Thirdparty RFP Att1

Judicial Council of California
Administrative Office of the Courts
ATTACHMENT 1
CONTRACT TERMS
EXHIBIT A
STANDARD PROVISIONS
1. Indemnification
The Contractor shall indemnify, defend (with counsel satisfactory to the State), and save
harmless the State and the AOC Group and its officers, agents, and employees from any and
all claims and losses accruing or resulting to any and all other contractors, Subcontractors,
suppliers, and laborers, and any other person, firm, or corporation furnishing or supplying
Work, Materials, Data, or services in connection with the performance of this Agreement,
and from any and all claims and losses accruing or resulting to any person, firm, or
corporation who may be injured or damaged by the Contractor or its agents or employees in
the performance of this Agreement.
2. Relationship of Parties
The Contractor and the agents and employees of the Contractor, in the performance of this
Agreement, shall act in an independent capacity and not as officers or employees or agents
of the state of California.
3. Termination for Cause
A. Pursuant to this provision, the State may terminate this Agreement in whole or in part
under any one of the following circumstances, by issuing a written Notice of termination
for default to the Contractor:
i. If the Contractor (a) fails to perform the services within the time specified herein
or any extension thereof, (b) fails to perform any requirements of this
Agreement, or (c) so fails to make progress as to endanger performance of this
Agreement in accordance with its terms, and, after receipt of a written Notice
from the State specifying failure due to any of the preceding three (3)
circumstances, the Contractor does not cure such failure within a period of five
(5) business days or a longer period, if authorized in the Notice of failure; or,
Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

Attachment 1, Contract Terms
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ii. If the Contractor should cease conducting business in the normal course, become
insolvent or bankrupt, make a general assignment for the benefit of creditors,
admit in writing its inability to pay its debts as they mature, suffer or permit the
appointment of the receiver for its business or assets, merge with or be
purchased by another entity, or avail itself of or become subject for a period of
thirty (30) Days to any proceeding under any statute of any State authority
relating to insolvency or protection from the rights of creditors.
B. In the event the State terminates this Agreement in whole or in part, due to the
Contractor’s failure to perform, the State may procure, upon such terms and in such
manner as it may deem appropriate, supplies or services similar to those so terminated,
and the Contractor shall be liable to the State for any excess costs for such similar
supplies or services, subject to the limitations contained elsewhere herein; further, the
Contractor shall continue the performance of this Agreement to the extent not terminated
under this provision.
C. The Contractor shall not be liable for any excess costs if the failure to perform the
Agreement arises out of acts of Force Majeure; but in every case the failure to perform
must be beyond the control and without the fault or negligence of the Contractor.
D. If, after Notice of termination for default of this Agreement, it is determined for any
reason that the Contractor was not in default under this provision, or that the default was
excusable under this provision, the obligations of the State shall be to pay only for the
services rendered at the rates set forth in the Agreement.
E. The rights and remedies of either party provided in this provision shall not be exclusive
and are in addition to any other rights and remedies provided by law or under this
Agreement.
4. No Assignment
Without the written consent of the State, the Contractor shall not assign this Agreement in
whole or in part.
5. Time of Essence
Time is of the essence in this Agreement.
6. Validity of Alterations
Alteration or variation of the terms of this Agreement shall not be valid unless made in
writing and signed by the parties, and an oral understanding or agreement that is not
incorporated shall not be binding on any of the parties.

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7. Consideration
The consideration to be paid to the Contractor under this Agreement shall be compensation
for all the Contractor's expenses incurred in the performance of this Agreement, including
travel and per diem, unless otherwise expressly provided.
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EXHIBIT B
SPECIAL PROVISIONS
1. Definitions
The terms defined below and elsewhere throughout the Contract Documents shall apply to
the Agreement as defined.
A. “Administrative Director” refers to that individual, or authorized designee,

empowered by the State to make final and binding executive decisions on behalf of the
State.
B. “Allocated Loss Expense” refers to the cost or expense incurred as part of a loss on a
Claim file, that may include, but are not limited to the following: legal fees, court
reporter fees, court costs, professional photographer fees, expert witness fees, subrosa
investigation expenses, field investigation expenses, rehabilitation service costs, and
costs or expenses for other similar services. Allocated Loss Expenses do not include
fees payable by the State to the Contractor, penalties payable by the Contractor, or
payments for services covered under a Basic Service Rate, Data Conversion Rate, or
Medical Management Service Charge.
C. “Amendment” means a written document issued by the State and signed by the
Contractor which alters the Contract Documents and identifies the following: (i) a
change in the Work; (ii) a change in Contract Amount; (iii) a change in time allotted
for performance; and/or (iv) an adjustment to the Agreement terms.
D. “AOC Group” means, collectively, each member of the Judiciary, and the Trial Courts
participating in the Program.
E. “AOC Group Representative(s)” refers to the individual(s), as identified by each

participating AOC Group, who will serve as the AOC Group’s point of contact in
Workers’ Compensation matters.
F. “Basic Service Rate” refers to the fixed rate per Indemnity, Medical Only, or Incident,
per Term, as set forth in Exhibit C, Payment Provisions, that the State shall pay the
Contractor for providing Claims Adjusting services for New Claims, Existing Claims,
or Runoff Claims. Basic Service Rates covers payment for services which are
unrelated to the services covered under Allocated Loss Expenses, Medical
Management Service Charges, or Data Conversion Rates and include but are not
limited to payment for the following services:
i. Intake and Referral;

ii. Client On-line Access to Claim files;

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iii. Full automation of the Claims Administration process;

iv. Implementation programming & set-up;
v. Loss report production and distribution to the AOC Group and the State;
vi. Customer service support;
vii. Reports, as may be required by the National Council on Compensation
Insurance (“NCCI”), Insurance Services Office (“ISO”), National Association of
Insurance Commissioners (“NAIC”), or other regulatory authorities;
viii. Primary or excess carrier reporting/information transfer;
ix. State electronic data interface (“EDI”) requirements;
x. IRS 1099 tax filings, that will be produced and provided on an automated basis
on magnetic tape to the federal and state agencies with the necessary printed
service provider forms and provided for final distribution as per IRS
requirements;
xi. Account Manager consulting and overall Program service management support;
xii. Special investigative services initial reporting compliance;
xiii. Creation and maintenance of MPN for AOC Group;
xiv. Check printing;
xv. Strategic case management meetings;
xvi. Maintenance of Closed Claim Files at no additional cost to the State for one (1)
year after the date of closure, until the Contract expires, or as per jurisdictional
mandates, whichever is longer;
xvii. Contract production;
xviii. Production of formal written client service instructions;
xix. Internal quality control auditing/security audits;
xx. General administration;
xxi. Distribution of all internal AOC Group processing forms required to the
servicing Claim offices; and
xxii. Transition assistance services.
G. “Claim” means a demand by an employee who claims to have sustained an injury or an

illness arising out of and in the course of employment for the AOC Group.
H. “Claimant” means an employee of the AOC Group who files a Claim for Workers’
Compensation.
I. “Claims Adjusting” or “Claims Administration” means the processing of Claims,

including New Claims, Existing Claims, Runoff Claims, and Data Conversion that
have includes, but is not limited to: certifying a Claimant’s eligibility; monitoring
examiners, attorneys and medical service providers; negotiating settlements; record-
keeping; preparing reports; and, notifying excess insurers as appropriate.

