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AGREEMENT FOR
CLAIMS ADMINISTRATION SERVICES
Article 1. GENERAL
This Agreement is entered into on July 1, 2020 by and between the City of Arcadia ("City"), a California
public entity, and AdminSure, Inc. ("Administrator"), having an office at 3380 Shelby Street, Ontario, CA
91764.
Article 2. SCOPE OF APPOINTMENT/RELATIONSHIP OF THE PARTIES
Administrator, its agents and employees are hereby appointed as the City agents and representatives to
administer the City's self-insured workers' compensation programs and processes, evaluate, adjust and
handle workers' compensation claims against the City. Administrator agrees to provide the services set
forth in Article 4 of this Agreement.
The relationship of Administrator and the City established by this Agreement is that of independent
contractors,and nothing contained in this Agreement shall be construed to establish an employer/employee
relationship or to constitute the parties as partners, joint ventures, co-owners, or otherwise as participants
in a joint and common undertaking. Administrator, its agents and employees are representatives of the
City only for the purpose of administering the Cities' self-insured workers' compensation program as set
forth in this Agreement, and they have no power or authority as agent, employee, or in any other capacity
to represent, act for, bind or otherwise create or assume any obligation on behalf of the City for any purpose
whatsoever, except as specifically required to perform Administrator's obligations under this Agreement.
Article 3. DURATION
This Agreement applies to all work performed by Administrator which is described in Article 4, whether
performed in anticipation of or following the execution of this Agreement. The initial term shall begin on
July 1, 2020 and shall expire June 30, 2023. Subsequent annual terms from July 1, to June 30, may be
mutually agreed upon between the parties.
The Agreement shall automatically renew from year-to-year subject to termination by either party at any
time during the life of the Agreement upon sixty (60) days written notice. The City of Arcadia maintains the
right to terminate this Agreement if the City determines that it is in the best interest to do so, in the City's
sole discretion and with or without cause. In the event the City purchases workers'compensation insurance
or its Certificate of Consent to Self-Insure is rescinded or revoked, this Agreement shall automatically
terminate upon the effective date of such event. When this Agreement is terminated, the parties shall, as
necessary, make an adjustment to the payment schedule in Article 6 to prorate fees through date of
termination. Thereafter, the City shall pay Administrator moneys due and owing after such adjustment, if
any, or Administrator shall refund moneys due and owing City after such adjustment, if any. Adjustments
due and owing shall be paid within 60 days after termination of the Agreement.
Upon notice of termination of the Agreement, the Administrator will fully cooperate with the new
Administrator, and the City in providing required information and service. Failure to fully cooperate will
result in a 10% reduction in fees paid to the Administrator during the period the Administrator does not fully
cooperate.
Article 4. ADMINISTRATOR SERVICES
Administrator will provide the City of Arcadia the following services:
1. Claims Administration
A. Administrator will adhere to the Minimum Performance Standards for Workers' Compensation
Claims Administration Policy adopted by CIPA.
B. Provide all forms and reports necessary for the efficient operation of the City's programs of
self-insurance with respect to workers' compensation claims and prepare and file all forms and
reports required by law in a timely manner.
C. Administrator will participate and assist the City in coordination of this program with other
associated disability and medical programs.
D. At the request of the City, Administrator will attend hearings at no charge to the City.
E. Maintain records in accordance with legal requirements.
F. Perform other general administrative services, as necessary, to effectively discharge the
City's duties to its employees and under the workers' compensation State statutes.
2. Communication and Training
A. Attend CIPA and City meetings as requested.
B. Conduct on-site formal educational programs for supervisors, managers and other staff
responsible for managing the workers' compensation program as requested, and at least once
a year.
C. Review open claims, procedures and other issues on-site at City, as requested.
D. Conduct meetings with City preferred medical providers to maximize effectiveness of
procedures and medical care as requested, and no more than quarterly for the City.
E. To the extent allowable by law, provide copies of file correspondence and documentation as
requested by CIPA and/or City.
3. State and Federal Reports
A. Prepare Self-Insurer's Annual Reports for City and/or CIPA's signature and submission to the
State of California.
B. Prepare Federal Information Return (Forms 1099) for applicable payments.
4. Information Management S sy tem
A. In coordination with CIPA and/or City, develop management reports that assist CIPA and/or
City and Administrator in effectively managing the workers' compensation program. Standard
Reports will be provided within ten (10) days after the end of the month or quarter.
B. Any hardware or cabling required by City to access the on-line system is City's responsibility.
C. The Administrator will report loss information to the excess insurance carrier(s), including CIPA,
in accordance with established procedures.
5. Consulting
Provide a comprehensive Annual Program Review which:
A. Analyzes past statistics, program costs and projects future trends.
B. Recommends program changes to favorably impact costs and improve procedures.
C. Upon request, Administrator will provide a comprehensive program review more frequently
than annually.
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6. Compliance
Provide all services in accordance with the applicable Workers' Compensation Laws of the State of
California.
7. Allocated Loss Expense
"Allocated loss expense" shall mean all reasonable costs actually incurred by Administrator including,
without limitation, all Workers' Compensation Appeals Board or court fees and expenses; fees for
service or process; copy service; fees to retain attorneys; the cost of the services of investigators and
detectives to perform surveillance; and other professional assistance required to provide these
services, if previously authorized by City. Allocated loss expense shall not include any costs or
expenses incurred by Administrator in connection with services performed by it, which services are
approved by CIPA and/or City and are normally performed in the course of administering workers'
compensation claims. Allocated charges are to be paid by City.
8. Index Bureau & Edex Charges
Index Bureau and Edex charges will be paid by the Administrator. Copies of the reports will be
distributed to City within 10 days of receipt.
