HomeMy WebLinkAbout(0033) M&C 20-0648City of Fort Worth, Texas
Mayor and Council Communication
DATE: 09/15/20 M&C FILE NUMBER: 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 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 BIDE 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.
Submitted for City Manager's Office by. Jay Chapa 5804
Originating Business Unit Head: Reginald Zeno 8517
Additional Information Contact: Cynthia Garcia 8525
John Padinjaravila Baby 2279