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R2020-152 2020-08-24RESOLUTION NO. R2020-152 A Resolution of the City Council of the City of Pearland, Texas, authorizing a professional services agreement with Cannon Cochran Management Services Inc. (CCMSI) for administration of the City's Workers' Compensation Program, in the amount of $35,000.00; and authorizing the purchase of Workers Compensation Excess Insurance Coverage from Midwest Employers, in the amount of $140,285.00, for the period of October 1, 2020 through September 30, 2021. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That certain professional services agreement with CCMSI, a copy of which is attached hereto as Exhibit "A" and made a part hereof for all purposes, is hereby authorized and approved. Section 2. That the purchase of Workers Compensation Excess Insurance coverage from Midwest Employers is hereby authorized. PASSED, APPROVED and ADOPTED this the 24th day of Augus . . 2020. TOM REID MAYOR ATTES . CR L ROAN, TRMC, CMC CITY SECRETARY APPROVED AS TO FORM: DARRIN M. COKER CITY ATTORNEY Resolution No. R2020-1 S2 Exhibit A SERVICE AGREEMENT BETWEEN THE CITY OF PEARLAND, TX AND CANNON COCHRAN MANAGEMENT SERVICES, INC. THIS SERVICE AGREEMENT is made and entered into this 15Y day of October, 2020, by and between The City of Pearland, TX (the "Client"), an authorized self-insured entity, and Cannon Cochran Management Services, Inc. ("CCMSI"), a Delaware corporation. It is agreed between the parties hereto as follows: A. APPOINTMENT OF CCMSI. The Client hereby appoints CCMSI, and CCMSI hereby agrees to serve, as Third Party Administrator ("Administrator") of the Client's self-insurance program created and existing under the State of Texas ("State") Self -Insurance Regulations. B. FUNCTIONS OF CCMSI. During the term of this Agreement, the regular functions of CCMSI as the Client's Administrator shall include the following: 1. Claim Administration. (a) Claim Management and Administration. In compliance with its Best Practices, CCMSI will manage and administer all claims of the Client that occur during the period of this Agreement. All claim payments shall be made with Client funds. CCMSI will act on behalf of Client in handling, monitoring, investigating, overseeing and adjusting all such actual and alleged claims. (b) Claim Settlement. CCMSI will settle claims of the Client with Client funds in accordance with reasonable limits and guidelines established with the Client. (c) Claim Reserves. CCMSI will establish reserves for unpaid reported claims and unpaid claim expenses. (d) Allocated Claim Expenses. CCMSI will pay all Allocated Claim Expenses with Client Funds. Allocated Claim Expenses are charges for services provided in connection with specific claims by persons or firms which are eligible claim expenses under the Client's program. Notwithstanding the foregoing, Allocated Claim Expenses will include all expenses incurred in connection with the investigation, adjustment, settlement or defense of Client claims, even if such expenses are incurred by CCMSI. Allocated Claim Expenses will include, but not be limited to, charges for: 1) Independent medical examinations of claimants; 2) Managed care expenses, which include the services provided by comp mc", CCMSI's proprietary managed care program. Examples of managed care expenses includes but is not limited to state fee schedule, PPO net works, utilization review, nurse case management, medical bill audits and medical bill review; CITY OF PEARLAND- LIFE OF AGREEMENT 10-1-2020 407 C C Nt 5 I The City of Pearland, TX - SERVICE AGREEMENT Page 2 of 19 3) Fraud detection expenses, such as surveillance, which include the services provided by FIRE, CCMSI's proprietary Special Investigation Unit (SIU), and other related expenses associated with the detection, reporting and prosecution of fraudulent claims, including legal fees; 4) Attorneys, experts and special process servers; 5) Court costs, fees, interest and expenses; 6) Depositions, court reporters and recorded statements; 7) Independent adjusters and appraisers; 8) Index bureau and OFAC (Office of Foreign Assets Control) charges; 9) MMSEA/SCHIP compliance charges; 10) Electronic Data Interchanges, EDI, charges if required by State law; 11) CCMSI personnel, at their customary rate or charge, but only with respect to claims outside the State and only if such customary rate is communicated to the Client prior to incurring such cost; 12) Actual reasonable expenses incurred by CCMSI employees outside the State for meals, travel, and lodging in conjunction with claim management; 13) Police, weather and fire report charges that are related to claims being administered under Client's program; 14) Charges associated with accident reconstruction, cause and origin investigations, etc.; 15) Charges for medical records, personnel documents, and other documents necessary for adjudication of claims under Client's program; 16) Charges associated with Medicare Set -Aside Allocations; and 17) Legal bill review expenses, which include, the services provided by CLEAR, CCMSI's proprietary legal bill review program. This shall include charges related to legal bill review / audit, which shall include reviewing and auditing invoices submitted by Client -approved law firms for compliance with the Client's Defense Counsel Billing Guidelines. 