9. Storage of Closed Claims
Administrator will provide storage of all closed claims, including storage of closed claims from prior
administrator(s).
Article 5. CITY OBLIGATIONS
In connection with this Service Agreement, the City accepts responsibility to:
A. Provide data to Administrator on a timely basis to permit compliance with State of California
reporting requirements.
B. Arrange for checking account and provide appropriate funding.
Article 6. COMPENSATION
In consideration of the services provided by Administrator, the City agrees to pay Administrator the monthly
fee as shown below. CIPA has no obligation to pay fees:
A. Claims Administration
Monthly claims administration fees by City are shown below:
Monthly Fee Monthly Fee Monthly Fee
(7/1/20-6/30/21) (7/1/21-6/30/22) (7/1/22-6/30/23)
$7,884 $8,120.52 $8,364.14
B. Ancillary Services
Ancillary services are not tied to this Agreement and may be purchased from another vendor at the
option of Member Cities. When ancillary services are purchased from Administrator, the fee shall
be as follows and no additional fees shall be charged without the City's written authorization and
incorporation into the Agreement: All ancillary services provided through Administrator by a third-
party vendor shall be billed at actual cost with no "mark-up" by the Administrator.
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1. Bill Review
The flat fee per bill, including challenged and duplicate bill is$9.00, plus when applicable, $0.60 for
e-bill/OCR.
The PPO fee is 20% of savings above the fee schedule except for Blue Cross PPO which is at
23% of savings. PPO fees shall be billed at cost with no mark-up.
If bill review services are not purchased from AdminSure, all electronic data interchange services
will be provided by vendor, and not by AdminSure.
2. Utilization Review
The Utilization Review fee is$85.00 flat fee per review/decision. Examiners will perform Utilization
Review in accordance with the Guidelines.
Utilization review by a physician is billed separately at ten (10) minute increments, at the rate of
$200 per hour.
Article 7. REIMBURSEMENTS
The City agrees to reimburse Administrator within thirty (30) days of presentation of an itemized statement
for the costs of charges not considered allocated expenses or included in Administrator's fee, which are
incurred on behalf of the City, provided the City has previously authorized such expense.
Article 8. AUDITS
Administrator agrees to cooperate with CIPA and the City in making any and all claim files and records
available to CIPA and the City for audit by CIPA or the City's appointed representatives including auditors.
During normal office hours, CIPA and/or the City's representatives, including auditors shall have reasonable
access to the necessary portions of Administrator's facilities, files and records for review or audit purposes,
so as not to interfere with Administrator's normal business.
Article 9. ASSIGNMENTS
Neither party may assign this Agreement, in part or in total, without the express written consent of the other
party.
Article 10. LEGAL RESPONSIBILITIES
The Administrator shall comply with all State and Federal laws, as well as all county and municipal
ordinances and regulations which in any manner affect the performance of services pursuant to this
agreement, or persons employed by the Administrator.
Administrator agrees that in the performance of the terms of this Agreement, no discrimination shall be
made in the employment of persons because of race, color, national origin, ancestry, or religion of such
persons. A violation of this provision will subject the Administrator to all penalties imposed by law.
Article 11. INSURANCE
The City reserves the right to modify these requirements, including limits, based on the nature of the risk,
prior experience, insurer, coverage, or other special circumstances. If the existing policies do not meet the
insurance requirements set forth herein,Administrator agrees to amend, supplement or endorse the policies
to do so.
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Without limiting the indemnity provisions of the contract, the Administrator shall procure and maintain in full
force and effect during the term of the contract, the following policies of insurance.
1. Minimum Scope of Insurance
Coverage shall be at least as broad as:
A. Commercial General Liability (CGL) which affords coverage at least as broad as Insurance
Services Office "occurrence" form CG 00 01, including products and completed operations,
property damage, bodily injury, and personal&advertising injury with limits no less than$1,000,000
per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply
separately to this project/location or the general aggregate limit shall be twice the required
occurrence limit.
B. Automobile Liability with coverage at least as broad as Insurance Services Office Form CA 0001
covering "Any Auto" (Symbol 1) with limit no less than $1,000,000 each accident for bodily injury
and property damage.
C. Workers' Compensation as required by the State of California with statutory limits, and
Employer's Liability Insurance with a limit of not less than $1,000,000 per accident for bodily injury
or disease.
D. Professional Liability with limit of not less than$2,000,000 each claim and$3,000,000 aggregate.
Covered professional services shall specifically include all work to be performed under the contract
and delete any exclusion that may potentially affect the work to be performed.
E. Cyber Privacy Liability in an amount not less than $2,000,000 per claim and annual aggregate,
covering(1)all acts, errors, omissions, negligence, infringement of intellectual property; (2)network
security and privacy risks, including but not limited to unauthorized access, failure of security,
breach of privacy perils,wrongful disclosure, collection, or negligence in the handling of confidential
information, privacy perils, including coverage for related regulatory defense and penalties; (3)data
breach expenses payable whether incurred by CIPA, the City or Administrator, including but not
limited to consumer notification, whether or not required by law, computer forensic investigations,
public relations and crisis management firm fees, credit file or identity monitoring or remediation
services in the performance of services for City or on behalf of City hereunder.
The policy shall contain an affirmative coverage grant for bodily injury and property damage
emanating from the failure of the technology services or an error or omission in the
content/information provided.
If a sub-limit applies to any elements of coverage, the certificate of insurance evidencing the
coverage above must specify the coverage section and the amount of the sub-limit.
F. Crime Bond in amount not less than $2,000,000 to include at a minimum employee theft, forgery
or alteration, computer fraud and funds transfer fraud.