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J. “Client On-Line Access” refers to the Contractor’s direct on-line access which will
make available all Claims Data including payments, recoveries, reserve changes,
examiner and supervisor notes, within confidentiality limits, excluding medical
Confidential Information subject to California Civil Code Section 56.05(f) as further
defined by Labor Code Section 3762.
K. “Closed Claim File” means (i) Claim files closed by settlement which precludes their
reopening, (ii) administratively closed files which may be subject to reopening for the
life of the Claimant, or (iii) files closed by settlement which could later be reopened.
L. “Confidential Information” means trade secrets, financial, statistical, personnel,

technical, and other Data and information relating to the State’s or AOC Group’s
business or the business of their personnel or constituents, and including any
confidential communications between the Contractor and the State or the AOC Group,
their personnel or constituents. Confidential Information shall include medical
information as defined by the California Civil Code Section 56.05 (f). Confidential
Information does not include (i) information that is already known by the receiving
party, free of obligation of confidentiality to the disclosing party; (ii) information that
becomes generally available to the public, other than as a result of disclosure by the
receiving party in breach of this Agreement; (iii) information that is independently
developed by the receiving party without reference to the Confidential Information;
and (iv) information that the receiving party rightfully obtains from a Third Party free
of the obligation of confidentiality to the disclosing party.
M. The “Contract” or “Contract Documents” constitute the entire integrated agreement

between the State and the Contractor, as attached to and incorporated by a fully
executed State Standard Agreement form. The terms “Contract” or “Contract
Documents” may be used interchangeably with the term “Agreement.”
N. “Contract Amount” means the total amount encumbered under this Agreement for
any payment of Basis Service Rate(s), and Data Conversion Rate(s) by the State to the
Contractor of Work, in accordance with the Contract Documents. The Contract
Amount does not include encumbrance for any payments to be made from the Trust
Account, such as Claims benefits, Allocated Loss Expenses, or Medical Management
Service Charges.
O. The “Contractor” means the individual, association, partnership, firm, company,

consultant, corporation, affiliates, or combination thereof, including joint ventures,
contracting with the State to do the Contract Work. The Contractor is one of the
parties to this Agreement.
P. “Data” means all types of raw data, articles, papers, charts, records, reports, studies,
research, memoranda, computation sheets, questionnaires, surveys, and other
documentation.

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Q. “Data Conversion” refers to the conversion of a Workers’ Compensation Claim from

one electronic system to different electronic system. Data Conversion may be
accomplished via an automated or a manual method, as described below:
i. “Automated Data Conversion” refers to a process wherein a new software

program is created specifically to map data from one system to another system.
ii. “Manual Data Conversion” refers to a system wherein the Workers’

Compensation data is manually entered into a different electronic system.
R. “Data Conversion Rate” refers to the fixed rate that the State will pay the Contractor
for Data Conversion provided per transfer, per AOC Group location. Data Conversion
Rates are unrelated to the payment for services covered under Allocated Loss
Expenses, Basic Service Rates, Medical Management Service Rates, or Data
Conversion Rates.
S. “Day” means calendar day, unless otherwise specified.
T. “Early Intervention” refers to the combined process of providing early and aggressive
Claims/case Medical Management Service to assist the injured employees with their
medical care and getting them back to work.
U. “Existing Claim” refers to any open or closed Incident, Indemnity, or Medical Claim
of an AOC Group employee, for which Claims Administration and Data Conversions
becomes the responsibility of the Contractor, upon the Effective Date of this
Agreement.
V. “Field Case Management” or “FCM” refers to the Medical Management Service

pertaining to the initial contact that the nurse case manager will make with the injured
worker, the treating physician, and the employer within 24 – 48 hours to direct care,
apply medical decision to treatment plan, and review protocols of treatment and work
on issues of return-to-work.
W. “Force Majeure” means a delay which impacts the timely performance of Work which
neither the Contractor nor the State or the AOC Group are liable for because such delay
or failure to perform was unforeseeable and beyond the control of the party. Acts of
Force Majeure include, but are not limited to:
i. Acts of God or the public enemy;

ii. Acts or omissions of any government entity;
iii. Fire or other casualty for which a party is not responsible;
iv. Quarantine or epidemic;
v. Strike or defensive lockout; and,
vi. Unusually severe weather conditions.

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X. “Hospital Bill Audit” refers to the Medical Management Service pertaining to the
retrospective audit which is designed to identify inappropriate charges, duplicate
charges, billing errors, identification of services rendered without appropriate
physicians’ orders, and identification of charges not related to the patients’ work injury.
Y. “Incident” means a communication to the Contractor in any form relating to a

situation that does not involve a Workers’ Compensation Claim, or a notification of an
incident that may result in a Claim for Workers’ Compensation pending further
investigation.
Z. “Indemnity” or “Lost Time” refers to a Workers’ Compensation Claim as defined in

Labor Code Section 4652, where an employee has lost four (4) or more days from
work, unless temporary disability continues for more than fourteen (14) days or unless
the employee is hospitalized as an in-patient for treatment required by the injury.
AA. “Intake and Referral” refers to the multi-state system provided by the Contractor
which is capable of reporting New Claims, referring injured workers to appropriate
medical providers within providers networks, and generating state-appropriate
employer injury reports through a client customized toll free number, twenty-four (24)
hours per day, seven (7) Days per week.
BB. “Judiciary” means, collectively, the following members: (i) the Judicial Council, (ii)
the Administrative Office of the Courts, (iii) the Commission on Judicial Performance
(CJP), (iv) the Habeas Corpus Resource Center (HCRC), (v) the Judicial Library, (vi)
the seven (7) appellate courts in the California state court judicial system, and (vii) the
judges of the superior courts of the California state court judicial system.
CC. “Key Personnel” refers to the Contractor’s personnel named in Exhibit TBD,
Contractor’s Key Personnel, whom the State has identified and approved to perform
the Work of the Contract.
DD. “Material” means all types of tangible personal property, including but not limited to
goods, supplies, equipment, commodities, and information and telecommunication
technology.
EE. “Medical” refers to that portion of a Workers’ Compensation Claim involving medical
treatment, but does not include an Indemnity or Lost Time Claim.
FF. “Medical Bill Review” refers to the Contractor’s Medical Management Service
pertaining to the reviewing medical bills and pharmacy bills for the proper application
of the state of California’s official Workers’ Compensation medical fee schedule in
effect during the Term(s) of the Contract.

