B30194 RFP Questions and Answers 1~1.docx

Question and Response Addendum B-30194 CPOGS: RFP Worker's Compensation Third Party Administrator

Questions/Responses:

1. Can you please provide the following breakdown of the State’s pharmacy spend:

Response:

CY 1/1/2021- 12/31/2021 – In-Network Pharmacy Breakdown

(Total Charge) Amount Paid (Allowance)

2. Was the State’s Procurement Department aware that Managed Care Advisors, a consultant on this solicitation is own Sedgwick, which is a third-party administrator that will be bidding on this RFP? Sedgwick acquires Managed Care Advisor. This appears to be a conflict of interest. How does the State Procurement / Purchasing department view this conflict of interest?

Response: Sedgwick will not be submitting a proposal for this solicitation.

3. Can the State provide a copy of the in-force contract with the incumbent, Tri-Star? If so, then please provide same.

Response: Vendor will need to provide a formal FOIA request to Central Management Services to obtain a copy of the current contract at the following contact information:

Department of Central Management Services Attention: FOIA Officer 313 South Sixth Street, 3rd Floor Springfield, Illinois, 62701

4. Please provide loss runs, for the last 5 calendar years, identifying all claims, open and closed.

Response: See attached Appendix 5 SOI Reported Claims CY 2017 – 2021.xls.

5. Page 1. RFP indicates the successful bidder must have “the ability to interface with both the current system maintained by CMS…” Question – what is the current system utilized by CMS?

Response: The State uses the Third-Party Administrators web-based claims system in conjunction with secure email and secure servers to transfer information.

6. Was Segal Company or Managed Care Advisors (MCA) awarded a contract to serve as consultants to the State of Illinois in connection with this RFP? If so, what was the proposal number associated with the State’s Contract with Segal Company and Managed Care Advisors?

Response: No

7. Please identify the owners of Segal Company.

Response: The Segal Group owns 100% of Segal.

8. Please identify the owners of Managed Care Advisors (MCA)?

Response: Managed Care Advisors (MCA) is owned by Sedgwick. Managed Care Advisors is a wholly owned subsidiary of Sedgwick and is operating under Sedgwick Government Solutions (SGS).

9. Will the State recuse bidders that hold ownership in either Segal Company or Managed Care Advisors (MCA)?

Response: Sedgwick will not be submitting a proposal for this solicitation.

10. Given the issue date of the RFP, the RFP complexities and requirements, and the upcoming national holiday, is the State willing to extend the response date another week to July 22nd?

Response: Yes, the Agency has agreed to an extension to July 22, 2022.

11. Page 14. Is the Business Enterprise Program goal of 20% the only goal for this solicitation?

Response: Yes

12. Page 14. RFP states that BEP goal is “20% of the administrative cost…” In the context of the State’s Appendix 4, Pricing Proposal, is the administrative cost variable the amount in cell S 33? If not, what cell in the spreadsheet ties back to “administrative cost” to the extent we can properly calculate our BEF goal?

Response: Yes, the total administrative cost represented in cell S33.

13. Page 16, Item 8.1. The State indicates it “reserves the right to make multiple awards to meet its managed care needs.” This appears to contradict the State’s comment on page 25, Item D1. that states “…it is the intent of the State to select and retain one vendor to partner with…to handle all aspects of the State’s Workers’ Compensation Claim program.” Question – is it the State’s intent to award all service elements identified within the Pricing Proposal to a single vendor?

Response: The language “reserves the right to make multiple awards” is in error and should not be considered. The State intends to make a single award for WC Third Party Administration services.

14. Page 25, second last paragraph. What is the total number of Workers’ Compensation Coordinators?

Response: Each agency has at least one Work Comp Coordinator. Currently, there are approximately 176 Coordinators.

15. Page 27, Minimum Mandatory Administrative Requirements. Does the State require all claim team members to be in the office daily? Is the State open to tele-working/remote claim team members servicing their program?

Response: No, if staff members are capable of delivering a high-quality work product while working remotely, they are not required to be in the office daily. If the State identifies issues or adverse trends with any employee that has an impact on service, the State will require that employee to work in the office with supervision. The State is open to a remote work environment as long as it does not have a service impact or affect work quality in a negative manner.

