DATE: November 8, 2022
TO: Board of Supervisors
SUBMITTED BY: Hollis Magill, Director of Human Resources
SUBJECT: Agreement with Acclamation Insurance Management Services
RECOMMENDED ACTION(S):
TITLE
Approve and authorize the Chairman to execute an Agreement with Acclamation Insurance Management Services for workers’ compensation third party claims administration and selected ancillary services effective January 1, 2023, not to exceed five years, which includes a three-year base contract and two optional one-year extensions, total not to exceed $12,276,277.
REPORT
Approval of the recommended action will provide for Third Party Administration (TPA) and associated ancillary services for the County’s self-insured Workers’ Compensation Program. The recommended Agreement is for a three-year base period and may be extended for two additional one-year periods. As with the current TPA agreement, the cost of this agreement will be part of program costs recovered through the Risk Management workers’ compensation rates. This item is countywide.
ALTERNATIVE ACTION(S):
There is no viable alternative option. The agreement with the incumbent vendor, Acclamation Insurance Management Services (AIMS) will expire on December 31, 2022. After a thorough review of bidder proposals, it has been determined that the services offered by AIMS will best meet the needs and requirements of the County.
FISCAL IMPACT:
Sufficient appropriations for this agreement have been included with Human Resources Risk Management Org 8925 FY 2022-23 Adopted Budget. The maximum cost associated with this agreement is $7,227,491 over the three-year base period. The cost for the fourth and fifth years shall not exceed $2,500,430 and $2,548,356 respectively. As with the current TPA contract, the cost of this agreement will be part of program costs recovered through the Risk Management Internal Services Fund (ISF) workers’ compensation rates.
DISCUSSION:
In the 56-year history of the County’s Self-Insured Workers’ Compensation program, the County has retained the services of a TPA to administer workers’ compensation claims. The County has chosen not to self-administer this program as it avoids labor costs, turnover issues, and creates better claim cost efficiencies. The current TPA agreement, which was approved by your Board on November 14, 2017, with AIMS became effective January 1, 2018, and will expire on December 31, 2022. In March of 2022, the County issued Request for Proposal (RFP) No. 22-051 requesting bids for services for the period beginning January 1, 2023. The RFP process was coordinated by Purchasing Staff.
Ancillary services associated with the administration of workers’ compensation claims such as bill review, utilization review, Medicare Section 111 reporting, and medical provider networks are important cost containment measures which are necessary to the successful, cost-effective administration of the program. Since July 1, 2006, the County has been utilizing a flat rate
pricing model to allow for stable cost allocation of these expenditures over the terms of the Agreement. The proposed Agreement recommended for approval, continues the flat rate pricing model.
The County sought proposals from vendors for claim administration and the above-mentioned ancillary services. Bidders were free to submit proposals for any or all of the services related to workers’ compensation claims management. The RFP was sent to all firms registered in the Purchasing system. The County received seven proposals, though one was deemed unresponsive by the Purchasing Manager.
A panel of five individuals was convened to perform selection activities, including one from the County’s Human Resources division; one from the Department of Public Works and Planning; one from the Sheriff’s Department; one from the Internal Services Division; and one from Public Risk Innovation, Solutions, and Management (PRISM). After the initial evaluation and review by panel members, the candidates for the TPA and selected ancillary services were narrowed to two. The panel members requested that Purchasing to allow the panel to conduct on-site interviews of the two top ranking vendors before making a final recommendation. Purchasing was able to approve the committee’s request to conduct on-site interviews to determine which of the two top vendors was best suited to meet the County’s needs.
The on-site interview of each of the two vendors consisted of general clarifying questions, a tour of the facilities and a demonstration of the proposed claims management system which displayed the ability to provide on demand ad-hoc reporting. Based on the panel’s assessment of the candidates, AIMS received the highest overall ranking, and a recommendation was made to award the contract to that vendor.
AIMS offers the claims administration ancillary services that are required of the County. Their proposal was strong, and they presented well during the on-site interviews. Additionally, the panel members noted the following strengths in the AIMS proposal:
• AIMS has guaranteed a 24-hour initial three-point contact from the time the injury report is received.
• AIMS provides ancillary services through their sister company, Allied Managed Care (AMC) to provide for proper medical control and ensure that cost containment measures are in place. AIMS and AMC work collaboratively on claims to deliver solutions that are advantageous to the injured worker and the County.
• AIMS has a fully integrated claims management systems with Allied Managed Care and is also fully integrated with their paperless management system.
• AIMS employs a medical director specialized in Occupational Medicine, who is available to AIMS staff for medical questions. This saves time and expense by providing the ability to address medical case management questions in-house as well as provides oversight of claims examiner approvals, reducing delays in care.
• In addition to a claim’s supervisor, six dedicated claims examiners, and two claims’ assistants, AIMS provides an additional staff member to serve as a Return-to-Work coordinator, who will interface with the County and medical providers to return injured workers to work as soon as practicable.
• AIMS provides up-to-date training to their claim’s examiners and the County staff. This creates job satisfaction and minimizes staff turnover.
• AIMS has the ability to provide robust reporting to include OSHA 300 reporting, as required by the RFP
• AIMS retains a legislative advocate on staff that will act on the County’s behalf and provide necessary information regarding upcoming legislation changes and other developments that could affect the County.
• AIMS maintains an office in Fresno to oversee the County claims. They also have an internal warehouse to store the County’s paper files and possess the ability to convert them to electronic files into their claims management system when pulling the paper files for further claims handling.
Your Board’s approval of the recommended action will allow the County to continue to receive necessary third-party claims administration and associated ancillary services for the County’s self-insured Workers’ Compensation Program.
REFERENCE MATERIAL:
BAI #30, August 10, 2021
BAI #8, November 14, 2017
ATTACHMENTS INCLUDED AND/OR ON FILE:
On File with the Clerk - Agreement with Acclamation Insurance Management Services
CAO ANALYST:
Samantha Buck