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GG. “Medical Management Service” means the medical service(s) relying primarily upon
negotiated fee schedules, provided by a network of contracts between the Contractor
and health care providers, and other cost controls, including the auditing of medical
bills (i.e. bill reviews), as described in Exhibit D, Work to be Performed.
HH. “Medical Management Service Charges” means the charges, as set forth in Exhibit
C, Payment Terms, for Medical Management Service(s), as set forth in Exhibit D,
Work to be Performed. Medical Management Service Charges are unrelated to the
payment for services covered under Allocated Loss Expenses, Basic Service Rates, or
Data Conversion Rates.
II. “Medical Provider Network” or “MPN” means a select entity or group of providers,
approved by the Administrative Director, Division of Workers’ Compensation,
Department of Industrial Relations, State of California, to treat WC injuries on behalf
of a self insured employer or insurance carrier.
JJ. “Medical Reserve Estimate” refers to the Medical Management Service pertaining to
the medical review by a nurse to formulate approximate medical cost per diagnosis or
procedure or life of the Claim.
KK. “New Claim” means any Incident, Indemnity, or Medical Claim that is either (i) newly
reported as a new injury or illness arising out of and in the course of employment, or
(ii) a Claim that is reopened. If a Claim that has been closed by the Contractor is
subsequently reopened by the Contractor during any Term(s) of the Agreement, the
Contractor will not be entitled to an additional service fee.
LL. “Notice” means a written document initiated by the authorized representative of either
party to this Agreement and given by:
i. Depositing in the U. S. Mail (or approved commercial express carrier) prepaid to

the address of the appropriate authorized representative of the other party, which
shall be effective upon date of receipt; or
ii. Hand-delivered to the other party’s authorized representative, which shall be

effective on the date of service.
MM. “Peer Review” refers to the Medical Management Service pertaining to the three (3)
attempts made by the Contractor to reach the treating physician to discuss the
diagnosis, treatment plan, and prognosis of the injured worker in hopes of persuading
the treating physician to render a more appropriate course of treatment. Bills for MPN
provider shall not be subject to Peer Review.

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NN. “Preferred Provider Organizations Network” or “PPO Network” refers to the

Medical Management Service pertaining to the provider organizations used by the
Contractor to leverage coverage of medical treatment, including but not limited to:
general medicine, internal medicine, occupational medicine, chiropractic, neurology,
orthopedics, psychiatry, podiatry, dentistry, physical therapy, and acupuncture,
pharmaceuticals, radiology, and ancillary providers such as home health, skilled
nursing, durable medical equipment (orthotics and prosthetics, medical supplies,
TENS, and bone growth stimulators), air and ground transport.
OO. “Runoff Claim” refers to any Incident, Indemnity, or Medical Claim of a Trial Court
employee that has been administered by a designated agent or the county in which the
Trial Court is located, for which Claims Administration and/or Data Conversion will
become the Contractor’s responsibility.
PP. “Service Team” refers to the team comprised of the Contractor’s Claims Supervisor,
Senior Claims Examiner(s), Claims Examiner(s), Claims Representatives, and a Claims
Manager, which will schedule, attend, and document the contents of regular meetings
with a designated AOC Group location.
QQ. The “State” refers to the Judicial Council of California / Administrative Office of the
Courts (“AOC”). The State is one of the parties to this Agreement.
RR. “State Standard Agreement” means the form used by the State to enter into
agreements with other parties. Several originally signed, fully executed versions of the
State Standard Agreement, together with the integrated Contract Documents, shall each
represent the Agreement as an individual “Contract Counterpart.”
SS. “Stop Work Order” means the written Notice, delivered in accordance with this
Agreement, by which the State may require the Contractor to stop all, or any part, of
the Work of this Agreement, for the period set forth in the Stop Work Order. The Stop
Work Order shall be specifically identified as such and shall indicate that it is issued
pursuant to the Stop Work provision in this Exhibit.
TT. “Subcontractor” shall mean an individual, firm, partnership, or corporation having a

contract, purchase order, or agreement with the Contractor, or with any Subcontractor
of any tier for the performance of any part of the Agreement. When the State refers to
Subcontractor(s) in this document, for purposes of this Agreement and unless
otherwise expressly stated, the term “Subcontractor” includes, at every level and/or
tier, all subcontractors, sub-consultants, suppliers, and materialmen.
UU. “Telephonic Case Management” or “TCM” refers to the Medical Management

Service pertaining to the telephonic coordination of inpatient, outpatient, diagnostic
studies, PPO Network direction, and home health care. Telephone contact will be
made by the nurse at time of injury to employee, employer, and provider to assess the
injury and the medical treatment. Contact will be made to direct care, apply medical

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decision to treatment plan, review protocols, and work with physician, employer, and
employee on issues of return-to-work. Direction into the PPO Network as well as
provider and hospital negotiation will be inclusive of this service.
VV. “Term” refers to the period defined by a beginning date and an end date, in accordance
with the terms and conditions set forth in the Agreement, during which the Contactor is
authorized to provide the Contract Work. The possible Terms of the Agreement are
described further in paragraph 38, Agreement Term(s) and Options, of this Exhibit.
WW. “Third Party” does not refer to a Claimant but refers to any individual, association,
partnership, firm, company, corporation, consultant, Subcontractor, or combination
thereof, including joint ventures, other than the State or the Contractor, which is not a
party to this Agreement.
XX. “Third Party Administrator” or “TPA” refers to a contractor certified to provide

Workers’ Compensation Claims Administration services.
YY. “To Be Determined” or “TBD” are those items that are not yet identified. Any and all
To Be Determined items, set forth herein, shall be determined by mutual agreement
between the Contractor and the State and incorporated into the Agreement via
Amendment(s).
ZZ. “Trial Court(s)” means the following members: one or more of the fifty-eight
superior courts in the California state court judicial system.
AAA. “Trust Account” refers to the pooled trust account of public funds established by the
Contractor in a nationally chartered financial institution, in good standing with
regulatory agencies and with a minimum rating of Morningstar 3, that is insured at
110% collaterization, for the payment of Workers’ Compensation benefits, Allocated
Loss Expenses, and Medical Management Service Charges to individual Claim files.
BBB. “Utilization Review” or “UR” refers to Medical Management Service pertaining to the
telephonic contact that will be made by the Contractor’s utilization management staff
to both the AOC Group and the provider in order to assess the injury and the medical
treatment. Under “UR,” the Contractor will review for a specific procedure or block of
treatment, including physical therapy, chiropractor review, hospital pre-certification,
concurrent review, and discharge planning. Bills for MPN provider shall not be subject
to Utilization Review.
CCC. “Work” or “Work to be Performed” or “Contract Work” may be used

interchangeably to refer to the service, labor, Materials, Data, and other items
necessary for the execution, completion and fulfillment of the Agreement by the
Contractor to the satisfaction of the State.

