REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Eric G. Parra, Interim City Manager
VIA: Marissa Sur, Director of Human Resources
PREPARED BY: DeAnna Soria, Risk Manager
Subject:
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Approve and authorize execution of Three-Year Professional Services Contracts for Workers’ Compensation Managed Care Services with Lien On Me, Inc. for Bill Review, and Arissa Cost Strategies, LLC for Utilization Review
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Statement of Issue:
The City of Huntington Beach issued a Request for Proposal (RFP) for Managed Care Services in support of the administration of its self-insured Workers’ Compensation program. Staff recommends awarding three-year, fixed-fee contracts to the most responsive and lowest bidders for each program: Lien On Me for medical Bill Review services and Arissa Cost Strategies for Utilization Review services.
Financial Impact:
These services will be funded out of the Workers’ Compensation Internal Services Fund (551). The proposed contract with Lien On Me is for an amount not to exceed $525,000 for a three-year period. The proposed contract with Arissa Cost Strategies is for an amount not to exceed $300,000 for a three-year period.
Recommended Action:
recommendation
A) Approve and authorize the Mayor and City Clerk to execute “Professional Services Contract Between the City of Huntington Beach and Lien On Me, Inc. for medical Bill Review services of the City’s Workers’ Compensation claims” in an amount not to exceed $525,000 for the three-year period, and
B) Approve and authorize the Mayor and City Clerk to execute “Professional Services Contract Between the City of Huntington Beach and Arissa Cost Strategies, LLC, for Utilization Review services of the City’s Workers’ Compensation claims” in an amount not to exceed $300,000 for the three-year period.
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Alternative Action(s):
Do not approve, and direct staff accordingly.
Analysis:
The City of Huntington Beach is required by law to provide Workers’ Compensation benefits to employees who are injured or become ill in the course and scope of their employment. To achieve operational efficiencies, the City also contracts out for ancillary managed care services, including medical Bill Review, Utilization Review, and Pharmacy Management.
In May 2024, the City of Huntington Beach issued a Request for Proposal (RFP) regarding these managed care services. The City’s intent via the RFP process was to evaluate and select the best qualified respondents for each service. The proposals were evaluated and scored against the criteria listed in the RFP by a panel of subject matter experts, including City of Huntington Beach Risk Manager, City of Santa Ana Risk Manager, City of Placentia Director of Human Resources, Genex Services Managed Care Consultant, and Director of Cypress Reporting/ MSA Settlements. Based on the initial scoring, the panel then interviewed the ten qualified respondents for Bill Review and ten qualified respondents for Utilization Review.
Lien On Me received the highest evaluation score for medical Bill Review services. Lien On Me is the Bill Review incumbent, and the City has been very satisfied with their services. Lien On Me slightly increased their pricing but remained competitive. The proposed three-year contract is estimated at $175,000 per year and has been the same for the past six years.
Arissa Cost Strategies received the highest evaluation score for Utilization Review services. Arissa Cost Strategies is the Utilization Review incumbent, and the City has been very satisfied with their services. Arissa Cost Strategies did increase their pricing while remaining competitive. The proposed three-year contract is estimated at $100,000 per year and has been the same for the past six years.
Environmental Status:
This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. Professional Services Contract with Lien On Me, Inc.
2. Professional Service Award Analysis- Lien On Me, Inc.
3. Bill Review Bidder’s List- Lien On Me, Inc.
4. Professional Services Contract with Arissa Cost Strategies
5. Professional Service Award Analysis- Arissa Cost Strategies
6. Utilization Review Bidder’s List- Arissa Cost Strategies