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HomeMy WebLinkAboutContract 54879 CITY SECRETARY CONTRACT NO._ c ADDENDUM TO CONTRACT 1 BETWEEN THE CITY OF FORT WORTH � G�sE AND SEDGWICK CLAIMS MANAGEMENT SERVICES,INC. This Addendum to Service Agreement for Administration of a Claims Program ("Addendum") is entered into by and between Sedgwick Claims Management Services, Inc. ("Vendor") and the City of Fort Worth ("City"), collectively the "parties", for a purchase of licenses. The Contract documents shall include the following: 1. The Service Agreement for Administration of a Claims Program;and 2. This Addendum. Notwithstanding any language to the contrary in the attached Service Agreement for Administration of a Claims Program (the"Agreement"),the Parties hereby stipulate by evidence of execution of this Addendum below by a representative of each party duly authorized to bind the parties hereto,that the parties hereby agree that the provisions in this Addendum below shall be applicable to the Agreement as follows: 1. Term. The Agreement shall become effective upon the signing of the Agreement by an Assistant City Manager of the City (the "Effective Date") and shall expire Five (5) years after the Effective Date(the Expiration Date"), unless terminated earlier in accordance with the provisions of the Agreement or otherwise extended by the parties.The Agreementmay be renewed for Two (2) of renewals upon terms and conditions mutually agreeable to both parties at City's option,each a"Renewal Term."City shallprovide Vendor with written notice of its intentto renew at least sixty(60)days prior to the end of each term. 2. Termination. a. Convenience.Either City or Vendor may terminate the Agreement at any time and for any reason by providing the other party with 30 days written notice of termination. b. Breach.If eitherparty commits a material breach ofthe Agreement,the non- breaching Party must give written notice to the breaching party that describes the breach in reasonable detail.The breaching party must cure the breach ten(10)calendar days after receipt of notice from the non-breaching party, or other time frame as agreed to by the parties.If the breaching party fails to cure the breach within the stated period of time,the non-breaching party may, in its sole discretion,and without prejudice to any other right under the Agreement, law, or equity, immediately terminate this Agreement by giving written notice to the breaching party. Addendum _s_r Page 1 of9 G, C. Fiscal Funding Out. In the event no funds or insufficient funds are appropriated by City in any fiscal period for any payments due hereunder, City will notify Vendor of such occurrence and the Agreement shall terminate on the last day of the fiscal period for which appropriations were received without penalty or expense to the City of any kind whatsoever, except as to the portions of the payments herein agreed upon for which funds have been appropriated. d. Duties and Obligations of the Parties. In the event that the Agreement is terminated prior to the Expiration Date, City shall pay Vendor for services actually rendered up to the final date of performance and Vendor shall continue to provide City with services requested by City and in accordance with the Agreement up to the effective date of termination.Upon termination of the Agreement for any reason,Vendor,at City's cost and expense, shall provide City with copies of all completed or partially completed documents prepared under the Agreement.In the event Vendor has received access to City information or data as a requirement to perform services hereunder,Vendor shall return all City provided data to City in the same format as provided to Vendor. 3. Law and Venue.The Agreement and the rights and obligations of the parties hereto shall be governed by,and construed in accordance with the laws of the United States and state of Texas,exclusive of conflicts of laws provisions.Venue for any suit brought under the Agreement shall be in a courtof competent jurisdiction in Tarrant C ounty,Texas.To the extentthe Agreement is required to be governed by any state law other than Texas or venue in Tarrant County, City objects to such terms and any such terms are hereby deleted from the Agreement and shall have no force or effect. 4. Linked Terms and Conditions.If the Agreement contains a website link to terms and conditions,the linked terms and conditions located at that website link as of the effective date of the Agreement shall be the linked terms and conditions referred to in the Agreement.To the extent that the linked terms and conditions conflict with any provision of either this Addendum or the Agreement,the provisions contained within this Addendum and the Agreement shall control. If any changes are made to the linked terms and conditions after the d ate of the Agreement,such changes are hereby deleted and void. Further, if Vendor cannot clearly and sufficiently demonstrate the exact terms and conditions as of the effective date of the Agreement, all of the linked terms and conditions are hereby deleted and void. 5. Insurance.The City is a governmental entity under the laws of the state of Texas and pursuant to Chapter 2259 of the Texas Government Code, entitled "Self-Insurance by Governmental Units,"is self-insured and therefore is not required to purchase insurance. To the extent the Agreement requires City to purchase insurance, City objects to any such provision,the parties agree that any such requirement shall be null and void and is hereby deleted from the Agreement and shall have no force or effect. City will provide a letter of self-insured status as requested by Vendor. 6. Sovereign Immunity. Nothing herein constitutes a waiver of City's sovereign immunity. To the extent the Agreement requires City to waive its rights or immunities as a government entity;such provisions are hereby deleted and shall have no force or effect. Addendum Page 2 of 9 7. To the extentthe Agreement requires City to indemnify or hold Vendor or any third party harmless from damages of any kind or character,City objects to these terms and any such terms are hereby deleted from the Agreement and shall have no force or effect. 8. IP Indemnification. If applicable, Vendor agrees to indemnify the City for infringement of any patent, copyright, trade mark, service mark, trade secret, or other intellectual property right arising from City's use of the Deliverable(s),or any part thereof, in accordance with this Agreement, it being understood that this agreement to indemnify, defend, settle or pay shall not apply if City modifies or misuses the Deliverable(s). So long as Vendor bears the cost and expense of payment for claims or actions againstthe City pursuant to this section 8, Vendor shall have the right to conduct the defense of any such claim or action and all negotiations for its settlement or compromise and to settle or compromise any such claim; however, City shall have the right to fully participate in any and all such settlement,negotiations,or lawsuit as necessary to protect the City's interest,and City agrees to cooperate with Vendor in doing so.In the event City, for whatever reason,assumes the responsibility for payment of costs and expenses for any claim or action brought against the City for infringement arising under this Agreement, the City shall have the sole right to conduct the defense of any such claim or action and all negotiations for its settlement or compromise and to settle or compromise any such claim; however, Vendor shall fully participate and cooperate with the City in defense of such claim or action.City agrees to give Vendor timely written notice of any such claim or action,with copies of all papers City may receive relating thereto.Notwithstanding the foregoing,the City's assumption of payment of costs or expenses shall not eliminate Vendor's duty to indemnify the City under this Agreement.If the Deliverable(s),or any part thereof, is held to infringe and the use thereof is enjoined or restrained or, if as a result of a settlement or compromise, such use is materially adversely restricted,Vendor shall,at its own expense and as City's sole remedy, either: (a) procure for City the right to continue to use the Deliverable(s); or(b) modify the Deliverable(s) to make them/it non-infringing, provided that such modification does not materially adversely affect City's authorized use of the Deliverable(s); or (c) replace the Deliverable(s)with equally suitable, compatible,and functionally equivalent non-infringing Deliverable(s)at no additional charge to City. 9. No Debt. In compliance with Article 11 § 5 of the Texas Constitution, it is understood and agreed that all obligations of City hereunder are subjectto the availability of funds. If such funds are not appropriated or become unavailable, City shall have the right to terminate the Agreement except for those portions of funds which have been appropriated prior to termination. 10. Confidential Information. City is a government entity under the laws of the State of Texas and all documents held or maintained by City are subject to disclosure under the Texas Public Information Act. To the extent the Agreement requires that City maintain records in violation of the Act, City hereby objects to such provisions and such provisions are hereby deleted from the Agreementand shall have no force or effect.In the eventthere is a requestfor information marked Confidential orProprietary,City shallpromptly notify Vendor.Itwill be the responsibility of Vendor to submit reasons objecting to disclosure.A determination on whether such reasons are Addendum Page 3 of 9 sufficient will not be decided by City, but by the Office of the Attorney General of the State of Texas or by a court of competent jurisdiction. 