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HomeMy WebLinkAboutService Contract Workers Claims c1.t'(j~- 2J7f S- -' SERVICE CONTRACT FOR WORKERS' COMPENSATION CLAIMS HANDLING THIS SERVICE CONTRACT FOR WORKERS' COMPENSATION CLAIMS HANDLING is made and entered into this 15th day of February, 2005, but is effective for all purposes as of the 1st day of February, 2005, by and between the CITY OF MIAMI BEACH (referred to as the "Employer"), and JOHNS EASTERN COMPANY, INe. (referred to as the "Service Agent"). WITNESSETH: WHEREAS, the Employer has undertaken to self-insure its Automobile Liability, General Liability and Workers' Compensation liability in accordance with the Florida Workers' Compensation Law and other applicable Florida statutes and regulations; and WHEREAS, the Service Agent is engaged in the supervision and administration of programs for self-insured employers; WHEREAS, the Employer desires to engage the Service Agent for, and the Service Agent desires to assist the Employer in, automobile liability, general liability and workers' compensation claims handling; NOW, THEREFORE, for and in consideration of the premises and of the mutual obligations, performance of services, and payment of compensation set forth herein, the parties agree as follows: 1. Eneaeement. The Employer hereby engages the Service Agent to supervise and administer the Self-Insured Workers' Compensation Program of the employer in accordance with the Workers' Compensation Law as adopted and amended by the State of Florida (the "Law") and the applicable rules and regulations as promulgated by the applicable agencies of the State of Florida relating to the Law (the "Rules"), all in accordance with the Service Agent's proposal dated November 1,2004, a copy of which is attached hereto and incorporated herein by this reference (the "Proposal"). 2. Term. Subject to termination pursuant to Paragraph 9, the term of this Agreement shall begin as of February 1, 2005, and shall terminate on January 31,2010. 3. Fund for Pavment of Claims. The Employer has the sole obligation and responsibility for funding the payment of claims made by its employees under the Law and Rules. The Service Agent assumes no duty to fund any such claims at any time and shall have no obligation to advance funds for any such payment. The Employer agrees to maintain all necessary funds for payment of claims in accordance with the Law and Rules and to inform the Service Agent of all relevant details with respect to any such accounts in order for the Service Agent to perform its duties under this Agreement. The Employer shall add to or increase the amount in any such accounts as needed, and, in any event, within five (5) business days from the Service Agent's notice to the Employer to such effect. 4. Allocated Claims Expenses. "Allocated Claims Expenses" shall be defined as expenses arising in connection with the settlement of claims, which shall be defined as expenses directly allocated to a particular claim to be discharged from the accounts funded by the Employer specified in Paragraph 3, including, but not limited to: a. Attorneys' and legal assistants' fees for claim and any lawsuits, before and at trial, on appeal, or otherwise; b. Court and other litigation and settlement expenses, including, without limitation: (i) Medical examinations to determine extent of liability; (ii) Expert medical and other testimony; (iii) Laboratory, X-ray and other diagnostic tests; (iv) Autopsy, surgical reviews, and other pathology services; (v) Physician and related fees and expenses in reading, interpreting, or performing any of the foregoing tests or services; (vi) Stenographer, process server, and other related trial preparation, trial, settlement, and court costs; (vii) Witnesses fees and expenses before and at trial, deposition, settlement discussions, or otherwise; and c. Fees and expenses for surveillance, private investigators, or otherwise, d. Fees for the indexing of injured employees, e. Fees for any work done outside the office, including, but not limited to, field investigations necessary to determine compensability, liability, subrogation recoverability, claimant control, attendance at mediations, hearings and depositions, attendance at management meetings, attendance at medical consultations or hearings, appraisals, medical management, case management and cost containment, f. Fees for over-night or special mail service for various documents, .. g. Fees for examining and reducing hospital and medical bills as appropriate, h. Photocopying and review of relevant documentation. 5. Comoensation for the Service Aeent. For performing its services under this Agreement, the Service Agent shall be entitled to the following compensation: a. Fees for claims handling for the Employer's exposures whose dates of loss fall between February 1,2005 and January 31,2007 will be a minimum and deposit of$187,500.00 per year. The Service Agent will bill this minimum and deposit quarterly, with the first payment due upon program inception. b. The annual minimum and deposit covers handling 500 workers' compensation exposures. Ifthe number of exposures exceeds 500, the Service Agent will increase the fees proportionately. This fee covers all claims management/administration and data processing services outlined in the original proposal. All years are subject to audit. c. Allocated expenses are costs associated with investigation and/or adjustment of a claim. The Service Agent will charge the allocated expense to the claim file. Fees for any field investigation will be $95.00 per hour, $0.45 a mile, and $2.00 per color photograph, and administrative expenses. The Service