REPORT TO THE CITY COUNCIL
June 18, 2015
FROM: JEFF CARDELL, Director
Personnel Services Department
BY: KEN PHILLIPS, Labor Relations Manager
Personnel Services Department
SUBJECT
Title
1. Approve a Workers' Compensation Alternative Dispute Prevention and Resolution Agreement between the City and Units 4 and 9, represented by the Fresno Police Officers Association (FPOA)
2. Approve an Alternative Dispute Resolution (ADR) Savings Agreement between the City and Units 4 and 9, represented by FPOA
Body
RECOMMENDATION
It is recommended that Council approve the attached Workers' Compensation Alternative Dispute Prevention and Resolution Agreement as well as the Alternative Dispute Resolution (ADR) Savings Agreement between the City and the Police Management and Police Basic Units represented by FPOA.
EXECUTIVE SUMMARY
Following receipt of approval to negotiate from the State, the City negotiated with FPOA a Workers' Compensation Alternate Dispute Resolution and corresponding Savings Agreement. The attached ADR Agreement outlines a process that provides more efficient delivery of medical care and resolution of various disputes that develop during a workers' compensation claim. The process will be overseen by a joint committee composed of members appointed by the City and by the Association. Employees are required to use the alternative process outlined in the Agreement, but retain the right to make a final appeal to the Workers Compensation Appeals Board (WCAB) after all appeals have been processed through the alternative process.
As part of the negotiations process, the City and FPOA have also agreed to an ADR Savings Agreement which provides that employees in Unit 4 and Unit 9 will receive 50% of savings, less costs associated with the ADR program.
Studies conducted by the State demonstrate that similar programs have been effective in resolving disputes at the lowest possible level, resolving claims sooner and reducing workers' compensation claims expenses.
BACKGROUND
Consistent with the obligation set forth in State law, the City provides workers compensation benefits which include medical care, temporary disability, permanent disability, supplemental job displacement and other benefits. One of the goals of the legislation that created the workers' compensation system was to implement a streamlined process. However, the system as it exists today fails to achieve that goal. One way to achieve a more expeditious resolution of workers compensation claims is through implementation of a negotiated carve-out program that will resolve workers' compensation claim disputes without diminishing statutory benefits.
State law allows bona fide labor organizations to petition the State for permission to negotiate an alternative dispute resolution for workers' compensation. Following receipt of the approval the City and FPOA have negotiated an alternative dispute resolution process which includes the following:
· An Ombudsperson, Mediator and Arbitrator to facilitate the resolution of disputes;
· A list of medical treatment providers that would provide medical care for claims covered by the program;
· A list of independent medical evaluators;
· A Nurse Advocate to facilitate the best possible medical care; and
· A joint labor-management committee that will oversee the program.
As expressed in the ADR agreement, it shall remain in effect for at least one year, continuing year to year thereafter unless terminated by one party providing sixty days written notice to the other party. The cost of the services contained in this program are to be paid by the City but will be deducted from the gross savings to determine the net savings that will be shared by the City and FPOA.
A key component of the program is the Ombudsman. This person will engage all parties to proactively identify and prevent disputes as well as identify and implement solutions that will facilitate advancement of the claim. The focus of each component part of the program is on providing the care that will allow the employee to return to work as expeditiously as possible and ultimately resolve the claim in a timely fashion. If the Ombudsperson is unable to resolve a dispute the next step is to schedule Mediation. If the issue remains in dispute following Mediation it proceeds to Arbitration. Either party can subsequently file a Petition for Reconsideration to the Workers' Compensation Appeals Board.
Statistics developed by the State regarding the impact of alternate dispute resolutions indicate that more than ninety percent of claims were resolved before proceeding to mediation and that nearly ninety percent of the claims were resolved within a year. The net effect is the expeditious treatment of illnesses/injuries which results in less lost time and reduction of expenses.
The City's actuary indicated that a study of alternate dispute resolution carve out programs representing a range of employer types supports the assertion that implementation of the program will generate savings. The amount of savings may vary from program to program based on the nature of claims exposures. Nonetheless, with limited information, the Actuary has estimated the ADR program could result in savings of more than 10% of claims costs on average when compared to claims with similar maturity.
The City and FPOA have agreed to equally share the savings after program costs have been deducted. The attached ADR savings agreement states that the Actuary will determine the savings following the conclusion of the program year. FPOA members will receive their share of the savings no later than first pay period in December following the end of the program year. The Savings Agreement may be terminated by either party on the same conditions as set forth in the ADR Agreement.
The Workers' Compensation Alternative Dispute Prevention and Resolution Agreement and the ADR Savings Agreement have been approved by the City Attorney's Office as to form. FPOA members ratified the tentative agreements on June 10, 2015.
ENVIRONMENTAL FINDINGS
N/A
LOCAL PREFERENCE
N/A
FISCAL IMPACT
The City's Actuary has estimated that the implementation of this program could result in reduced workers' compensation claims expenses of more than 10%.
Attachments:
Workers' Compensation Alternative Dispute Prevention & Resolution Program Agreement
Alternative Dispute Resolution Savings Agreement