2010-27564 Reso RESOLUTION NO! 2010 -27564
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF
THE CITY MANAGER RELATIVE TO THE RANKING OF PROPOSALS,
PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO. 36-09/10,
FOR THIRD PARTY ADMINISTRATOR CLAIM AUDIT AND PERFORMANCE
EVALUATION SERVICES; AUTHORIZING THE ADMINISTRATION TO ENTER
INTO NEGOTIATIONS WITH CLAIM TECHNOLOGIES, INCORPORATED,
AND SHOULD THE ADMINISTRATION NOT BE ABLE TO NEGOTIATE AN
AGREEMENT WITH CLAIM TECHNOLOGIES, AUTHORIZING THE
ADMINISTRATION TO NEGOTIATE WITH DELOITTE CONSULTING, LLP;
AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE AN AGREEMENT UPON THE COMPLETION OF
SUCCESSFUL NEGOTIATIONS BY THE ADMINISTRATION.
WHEREAS, the City offers a program of self- funded medical plans for the benefit
of its approximately 2,000 active employees, 1,850 retirees, and their covered
dependents; and
WHEREAS, Humana Medical Plans (Humana) has served as the Third -Party
Administrator (TPA) for the City's medical plan since January 1, 2009; and
WHEREAS, the City does have the right to audit Humana's administration of its
medical plans as outlined in Article VI of the City's Service Agreement; and
WHEREAS, the audit should include Humana's compliance with the terms of the
performance guarantees between the City and Humana; and
WHEREAS, the City is also seeking a firm to conduct single or multiple claim
audits at the request of an individual enrolled in one of the City's group health plans; and
WHEREAS, on July 15, 2010, RFP No. 36 -09/10 was issued, with notifications to
over 40 firms, which resulted in the receipt of proposals from Brown Smith Wallace, LLC;
Claim Technologies, Incorporated; Deloitte Consulting, LLP; Gallagher Benefit Services,
Inc.; Grant Thornton, LLP; Healthcare Data Management, Inc.; Siver Insurance
Consultants; and The Segal Company; and
WHEREAS, the proposals from Grant Thornton LLP and The Segal Company
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were deemed non - responsive; and
WHEREAS on September 24, 2010, the City Manager via Letter to Commission
No. 253 -2010 appointed an Evaluation Committee (the "Committee "), consistin g of the
following individuals:
Henry Castillo, Resident and Leadership Academy Graduate;
Paulette Rolle, Administrator, Human Resources Department;
James Sutte, Internal Auditor, Internal Audit Department;
Katie Yanke, Financial Analyst, Finance Department;
Jeremy White, Resident, Financial Consultant and Graduate of Leadership Academy; and
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WHEREAS, the . Committee convened on November 5, 2010, and was provided
with an overview of the project, information relative to the City's Cone of Silence
Ordinance, the Government in the Sunshine Law, listened to presentations, participated
in a question and answer session with each of the six (6) responsive Proposers, and
discussed and evaluated the proposals based on the evaluation criteria as outlined in the
RFP; and
WHEREAS, the Committee ranked Gallagher Benefit Services as the top- ranked
firm, Claim Technologies, Incorporated as the second - ranked firm, and Deloitte Consulting
LLP as the third - ranked firm; and
WHEREAS, after considering the recommendation of the Committee, the City
Manager recommends that the Administration enter into negotiations with Claim
Technologies, Incorporated, and should the Administration not be able to negotiate an
agreement with Claims Technologies, that the Administration be authorized to negotiate
with Deloitte Consulting, LLP.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND THE
CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and
City Commission hereby accept the recommendation of the City Manager pertaining to the
ranking of proposals pursuant to Request for Proposals (RFP) No. 36- 09/10, for Third
Party Administrator Claim Audit and Performance Evaluation Services, and authorize the
Administration to enter into negotiations with Claim Technologies, Incorporated; and
should the Administration not be able to negotiate an agreement with Claim
Technologies, authorize the Administration to negotiate with Deloitte Consulting, LLP;
further authorizing the Mayor and City Clerk to execute an agreement upon conclusion of
successful negotiations by the Administration.
PASSED and ADOPTED h' $' h Decepilo-er-- t is � day of , 2010.