2. Endorsements
Insurance policies shall not be in compliance if they include any limiting provision or endorsement. The
insurance policies shall contain, or be endorsed to contain, the following provisions:
A. Commercial General Liability
(1) Additional Insured: California Insurance Pool Authority and the City of Arcadia, elected
officials, officers, employees, volunteers, boards, agents and representatives shall be
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additional insureds with regard to liability and defense of suits or claims arising out of the work
or operations performed by or on behalf of the Administrator including materials, parts or
equipment furnished in connection with such work or operations.
Additional Insured Endorsements shall not:
1. Exclude"Contractual Liability"
2. Be limited to"Ongoing Operations"
3. Restrict coverage to the "sole" liability of Administrator
4. Exclude"Third-Party-Over Actions"
5. Contain any other exclusion contrary to the contract
Additional Insured Endorsements shall be at least as broad as ISO Form(s) CG 20 10 11 85;
or CG 20 10 and CG 20 37.
(2) Primary Insurance: This insurance shall be primary and any other insurance whether
primary, excess, umbrella or contingent insurance, including deductible, or self-insurance
available to the insureds added by endorsement shall be in excess of and shall not contribute
with this insurance. Coverage shall be at least as broad as ISO CG 20 01 04 13.
B. Auto Liability
(1) Additional Insured: California Insurance Pool Authority and the City of Arcadia, elected
officials, officers, employees, volunteers, boards, agents and representatives shall be
additional insureds with regard to liability and defense of suits or claims arising out of the work
or operations performed by or on behalf of the Administrator.
(2) Primary Insurance: This insurance shall be primary and any other insurance whether
primary, excess, umbrella or contingent insurance, including deductible, or self-insurance
available to the insureds added by endorsement shall be in excess of and shall not contribute
with this insurance.
C. Workers' Compensation
(1) Waiver of Subrogation: A waiver of subrogation stating that the insurer waives all rights of
subrogation against the indemnified parties.
3. Insurance Obligations of Administrator
The insurance obligations under this contract shall be: (1) all the insurance coverage and/or limits carried
by or available to the Administrator; or (2) the minimum insurance coverage requirements and/or limits
shown in this contract; whichever is greater. Any insurance proceeds in excess of or broader than the
minimum required coverage and/or minimum required limits, which are applicable to a given loss, shall be
available to the City. No representation is made that the minimum insurance requirements of this contract
are sufficient to cover the obligations of the Administrator under this contract.
4. Notice of Cancellation
Required insurance policies shall not be cancelled or the coverage reduced until a thirty (30) day written
notice of cancellation has been served upon the City, except ten(10)days shall be allowed for non-payment
of premium.
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5. Waiver of Subrogation
Required insurance coverages shall not prohibit Administrator from waiving the right of subrogation prior to
a loss. Administrator shall waive all rights of subrogation against the indemnified parties and policies shall
contain or be endorsed to contain such a provision. This provision applies regardless of whether the City
has received a waiver of subrogation endorsement from the insurer.
6. Evidence of Insurance
All policies, endorsements, certificates, and/or binders shall be subject to approval by the City as to form
and content. These requirements are subject to amendment or waiver only if so, approved in writing by the
City. The City reserves the right to require complete, certified copies of all required insurance policies,
including endorsements required by these specifications, at any time.
The certificates and endorsements for each insurance policy shall be signed by a person authorized by that
insurer to bind coverage on its behalf. At least fifteen (15) days prior to the expiration of any such policy,
evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed
with the City. If such coverage is cancelled or reduced,Administrator shall,within ten (10)days after receipt
of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance
showing that the required insurance has been reinstated or has been provided through another insurance
company or companies.
7. Deductible or Self-Insured Retention
Any deductible or self-insured retention must be approved in writing by the City and shall protect the
indemnified parties in the same manner and to the same extent as they would have been protected had the
policy or policies not containing a deductible or self-insured retention. The City may require the
Administrator to purchase coverage with a lower retention or provide proof of ability to pay losses and
related investigations, claim administration and defense expenses within the retention. The policy language
shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the
Administrator or the City.
8. Contractual Liability
The coverage provided shall apply to the obligations assumed by the Administrator under the indemnity
provisions of this contract.
9. Failure to Maintain Coverage
Administrator agrees to suspend and cease all operations hereunder during such period of time as the
required insurance coverage is not in effect and evidence of insurance has not been furnished to the City.
The City shall have the right to withhold any payment due until Administrator has fully complied with the
insurance provisions of this contract.
In the event that the Administrator's operations are suspended for failure to maintain required insurance
coverage, the Administrator shall not be entitled to an extension of time for completion of the work because
of production lost during suspension.
10. Acceptability of Insurers
Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than
A:VII and authorized to do business in the State of California, or otherwise allowed to place insurance
through surplus line brokers under applicable provisions of the California Insurance Code or any federal
law. Any other rating must be approved in writing by the City.
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11. Claims Made Policies
If coverage is written on a claims-made basis, the retroactive date on such insurance and all subsequent
insurance shall coincide or precede the effective date of the initial Administrator's contract with the City and
continuous coverage shall be maintained or an extended reporting period shall be exercised for a period of
at least five (5) years from termination or expiration of this contract.
12. Insurance for Subcontractors
Administrator shall be responsible for causing Subcontractors to purchase the same types and limits of
insurance in compliance with the terms of this contract, including adding the City as an Additional Insured,
providing Primary and Non-Contributory coverage and Waiver of Subrogation to the Subcontractor's
policies. The Commercial General Liability Additional Insured Endorsement shall be on a form at least as
broad as CG 20 38 04 13.
