Attachment 2- LWP Claims Solutions Inc. AgreementAGR_3D. UOG
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AGREEMENT FOR CONSULTANT SERVICES
THIS AGREEMENT is made and entered into on this I` day of January, 2020 by and between
TOWN OF LOS GATOS, a California municipal corporation, ("Town") and LWP Claims Solutions,
Inc., ("Consultant"), whose address is 35 Miller Avenue #214, Mill Valley, CA 94941. This
Agreement is made with reference to the following facts.
RECITALS
1.1 The Town desires to engage Consultant to provide workers' compensation third -party
claims administration services for the Town's self -insured workers' compensation
program.
1.2 The Consultant represents and affirms that it is willing to perform the desired work
pursuant to this Agreement.
1.3 Consultant warrants it possesses the distinct professional skills, qualifications, experience,
and resources necessary to timely perform the services described in this Agreement.
Consultant acknowledges Town has relied upon these warranties to retain Consultant.
II. AGREEMENTS
2. 1 Scope of Services. Consultant shall provide services as described in that certain Scope of
Services sent to the Town on August 19, 2019, which is hereby incorporated by reference
and attached as Exhibit A.
2. 2 Term and Time of Performance. This contract will remain in effect from January 1, 2020 to
December 31, 2022.
2. 3 Compliance with Laws. The Consultant shall comply with all applicable laws, codes,
ordinances, and regulations of governing federal, state and local laws. Consultant
represents and warrants to Town that it has all licenses, permits, qualifications and
approvals of whatsoever nature which are legally required for Consultant to practice its
profession. Consultant shall maintain a Town of Los Gatos business license pursuant to
Chapter 14 of the Code of the Town of Los Gatos.
2.4 Sole Responsibility. Consultant shall be responsible for employing or engaging all persons
necessary to perform the services under this Agreement.
2.5 Information/Report Handling. All documents furnished to Consultant by the Town and all
reports and supportive data prepared by the Consultant under this Agreement are the
Town's property and shall be delivered to the Town upon the completion of Consultant's
services or at the Town's written request. All reports, information, data, and exhibits
prepared or assembled by Consultant in connection with the performance of its services
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ATTACHMENT 2
pursuant to this Agreement are confidential until released by the Town to the public, and
the Consultant shall not make any of the these documents or information available to any
individual or organization not employed by the Consultant or the Town without the
written consent of the Town before such release. The Town acknowledges that the
reports to be prepared by the Consultant pursuant to this Agreement are for the purpose
of evaluating a defined project, and Town's use of the information contained in the reports
prepared by the Consultant in connection with other projects shall be solely at Town's risk,
unless Consultant expressly consents to such use in writing. Town further agrees that it
will not appropriate any methodology or technique of Consultant which is and has been
confirmed in writing by Consultant to be a trade secret of Consultant.
2.6 Compensation. Compensation for Consultant's professional services shall not exceed "
171,357, inclusive of all costs. The service fee schedule is incorporated in this agreement
as Exhibit B. Payment shall be based upon Town approval of each task.
2.7 Billing. Billing shall be monthly by invoice within thirty (30) days of the rendering of the
service and shall be accompanied by a detailed explanation of the work performed by
whom at what rate and on what date. Also, plans, specifications, documents or other
pertinent materials shall be submitted for Town review, even if only in partial or draft
form.
Payment shall be net thirty (30) days. All invoices and statements to the Town shall be
addressed as follows:
Invoices:
Town of Los Gatos
Attn: Human Resources
110 E. Main Street
Los Gatos, CA 95030
2.8 Availability of Records. Consultant shall maintain the records supporting this billing for not
less than three years following completion of the work under this Agreement. Consultant
shall make these records available to authorized personnel of the Town at the Consultant's
offices during business hours upon written request of the Town.