18) Other expenses normally recognized as ALAE by industry standards. (e) Subrogation. CCMSI will monitor claims for subrogation. 407 C C M S I The City of Pearland, TX - SERVICE AGREEMENT Page 3 of 19 (f) Provision of Reports. CCMSI agrees to provide reports to the Client as specified in the Schedule of Reports attached hereto as Exhibit A. 2. Risk Management Services. CCMSI will provide the Client with additional Risk Management Services not contemplated in the Agreement upon mutual agreement of the parties. The Schedule of additional Risk Management Services to be provided is attached hereto as Exhibit B. 3. Loss Control Services. CCMSI will provide the Client loss control services upon mutual agreement of the parties. The client shall remain fully responsible for the implementation and operation of its own safety programs and for the detection and elimination of any unsafe conditions or practices. CCMSI assumes no responsibility for the detection, identification, communication, mitigation, or elimination of any unsafe condition or practice associated with the safety program of any client. Further, CCMSI assumes no responsibility for any injury sustained by an employee of the client. The Schedule of Loss Control Services to be provided is attached hereto as Exhibit C. 4. Legal Bill Review / Audit Services. In conjunction with its claims administration services, CCMSI will provide Client with Legal Bill Review / Audit Services (CLEAR). The Schedule of Legal Bill Review / Audit Services, including applicable fees, is attached hereto as Exhibit E. 5. Managed Care Services. CCMSI will provide the Client with managed care services (comp mc'm) upon mutual agreement of the parties. The Schedule of Managed Care Services to be provided is attached hereto as Exhibit D. C. CLIENT RESPONSIBILITIES. Client agrees to: 1. Report all claims, incidents, reports or correspondence relating to potential claims in a timely manner. 2. Reasonably cooperate in the disposition of all claims. 3. Provide adequate funds to pay all claims and expenses in a timely manner. 4. Respond to reasonable information requests in a timely manner. 5. Identify in writing all insurance carriers applicable to CCMSI's claim handling responsibilities contemplated in this Service Agreement that CCMSI will have claim or data reporting requirements. In this regard, Client agrees to provide CCMSI with a complete copy of the current excess or other insurance policies, including applicable endorsements and audits, applicable to Clients insurance program and this Service Agreement. CCMSI assumes no responsibility of any kind for not reporting an otherwise reportable claim to any carrier that Client has failed to disclose to CCMSI and/or provide CCMSI with a copy of the applicable insurance policy and reporting instructions relative to that carrier. 407 c c M S I The City of Pearland, TX - SERVICE AGREEMENT Page 4 of 19 6. Pay any fees or costs charged by any carrier or prior TPA of Client for the conversion of data associated with CCMSI handling run off claims for Client, or for the general transfer of data to CCMSI's operating systems. 7. Pay CCMSI's service fees within 30 days of receipt. D. OPERATING EXPENSES. The Client agrees to be responsible for and pay all of its own operating expenses other than service obligations of CCMSI. Such operating expenses shall include but not be limited to charges for the following: 1. All costs associated with Client meeting its State security and licensing requirements; 2. Certified Public Accountants 3. Attorneys, other than provided for in Section 6.1. (d) 3) and B.1. (d) 4) of this Agreement; 4. Outside consultants, actuarial services or studies and State audits; 5. Independent payroll audits; 6. Allocated Claims Expenses incurred pursuant to Section B. 1. (d) of this Agreement; 7. All applicable regulatory fees and taxes; S. Educational and/or promotional material, industry -specific loss control material, customized forms and/or stationery, supplies and extraordinary postage, such as bulk mailing, express mail or messenger service. 