Article 12. INDEMNIFICATION
Administrator shall defend, indemnify and hold harmless CIPA and/or the City of Arcadia including its
governing board, directors, officers, administrators, employees, and agents, from any and all claims, losses
and liabilities against or incurred by CIPA and/or the City arising out of the actions, omissions to act or other
conduct of Administrator, its agents, employees or subcontractors, in the performance of its duties under
this Agreement or otherwise in connection with its activities pursuant to this Agreement. This includes, but
is not limited to, any breach by Administrator of its duties or responsibilities under the Agreement, as well
as any losses occasioned by a failure of Administrator to provide the services contracted for by CIPA and
the City pursuant to this Agreement. In addition, Administrator agrees to assume the defense, at
Administrator's expense, using attorneys reasonably acceptable to CIPA of any lawsuit or other proceeding
which names CIPA and or the City of Arcadia or its directors, officers, employees and agents as defendants.
Article 13. BUSINESS LICENSE.
Administrator shall maintain a business license for each City as required.
Article 14. RIGHTS TO DATA
All claim files, paper and computer, are and shall remain the property of CIPA and/or the City of Arcadia.
CIPA and/or the City reserve the right to obtain original claim files, data discs, copies of reports and other
documents applicable to CIPA and/or the City in the event this Agreement is terminated. No documents
shall be destroyed unless they have been scanned into the system. Original documents received after
termination of this agreement shall be forwarded to the new administrator. Administrator shall bear the
cost of relocating any claim files from the premises of Administrator to the premises of CIPA or designated
party upon termination of the Agreement.
Article 15. CONFIDENTIALITY
It is agreed and understood that Administrator shall treat information, reports and analyses obtained or
developed pursuant to this Agreement as being confidential. Prior written consent from CIPA and/or the
City of Arcadia shall be required before any information, in any format, is disclosed to any third party. It is
further agreed and understood that Administrator shall produce, maintain and dispose of all such
information, reports and analyses in a manner to guarantee reasonable safeguards to such confidentiality.
Article 16. INTERNAL SERVICES PROVIDED BY ADMINISTRATOR
No internal services shall be provided for a fee without the express written permission of the City.
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Article 17. EXTERNAL PROVIDERNENDOR SERVICES
All services provided by external providers/vendors shall be approved by the City and billed at actual cost
with no "mark-up" by the Administrator. All external providers/vendors will be selected from a panel
approved by the City.
Article 18. DOCUMENTS/CORRESPONDENCE
City will designate documents/correspondence they will require for their files and a timeframe for receipt of
such documents/correspondence.
Article 19. MATERIAL PROBLEMS AND REGULATORY CHANGES
The Administrator will advise CIPA on any material problems or need for improvements in any matter related
to this Agreement, including advice relating to changes and proposed changes in statutes, regulations and
rules affecting the City's workers' compensation programs.
Article 20. CONFLICT OF INTEREST
Administrator agrees to disclose to CIPA any potential conflicts of interest, including but not limited to other
sources of income.
Article 21. NOTICES
All notices required or permitted hereunder shall be sent to the other party at the following addresses, or at
such other address as may be provided in writing to the other party from time to time:
To Administrator: Alithia Vargas-Flores
AdminSure, Inc.
3380 Shelby Street
Ontario, CA 91764
avargas-flores@adminsure.com
To City: Hue Quach
Administrative Services Director
City of Arcadia
240 W. Huntington Drive
Arcadia, CA 91007
To CIPA: Janet D. Kiser
General Manager
California Insurance Pool Authority
366 San Miguel Drive
Suite 312
Newport Beach, CA 92660
jk@kiserco.com
Article 22. DWC AUDIT PENALTY
All penalties assessed by the Workers' Compensation Division, Office of Benefit Assistance and
Enforcement shall be paid, whether directly or through reimbursement, by the party responsible for the
assessment of the penalty. No claim shall be settled to include payment of any penalty without the express
written consent of the City. Settlement of any penalty incurs an additional settlement cost and the
responsible party shall pay the additional cost for the penalty. If either party disputes the liability for
payment of the penalty, the parties shall negotiate to resolve the dispute. If the dispute is not resolved
within 30 days after notice to both parties of the penalty, then such dispute shall be submitted to arbitration
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for determination of the party responsible for the assessment and payment of the penalty. The provisions
of this Article shall survive any termination of this Agreement.
The Administrator shall provide a detailed monthly listing of penalties identifying those payable by the City
and those payable by the Administrator. The listing shall include fines, penalties and 10% self-imposed
increases paid through settlement of a claim. The obligations of the Administrator to pay for fines, penalties,
and 10% self-imposed increases shall survive the termination of this Agreement.
Article 23. MMSEA REPORTING & PENALTIES
The Administrator shall report all claims in compliance with Medicare, Medicaid and SCHIP Extension Act
(MMSEA) Section 111 Mandatory Reporting.
All Section 111 penalties shall be paid by the Administrator. CIPA and the City of Arcadia shall be promptly
notified of any Section 111 penalties assessed. The obligation of the Administrator to pay for penalties
shall survive the termination of this Agreement.
Article 24. ASSIGNED PERSONNEL
Each examiner assigned to the City will not have a case load that exceeds 150. Caseloads for examiners
shall not exceed 150, unless approved in writing by the City. Caseloads that include future medical and
medical only claims shall count these claims as 2:1 in the caseload limit. Dedicated examiners will not
handle claims for any other account. Designated examiners, assistants and medical only clerks will be
assigned. If the caseload of an examiner exceeds 150 claim files for two consecutive months, CIPA and/or
the City will have the discretion of allowing the overflow or will have the Administrator assign an additional
non-dedicated examiner to handle the overflow claims.