2.9 Proiect Manager. The Project Manager for the Consultant for the work under this
Agreement shall be:
Amber Davis, Claims Manager
P.O. Box 349016
Sacramento, CA 95834
Phone: (916) 609-3654 Email: a_davis@lwpclaims.com
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2.10 Assignability and Subcontracting. The services to be performed under this Agreement are
unique and personal to the Consultant. No portion of these services shall be assigned or
subcontracted without the written consent of the Town.
2.11 Independent Contractor. It is understood that the Consultant, in the performance of the
work and services agreed to be performed, shall act as and be an independent contractor
and not an agent or employee of the Town. As an independent contractor he/she shall not
obtain any rights to retirement benefits or other benefits which accrue to Town
employee(s). With prior written consent, the Consultant may perform some obligations
under this Agreement by subcontracting, but may not delegate ultimate responsibility for
performance or assign or transfer interests under this Agreement. Consultant agrees to
testify in any litigation brought regarding the subject of the work to be performed under
this Agreement. Consultant shall be compensated for its costs and expenses in preparing
for, traveling to, and testifying in such matters at its then current hourly rates of
compensation, unless such litigation is brought by Consultant or is based on allegations of
Consultant's negligent performance or wrongdoing.
2.12 Conflict of Interest. Consultant understands that its professional responsibilities are solely
to the Town. The Consultant has and shall not obtain any holding or interest within the
Town of Los Gatos. Consultant has no business holdings or agreements with any individual
member of the Staff or management of the Town or its representatives nor shall it enter
into any such holdings or agreements. In addition, Consultant warrants that it does not
presently and shall not acquire any direct or indirect interest adverse to those of the Town
in the subject of this Agreement, and it shall immediately disassociate itself from such an
interest, should it discover it has done so and shall, at the Town's sole discretion, divest
itself of such interest. Consultant shall not knowingly and shall take reasonable steps to
ensure that it does not employ a person having such an interest in this performance of this
Agreement. If after employment of a person, Consultant discovers it has employed a
person with a direct or indirect interest that would conflict with its performance of this
Agreement, Consultant shall promptly notify Town of this employment relationship, and
shall, at the Town's sole discretion, sever any such employment relationship.
2.13 Equal Employment Opportunity. Consultant warrants that it is an equal opportunity
employer and shall comply with applicable regulations governing equal employment
opportunity. Neither Consultant nor its subcontractors do and neither shall discriminate
against persons employed or seeking employment with them on the basis of age, sex,
color, race, marital status, sexual orientation, ancestry, physical or mental disability,
national origin, religion, or medical condition, unless based upon a bona fide occupational
qualification pursuant to the California Fair Employment & Housing Act.
III. INSURANCE AND INDEMNIFICATION
3.1 Minimum Scope of Insurance:
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Consultant agrees to have and maintain, for the duration of the contract,
General Liability insurance policies insuring him/her and his/her firm to an
amount not less than: one million dollars ($1,000,000) combined single
limit per occurrence for bodily injury, personal injury and property damage.
Consultant agrees to have and maintain for the duration of the contract, an
Automobile Liability insurance policy ensuring him/her and his/her staff to
an amount not less than one million dollars ($1,000,000) combined single
limit per accident for bodily injury and property damage.
iii. Consultant shall provide to the Town all certificates of insurance, with
original endorsements effecting coverage. Consultant agrees that all
certificates and endorsements are to be received and approved by the
Town before work commences.
iv. Consultant agrees to have and maintain, for the duration of the contract,
professional liability insurance in amounts not less than $1,000,000 which is
sufficient to insure Consultant for professional errors or omissions in the
performance of the particular scope of work under this agreement.
General Liability:
The Town, its officers, officials, employees and volunteers are to be covered
as insured as respects: liability arising out of activities performed by or on
behalf of the Consultant; products and completed operations of Consultant,
premises owned or used by the Consultant. This requirement does not
apply to the professional liability insurance required for professional errors
and omissions.
