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HomeMy WebLinkAboutResolution - 2006-R0569 - Contract - Benefit Plan Audit Services - Medical Claims Audit - 11/21/2006Resolution No. 2006-RO569 November 21, 2006 Item No. 5.22 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock, a Contract with Benefit Plan Audit Services for medical claims audit, which Contract is attached hereto and incorporated herein as part of this Resolution. Passed by the City Council this 21st day of November , 2006. DAVID A. MILLER, MAYOR ATTEST: Rebecca Garza, City Secretary APPROVED AS TO CONTENT: Manager APPROVED AS TOFORM: gs/ccdocs/Cont-Benefit Plan Audit Srvs.res Dec. 5, 2006. Corporate Office: 961 Amherst Avenue Los Angeles, CA 90049 Phone: (310) 442-5248 Fax: (310) 442-2859 rfrcek@beneplanaudit.com November 17, 2006 Resolution No. 2006—RO569 November 21, 2006 Item No. 5.22 Benefit flan Audit Services City of Lubbock Purchasing & Contract Management, Room 204 162513 1h Street Lubbock, TX 79401 Attn: Marta Alvarez, Purchasing Manager Dear Ms. Alvarez: Thank you for giving us this opportunity to present you with our proposal to provide claims and operational review services. This letter will describe the services Benefit Plan Audit Services, LLC (BPA) could provide, along with our plan to complete this work and report timely results to you. Finally, should you accept the terms we propose, this letter will serve as our letter of engagement, upon your signing on the last page below, to accept the terms detailed. Scope of Work Based on RFQ #06 -079 -MA, we understand you are requesting an review of U.S. medical claims paid for the City of Lubbock (the "City") by a Claims Adjuster in Lubbock, TX between January 1, 2004 and an October 31, 2006, for a plan or plans covering approximately 2,400 covered employees and retirees, and 4,400 covered lives. We understand that you want the claim testing to encompass the entire scope period (111104-10/31106). The parties agree that the terms and conditions in the RFQ, and EPA's response thereto, are fully incorporated herein as though set forth in their entirety. The claims payment detail testing will be performed on-site at the Claims Adjuster's Lubbock, TX office, or in another practicable location as may be directed by the City. Further, you would also like us to perform an on-site "Claims Internal Control Operational Review' at the Claims Adjuster's Lubbock, TX office. As a result, this proposal will provide specifications and pricing for the above services. A "Random Sample Review" would give you statistically valid results showing how accurate your medical claims are being paid. We would review your medical claims by tailoring our standard random claims review to ft your concerns. Our standard sample is 150-225 claims. Our reviews stratify your file into meaningful payment bands, and use random sampling to adequately represent your entire claims payment population. We extrapolate the results over your claims payment history, so you can see where you may be losing money. We also give you statistically valid weighted average extrapolated percentages for payment, procedural, and financial accuracy, and for turnaround time, so you can see exactly how your Claims Adjuster measures up against industry standards, and any contractual performance goals you may have. Depending upon the total number and dollar amount of claims actually paid for the period to be tested, we will select a monetary unit random sample of sufficient size to ensure a ninety-five percent (95%) confidence level in our findings for those claims analyzed that are of an amount of $19,999.99 or less. For those claims analyzed that are of an amount of $20,000.00 or greater, we shall ensure a minimum confidence level in our findings of ninety-eight percent (98%). We would import the claims population file into our Interactive Data Extraction and Analysis (IDEA) software. Then the population and the sample would be stratified among various meaningful payment bands. We would use the following seven strata for measuring the accuracy of the claims payments: www.beneplanaudit.com Mr. Marta Alvarez City of Lubbock November 17, 2006 Page 2 Strata # Strata Range 1 $0.01 to $500.00 2 $500.01 to $1,000.00 3 $1,000.01 to $2,000.00 4 $2,000.01 to $5,000.00 5 $5,000.01 to $20,000.00 6 $20,000.01 to $50,000.00 7 $50,000.01 and above We would then extrapolate the results over your entire claims history for the period tested, to provide weighted statistical results for the population reviewed. We understand you would like statistically valid weighted average extrapolated percentages for payment, procedural, and financial accuracy, and for claims turnaround time, so you can see how your Claims Adjuster measures up against industry standards, and any contractual performance goals you may have. For your reference, each year, BPA staff survey leading firms in the benefit administration field to determine what standards are being used to measure Claims Adjuster performance. In doing this, we contact Consultants, CPAs, Insurance Carrier Internal Auditors, and other professionals who regularly audit benefit plan disbursements. From this survey, we identify the most common performance measurements being used. Based on our analysis, and our interpretation of trends being followed within the industry, we develop our internal performance