Administrator shall provide CIPA and the City with an accounting of caseloads each June 30 and December
31. The accounting for each examiner shall include (1) the name or pseudo name of all assigned clients;
and (2) the number of claims, by claim type, for each client. Each examiner shall sign acknowledgement
of their claims count and provide to CIPA and the City.
The examiner assigned to the account must have a minimum of five (5) years full-time experience as a
workers'compensation examiner in California, unless requirement is waived by the City, and the examiner
shall have a California Self-Insured Workers' Compensation Certificate.
The City must approve personnel assigned to their account. If, for any reason, the service provided by
assigned personnel is unsatisfactory, the Administrator will agree to assign replacement personnel
approved by the City.
Article 25. FUNDS
The City may provide Administrator initial funding in an amount mutually agreed to by the City and
Administrator to be held in trust by and used by Administrator to meet the obligations of the City.
Administrator and the City may establish written procedures for approval or ratification of expenditures from
such trust accounts and methods of handling such funds; in such event Administrator shall provide a copy
of the written procedures to the City. Trust funds shall be used and paid out by Administrator only in the
manner set forth in this Agreement.
Article 26. WAIVER
The failure of either party at any time to enforce any right or remedy available to it under this contract with
respect to any breach or failure by the other party shall not be constructed to be a waiver of such right or
remedy.
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Article 27. MISCELLANEOUS
This Agreement shall be governed by, and construed in accordance with, the laws of the State of California.
If any of the provisions of this Agreement shall be held by a court or other tribunal of competent jurisdiction
to be unenforceable, the remaining portions of this Agreement shall remain in full force and effect.
All terms and conditions of the Administrator's proposals of March 26,2020 are incorporated into this
contract, except that in the event of any conflict between the Agreement and the proposal, this Agreement
shall be controlling. Any modifications of this Agreement must be in writing and signed by both parties.
Each member of CIPA identified herein shall be a third-party beneficiary of this Agreement with the right to
enforce the provisions of this Agreement against Administrator.
In witness whereof the parties hereto have signed this Agreement as of the date set forth in Article 1.
CITY OF ARCADIA APPROVED AS TO FORM:
Dominic LazzaretStephen P. Deitsch
City Manager City Attorney
Dated: "i•—:-3C. l j ZtZo
AT-Try
Pd 001
City Clerk
ADMINISTRATOR: ADMINSURE, INC.
i /,I , 4
Authorized Sig sure
Print Name
Title
icy/i11,
Date
11 of 20
ADDENDUM 1
MINIMUM PERFORMANCE STANDARDS
CLAIMS ADMINISTRATOR
CIPA's Minimum Performance Standards for Workers' Compensation Claims Administration Policy is
adopted by the Board of Directors and may be revised from time-to time. The adopted Policy is to be
incorporated as a part of the Agreement between the City of Arcadia ("City") and the Administrator and is
contained below. Any future revisions to the Policy will be sent to the Administrator and automatically
incorporated into the Agreement between the City's and the Administrator.
The most stringent requirements shall apply if there is any conflict between these standards and the Labor
Code or Code of Regulations.
1. CASELOADS
A. Caseloads for examiners shall not exceed 150, unless approved in writing by the City. Caseloads
that include future medical and medical only claims shall count these claims as 2:1 in the caseload
limit.
B. Administrator shall provide CIPA and the City with an accounting of caseloads each June 30 and
December 31. The accounting for each examiner shall include(1)the name or pseudo name of all
assigned clients; and (2) the number of claims, by claim type, for each client. Each examiner shall
sign acknowledgement of their claims count and provide to CIPA and the City.
C. Supervisory personnel shall not handle a caseload. Exceptions may be made for a small number
of claims involving special issues.
2. INITIAL FILE SET-UP AND THREE-POINT CONTACT
A. Claims will be created and entered in the computer within one (1) business day of receipt of the
Form 5020.
B. All Employers' Reports of Occupational Injury or Illness, or notification of a new claim from any
other source, will be reviewed for compensability and a decision made to accept, delay or deny
within seven (7) calendar days of receipt, or sooner if a delay in payment or notice will result.
C. Employees will be contacted by telephone or in person within one (1) business day of receipt of a
claim by the Administrator, unless the employee is represented by an attorney. During this initial
contact, employees will be provided with an explanation of their benefits and will be asked whether
they have any questions or concerns, which shall be addressed immediately. A benefits pamphlet
will be sent to the employee notifying them of their rights under workers' compensation laws of
California. The examiner shall contact the employer for assistance if unable to contact the
employee. All contact and attempts to contact employee and employer shall be documented in the
file.
D. The City will be contacted within two (2) business days of receipt of a claim to verify continuing
disability, clarify issues and request additional required information. Contact will be made sooner
if delay will result in a late payment or a penalty situation.
E. The employee's treating doctor will be contacted within two (2) business days of receipt of claim to
verify duration of disability, compensability, proposed treatment, clarify issues and request
additional information. Contact will be made sooner if a delay will result in a late payment or penalty
situation. Thereafter, until the employee returns to work, the examiner shall maintain contact at
least every thirty (30) calendar days with the attending physician, obtaining medical reports,
monitoring medical treatment and facilitating an early return to work.
3. CASE REVIEW
A. Lost-time claims, except for future medical claims, shall be reviewed on diary by the assigned
examiner no less than every thirty (30) calendar days or more frequently when needed.
B. In cases where claims investigations are being conducted, claims will be placed on diary no less
than every fourteen (14) calendar days by the assigned examiner until all outstanding issues have
been resolved.
C. Medical only claims will be reviewed no less than every thirty (30) calendar days for possible
closure. They will be transferred to an indemnity claim when disability is due, compensability is an
issue, they are over 120 calendar days old or medical payments (excluding diagnostic expenses)
exceed$1,500.