The Consultant's insurance coverage shall be primary insurance as respects
the Town, its officers, officials, employees and volunteers. Any insurance or
self -insurances maintained by the Town, its officers, officials, employees or
volunteers shall be excess of the Consultant's insurance and shall not
contribute with it.
iii. Any failure to comply with reporting provisions of the policies shall not
affect coverage provided to the Town, its officers, officials, employees or
volunteers.
iv. The Consultant's insurance shall apply separately to each insured against
whom a claim is made or suit is brought, except with respect to the limits of
the insurer's liability.
LWP CLAIMS SOLUTIONS INC.- WORKERS' COMPENSATION THIRD PARTY ADMINISTRATION AGREEMENT Page of
3.2 All Coverages. Each insurance policy required in this item shall be endorsed to state that
coverage shall not be suspended, voided, cancelled, reduced in coverage or in limits except
after thirty (30) days' prior written notice by certified mail, return receipt requested, has
been given to the Town. Current certification of such insurance shall be kept on file at all
times during the term of this agreement with the Town Clerk.
3.3 Workers' Compensation. In addition to these policies, Consultant shall have and maintain
Workers' Compensation insurance as required by California law and shall provide evidence
of such policy to the Town before beginning services under this Agreement. Further,
Consultant shall ensure that all subcontractors employed by Consultant provide the
required Workers' Compensation insurance for their respective employees.
3.4 Indemnification. The Consultant shall save, keep, hold harmless and indemnify and defend
the Town its officers, agent, employees and volunteers from all damages, liabilities,
penalties, costs, or expenses in law or equity that may at any time arise or be set up
because of damages to property or personal injury received by reason of, or in the course
of performing work which may be occasioned by a willful or negligent act or omissions of
the Consultant, or any of the Consultant's officers, employees, or agents or any
subconsultant.
IV. GENERAL TERMS
4.1 Waiver. No failure on the part of either party to exercise any right or remedy hereunder
shall operate as a waiver of any other right or remedy that party may have hereunder, nor
does waiver of a breach or default under this Agreement constitute a continuing waiver of
a subsequent breach of the same or any other provision of this Agreement.
4.2 Governing Law. This Agreement, regardless of where executed, shall be governed by and
construed to the laws of the State of California. Venue for any action regarding this
Agreement shall be in the Superior Court of the County of Santa Clara.
4.3 Termination of Agreement. The Town and the Consultant shall have the right to terminate
this agreement with or without cause by giving not less than sixty days (60) written notice
of termination. In the event of termination, the Consultant shall deliver to the Town all
plans, files, documents, reports, performed to date by the Consultant. In the event of such
termination, Town shall pay Consultant an amount that bears the same ratio to the
maximum contract price as the work delivered to the Town bears to completed services
contemplated under this Agreement, unless such termination is made for cause, in which
event, compensation, if any, shall be adjusted in light of the particular facts and
circumstances involved in such termination.
4.4 Amendment. No modification, waiver, mutual termination, or amendment of this
Agreement is effective unless made in writing and signed by the Town and the Consultant.
LWP CLAIMS SOLUTIONS INC. - WORKERS' COMPENSATION THIRD PARTY ADMINISTRATION AGREEMENT Page 5 of 7
4.5 Disputes. In any dispute over any aspect of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees, including costs of appeal.
4.6 Notices. Any notice required to be given shall be deemed to be duly and properly given if
mailed postage prepaid, and addressed to:
Town of Los Gatos
Attn: Human Resources Director
110 E. Main Street
Los Gatos, CA 95030
LWP Claims Solutions, Inc.
Attn: Judy Adlam, President & CEO
35 Miller Ave #214
Mill Valley, CA 94941
or personally delivered to Consultant to such address or such other address as Consultant
designates in writing to Town.
Unless otherwise specified, consultant contact with Town shall be limited to the Human
Resources Director, Human Resources Analyst, Human Resources Technician, Town
Attorney, Town Manager or their designee.