9. National Council on Compensation Insurance, NCCI, charges; 10. Excess and other insurance premiums; 11. Costs associated with the development, record keeping and filing of fraud statistics and plans, but only if required by any State or regulatory authority having jurisdiction over Client; 12. Other operating costs as normally incurred by the Client. E. BOOKS AND RECORDS. 1. (a)CCMSI shall maintain all claim information relating specifically to the Client which is necessary to the performance of CCMSI's obligations under this Agreement (the "Records"). The Records shall remain at all times the sole property of the Client. (b)The Records shall not include any manuals, forms, files and reports, documents, customer lists, rights to solicit renewals, computer records and tapes, financial and strategic data, or information which documents CCMSI's processes, procedures and methods, or which CCMSI 407 C C M S I The City of Pearland, TX - SERVICE AGREEMENT Page 5 of 19 employs to administer programs other than the Client. The items specified in this Paragraph E. 1. (b) shall at all times be and remain the sole and exclusive property of CCMSI, and the Client shall not have any ownership, interest, right to duplicate or right to utilize these items except for the above documentation or information that relates solely to Client's Program. 2. During the term of this Agreement, CCMSI shall provide the Client with copies of the Records, if so requested by the Client. Any reasonable costs of reproduction of the Records shall be borne by the Client. 3. CCMSI shall make the Records available for inspection by any duly authorized representative of the Client, or any governmental or regulatory authority having jurisdiction over CCMSI or the Client. F. NON -SOLICITATION OF EMPLOYEES. During the term of the Agreement and for two (2) years thereafter, the Client and CCMSI mutually agree not to recruit, solicit or hire any employee of the other without written permission. G. OTHER INSURANCE. If CCMSI places any specific or aggregate excess insurance, reinsurance, or other insurance product associated with this Agreement, then customary commissions and fees will be retained by CCMSI. H. TERM AND TERMINATION. 1. Term of Agreement. The first term of this Agreement shall be for Five (5) years beginning on October 1st, 2020 and terminating on September 301h, 2025. Unless the Agreement is terminated as set forth in paragraph H. 2., it will automatically renew for successive Five (5) year terms. At least ninety (90) days prior to the expiration of each Five (5) year term of this Agreement, the parties shall enter into good -faith negotiations regarding any proposed change in Agreement terms or fees. If there are no changes requested by either party, then the Agreement will automatically renew under the same terms and fee arrangement as the prior term. 2. Termination of Agreement. This Agreement may be terminated: (a) For convenience by either party with 30 days written notice to the other party hereto; (b) Upon expiration of the current term of this Agreement if either party has given the other at least ninety (90) days written notice of its intention to terminate as set forth in paragraph H. 1.; (c) Upon dissolution of the Client's self-insurance program whether voluntary or due to cessation of Client's authority to self -insure; (d) Upon dissolution of the Client's self-insurance program due to Client insolvency or bankruptcy; The City of Pearland, TX - SERVICE AGREEMENT Page 6 of 19 (e) Upon ninety (90) days written notice by either party if the other party is in material breach of any term, covenant or condition contained herein; provided, however, that as a condition precedent to termination under this Section H. 2. (e), the terminating party shall give written notice to the other party, who shall have sixty (60) days from the date of such notice to cure or correct the grounds for termination. If the grounds of termination are not corrected or cured during the sixty (60) day period, this Agreement may be terminated on the termination date specified in the notice, but not prior to the expiration of the ninety (90) day period described herein. 3. Services Following Termination of Agreement. Should this Agreement be terminated or non - renewed for any reason, CCMSI will cease providing services, turn over to the Client all Client files in CCMSI's possession, which shall include all open and closed files. Upon the Client's request and subject to agreement by CCMSI, CCMSI will be paid a reasonable negotiated fee to: (a) Provide for continued administration of the open claim files; (b) Cooperate with any successor administrator in the orderly transfer of all functions, including providing a runoff listing of open claim files if desired by the Client and any other records reasonable and necessary for a successor administrator; and (c) Provide an electronic transfer of data if such is feasible, with the cost of