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T:IAGENDA\2010 \December 8 \Consent \TPA Claim Audit Reso.doc
APPROVED AS TO
FORM & LANGUAGE
6 FOi FO " EXECUTION
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COMMISSION ITEM SUMMARY
Condensed Title:
A Resolution Accepting The City Manager's Recommendation Pertaining To The Ranking of Firms For Third Party
Administrator Claim Audit And Performance Evaluation Services, Authorizing The Administration To Enter Into Negotiations,
And Authorizing The Mayor And City Clerk To Execute An Agreement.
Key Intended Outcome Supported:
Control costs of payroll, including salary and fringes /minimize taxes /ensure expenditure trends are sustainable over the long
term.
Supporting Data (Surveys, Environmental Scan, etc.): In the 2009 Community Satisfaction Survey, among the four (4)
areas of customer service measured, 85.5% of respondents agreed that "The employees that assisted me were courteous and
professional."
Issue:
1 Shall the Commission Adopt the Resolution?
Item Summary /Recommendation:
The City offers a program of self - funded medical plans for the benefit of its approximately 2,000 active employees, 1,850
retirees, and their covered dependents. Humana Medical Plans (Humana) has served as the Third -Party Administrator (TPA)
for the City's medical plan since January 1, 2009.
The City has the right to audit Humana's administration of its medical plans as outlined in Article VI of the City's Service
Agreement. The audit should include Humana's compliance with the terms of the performance guarantees between the City
and Humana.
The City is also seeking a firm to conduct single or multiple claim audits at the request of an individual enrolled in one of the
City's group health plans.
RFP No. 36 -09/10 was issued and sent to over 40 firms. This outreach resulted in the receipt of proposals from the following
eight (8) firms: Brown Smith Wallace, LLC; Claim Technologies, Incorporated; Deloitte Consulting, LLP; Gallagher Benefit
Services, Inc.; Grant Thornton, LLP; Healthcare Data Management, Inc.; Siver Insurance Consultants; and The Segal
Company. Upon Procurement performing the test for responsiveness and in consultation with the City Attorney's Office, the
proposals from both Grant Thornton and The Segal Company were deemed non - responsive.
An Evaluation Committee appointed by the City Manager reviewed, scored and ranked the proposals. Based on the published
evaluation criteria, the Committee Members ranked Gallagher Benefit Services as the top- ranked firm, Claim Technologies,
Incorporated as the second - ranked firm, and Deloitte Consulting LLP as the third - ranked firm.
The Evaluation Committee's top- ranked firm, Gallagher Benefit Services, is currently the City's benefit consultant, an entity that
was crucial in assisting the City in selecting Humana as its medical provider; their fees for the services provided to the City are
derived from commissions paid by Humana, and who was recently awarded a five (5) year agreement to continue to provide
such services. During his due diligence review of the Evaluation Committee's recommendation, and in an effort to ensure
transparency, reduce any potential perception of conflict and provide for the checks and balances necessary to conduct a
combined performance evaluation and audit of Humana services to the City, the City Manager deems it is in the City's best
interest for the Administration to enter into negotiations with his top- ranked firm, Claim Technologies, Inc. and if negotiations
are not successful, enter into negotiations with Deloitte Consulting, LLP.
It is recommended that the Mayor and City Commission adopt the resolution.
Advisory Board Recommendation:
N/A
Financial Information:
Source of Amount Account
Funds:
Funding is - -
g s available from account number 560 1793 000303,
1 $61,000 Administration Fees - Self Insurance Medical Health
2
3
OBPI Total $61,000
Financial Impact Sum - ry:
City Clerk's Office Le 9 i Native Trackin g :
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City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the ity Commission
FROM: Jorge M. Gonzalez, City Manag4ir
DATE: December 8, 2010
SUBJECT: A RESOLUTION OF THE MA • AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE
RECOMMENDATION OF THE CITY MANAGER RELATIVE TO THE
RANKING OF PROPOSERS, PURSUANT TO REQUEST FOR
PROPOSALS (RFP) NO. 36- 09/10, FOR THIRD PARTY
ADMINISTRATOR CLAIM AUDIT AND PERFORMANCE EVALUATION
SERVICES; AUTHORIZING THE ADMINISTRATION TO ENTER INTO
NEGOTIATIONS WITH CLAIM TECHNOLOGIES, INCORPORATED, AND
SHOULD THE ADMINISTRATION NOT BE ABLE TO NEGOTIATE AN
AGREEMENT WITH CLAIM TECHNOLOGIES, AUTHORIZING THE
ADMINISTRATION TO NEGOTIATE WITH DELOITTE CONSULTING,
LLP; AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE AN AGREEMENT UPON THE COMPLETION OF
SUCCESSFUL NEGOTIATIONS BY THE ADMINISTRATION
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
FUNDING
$61,000 Funding is available from account number 560 - 1793- 000303; Administration
Fees - Self. Insurance Medical Health
KEY INTENDED OUTCOMES SUPPORTED
Control costs of payroll, including salary and fringes /Minimize Taxes /Ensure expenditure
trends are sustainable over the long term.
