REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Travis Hopkins, City Manager
VIA: Marissa Sur, Assistant City Manager
PREPARED BY: Marissa Sur, Assistant City Manager
Subject:
title
Approve and authorize execution of a Professional Services Contract with Pacific Secured Equities, Inc. dba Intercare Holdings Insurance Services for Third Party Workers’ Compensation Claims Administration and Utilization Review Services
body
Statement of Issue:
As a self-insured public entity, the City contracts with a third party administrator (TPA) for workers’ compensation claims adjusting services and other vendors for managed care services including utilization review. The TPA is charged with providing overall program administration of the workers’ compensation claims and works directly with the injured employees, medical providers, consultants, and attorneys, to administer workers’ compensation benefits on behalf of the City and in compliance with applicable laws. With the City’s current agreement expiring on October 31, 2026, staff initiated a Request for Proposal to review TPA and managed care services options available to the City and now requests City Council approval of the proposed agreement with Pacific Secured Equities, Inc. dba Intercare Holdings Insurance Services (Intercare).
Financial Impact:
The annual fiscal impact during the term of the contract is: Yr. 1) $870,000; Yr. 2) $900,000; Yr. 3) $930,000. The total compensation over three years is $2,700,000. Sufficient funding is budgeted in the Workers’ Compensation Internal Service Fund (551) for FY 2026/27. Funding for years 2 and 3 will be included in the subsequent budgets.
Recommended Action:
recommendation
Approve and authorize the Mayor and City Clerk to execute “Professional Services Contract Between the City of Huntington Beach and Intercare Holdings Insurance Services for Workers’ Compensation Third Party Administration and Utilization Review Services,” at a not-to-exceed amount of $2,700,000.
end
Alternative Action(s):
Do not approve recommended action and direct staff accordingly.
Analysis:
The City’s current contract with Intercare for workers’ compensation claims administration services expires on October 31, 2026. In anticipation of the current contract’s expiration, staff issued a Request for Proposal (RFP) solicitation. The City also currently contracts separately with providers for Managed Care Services, including Utilization Review, Bill Review and Pharmacy Benefit Management. Through this RFP process, staff also evaluated the feasibility of bundling any of these services with the TPA contract in order to streamline processes and enhance the customer experience for injured workers.
RFP Process
The Request for Proposal was posted on Planet Bids and closed in June 2026; 14 responses were received. The City evaluated the proposals received using a Qualifications-Based Selection (QSB) process incorporating a multitude of factors including Qualifications and Experience, Approach and Methodology, Compliance with RFP, Partnership Strength & Value-Added Features, and Proposed Costs.
Based on the proposal review, 4 workers’ compensation TPAs were invited to participate in a panel interview consisting of a mix of internal and external raters.
Following the interviews, the TPAs were placed in rank order by the panelists and their average combined ranking resulted in their overall comparison ranking.
After consideration of their proposal and overall ranking, Intercare was identified as the highest-qualified proposer and most effective provider for Workers’ Compensation Third Party Administration and Utilization Review services. Including Utilization Review services under the TPA umbrella streamlines the review process for treatment and allows for adjusters to have direct access with the Utilization Review team. This change will alleviate some of the current concerns with the review process that employees have experience.
As a California based company, Intercare has worked with a wide range of public entities across the state developing a strong reputation for administering complex claims. They have hands-on experience with administering benefits under Labor Code Section 4850, the application of presumptive injuries, administration of ADR programs, and the integration of workers’ compensation benefits into City retirement programs. During the interview, the panel noted their familiarity with the City and its processes and understanding of customer service expectations among the top reasons they were ranked highest.
Since initially switching to Intercare as the City’s workers’ compensation TPA in November 2023, Intercare has worked closely with Risk Management staff to develop and improve the City’s workers’ compensation program and the customer service offered to the injured employees.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Goal 3 - High Performing Organization, Strategy G - Select a new third-party administrator (TPA) for worker's compensation to manage City claims efficiently, reduce cost and create a safer workplace.
Attachment(s):
1. RCA Contract Agreement Summary
2. Professional Services Contract