providing such borne by the Client. The electronic transfer of data will be subject to a flat fee of $2,500. SERVICE FEE PAYMENTS. The Client shall pay to CCMSI a service fee as outlined in the Fee and Payment Schedule attached hereto as Exhibit F. J. RELATIONSHIP OF PARTIES. With respect to the services provided by CCMSI in this Agreement, CCMSI is considered an independent contractor. Nothing in this Agreement shall be construed to create a relationship of employer/employee, partners or joint ventures between the Client and CCMSI. This Agreement is non-exclusive, and CCMSI shall have the right to perform services on behalf of other individuals, firms, corporations and entities. K. CHANGE IN CIRCUMSTANCES. In the event the adoption of any statute, rule or regulation materially changes the nature of the relationship between the parties hereto or the legal or economic premises upon which this Agreement is based, the parties hereto shall undertake good faith negotiations to amend the terms of this Agreement to account for such changes in a reasonable manner. L. SOFTWARE ACCESS. The Client may be provided with the right to use one or more CCMSI Applications in connection with the services provided by CCMSI in this Agreement. CCMSI Applications include iCE, MyReports, Loss Control ASAP, Loss Control Resources and iCEBAR. The right to use CCMSI Applications is non-exclusive, limited to the term of this Agreement per paragraph H.1., non -transferable and is solely for the internal business use of Client. The City of Pearland, TX - SERVICE AGREEMENT Page 7 of 19 CCMSI owns and reserves all rights, title, and interest in and to the CCMSI Applications. Client has no right to receive a copy of the object code or source code to the CCMSI Applications. Client may not attempt to: 1. License, sell, lease or otherwise make the CCMSI Applications available to any other party. Client will not provide any access, passwords or other information regarding the CCMSI Applications to any third parties and/or competitors of CCMSI without the prior written consent of CCMSI; 2. Use the CCMSI Applications in any way that violates any law, regulation or mandate, or the term of this Agreement; or 3. Take any action that jeopardizes confidential or proprietary information held by CCMSI. Client is responsible for any confidential or proprietary information accessed or downloaded by Client from the CCMSI Applications, including the implementation of appropriate information security controls surrounding such information. Except as expressly provided in this Agreement, CCMSI Applications are provided "as -is". CCMSI disclaims all other warranties, express, implied, or statutory, including the implied warranties or merchantability, satisfactory quality, title, fitness for a particular purpose, non -infringement, compatibility, security, quiet enjoyment, or accuracy. Without limiting the foregoing, CCMSI does not warrant that access to or use of the CCMSI Applications will be uninterrupted or error -free. CCMSI will provide support for the CCMSI Applications in the two most recent two versions of the Internet Explorer, Chrome, Firefox and Safari browsers. M. MISCELLANEOUS. 1. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas without regard to principles of conflicts of law. 2. Timing of Services. CCMSI may exercise its own reasonable judgment, within the parameters set forth herein and in compliance with State regulations, as to the time and manner in which it performs the services required hereunder. Additionally, CCMSI will be held to a standard of like administrators performing like services for customers such as Client. 3. Successors in Interest. This Agreement shall be binding upon, and inure to the benefit of, the successors in interest and permitted assigns of the parties hereto. 4. Severability. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if the invalid or unenforceable provision had been revised to the minimum extent necessary to make it valid and fully enforceable under applicable law. 5. Paragraph Headings. All paragraph headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The City of Pearland, TX - SERVICE AGREEMENT Page 8 of 19 6. Waiver. The failure of any party to enforce any provisions of this Agreement shall not constitute a waiver by such party of any provision. A past waiver of a provision by either party shall not constitute a course of conduct or a waiver in the future with respect to that same provision. 