BACKGROUND
The City offers a program of self- funded medical plans for the benefit of its approximately
2,000 active employees, 1,850 retirees, and their covered dependents. Humana Medical
Plans (Humana) has served as the Third -Party Administrator (TPA) for the City's medical
plan since January 1, 2009. Humana processes the City's medical claims from their
Louisville, Kentucky claim office.
The City does have the right to audit Humana's administration of its medical plans as
outlined in Article VI of the City's Service Agreement.
The audit should include Humana's compliance with the terms of the performance
Commission Memorandum
December 8, 2010
RFP No.36 -09/10 Third Party Claim Audit and Performance Evaluation Services
Page 2 of 4
guarantees between the City and Humana.
Humana provides the City with administrative services for its five (5) health care plans:
• Premium Preferred Provider Organization (PPO);
• Premium Health Maintenance Organization (HMO);
• Point of Service (POS);
• Standard Preferred Provider Organization (PPO); and
• Standard Health Maintenance Organization (HMO).
The City is also seeking a firm to conduct single or multiple claim audits at the request of an
individual enrolled in one of the City's group health plans. The successful firm would, upon
the request of an enrolled individual, perform an audit of an invoice or billing statement
received from a service provider to determine the accuracy of the bill, detecting any
erroneous or duplicate charges submitted. The firm would then negotiate any appropriate
corrections to the service provider's billing with the service provider, communicating the
results directly to the employee. The selected firm would provide these ongoing services for
a period not to exceed three years.
RFP PROCESS
RFP No. 36 -09/10 was issued on July 15, 2010, and the Procurement Division e- mailed, as
well as uploaded the RFP to BidSync.com and BidNet, sending notifications to over 40
firms. This outreach resulted in the receipt of proposals from the following eight (8) firms:
Brown Smith Wallace, LLC; Claim Technologies, Incorporated; Deloitte Consulting, LLP;
Gallagher Benefit Services, Inc.; Grant Thornton, LLP; Healthcare Data Management, Inc.;
Siver Insurance Consultants; and The Segal Company.
Upon Procurement performing the review for responsiveness of the proposals, and in
conjunction with soliciting feedback from the City Attorney's Office, the proposals from Grant
Thornton LLP and The Segal Company were deemed non - responsive. These firms
requested exceptions to the City's terms for indemnification and cancellation as outlined in
the RFP, and were not willing to accept the City's requirements.
On September 24, 2010, the City Manager via Letter to Commission No. 253 -2010
appointed an Evaluation Committee (the "Committee "), consisting of the following
individuals.
Henry Castillo Resident and Leadership Academy Graduate
Paulette Rolle Administrator, Human Resources Department
James Sutter Internal Auditor, Internal Audit Department
Katie Yanke Financial Analyst, Finance Department
Jeremy White Resident, Financial Consultant and Graduate of Leadership Academy
Mr. Joseph DiBella was added to the Committee by request of Commissioner Wolfson via
the City Manager. Upon receipt of the proposals, Mr. DiBella recused himself from
participating due to a lengthy business relationship he had maintained with the firm of
Deloitte.
The Committee convened on November 5, 2010, and was provided with an overview of the
project, information relative to the City's Cone of Silence Ordinance and the Government in
the Sunshine Law. Henry Castillo was unable to attend at the last minute. Jeremy White
was nominated as Chairperson of the Committee. The Committee listened to a brief
Commission Memorandum
December 8, 2010
RFP No.36 -09/10 Third Party Claim Audit and Performance Evaluation Services
Page 3 of 4
overview and participated in a question and answer session with each of the six (6)
responsive Proposers.