11. Addendum Controlling. If any provisions of the attached Agreement,conflict with the terms herein,are prohibited by applicable law,conflict with any applicable rule,regulation or ordinance of City,the terms in this Addendum shall control. 12. Immigration Nationality Act. Vendor shall verify the identity and employment eligibility of its employees who perform work under this Agreement, including completing the Employment Eligibility Verification Form(1-9). Upon request by City,Vendor shall provide City with copies of all I-9 forms and supporting eligibility documentation for each employee who performs work under this Agreement. Vendor shall adhere to all Federal and State laws as well as establish appropriate procedures and controls so that no services will be performed by any Vendor employee who is not legally eligible to perform such services.VENDOR SHALL INDEMNIFY CITY AND HOLD CITY HARMLESS FROM ANY PENALTIES, LIABILITIES, OR LOSSES DUE TO VIOLATIONS OF THIS PARAGRAPH BY VENDOR, VENDOR'S EMPLOYEES,SUBCONTRACTORS,AGENTS,ORLICENSEES. City,upon written notice to Vendor, shall have the right to immediately terminate this Agreement for violations of this provision by Vendor. 13. No Boycott of Israel. If Vendor has fewer than 10 employees or the Agreement is for less than$100,000,this section does not apply.Vendor acknowledges that in accordance with Chapter 2270 of the Texas Government Code,City is prohibited from entering into a contract with a company for goods or services unless the contract contains a written verification from the company that it: (1) does not boycott Israel;and(2)will not b oycott Israel during the term of the contract. The terms "boycott Israel" and "company"shall have the meanings ascribed to those terms in Section 808.001 of the Texas Government Code. By signing this Addendum, Vendor certifies that Vendor's signature provides written verification to City that Vendor: (1) does not boycottlsrael;and(2)will not boycottlsrael during the term oftheAgreement. 14. Right to Audit. Vendor agrees that City shall,until the expiration of three(3)years after final payment under the Agreement, have access to and the right to examine any directly pertinent books,documents,papers and records of Vendor involving transactions relating solely to the Agreement.Any such audit shall be at a time and place and in a manner mutually agreeable to both parties. 15. Vendor agrees to adhere to Section G., "TPA AND URA PERFORMANCE STANDARDS AND COMPLIANCE"of the Workers'Compensation AccountRequirements and Instruction Manual that was labeled as"Attachment H"in the City's Request for Proposal and is attached hereto as Exhibit"A". (signature page follows) Addendum Page 4 of 9 ACCEPTED AND AGREED: CITY: City of Fort Worth Contract Compliance Manager: By signing I acknowledge that I am the person �_ responsible for the monitoring and administration �> of this contract, including ensuring all By: ��G performance and reporting requirements. Name: Jesus J. Chapa Title: Assistant City Manager Date: a By: • Name: Chris Lam Approval Recommended: Title: Human Resources Manager Approved as to Form and Legality: By: Name: Mark Bar Title: Assistant Director By: Name: J B. Strong Attest: Title: Assistant City orney Contract Authorization: M&C: ab 0(oy.$ aa(Islao By: �i-► N18lags: aoao- Ip 609Q Name: rar Kayser .k, Title: City Secretary . 4a VENDOR: ` ata .,,. �T �.. �. Sedgwick Claims Management Services,Inc. By: ��16��w Name: 0. Edward Peel Title: Vice President Date: November 13,2020 Addendum Page 5 of 9 EXHIBIT A G.TPA AND URA PERFORMANCE STANDARDS AND COMPLIANCE(WORKERS'COMPENSATION ACCOUNT REQUIREMENTS AND INSTRUCTION MANUAL —AttachmentH from RFP) Listed beloware Performance Standards which must be met by SEDGWICKas TPA throughout the contract term, excluding an initial 90-day transition period at the start of the contract, and including any renewal terms. Also listed below are incentives for meeting the standards, and the amounts at risk for failure to meet the respective Performance Standards. If the TPA materially fails to meet one or more of the Performance Standards, it agrees to pay the aggregate of the respective amounts at risk in the form of a reduction in the Basic Claims Administration Fee due and payable under the Agreement. Such amount will be deducted from the Basic Claims Administration Fee due the month following the determination that the Performance Standards have been breached.The amount of fee to be withheld is not to be considered as a penalty, but shall be deemed,taken or treated as reasonable liquidated damages, fixed and agreed upon by and between TPA and City because of the impracticality and difficulty of fixing and ascertaining the actual damages City would sustain in the event of a failure or refusal to meet each performance standard, and the above-mentioned amounts are agreed to be the amountof damages that City would sustain. The City's actual withholding from the TPA's fees for failure to meet the performance standards shall not, in any contract year, exceed 10% of the annual contract cost. However, this sum does not include any liquidated damages that may be assessed for failing to meet the guarantee described below related to the Performance Based Oversight(PBO)Audit performed by the State. If an at risk determination is made after termination of the Agreement or at the end of the Contract Term,the TPA agrees to pay the City an amount equal to the aggregate of the respective amounts at risk in a lump sum payment within 30 days following written notification from the Director of the amount due. The TPA's performance under the Performance Standards will be evaluated by the City's third- party claims auditor. In the absence of an auditor,the Performance Standards will be jointly reviewed and evaluated by the TPA and the Director. Repayment of the amounts specified herein shall not be the City's sole remedy if the TPA materially breaches one (1) or more of the Performance Standards and shall not prejudice the City's right to terminate this Agreement for cause. If the TPA meets any ofthe performance standards listed below,the CITY agreesto paythe aggregate of the respective amounts in the form of an additional payment to the Basic Claims Administration Fee due and payable under the Agreement, Such payment shall be added to the Basic Claims Administration Fee due the month following the determination that the incentive pay is applicable. SCHEDULE 1 -- TDVDWC Performance-Based Oversight Assessment of Carrier DWC Scoring of Individual High Tier Avg.Tier Poor Tier Measure %Calculation -> 95%or Higher 80%-94.99% 79.99%or Lower Incentive 1%of Annual TIBS N/A N/A Timeliness of Payment of Paid I nitial TI Bs 1%of Annual TI BS At Risk N/A Loss of Contract Paid Addendum Page 6 of 9 0.5%of Annual Incentive N/A N/A Timeliness of Processing Medical Paid Loss of Med. Bill Initial Medical Bill 0.5%of Annual At Risk N/A Medical Paid portion of Contract Timeliness of Processing Incentive $25K N/A N/A Request f/Reconsideration Loss of Med. Bill Medical Bills At Risk N/A $25K portion of Contract Incentive $25K N/A N/A Timeliness of Submission of EDI Initial Pay Data At Risk N/A $25K $50K Incentive $25K N/A N/A Timeliness of Submission of EDI Medical Data At Risk N/A $25K $50K Incentive $25K N/A N/A OVERALL TI ER PLACEMENT At Risk N/A Payment of TDI- Loss of Contract Assessed Penalties Penalties shall apply if TPA is at fault. Penalty shall not apply if CITY is at fault. Failure of TPA to move from Avg.Tier to High Performer may result in loss of contract. SCHEDULE 2 --Other TDI/DWC Determinations of Carrier TDI Determination Amount at Risk Single Confirmed Allegation of WC Act/ TPA pays for TDI-assessed penalty Rules Violation Repeat Confirmed TPA pays for TDI-assessed PLUS $51K for each repeat Allegation of WC Act/ penalty violation Rules Violation Penalties shall apply if TPA is at fault. Penalty shall not apply if CITY is at fault. SCHEDULE 3 -- Best Practices Performance Claim Files Audit of TPA by CITY 90% or Higher 80%-89.99% 79.99% or Performance Standard -> Below Compliance Compliance Compliance NEW CLAIMS See Performance and At-Risk Levels Below Addendum Page 7 of 9 Two-Point Contact Initiated w/in Acceptable Needs Unacceptable 24 hrs. for Record Only Claims Improvement Three-Point Contact Initiated w/in Needs 24 hrs. for Med.Only and Lost Acceptable Unacceptable Time Claims Improvement Supervisor Reviewtimely initiated Needs Acceptable Unacceptable w/in 3 days Improvement Recorded Statement Obtained Needs w/in 5 days on LT Claims Acceptable Improvement Unacceptable Compensability Determinedw/in Acceptable Needs Unacceptable 14 Days Improvement ReservesSetw/in 15 days Needs Acceptable Unacceptable Improvement Reserves Initially Calculated Acceptable Needs Unacceptable Accurately Improvement Subrogation Potential Evaluated Needs Timely w/in 15 days Acceptable Improvement Unacceptable Contribution Potential Evaluated Needs Timely (w/in 30 days) Acceptable Improvement Unacceptable ODG Med.Treatment Guidelines Needs Documented w/in 30 days Acceptable Improvement Unacceptable ODG RTW Disability Duration Needs Guidelines Documentedw/in 30 Acceptable Unacceptable days Improvement RTW evaluated prior to Expiration Needs of Best Practices Days; CITY RTW Acceptable Unacceptable Coordinator Notified Improvement ODG RTW evaluated prior to Expiration of Median Disability Acceptable Needs Unacceptable Duration Days; CITY RTW Improvement Coordinator Notified Medical Only Caseloads Not Acceptable Needs Unacceptable Exceeded Improvement Lost Time Caseloads Not Exceeded Needs Acceptable Unacceptable Improvement CLOSED FILES See Performance and At-Risk Levels Below Supervisor Reviews timely Needs initiated Acceptable