HomeMy WebLinkAboutNB 5 WKRS COMP ADMIN 11-17-80DATE:
TO:
FROM:
SUBJECT:
November 12, 1980
NEW BUSINESS
No. 5
11-17-80
Inter-Corn
Mayor and City Council
Roy Gonzales, Personnel Director
Workers' Compensation Administrator
Background
The City of Tustin and the Orange County Cities Risk Management Authority
(OCCRMA) have been dissatisfied with the level of service provided by Bierly
and Associates since shortly after they assumed the County of Orange as a
client in late 1979. An audit of Bierly conducted under the auspices of
OCCRMA showed they were not working strictly within the caseload limits
they claimed, and that their procedures were not within acceptable norms.
Bierly was requested by the OCCRMA Board to modify and upgrade their pro-
cedures. To date, this has not been fully accomplished.
Early in 1980, the Personnel and Finance Directors proposed a change to the
firm of Fitzpatrick for claims administration services. This move, which
would have been done independent of OCCRMA was questioned by the Council,
and eventually discarded.
In July of 1980, OCCRMA began looking at the possibility of becoming totally
self-administered by hiring a Claims Administrator and assuming full respon-
sibility for claims in-house. This move was found impractical for reasons
of which would train an adjuster for OCC~%~ and leave us the option of with-
drawing at a future date to become self-administered. After careful considera-
tion by both the Risk Manager for OCC~A and the Risk Management Board, CDS
of California was recommended and supported unanimously by the six cities in-
volved with Workers' Compensation through OCCP~.
Information concerning CDS of California is attached for your review.
Discussion
On 12/3/79 the City Council voted to authorize City participation in OCCRMA and
to accept the amended by-laws of that authority (Resolution 79-91). Among the
provisions of those by-laws it states t~at the Risk Management Board shall be
responsible for selection of Claims Administrators (Section 2.100 (c) (2) (viii)
Attached).
In accordance with that provision, the Risk Management Board reviewed the per-
formance of Bierly and Associates and reviewed the available claims administra-
tion services and recommended that OCCRMA change to CDS of California, with the
provision that they are to train a staff person to work exclusively on OCCR~
claims, and that, at the end of one year OCCRMA would have the option of hiring
that person for the purposes of becoming independently self-administered or con-
tinuing with CDS of California for administration services.
Mayor and City Council
November 12, 1980
Page Two
The OCCRMA Board has placed Bierly and Associates on a 90 day notice as
of 10/20/80, and has changed all claims services to CDS as of that date.
The Council has several options in this matter, among them:
1. Approve and support the action taken by the OCCRMA Board;
2. Continue to contract with Bierly and Associates for claims services;
3. Go to open bid for claims administration services to meet the City's
specifications;
4. Hire additional City staff to administer claims in-house.
Options 2,3 and 4 would require modifying our participation with OCCRMA to
exclude Workers' Compensation services.
While all of the options have some advantages, the additional control and input
afforded by participation in OCCRMA, and the savings projected through the change
to CDS, would appear to outweigh those advantages. CDS, through more efficient
and competent claims administration could save this City a significant amount of
~oney over the next two years, which I am not confident would be possible with
the other three alternatives.
Recommendation
That the City Council take action to affirm the change in Workers' Compensation
administration firms from Bierly and Associates to CDS of California as recomm-
ended by the Risk Management Board of the Orange County Cities Risk Management
Authority (OCCRMA).
RPG/kaf
Attachments
cc: Dan Blankenship
Ron Nault
Sec. 2.100
(a)
(b)
manageme~t program, including but not liz~ited to the
acquisition of necessary facilities and equipment, the
employment of personnel, and the operation and mainten-
ance of a system of risk management.
RISK I. bXNAC~fENT BOARD
The governing body of the Authority ~hall be the "Risk Manage-
meat Board" and may be referred to herein as the "Board".
Voting members of the Board :~hall consist of one represent-
ative from each parpicipatiag member 'agency. Each member's'
representative shall be so designated by appointment by the
member agency's governing board. Each member's governing "~
board also ~na>' appoint one alternate who may attend meetings
'Jnd vote in the event of ab.~cnc~,, of the representative. Each
lepresentacLvo or aiternat.~ :._t~:;t be c: city staff me::~ber. Each
representative shall take each 7ear's proposed Authority budget
to :!:~ repref;,~:r~tat~ve's Cfry f:oun~:[! or governin~i board for
The Risk Hana~e~:mnt Board shall meet at leas~ quarterly to revieu-
ali operation:; of 0CCRi. IA c:onduc:t~td pt,.r~mant to the OC(~RF~i Joint
E:.:era[se of Po'.,'er~; Agreement and these By-I.a~..'s. The Board shall
provide policy direction for the Operations Co:mnittee
and the Risk Hanager. Other functio:~s of the Board shall include,
but not be limited to, final approval of:
(.~)
(2)
All matters with, respect to which it is manJator'z'- that the
Managem_~n~-C*t~mmz~ee Optzraulono Committee make recoz::::andations
to the Board, and
The follo',:ing matters not covered by paragraph (1) above:
(i) Selection aod employment of a Risk~:,~'an.~=i¢r"[, ,-
(ii) Admi'~sion of new
(iii) E.'.:pulsio~ of present Members;
(iv) l.oans to ,~:e;nbcrs from appropriate fund.a;
(v) Determinations of the duratio~m of !oaas to
Membe~-s and the interest rates to be charged
thereon;
(vi) An operating budget fo~ OCC~b%, to be approved in
advm~ca of the con~mencemen~ of each fiscal year;
(vii)
fo~ establishment of r~;h m~ma~',em~nt related lines
of
(viii) SelettJoa of ~ ~-~ '
c ~,: ~..~.~-, ad:nulist rato rs.