The Committee was instructed to score and rank each proposal pursuant to the evaluation
criteria established in the RFP, which was as follows, for a total possible 100 points:
• Related experience 30 points
• Proposed Methodology 30 points
• Proposed Fees 30 points
• Client References 10 points
Total: 100 points
The Committee discussed the proposals and proceeded to score as follows:
Paulette James Katie Jeremy Ranking of
Rolle Sutter Yanke White Firm
Gallagher Benefit
Services, Inc. 80 (2) 95 (1) 100 (1) 70 (3) 7
Claim
Technologies, Inc. 78 (3) 92 (2) 95 (2) 78 (1) 8
Deloitte Consulting
LLP 85 (1) 89 (3) 90 (3) 75 (2) 9
Healthcare Data
Management, Inc. 55 (6) 78 (4) 88 (4) 60 (4) 18
Brown Smith
Wallace, LLC 70 (5) 77 (5) 87 (5) 45 (5) 20
Slyer Insurance
Consultants 75 (4) 68 (6) 83 (6) 40 (6) 22
The Committee was in concurrence that each of the top three - ranked firms had vast
experience and capabilities, and each of these three firms presented an impressive
methodology relative to satisfying the requirements outlined in the RFP, and further
discussed during the Committee interview process with the Proposers.
A motion was made, and passed unanimously, to accept the ranking as outlined above.
CITY MANAGER'S DUE DILIGENCE
The Evaluation Committee's recommended top - ranked firm, Gallagher Benefit Services
(Gallagher), is the City's current benefit consultant, assisting the City Administration in
determining the City's benefits program, which includes, but is not limited to:
1. Approaching all acceptable healthcare insurance companies, on behalf of the City, in
order to present and recommend to the City the selection of one entity to provide the
specified coverage;
2. Providing assistance in determining the City's Group Employee Benefit Program;
3. Providing actuarial support and analysis of the City's self- funded medical and dental
plans;
4. Issuing recommendations to the City to guarantee continued, affordable medical and
dental plans options for its employees and retirees;
5. Preparing reports informing the City regarding market conditions that may affect the
City's policies and risk exposures prior to policy renewals;
6. Negotiating, on behalf of, and with direction from, the City with all carriers to obtain the
Commission Memorandum
December 8, 2010
RFP No.36 -09/10 Third Party Claim Audit and Performance Evaluation Services
Page 4 of 4
best prices, terms and conditions available;
7. Reviewing and evaluating existing City benefits to provide recommendations for possible
improvement of price, terms and conditions;
8. Providing an annual report summarizing coverage, anticipated market conditions,
recommendations and strategies;
9. Conducting actuarial analysis and reporting, as required for the City's GASB 45 filings;
and
10. Supporting and guiding the City on implementation and impact of the Patient Protection
and Affordable Care Act.
The agreement with Gallagher has been in effect for five (5) years, and expired on
September 30, 2010. On September 15, 2010, the Commission authorized a month -to-
month extension not to exceed six (6) months. On November 17, 2010, the Commission
authorized the Administration to enter into negotiations with Gallagher, the top- ranked firm of
RFP 49- 09 -10, to continue to provide benefit consulting services for the City. Gallagher was
crucial in assisting the City in selecting its current medical provider, Humana Medical Plans.
Gallagher's fees for the services provided to the City are derived from commissions paid by
Humana.
After considering the recommendation of the Evaluation Committee, as well as the
Commission's recent selection of Gallagher as the City's benefit consultant, during his due
diligence review of the Evaluation Committee's recommendation, and in an effort to ensure
transparency, reduce any potential perception of conflict and provide for the checks and
balances necessary to conduct a combined performance evaluation and audit of Humana
services to the City, the City Manager deemed it is in the City's best interest for the
Administration to enter into negotiations with his top- ranked firm, Claim Technologies, Inc.
and if negotiations are not successful, enter into negotiations with Deloitte Consulting, LLP. '
CONCLUSION
The Administration recommends that the Mayor and City Commission approve the attached
resolution, accepting the recommendation of the City Manager relative to the ranking of
proposers, pursuant to request for proposals (RFP) No. 36- 09/10, for Third Party
Administrator Claim Audit and Performance Evaluation Services, and authorizing the
Administration to enter into negotiations with Claim Technologies, Incorporated, and should
the Administration not be able to negotiate an agreement with Claim Technologies,
authorizing the Administration to negotiate with Deloitte Consulting, LLP.
T:\AGENDA\2010 \December 8 \Consent \TPA Claim Audit Memo VERS 2.doc