Improvement Unacceptable Reserves Re-Evaluated Timely Needs Acceptable Unacceptable Improvement Contribution Requested Timely (if Needs Applicable) Acceptable Improvement Unacceptable Addendum Page 8 of 9 Subrogation Collected Timely Needs Acceptable Unacceptable Improvement File Closed Timely w/in 90 Days of Needs last activity Acceptable Improvement Unacceptable MANAGEMENT REPORTS See Performance and At-Risk Levels Below Weekly Reports Timely Submitted to Risk Management per Acceptable Needs Unacceptable Subsection E.9.3 Improvement Monthly Reports Timely Needs Submitted to Risk Management Acceptable Unacceptable per Subsection E.9.3 Improvement Quarterly reports Timely Needs Submitted to Risk Management Acceptable Unacceptable per Subsection E.9.3 Improvement Annual Reports Timely Submitted Needs to Risk Management per Improvement Unacceptable Subsection E.9.3 PERFORMANCE ACCEPTABLE -TPA eligible for$1,000 incentive per acceptable line item PERFORMANCE NEEDS IMPROVEMENT -TPA must take action to improve performance to acceptable level.At Risk amount = $1,000 per documented occurrence PERFORMANCE NOT ACCEPTABLE -At Risk amount = $5,000 per unacceptable occurrence TPA's Acknowledgement and Acceptance of Performance Standards As authorized representative of(Insert Name of Third Party Claims Administrator), I hereby acknowledge the performance standards specified in Attachment H. Section G "TPA and URA Performance Standards", and do hereby declare the TPA's intention to comply with the Standards of Performance specified in Schedules 1 through 3 of Section G of the City of Fort Worth's "Account Requirements and Instructions Manual", Attachment H, Request for Proposal No. 20-xxxx. Date Signature Written Name of Authorized Representative Addendum Page 9 of 9 QI /, SERVICE AGREEMENT FOR ADMINISTRATION OF A CLAIMS PROGRAM This Agreement is entered into effective the 1st day of November, 2020 ("Effective Date"), by and between Sedgwick Claims Management Services, Inc. ("Sedgwick") and the City of Fort Worth ("Client"). RECITALS 1. Client self-insures its claims administration program for workers compensation risks and desires to have Sedgwick provide the specific services set forth below in connection with such self- insured program(the"Program,"as defined on Exhibit A, attached hereto). 2. Sedgwick is willing to provide such services on the terms and conditions hereinafter stated. AGREEMENT 1. Services to Be Performed by Sedgwick: Sedgwick agrees to perform the following services: A. With regard to Claims Administration, Sedgwick shall: (1) During the term of this Agreement, review all claim and loss reports received from Client that are required to be reviewed under the Program (a "Qualified Claim"), and process each such claim or loss report in accordance with applicable statutory and administrative regulations; (2) Conduct an investigation of each Qualified Claim to the extent deemed necessary by Sedgwick in the performance of its obligations hereunder; (3) Arrange for independent investigators,appraisers, or medical or other experts to the extent deemed necessary by Sedgwick in connection with processing any Qualified Claim; (4) Pay benefits, expenses, and adjust or settle each Qualified Claim, but only if in the sole judgment of Sedgwick such payment would be prudent for Client and the anticipated amount thereof does not exceed the limit specified in accordance with paragraphs 2F and 2G below, or as Client specifically approves or directs such action in writing; (5) Maintain a file for each Qualified Claim which shall be the property of Client (for self-insured claims)and which shall be available for review by Client during normal business hours upon three(3)days prior written notice; (6) Notify Client's first layer of insurance coverage for each Qualified Claim where the values may exceed Client's retention, providing such insurer with necessary information on the current status of those claims, unless relieved of this obligation by Client pursuant to paragraph 2A; (7) Assist Client's counsel, if requested, in preparing the defense of litigated cases arising out of Qualified Claims,negotiating settlements and pursuing subrogation or contribution actions; 1 (8) Maintain a current estimate of the expected total cost of each Qualified Claim which is based on facts known at the estimation date, but is not trended or actuarially developed; (9) Use a proprietary data management system to furnish to Client agreed upon loss and information reports. These reports shall contain information such as each Qualified Claim date, condensed claim description, payments made, estimated future costs and total expected costs of all Qualified Claims, as well as summary and other data deemed relevant by Sedgwick, but not IBNR (incurred but not reported)claims or actuarially developed loss values;and (10) Annually report federal, state and local 1099 information under Client's tax identification number(s), when Client has provided all required IRS authorizations, for vendor payments issued by Sedgwick on bank accounts owned by Client, but not for payment authorizations when Sedgwick does not issue the checks. B. Sedgwick will provide managed care services as set forth in the attached Managed Care Service Schedule. C. Sedgwick shall provide the special investigative unit (SIU) services set forth in the attached SIU Service Schedule. D. Sedgwick shall provide Client with the capability to perform searches in a database which contains information regarding Client's Qualified Claims as set forth in the attached OSHA Database Service Schedule. E. Sedgwick will provide the MMSEA/SCHIP Reporting services as set forth in the Medicare Reporting Services Schedule attached hereto. F. Sedgwick will provide the clinical consultation services as set forth in the Clinical Consultation Services Schedule attached hereto. 2. Obligations of Client: A. Client shall provide Sedgwick in a timely manner with its first layer of insurance coverage for the policy years necessary for proper notification of applicable Qualified Claims to such first layer insurers by Sedgwick. Should Client fail to provide this information, Sedgwick shall be relieved of any such reporting obligations. B. Client shall pay to Sedgwick a service fee which, in the initial term of this Agreement, shall be computed and payable as shown in Exhibit B, attached hereto and made a part of this Agreement, plus applicable taxes, if any. Client shall reimburse Sedgwick for the reasonable and customary out-of-pocket expenses incurred by Sedgwick such as travel expenses in conjunction with the services being performed. If Client, in its sole discretion, requests Sedgwick to perform services outside of the scope of work listed herein, then Client shall compensate Sedgwick for such services at Sedgwick's then applicable standard rates for such service. C. Client shall at all times provide funds adequate for the payment of Qualified Claims, including allocated loss adjustment expenses. For purposes of this Agreement, allocated 2 loss adjustment expenses shall mean all costs, charges or expenses incurred by Sedgwick, its agents or its employees which are properly chargeable to a Qualified Claim including, without limitation, court costs;fees and expenses of attorneys;appeal bonds;independent adjusters; investigators; appraisers; vocational services, training or evaluation; medical expenses and medical cost containment service providers (including those provided by Sedgwick, if applicable);durable medical equipment;rehabilitation services;experts and witnesses; fees for obtaining statements, diagrams, reports, records, documents, transcripts, depositions, Medicare reporting and compliance services fees and costs, index bureau filings and re-filings, and photographs;cost of file retrieval;cost associated with the pursuit of subrogation and/or Special Injury Fund claims; hearing representation services; and travel fees and expenses incurred at Client's request. Sedgwick may, but need not, elect to utilize its own staff or affiliated entities to perform these services. Associated fees and costs will be charged as allocated loss adjustment expenses. D. Client shall deposit funds for payment of Qualified Claims, including allocated loss adjustment expenses,in a bank account or accounts (the"Claim Account"). Client shall be responsible for providing sufficient funds to enable Sedgwick to write checks on the Claim Account for use in the payment of Client's Qualified Claims. Such funds shall be provided by electronic funds transfer at the inception of the Program and replenishe d by electronic funds transfer promptly from time to time thereafter. The amount of the escrow required for the Claim Account may be modified in the following instances: (1) There is a substantial increase or decrease in claims payment activity; (2) Client fails to fund the Claim Account within the agreed upon time period; (3) There is a change in funding cycle; (4) The escrow is recalculated at Client's request;or (5) The escrow amount is automatically recalculated on an annual basis. E. It is expressly understood that Sedgwick shall not be required to advance its own funds to pay losses or allocated loss adjustment expenses for any Qualified Claim hereunder. It is further understood that if Client fails to promptly provide funds sufficient to allow required payments to be made timely, or if funds previously provided by or on behalf of Client are seized, frozen or otherwise unavailable to Sedgwick to allow required payments to be made timely on account of the bankruptcy, receivership, or other insolvency proceeding of Client[or Insurer, in cases where Insurer funds claim account], Sedgwick will have no obligation to perform any claims payments