Resolution 2019-31021 RESOLUTION NO. 20 1 9 3 1 0 2 1
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE WRITTEN RECOMMENDATION
OF THE CITY MANAGER AND WAIVING, BY A 5/7THS VOTE, THE FORMAL
COMPETITIVE BIDDING REQUIREMENT, FINDING SUCH WAIVER TO BE IN
THE CITY'S BEST INTEREST, AND AUTHORIZING THE CITY MANAGER TO
NEGOTIATE AND EXECUTE AMENDMENT NO. 1 TO THE CURRENT
AGREEMENT WITH CORVEL ENTERPRISE COMP, INC., PURSUANT TO
RFP 2014-302-SW FOR CLAIMS ADMINISTRATION SERVICES BY A THIRD-
PARTY ADMINISTRATOR FOR WORKER'S COMPENSATION AND
GENERAL LIABILITY, EXTENDING THE AGREEMENT FOR AN ADDITIONAL
TWO (2) YEARS, AT THE CURRENT ANNUAL ADMINISTRATION COST.OF
$163,108, PLUS ANNUAL COST ESCALATION NOT TO EXCEED THE
APPLICABLE CPI INCREASE OR 3%, WHICHEVER IS LESS.
WHEREAS, the City of Miami Beach (the "City") is approved by the Florida Department
of Labor and Employment Security/Division of Workers' Compensation to self-insure for
Workers' Compensation; and
WHEREAS, the Division of Workers' Compensation requires that the claims
administration be provided by a State Certified Workers' Compensation Claims Administrator;
and
WHEREAS, on November 19, 2014, the Mayor and City Commission awarded an
agreement, pursuant to Request for Proposals (RFP) 2014-302-SW for claims administration
services by a third-party administrator for worker's compensation and general liability (the
"Agreement"), to CorVel Enterprise Comp, Inc.; and
WHEREAS, the Agreement had an initial term of three (3) years, with two (2) additional
one (1) year renewal options; and
WHEREAS, all renewal options have been exercised and the Agreement is now set to
expire on January 31, 2020; and
WHEREAS, the City's annual administrative cost to CorVel per the Agreement is
$163,108 per year for three workers compensation adjusters, an on-site dedicated adjuster, a
supervisor, and an account manager;
WHEREAS, in the current Agreement, City staff has access to CorVel's RMIS CareMC
platform at no additional cost to the City; and
WHEREAS, the RMIS feature is a valuable tool that provides access to over 100 user
accounts where City staff are able to electronically report injury/illness claims to the TPA,
Human Resources, and the State of Florida simultaneously, which avoids costly penalties, and
gets a CorVel adjuster on the case and contacting the injured worker within 24 hours of the
incident; and
WHEREAS, if the City were to go to an active market Workers' Compensation TPA
services,rthe RFP will result in a fee to place a RMIS city-wide; and •
WHEREAS, the City of Miami, with a similar claim count size as Miami Beach, had a
recent RFP for Workers' Compensation TPA Services (RFP#605386) and was quoted $1,000
per user for the RMIS; and
WHEREAS, this sort of pricing would cost the City an additional $105,000 a year for our
current 105 users; and
WHEREAS, the training that is involved in adopting a new RMIS system is also
expensive and time consuming — it took approximately six (6) to nine (9) months for City staff to
transition from paper reporting to electronic reporting; and
WHEREAS, in addition, training for new staff and refresher training is conducted
throughout the year; and
WHEREAS, since 2015, the number of injured workers that participate in CorVel's
Pharmacy Benefit Management ("PBM") program has grown to 80.7% in fiscal year 2018; this
utilization has resulted in a $304,939 savings; and
WHEREAS, based on the justification stated above, the City Manager recommends that
the Mayor and City Commission, pursuant to Section 2-367(e) of the City Code, accept his
written recommendation and waive, by 5/7th vote, the competitive bidding requirement for
claims administration services, finding such waiver to be in the interest of the City; and
WHEREAS, the City Manager further recommends that the City Commission authorize
the City Manager to negotiate an amendment to the Agreement, extending the term for an
additional two (2) years, at the current annual administration cost of $163,108, plus annual cost
escalation, not to exceed the applicable CPI increase or 3%, whichever is less.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, the Mayor and City Commission
of the City of Miami Beach, Florida, accept the written recommendation of the City Manager
and waive, by a 5/7ths vote, the formal competitive bidding requirement, finding such waiver to
be in the City's best interest, and authorize the City Manager to negotiate and execute
Amendment No. 1 to the current Agreement with CorVel Enterprise Comp, Inc., pursuant to
RFP 2014-302-SW for claims administration services by a third-party administrator for worker's
compensation and general liability, extending the Agreement for an additional two (2) years, at
the current annual administration cost of $163,108, plus annual cost escalation not to exceed
the applicable CPI increase or 3%, whichever is less.
