround time for customized reports when requested? Financial Management 1. Please provide a copy of the Proposer s most recent audited financial statement. 2. Are the Proposer s financial statements prepared in adherence with GAAP, GASB, GASB 10, and FASB? If not, please explain. 3. Are the services of an independent actuary available? If yes, what is the fee and is it in compliance with GASB 10? a. Provide the name and address of the firm providing the annual actuarial review and/or annual report on the estimate of ultimate loss and Allocated Loss Adjustment Expense Reserves. b. Provide the name and credentials of the individual preparing the actuarial review and/or report. 4. State the length of time in which this proposal is guaranteed. Will any administrative fees, rates or other fees change mid-year or mid-contract? Outline the proposal dates of the contract. 5. Please indicate how City of Danville will be billed. Specify administration charges, claim reimbursements and stop loss Submittal: Respondents should submit one (1) original and five (5) copies of their proposal to the address below no later than 5:00 PM April 8, 2014 to: J. Gary Via, Purchasing Director City of Danville Purchasing Department 427 Patton Street, Room 304 Danville, VA 24541 Evaluation procedure: Each proposal will be based on the following: Vendors will be evaluated on: 9
The appropriateness of the proposed methodology for meeting the City s workers compensation needs. The qualifications, experience, and availability of the firm and the City s proposed claims team. The degree of completeness of the vendor s response to the specific requirements of the RFP. Experience and history of the vendor in the areas covered by the RFP. The technical capabilities of the vendor. References Cost of the services to be provided. Award procedure: A selection committee shall review the proposals submitted. After each proposal has been evaluated, short-listing procedures will narrow the list of candidates to the best qualified firms. These firms may then be invited to an interview, at which time each will be expected to conduct a presentation on its proposal and to answer questions of the selection committee. The City reserves the right to reject any or all proposals submitted, and to waive any informality in the proposals. The right is also reserved to award the contract where it appears to be in the best interest of the City of Danville. The right is also reserved to negotiate with multiple firms. The City is not responsible for reimbursement of any costs associated with work undertaken by the Firm to respond to this RFP. ******************************************* Codes and Standards: This procurement process is governed by the "PROCUREMENT CODE OF THE CITY OF DANVILLE, VIRGINIA". Copies of the Procurement Code may be obtained by writing the City of Danville, Purchasing Department, PO Box 3300, Danville, VA 24543. Minority and/or female-owned businesses are encouraged to apply. The City of Danville is an equal opportunity employer and does not discriminate on the basis of race, color, creed, national origin or against faith-based organizations. The Firm, its officers, agents, employees, and any subcontractors, in the performance of this Agreement shall comply with all applicable statutes and laws of the United States and the Commonwealth of Virginia, the Charter and ordinances of the City of Danville, and the applicable rules and regulations of the agencies of each. The Firm does not, and shall not during the performance of the contract for goods and services knowingly employ an unauthorized alien as defined in the federal Immigration Reform and Control Act of 1986. During the performance of this contract, the Firm agrees as follows: The Firm will not discriminate against any employee or applicant for employment because of race, religion, color, sex, or national origin, except where religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of the Firm. The Firm agrees to post in 10
conspicuous places, available to employees or applicants for employment, notices setting forth the provisions of this nondiscrimination clause. The Firm also shall not discriminate against any handicapped person in violation of any state or federal law or regulation and shall also post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this additional nondiscrimination clause. The Firm, in all solicitations or advertisements for employees placed by or on behalf of the Firm, will state that such Firm is an equal opportunity employer. Notices, advertisements and solicitations placed in accordance with federal law, rules or regulations shall be deemed sufficient for the purpose of meeting the requirements of this article. The Firm will otherwise comply with all other applicable provisions of local, State, and Federal law. The City of Danville does not discriminate against faith-based organizations Drug Free Work Place: During the performance of this contract, the Firm agrees to: Provide a drug-free workplace for the Firm s employees. Post in conspicuous places, available to employees and applicants for employment, a statement notifying employees that the unlawful manufacture, sale, distribution, dispensation, possession, or use of a controlled substance or marijuana is prohibited in the Firm s workplace and specifying the actions that will be taken against employees for violations of such prohibition. State in all solicitations or advertisements for employees placed by or on behalf of the Firm that the Firm maintains a drug-free workplace. Include the provisions of the foregoing clauses in every subcontract or purchase order of or over $10,000, so that the provisions will be binding upon each subcontractor or vendor. Drug-free workplace means a site for the performance of work done in connection with a specific contract awarded to a Firm in accordance with this chapter, the employees of whom are prohibited from engaging in the unlawful manufacture, sale, distribution, dispensation, possession or use of any controlled substance or marijuana during the performance of the contract. Indemnification: The Firm shall indemnify, keep and save harmless the City, its agents, officials and employees, against all injuries, deaths, loss, damages, claims, patent claims, suits, liabilities, judgments, costs and expenses, which may in anywise accrue against the City, its agents, officials and employees in consequence of the granting of this contract or which may in anyway result therefrom, whether or not it shall be alleged or determine that the act was caused through negligence or omission of the Firm or his employees, or of the subcontractor or his employees, if any, and the Firm shall, at his own expense, appear, defend and pay all charges of attorneys and other expenses arising therefrom or incurred in connection therewith, and, if any judgment shall be rendered against the City in any such action, the Firm shall, at his own expense, 11