services during any period of underfunding. F. Sedgwick shall have full discretion to make an individual payment of an allocated loss adjustment expense in an amount up to $25,000 on any Qualified Claim and shall not need the approval of Client to make such payments. This amount may be changed at any time by Client upon ten (10) days prior written notice to Sedgwick. It is agreed that Sedgwick shall have full authority and control in all matters pertaining to the payment, processing, investigation and administration of Qualified Claims within the limit established by this paragraph. G. Sedgwick shall have full discretion to redeem,compromise or settle any Qualified Cl aim 3 for an amount not to exceed $25,000 and shall not need the approval of Client to consummate such redemption, compromise or settlement. This amount may be changed at any time by Client upon ten (10) days prior written notice to Sedgwick. Failure of Sedgwick to settle a Qualified Claim within such limit, however, shall not subject Sedgwick to any liability whatsoever in the event of an adverse judgment entered by any court or the settlement of such Qualified Claim for an amount in excess of such limit. H. Should Client fail to make timely payments of any service fees due Sedgwick or should Client in any other way breach a material term of this Agreement, Sedgwick shall then have the right to refuse to perform any further services or terminate this Agreement. If Sedgwick elects to exercise its rights under this paragraph, in addition to all other legal or equitable remedies, Sedgwick will have the right to its full minimum fee, if any, as well as any other fees for which Sedgwick may be eligible, and may collect such fees from any loss fund that may be in Sedgwick's care,custody and control. I. Upon receipt of any form of notice advising of facts which are or may be a Qualified Claim, Client shall promptly assign the Qualified Claim to Sedgwick for management. Client shall promptly provide Sedgwick with such information as Sedgwick may require, including, but not limited to, any copy of documents describing its Program, including but not limited to documents submitted to any legal, administrative or regulatory authority for approval of the Program,as well as incident reports and related information in Client's possession and otherwise cooperate with Sedgwick in carrying out Sedgwick's tasks hereunder. 3. Discontinuance of Operations: Should Client discontinue its business for any reason, all fees due Sedgwick shall be paid immediately. Sedgwick shall have no further obligation to continue to provide the services called for in this Agreement,and,at Sedgwick's option,this Agreement shall be considered terminated as of the date Client ceases operations or is subject to a bankruptcy or receivership filing, either voluntarily or involuntarily. 4. Covered Jurisdictions: This Agreement shall cover all operations of Client in the state(s)of Texas. 5. Term of Agreement and Termination: A. The term of this Agreement shall commence on the Effective Date and shall continue until and through the fifth anniversary of the Effective Date (the "Initial Term"). The Agreement shall be automatically extended for two additional one-year terms as of each anniversary of its commencement unless prior to that time it has been terminated in accordance with the provisions of this Agreement(each,a"Renewal Term", and together with the Initial Term,the"Term");and provided further that upon any extension of this Agreement, the extension, except for service fees and other expenses which shall be subject to change, shall be upon the same terms and conditions as set forth in this Agreement unless the parties mutually agree in writing to amend its provisions. B. This Agreement may be terminated by either party at any time,provided that at least sixty (60) days prior written notice of the effective date of termination is given to the other party. 4 C. Sedgwick is providing services to Client on a life of contract basis. If requested by Client, Sedgwick will continue to process Client's Qualified Claims remaining open at the expiration or termination of this Agreement, if any, provided that Client shall continue to make adequate funds available for the payment of such Qualified Claims, including any allocated loss adjustment expenses and pay information technology fees, fees for encrypted data files, program management fees, and any other applicable fees. This provision shall not apply unless the additional fee for this service shall have been negotiated and agreed to in writing prior to the effective date of termination. D. If Sedgwick is required by Insurer to adjust Client's insured Qualified Claims after expiration or termination of this Agreement, Client shall continue to fund claims payments and allocated loss adjustment expenses as otherwise provided herein, and Client shall pay Sedgwick a mutually agreed upon fee, plus the prevailing fee for any information technology or encrypted data files required by Insurer. E. If Insurer fails to pay Sedgwick service fees which it is obligated to pay,then S edgwi ck may present all unpaid invoices to Client and Client shall pay such service fees within thirty(30)days of presentment. If Insurer is responsible for funding the Claim Account and fails to adequately do so, then Client shall immediately and adequately fund the Claim Account upon notice from Sedgwick of the deficiency. F. Upon expiration or termination of this Agreement, Sedgwick shall deliver, at Client's sole cost, the hard copy and imaged files that Sedgwick has maintained for Qualified Claims (but not including any computer hardware, firmware, software or other proprietary information of Sedgwick), except those Sedgwick has agreed in writing to continue to process or files that are owned by Insurer;provided,however,that Sedgwi ck or its agents, employees or attorneys shall continue to be entitled to inspect all such files and make copies or extracts there from. Imaged files shall be transferred to Client in the same electronic format. Client shall pay Sedgwick a one-time payment for transition of Qualified Claims as consideration for Sedgwick's associated costs, which costs may include,but are not limited to,carrier coordination,coordination with the new third party administrator, if any, necessary mailings and notifications, catalog and transfer of hard inventory,digital recording retrieval&transfer,advanced TIBS payments,multiple loss runs, payment history for advanced TIBS, claim hot list, banking reconciliation, validation of billings paid in field prior to transfer,field examiners validation and release of pending payments, client services & parameters group time (13213 interface shutoff, intake shutoff, CSI shutdown), as well as technology items such as preliminary and final data extract, image extract,bill review extract, MMSEA extract and hierarchy structure extract. If Client does not agree to accept such files,they will be retained or destroyed at Sedgwick's option and Client shall have no recourse against Sedgwick for failure to retain them. G. Should Client terminate the Agreement for convenience within the first twelve months of the Agreement, the Client shall pay Sedgwick fees equal to three months of the service fees. Should Client terminate for convenience within the second twelve months of the Agreement, the Client shall pay Sedgwick fees equal to two months of the service fees. Termination fees are payable within thirty (30) days of the date of notice of such termination. 5 6. Professional Advice: Nothing in this Agreement is intended to require Sedgwick to engage in the practice of 1 aw, and services provided shall not be considered legal,tax or accounting advice,and Sedgwick shall in no event give, or be required to give, any legal opinion or provide any legal, tax or accounting representation to Client. Client acknowledges that Sedgwick has been engaged to provide certain professional services and that it is not the intent of the parties that Sedgwick assume any insurance risk. Sedgwick shall not act as an insurer for Client, and this Agreement shall not be construed as an insurance policy; it being understood that Sedgwick is in no event financially responsible for payment or satisfaction of Client's claims,lawsuits, or any form of cause of action against Client from Sedgwick funds. 