measurements, which we use when we review our client benefit plans. The current benchmark standards we use to compare to the actual Claims Adjuster performance are: Measurement Financial Accuracy Procedural Accuracy Payment Accuracy Turnaround Time Call Abandonment Rate Speed of Answering Calls Acceptable Performance 99% or better 97% or better 97% or better 90% processed within 10 business days 3.5% or less 85% or more within 30 seconds If your claims review discloses significant overpayments have occurred, and you request us to perform additional procedures, we would be available to perform the following additional services and analysis, on an hourly billing basis, depending on your direction: • Selection of additional targeted claims for review, focusing on high dollar claims and claims for services which are most likely to include overpayments, and result in cost recoveries to you. • Performance of customized additional services you define, to suit your specific needs. A "Claims Internal Control Operational Review" would include an on-site operational review of controls at your Claims Adjuster's office, to make sure your organization's money and resources are not at risk for unnecessary exposure. This review would be conducted at the Claims Adjuster's office in Lubbock, TX, and would include testing of system security, segregation access for employees, claims control, refund and returned check controls, outgoing check controls, pendedldeniedlappealed claims review procedures, fraudulent provider identification procedures, and a review of overpayment procedures. We would also review any areas of special concern you identify. This would include devising appropriate tests to review the following areas on a test basis that you identified in the RFQ: www.beneplanaudit.com Mr. Marta Alvarez City of Lubbock November 17, 2006 Page 3 • Invoicing and related payments by ICON under the Agreement to, and in connection with, the following entities (e.g., HealthSmart Preferred Care, II, L.P.: Q -elements, L.P.; Systemed, L.L.C.; Highmark Life Insurance Company; and other affiliates or subsidiaries of ICON). • Any and all fees, charges, surcharges, or remuneration of any kind paid by the City of Lubbock or by ICON to another entity in connection with the City of Lubbock's self-funded employee welfare benefit plan. • Analysis of provider discounts that were actually applied to City of Lubbock eligible claims by ICON, as well as amounts actually saved as a result of discount arrangements. • Analysis of all fees and charges associated with the On -Site Clinic as they relate to conditional Guarantees offered by ICON. • Determination of ICON's compliance, and that of its affiliates, with requirements of HIPAA and COBRA, number and accuracy of any reports to, and recovery from, the City's Excess Carrier, and data capture as required for IRS filings. Additionally, we will fully review and analyze, to the satisfaction of the City, the following area of special concern, taking into account all discoverable examples of: • Commissions and/or market fees paid to the ICON, its principals, or its affiliates in connection with the City of Lubbock's self-funded employee welfare benefit plan. During this on-site visit, depending on your direction, we could also review the Customer Service function, by reviewing performance against industry standards. This would include analyzing trends or performance spikes noted on their telephone system reports that measure customer service performance issues, such as call abandonment rate, call waiting time, and the speed of answering calls. With your authorization, we could also monitor selected calls to review the quality of the customer service representatives' performance. Finally, to help protect your assets, we would verify that stop -loss reinsurance controls and procedures are adequate to identify and report stop loss claims to the appropriate carrier timely when claims approach the specific attachment limits outlined in the contract. This would include a review of the completeness of information reported (e.g., related pharmacy claims).. Review Approach We propose to complete the review for the scope defined above in the following manner: Once you accept our proposal, we will contact the Claims Adjuster and ask them to either email us a ZIP file, or provide us with a CD-ROM, with an Excel or Access file, containing the records of all claims paid during the scope period defined above. Before we contact the Claims Adjuster, you would let us know whether you would want the file to include or exclude claims with a $0 payment. The file would include the following fields for all claims: member name, social security number, patient name, relationship code, date(s) of service, provider name, provider specialty, provider TIN, provider type code (if applicable), claim number, amount billed, payment amount, check number, payment date, and payee. We would then stratify this file and select a monetary unit random sample, covering claims paid in all payment bands within the file. www.beneplanaudit.com Mr. Marta Alvarez City of Lubbock November 17, 2006 Page 4 The Claims Adjuster would email the ZIP file, or send the CD-ROM, to us, at the following address: Robert J. Frcek Benefit Plan Audit Services 961 Amherst Ave Los Angeles, CA 90049-5801 Email: rfrcek@beneplanaudit.com Upon receipt of a