(ix) Selection of
sl~.c~,~cu of the Risk:-~ana~e" ~ r.
(>:i) Dete~':nine, 'by majority vote, reductions in partici-
pation in services or costs of claims administration
or risk management due to special circumstances.
Sec. 2.110 ,.IEEII,,Gb OF TIlE
The Boa~'d shall establish a time and place to hold regular meetings
not less ofte~ than quarterly. The Board President shall m~il notice of
all Board meetings to each representative and each alternate o~] the Bmard.
Meetings shall be conducted pursuant to the mo~;t current edition of Roberts
Rules of Ordor or such oth,:r p~oce~l.ral guide at: tho Board shall designate.
CORPORATE HISTORICAL DEVELOP~IENT
Teknekron, Inc. (1967)
Insurance Technology Company (1968)
Claims Administration Systems, Inc. (1975/1979)
CDS of California
Workers' Compensation and
Group Health
Claims Administration
CDS of Texas
Workers' Compensation and
Group Health
Claims Administration
CDS of Nevada
Workers' Compensation and
Group llealth
Claims Administration
CAS Associates, Inc. (1979)
Public General Liability
Claims Administration
CDS of Oregon/Washington
Workers' CompeJsation and
Group Health
Claims Administration
CDS of Georgia
Workers' Compensation and
Group Health
Claims Administration
Professional Risk Management, Inc.
Liability and Medical Halpractice
Claims. Administration
Case Service Representatives (1976)
40 Service Representatives available
for home or hospital contact with
injured and ill workers and vocational
rehabilitation
All entities under Claims Administration Systems, Inc. other than
Professional Risk Management and CAS Associates, Inc. are 100%
owned and operated by Claims Administration Systems, Inc.
CDS/Claims Administration Systems, Inc.
CDS is a division of Claims Administration Systems, Inc. whose mission
is the provision of claims services and systems. The resources of the-
two organizations are coordinated to accomplish major projects.
CDS/Claims Administration Systems resources:
Offices: Atlanta, Georgia
Boise, Idaho
Cypress, California
Dallas, rl'exas
Las Vegas, Nevada
Reno, Nevada
Salem, Oregon
San Francisco, California'
Torrance, California
Professional Staff:
Professional and technical - 75
Clerical - 30
Associate consulting staff - 45
Computer Facilities:
11 Data General mini-computer information systems.
Terminal connections to two major service bureaus.
Support Facilities:
Complete data processing facilit'ies
Complete maintenance staff for computer systems
CDS/Claims Administration Systems, Inc.
Sununary of significant experience in Workers' Compensation and Liability
claims management.
Development and implementation of claims systems for two
State Funds and private carriers with the capacity of
50,000 indemnity claims >'early.
Development of training manual and quality assurance programs.
Conducted National Survey of Insurers including self-insurers
to evaluate effectiveness of Workers' Compensation operations
nationwide for Federal Government.
Presently implemented a major system thru iTC (~IVRS)
affiliate for automation] of claims files for Washington
Department of Labor and Industries.
Presently managing implemented self-insured l~,'orkers' Comp-
easation program for Washington Department of Labor and
industries.
Presently managing self-insured e.~tities and public agencies
in the States of California, >~evada, Ore,on, I'.~ashington,
Idaho, Texas and Ceo~'gia.
Designed medical mal;~ractice i:~cident reporting and active
case management claims system for L.A. County Hospitals
(largest self-insured program of its kind in U.S.A.) '~
Designed products liability incident reporting and active
case management system for national insurance adjusting firm
headquartered in Atlanta, Georgia.
Management of highly successful L.A. County Hospital Medical
malpractice self-insured program for past three years.
I. INTRODUCTION: ~{E CLAIHS DIRECI'OR SYSTEH
The Claims Director System's new CSR~ version, developed for
CAS, is more than the CDS 18S0 described in this brochure. The
System is, more fully, a new and modern methodology for handling
Severe and Difficult Classes of ~/C Claims, ~ncompassing:
-- A new orientation toward the claims representative as a
professional working at the confluence of medical,' 's~cial,
legal and employment resources.
-- A philosophy which considers early intervention, prediction,
estimation, and anticipatory guidance as the keys to success-
ful control and disposition of verified liability claims.
-- A systems engineering viewpoint which sees all claims handling
activity- clerical, professional and man~se.~a~ ~ alike --
as part of a single system ;~hich must be optimized.
