Worker's Compensation Third Party Administration (TPA) Claims Management Services

The City of Phoenix is requesting sealed offers for worker's compensation third-party administration claims management services under a five-year agreement commencing July 1, 2027, with offers due July 31, 2026.

The contractor must hold an Arizona license to adjust workers' compensation claims and be approved as a TPA by the Industrial Commission of Arizona by July 1, 2025. A DBE-N (Disadvantaged Business Enterprise – Neutral) small-business participation plan applies, requiring contractors to submit an annual Small Business Participation Plan tracking all small business participation through procurements, joint ventures, and goods and services arrangements, with monthly documentation in the City of Phoenix Certification and Compliance System.

The scope encompasses comprehensive claims administration for approximately 14,000 benefit-eligible employees, including timely claims setup within one business day of notice; three-point contact with the City, injured worker, and providers within one business day; compensability determinations within 14 business days; indemnity benefit payments; medical payments; subrogation and restitution recovery; third-party lien management; and compliance with Medicare Secondary Payer reporting requirements. The contractor must maintain an on-site dedicated unit consisting of a minimum of one Account/Operations Manager, one Claims Manager, two to three Supervisors, one Senior Subrogation and Restitution Recovery Adjuster with an assistant, and sufficient Senior/Indemnity Adjusters and assistants to manage approximately 150 active claims and 500 supportive care claims. All on-site staff must reside in Arizona, with Supervisors required on-site daily and other personnel subject to teleworking policies requiring one to four days per week on-site depending on job classification. The contractor assumes responsibility for transitioning approximately 43,000 claims (2,500 open and 41,000 closed) with no additional implementation fees beyond base administrative fees. Performance guarantees include penalties such as $200 per instance for improperly denied exposure claims, $5,000 per instance for personally identifiable information breaches, and $500 fees for caseload exceedances.

The contract is all-inclusive pricing with initial rates guaranteed for the entire five-year period. A Most Favored Nations clause requires contractors to provide Election Notices if they have entered into agreements with similarly sized and risked employee pools offering more favorable fee schedules; the City may elect to receive such more favorable terms within thirty days of notice. The agreement includes a Business Associate Agreement addressing HIPAA, HITECH, and related federal privacy and security requirements. No contract extension options are available. The agreement will terminate upon the earliest occurrence of reaching the end of the five-year term or termination pursuant to contract provisions.