4.7 Order of Precedence. In the event of any conflict, contradiction, or ambiguity between the
terms and conditions of this Agreement in respect of the Products or Services and any
attachments to this Agreement, then the terms and conditions of this Agreement shall
prevail over attachments or other writings.
4.8 Entire Agreement. This Agreement, including all Exhibits, constitutes the complete and
exclusive statement of the Agreement between the Town and Consultant. No terms,
conditions, understandings or agreements purporting to modify or vary this Agreement,
unless hereafter made in writing and signed by the party to be bound, shall be binding on
either party.
LWP CLAIMS SOLUTIONS INC. - WORKERS' COMPENSATION THIRD PARTY ADMINISTRATION AGREEMENT Page 6 of 7
IN WITNESS WHEREOF, the Town and Consultant have executed this Agreement.
Town of Los Gatos by:
AN_&
Laurel Prevetti, Town Manager
Recommended by:
X 'oVu Vd,Laiatc
Lisa Velasco, Human Resources Director
Approved as to Form:
Robert Schultz, Tow I torney
Attest:
dN
Shelley Neis, CIVIC, TOM Clerk
Consultant, by:
Judy dlam, Pres' ent &CEO
LW laims Solut ns, Inc.
LWP CLAIMS SOLUTIONS INC. - WORKERS' COMPENSATION THIRD PARTY ADMINISTRATION AGREEMENT Page 7 of 7
EXHIBIT A - SCOPE OF SERVICES
During the Term of this Agreement, Consultant shall provide the following services to
ensure compliance with workers' compensation statutes and regulations as established
by the Department of Industrial Relations:
A. WORKERS' COMPENSATION CLAIMS MANAGEMENT AND ADMINISTRATION:
1. To review on behalf of the Town all reports of injury as defined by California Labor
Code Sections 3208 and 3208.1 that are reported by the Town to Consultant.
To determine on behalf of the Town for each reported employee Injury those
benefits, if any, that should be paid or rendered under the California Workers'
Compensation laws (the "WC Laws").
3. To establish and maintain a claim file on each reported claim, which file shall be
available to the Town for inspection. The maintenance of such files shall exhibit
handling practices which meet or exceed minimum industry standards for
California workers' compensation claims.
4. To maintain current cost -benefit figures and an estimate of the total costs of all
reasonable and foreseeable benefits and related expenses on each case.
5. To prepare and file on behalf of the Town all legally required forms and
reports with the Administrative Director or Self -Insurance Plans, or any other
report required by the State.
6. To pay on the behalf of the Town, from a segregated bank workers' compensation
account funded and maintained by the Town, those sums that should reasonably
be paid for claims and claims -related expenses under the California Workers'
Compensation Laws for each reported claim.
7. When required and appropriate, to refer cases where an employee of the Town
files an application with the California Workers' Compensation Appeals Board or
any other activity involving litigation to attorneys selected and approved by the
Town and not to any other attorneys without the prior written consent of the
Town.
8. To render assistance as is reasonably necessary in the preparation of litigated
cases.
9. To pay on behalf of the Town out of the bank workers' compensation trust account
funded by the Town all "Allocated Loss Expense" which is defined to include all
fees of attorneys, witnesses, court reporters, process servers, independent
investigators, anycourtorWorkers' CompensationAppeals Board, for depositions,
surveillance orthe necessary engagement of personnel in the handling of any claim
subject to this Agreement.
10. To provide computerized loss analysis and financial claim detail reports
within ten days following the end of the month. At no additional charge,
Consultant will provide the following reports:
a. Annual graphic reports reflecting the highest cost department and loss -types.
Annual recaps, litigated claims and other mutually accepted categories.
11. To provide and make appropriate claims reports to excess carriers and collect
excess recoveries, including the return of excess recoveries to Town, subject to
the Town providing Consultant with a list of excess carriers for all preceding
years, and identifying the policy numbers and the parties to whom reports are to
be directed.
