HomeMy WebLinkAbout31- Risk Management CITY OF SAN BERN/` RDINO - REQUEST FnR COUNCIL ACTION
From: Fred Wilson Subject: Resolution authorizing the execution of a
Acting Director, Risk Management Workers ' Compensation managed care ser-
Dept: Risk Management vices agreement between Beech Street of
California, Inc. and the City of San
Date: October 18, 1995 Bernardino.
Synopsis of Previous Council action:
No previous action
C,Ta 7 : 56
Recommended motion:
Adopt Resolution
Signature
contact person: Leslie Madrid Phone: 384-5173
Supporting data attached: Yes Ward:
=UNDINO REQUIREMENTS: Amount: $24,000.00
Source: (ACCT. NO.) 678-452-5505
(ACCT. DESCRIPTION) Other Professional Services
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ouncil Notes:
�/ to S
o:6z Agenda Item No. ��
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CITY OF SAN BERNA"!"DINO - REQUEST FOR COUNCIL ACTION
STAFF REPORT
The cost to administer the City's self-insured Workers'
Compensation program has increased over the past few years. There
are three main reasons for increase in costs: a 50% growth in the
filing of claims, state mandated increases in indemnity benefits,
and a rise in the number of claims which are being litigated by
claimants.
The establishment of a cost containment program has been identified
as a major step towards controlling expenses. One key element of
a cost containment program is the utilization of a medical billing
review service. A second element is the establishment of a
Preferred Provider Organization (PPO) through negotiated contract
rates with hospitals.
The proposed agreement with Beech Street of California, Ltd. will
assist the department in implementing these two cost containment
elements. The major provisions of the contract include:
Medical Billing Review services
* Reviewing all medical fees to ensure that the charges comply
with the medical fee schedule, mandated by the State of
California.
* Hospital bill audit/screen reports. A pre-screen and/or audit
report for in patient hospital bills. This audit process will
provide a detail of provider over charges, identification of
items unrelated to the covered diagnosis and the medical
necessity of services billed.
Preferred Provider Organization
* The service will process and apply the negotiated contract
rates to Workers' Compensation bills (in patient and out
patient) from provider members of the PPO.
* A monthly report which summarizes the following information
for all PPO bills which itemizes: gross charges submitted,
recommended allowances to be paid by the City based on
negotiated contract rates, resulting in savings to the City.
A pilot program was completed by Beech Street at no charge to the
City in September 1995 in which 33 randomly pulled invoices were
reviewed. Of these 33 invoices, which total $43 , 069 .00, Beech
Street presented a savings to the City the amount of $11,421. 00; a
27% reduction.
The cost to the City for the medical review services set forth in
this letter of agreement is eight dollars ($8.00) per bill.
75-0264
t
Several public entities in San Bernardino and Riverside County
currently utilize Beech Street. They include the County of
Riverside, County of Los Angeles, City of Riverside, Fontana
Unified School District, and Los Angeles City of Water and Power.
This agreement may be canceled by way of a thirty day written
notice from either the City of San Bernardino or Beech Street.