7. Indemnification: A. Sedgwick shall be fully responsible for exercising reasonable care at all times in the performance of its obligations hereunder. However, if Sedgwick is named as a party to any litigation or proceeding, or is the subject of any claim or demand because of its actions on behalf of Client, Client agrees to indemnify, defend,and hold Sedgwick, its officers, directors, employees and agents harmless from any and all losses, damages, costs, judgments and expenses (including attorneys fees and costs) with respect to any such litigation,proceeding, claim or demand,unless and until a finding is entered to the effect that Sedgwick failed to exercise such reasonable care in the performance of its obligations hereunder. Sedgwick agrees to indemnify,hold harmless and defend Client, its directors, officers, employees and agents from and against any and all liabilities, loss or damage that they may suffer as a result of any claim, demand, cost or judgment against them arising out of the negligence or willful misconduct of Sedgwick in connection with its performance under this Agreement,provided that such acts or omissions do not arise out of or relate to oral or written instructions,procedures or forms supplied by Client or to Client's internal management or adjustment of its claims. Each party agrees to keep the other fully informed of any matter for which it is defending, holding harmless or indemnifying the other party. Each parry reserves the right to appoint its own counsel, at its own expense, regarding any matter defended hereunder and to approve any settlements of same. B. Notwithstanding anything to the contrary contained in the above paragraph, it is understood and agreed that if Client, directly or through a subcontractor or vendor of Client's choosing("Client Subcontractor"),retains administration of a claim or performs any services for a claim Sedgwick administers, or if Client otherwise directs the administration of a claim, Client will indemnify, defend, and hold Sedgwick,its officers, directors, employees and agents harmless from the losses, damages, costs,judgments and expenses (including attorneys fees and costs) as a result of any litigation or proceeding, fines,penalties,revocation of license, or any other state regulatory investigation or action arising against Sedgwick related to the acts or omissions of Client or the Client Subcontractor. C. If Client's access to claim data includes the ability to add and modify data, Sedgwick shall not be required to verify,or otherwise be responsible for,the accuracy of data added or modified by Client. Client shall indemnify, defend and hold Sedgwick, its officers, directors, employees and agents harmless for any loss, cost (including attorney's fees), claim or judgment which is attributable to Client's input or modification of data. 6 D. The parties agree that in no event shall Sedgwick's liability under this Agreement exceed the service fees paid to Sedgwick for the six(6) months immediately prior to the event from which the claim or matter arises. IN NO EVENT SHALL SEDGWICK BE LIABLE FOR ANY LOSS OR DAMAGE TO REVENUES,PROFITS OR GOODWILL OR OTHER SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND RESULTING FROM ITS PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT OR RESULTING FROM THE FURNISHING, PERFORMANCE, USE OR LOSS OF USE OF ANY SOFTWARE, SYSTEM, SITE, OR DELIVERABLE PROVIDED TO CLIENT HEREUNDER, INCLUDING WITHOUT LIMITATION ANY INTERRUPTION OF BUSINESS,EVENIF SEDGWICK HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE. E. Notwithstanding the foregoing,an indemnifying party will not settle a claim without the indemnified party's written consent,unless such settlement results in(i)a full release of all parties, (ii)no liability to the indemnified party or future obligation of the indemnified party;and-(iii)no admission of wrongdoing by Client or Sedgwick. F. The provisions of this section shall survive the expiration or termination of the Agreement. 8. Network Security/Confidentiality: A. If Client's access to the data management system requires a network connection (the "Network Connection") between Client's network and Sedgwick's network, Sedgwick and Client shall take reasonable and customary precautions to prevent unauthorized access to or use of the Network Connection through their respective networks. The parties agree,however,that each party is responsible for the security of its own network. Neither party shall be liable to the other for unauthorized access to the Network Connection, so long as the accused party shall have taken reasonable and customary precautions to prevent such unauthorized access. B. Whether or not marked as such, and without regard to the media in which such records are stored,"Confidential Information"shall mean: (1) any business or technical information pertaining to the parties herein or to third parties,which is furnished, disclosed or made available by one party to the other, including, without limitation, specifications, prototypes, software, marketing plans,financial data and personnel statistics; and (2) Medical records, reports and information, as well as any other non-medical records,reports or information pertaining to claimants under the Program. C. Each party agrees to protect Confidential Information received hereunder with the same degree of care that such party exercises with its own confidential information(but in no event less than reasonable care) and to limit access and disclosure of Confidential Information only to their employees,agents and contractors who have a"need to know," and who agree to maintain confidentiality in accordance with this section. Notwithstanding the foregoing, Client agrees to permit Sedgwick to compile and disseminate aggregate, de-identified information for auditing, compliance, internal assessments, process improvement and related analytics, benchmarking purposes or forward to a data collection facility data for Qualified Claims handled pursuant to this Agreement, provided that such facility agrees in writing to keep Client's data confidential. Further, Sedgwick shall be entitled, without violation of this section and without the prior consent of Client, to retain claims administration information and to forward claims administration information to government agencies to the extent required by law for the proper performance of the services set forth herein. D. The provisions of this section shall survive the expiration or termination of the Agreement. 9. Notices: Any notice required to be given under this Agreement shall be sent by certified or registered mail, postage prepaid, to General Counsel - Americas, Sedgwick Claims Management Services, Inc., 8125 Sedgwick Way,Memphis,TN 38125,in the case of Sedgwick, and to Chris Lam, Workers' Compensation/Safety Manager, 900 Monroe Street, Ste. 362 Fort Worth,Texas 76102,in the case of Client. 10. Assignment: The Client may not assign its rights or obligations under this Agreement. Sedgwick may assign or subcontract part of the services required hereunder and may at its discretion delegate to a subsidiary or affiliate such of its duties as it deems appropriate,provided that such subcontracting or delegation shall not relieve Sedgwick of any of its obligations hereunder. 11. Entire Agreement and Modification or Amendment: This Agreement and its attached exhibits and schedules represent the full and final understanding of the parties with respect to the subject matter described herein and supersedes any and all prior agreements or understandings, written or oral, express or implied. This Agreement may be modified or amended only by a written statement signed by both parties. 12. Applicable Law: The terms and conditions of this Agreement shall be governed by the laws of the State of Tennessee without regard to conflicts of law principles. If any dispute or claim arises hereunder that the parties are not able to resolve amicably,the parties agree and stipulate that such litigation shall be resolved in the State of Tennessee, and the parties irrevocably submit to the exclusive venue and jurisdiction of such court for the purpose of any such action or proceeding.In the event of a dispute between the parties resulting in litigation,the prevailing party may, in addition to any other relief obtained,recover its court costs and reasonable attorney's fees. 13. ForceMajeure: Neither party shall be liable to the other party or be deemed to have breached this Agreement for any failure or delay in the performance of all or any portion of its obligations under this Agreement if such failure or delay is due to any contingency beyond its reasonable control(a "force majeure"). Without limiting the generality of the foregoing, such contingency includes, but is not limited to, acts of God, fires, floods, pandemics, storms, earthquakes, riots, boycotts, strikes, lock-outs, acts of terror, wars and war operations, restraints of government, power or communication line failure or other circumstance beyond such party's reasonable control, or by 8 reason of the bankruptcy, receivership or other insolvency proceeding of any bank or other financial institution where funds to pay losses and allocated loss adjustment expenses are held, or by reason of a judgment, ruling or order of any court or agency of competent jurisdiction or change of law or regulation subsequent to the execution of this Agreement. Both parties are obligated to provide reasonable back-up capability to avoid the potential interruptions described above. If a force majeure occurs, the party delayed or unable to perform shall give immediate notice to the other party. Client acknowledges that the foregoing provision does not apply to Client's obligation to make timely payment of any fees due Sedgwick,and that Sedgwick shall'be entitled to all remedies set forth in this Agreement and those allowed by law for Client's failure to timely pay such fees. 14. Headings: Headings herein are for convenience of reference only and shall not be considered in any interpretation of this Agreement. 15. Relationship of Parties;Expenses: Nothing contained in this Agreement shall be deemed to create a partnership or joint venture between the parties hereto; the only relationship among the parties shall be that of independent parties to a contract. Except as expressly provided herein,no party hereto shall have authority or shall hold itself out as having authority to act for or bind any other party hereto. Except as expressly set forth herein, each party shall bear all expenses it may incur in connection with the execution, delivery and performance of this Agreement. 16. Waiver of Breach: Failure of either party hereto to require the performance by the other party hereto of any obligation under this Agreement shall not affect its right subsequently to require performance of that or any other obligation. Any waiver by any party hereto of any breach of any provision of this Agreement shall not be construed as a continuing waiver of any such provision or a waiver of any succeeding breach or modification of any other right under this Agreement. 