Agent will bill at these rates all activities involving handling, controlling or settling an employer's liability on a claim. d. Managed Care services will be provided in-house by the Service Agent. The fees for this service will be: . $1,000 payable to the Agency for Health Care Administration (AHCA) for the application fee. There will be no fee payable to ARCA if the current plan can be amended. . $1,000 payable to the Service Agent to writer or re-write the existing plan and have it approved. This fee also covers one-day employer/employee training. . Fees for telephonic managed care services will be $171.00 per lost time and medical only exposure whose dates ofloss fall between February 1,2005 and January 31,2007. This fee applies only to cases handled by the Service Agent. .' e. The Service Agent will provide Risk Management Information Services at the following rates under the Gold Plan: . Standard Reports are included . Notice ofInjury (NO I) over the Internet is included . Florida State Reporting - Claim; DWC4, DWC12 is included . Florida State Reporting - Underwriting; BSI-17, BSI-20 is included . Internet Access is included up to 6 users. $50.00 per month each additional address. . Training at Service Agent's site (Internet & Looking Glass) will be $1,250.00 per day. . Standard reports via paper will be $100.00 per report, per printing. Includes 3 copies of report. . Specialty reports via paper will be $125.00 per report, per printing. Includes 3 copies of report. . Specialty reports via email will be $100.00 per month; per set or $900.00 per year, per set. . NOI for Internal Incident Reporting will be $15.00 per NOr. . Programming of Special Reports is $125.00 per hour. Minimum 1 hour. Includes data sharing and spreadsheet preparation. Employer agrees to total hours per report prior to work completion. . Maintenance of Special Reports is $125.00 per hour. Minimum of 0.5 hours. . Looking Glass (one CD-ROM) will be provided semI- annually at no charge. . Training at client site (Internet & Looking Glass) will be $1,250.00 per day, plus travel and expenses. . Personnel loaded into our database will be a $1,000.00 one time charge. f. Provider bill review/cost containment services will be handled by the Service Agent. The Service Agent will review all medical bills and make appropriate reductions as required by Florida Statute 440. Fees for these services are $5.95 per bill and 30% of savings over and above Fee Schedule savings. g. Loss control services are available through the Service Agent's consultant at a rate of$95.00 per hour. The Service Agent can customize Safety/Loss Control services to meet the Employer's program and risk needs. This service is offered on an as needed basis. h. Fees for the 3rd, 4th, and 5th years are guaranteed not to exceed a 5% increase over the previous year's fee. ~ 6. Continuine: Handline: of Claims After Termination of Contract or Lee:allv Imposed Mandates. Upon termination of this Agreement as set forth in Paragraph 9, the Service Agent agrees to continue handling all claims that have been made and reported to it prior to such date oftermination for thirty (30) days unless the parties have agreed otherwise in writing. Upon repeal of any service mandated by the workers' compensation law and/or other applicable statutes and/or regulations, the Service Agent agrees to continue handling all claims under the repealed service that have been reported to it prior to the date of such repeal for thirty (30) days unless the parties have agreed otherwise in writing. Upon exiting, client data will be provided to the new Third Party Administrator either by a series of attachments to one or more email messages containing zip files which can be password-protected or via CD ROMS. The claim files may exist as paper files and will be shipped as such. If the claim files are stored as images in a document retrieval system, they will be provided via CD ROM or the most current means of providing data. The cost for this will be no greater than $3,500.00. The Employer will be billed for any additional programming to help in data transfer. 7. Excess Reportine: Oblie:ation. Unless otherwise specified in this Agreement, Service Agent agrees that reporting claims to excess insurance carrier is the Service Agent's responsibility. It is the responsibility of the Employer to provide accurate coverage information regarding any insurance policies insuring claims covered by this Agreement. The information for all claim years that the Service Agent is handling will be made available to the Service Agent within 90 days of contract inception. New insurance information on renewal years will be made within 90 days of renewal date. Excess information will include name and claims reporting address and phone number of all carriers, policy number, effective dates, limits of liability, deductibles, specific retentions and loss funds. Actual policies will be provided. This information is required for each claim year that the Service Agent is handling for the employer. If this information is not made available as outlined in this paragraph, Service Agent will not be responsible for any penalties, interest, or reductions in excess recoveries because of late reporting. 8. Disputes Subiect to Arbitration. Any dispute or claim arising out of or relating to this Agreement or any breach thereof shall be resolved by submission of such dispute or claim to an arbitration panel composed as follows: The Employer and the Service Agent shall each select one member of the panel and the two selected members shall select a third member. The parties agree to follow the rules of the American Arbitration Association. 