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DDD. “Workers’ Compensation” or “WC” refers to the employer’s responsibility to

compensate injuries, illnesses, disabilities, or death of employees, as prescribed by
California Workers’ Compensation laws.
EEE. “Workers’ Compensation Program” or “Program” or “Judicial Branch Workers’

Compensation Program” or “JBWCP” refers to all activity relative to this
Agreement including activity of the Contractor, its Subcontractors, the State, and the
AOC Group.
2. Manner of Performance of Work
The Contractor shall complete all Work specified in these Contract Documents to the State
and the AOC Group's satisfaction and in compliance with this Exhibit’s, paragraph 29,
Nondiscrimination/No Harassment Clause, and Exhibit D, Work to be Performed, paragraph
40, Minimum Performance Standards.
3. Termination Other Than for Cause
A. In addition to termination for cause under Exhibit A, Standard Provisions, paragraph 3,

the State may terminate this Agreement at any time upon providing the Contractor
written Notice at least ten (10) Days before the effective date of termination. Upon
receipt of the termination Notice, the Contractor shall promptly discontinue all services
affected unless the Notice specifies otherwise.
B. If the State terminates all or a portion of this Agreement other than for cause, the State
shall pay the Contractor for the fair value of satisfactory services rendered before the
termination, not to exceed the total Contract Amount.
4. State's Obligation Subject to Availability of Funds
A. The State's obligation under this Agreement is subject to the availability of authorized
funds. The State may terminate the Agreement or any part of the Contract Work,
without prejudice to any right or remedy of the State, for lack of appropriation of
funds. If expected or actual funding is withdrawn, reduced or limited in any way prior
to the expiration date set forth in this Agreement, or in any Amendment hereto, the
State may terminate this Agreement in whole or in part, upon written Notice to the
Contractor. Such termination shall be in addition to the State's rights to terminate for
convenience or default.
B. Payment shall not exceed the amount allowable for appropriation by Legislature. If the
Agreement is terminated for non-appropriation:
i. The State will be liable only for payment in accordance with the terms of this
Agreement for services rendered prior to the effective date of termination; and

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ii. The Contractor shall be released from any obligation to provide further services
pursuant to the Agreement as are affected by the termination.
C. Funding for this Agreement beyond the current appropriation year is conditional upon
appropriation by the Legislature of sufficient funds to support the activities described
in this Agreement. Should such an appropriation not be approved, the Agreement will
terminate at the close of the current appropriation year. The appropriation year ends on
June 30 of each year.
5. Stop Work
A. The State may, at any time, by written Notice to the Contractor, require the Contractor
to stop all, or any part, of the Work of this Agreement, for a period up to ninety (90)
Days after the Notice is delivered to the Contractor, and for any further period to which
the parties may agree (“Stop Work Order”). The Stop Work Order shall be
specifically identified as such and shall indicate it is issued under this provision. Upon
receipt of the Stop Work Order, the Contractor shall immediately comply with its terms
and take all reasonable steps to minimize the incurrence of costs allocable to the Work
covered by the Stop Work Order during the period of Work stoppage. Within a period
of ninety (90) Days after a Stop Work Order is delivered to the Contractor, or within
any extension of that period to which the parties shall have agreed, the State shall
either:
i. Cancel the Stop Work Order; or
ii. Terminate the Work covered by the Stop Work Order as provided for in either of
the termination provisions of this Agreement.
B. If a Stop Work Order issued under this provision is canceled or the period of the Stop
Work Order or any extension thereof expires, the Contractor shall resume Work. The
State shall make an equitable adjustment in the delivery schedule, the Contract
Amount, or both, and the Agreement shall be modified, in writing, accordingly, if:
i. The Stop Work Order results in an increase in the time required for, or in the
Contractor’s cost properly allocable to the performance of any part of this
Agreement; and
ii. The Contractor asserts its right to an equitable adjustment within thirty (30)
Days after the end of the period of Work stoppage; however, if the State decides
the facts justify the action, the State may receive and act upon a proposal
submitted at any time before final payment under this Agreement.
C. If a Stop Work Order is not canceled and the Work covered by the Stop Work Order is
terminated in accordance with the Termination Other Than For Cause provision or the
State’s Obligation Subject to Availability of Funds provision, as set forth under Exhibit B,

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the State shall allow reasonable costs resulting from the Stop Work Order in arriving at
the termination settlement.
D. The State shall not be liable to the Contractor for loss of profits because of the Stop
Work Order issued under this provision.
6. Agreement Administration/Communication
A. Under this Agreement, the Program Manager, _______________, or any designee or

successor, as designated by the State, shall monitor and evaluate the Contractor's
performance. All requests and communications about the Work to be Performed under
this Agreement shall be made through the Program Manager. Any Notice from the
Contractor to the State shall be in writing and shall be delivered to the Program
Manager as follows:
________________, Program Manager

Judicial Council of California,
455 Golden Gate Avenue
San Francisco, CA 94102-3688
B. Notice to the Contractor shall be directed in writing to:
_____________________
_____________________
_____________________
_____________________
_____________________
7. Standard of Professionalism
The Contractor shall conduct all work consistent with professional standards for the industry
and type of work being performed under the Agreement.
8. Service Guarantee
The Contactor agrees that throughout the Term(s) of this Agreement, the guarantee set forth
in the provision shall apply. The Contractor guarantees that Work performed pursuant to
this Agreement shall be fit for use as reasonably intended by the parities and shall be in
accordance with Contract and performance requirements.
9. Subcontracting
The Contractor shall not subcontract this Agreement or services provided under this
Agreement, unless the State agrees to the subcontracting in writing. Any authorized

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subcontract(s) shall be executed in the same manner as this Agreement. No party to this
Agreement shall in any way contract on behalf of or in the name of another party to this
Agreement.
10. Contractor's Personnel and Replacement of Personnel
A. The Contractor shall provide for the staffing requirements as set forth in Exhibit D,
Work to be Performed. Personnel will have the ability and authority to make decisions
commensurate with his or her role and level of responsibility regarding the Work of
this Agreement.
B. The State has the right to review resumes and interview the Contractor’s proposed
personnel prior to commencement of the Work of this Agreement. If, in the State’s
reasonable opinion, any of the proposed personnel is unsatisfactory or does not meet
the State’s requirements, the Contractor shall submit a different candidate for
consideration.
C. The individuals assigned as Key Personnel at the time of agreement, with

qualifications supported by their resumes, are included in Exhibit TBD, Contractor’s
Key Personnel. Although an Amendment will not necessary, any revision to the
individuals identified as Key Personnel must be approved in writing by the Program
Manager.
D. The State reserves the right to disapprove the continuing assignment of any of the
Contractor's personnel provided to the State under this Agreement if in the State's
opinion, the performance of the Contractor’s personnel is unsatisfactory. The State
agrees to provide Notice to the Contractor in the event it makes such a determination.
If the State exercises this right, the Contractor shall immediately assign replacement
personnel, possessing equivalent or greater experience and skills.
E. If any of the Contractor's personnel become unavailable during the Term(s) of this
Agreement, the Contractor shall immediately assign replacement personnel, possessing
equivalent or greater experience and skills.
F. The Contractor shall endeavor to retain the same individuals on the Program during the
performance of the Work of this Agreement. However, the Contractor may, with
approval of the Program Manager, introduce personnel to the Program with specific
skill sets or release personnel from the Program whose skill set is not needed at the
time.
G. If any of the Contractor's personnel become unavailable or are disapproved and the
Contractor cannot furnish a replacement acceptable to the State, the State may
terminate this Agreement for cause pursuant to Exhibit A, Standard Provisions,
paragraph 3.