readable ZIP or CD-ROM file, we will select the sample and provide the list of selected claims to the Claims Adjuster within five business days. We would then ask them to pull the related claims documentation and provide it to us for review. This documentation can either be provided in hard copy format (photocopies or screen prints), or can be made available by giving us access to their imaging file system, should imaging be in place for the claims documents. We would ask that the Claims Adjuster provide two or three terminals in their Lubbock, TX office for us to use to access the system, so we can review the relevant claims screens and determine the propriety of the claim payments made for the sample we selected. We would ask that you provide us with the contact information (names, titles, email addresses, telephone numbers, fax numbers, etc.) for the members of both your staff and the Claims Adjuster's staff with whom we should coordinate our testing, and to whom we should submit questions and findings. We would also ask that you arrange with your contact at the Claims Adjuster's office to provide BPA with a few hours of system training in their Lubbock, TX office, covering the screens and functions used on their claims system, before the start of the actual detail claims testing. We would begin the actual detail testing of the claims payments upon receipt of the relevant materials from the City of Lubbock and the Claims Adjuster's staff, and the establishment of appropriate system access. These materials would include documentation for the claims payments, the SPD/plan document, and other relevant repricing or other schedules needed to calculate benefits. If either the City of Lubbock or the Claims Adjuster's office is responsible for doing the claim repricing using a direct link to the PPO, we would need access to the repricing system to make sure the office repriced the claims properly. You would provide us a copy of your contract with the Claims Adjuster, so we can identify and measure against the duties they contracted to perform, including the contractual performance standards they are obligated to meet. To expedite the sharing of information among the members of my staff involved in your review, we would ask that you email us electronic versions of documents, or fax us any documents that are not too lengthy. In addition to the data file with the claims population, we would ask the Claims Adjuster to provide us the following documents for the City of Lubbock for our receipt and advance reviews Current and prior benefit booklets that were in effect during the scope period. 2. Copies of current and prior plan documents and amendments that were in effect during the scope period. 3. Documentation regarding PPO rates (repricing fee scheduling, etc.). 4. A copy of the claims department organization chart, along with contact information on the Claims Adjuster's staff members we should coordinate with for this review. This list should www.beneplanaudit.com Mr. Marta Alvarez City of Lubbock November 17, 2006 Page 5 include names, titles, office address, phone and fax numbers, email addresses, and normal office hours for contacting staff (such as 8 am to 4 pm, 9 am to 5 pm, etc.). 5. Copies of current system denial, eligibility, service, diagnosis, and pend codes and their corresponding descriptions. Please include all eligibility codes for all the relevant group numbers. 6. Copies of any written client instructions/documentation pertaining to benefits that are not included in the plan documents or benefit booklets, 7. A copy of any Plan Abstract used by the claims examiners. 8. A copy of the Administrative Services Contract between the Claims Adjuster and the City of Lubbock. We are ready to begin requesting the data file and selecting the samples immediately, and can have staff available to begin the actual review work within 30 to 45 days, or as soon as we receive the materials needed to begin the testing, We would expect that we would complete the work and provide the preliminary report within 15 days from completion of the on-site visit, and the final report for the review to you no later than 30 days after we complete our testing for the review. We understand the need to provide timely information to you, and will make every effort to provide our preliminary report within 10 days after we complete the detailed claims testing for the Claims Adjuster, depending upon the cooperation and speed with which we receive needed materials and responses from the staff the Claims Adjuster assigns to coordinate this review. Our approach in performing this or any review is to develop a positive, cooperative rapport with both your and your Claims Adjuster's staff, so we can partner with you to provide a true and independent appraisal of your benefit plan payments, procedures, and controls. To test the claim payments, we would first determine that the payment appears to be for covered charges for a valid claim, verify eligibility, compare the claim form information to the system, and verify that the claim was processed under the correct member/dependent account. Then, we would check the accuracy of the facility/network discount and other calculations, deductibles, out-of-pocket maximums, coinsurance amounts, any other contracted provider discounts, and the propriety of service, diagnosis and procedure codes, the