1992 AGN JUN 16 I18 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT For Council Meeting of June 16, 1992 TO: HONORABLE MAYOR AND CITY COUNCIL DATE: JUNE 10, 1992 FROM: GORDON R. JOHNSON Personnel Director SUBJECT: ADOPT AGREEMENT WITH HAZELRIGG RISK MANAGEMENT SERVICES FOR WORKERS' COMPENSATION CLAIMS ADMINISTRATION SERVICES BACKGROUND Gates McDonald has administered the City's workers' compensations claims since September 13, 1989. The current agreement with Gates McDonald expires on June 30, 1992. Due to substantial rate increases each year, state mandated requirements, and the desire to secure a firm which can provide more efficient claims handling and loss control, my office sent out a Request for Proposals (RFP) in April for Workers' Compensation Claims Administration Services. Six responses were received and carefully reviewed. Joanne Knowles and I interviewed three finalists on May 28 and jointly recommend the selection of Hazelrigg Risk Management Services, Inc. (HRMS) of Diamond Bar. The City paid $461,917 in claims costs during fiscal year 1990-91 which did include our expenses such as City of Colton administrative staff salary and benefits, litigation, subrogation and subrosa. The proposed fee represents less than 13 % of the claims costs. The remaining 87 % is greatly impacted by the type of claims administration services utilized. HRMS believes its proactive pursuit of cost containment will save the City more than the cost of its services. The following list of ten factors why HRMS feels its service will be a cost savings rather than a cost to the City highlights their claims philosophy: 1. Early claim file intervention which leads to lower litigation rates. 2. Audit of medical charges to ensure compliance with State approved RVS schedule. 3. Experience in handling claims which may involve industrial disability retirements, or State mandated presumptions. 4. Comprehensive information gathering and reporting system which facilitates the risk identification and eradication process. 5. No hidden vendor costs which supplement the claims administration fees. HRMS is an independent provider responsible for obtaining superior services at a reasonable cost. 6. Mandatory system of file review to ensure compliance with State regulations and recommended reserving practices. This allows the City to review with confidence the numbers associated with its self-