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11. Accounting System Requirement
The Contractor shall maintain an adequate system of accounting and internal controls that
meets Generally Accepted Accounting Principles or GAAP.
12. Retention of Records
The Contractor shall maintain all financial Data, supporting documents, and all other
records relating to performance and billing under this Agreement for a period in accordance
with state and federal law, a minimum retention period being no less than four (4) years.
The retention period starts from the date of the submission of the final payment request.
The Contractor is also obligated to protect Data adequately against fire or other damage.
13. Ownership of Results
A. Any interest of the Contractor in Data in any form, or other documents and/or
recordings prepared by the Contractor for performance of services under this
Agreement shall become the property of the State or AOC Group.
B. The Contractor agrees not to assert any rights at common law, or in equity, or establish
any claim to statutory copyright in such Data. The Contractor shall not publish or
reproduce such Data in whole, or part, or any manner or form, or authorize others to do
so without the written consent of the State.
C. Upon the State's written request, the Contractor shall provide the State and AOC Group
with all this Data within thirty (30) Days of the request; however, employee medical
records shall be treated in accordance with applicable Workers’ Compensation laws.
Although ownership of Data may be the State's or the AOC Group's, the Contractor
shall return all Data, including Confidential Information, to the State upon termination
or expiration of the Agreement, at the Contractor’s expense. The State, as one of the
parties to the Agreement, will be responsible for returning the Data to the appropriate
AOC Group employee, passing the Data on to the next TPA, destroying the Data, or
otherwise disposing of the Data as appropriate.
14. Limitation on Publication
The Contractor shall not publish or submit for publication any article, press release, or other
writing relating to the Contractor's services for the State without prior review and written
permission by the State.
15. Limitation on State's Liability
The State or the AOC Group shall not be responsible for loss of or damage to any non-State
or non-AOC Group equipment arising from causes beyond the AOC Group or the State's
control.
Page 16 of 78
16. Trade Secret, Patent and Copyright Indemnification
A. The Contractor shall hold the State and the AOC Group, its officers, agents, and
employees, and the AOC Group harmless from liability of any nature or kind,
including costs and expenses, for infringement or use of any copyrighted or un-
copyrighted composition, secret process, patented or un-patented invention, article, or
appliance furnished or used in connection with the Agreement.
B. The Contractor may be required to furnish a bond to the State or AOC Group against
any and all loss, damage, costs, expenses, claims, and liability for patent, copyright,
and trade secret infringement.
C. Should the Data, Materials, or the operation thereof, become, or in the Contractor’s
opinion are likely to become, the subject of a claim of infringement of a United States
patent or copyright or a trade secret, the State or AOC Group shall permit the
Contractor at its option and expense either to procure for the State or AOC Group the
right to continue using the Data or Materials, or to replace or modify the same so that
they become non-infringing. If none of these options can reasonably be taken, or if the
use of such Data or Materials by the State or AOC Group shall be prevented by
injunction, the Contractor agrees to take back such Data or Materials and make every
reasonable effort to assist the State or AOC Group in procuring substitute Data or
Materials. If, in the sole option of the State, the return of such infringing Data or
Materials makes the retention of other Data or Materials acquired from the Contractor
under this Agreement impractical, the State or AOC Group shall then have the option
of terminating such contracts, or applicable portions thereof, without penalty or
termination charge. The Contractor agrees to take back such Data or Materials and
refund any sums that the State or AOC Group has paid the Contractor less any
reasonable amount for use or damage.
D. The Contractor shall have no liability to the State or AOC Group under any provision
of this clause with respect to any claim of patent, copyright, or trade secret
infringement which is based upon the following:
i. The combination or utilization of Data and/or Materials furnished hereunder

with equipment or devices not made or furnished by the Contractor; or,
ii. The operation of equipment furnished by the Contractor under the control of any
operating software other than, or in addition to, the current version of
Contractor-supplied operating software; or,
iii. The modification by the State or AOC Group of the equipment furnished
hereunder or of the software; or,
iv. The combination or utilization of software furnished hereunder with non-
Contractor supplied software.

Page 17 of 78
E. The Contractor certifies that it has appropriate systems and controls in place to ensure
that State funds will not be used in the performance of this Agreement for the
acquisition, operation, or maintenance of computer software in violation of copyright
laws.
F. The foregoing states the entire liability of the Contractor to the State and AOC Group
with respect to infringement of patents, copyrights, or trade secrets.
17. Protection of Proprietary Software and Other Proprietary Data
A. The State agrees that all Data and Materials appropriately marked or identified in
writing as proprietary, and furnished hereunder, are provided for the State’s and/or the
AOC Group’s exclusive use for the purposes of this Agreement only. All such
proprietary Data and software shall remain the property of the Contractor. The State
agrees to take all reasonable steps to insure that such proprietary Data are not disclosed
to others, without prior written consent of the Contractor.
B. The State will use reasonable efforts to insure, prior to disposing of any media, that any
licensed Data and Materials contained thereon have been erased or otherwise
destroyed.
C. The State agrees that it will take appropriate action by instruction, agreement, or
otherwise, with its employees, AOC Group, or other persons permitted access to
licensed software and other proprietary Data, to satisfy its obligations under this
Agreement with respect to use, copying, modification, protection, and security of
proprietary software and other proprietary Data.
18. Evaluation of Contractor
The State shall evaluate the Contractor's performance under the Agreement.
19. Audit
The Contractor shall permit the authorized representative of the State, AOC Group, or
designee(s) at any reasonable time to inspect or audit all Data relating to performance and
billing to the State under this Agreement. The Contractor further agrees to maintain such
Data for a period of four (4) years after final payment under this Agreement.
20. Confidentiality
A. Both the State and the Contractor acknowledge and agree that in the course of
performing the Work under this Agreement, the State or AOC Group may disclose
Confidential Information to the Contractor.