D. Future medical claims will be reviewed on diary at least every ninety(90)calendar days. The extent
and appropriateness of medical treatment shall be evaluated and documented in the notepad
entries.
E. All files shall be reviewed for closure and closed within seven calendar days from the date all issues
have been resolved.
4. COMMUNICATION
A. The injured or ill employee will be contacted at least every two (2) weeks while they are disabled
from working, unless they are represented by an attorney or their claim has been finalized.
B. Employer contact is required to verify continuing disability and explore the availability of modified
or light duty work before processing disability payments.
C. The employee will be called before sending notification of permanent disability and PQME letter, to
explain the process and answer the employee's questions.
D. The City will be notified of any claim being delayed or denied before a Notice is sent to the
employee. The City will also be notified before any questionable claim is accepted.
E. The City will be notified within three (3) business days after knowledge that employee has been
found permanent and stationary by the treating doctor.
F. Telephone calls will be returned within one (1) business day. If the staff member called is not
available within this time frame, another designated staff member will return the call.
G. All written communications received shall be stamped with date of receipt.
H. The examiner shall respond to all written communications within five (5) business days of receipt
or sooner if an immediate response is required.
5. FILE DOCUMENTATION
A. All files will have a"Plan of Action"identified, including time frames for completing activity. Progress
on the plan of action will be documented, as well the reasons for any delays or modifications to the
plan and include all information that relates to the direction and value of the case. An active case
strategy will be documented in the claim until closure. The plan of action shall be updated at each
diary review.
B. Delayed claims will clearly document the reasons for the delay, the information needed to
determine compensability and the anticipated date of a final decision. In no case will the final
decision be more than eighty-five (85) calendar days from the t City's date of knowledge. Cases
will be diaried at least every fourteen (14) calendar days or sooner to monitor the investigation
process. All delay in decision letters will be reviewed by the appropriate supervisor before mailing.
C. All denied claims will document the factual, medical or legal basis for denial in accordance with
State statutes. Denials will be made as soon as information is available that the claim should be
denied. All denial letters will be reviewed by the appropriate supervisor before mailing.
D. Notes and activities entered in the computer system must be dated and identify who completed.
All action must be documented in the computer file notes.
E. File notes shall not be copied from prior entries without reviewing for relevance and accuracy.
F. All files will contain file contents as specified in the California Code of Regulations.
6. SUPERVISORY REVIEW
A. Indemnity claims, excluding future medical claims, will be reviewed by the appropriate supervisor
no less frequently than every 120 calendar days and at the following intervals: file creation, before
cases are delayed and/or denied, when reserve increases exceed the examiner's limit of authority,
proposed settlements or payments exceed the examiner's limit of authority, at AOE/COE and
subrosa investigative referrals, at medical case management referrals, upon defense counsel
referrals, fifteen (15) calendar days before mandatory settlement conferences and fifteen (15)
calendar days before scheduled trials. Review by the supervisor, including recommended action,
shall be documented.
B. Future medical claims shall be reviewed by the supervisor at least every 180 calendar days.
Review shall include the extent and appropriateness of medical treatment and the supervisor shall
document their findings and recommendations.
C. Supervisors shall review files to determine if present and prior plans of action are being
implemented.
D. Supervisors shall review all status reports, including adequacy of reserves, before forwarding to
CIPA. Any outstanding issues should be identified by the supervisor and the status report corrected
prior to forwarding to CIPA.
7. PAYMENTS & NOTICES
A. Accurate and timely benefits will be paid to employees as required by State statutes.
B. All medical, legal, rehabilitation, investigation and other service provider invoices will be reviewed
before payment regarding causal relationship to injury and if services billed are for services
requested. Invoices will be paid according to State allowable rates, appropriateness, compliance
with any agreements in place with the facility,or as agreed to when service was requested. Vendors
providing service at an excessive rate, or billing for services that are not requested or required will
be notified of the amount and reason for their reduction in payment. The City shall be notified of
any provider who continues to bill unreasonably for services.
C. Reimbursements to injured workers shall be issued within fifteen (15) calendar days of the receipt
of the claim for reimbursement.
D. Advance travel expenses shall be issued to the injured worker no less than ten (10)calendar days
prior to the date of travel.
E. Indemnity files shall be balanced at least every 180 calendar days to reconcile periods and amounts
due compared to actual payments. File notes shall contain the reconciliation.
F. Penalties shall be coded to be identified as a penalty payment.
G. Annual proof of life confirmation shall be obtained from claimants receiving life pensions.
H. Accurate and timely Benefit Notices will be sent in accordance with the California Code of
Regulations.
8. INVESTIGATIONS
A. Investigations shall be initiated within three (3) business days after a claim is delayed. This may
include, but not be limited to, taking employee/witness statements, obtaining services of
investigator, requesting medical records and beginning medical evaluation process.
B. On questionable indemnity claims, investigative assignments will be made to outside vendors with
prior authorization from the City. Referrals will include specific written instructions regarding the
scope of the investigation.
C. Where medical causation is unclear, a qualified medical examination (QME) or agreed medical
examination (AME) will be scheduled. All relevant medical records and investigative information
will be provided to the physician for review before the date of examination.
D. An Index Bureau and Edex Request will be submitted on all new claims. Thereafter, on claims not
finalized, requests will be submitted at least annually or at appropriate intervals if the possibility of
other injuries is suspected, and when requested by the City.
E. Investigators will be selected from a panel approved by the City. The examiner shall evaluate and
monitor the panel's performance. All concerns or recommendations for panel additions/deletions
will be discussed with the City.
F. Copies of voluminous medical records by subpoena or copy service will not be obtained unless
necessary to the defense of the claim. The examiner will first attempt to obtain copies through
plaintiffs' attorney by seeking their cooperation in providing the desired records.