PASSED AND ADOPTED this go day of A�/-
v6lr, 2019.
ATTEST:
Dan Gel el-, Mayor
)1
12-M(9Rafa I E. dranado, City Clerk
..,,,,,
APPROVED AS TO
' , B °�,, FORM & LANGUAGE
& FO X UTION
IMtORP ORATED
10,12s, City Attorney Date
Resolutions -C7 L
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Jimmy L. Morales, City Manager
DATE: October 16, 2019
SUBJECT:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, ACCEPTING THE WRITTEN
RECOMMENDATION OF THE CITY MANAGER AND WAIVING, BY 517TH
VOTE, THE FORMAL COMPETITIVE BIDDING REQUIREMENT FOR
CLAIMS ADMINISTRATION SERVICES, FINDING SUCH WAIVER TO BE
IN THE CITY'S BEST INTEREST,AND FURTHER AUTHORIZING THE CITY
MANAGER TO NEGOTIATE AND EXECUTE AMENDMENT NO. 1 TO THE
CURRENT AGREEMENT WITH CORVEL ENTERPRISE COMP, INC.,
PURSUANT TO RFP 2014-302-SW FOR CLAIMS ADMINISTRATION
SERVICES BY A THIRD-PARTY ADMINISTRATOR FOR WORKER'S
COMPENSATION AND GENERAL LIABILITY, EXTENDING THE
AGREEMENT FOR AN ADDITIONAL TWO (2) YEARS, AT THE CURRENT
ANNUAL ADMINISTRATION COST OF $154,000, PLUS ANNUAL COST
ESCALATION NOT TO EXCEED THE APPLICABLE CPI INCREASE OR
3%, WHICHEVER IS LESS.
RECOMMENDATION
Adopt the resolution approving the City Manager's recommendation.
BACKGROUND/HISTORY
The City is approved by the Florida Department of Labor and Employment Security/Division of
Workers' Compensation to self-insure for Workers' Compensation. Workers' Compensation is
a statutory benefit provided to employees that sustain injury within the course and scope of their
employment. The Division of Workers' Compensation requires that the claims administration be
provided by a State Certified Workers'Compensation Claims Administrator.
On November 19, 2014, the Mayor and City Commission awarded an Agreement, pursuant to
Request for Proposals (RFP)2014-302-SW for claims administration services by a third-party
administrator for worker's compensation and general liability (the "Agreement"), to CorVel
Enterprise Comp, Inc. The Agreement had an initial term of three (3) years, with two (2)
additional one (1) year renewal options. All renewal options have been exercised and the
Agreement is now set to expire on January 31, 2020.
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•
In the past five years, staff has built a strategic partnership with CorVel to reduce our overall
workers' compensation cost, while providing our injured workers with quality medical care and
the opportunity to return to work as soon as possible. The Administration is seeking an
extension of the Agreement, which will result in savings to the City for reasons explained below,
as well as avoid possible disruption of medical care, prescription drugs and loss wage
payments for nearly 300 injured workers.
NALYSIS
Decrease in Total Incurred/Average Incurred Claims
There has been a steady decrease in both total incurred (includes medical, pharmacy and
indemnity), as well as average incurred losses per claim since the inception of the program. It
generally takes a three to four-year partnership to make an impact on your claim cost bottom
line. In fiscal year 2018, the average incurred claim was $3,667, which is a 42% decrease from
fiscal year 2017. See the chart below ranging from year 2014—2018.
53,000,000
$1500.000
51,000.000
51500,000
•
51,000,000
5500,000
5o
Injury Year 2014 2015 2016 2017 2018
(FYE)
• Number of 267 302 262 250 295
Claims
Total $2,613,899 $2,244,811 $2,149,398 $2,164,216 $1,081,822
Incurred _
Average $9,790 $7,433 $8,204 $8,657 $3,667
Incurred
Pharmacy Program
The pharmacy program within the CorVel bundled system achieves many safety outcomes for
the injured workers. The medications are crossed check for safety and approved against the
city's formulary. This savings and network increase are a direct result of the trainings and
employee education conducted by Risk Management and the CorVel team. Most TPA's do not
have an owned Pharmacy network within their Risk Management Information System (RMIS).
Pharmacy is typically a stand-alone service. With transparency of CorVeI's RMIS, medications
are reviewed for formulary, safety of combinations, and decision on claims and conditions.