-- A stand - alone, turn-key ¢ompu~.er system, the CDS 1850
which provides instant access to pertinent information on
individual cases and groups of cases; helps organize the
professional, cleriqal and managerial activity of a claims
office; and directs this activity into the channels indicated
above.
This brochure concentrates on the capabilities and characteristic~
of the CDS lg50, especially in i~s role'of a catalyst enabling the
Claims Director System as a whole to work effectively. Descriptions
of :he other aspects of the System listed above, as well as data on the
extremely favorable results obtained from its use, are given in other
documented sections or are available from CAS, Inc.
1]IRIFq~/ CORPOI~ATION - Fred Mastrogiovan.ni, Risk Hanager
5051 Rodeo Road; Los Angeles, CA t~)~)lO; (2.13) 293-5111
- Thrift>' Drug and Discount Stores
- Newman Importing
- Thrifty Realty
- Big 5 Sporting Goods Stores
- Borun Bros.
WAITE-HILL SERVICES, INC. - Jack Mangus, Vice President
Suite 444; 3330 Peach Tree Rd.; N.E.; Atlanta, GA 303261
(404) 213-2084
EMERSON ELECTRIC COMPANY - Jim Bryant, Industrial Relations Manager
330 Standard St.; Santa Aha, CA 92702; (714) 545-5581
WESTERN TEXTILE LAUNDERING ASSOCIATION - Arthur I~ite, Risk }-Ianager
P.O.Box 687; San Pedro, CA 90733: (213) 833-4455
FP~XXK LUHBER COHPANY, INC. - Jim Frank, Risk Hanager
P.O.Box 1467; Hill City, OR 973~0; (505) 897-257!
WEST COAST GROCERY - Glen Everett, Risk ;.hmager
,195 E. 19th St.; Tacoma, WA 98421; (206) 595-3200
PUBLIC ENTITIES
CI~' OF SOUTI{ GATE - George Warner, Secrctar>- of Finance
8650 California Avenue; South Gate, CA 90280; (213) 567-1331
CI~' OF EL SEGUNDO- James F. Weber, Director of Finance
350 Main Street, E1 Segundo, CA 90245; (213) 322-4670
LObLk LINDA UNIVERSI~' HEDICAL CENTER - Stanton Parker, CPCU, Director of
Risk Hanagemen t
koma Linda University Hedic~l Center; Loma Linda, CA 92354;
(714) 82:1-0800 Ext. 3975
CITY OF TOR[L:XNCE Susan Ruiz, Workers' Compensation Supervisor
3031 Torrance Blvd.; Torrance, CA 90503 (213) 328-5310
CI]'Y OF CUI,\"ER (.'.ITY - Saralyn Ready, Loss l)rcvcntion
9070 Culver Blvd.; Culver City, CA 90230; (215) 837-B211
CITY OF IXGLEWOOD - ~larilyn Green, Safety Officer
One ;,',anchester Blwl.; Inglewood,.(ZA 90301; (213) 649-7111
CITY OF ~LAX}IATTAN BEACIt - Ralph buciani, Personnel Director
1400 Highland Ave., ~.lanhattan Beach, CA 90266 (215) 5~5-5621
}.IO~;TEBELLO UNIFIED SCHOOL DISTRICT - Stephen L. Phillips, Director
of Risk ~qanagement and Budget
123 S. 51ontebello Blvd.; Montebeilo, CA 90640; (213) 726-1225
'CLARH~IONT UNIFIED SCHOOL DISTRICT - Charles R. Abbott, Business ~lanager
2080 X. Hountain Ave.; Claremont, CA 91711; (71~1) 624-9041
BONITA UNIFIED SCHOOL DISTRICT - Dr. James Overin, Business ~]anager
115 ;f. Allen Ave.; San Dimas, CA 91773 (714) 599-6787
PO~.~ONA UNIFIED SCHOOL DISTRICT - Kenneth Cooper, Business },lanager
800 S. Garey Ave.; Pomona, CA 917(~0; (71~1) 625-S2S1
~fAL~,~UT VALI,HY UNIFIED SCHOOL DISTRICT - George Hartnett, Business :.~anager
P.O.Box 901; Walnut, CA 91789; (714) 596-t262
C~AR'I'ER (LIE UNIFIED S(:ilOOI, DISTRICT - Robert Frick, Business ?lanager
P.O.Box 9; Covi~a, CA 91723; (213) '760-8331
AL}LU.IBIL~ CiiT SCHOOLS - Willia[~ T. Pickford, Assistant SuperSntendent-
Adninist ration
15 West Alhambra Road; Alhambra, CA 91801; (215) 289-54!1
NO2TH ORANGE COUNTY CO?.I~IUNITY COLLECE DISTRICT - Paul Voyten, Risk ~.lanager
1000 N. [,emon St.; Fullerton, CA 92634; (714) 871-4050
CITy OF LA HAB[Gt - Carlene Cook~ Director of Finance
La Habra, CA 90631; (215) 694-1011
CITY OF HERSIOSA BEACII - Caroline Smith, Personnel Director
Hermosa Beach, CA; (213) 376-698,1