Item Coversheet
  CITY COUNCIL AGENDA MEMO
MEETING DATE: 9/20/2022
DEPARTMENT:Risk Management
DIRECTOR:LaShon Ross, Deputy City Manager
AGENDA ITEM:Award of RFP 2022-0173-AC for Third Party Claims Administrator
RECOMMENDED ACTION:Award/Rejection of Bid/Proposal

ITEM SUMMARY

RFP No. 2022-173-AC for a one (1) year contract with five (5) automatic one-year renewals for Third Party Claims Administrator to Risk Management Division to Corvel Enterprise Comp, Inc. in the estimated annual amount of $445,424; and authorizing the City Manager to execute all necessary documents. Approved

PREVIOUS ACTION/PRESENTATION

 

BACKGROUND

This RFP is for the selection and award of Third Party Claim Services for the Plano Risk Management Program. This includes handling of multiple processes related to self-funded workers’ compensation, general liability, auto liability, directors and officers coverage, employment-related claims, and property claims.

 

Competitive proposals were obtained through a solicitation facilitated by the Plano Procurement Department. Responses were received from Claims Administrative Services, Inc., Corvel Enterprise Comp, Inc., Davies Claims Solutions, LLC., and TRISTAR Claims Management. A selection committee was formed and included various departments within the City of Plano. Four proposals were received. The committee reviewed all written responses and invited selected proposers to have personal interviews and provide oral presentations. Interviews and presentations included information from their individual proposals as well as responses to questions from the committee. After a thorough review of all proposals, the committee selected Corvel Enterprise Comp, Inc. The selection committee determined that Corvel Enterprise Comp, Inc., best fit the City’s needs, and Corvel Enterprise Comp, Inc., scored best in the selection criteria.

 

The proposed contract will be for one year with five automatic renewals. The agreement has a first year expenditure of $445,424, which includes $365,424 in fixed cost for claims administration personnel and services, an estimated $75,000 for bill review and managed care services, and $5000 for one-time network setup. We anticipate that costs may vary, as the contract includes a provision for a CPI-indexed increase year over year and the bill review and managed care services are dependent on the volume of claims. It should be noted that these estimated additional fees are allocated expenses that are paid directly from individual claim files paid from the loss fund and not operating expenses.

 

If this contract is not awarded, the immediate impact to the City would be we would continue our current contract on a month by month basis until we have selected a new TPA. Approval of this award would allow us to implement programs that will reduce the costs on our workers’ compensation program. The focus of this proposed contract is to implement new programs including a medical network, telemedicine, and nurse case management that will help us control and reduce the costs of our workers’ compensation program.

FINANCIAL SUMMARY/STRATEGIC GOALS

This item approves a one-year contract with five (5) automatic renewals for Third Party Claim Services for the City of Plano claims program. Expenditures will be made in the Risk Management Fund within the approved budget appropriations for each year of the contract. The estimated total future cost is $2,848,583, if all renewal years are exercised (or $370,424 in FY 2022-23 with a 3.5% annual escalator through FY 2027-28 and $75,000 per year for FY 2022-23 through FY 2027-28 for any allocated expenses for individual claims).

 

Approval of this contract will support the City's Strategic Plan Critical Success Factor of being an Excellent, Innovative, and Accountable City Government.

ATTACHMENTS:
DescriptionUpload DateType
RFP Recap9/9/2022RFP Recap