7. Notice Provision. All notices, requests and other communications required under this Agreement shall be in writing and delivered by hand or mailed, registered or certified, return receipt requested, postage paid, or sent via a nationally recognized overnight courier to the other party at the following address: Client: Melissa Sullinger City of Pearland, TX 3519 Liberty Dr. Pearland, TX 77581 CCMSI: Cannon Cochran Management Services, Inc. 2 E. Main St. Danville, IL 61832 Attn: Chief Operating Officer 8. File Destruction Policy. CCMSI will maintain electronic claim file records or hard copy files (where applicable) on all closed files on behalf of Client for a period of fifteen (15) years after the month of closure, or for as long as necessary to protect the applicable statute of limitations, whichever is longer. It is the sole responsibility of Client to advise CCMSI if files are not to be destroyed per this policy. 9. Insurance. CCMSI will purchase and maintain insurance coverages for its performance of the services contemplated in this Agreement. Minimum policy limits are as follows: Workers Compensation — Statutory Professional - $5,000,000 General Liability - $1,000,000 / $2,000,000 Umbrella - $5,000,000 Cyber Coverage - $5,000,000 Comprehensive Automobile Liability - $1,000,000 CCMSI will include the City as an additional insured under the policies, with the exception of the Professional Liability Insurance and Workers' Compensation. CCMSI will agree to waive its Right to Subrogation. Certificates of Insurance and endorsements shall be furnished to the City before work commences. Each insurance policy shall be endorsed to state that coverage shall not be suspended, voided, canceled, and/or reduced in coverage or in limits ("Change in Coverage") except with prior written consent of the City and only after the City has been provided with written notice of the change. Prior to commencing services under this contract, CCMSI shall furnish the City with certificates of insurance, or formal endorsements as required by this contract, as evidence that policies providing the required coverage and conditions and limits required by this contract are in full force and effect. The City of Pearland, TX - SERVICE AGREEMENT Page 9 of 19 10. Escheatment. CCMSI will monitor all outstanding checks issued on CCMSI escrow accounts for escheatment. Information necessary for escheatment filings and funds to cover those amounts will be provided to Client no less than 90 days prior to the applicable filing date. Client is solely responsible for complying with all applicable abandoned property or escheat laws, making any required payments, and filing any required reports. 11. Confidential Information. Confidential Information includes nonpublic information (information not subject to the Texas Public Information Act) that is exchanged between the Client and CCMSI, including, without limitation, information relating to the business, financials, personnel, customer data and operating procedures. Confidential Information includes information whether in written, electronic, or oral form created and relating to services provided under the Agreement. All Confidential Information is proprietary. Client and CCMSI may use the other party's Confidential Information only for the purpose of this Agreement and will limit its disclosure to only those persons reasonably necessary to perform under the Agreement. CCMSI will share nonpersonal bulk claim data with the IDS National Database unless the Client directs otherwise. 12. Information Security. CCMSI is responsible for the protection of the confidentiality, availability, privacy and integrity of Client information in our custody. CCMSI has implemented an Information Security Policy that has been developed to comply with applicable federal and state laws or regulations and industry best practices. The Information Security Policy applies to all CCMSI personnel, including temporary employees, independent contractors and vendors with access to CCMSI systems. 13. Entire Agreement/Amendment. This Agreement sets forth the full and final understanding of the parties hereto with respect to the matters described herein and supersedes any and all prior agreements and understandings between them, whether written or oral. This Agreement may be amended only by written document executed by the Client and CCMSI. The City of Pearland,TX-SERVICE AGREEMENT Page 10 of 19 Executed this .PLj day of ,20 a'1 CANNON COCHRAN MANAGEMENT SERVICES, INC. By: e,,/ .� 'U�i... Ro Aly J.Golden Its: Chief Operating Officer/Executive Vice President CITY OF PEARLAND,TX • By: .N1A`-- • �1�V.1�►�0!