9. MEDICAL MANAGEMENT& COST CONTAINMENT
A. Employees who have not pre-designated a personal physician will be directed to panel medical
providers. Panel medical providers will be selected and approved by the City. The examiner shall
evaluate and monitor the panel's performance. All concerns or recommendations for panel
additions/deletions will be discussed with the City.
B. Medical treatment will be monitored to ensure that treatment is appropriate and related to the
compensable injury or illness. Inappropriate medical reports will be objected to timely.
C. Independent medical examinations by qualified physicians will be scheduled when needed to
address necessity or reasonableness of care. A cover letter will be provided to the physician
outlining the specific issues and concerns along with the examiner's questions. All medical records
shall be sent to the physician prior to the examination.
D. Pre-existing medical conditions and medical records will be explored/obtained on lost time claims
and as requested by the City.
E. Treatment recommendations for care such as physical therapy, chiropractic manipulations, etc.,
will be verified with the physician as to duration, frequency and anticipated results.
F. Authorization must be obtained from CIPA in advance for the selection of an Agreed Medical
Examiner (AME) on claims reportable to CIPA. Authorization must be obtained before any
agreement is reached with the applicant's attorney.
G. Claims referred for outside medical management services will reflect the intent and scope of
services requested and must be authorized on a case-by-case basis by the City. The City will
approve medical management firms and all other review firms.
H. On future medical claims, yearly medical reports will be obtained if the employee continues to
receive medical treatment.
I. Medical bills submitted without a supporting medical report will not be paid until a medical report is
obtained. Medical bills will be paid/denied/objected to in accordance with State statutes and paid
in accordance with the fee schedule or negotiated rate.
J. Medical-legal costs will be reviewed for appropriateness and necessity. Bills which do not qualify
as valid medical-legal expenses will be objected to on a timely basis according to the Labor Code.
10. RETURN TO WORK
A. The City shall be notified immediately of an injured employee's temporary work restrictions or
release to full duty and assist in returning the employee to work. Follow-up with the City shall take
place no less than fourteen (14) calendar days after initial notice to the City.
B. The City shall be notified immediately of an employee's permanent work restrictions so that the
City can determine the availability of alternative, modified or regular work. Follow-up with the City
shall take place no less than fourteen (14) calendar days after initial notice to the City.
11. SUPPLEMENTAL JOB DISPLACEMENT/REHABILITATION MANAGEMENT
A. For injuries on or after January 1,2004, the examiner shall coordinate with the City to offer modified
or alternate work within ten (10) calendar days of the last payment of temporary disability.
B. For injuries on or after January 1, 2004, employees not returning to work shall be provided a
supplemental job displacement benefit in accordance with regulations, including the issuance of
timely notices.
12. ALLOCATION OF CLAIM COSTS TO APPROPRIATE FILE
A. For all injuries resulting in the need for permanent disability and/or future medical care where the
injured worker has a prior claim to the same body part, the examiner shall obtain a medical opinion
addressing allocation and payment of future benefits. The medical opinion is to determine the
specific allocation for permanent disability and a separate allocation for future medical care related
to the industrial injuries. The percentage allocated to indemnity and future medical care benefits
will not be assumed to be the same.
B. Payments and reserves will not be lumped on one claim when a claimant has multiple claims,
including continuous trauma claims. Files will accurately reflect the payments and reserves related
to the exposure on each separate claim.
13. LITIGATION MANAGEMENT
A. The examiner shall retain primary responsibility on all claims referred to defense counsel. Defense
counsel will not be used to perform routine activities that should be the responsibility of the
examiner. Some examples of routine tasks include, but are not limited to, setting medical
examinations, preparing medical cover letters, filing and serving medical reports, negotiating liens,
and arranging for photocopying, investigators or other outside vendors. Exceptions will be
approved by the City.
B. Legal counsel will be selected from a panel approved by the City. The examiner shall evaluate and
monitor the panel's performance. Legal counsel will be reviewed for their ability to identify issues,
aggressiveness in resolving claims, responsiveness, timeliness, and billing practices. All concerns
or recommendations for panel additions/deletions will be discussed with the City.
C. Claims sent to defense counsel will be accompanied by a transmittal letter outlining the status of
the case, result of investigation, primary issues, requested action, and a copy of any pertinent
documentation. Ongoing documentation will be sent timely to defense counsel.
D. At the close of discovery on cases going to trial, the file shall be adequately prepared to include
necessary depositions, medical examinations and witness identification and contact information.
E. When copies of medical reports or other records are required by defense counsel, the examiner
shall make copies and provide to defense counsel. All invoices for photocopying will be closely
monitored to assure compliance with this requirement.
F. If defense counsel or the examiner learns of new information that could influence the outcome of
the trial, they must immediately inform each other. The strategy to resolve the claim will then be
assessed.
G. The examiner is responsible for monitoring compliance with the Workers' Compensation Program
Defense Counsel Policy, attached as Exhibit A. The City, and CIPA if applicable, shall be copied
on follow-up requests to defense counsel when out of compliance. All examiners are responsible
for being fully knowledgeable of requirements in Exhibit A.
14. CLAIM RESOLUTION &SETTLEMENT AUTHORITY
A. Action shall be taken within fifteen (15) calendar days to finalize a claim upon receipt of medical
information that a claim can be finalized. Continued follow-up shall occur, including with legal
counsel to facilitate a settlement. The file shall document all efforts and communications regarding
a settlement.
B. Claim files shall fully document the value of any anticipated or proposed settlement. Settlement
worksheets shall be prepared and submitted to City, and to CIPA if indicated, for approval on all
settlements as required. Overpayments shall be identified on any settlement request.