Page 674 of 2557
brooks Year 2014 ® 2011 • 2016 I 2017 I 2011
Tani 4,719 5,048 5,239 4,996
CorVel PBM 3,716 4,120 4,234 4,030
Plry9din Dispensed 673 655 638 463
Assignee 21 5 6 6
Other Pharmacy 309 268 361 497
CorVel P8MUtilitationb/Script 787% 81,6% 808% 807%
CorVel's Pharmacy Benefit Management (PBM) program is an integral part of claims
administration and the resulting savings are passed on to the City. CorVel's PBM has a bill
review system that identifies out-of-network bills, paper bills and third-party bills, and having them
redirected into the pharmacy program. This results in more pharmacy bills being processed
through the PBM program. Since 2015, the number of injured workers that participate in
CorVel's Pharmacy Benefit Management (PBM) program has grown to 80.7% in fiscal year
2018. This utilization has resulted in a$304,939 savings.
$350,000
$300.000
$250.000
$200,000
$150.000
$100,000
$50,000
$0 •
Invoice Year 2015 2016 2017 2018
Rx Claims 3716 4120 4234 4030
Rx Charges $899,399 $1,041,319 $1,044,953 . $1,067,756
Recommended $659,871 $770,111 $759,995 $762,817
Payment
Rx Savings $239,528 $271,208 $284,958 $304,939
Rx Savings % 26.6% 26% 27.3% 28.6%
Risk Management Information System(RM IS)
In the current Agreement, City staff has access to CorVel's RMIS CareMC platform at no
additional cost to the City. In contrast, several municipalities have reported that using a third-
party RMIS is costing up to $1,000 per user per year. The RMIS feature is a valuable tool that
provides access to over 100 user accounts where City staff are able to electronically report
injury/illness claims to the TPA, Human Resources, and the State of Florida simultaneously,
which avoids costly penalties, and gets a CorVel adjuster on the case and contacting the injured
worker within 24 hours of the incident. The adjusters are able to immediately begin intervention
of the on-the-job injury, which ultimately can control the outcome of the claim. The RMIS is
especially helpful when handling heart/lung claims because the majority of those cases are when
our first responders are seen in an emergency room and one of the primary goals is to have a
Page 675 of 2557
clear snapshot of the first notice.
Further, the training that is involved in adopting a new RMI S system is expensive and time
consuming. It took approximately six to nine months to transition City staff from paper reporting
to electronic reporting. Also training for new staff and refresher training is conducted throughout
the year. (Note: City of Miami, with a similar claim count size as Miami Beach, had a recent
RFP for Workers' Compensation TPA Services (RFP#605386) and was quoted $1,000 per
user for the RMI S. This sort of pricing would cost the City an additional $105,000 a year for our
current 105 users.) Our annual administrative cost to CorVel is $154,000 for three workers
compensation adjusters, an on-site dedicated adjuster, Supervisor, and Account Manager.
Other Remarkable Factors
At no additional cost to the City, CorVel provides the following services to improve claims
processes and injured workers'experience:
• Dedicated on-site claims adjuster that provides immediate response to injured workers
and assistance to Risk Management when returning the injured workers back to work
• 2417 Work Injury Registered Nurse Hotline for Police and Fire personnel that may be
injured after hours or on weekends
• Nurse case management for catastrophic injuries/illnesses that improve care of injured
workers and coordinates comprehensive information with the adjusters to make better
decisions
• MyCare App that is available to all injured workers as a download to their phone. The App
provides an injured worker access to their claims data, appointments, pharmacy card, and
adjuster contact information
Prior RFP
CorVel was selected pursuant to RFP 2014-302-SW issued by the City in July 2014. Only two
(2) other bidders submitted proposals in response to the RFP. Both bidders submitted
significantly higher pricing for the services required by the City.
CONCLUSION
Based on the documented cost savings and the disruptive nature of transitioning from one third-
party administrator to another, as well as the fact that the prior RFP resulted in only two other
bidders with proposed costs higher than CorVel, it is the recommendation of the Administration
that the Mayor and City Commission of the City of Miami Beach, Florida, accept the written
recommendation of the City Manager to waive, by a 517ths vote, the formal competitive bidding
requirement, finding such waiver to be in the City's best interest, authorizing the City Manager to
negotiate and execute Amendment No. 1 to the current Agreement with CorVel Enterprise
Comp, Inc., pursuant to RFP 2014-302-SW for claims administration services by a third-party
administrator for worker's compensation and general liability, extending the Agreement for an
additional two (2)years, at the current annual administration cost of $154,000, plus annual cost
escalation not to exceed the applicable CPI increase or 3%,whichever is less.
Applicable Area
Not Applicable
Is this a Resident Right to Does this item utilize G.O.
Page 676 of 2557
•
Know item? Bond Funds?
No No
Legislative Tracking
Human Resources/Procurement
ATTACHMENTS:
Description
❑ Resolution
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