`t Its: iy Q • CCAlS1- The City of Pearland, TX SERVICE AGREEMENT Page 11 of 19 EXHIBIT A SCHEDULE OF REPORTS 1. A detailed listing of all claims broken down by location, policy year and line of coverage. (MONTHLY) 2. A summary of all claims broken down by location, policy year and line of coverage. (MONTHLY) 3. A check register listing all checks issued during a reporting period. (MONTHLY) 407 C C M S I The City of Pearland, TX - SERVICE AGREEMENT Page 12 of 19 EXHIBIT B SCHEDULE OF RISK MANAGEMENT SERVICES N/A V 0 c c M s I The City of Pearland, TX - SERVICE AGREEMENT Page 13 of 19 EXHIBIT C SCHEDULE OF LOSS CONTROL SERVICES N/A CCMSI will provide the Client loss control services upon mutual agreement of the parties. The client shall remain fully responsible for the implementation and operation of its own safety programs and for the detection and elimination of any unsafe conditions or practices. CCMSI assumes no responsibility for the detection, identification, communication, mitigation, or elimination of any unsafe condition or practice associated with the safety program of any client. Further, CCMSI assumes no responsibility for any injury sustained by an employee of the client. 407 C C M S I The City of Pearland, TX - SERVICE AGREEMENT Page 14 of 19 EXHIBIT D SCHEDULE OF comp mc'"" SERVICES AND FEES Provider Bill Re -pricing Service Fee Usual and Customary re -pricing $9 per bill Fee Schedule state re -pricing $9 per bill Medical Bill State Reporting for applicable medical bills to reportable state $1.50 per reportable bill PPO Re -pricing PPO re-pricine is billed at 28.5% of savines Pharmacy Network Services Pharmacy Network services are priced at 33% of savings. G 0 C C M S I The City of Pearland, TX - SERVICE AGREEMENT Page 15 of 19 EXHIBIT E SCHEDULE OF CLEAR SERVICES AND FEES Service Description Service Fee Review and audit all legal invoices submitted PAID TO BOTTOMLINE by Program -approved law firms for TECHNOLOGIES, INC. Legal Bill Review/ Audit adjudication in compliance with Program's 1.95% of the gross monetary Services Defense Counsel Billing Guidelines and total of each invoice Generally Accepted Legal Billing Principles. submitted and audited This includes integration of "PartnerSelect", a (inclusive of law firm fees, web -based analysis tool that provides costs and disbursements). information designed to assist in the evaluation and selection of qualified law firms. Management Fee for Integration and interface of legal bill review / PAID TO CCMSI administration of Legal Bill audit software with CCMSI's claim system 0.25% of the gross monetary Review Program, necessary to review and adjudicate legal total of each invoice administration and invoices electronically. Periodic standard submitted and audited integration of data reports will be developed and produced (inclusive of law firm fees, reporting and data transfer, summarizing Program's overall savings results. costs and disbursements). development and delivery Metrics will be applied to analyze the overall of Performance Reports, performance of law firms. A Bill Analysis and maintenance of Report (BAR) will be generated for each legal technology interface invoice reviewed. The BAR will be included with each check to the appropriate law firm and include details and supporting documentation for any deductions applied to the original billing. Note: Fees relative to legal bill review services will appear on the transaction register payable to "CLEAR", CCMSI's proprietary legal bill review program. Guarantee: If Legal Bill Review savings achieved for Client is less than the 2.20% total service fee incurred on an annual basis, the Client will be refunded the difference between the service fee incurred and the amount actually saved on invoices. Therefore, service fees will never exceed the savings achieved for Client on an annual basis. Bottomline Technologies, Inc. and CCMSI service fees are paid as ALAE to the applicable claim file as described in section B. 1.(d)17) of this Agreement. 407 c c M S I The City of Pearland, TX - SERVICE AGREEMENT Page 16 of 19 EXHIBIT F FEE AND PAYMENT SCHEDULE Service Agreement Term: Services: Fees: Claims Administration (minimum) $25,000 CCMSI will manage all workers' compensation claims for the Life of Agreement for an annual flat fee as follows: Note: If claim volume increases to eclipse the minimum claim fee, per claim fee of $1,350 for indemnity and $175 for medical only will be applied and there will be a true up at the end of the contract year. Workers' compensation flat fee schedule: Year 1: $35,000 Year 2: $30,000 Year 3: $31,500 Year 4: $33,075 Year 5: $34,728 There will be a 5% fee increase to the flat fee per year after the second year. Workers' Compensation Claim Definitions ■ Indemnity Claims — Claims involving lost -time, questionable compensability, legal involvement, subrogation, second injury fund, probable permanent impairment/disability, jurisdictional issues, coverage issues or claims involving complex issues that are assigned or transferred to the indemnity adjuster for claims handling. ■ Medical Only Claims — Claims which have no issues of lost time, no evidence of other indemnity benefit exposure, no obvious question of compensability, no evidence of potential subrogation or second injury fund