16. Page 31, Item D 2.2.44. Does the State’s incumbent TPA have any claim settlement authority? If so. In what amount? If not, does the authority come from the state agency and/or the AG’s office.

Response: No, they have no claim Settlement authority. The Authority will come from the State Agency. The TPA is not involved in any settlement demands. The settlement is handled by the Attorney General’s office and the State Agency.

17. Page 32, Item D 2.2.53. The State’s requirement is that the “vendor shall pay all litigation cost and expenses…” we assume it’s implying that these payment will be made from the loss fund account the TPA manages on behalf of the State. Is this a correct assumption? If not, then please explain.

Response: Costs and expenses are paid by TPA and reimbursed monthly.

18. Page 34, Item D. 2.2.61. Can the State provide a report detailing its provider bill repricing results for 2021? If so, then please provide.

Response: See table below referencing the past three (3) years.

19. Page 38, Item D 2.2.106. Does the AG’s office employ outside counsel on an as-needed basis to support their team? If yes, then what was the total spend for outside counsel for 2021?

Response: No

20. Page 40, Item D 2.2.120. What data is currently exchanged between the State and its incumbent TPA? What database/software does the State use as its repository?

Response: The state uses the TPA’s web-based claims system in conjunction with secured email and secured servers to transfer information.

21. Page 46, Item D 3.3. With RFP response being due July 15th, that leaves the State 16 calendar days to evaluate responses, hold orals (as necessary) and negotiate a contract. In that context, does July 31, 2022, remain the State’s target date?

Response: No, The Agency anticipates a contract execution by late summer/early fall September/October 2022.

22. Page 47, Item 3.4, Ongoing Service. How many vendor employees currently service the State’s program? How many are in Chicago? How many are in Springfield?

Response: Currently, 27 employees (there may be some that work behind the scenes) 2 employees are in Springfield the remaining are in Chicago besides one Manager who is located out of State. This will change in the future. We need TPA staff in both locations to address the need for hearing testimony at various venues throughout the State. Our vision or expectation is 8-10 downstate and remainder in Northern territory.

23. How many claim supervisors service the State’s program? How many adjusters service the State’s program?

Response: 4 Claims supervisors, 1 IME supervisor, 17 adjusters, 3 IME employees, 1 program Manager and 1 Operations Manager.

24. What is the target caseload for indemnity adjusters? What is the target caseload for medical only adjusters?

Response: Indemnity adjusters shall have an average caseload not exceeding 150 open active indemnity claims (temporary total disability, temporary partial disability, extended benefit). Active medical only adjusters shall have an average caseload not exceeding 250 open active medical only claims.

25. Does the incumbent TPA have a dedicated paralegal service the State’s program?

Response: No

26. With respect to the Claimant Type Descriptions in Column K, what is the State’s definition of “Settlement?”

Response: The term Settlement is used to identify inactive litigated claims that are accepted and pending AAG/CMS settlement with employee.

27. Are claims with the Claimant Type Description in Column K “Settlement” in active settlement negotiations?

Response: No

28. Are claims with Claimant Type Description in Column K “Settlement” awaiting settlement approval?

Response: No, for same reasoning noted in Response 26. These are inactive litigated claims.

29. Pricing Proposal. In reviewing the worksheet, we don’t find a line item(s) for the handling of open file being currently handled by the incumbent? Will the State be revising the worksheet to include this line-item(s)? If not, then please explain why not?

Response: No, pending inventories will be transferred to the successful vendor.

30. Pricing Proposal. With respect to line 13 of the spreadsheet, what is the State’s definition of a “Permanent Disability” claim?

Response: Permanent Total Disability (PTD) this claim is used when we receive Award or Decision adjudicating injured worker as a permanent total individual based upon injuries, restrictions, education level, geographic area of residence, job market, etc.

31. Pricing Proposal. For lines 16, 17, 18 and 19, there may be situations where multiple exams and/or reviews are needed. In that context, does the State need this serve quoted on a per-claim or on a per-utilization rate?

Response: Per utilization rate.

32. Pricing Proposal. Line 21. Is this line item the cost for nurse case triage at the point when the claim is initially reported?

Response: No, it is for when the need for a nurse is present to provide opinions regarding treatment, review extensive medical reports, early intervention, etc. A nurse is not needed on every claim and may require State approval for usage.