reasonableness of services rendered and amounts charged, amounts allowed by the plan (such as, HIAA, RVS, MDR, etc.), proper payee, coordination of benefits (including Medicare), and any unusual items (for example, potential duplicate payments, over -utilization, subrogation/TPL, worker's compensation claims, etc.). We would also assess the billing detail of the claims, searching for possible improper coding (inappropriate charging for a higher -paying code), fee unbundling (charging for discrete procedures rather than the appropriate global procedure), and fraud (misrepresenting the diagnosis or treatment provided). If applicable, we would verify that the office is providing a complete and timely notice to Medicare about any claims where Medicare made primary payment when the client should have paid primary. Finally, if applicable, we would verify that claims over a certain dollar amount that require supervisor/management approval have been initialed or signed by the proper authority. Any payment or financial exceptions we note will be reported to your Claims Adjuster on a "Reportable Finding" form. We will ask appropriate Claims Adjuster management to sign the form indicating whether www.beneplanaudit.com Mr. Marta Alvarez City of Lubbock November 17, 2006 Page 6 they agree or disagree with our findings. If they disagree, we will ask them to provide an explanation and return their response with the claim and all relevant supporting documentation. We will then review any errors with which they disagree either via telephone/fax/email, or when we are on-site at their Lubbock, TX office. Then, we will either remove or revise the errors, if warranted, or indicate why the errors will stand and show in our report, along with their comments. During our on-site operational review of procedures and controls, we will present business improvement proposals to the Claims Adjuster's management if we note any areas needing improved controls, or procedural changes to increase operational efficiency. These forms will include a description of the current situation, the impact it has, and the proposed changes. We will hold an exit meeting at the Claims Adjuster's office to discuss our results and get their agreement to implement any proposals we make. We will then ask them to sign the forms indicating whether or not they agree to implement the corrective actions we suggest, along with target dates for completing the actions. However, depending upon your direction, we can either provide our proposals directly to the Claims Adjuster's staff for their review and comment, or we can just provide them to you for your review and decision on actions needed. Again, depending on your direction, we can either provide a draft of our report first to your Claims Adjuster's claims management group for their review and comment, before providing the final report to you, or we can provide our preliminary report directly to you only, for your discussion with your Claims Adjuster's claims management staff. We would expect that our initial report would be available no more than 15 business days after we complete our on-site work at your Claims Adjuster's office. Claims Adiuster Responsibilities Claims Adjuster management would be responsible for identifying the contacts at the Claims Adjuster's payment location, helping coordinate scheduling and gathering of documentation needed for the testing, providing direction on to whom we should direct claims errors and business improvement proposals, and establishing appropriate system access, as needed, for us to take inquiries to do this project, with appropriate security established. Project Timing BPA agrees to begin scheduling and requesting documentation needed to perform the work involved within fifteen calendar days from BPA's receipt of a signed acceptance of our proposal from the City of Lubbock. Depending upon the Claims Adjuster's management's timeliness in completing the actions required of them (such as, providing data files, scheduling on-site visits, providing documentation requested, etc.), BPA agrees to complete this assignment and to provide the preliminary report anticipated for the TPA review within 15 days from completion of the on-site visit, and within 90 days from commencement of the assignment, with a goal to complete all work within 60 days after starting the project work for this review. Neither party shall be liable for any delay or failure to perform its obligations under this agreement arising out of a cause beyond its control or without its fault or negligence. Such causes may include, but are not limited to, fires, floods, earthquakes, riots, explosions, other natural or man-made disasters, interruption of transportation facilities, or acts of war or terrorism. The approximate proposed timeframe for the review, assuming your prompt acceptance of this proposal, would be as follows: www.beneplanaudit.com Mr. Marta Alvarez City of Lubbock November 17, 2006 Page 7 • City of Lubbock accepts BPA proposal and submits signed acceptance of BPA's proposal to BPA by November 24, 2006. • BPA requests the claims data file and documentation from the Claims Adjuster under review by December 1, 2006. • Claims Adjuster provides BPA with the Claims Population via email or on CD-ROM by December 19, 2006. • BPA provides Claims Adjuster with our Random Samples by December 26, 