Page 18 of 78
B. The Contractor agrees not to disclose the Confidential Information to any third party
and to treat it with the same degree of care as it would its own confidential information.
It is understood, however, that the Contractor may disclose Confidential Information
on a “need to know” basis to the Contractor’s employees and Subcontractors and, as
directed by the Program Manager, representatives of the State that are working on the
Program. All such employees and Subcontractors of the Contractor shall have
executed a confidentiality agreement with the Contractor requiring a promise of
confidentiality concerning the Contractor’s clients and business.
C. The Contractor shall acquire no right or title to the Confidential Information. The
Contractor agrees not to use the Confidential Information for any purpose except as
contemplated pursuant to this Agreement. Notwithstanding the foregoing, the
Contractor may disclose the Confidential Information (i) to the extent necessary to
comply with any law, rule, regulation or ruling applicable to it; (ii) as appropriate to
respond to any summons or subpoena applicable to it; or (iii) to the extent necessary to
enforce its rights under this Agreement.
21. Changes and Amendments
Changes or Amendments to any component of the Contract Documents can be made only
with prior written approval from the Program Manager. Requests for changes or
Amendments must be submitted in writing and must be accompanied by a narrative
description of the proposed change and the reasons for the change. Additional funds may
not be encumbered under the Agreement due to an act of Force Majeure, although the
performance period of the Agreement may be amended due to an act of Force Majeure.
After the Program Manager reviews the request, a written decision shall be provided to the
Contractor. Amendments to the Agreement shall be authorized via bilateral execution of a
State Standard Agreement.
22. AOC Group Representation, Beneficiary
A. The State has the authority to speak on behalf of the AOC Group and to bind the AOC
Group with respect to acceptance of Work and payment for services rendered.
B. Each member of the AOC Group, including its employees, agents, officials, and other
representatives, shall be deemed an intended beneficiary of this Agreement. Without
limiting the foregoing, the State and the Contractor agree and acknowledge that the
AOC Group shall have the right to enforce all terms and conditions set forth herein. In
the event a member of the AOC Group gives conflicting instructions or makes
conflicting determinations with respect to any matter, it shall be the State's
responsibility to resolve any such conflict promptly. The Contractor shall immediately
notify the State of any such conflicting instructions from the AOC Group.
23. Insurance Requirements

Page 19 of 78
A. General. The Contractor shall obtain and maintain the minimum insurance set forth in
subparagraph B, below. By requiring such minimum insurance, the State shall not be
deemed or construed to have assessed the risks that may be applicable to the Contractor
under this Agreement. The Contractor shall assess its own risks and if it deems
appropriate and/or prudent, maintain greater limits and/or broader coverage. For full
coverage, each insurance policy shall be written on an “occurrence” form; excepting
that insurance for professional liability, when required, may be acceptable on a “claims
made” form. If coverage is purchased on a “claims made” basis, the Contractor
warrants continuation of coverage, either through policy renewals or the purchase of an
extended discovery period, if such extended coverage is available, for not less than
three (3) years from the date of completion of the Work which is the subject of this
Agreement.
B. Minimum Scope and Limits of Insurance. The Contractor shall maintain coverage and
limits no less than the following:
i. Workers’ Compensation at statutory requirements of the state of residency.
ii. Employers' Liability with limits not less than $1,000,000.00 for each accident.
iii. Comprehensive General Liability Insurance with limits not less than
$1,000,000.00 for each occurrence, Combined Single Limit Bodily Injury and
Property Damage, with aggregate limits at $2,000,000.00.
iv. Comprehensive Automobile Liability Insurance with limits not less than
$1,000,000.00 for each occurrence, Combined Single Limit Bodily Injury and
Property Damage, including owned and non-owned and hired automobile
coverage, as applicable.
v. Professional Liability: Errors and Omissions; $1,000,000.00 single occurrence

and $2,000,000.00 aggregate limit.
vi. Comprehensive Crime Insurance, including Employee Dishonesty / Fidelity

(must cover all of the Contractor’s representatives who perform Work under this
Agreement, especially Trust Account activities), On-Premises (loss inside the
premises), In-Transit (loss outside the premises), and loss of face value for
items, with a minimum limit of $2,000,000.00 per occurrence.
vii. Fiduciary Liability Insurance (must cover all of the Contractor’s representatives
who perform Work under this Agreement, especially Trust Account activities)
with aggregate limits at $1,000,000.00.
C. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions

must be declared to the State. The deductible and/or self-insured retention of the
policies shall not limit or apply to the Contractor’s liability to the State and shall be the
sole responsibility of the Contractor.
Page 20 of 78
D. Other Insurance Provisions. The General Liability policy required in this Agreement is
to contain, or be endorsed to contain, the following provisions:
i. The State, its officers, officials, employees and agents, as well as the officers,
officials, employees and agents of the AOC Group, are to be covered as
additional insureds as respects liability arising out of activities performed by or
on behalf of the Contractor in connection with this Agreement.
ii. To the extent of the Contractor’s negligence, the Contractor’s insurance

coverage shall be primary insurance as respects the State, its officers, officials,
employees and agents. Any insurance and/or self-insurance maintained by the
State, its officers, officials, employees or agents shall not contribute with the
insurance or benefit the Contractor in any way,
iii. The Contractor’s insurance shall apply separately to each insured against whom
a claim is made and/or lawsuit is brought, except with respect to the limits of the
insurer’s liability.
E. The Contractor shall provide the State certificates of insurance satisfactory to the State
evidencing all required coverages before Contractor begins any Work under this
Agreement, including Trust Account activities, and complete copies of each policy
upon the State's request.
F. If at any time the foregoing policies shall be or become unsatisfactory to the State, as to
form or substance, or if a company issuing any such policy shall be or become
unsatisfactory to the State, the Contractor shall, upon Notice to that effect from the
State, promptly obtain a new policy, and shall submit the same to the State, with the
appropriate certificates and endorsements, for approval.
G. Acceptability of Insurers. Unless otherwise approved by the State:
i. Insurance is to be placed with insurers with a Best’s rating of no less than

A:VIII, or, if not rated with Best’s, with minimum surpluses the equivalent of
Best’s surplus size VIII.
ii. Professional Liability, Errors and Omissions insurance may be placed with
insurers with a Best’s rating of B+: VII. Any exception must be approved by the
State.
H. Subcontractors. The Contractor shall include any Subcontractors as insured under its
policies, or shall furnish separate certificates of insurance and policy endorsements for
each Subcontractor. Insurance coverages provided by Subcontractors as evidence of
compliance with the insurance requirements of this Agreement shall be subject to all of
the requirements stated herein.

Page 21 of 78
I. All of the Contractor's policies shall be endorsed to provide advanced written Notice to
the State of cancellation, nonrenewal, and reduction in coverage, within thirty (30)
Days, mailed to the following address: Judicial Council, Administrative Office of the
Courts, Finance Division – Business Services Manager, 455 Golden Gate Ave., San
Francisco, CA 94102.
24. Public Contract Code References
References to the Public Contract Code are provided for Contract’s convenience only and
shall not imply that the Public Contract Code applies to the AOC, but rather shall be used to
define the Contractor’s obligations under the particular contract provision in which such
code section is referenced.
25. Conflict of Interest
A. The Contractor and employees of the Contractor shall not participate in proceedings
that involve the use of State funds or that are sponsored by the State if the person's
partner, family, or organization has a financial interest in the outcome of the
proceedings. The Contractor and employees of the Contractor shall also avoid actions
resulting in or creating the appearance of (i) use of an official position with the
government for private gain; (ii) preferential treatment to any particular person
associated with this Agreement or the Work of this Agreement; (iii) loss of
independence or impartiality; (iv) a decision made outside official channels; or (v)
adverse effects on the confidence of the public in the integrity of the government or
this Agreement.
B. The Contractor certifies and shall require any Subcontractor to certify to the following:
Former State employees will not be awarded a contract for two (2) years from the
date of separation if that employee had any part of the decision making process
relevant to the contract, or for one (1) year from the date of separation if that
employee was in a policy making position in the same general subject area as the
proposed contract within the twelve (12) month period of his or her separation from
state service.
26. Covenant Against Gratuities

