South Coast Air Quality Management District
South Coast Air Quality Management District
BOARD MEETING DATE: November 17, 2000 AGENDA NO. 11
Issue RFP for Workers’ Compensation Claims Third-Party Administrator and/or General Liability Adjusting Services
SYNOPSIS:
AQMD contracts with JT2 Integrated Resources for third-party administration of workers’ compensation claims. This contract is scheduled to expire October 31, 2001. However, JT2 has claimed it cannot meet AQMD service requirements under current contract cost arrangements. To ensure the most cost-effective services are obtained, staff recommends releasing the RFP at this time and potentially terminating the current contract effective June 30, 2001, or, if necessary, earlier. This action is to issue an RFP to solicit proposals from state-certified third-party administrators. AQMD is also seeking, with this RFP, proposals from these administrators or other qualified contractors to perform general liability claims adjusting services. The contract(s) would be for a one-year base period, commencing July 1, 2001, with two additional one-year options, at AQMD’s discretion.
COMMITTEE:
Administrative, October 13, 2000, Recommended for Approval
RECOMMENDED ACTION:
Approve the release of RFP #P2001-20 for workers’ compensation claims third-party administrator and/or general liability adjusting services.
Barry R. Wallerstein, D.Env.
Executive Officer
Background
AQMD currently contracts with JT2 Integrated Resources to provide workers’ compensation third-party claims administration. These services include the processing of all workers’ compensation claims in accordance with applicable Labor Code regulations; engaging the services of medical providers, defense attorneys, and other firms or individuals to perform specialized work in connection with claims handling; conducting the necessary investigation of claims and assisting AQMD to identify and aggressively defend against fraudulent claims; and, making timely payments on behalf of AQMD to claimants and service providers in accordance with Labor Code regulations to minimize the risk of late-payment penalties. The current contract to provide workers’ compensation third-party claims administration expires on October 31, 2001.
In July 1995, JT2 Integrated Resources entered into a contract with AQMD to provide workers’ compensation third-party claims administration and general liability adjusting services. A subsequent three-year contract for these services was entered into in November 1998; however, by mutual agreement of the parties, JT2 Integrated Resources was determined to be inappropriately experienced and inadequately staffed to continue general liability adjusting services for AQMD. Since November 1, 1999, AQMD staff has performed the general liability claims adjusting services.
In May 2000, JT2 Integrated Resources notified AQMD staff that the current contract provides insufficient remuneration to meet the challenging demands placed on them by AQMD in regards to the administration of the workers’ compensation claims. Specifically, JT2 Integrated Resources agreed to a reduction in their claims examiner’s overall caseload to focus more attention on AQMD claims and to implement quantifiable performance measurements, as recommended in an independent audit conducted in October 1999. JT2 Integrated Resources has now requested an increase in the overall contract amount of nearly 50% for these added services.
Proposal
Staff requests permission to release RFP #P2001-20 to solicit bids from state-certified third-party administrators interested in providing workers’ compensation claims administration. Staff is also seeking proposals from these administrators or other qualified contractors to perform general liability adjusting services. Staff is further proposing that the existing contract with JT2 Integrated Resources be terminated effective June 30, 2001, or possibly earlier, to secure the services of a contractor able to perform these services in the most cost-effective manner and at the levels of service and performance required by AQMD. AQMD’s contract with JT2 Integrated Resources provides for early termination of the contract upon notification to the contractor.
The new contract(s) for workers’ compensation third-party claim administration and/or general liability adjusting services would authorize the selected contractors(s) to utilize its resources to obtain, subject to Executive Officer approval, the services of medical services providers, defense attorneys, and other firms or individuals needed to perform specialized work in connection with claims handling . Funds expected to be expended for claims administration and liability adjusting services are included in AQMD’s budget each fiscal year under the District General – Insurance account.
Outreach
In accordance with AQMD's consulting and contracting policies, a public notice advertising the RFP and inviting proposals will be published in the following publications:
Additionally, potential bidders will be identified using Los Angeles County MTA Directory of Certified Minority, Women, Disadvantaged and Disabled Veterans Business Enterprises; the Inland Empire Opportunity Pages Ethnic/Women Business & Professional Directory; AQMD’s own electronic listing of certified minority vendors; and AQMD Purchasing’s mailing list. Notice of the RFP will be mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, and will be placed on the Internet at AQMD’s Web site [http://www.aqmd.gov, "Business and Job Opportunities" icon]; and on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.
Bid Evaluation
Proposals will be reviewed and evaluated by a diverse, technically qualified panel in accordance with criteria contained in the attached RFP.
RFP #P2001-20 – Workers’ Compensation Claims Third-Party Administrator and/or General Liability Adjusting Services
/ / /