2006. • Claims Adjuster and/or the City of Lubbock provide BPA with documentation needed to perform the review by January 11, 2007. • Claims Adjuster provides BPA with up to a half-day of their system training by January 16, 2007. • BPA performs detail claims testing, on-site review of controls/procedures, and review of error rebuttals at Claims Adjuster's Lubbock, TX office between January 16, 2007 and January 26, 2007. • BPA provides preliminary draft report for discussion by February 9, 2007. • Claims Adjuster and the City of Lubbock provide comments needed to finalize report by February 23, 2007. • BPA publishes final report by February 28, 2007. We are ready and willing to respond to the City of Lubbock's priorities as needed to meet any emergencies that arise. BPA's standard is to begin scheduling and requesting documentation needed to perform the work involved within fifteen calendar days from BPA's receipt of a signed acceptance of our proposal and to complete each individual assignment and to provide the preliminary report anticipated for each TPA review within 30 days from completion of each on-site visit, and within 90 days from commencement of each assignment, with a goal to complete all work within 60 days after starting the project work for each review. BPA Staffing Robert J. Frcek will oversee the planning, the management of the process, and the reporting of our results. At this time, we would anticipate that Sue Trammel would perform most of the work for City of Lubbock, with Ruth Pence, Cheri Havasi, and/or Thomas Travers assisting. Based on the timing and scheduling for this work and other contracted reviews BPA will perform, David 'Paszkiewicz may assist on certain review work. Our Chief Information Officer, Robert Kaplan, may oversee the establishment of appropriate system access for us to do the review, with appropriate security established, with the TPA's information technology department. Sue Trammel will supervise the detail testing work from a claims technical standpoint. Sue will primarily perform the actual detail testing of the claims, and review the operational controls. Ruth Pence, Cheri www.beneplanaudit.com Mr. Marta Alvarez City of Lubbock November 17, 2006 Page 8 Havasi, and/or Thomas Travers, who are three of our other Senior Claims E=valuators, may be assisting Sue in performing the detail testing of the claims, and the review of the Claims Adjuster's operations. At this time, we would expect that Sue Trammel and Ruth Pence would be the primary individuals involved for any claims review work for which you would retain our firm. Project Fee Our reviews are priced on a firm, fixed flat fee basis. We do not perform evaluations on a recovery contingency basis. BPA's fees for the services described in this proposal, except for any additional services you request on an hourly consulting basis, would be set as firm, fixed flat fees, which cover all work related to the project. There would be no initial set-up fees. Fee payments for this evaluation would be due in three equal progress billing installments as follows The first installment would be due within 30 days after receiving appropriate management approval to schedule the evaluation and request the data file for sample selection. 2. The second installment would be due within 30 days after commencement of the on-site testing portion of the evaluation. 3. The third and final installment would be due within 30 days after we release our preliminary report with results and recommendations for the evaluation. We are providing our fee proposal under two alternative methods of your choice as follows: Claims Payment and Operational Controls Review (flat fee including travel costs): $33,690 Claims Payment and Operational Controls Review Fee, excluding travel costs: $25,680, plus actual travel expenses Thus, you can choose the $33,690 fee to lock in a fixed, firm, flat fee which includes travel costs, so you are not at risk should travel costs be higher than expected, or you can choose the lower $25,680 fee, in which case you would also be responsible for reimbursing our actual reasonable travel expenses for the review for normal travel expense items (airfare, car rental, hotel, meals, airport parking or shuttle, tips, etc.). This pricing assumes in person attendance at the Claims Adjuster's office to perform the review, with attendance at all other required meetings to plan the review and to discuss findings and results with the City of Lubbock and the Claims Adjuster via telephone conference call. In addition, you requested a rate for an oral presentation of results. For this item, we are providing a per diem rate for meeting attendance (per person, per day). We are providing three different optional rates for our per diem meeting attendance based on whether the meeting is on-site or via telephonic conference call, and based on whether or not the on-site meeting is in conjunction with our trip to Lubbock, TX to perform the review work at the Claims Adjuster as follows: www.beneplanaudit.com Mr. Marta Alvarez City of Lubbock November 17, 2006 Page 9 On -Site Meeting Attendance during our trip to perform the Review: On -Site Meeting Attendance for meetings requiring a special trip: Telephonic Conference Call Meeting Attendance: $1,350 per diem rate (per person, per day) $1,775 per diem rate (per person, per day) $135 per hour (per person, per hour) You also requested a price for a second review within two years of the original contract. Our fees for a follow-up review in two years, involving all the same claims and operational testing, as well as follow-up on the implementation status for all recommendations made during the initial review, would be as follows:. Claims Payment and Operational Controls Review (flat fee including travel costs): $35,715 Claims Payment and Operational Controls Review Fee, excluding travel costs: $27,225, plus actual travel expenses Thus, you can choose the $35,715 fee to lock in a fixed, firm, flat fee which includes travel costs, so you are not at risk should travel costs be higher than expected, or you can choose the lower $27,225 fee, in which case you would also be responsible for reimbursing our actual reasonable travel expenses for the review for normal travel expense items (airfare, car rental, hotel, meals, airport parking or shuttle, tips, etc.). Finally, we also offer the following additional optional proposed fees: Additional Services (as defined below) $125 per hour We are available to provide additional services you may desire. If your Claims Adjuster's claims review discloses significant overpayments have occurred, and you request us to perform additional procedures, we would be available to perform the following additional services and analysis, on an hourly billing basis, depending on your direction: • Selection of additional targeted claims for review, focusing on high dollar claims and claims for services which are most likely to include overpayments, and result in cost recoveries to you. • Performance of customized additional services you define, to suit your specific needs. www.beneplanaudit.com Mr. Marta Alvarez City of Lubbock November 17, 2000 Page 10 Confidentiality Both parties to this contract acknowledge and agree that, to the extent permitted by law, the following stipulations regarding confidentiality and nondisclosure will be in force, for an indefinite duration, as a condition of both parties entering into this agreement: Both parties acknowledge that all written, electronic, and oral information in all documents and data obtained by either party or any of its representatives, affiliates, or agents (hereinafter collectively referred to as "representatives") is hereby considered confidential. Such information and documents, including, without limitation, any and all financial information, technical data, programs, customer lists, lists of employees and agents, seals and marketing plans, operating procedures and agreements and information relating thereto, are herein collectively referred to as the "Confidential Information." Both parties further acknowledge and agree that such Confidential Information constitutes valuable property and trade secrets and is therefore entitled to protection. Both parties agree to protect the disclosed Confidential Information that comes into their custody by using the same degree of care, but no less than a reasonable degree of care, that they use to protect their own Confidential Information, to prevent unauthorized disclosure of the Confidential Information. Both parties agree to allow access to the Confidential Information exclusively to those of their representatives who have a reasonable need to see and use it for the purposes outlined in this agreement, provided however that both parties will make their representatives aware of the confidential nature of such information, and the restricted use thereof, at the time such information is disclosed to any such representative. 3. Neither party shall disclose or permit the disclosure of any of the Confidential Information to any person or entity unless the other party has specifically granted written permission thereof. Without in any way limiting any other obligation or liability of either party under this Agreement, both parties shall take all appropriate action by instruction or otherwise, to prevent the unauthorized use, disclosure, copying or reproduction of the Confidential Information and shall take all reasonable precautions to protect and maintain the confidentiality of the Confidential Information. 4. In the event that either party is required by judicial or administrative process to disclose Confidential Information, the party obligated to make the disclosure shall inform the other party before any such disclosure occurs, so that the other party may seek a protective order or other appropriate remedy. If such a protective order or remedy is obtained, the party obligated to make the disclosure shall only furnish that portion of the Confidential Information that it is legally required to make, and shall disclose such Confidential Information in a manner reasonably designed to preserve its confidential nature. This agreement imposes no obligation on either party with respect to information that was in the party's possession before receipt from the other party and is so demonstrated promptly, that is or becomes available to the public through no fault of the other party, that is received in good faith by either party from a third party who is not subject to an obligation of confidentiality owed to the other party, is independently developed by the party without reference to information received hereunder, was disclosed by either party pursuant to the written permission of the disclosing party, was in the public domain at the time of disclosure without breach of this agreement, was known to or contained in the records of either party from a source other than the other party at the time of disclosure and is so demonstrated, or must be disclosed pursuant to a legal obligation beyond the control of either party. www.beneplanaudit.com Mr. Marta Alvarez City of Lubbock November 17, 2006 Page 11 Neither party acquires any license under intellectual property rights of the other party to this agreement. Further, neither party has any obligation under this agreement to purchase any goods or services, or to offer for sale any products or services, to the other party. The parties do not intend to enter into any form of agency or partnership relationship under this agreement. 