Page 22 of 78
The Contractor warrants by signing this Agreement that no gratuities, in the form of
entertainment, gifts, or otherwise, were offered by the Contractor or any agent, director, or
representative of the Contractor, to any officer, official, agent, or employee of the State or
AOC Group with a view toward securing the Contract or securing favorable treatment with
respect to any determinations concerning the performance of the Contract. For breach or
violation of this warranty, the State will have the right to terminate the Contract, either in
whole or in part, and any loss or damage sustained by the State in procuring, on the open
market, any items which the Contractor agreed to supply, shall be borne and paid for by the
Contractor. The rights and remedies of the State provided in this provision shall not be
exclusive and are in addition to any other rights and remedies provided by law or under the
Contract.
27. National Labor Relations Board
By executing this Agreement, the Contractor certifies under penalty of perjury under the
laws of the State of California that no more than one (1) final, unappealable finding of
contempt of court by a federal court has been issued against the Contractor within the
immediately preceding two (2) year period because of the Contractor's failure to comply
with an order of the National Labor Relations Board.
28. Drug-Free Workplace
The Contractor certifies that it will provide a drug-free workplace as required by California
Government Code, Section 8355 through Section 8357.
29. Nondiscrimination/No Harassment Clause
A. During the performance of this Agreement, the Contractor and its Subcontractors shall
not unlawfully discriminate against any employee or applicant for employment because
of race, religion, color, national origin, ancestry, physical or mental disability, medical
condition, marital status, age (over 40), sex, or sexual orientation. The Contractor shall
ensure that the evaluation and treatment of employees and applicants for employment
are free of such discrimination.
B. During the performance of this Agreement, the Contractor and its Subcontractors shall
not engage in unlawful harassment, including sexual harassment, with respect to any
persons with whom the Contractor or its Subcontractors interact in the performance of
this Agreement. The Contractor and its Subcontractors shall take all reasonable steps
to prevent harassment from occurring.
C. The Contractor shall comply with applicable provisions of the Fair Employment and
Housing Act, California Government Code, Sections 12990 et seq., and the applicable
regulations promulgated under California Code of Regulations, title 2, Sections 7285 et
seq. The applicable regulations of the Fair Employment and Housing Commission
implementing California Government Code, Section 12990, set forth in chapter 5 of
Page 23 of 78
division 4 of title 2 of the California Code of Regulations, are incorporated into this
Agreement by reference and made a part of it as if set forth in full.
D. The Contractor and any of its Subcontractors shall give written Notice of their
obligations under this clause to labor organizations with which they have a collective
bargaining or other agreement.
E. The Contractor shall include the nondiscrimination/no harassment and compliance

provisions of this clause in any and all subcontracts issued to perform Work under the
Agreement.
30. Americans with Disabilities Act
By signing this Agreement, Contractor assures the State that it complies with applicable
provisions of the Americans with Disabilities Act (“ADA”) of 1990 (42 U.S.C. Sections
012101 et seq.), which prohibits discrimination on the basis of disability, as well as with all
applicable regulations and guidelines issued pursuant to the ADA.
31. California Law
This Agreement shall be subject to and construed in accordance with the laws of the state of
California.
32. Permits and Licenses
The Contractor shall observe and comply with all federal, state, city, and county laws, rules,
and regulations affecting services under this Agreement. The Contractor shall procure and
keep in full force and effect during the Term(s) of this Agreement all permits and licenses
necessary to accomplish the Work contemplated in this Agreement.
33. Services Warranty
The Contractor warrants and represents that each of its employees, independent contractors
or agents assigned to perform any services or provide any technical assistance in planning,
development, training, consulting or related services under the terms of this Agreement shall
have the skills, training, and background reasonably commensurate with his or her level of
performance or responsibility, so as to be able to perform in a competent and professional
manner. The Contractor further warrants that the services provided hereunder will conform
to the requirements of this Agreement. All warranties, including any special warranties
specified elsewhere herein, shall inure to the State, its successors, assigns, customer
agencies, and any other recipients of the services provided hereunder.
34. Severability

Page 24 of 78
If any term or provision of this Agreement is found to be illegal or unenforceable, this

Agreement shall remain in full force and effect and that term or provision shall be deemed
stricken.
35. Waiver
The omission by either party at any time to enforce any default or right, or to require
performance of any of this Agreement's terms, covenants, or provisions by the other party at
the time designated, shall not be a waiver of the default or right, nor shall it affect the right
of the party to enforce those provisions later.
36. Signature Authority
The parties signing this Agreement certify that they have proper authorization to do so.
37. Survival
The termination or expiration of the Agreement shall not relieve either party of any
obligation or liability accrued hereunder prior to or subsequent to such termination or
expiration, nor affect or impair the rights of either party arising under the Agreement prior
to or subsequent to such termination or expiration, except as expressly provided herein.
38. Agreement Term(s) and Options
A. This Agreement is of no force and effect until signed by both parties and all approvals
are secured. Any commencement of performance prior to agreement approval shall be
done so at the Contractor’s own risk; notice to proceed shall not be official until this
Agreement is fully executed.
B. This Agreement shall commence on __________________ and expire on

__________________ (“Initial Term”), unless otherwise set forth in writing, in
accordance with the terms and conditions of this Agreement.
C. The parties agree that the State may elect to extend this Agreement up to three (3)
consecutive optional one-year Terms, identified as follows, if authorized in writing in
accordance with the terms and conditions of this Agreement:
i. _________________ through _________________ (“First Option Term”).

ii. _________________ through _________________ (“Second Option Term”).
iii. _________________ through _________________ (“Third Option Term”).
D. In the event the State elects to extend the Agreement for additional an additional
Term(s), in whole or in part, the parties agree to modify the Agreement via bilateral
execution of the State’s Standard Agreement form and incorporate the extended
Term(s) via one (1) or more Amendments.

Page 25 of 78
E. In the event any option Term is exercised under this Agreement, the charges, fees and
rates applicable for each option Term shall be set forth in any subsequent Amendments
to extend this Agreement. The parties agree that any charge, fee or rate, as set forth in
Exhibit C, Payment Provisions, may be amended by the parties to a higher charge, fee
or rate for the next subsequent consecutive Term for that item, as long as the negotiated
charge, fee or rate does not increase more than three percent (3%) over the charge, fee
or rate for that item under the preceding Term. The parties further agree to renegotiate
contractual charges, fees, or rates in the event that legislation is passed, subsequent to
execution of this Agreement, but during any Term, which requires mandatory
participation in the Program for the AOC Group.
F. The Contractor’s success in achieving the standards of performance, as set forth in

Exhibit D, Work to Be Performed, paragraph 40, Minimum Performance Standards,
will be a factor in the State’s decision to exercise any option under this Agreement.
39. Entire Agreement
This Agreement, consisting of all documents as defined herein, constitutes the entire
agreement between the parties with respect to the subject matter hereof and shall supersede
all previous proposals, both oral and written, negotiations, representations, commitments,
writing and all other communications between the parties. No waiver, alteration,
modification of, or addition to the terms and conditions contained herein shall be binding
unless expressly agreed in writing by a duly authorized officer of the State.