C. All settlement offers requiring any payment or potential payment from CIPA must be approved in
writing in advance by CIPA. Neither the examiner or legal counsel shall make any
recommendations or commitments to injured employees or their legal counsel for settlements that
involve or potentially involve CIPA funds, without CIPA's prior approval.
D. Proof of settlement authorization from the City, and CIPA if applicable, shall be maintained in the
file.
E. A copy of all settlement documents on reportable claims shall be sent to CIPA within fifteen (15)
calendar days of receipt by examiner.
15. SUBROGATION
A. Subrogation possibilities will be identified within five (5) business days after a claim is opened, or
within five(5) business days after information is available that subrogation may exist. The claim file
shall document subrogation possibilities and all action related to pursuing.
B. The party responsible for the injury shall be notified of the City's right to subrogation within fourteen
(14) calendar days after the identity of the responsible party is known by examiner.
C. Contact with the responsible party and/or insurer to provide notification of the amount of estimated
recovery shall be made at least every sixty (60) calendar days or sooner if costs escalate.
Subrogation shall be pursued to maximize the recovery for benefits paid and credit for future benefit
payments.
D. The City shall be notified within fifteen (15) calendar days after the examiner's knowledge that
injured employee filed a civil action against the responsible party. Subrogation counsel shall be
assigned to file a Lien or Complaint in Intervention to the civil action, if authorized by the City. All
discussions and actions regarding subrogation shall be documented in the file.
E. The City approval is required to waive pursuit of subrogation or agree to a settlement of a third-
party recovery. This approval shall be documented in the claim file.
F. CIPA's approval is required to waive pursuit of subrogation or agree to a third-party settlement if
there is potential for the claim to exceed the City's self-insured retention.
16. RESERVING
A. Reserves established on indemnity claims will reflect the ultimate probable cost of each claim
based on the information developed to date. Reserve worksheets will be used to document all
reserve changes and reflect amounts allocated to temporary disability, 4850 benefits, permanent
disability, life pension, vocational rehabilitation, medical care and allocated expense. The injured
workers' disability, age and occupation will be considered in estimating permanent disability.
B. Reserves will be evaluated at each diary review and modified upon receipt of new information.
Files shall document rationale for reserves.
17. EXCESS INSURANCE REPORTING
A. The examiner shall report to the excess insurance carrier(s), including CIPA, in accordance with
established procedures.
B. CIPA's Excess Claims Status Report shall be used for all initial, periodic and final reports. All
portions of the report shall be completed and include the information requested. Supervisors must
review for completeness and accuracy of reports.
C. As defined by CIPA's Memorandum of Coverage, as may be modified from time to time, the
following claims are reportable to CIPA within five (5) business days after receipt by examiner:
1. A serious injury to two or more employees
2. Paraplegic
3. Quadriplegic
4. Brain Injury
5. Serious burns
6. Loss of vision
7. Death
8. Amputation of a major extremity
D. Initial Excess Claim Status Reports are due within ten (10) business days after the total incurred is
50%or more of the City's self-insured retention.
E. Excess Claim Status Reports on reportable claims are due to CIPA no less frequently than as
follows, and sooner if claims activity warrants:
1. Every three (3) months on claims not finalized by settlement or award
2. Semi-annually on claims finalized by settlement or award
3. Within fifteen (15) calendar days of the total incurred increasing/decreasing by 25% or
more
4. Within thirty (30)calendar days of a reportable claim being closed
5. Within thirty (30) calendar days of no longer meeting the reporting requirements (for
example, reserves less than 50% of the City's SIR)
6. Within ten (10) calendar days of receipt of a New & Further filing
7. As requested by the City or CIPA
18. MEDICARE REPORTING
A. The examiner shall report all claims in compliance with Medicare, Medicaid and SCHIP Extension
Act (MMSEA) Section 111 Mandatory reporting.
B. Medicare eligibility shall be documented in the file no later than at the time the file is evaluated for
settlement.
EXHIBIT A
Utilization Review Authorization Criteria
*See Attached Exhibit-A"
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Rachelle Arellano
From: Stephen Deitsch <Stephen.Deitsch@bbklaw.com>
Sent: Tuesday, June 23, 2020 12:46 PM
To: Rachelle Arellano
Cc: Arcadia City Clerk
Subject: RE: City Attorney's Review June 23, 2020
Rachelle, the Agreement with AdminSure for Claims Administration Services needs correction.
In the box in Article 6, Paragraph A,the first year should end in "21" not "20, and the third year should begin in "22" not
"21."
After those corrections are made,the Agreement looks fine, and you may at that point affix my signature, approving it
as to form.
Thanks.
Steve
Stephen Deitsch
Partner
stephen.deitsch@bbklaw.com
T: (909)483-6642 C:(951)662-9343
www.BBKlaw.com CC
Stay at home and public health orders issued in multiple counties across the U.S. require our offices to be
physically closed, effective March 17, 2020. Because all staff are working remotely, all documents(including
correspondence, pleadings, and discovery) will be served via e-mail until further notice. Because we may not
receive regular mail or other deliveries during this period of time, please e-mail copies of anything you send
by regular mail or delivery. Send all e-served documents in your case to the e-mail addresses for any Best
Best& Krieger LLP attorney who has appeared in your case, or who has communicated with you by e-mail
on your matter.
From: Rachelle Arellano [mailto:rarellano@arcadiaca.gov]
Sent: Tuesday, June 23, 2020 9:49 AM
To: Stephen Deitsch
Cc: City Attorney
Subject: City Attorney's Review June 23, 2020
CAUTION - EXTERNAL SENDER.
Hi Steve,
Attached is a folder with the following documents for your review today:
1. Agreement for Claims Administration Services