17. Subcontractor Disclosure: Through contractual arrangements with subcontractors, Sedgwick provides a full range of medical management and investigative services to its clients, as well as structured settlements, claim indexing services, imaging, auto-bill adjudication, and extra-territorial claims administration services. Medical management services include,but are not limited to,bill review, network access, pharmacy benefits management, peer review, field case management, electro- medical devices, bone growth stimulators, orthotics, prosthetics, translation and interpretation, transportation, medical supplies, IV and respiratory therapy, home health, and durable medical equipment. Client recognizes and agrees that delivery of some of these services is being provided pursuant to separate agreements between subcontractors and Sedgwick. Invoices for these services will be paid as allocated loss adjustment expenses on individual claims,unless otherwise agreed between Client and Sedgwick. Notwithstanding the foregoing, Client agrees and understands that Client is obligated to make payment to the subcontractors either directly or by remitting such payment to Sedgwick,for any money due for subcontracted services which have been provided under this Agreement. Client acknowledges that Sedgwick receives a portion of charges for subcontracted services as reimbursement for cost of program management, administration, and technological and service enhancements. In no event will charges to Client 9 exceed the amount indicated in the Agreement. 18. Equitable Ad_justment: This Agreement contemplates that the standards applicable to this Agreement are those in effect on the date of this Agreement,whether such standards are set forth in statutes,regulations,rul es, orders, case law or otherwise. In the event of a change in a service standard, Sedgwick shall be entitled to an equitable adjustment in its compensation if such change increases Sedgwick's cost of providing the services under this Agreement or reduces its profitability. 19. Non-Solicitation: Client acknowledges and agrees that Sedgwick personnel who perform the services are a valuable asset to Sedgwick and difficult to replace. Accordingly,Client agrees that, during the term ofthe Agreement, and for twelve months thereafter, it will not solicit, contract or hire Sedgwick personnel or encourage them to seek employment or any other contractual arrangements with Client. The parties further agree that in the event Client breaches the provision of this Section, Client shall pay Sedgwick liquidated damages in the amount of two times the annual compensation to be paid to such person for each such breach, which is the parties' good faith estimate of the amount of damages to Sedgwick from such breach. This Section shall survive the termination of this Agreement. IN WITNESS WHEREOF,the parties have caused this Agreement to be executed on the dates written below. City of Fort Wo Sedgwick Claims Management Services,Inc. By By /A&W Title f�� �;s k / i, r Title Vice President Date / f r / 7 Date November 13,2020 10 EXHIBIT A SERVICE PROGRAM OVERVIEW I. Introduction Sedgwick is administering the self-insured workers compensation claims for Client as follows: State(s)Serviced: Texas Sedgwick Servicing Office: City of Fort Worth(client)offices,Fort Worth,Texas H. Account Coordination On behalf of Client,this service program will be coordinated by: Client Representative: Chris Lam Client Name: City of Fort Worth Client Address: 900 Monroe St, Ste. 362,Fort Worth,TX 76102 Telephone#: 817-392-6398 Fax#: 817-887-3012 On behalf of Sedgwick,this service program will be coordinated by: Sedgwick Representative: Susan Mullins Sedgwick Office Address: 10535 Boyer Blvd, Suite 100 Austin,TX 78757 Telephone#: 512-427-2381 Fax#: 512-346-9321 Each party reserves the right to change its designated representative during the term of the Agreement. 11 EXHIBIT B SERVICE FEES Client shall pay the following fees on a life of contract basis for services provided during the term of this Agreement: Annual flat fee Client shall pay the following fees for claims received by Sedgwick during the period beginning November 1,2020 and ending October 31,2021: $725,967.This fee is based on the estimated claim volumes and the dedicated staff to service those claims. Our proposed staffing model will continue to provide the City with exceptional claims services deliver results that reduce the City's overall cost of risk. Under this option, Sedgwick reserves the right to modify the annual flat fee if acquisitions,divestitures, changes in program requirements, or an increase in claim volume that impacts the staffing requirements of the unit. Since Sedgwick is presenting a dedicated staff our pricing model is fixed annual as stated above and we are not presenting variable option at a fee per claim. Claims open at contract termination will either be transferred to the new administrator or handled by Sedgwick for an additional annual fee. RMIS The following items are included at no charge in the RMIS line item in the table above. • RMIS access: viaOne for six users, which provides a platform-independent,web-based tool for viewing and analyzing claims data.Access provides secure,near real-time information from Sedgwick's proprietary claims information systems • RMIS data outgoing feed:Monthly data file to a single source • RMIS data outgoing feed:Monthly feed to Integer Health for claims and bill review files. • RMIS data incoming feed biweekly feed from the city's payroll. Items included in the quoted fees include: • Customer service intake(call center or web reporting only) • Semi-annual telephonic claim reviews with electronic status reports Services available for an additional fee include: • Subrogation services will be charged 20%of recoveries when referred to a specialist(with client approval) • RMIS access: Additional viaOne user access is$845 per user per year. • RMIS data feeds: Additional interface files are$220 per month for monthly file, $605 per month for weekly file or$1,895 per month for daily file 12 • RMIS: System interfaces or custom programming charged at$185 per hour • Risk control services are available for$150 per hour plus direct expenses for general safety personnel, $165 per hour plus direct expenses for specialized industrial hygiene and$175 per hour plus direct expenses for ergonomists/analytics • Escheatment services Sedgwick Managed Care Sedgwick had presented two MBE AA partners to provide case management and peer review.However, we removed one due to the location of the county. We have increased the participation of Trinity Review Services,Inc.. Sedgwick has also included its fees for these services should at any time back up is needed. All claim administration fees and services contemplate the deployment of Sedgwick's all other managed care services including medical bill review and clinical case management services. Bill review, including five-star Bill review $8.52 per bill provider network. $8.12 per bill Blackstone(Network) ($16.64 total per bill) Clinical services providing Utilization review $91.35 per review utilization review,including (including pharmacy UR) pharmacy UR,in compliance with applicable regulatory Physician advisor/peer $162.40 per review requirements;UR embedded with review TCM, when assigned Telephonic case $91.35 per hour management and surgery nurse Sedgwick provides the following managed care, oversight, regulatory compliance and quality assurance services at no charge to our clients. • Managed care implementation including regulatory consultation • Sedgwick medical card, identifying local four-to five-star providers and specialty networks for injured employees • Standard provider panel postings 13 Additional cost containment services Sedgwick managed care can offer additional cost containment services and associated fees upon request: Clinical consultation service—24/7/365 triage Work placement solutions—transitional work placement(at not-for-profit) Catastrophic case management—emergency Field case management—critical claim intervention claim oversight Complex pharmacy management—medication review by clinical experts Definitions,terms and conditions Definitions Life of contract: Sedgwick will administer all claims received during the contract for the quoted fee. Claims open at contract termination will either be transferred to the new administrator or handled by Sedgwick for an additional annual fee. Lost time claim: A lost time/indemnity claim shall mean any workers' compensation qualified claim as follows: • For which a payment is made,or reserve is posted under the indemnity portion(i.e.,not medical and not expense) of the qualified claim or there is time lost from work • For which an application for adjudication of a claim or hearing notice is received or otherwise involves litigation or communication from or to a petitioner's attorney • Where incurred medical costs exceed $3,000 • That is denied but otherwise would have been classified as indemnity claims • For which City of Fort Worth requests to be investigated or classified as an indemnity claim • That Sedgwick determines additional investigation is necessary to determine compensability, to comply with applicable laws, or both • For which subrogation is investigated or pursued • That is open longer than 12 months Medical only claim: A medical only claim is defined as any claim that is not a lost time claim or an incident-only claim. Incident only: Incident only claims are claims reported by City of Fort Worth that require no payment or activity other than generating a record in the claims administration system.These claims carry no reserves and no contacts are made by Sedgwick. Allocated expenses: The claim fees agreed to shall include all costs incurred by Sedgwick