satisfy and discharge the same. The Firm expressly understands and agrees that any performance bond or insurance protection required by this contract, or otherwise provided by the Firm, shall in no way limit the responsibility to indemnify, keep and save harmless and defend the City, its agents, officials, and employees as herein provided. The Firm shall have charge and control of the entire work until its completion and acceptance by the City. The Firm shall assume all risks and responsibilities for casualties of every description in connection with the work, except that he shall not be held liable or responsible for delays or damage to the work caused by acts of God, acts of Public enemy, acts of Government, quarantine restrictions, general strikes through the trade, or by freight embargoes not caused or participated in by the Firm. The Firm shall have charge and control of the entire work until completion and acceptance of the same by the City. The Firm shall alone be liable and responsible for, and shall pay, any and all loss or damage sustained by any person or party either during the performance or subsequent to the completion of the work under this agreement by reason of injuries to persons and damage to property, buildings, and adjacent work, that may occur either during the performance of the work covered by this contract or that may be sustained as a result of or in consequence thereof, irrespective of whether or not such injury or damage be due to negligence or the inherent nature of the work. The Firm shall bear all losses resulting from the amount or character of the work being different, or because the nature of the premises on which the work is done is different from what was expected, or on account of the weather, or similar other causes. Insurance: The Firm shall not commence work under this contract until he has obtained all the insurance required hereunder and such insurance has been approved by the City; nor shall the Firm allow any Subcontractor to commence work on his subcontract until all similar insurance has been so obtained and approved. Approval of the insurance by the City shall not relieve or decrease the liability of the Firm hereunder. Worker's Compensation including Occupational Disease and Employer's Liability Insurance: The Firm shall take out and maintain during the life of this Contract Workers' Compensation and Employer's Liability Insurance for all of his employees to be engaged in work on the project under this contract in an amount no less than the minimum allowed by the State Corporation Commission, and in case of such work is sublet, the Firm shall require the Subcontractor similarly to provide Workers' Compensation and Employer's Liability Insurance for all of the latter's employees to be engaged in such work. Comprehensive General Liability Insurance: The Firm shall maintain during the life of this Contract comprehensive general liability insurance as shall protect him, the City of Danville and its offices, agents and employees, and any Subcontractors performing work covered by this Contract from claims for damage for personal injury, including death, as well as from claims for property damage, which may arise from operations under this Contract, whether such operations by himself or by any Subcontractor, or by anyone directly or indirectly employed by either of them. The amount of such insurance shall not be less than a combination single limit of $1,000,000 per occurrence on bodily injury and 12
property damage and $1,000,000 aggregate on completed operations. The comprehensive general liability insurance shall provide the following coverage: Comprehensive Premises Operation Products/Completed Operations Hazard Contractual Insurance Underground Hazard Explosion & Collapse Hazard Independent Firm and Subcontractor Broad Form Property Damage Personal Injury Automobile liability insurance minimum combined single limits of $1,000,000 for any one person and subject to the same limit for each person, $1,000,000 on account of any one accident. This insurance shall include bodily injury and property damage for the following vehicles: Owned Vehicles Non-owned Vehicles Hired Vehicles Umbrella Policy. At the option of the Firm, primary limits may be less than required, with an umbrella policy providing the additional limits needed. This form of insurance will be acceptable provided that the primary and umbrella policies both provide the insurance coverage's herein required. However, any such umbrella policy must have minimum coverage limits of $3,000,000.00. All policies shall name the City of Danville, its officers, agents, and employees, as additional insured. This coverage shall be reflected on the Certificates of Insurance (including any endorsements or riders thereto), which will be provided to the City. Each Certificate of Insurance shall require that notice be given thirty (30) days prior to cancellation or material change in the policies to the Director of Purchasing. Written evidence of the insurance required herein shall be filed with the City not later than thirty (30) days following the date of the award of the Contract. A copy of the evidence of insurance shall be filed with the Director of Purchasing. Payments to subcontractors: The Firm shall take one of the two following actions within seven days after receipt of amounts paid to the Firm by the City of Danville for work performed by the subcontractor Pay the subcontractor for the proportionate share of the total payment received from the agency attributable to the work performed by the subcontractor under that contract; or Notify the agency and subcontractor, in writing, of his intention to withhold all or a part of the subcontractor's payment with the reason for nonpayment. 13
Individual Firms shall provide their social security numbers and proprietorships, partnerships, and corporations to provide their federal employer identification numbers. The Firm shall pay interest to the subcontractor on all amounts owed by the Firm that remain unpaid after seven days following receipt by the Firm of payment from the City of Danville for work performed by the subcontractor, except for amounts withheld as allowed in subdivision 1. Unless otherwise provided under the terms of this contract, interest shall accrue at the rate of one percent per month. The Firm shall include in each of its subcontracts a provision requiring each subcontractor to include or otherwise be subject to the same payment and interest requirements with respect to each lower-tier subcontractor. A Firm's obligation to pay an interest charge to a subcontractor pursuant to the payment clause in this section shall not be construed to be an obligation of the City of Danville. A contract modification shall not be made for the purpose of providing reimbursement for the interest charge. A cost reimbursement claim shall not include any amount for reimbursement for the interest charge. Security Exchange Commission Registration: Contractors organized as a stock or nonstock corporation, limited liability company, business trust, or limited partnership or registered as a registered limited liability partnership shall be authorized to transact business in the Commonwealth as a domestic or foreign business entity if so required by Virginia Title 13.1 or Title 50 or as otherwise required by law. A Contactor organized or authorized to transact business in the Commonwealth pursuant to Virginia Title 13.1 or Title 50 shall include in its bid or proposal the identification number issued to it by the State Corporation Commission. Any bidder or offeror that is not required to be authorized to transact business in the Commonwealth as a foreign business entity under Title 13.1 or Title 50 or as otherwise required by law shall include in its bid or proposal a statement describing why the bidder or offeror is not required to be so authorized. 14