12. To attend Workers' Compensation Appeals Board hearings, rehabilitation
hearings, meetings with defense counsel, and meetings with Town staff,
departments, and employee groups as necessary and as requested to do so.
13. To provide monthly summaries of all Town of Los Gatos workers' compensation
bank trust account activities undertaken by Consultant.
14. To advise the Town on any material problems or need for improvement in the
claims reporting, administration or other aspects of the workers' compensation
program.
15. To employ, as necessary, outside vendors subject to obtaining the Town's prior
written approval of all vendors eligible to provide services, directly or indirectly,
on behalf of, or for the Town pursuant to this Agreement.
B. PROGRAM IMPLEMENTATION SERVICES:
Consultant will provide the following services:
16. Storage of all closed files, even those assumed from the prior administrators.
17. Develop and print up to fifty copies of a claim reporting procedure manual
including the most recent workers' compensation reform information) for
distribution to all departments and key employees, should any major changes in
procedures be required.
18. Implementation visits to the Town to distribute claim manuals and discuss self-
insurance and TPA service program with key personnel, should any major
changes in procedures be required.
19. Design and implement all accounting and trust fund procedures, should any
changes be required.
20. Produce and design all necessary reports.
Town of Los Gatos — Response to RFP
Exhibit B - Service Fee Schedule
Year 1 $51,000
Year $52,275
Year 3 -Optional Year 3 $53,582
Assumes open case load of 30 claims. Should takeover claims (including reopen) be more than 35 an
additional annual fee of $1,000 for each indemnity claim open over 35 will be charged.
Services Included in Claims Administration Fee
Claims Administration Designated Account Manager
Claim Review Meetings
Swat Team Claim Intake
Litigation Management
Reporting to Reinsurer
Additional
Annual Administration Fee $2,500
Bank Charges (one Account)
Storage Fees
On -Line 5020 Reporting
Loss Reports
On -Line System Access
Trust Accounting
Preparation and filing of 1099's
Preparation of SIP reports
FROI/SRO1 Reporting
Medicare Reporting
Ebill
Transition Services
Data Intake
Claims Triage
August 19, 2019
Included
Included
Included
Included
Included up to 4 users, $250 per user/year over
4 users
Included
Included
Included
Included
Included
Included
5,000
No Charge
Town of Los Gatos — Response to RFP
Year 1 $60,500
Year $54,775
Year 3 - Optional $56,082
Does not include fees allocated to claims included below.
Index and OFAC Reporting (ISO Fee passed through) $10.40 per report (2019 fee - reviewed annually)
Standard Medical Bill Review Fee Schedule
Reductions
Inpatient or outpatient hospital or surgery
center
PPO Reduction
Bills not subject to Fee Schedule
Medical Bill EDI
8.50 per bill plus PPO Reduction
500 per bill plus PPO Reduction
24% of Reduction below Fee Schedule
24% of Reduction
1 per bill
Telephonic Case Management $102 per hour
Field Case Management $108 per hour+ incidentals (including mileage,
phone, tolls, parking, etc.)
Tier 1- Nurse Review $110 Flat Fee
Includes 3 medical request in a single review, set up, phone calls to physician, email notices to adjuster and letters to all
parties including network providers. Fee applies to reviews approved by nurse or escalated to physician.
Tier 2 - Physician Review $235 plus nurse charge
Includes 3 medical request in a single review.
Pharmacy Review $385 plus nurse charge
Includes unlimited medical request in a single review.
PPO fee for savings below fee schedule and negotiations 24%
There is no separate charge for medical provider access to IWP's proprietary network. Percentage of savings below fee
schedule is the only charge.
Specialized Network Access (bill review charges do not apply)
Durable Medical Goods $4 per bill network access fee
Expedited Diagnostic Testing
Physical Therapy Network
Pharmacy Benefit Network
August 19, 2019
4 per bill network access fee
4 per bill network access fee
4 per bill network access fee
Investigation
Field Investigation
SILI related work
Town of Los Gatos — Response to RPP
These charges apply only if LWP's programs are utilized.