7. Both parties agree to, upon request of the other party, immediately return any and all documents or other materials in their possession, custody, or control that record or incorporate any part of the Confidential Information, and all copies thereof which may have been made by or on behalf of the other party. Further, both parties agree, upon the request of the other party, to destroy all written or computerized notes, analyses, studies, or other material which contain or are based upon any Confidential Information, to the extent allowed by law. 8. Any and all additions or modifications to this agreement must be made in writing and signed by both parties. Both parties agree that this Agreement is necessary to protect the value of the Confidential Information described above. Both parties agree that any breach of this Agreement will result in irreparable damage to the other and that there is no adequate remedy for such damage under the law. Therefore, both parties consent to an injunction by any court of competent jurisdiction in favor of the non -breaching party enjoining any breach or threatened breach of this Agreement, and both parties agree that such remedy shall be cumulative, not exclusive, and without prejudice to any other right or remedy available under the law. 9. To the extent permitted by law, both parties agree to indemnify and hold harmless from and against any and all loss, liability, damage, cost or expense (including reasonable attorney fees and costs) incurred directly or indirectly, or arising out of or resulting from a breach or threatened breach of this Agreement. 10. This Agreement shall be binding upon and inure to the benefit and be enforceable by each of the parties and their respective successors, assigns, affiliates and subsidiaries. With respect to its subject matter, this Agreement contains the entire understanding of the parties. If any provision or provisions of this Agreement are held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired thereby. This Agreement shall be governed by all construed in accordance with the laws of the State of Texas. Additional Services Should you desire any additional work not detailed in this proposal, we would be happy to provide additional services for a mutually agreeable fee. Venue The parties agree that venue for any dispute arising from, or in connection with, this Agreement shall be Lubbock County, Texas. Designated CitV Representative The City hereby designates the City Attorney as the City's representative in all matters pertaining to this Agreement, and the undersigned parties further hereby acknowledge and agree that the services rendered by BPA pursuant to this Agreement shall be under the purview of, and at the sole direction and cognizance of the City Attorney of the City of Lubbock. BPA further agrees to serve, on a per diem special trip basis, as an expert witness on behalf of the City in any related legal proceedings or arbitration commenced, if any, to which the City is a party, and that may arise out of or in connection with errors and/or claims asserted by the City against the Claims Administrator, its affiliated entities, or subsidiaries to the extent any or all of them are deemed by the City, in its sole judgment, to be responsible and/or liable. www.beneplanaudit.com Mr. Marta Alvarez City of Lubbock November 17, 2006 Page 12 Thank You Again, we thank you for giving us this opportunity to present our proposal to you. We look forward to working with you and your staff on these reviews, and to developing a long and mutually satisfying relationship with the City of Lubbock, TX. If you agree to retain our firm, please indicate your agreement to the terms of this letter of engagement, b signing below. Sincerely, Robert J. Frcek Chief Executive Officer Benefit Pian Audit Services, LLC (BPA) The City of Lubbock, TX and Benefit Plan Audit Services, LLC (BPA) hereby agree to the terms of this letter of engagement. The City of Lubbock, TX hereby selects the following fee arrangement: Claims Payment and Operational Controls Review (flat fee including travel costs): $33,690 } Claims Payment and Operational Controls Review Fee, excluding travel costs: $27,225, plus actual travel expenses F -- -17-06 �Yl/21/t)6 (Signature) Date i nature Date Printed Name: David A. Miller Robert J. Frcek Title: MAYOR Chief Executive Officer The City of Lubbock, TX Benefit Plan Audit Services, LLC Attest: Rau_� 4-- Rebecrza City Secretary •�_��� �� • sir- - — Approved as to Content: Leisa Hutcheson Risk Management Coordinator www.beneplanaudit.com