9. Termination. This Agreement may be terminated by either the Employer or the Service Agent by giving prior written notice of ninety (90) days. In the event of such termination, compensation paid or payable to Service Agent under Paragraph 5 shall be prorated as appropriate. Notwithstanding anything in this Paragraph 9 to the contrary, the insolvency or filing for relief from creditors of any party pursuant to the United States Bankruptcy Code or the material breach of a material provision of this Agreement by any party shall permit the other party to cancel this Agreement immediately upon written notice. 10. Covenants of the Service Aeent and the Emplover. Each of the Service Agent and the Employer agrees to use its normal and ordinary professional care and diligence in the performance of its duties under this Agreement and will use its best efforts to comply at all times with the Law and the Rules. 11. Indemnification. The Service Agent agrees to indemnify and hold harmless the Employer and its directors, officers, employees, stockholders, and agents against any and all claims, lawsuits, settlements, judgments, costs, penalties, and expenses, including, without limitation, attorneys' and legal assistants' fees before and at trial, on appeal, or otherwise, resulting from the breach of, or negligence or misconduct in performing, any provision of this Agreement, by the Service Agent or by its directors, officers, employees, stockholders or agents, whether acting alone or in collusion with others. 12. Miscellaneous. a. Each party represents and warrants that it has full power and authority to enter into this Agreement. b. All notices, requests, demands and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by telecopy, electronic telephone line facsimile transmission, or other similar electronic or digital transmission method; the day after it is sent, if sent by recognized expedited delivery service; and five (5) days after it is sent, if mailed, certified or registered mail, return receipt requested, postage prepaid. In each case, notice shall be sent to: If to the Employer: Clifton Leonard, Claims Coordinator City of Miami Beach 1700 Convention Center Dr. City Hall Miami Beach, FL 33139 If to the Service Agent: Kenneth M. Johns, III, CPCU, ARM, AIM Chairman and President Johns Eastern Company, Inc. Post Office Box 4175 Sarasota, FL 34230 or to such other address as either party may have specified in writing to the other using the procedures specified above in this paragraph. c. (i) This Agreement shall be construed pursuant to and governed by the substantive laws ofthe State Of Florida (and any provision of Florida law shall not apply if the law of a state or jurisdiction other than Florida would otherwise apply). (ii) The headings of the various paragraphs in this Agreement are inserted for the convenience of the parties and shall not affect the meaning, construction, or interpretation of this Agreement. (iii) Any provision of this Agreement which is determined by a court of competent jurisdiction to be prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non-authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction. In any such case, such determination shall not affect any other provision of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect. If any provision or term of this Agreement is susceptible to two or more constructions or interpretations, one or more of which would render the provision or term void or unenforceable, the parties agree that a construction or interpretation which renders the term or provision valid shall be favored. d. This Agreement constitutes the entire Agreement, and supersedes all prior agreements and understandings, oral and written among the parties to this Agreement with respect to the subject matter hereof. e. (i) If, within ten (10) days after demand to comply with the obligations of one ofthe parties to this Agreement served in writing on the other, compliance or reasonable assurance of compliance is not forthcoming, and the other party takes steps to enforce rights under this Agreement pursuant to paragraph 8 or otherwise, the prevailing party in any action shall be entitled to recover all reasonable costs and expenses (including reasonable attorneys' and legal assistants' fees before and at trial, on appeal, or otherwise.) (ii) If any monies shall be due either of the parties to this Agreement hereunder and shall not be paid within thirty (30) days from the due date of such payment, interest shall accrue on such unpaid amount at the rate of 1 % per month in accordance with the Florida Prompt Payment Act - F.S.218.70-79. f. This Agreement shall be binding upon and inure to the benefit of the successors in interest and assigns of the parties. g. The parties to this Agreement will execute and deliver, or cause to be executed and delivered, such additional or further documents, agreements, or instruments and shall cooperate with one another in all respects for the purpose of carrying out the transactions contemplated by this Agreement. h. This Agreement may be executed in any number of counterparts, each of which shall be considered an original, but all of which together shall constitute one and the same instrument and shall become effective when each of the parties has executed at least one of the counterparts even if all the parties have not executed the same counterpart. " IN WITNESS WHEREOF, the parties have executed this Agreement effective for ,',. j ,al~purpOs.esa:; of February 1,2005. . ", ...J~~,"" '.. .;>1>,", 4 ..1f;J......~ CIty Clerk Robert E. Parcher David Dermer APPROVED AS TO FORM & LANGUAGE & FOR EXECUnON I1AiUfIJJ_1J '__ ~ '~V\. Date