in handling 14 claims submitted, except those costs normally referred to as"allocated expenses."These expenses will be billed to the individual claim file when incurred. In some cases, Sedgwick engages subcontractors to assist us in providing services.In order to hold down the cost to our clients, Sedgwick may have arrangements with these subcontractors to cover expense for certain activities,including but not limited to, development of integrated data systems,account - management,quality oversight and ongoing projects that improve penetration and efficiency for our examiners. These cooperative service agreements are not transactional-based and are not dependent on any activity generated by City of Fort Worth. In fact,the flat cooperative service fees remain the same regardless of whether City of Fort Worth uses these vendors on their program or not. Allocated expenses include but are not limited to: • Attorney fees and costs • Court costs and appeal bonds • Cost of providing rehabilitation services • Cost of surveillance activities and other outside investigations • Cost of expert witnesses, accident reconstruction specialists, or any other specialist necessary for the investigation and/or defense of a claim • Cost incurred to obtain statements,photographs, records,transcripts, depositions, digital call recording,etc. • Cost of independent medical exam • Cost of medical bill review,PPO,managed care and other similar programs • Cost of medical experts,peer review,utilization review, case management,pre-certifications and medical necessity evaluations • Cost of translation services • Medicare reporting and compliance services fees and costs • Index filings • Cost of vocational evaluations,vocational services,training or other vocational activities • Cost of outside assistance necessary to prepare or protect a client's subrogation right or Special Disability Trust Fund claim • Expenses for travel to depositions,mediations, arbitrations,hearings or other legal proceedings at the client's request or as required by law or rule of a federal,state or local agency 15 Terms and conditions Quotation expiration: All pricing quoted is valid for a period of 180 days from submission unless a written extension is requested. Takeover of existing claims: There is no takeover of existing claims anticipated in this program. Payment terms: All implementation and data conversion fees are billed upon notification of award. Claim service,program management and information technology fees are billed on a monthly basis in advance based on annual estimates. The estimates are subject to audit 30 days after the conclusion of each contract year. Invoices are payable upon receipt. All service fees contemplate program service commencing on 11/01/2020.In the event the effective date of services is delayed at the request of City of Fort Worth, Sedgwick reserves the right to bill City of Fort Worth for program deployment expenses incurred outside of the scope of agreed implementation period, up to and including full fees for service on the originally scheduled implementation date with invoices payable upon receipt. Early termination: Should City of Fort Worth terminate for convenience within the first 12 months of the agreement,City of Fort Worth shall pay Sedgwick fees equal to three months of the service fees. Should City of Fort Worth terminate during the second 12 months, City of Fort Worth shall pay fees equal to two months of the services fees. Termination fees are payable within 30 days of the date of notice of such termination. File storage: City of Fort Worth is responsible for storage of claim files closed at the time that Sedgwick begins claims administration. Submission of all applicable claims: The fees quoted are based on the assumption that City of Fort Worth will forward to Sedgwick all claims arising during the applicable time period in a covered jurisdiction.In the event that City of Fort Worth does not forward all such claims to Sedgwick,we reserve the right to adjust the fees accordingly. Contract term: All fees assume that the parties will enter into a five-year contract(with two, one-year renewals)with an annual increase of 2.5%to all fees. 3. Invoicing All implementation and data conversion fees are billed upon notification of award. Sedgwick shall submit its invoice for all other fees on a monthly basis,in advance,based on an annual fee estimate. Shortly after the expiration of the contract year, or upon termination,Sedgwick shall compar e the installment amounts paid by Client to the actual fee due. Client shall pay any additional fee due, or Sedgwick shall credit Client for any overpayment,as the case may be. 4. SIU Service Fees The charges set forth below are the current fees for the services listed, and these fees may change from time to time upon sixty days prior written notice to Client: 16 Service name Research services Comprehensive background $450 Social media investigation $250 SmartPlus $395 Canvassing services $250 Skip tracing/individual locate $175 Asset check $225 Criminal and civil check $135 plus cost of records Additional counties: $35(per county) Records request $100 plus cost of records Social media monitoring $25/week of monitoring Other research services Quote upon request Surveillance services Surveillance $85 per hour(portal to portal):All other states $95 per hour(portal to portal):California,Hawaii and New York Additional expenses to hourly rate: Report writing(up to 1/2 hour per day at standard surveillance rates) Pre-surveillance investigation: $85 License plate searches: $10(post prelim) Unmanned surveillance $700 per day(three-day minimum) Deployment and extraction of stationary device: $85 per hour:All other states $95 per hour: California,Hawaii and New York Video copies $60 per additional copy plus shipping Field Services Alive and Well Check-In person $325:All other states $350: California,Hawaii and New York Alive and Well Check-Virtual Interview $125 Activity Check $350: All other states $375: California,Hawaii and New York AOE/COE $85 per hour(portal to portal):All other states Recorded Statement $95 per hour(portal to portal):California,Hawaii Scene Investigation and New York Trial/Deposition Mileage charged at IRS standard mileage rate International investigations Quote upon request Other field services_ Quote upon request Assessment services Suspect file review $95 per hour Fraud investigation(includes state $95 per hour reporting) SIU intelligence program Workers' compensation and general liability— $150 per claim triggered(includes up to three claim triage reviews per claim triggered) Other assessment services Quote upon request 17 6. Subrogation and Other Recoveries: A. Sedgwick shall pursue recoveries for subrogation, second injury funds, and other applicable special funds such as supplemental state funds, COLA reimbursements,retro funds,and other similar funds. Client shall pay Sedgwick twenty percent(20%)of the recovery received. All fees and expenses, including attorneys' fees or investigations, for pursuit of any recovery shall be charged to the appropriate Qualified Claim file as an allocated loss adjustment expense. B. As determined by the parties, Sedgwick shall either: a. Deposit the recovery funds and issue payment from Sedgwick's accounts payable system to Client for the net recovery (less Sedgwick's fee). Sedgwick will deposit the net recovery check into the Client's loss-funding account or forward it directly to the Client. b. Deposit the recovery funds into the Client's loss-funding account and Sedgwick shall receive payment from the claim file or directly from Client. 7. Payment Terms Client acknowledges that all fees set forth in the Agreement are due and payable within thirty(30)days of the invoice. Any and all past due fees will incur interest at the rate of 1.5%per month,unless otherwise prohibited bylaw. Client acknowledges that in the event Sedgwick undertakes collection proceedings for any outstanding fees, then Client will reimburse Sedgwick for all costs associated with such collection action, including a reasonable attorney fee and court cost. The fees set forth herein assume that all facilities (rent and capital expenditures), postage (including express mail),office equipment(excluding personal computers),supplies, and telephone equipment will be provided by Client. All fees are contingent upon claim management from Sedgwick's systems. 18 SIU SERVICE SCHEDULE Sedgwick Special Investigations Unit ("Sedgwick SIU") will provide centralized management of investigative service vendors and will maintain a national vendor list of approved service providers based upon client or local Sedgwick office preference. Sedgwick SIU will establish quality benchmarking and ensure its vendors are properly licensed and maintain insurance coverage as mandated in vendor agreements with these firms. Sedgwick SIU will serve as a central referral and coordination unit providing the following SIU s e r v i c e s for the fees itemized in Exhibit B: 1. Assessment services including case review, consultation, action plan development, state fraud filing, claim file demand and fraud packaging. 2. Field services including surveillance, activity checks, alive and well checks, and on-site investigations including recorded statements,AOE/COE, and scene investigations. 3. Research services including comprehensive background checks, internet searches, facility canvasses public records, skip tracing, criminal,civil and asset checks. 4. SIU compliance services including carrier and state annual reporting and fraud awareness training. 