88 per hour
98 per hour
Other Charges
Subrogation 15%of gross recovery
Fee shall not apply to cases wherefile is referred to subrogation attorneyforhondling, and shall apply only to cases where recovery is
negotiated by LWP staff Fee sholl still apply to cases where counsel is employed ONLY to draft releases, but where LWP did all negotiations.
Liens 10% of savings achieved
Charge does not apply toliens negotiated by defense counsel. Additionalfees that may be incurredfor liens negotiated directly by defense
counsel will be charged to the file as on expense. Charge does not apply to liens that are negotiated as a result ofa dispute over afee
schedule and/or a PPO reduction.
August 19, 2019
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
DATE: November 21, 2019
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
MEETING DATE: 12/03/2019
ITEM NO: 4
SUBJECT: Authorize the Town Manager to Execute an Agreement for Services with LWP
Claims Solutions to Provide Workers' Compensation Third -Party
Administration Services Effective January 1, 2020 Through December 31,
2022 for a Total Amount Not to Exceed $171,357
RECOMMENDATION:
Authorize the Town Manager to execute an Agreement for Services with LWP Claims Solutions
Attachment 1) to provide workers' compensation third -party administration services effective
January 1, 2020 through December 31, 2022 for a total not to exceed amount of $171,357.
BACKGROUND:
The California Division of Occupational Safety and Health requires that all employers provide
workers' compensation insurance protection for workers' who are injured or ill as a result of
their employment to provide medical care and replace lost income. The Town of Los Gatos is
self -insured for workers' compensation insurance and engages the services of a third -party
administrator to receive and evaluate employee claims, authorize and pay for medical care,
coordinate the payment of lost income, ensure the plan remains in compliance with state
regulations, provide training to managers and supervisors, determine appropriate reserves for
future medical care and permanent disability, and represent the Town in cases that are
elevated for evaluation before the Workers' Compensation Appeals Board.
The Town last issued a request for proposals (RFP) for workers' compensation third -party
administration services in 2010.
PREPARED BY: Lisa Velasco
Human Resources Director
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director
110 E. Main Street Los Gatos, CA 95030 • (408) 354-6832
www.losgatosca.gov
PAGE 2OF2
SUBJECT: Agreement for Services with LWP Claims Solutions
DATE: November 21, 2019
DISCUSSION:
Due to the length of time since a formal RFP has been solicited for workers' compensation
claims administration services, a new request was sent to vendors in July 2019. The request
was sent to twenty (20) vendors, including the Town's current vendor, and posted on the
Town's website. Five responses were received by the due date and after evaluation, three
finalists were invited to interview with a panel of Town representatives that are most closely
involved with workers' compensation administration services. Based on the interviews, the
panel selected LWP Claims Solutions as a new vendor to provide workers' compensation claims
administration services for the Town based on their record of providing high quality and strong
customer service commitment to public agencies. In addition, LWP Claims Solutions has a track
record of reducing costs associated with utilization reviews, collaborating with employees to
assist in a timely return to work, and reducing overall claims cost.
CONCLUSION:
Based on the outcome of the competitive RFP process for workers' compensation third -party
claims administration services, staff recommends that Council authorize the Town Manager to
execute a new Agreement for Services with LWP Claims Solutions.
FISCAL IMPACT:
LWP Claims Solution has committed to a not to exceed claims administration fee amount of
60,500 for year one of the agreement which is an overall increase of $5,848 for the remainder
of FY 2019/20. Staff will recommend a mid -year budget adjustment to factor the additional
cost into the FY 2019/20 Operating Budget. The costs for year two and year three of the
agreement will be built into the Operating Budgets for FY 2020/21 and FY 2021/22.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachment:
1. Agreement for Services