Title
Resolution to Approve Acquisition of Risk Management Claims Reporting and Management Information System ($37,175.00) and Establish a Project Budget Not to Exceed ($40,893.00)
Memorandum
The City's Risk Management Service Unit, in response to increased concerns around inconsistencies in incident reporting around City property damage and employee injuries, the efforts required in providing consistent claims tracking and in continuing to provide effective management of the City's Risk Fund, is proposing that a common technology platform be acquired that will allow for streamlining the standard processes for incident reporting (aka First Notice Of Loss Notification), improve the claims management process through automation and centralization, enhance financial reporting abilities, improve risk mitigation, enhance root cause evaluation and enrich loss control.
Effective risk management is vital to the mission of the City of Ann Arbor. Today, the City engages in proactive management of risk, but this is largely limited to the consistency that the current processes provide. The Safety, Loss Prevention and Risk Management functions are distributed among several service units; Human Resources manages Workers' Compensation, Public Services manages Safety and Loss Control, the City Attorney's Office manages personal injury cases and the Risk Management Service Unit manages City property loss or damage reports and the Risk Fund overall.
This distributed Safety, Loss Prevention and Risk Management approach is complicated by inconsistent incident reporting, loss of productivity and frustration among the several stakeholders. A centralized, common technology platform can improve these reporting inconsistencies, assure timeliness of the distribution of information all stakeholders, improve availability of data, provide transparency to the Risk Fund managers and stakeholders, and allow the City to proactively manage employee safety and property loss or damage risks.
Critical success factors for the selection and successful implementation of a Claims Reporting and Management Services platform require that the following criteria be met:
· The service must be able to process all the necessary aspects of claim data including claims analysis reports, ad hoc reporting, financial tools, bill review, EDI capabilities (for connecting to TPAs), proper security and audit trails, and the ability to interface with the City's standard systems including imaging, human resource, payroll and financial systems.
· The service must provide a way to consistently capture incident information and depending on the type of incident, notify specific stakeholders via multiple interfaces.
· The service must be able to be deployed in a short timeframe, require minimum support resources and operate within the City's IT infrastructure.
· The service's infrastructure must ensure a high level of availability and should be accessible from both inside and outside the City's network.
Staff identified and considered four alternatives. Those alternatives and summaries of their evaluation are below:
Alternative A - Develop a custom claims management and reporting system
This option is not a viable option because it is not consistent with the strategic direction of ITSU and because of time and budget constraints.
Alternative B - Partner with Washtenaw County and use their existing Claims Reporting System.
A cursory review of this system shows it to be a centralized incident capture system with limited reporting abilities. Most decision making and notification is manual. The focus of the County's system is incident capture and basic OSHA reporting and it is not being brought forth as a viable alternative.
Alternative C - Continue with the manual processes we currently have in place and augment with a common incident reporting web page.
Our current manual system is primarily an incident capture and basic OSHA reporting system is not consistent with the organization's needs and therefore is not being brought forth as a viable alternative.
Alternative D - Purchase commercial off-the-shelf (COTS) Claims Management & Reporting System.
This approach is the recommend option for the organization. A COTS system is consistent with the IT strategic direction and will meet the organization's business, budget and timing requirements and is therefore being recommended as the approach to follow.
Staff researched possible vendors for a solution that would meet the City's needs. Only one vendor was identified that offered the type of product the City seeks. ClaimZone is a web-based claims reporting and management system that is available through our relationship with the City's Insurance broker, Arthur J. Gallagher & Co. ClaimZone is developed by a company called MountainView Software (http://www.mvsc.com). Staff recommends the acquisition of ClaimZone Reporter for claims intake, communication and workflow; and ClaimZone Manager for claims management, analysis and loss prevention.
Acquisition of this product will provide efficient claims documentation, immediate communication of incident and loss information to stakeholders, and a functional repository of loss data. Although staff cannot accurately predict a level of savings, there is consensus among all stakeholders that improved information management will result in fewer claims, improved safety, and more efficient processes.
The total first year cost including licensing, subscription, support, hosting, setup, implementation, and training is $37,175.00. The annual maintenance cost is approximately $4,200.00 thereafter plus $6 per submitted incident billed quarterly.
A project budget, including a 10% contingency, is being requested in a not to exceed amount of $40,893.00.
This project was analyzed through the standard information technology processes, including the formulation of a business case, presentation and approval at the Service Area level, and presentation and approval at the IT Leadership Board level.
MountainView Software received Living Wage and Human Rights approval on March 17, 2011
The funds necessary for this project are available in the FY2011 Risk Fund.
Passage of this resolution is recommended.
..Staff
Prepared By: Matthew V. Horning, Treasurer, Dan Rainey, IT Director
Reviewed By: Sue McCormick, Public Services Area Administrator, Tom Crawford, Financial & Administrative Services Area Administrator
Approved By: Roger Fraser, City Administrator
Body
Whereas, The City has identified deficiencies in communicating data regarding claims across all service units;
Whereas, The City can improve communication, improve safety and reduce losses through the acquisition of a claims management system;
Whereas, The funds necessary for this project are available in the FY2011 Risk Fund;
Whereas, MountainView Software has been identified as a sole source provider as defined in Administrative Policy #208, section 3.5; and
Whereas, MountainView Software received human rights and living wage approval on March 17, 2011;
RESOLVED, That City Council approve the acquisition and implementation of Claims Manager and Claims Reporter solutions from MountainView Software and authorizes the expenditures of up to $37,175.00 plus a ten percent contingency, if necessary;
RESOLVED, That City Council establish a project budget not to exceed $40,893.00;
RESOLVED, That the Mayor and City Clerk be authorized and directed to execute the agreement after approval as to substance by the City Administrator and approval as to form by the City Attorney; and
RESOLVED, That the City Administrator be authorized to take all necessary actions to implement this Resolution regardless of Fiscal Year.