5. And, other services as outlined in Exhibit B. 19 a MEDICARE REPORTING SERVICES SCHEDULE To assist the Client in fulfilling Client's Medicare beneficiary reporting obligations under Medicare, Medicaid and State Children's Health Insurance Program Extension Act of 2007("MMSEA")Section 111 as set forth in 42 U.S.C. §1395y(b)(7)&(8)and the CMS User Guide("User Guide")published on March 16,2009(and as amended and revised), Sedgwick will perform the following reporting services: I. Sedgwick will electronically interface with the Centers for Medicare and Medicaid Services ("CMS")to capture and report data in the format prescribed by the CMS Specifications. ' 2. Sedgwick will report directly to CMS on behalf of Client as an Account Designee (reporting agent), as such term is defined in the CMS User Guide as amended from time to time by CMS. 3. Client will be considered a Responsible Reporting Entity ("RRE") as that term is defined in the User Guide. a. Client will be responsible for maintaining a valid RRE Identification Number as described in the User Guide and is a condition precedent to Sedgwick preforming the duties under this section.Failure to maintain the RRE Identification Number will result in Sedgwick's inability to properly report claims on behalf of the Client. Sedgwick assumes no responsibility for maintaining a valid RRE Identification Number on behalf of the Client. 4. Sedgwick will assist Client as follows: a. Sedgwick will electronically interface with the Centers for Medicare and Medicaid Services ("CMS")to capture and report data in the format prescribed by the User Guide. b. Sedgwick will report directly to CMS on behalf of the Client as an Account Designee (reporting agent), and/or Account Manager as such term is defined in the User Guide. c. Sedgwick will prepare the required data files and submit them to CMS on a periodic basis in order to properly query and report the appropriate files as defined in the User Guide. 5. Sedgwick will be responsible for payment of any and all fines assessed to Client regarding compliance with the Medicare beneficiary reporting requirements of Medicare, Medicaid and SCHIP Extension Act of 2007 that relate to the negligent acts or omissions of Sedgwick except to the extent that: a. Such fines or penalties are the direct result of specific direction given by Client and/or its agent or the actions or omissions of Client and/or its agent;or b. Sedgwick did not receive information from Client that is essential to the performance of the duties set forth herein in a timely manner so as to be able to comply with the terms of this Agreement. 20 City of Fort Worth, Texas Mayor and Council Communication DATE: Tuesday, September 15, 2020 REFERENCE NO.: **M&C 20-0648 LOG NAME: 13P 20-0148 WORKERS' COMPENSATION ADMINISTRATION HRD JPB SUBJECT: (ALL) Authorize Execution of an Agreement with Sedgwick Claims Management Services, Inc. for Workers' Compensation Administration and Related Services for a Flat Fee Up to $725,967.00 for the First Year and about a 2.5% Increase in the Subsequent Years (Year 2 - $744,116.00, Year 3 - $762,719.00, Year 4 - $781,878.00, and Year 5 - $801,332.00), for a Five-Year Initial Term with Option to Renew Up to Two Additional One-Year Terms at the City's Sole Discretion RECOMMENDATION: It is recommended that the City Council authorize the execution of an agreement with Sedgwick Claims Management Services, Inc. for workers' compensation administration and related services for a flat fee up to $725,967.00 for the first year and about a 2.5\% increase in the subsequent years (year 2 - $744,116.00, year 3 - $762,719.00, year 4 - $781,878.00, and year 5 - $801,332.00), for a five-year initial term with option to renew up to two additional one-year terms at the City's sole discretion, and authorize claims and associated costs to be paid for estimated claims expenses in the initial one-year period up to $9,400,000.00 and an estimated 5 percent increase in future years (year 2 -$9,870,000.00, year 3 - $10,380,000.00, year 4 -$10,890,000.00, and year 5 -$11,430,000.00). DISCUSSION: The Human Resources Department(HRD) approached the Purchasing Division to secure an agreement for workers' compensation administration and related services. The services includes: (1) third party claims administration services for a self-funded workers' compensation program to include claims adjusting, claims investigations, claims payments, establishing reserves, and claims management reports; (2) medical case management to include field and telephonic case management and vocational case management; (3) medical cost containment to include field and telephonic case management, early intervention, medical bill auditing, preauthorization and reconsideration determinations, utilization review, and durable medical equipment management; (4) pharmacy benefits management to include developing and maintaining a drug formulary, contracting with pharmacies, negotiating discounts and rebates with drug manufacturers, processing and paying prescription drug claims, and working with the City and the vendor to maintain or reduce pharmacy expenditures and improving health care outcomes of City employees; (5) 504 medical provider program—administration of the City's"BlackStone Provider Panel"to include provider credentialing, website maintenance, and maintenance of claimant and healthcare provider policies and procedures; (6) related services, such as Department of Workers' Compensation Austin Representatives, actuarial services, claims auditing, private investigations, legal representation at hearings; and (7) other such services. The York Risk Services Group, Inc. has been providing these services since November 1, 2015 under its previous Agreement (City Secretary Contract (CSC) No. 47186; Mayor and Council communication (M&C) C-27435)with the City. This agreement will expire on October 31, 2020. Staff issued a Request for Proposals (RFP) that consisted of detailed scope of services. The RFP was advertised in the Fort Worth Star-Telegram every Wednesday from May 13, 2020 through June 24, 2020. Seventeen vendors were solicited from the purchasing database; eleven responses were received. An evaluation team consisting of staff from the HRD, the Police Department, the Fire Department, the Law Department and the Diversity and Inclusions Department evaluated proposals received. The evaluation team ranked the proposals based on pre-defined factors. Three finalists were selected for presentations. Following the presentations, the evaluation team determined Sedgwick Claims Management Services, Inc. provides the best overall services and recommended that the City Council authorize the execution of agreement for an initial five-year term with options to renew up to two additional one-year terms at the http://apps.cfwnet.org/ecouncil/printmc.asp?id=28217&print=true&DocType=Print 11/17/2020 City's sole discretion. The flat fee for the initial one-year period is up to $725,967.00 and anticipated to trend at about a 2.5 percent increase in subsequent years (year 2 -$744,116.00, year 3 - $762,719.00, year 4 -$781,878.00, year 5 - $801,332.00, year 6 - $821,365.00, and year 7 - $841,899.00). In addition, claims and associated cost will be budgeted for in the respective fiscal years and paid. The estimated claims expenses for the initial one-year period is up to $9,400,000.00 and anticipated to trend at about a 5 percent increase in future years (year 2 - $9,870,000.00, year 3 -$10,380,000.00, year 4 -$10,890,000.00, year 5 - $11,430,000.00, year 6 -$12,000,000.00, and year 7 - $12,600,000.00). An administrative change order or increase may be made by the City Manager up to the amount allowed by relevant law and the Fort Worth City Code and does not require specific City Council approval as long as sufficient funds have been appropriated. Sedgwick Claims Management Services, Inc. is in compliance with the City's BDE Ordinance by committing to 10 percent MBE-AA(Minority Business Enterprises -African American) participation on this project. The City's goal on this project is 10 percent MBE-AA. Upon City Council approval, the five-year term of this contracts shall begin on November 1, 2020 and expire on October 31, 2025. The contract may be renewed for up to two successive one-year term at the City's option. This action does not require specific City Council approval, provided that the City has appropriated sufficient funds to satisfy the City's obligations during the renewal term. The contract will include a standard fiscal funding out clause that would comply with state law requirements by allowing the City to terminate the Agreement without penalty, if in the future, the Council elects not to appropriate funds for contracted services. FISCAL INFORMATION /CERTIFICATION: The Director of Finance certifies that upon approval of the above recommendations funds are available upon adoption of the Fiscal Year 2021 Budget by the City Council, funds will be available in the Fiscal Year 2021 Operating Budget, as appropriated, in the Risk Financing Fund. Prior to an expenditure being incurred, the Human Resources Department has the responsibility to validate the availability of funds. BQN\\ FUND IDENTIFIERS (FIDs): TO Fund Department ccoun Project Program ctivity Budget Reference # moun ID ID Year Chartfield 2 FROM Fund Department ccoun Project Program ctivity Budget Reference # moun ID ID Year Chartfield 2 CERTIFICATIONS: Submitted for City Manager's Office by: Jay Chapa (5804) Originating Department Head: Reginald Zeno (8517) Cynthia Garcia (8525) Additional Information Contact: John Padinjaravila Baby (2279) ATTACHMENTS 1. 1295 signed Sedwick.pdf (CFW Internal) 2. 20-0148 Workers Comp FID.XLSX (CFW Internal) 3. 200825 20-0148 Sedgwick Comp Memo_rev.pdf (CFW Internal) 4. SAMs Report 8-21-2020 Sedwick.pdf (CFW Internal) http://apps.cfwnet.org/ecouncil/printmc.asp?id=28217&print=true&DocType=Print 11/17/2020