33. Pricing Proposal. Line item 28. Does the State only utilize 150 hours of field case management annually? If not, then please provide the number of field case management hours utilized in 2021.

Response: No, The State paid for services billed as Case Management in the amount of 37.2 hours in CY21.

34. Pricing Proposal. Line item 30. How does the State presently utilize 150 hours of loss preventions services? Does it use these services to support/supplement its in-house/agency level initiatives?

Response: No. However, there are times that the State may seek assistance from a TPA to provide safety materials for Risk Management newsletters, or to present materials at Coordinator trainings.

35. Page 14. RFP states that BEP goal is “20% of the administrative cost…” In the context of the State’s Appendix 4, Pricing Proposal, is the administrative cost variable the amount in cell S 33? If not, what cell in the spreadsheet ties back to “administrative cost” to the extent we can properly calculate our BEP goal?

Response: Yes. The Business Enterprise Program goal is 20%. The total administrative cost is represented in cell S33.

36. Section 2, PRICING. While we can and will provide the State with pricing in the format detailed in Appendix 4, we believe a cost-plus model would be more cost-effective pricing model. Questions. Is the State willing to consider a cost-plus pricing model as an alternative to the required fee per-claim pricing model? If so, would the State be willing to use the cost-plus pricing model as the basis for the compensation terms of the resulting contract?

Response: No. Cost plus is prohibited by Section 20-55 of the Illinois Procurement Code.

37. Can a Vendor respond to this proposal as a Workers’ Compensation Pharmacy Benefits Management (PBM) only.

Response: No. For administration reasons, the Agency is not considering unbundling services for this solicitation. The Agency’s expectation is for the successful vendor to provide their contracted PBM.

38. Early Intervention - Does the Flat rate for all cases (including preparation of IC-45) apply for the first 60 days of Early Intervention?

Response: Early intervention currently includes IC-45 preparation and 30 days of early intervention service.

39. Should the “One Time Implementation Fee” included in Year 1 include the cost of taking over the existing open claims files? Please confirm the current inventory?

Response: Yes. As of July 8, 2022 the pending inventory is 5,444.

40. Does the “Cost Per Bill” under Bill Review Services include reviewing the medical bills to the State Fee Schedule, or does it include PPO fees as well?

Response: Yes. It includes reviewing medical bills to the State Fee Schedule. PPO fees are separate.

41. With respect to references, the RFP has the following wording: Send the customized reference questionnaires to each client chosen to provide a reference along with a new standard #10 envelope, stamped and addressed with the label: Central Management Services, Attn: Tom Sestak, Healthcare Portfolio Manager, 801 South Seventh Street, 2nd Floor Main, Springfield, IL 62703. Ensure the referenced Bid number is included on the outside of the envelope, as well as the Offeror’s name. It also stipulates ‘If providing a hard copy via mail”. Our question is, can the references submit this form electronically? If yes, to whom should we have them direct the information response?

Response: Yes, references may be submitted electronically. The single point of contact for this solicitation is Diana Siegrist. Diana.siegrist@illinois.gov

42. Are the PPO Discount % the fee we charge, or on the savings we generate for the State?

Response: The PPO Discount % is typically what is charged. The Agency’s understanding is that the PPO % savings vary by provider and contracted rates.

43. Besides a full time office attendance, please confirm that the State will allow Claim adjusters to work from Home or in a hybrid model (2-3 days in the office and the remainder at home) as long as they maintain their Illinois adjusters license or certification as required (Nurses, doctors, and other professionals). Is this acceptable?

Response: Yes. If staff members are capable of delivering a high-quality work product while working remotely, they are not required to be in the office daily. If the State identifies issues or adverse trends with any employee that has an impact on service, the State will require that employee to work in the office with supervision. The State is open to a remote work environment as long as it does not have a service impact or affect work quality in a negative manner.

44. We would like to clarify that the services provided in the Box below should be valued on a “Per Case” basis rather than on a “Per Claim” basis. Please confirm at your earliest convenience.

Per Claim

Per Claim

Per Claim

Response: The services should be classified as follows. Please refer to attached Appendix 4 Pricing Proposal Revised.xlsm.

Flat Rate

Flat Rate

Per Review image1.png