recovery, no evidence of problematic medical issues and no requirement or need for any formal statements. ■ Report Only/Incident Only Claims — Reported claims which require only input into RMIS system and requires no claims management activity. The City of Pearland, TX - SERVICE AGREEMENT Page 17 of 19 Annual Administration Included in Flat Fee • Dedicated client service team • Development of specific client service requirements • Monthly loss reporting • Quarterly claim reviews at client's request • Issuance of 1099's • Assistance in filing of all required state forms including state mandated assessments o If Client has directed CCMSI to utilize a third party vendor selected by Client for the provision of services then such assistance will be the responsibility of the third party vendor • Workers' compensation claims packets/state forms • Preparation for, compliance with and response to regulatory audits • Account Management and Administration • Ability to generate OSHA 300 Log and 300A OSHA Summary Account Set-up (One time only fee) 5 000 Initial set-up meeting to review and establish the following: • Computer Set-up • Banking and Funding • Reports • Special Claim Handling Guidelines • All Other Miscellaneous Start-up Issues Internet Claim Access Included in Flat Fee Internet claims system access which includes: • Viewing access to all claims data • Risk Management statistical analysis • Comprehensive and complete access to claims management process • On-line reports • On-line reporting capability via the internet • Ability to generate OSHA 301 Form First Report of Injury Taxes CCMSI fees will be increased by any applicable Sales, Gross Receipts, or similar (excluding income) taxes imposed by Federal, State or Local bodies. Loss Control Services N/A 407 C C M S I The City of Pearland, TX - SERVICE AGREEMENT Page 18 of 19 CCMSI will provide the Client loss control services upon mutual agreement of the parties. The client shall remain fully responsible for the implementation and operation of its own safety programs and for the detection and elimination of any unsafe conditions or practices. CCMSI assumes no responsibility for the detection, identification, communication, mitigation, or elimination of any unsafe condition or practice associated with the safety program of any client. Further, CCMSI assumes no responsibility for any injury sustained by an employee of the client. Managed Care Service I See Detail Provider Bill Re -pricing Service Fee Usual and Customary re -pricing $9 per bill Fee Schedule state re -pricing $9 per bill Medical Bill State Reporting for applicable medical bills to reportable state $1.50 per reportable bill PPO Re -pricing PPO re -pricing is billed at 28.5% of savings Pharmacy Network Services Pharmacy Network services are priced at 28.5% of savings. State Reporting EDI Initial reporting $10 per report Subsequent reports $5 per report Index Bureau Note: The above index fee is a direct pass through charge for ISO. If ISO increases their current market rate per index, CCMSI will adjust the above fee accordingly. $10 FROI $5 SROI Current ISO Market Rate = $12.30/Per Index Subrogation 20% of Recovery Data Conversion Fee (one-time fee) (Optional) $10,000 This includes the transfer of claim data from the prior TPA(s) claim system to CCMSI (if applicable). MMSEA Section 111 Reporting $25/Per Claim Hit CCMSI in conjunction with our reporting agent will comply with MMSEA Section 111 Reporting on behalf of City of Pearland, TX: • All injury claims will be queried to CMS for Medicare eligibility (no charge). • CCMSI will collect additional mandatory data on claims where Medicare eligibility has been verified. CCMSI along with our reporting agent will G 0 c c M S I The City of Pearland,TX-SERVICE AGREEMENT . Page 19 of 19 report all claims meeting the reporting guidelines as set forth by CMS. (one-time$25 per claim fee) Carrier FeesTBD If applicable, Client will be responsible for payment of any carrier fees associated with the transition of claim handling responsibilities to CCMSI. Special System Reports $125 an hour CCMSI will provide special reports, (reports not currently programmed or written) for a fee of$125 per hour for system programming time. CCMSI will provide an estimate of charges before any work will be done. GRAND TOTAL . $35,000 Fee&Payment Schedule The quarterly installments of$8,750 will be due on 10/1,1/1,4/1 and 7/1. • Subsequent year service fees shall be subject to an annual 5%increase after second year as previously indicated in Exhibit F. Executed this 4211 day of , 20 'Z° CANNON COCHRAN MANAGEMENT/� SERVICES,INC. • By: • 9 / , ' ,' g�iiBv► . dney J.Golden Its: Chief Operating Officer/Executive Vice President CITY OF PEARLAND,TX • By: C�1L _i --0•-/`"0/\/-N Its: OM ab d:7 t hAW °V+- • G C C M S 1.