SR 11-14-2023 5I
City Council
Report
City Council Meeting: November 14, 2023
Agenda Item: 5.I
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To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department, Risk Management
Subject: Award Agreement to Lien On Me, Inc. for Workers’ Compensation Medical Bill
Review Services
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section
15061(b)(3) (Common Sense Exemption) of the California Environmental
Quality Act (CEQA) Guidelines.
2. Award RFP# 367 to Lien On Me Inc. (Lien On Me) for workers’ compensation
medical bill review services for the Finance Department;
3. Authorize the City Manager to negotiate and execute an agreement with Lien On
Me, in an amount not to exceed $485,000 over a five-year period, with future
year funding contingent on Council budget approval.
Summary
The City has an ongoing need for workers’ compensation medical bill review services.
As part of administering the City’s workers’ compensation claims, staff annually
processes approximately 8,200 bills for medical care provided to injured workers. Each
medical bill received must be reviewed for compliance and reconciled with the California
Division of Workers’ Compensation fee schedule for medical services. With the current
agreement for workers’ compensation medical bill review services set to expire, staff
solicited proposals in accordance with procurement policies and received responses
from ten vendors. A panel of City staff subsequently evaluated each firm’s proposal and
determined that Lien On Me was the best qualified vendor. The Evaluation Committee
recommends the City pursue a five-year agreement with Lien On Me at a cost of
$485,000.
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Discussion
The Risk Management Division is responsible for managing the City’s Workers’
Compensation Program, and in this capacity, ensures that the program operates cost-
effectively and in compliance with State law and regulations. The bill review service is a
critical cost containment component of the program as the State’s fee schedule for
medical services is substantially lower than usual and customary fees charged by health
care providers. In addition, medical bill reviewers have an ability to reduce the fees
even further through Preferred Provider Organizations (PPOs) that the health care
providers are contracted with. In FY 2022-23, the workers’ compensation bill review
process saved the City $496,431.
Risk Management has historically contracted out workers’ compensation medical bill
review services due to its very specialized technical nature which requires a separate
bill review system. The contractor is responsible for reviewing and repricing all medical
bills submitted to the City in compliance with State mandated timeframes to ensure that
duplicate payments are not made and that charges reflect medical services approved by
Workers’ Compensation staff. Since 2012, the City has utilized Intermed Cost
Containment Services for these services. The contract with Intermed is set to expire on
December 12, 2023.
Vendor Selection
Bidder Recommendation
Best Qualified Person/Firm Lien on Me, Inc
Evaluation Criteria
Training/credentials/experience, quality of work/technical capabilities,
cost, references, and presentation/demonstration.
Municipal Code SMMC 2.24.190
RFPs Received
Accuro Solutions Allied Managed Care, Inc. CostFirst Corp.
Diamond Bill Review EK Health Services Inc. Innovative Claims Strategies
InterMed Cost Containment
Services, Inc.
Johnson's Medical Billing Collection
Services
Lien On Me, Inc.
USIS, Inc. dba/AmeriSys
RFP Data
Posted On Posted On
Advertised In
(City Charter & SMMC)
Vendors
Downloaded
Date Publicly
Opened
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08/04/2023 City's Online
Bidding Site Santa Monica Daily Press 28 09/07/2023
Justification to Award
Staff evaluated the RFP submissions from the ten firms and shortlisted three firms for
interviews. Based on the evaluation criteria established in the RFP and criteria in SMMC
2.24.190, staff recommends Lien On Me, Inc. as the best qualified firm to provide
workers’ compensation medical bill review services based on their extensive experience
with workers’ compensation medical bill review services for municipal clients, the quality
of their presentation/demonstration, and a competitively priced proposal.
Environmental Review
The award of an agreement for workers’ compensation medical bill review services
would have no possibility of significant effect on the environment, and therefore, is
exempt pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California
Environmental Quality Act (CEQA) Guidelines.
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the Self-Insurance, Workers’
Compensation Fund to award an agreement with Lien On Me Inc. for workers’
compensation medical review bill review services.
Agreement Request
Current Year
Request Amount
Amount for
Future Years
FY 2023-24 Budget
Department Account #
Total Contract
Amount
$49,000 $436,000 74800002.534510 $485,000
Future year funding is contingent on Council budget approval.
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Prepared By: Oles Gordeev, Acting Director of Human Resources
Approved
Forwarded to Council
Attachments:
A. Oaks_Initiative_Form_Signed
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Packet Pg. 82 Attachment: Oaks_Initiative_Form_Signed (6110 : Workers' Compensation Medical Bill Review Services)
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Packet Pg. 83 Attachment: Oaks_Initiative_Form_Signed (6110 : Workers' Compensation Medical Bill Review Services)