Page 26 of 78
EXHIBIT C
PAYMENT PROVISIONS
1. Total Contract Amount
A. As set forth in this Exhibit, the total amount of Basic Services Rate(s) and Data
Conversion Rate(s) which the State may pay to the Contractor under this Agreement
for performing the Work, as set forth in Exhibit D, Work to be Performed, shall not
exceed the Contract Amount of $TBD_________________, not to exceed the amount
identified for each Term, set forth below.
i. $TBD_____________ for the Initial Term.

ii. $TBD_____________ for the First Option Term.
iii. $TBD_____________ for the Second Option Term.
iv. $TBD_____________ for the Third Option Term.
B. The Contractor has estimated the costs and expenses necessary to complete the Work.
The State’s acceptance of the Contractor’s proposal and price does not (i) imply that
the State approves of or adopts the Contractor’s plan, means, methods, techniques, or
procedures required to perform the Work, nor (ii) relieve the Contractor from the sole
responsibility for the accuracy of its estimate and timely completion of the Work of
this Agreement within the total amount for compensation set forth herein.
C. Funding for Allocated Loss Expenses and Medical Management Service Charges will
not be encumbered under this Agreement; the Contractor will make payment for
Allocated Loss Expenses and Medical Management Service Charges from a pooled
Trust Account, as further described in this Exhibit’s paragraph 8, Trust Account -
Funding, Maintenance, and Method of Payment , herein.
2. Payment of Basic Service Rates for New Claims
A. For Claims Administration, the State will pay the Contractor the Basic Service Rate,
per applicable Claim type and Term, as set forth in Table 1, below, for the actual
number of New Claims adjusted, not to exceed the following amounts by Term.

Table 1: Basic Service Rates for New Claims

Page 27 of 78
Claim Type Basic Service Basic Service Basic Service Basic Service
Rates for Initial Rates for First Rates for Second Rates for Third
Term Option Term Option Term Option Term
Indemnity $TBD $TBD $TBD $TBD
Medical Only $TBD $TBD $TBD $TBD
Incident $TBD $TBD $TBD $TBD
3. Payment of Basic Service Rates for Existing Claims
number of Existing Claims adjusted, not to exceed the following amounts by Term.

Table 2: Basic Service Rates for Existing Claims
4. Payment of Basic Service Rates for Runoff Claims
number of Runoff Claims adjusted, not to exceed the following amounts by Term.

Table 3: Basic Service Rates for Runoff Claims

Page 28 of 78
5. Conditions for Payment of Basic Service Rates
A. The State’s payment of Basic Service Rates, set forth in Tables 1 through 3, above, are
based upon the following conditions:
i. A maximum caseload of 150 Claims per Claims Examiner. The Contractor’s

supervisory personnel shall carry no caseloads.
ii. Closed file maintenance for Closed Claim Files transferred from the
participating AOC Group is included in the Basic Service Rates set forth above.
B. The parties agree that the Basic Service Rates set forth herein, shall apply to Claims
for the applicable Term of the Agreement plus any subsequent agreement(s) through
which the State may contract the Contractor to provide Claims Adjusting services,
regardless of any interruption in continuous service.
C. The parties agree that the Contractor will provide Termination Assistance Services, as
set forth in Exhibit D, Work to be Performed, including electronic and physical file
transfer, at no additional charge.
6. Reimbursement of Data Conversion Rates
A. The State will reimburse the Contractor the Data Conversion Rate, for Term, as set
forth in Table 4, below, for the actual number of Data Conversions transferred, not to
exceed the following amounts by Term.

Table 4: Data Conversion Rates
Term Data Conversion Rates

Initial Term $TBD
First Option Term $TBD
Second Option Term $TBD
Third Option Term $TBD
7. Contract Amount - Method of Payment

Page 29 of 78
A. The Contractor shall submit an invoice for charges pertaining to the Work provided, as
set forth in Exhibit D, Work to be Performed, on a monthly basis. After receipt of
invoice, the State will either approve the invoice for payment or give the Contractor
specific written reasons why part or all of the payment is being withheld and what
remedial actions the Contractor must take to receive the withheld amount.
B. The State will make payment in arrears after receipt of the Contractor’s properly
completed invoice. Invoices shall clearly indicate the following:
i. The Contract number;

ii. A unique invoice number;
iii. The Contractor's name and address;
iv. The taxpayer identification number (Contractor’s federal employer identification
number);
v. Identity the appropriate and allowable Basic Service Rate(s) or Data Conversion
Rate(s), applicable for the Term, and identify Basic Service Rates as Indemnity,
Medical Only, or Incident for New Claims, Existing Claims, or Runoff Claims,
as applicable;
vi. The period and dates services were provided, and hours worked if compensation
on an hourly basis; and
vii. A preferred remittance address, if different from the mailing address.
C. The Contractor shall submit one (1) original and two (2) copies of invoices to:

c/o Finance Division, Accounts Payable
D. Please note that invoices or vouchers not on printed bill heads shall be signed by the
Contractor or the person furnishing the supplies or services.
8. Trust Account - Funding, Maintenance, and Method of Payment
A. The Contractor must advise the financial institution that the funds beting deposited are
public funds and, as a result, a Trust Account must be establisehd to segregate these
funds from other accounts, for use as specified under this Agreement.
B. The Contractor shall deposit funds into the Trust Account and shall issue claim checks
from check stock purchased by the Contractor. The State shall provide a check to the
Contractor for the initial deposit into the Trust Account, upon which the Contractor
shall complete and return to the State a Form For Receipt of Trust Account Funds,
included herein as Form 1. The Trust Account shall be interest bearing unless
otherwise agreed to or prohibited by law.
Page 30 of 78
C. The State shall provide sufficient funds to the Contractor to maintain in the Trust
Account in order for the Contractor to make timely payments of all Claims, Allocated
Loss Expenses, Medical Management Service Charges, and all other amounts which
the Contractor will be authorized or required to make, pursuant to this Agreement or
otherwise on behalf of the State. The State shall provide funds to the Contractor to
replenish the Trust Account for the Claims, Allocated Loss Expenses, and Medical
Management Service Charges that were approved and actually paid. The Contractor
shall deposit such reimbursements into the Trust Account and shall not use funds
allocated for the Trust Account as reimbursement for any other purpose.
D. The State will be liable for all Claims, Allocated Loss Expenses, and Medical
Management Service Charges incurred by or on behalf of the AOC Group in
connection with the handling of any Claim under this Agreement. The Contractor will
advise the State whenever such services may be required and will request its approval
before incurring Allocated Loss Expenses or Medical Management Service Charges
on behalf of the AOC Group. Any Allocated Loss Expenses and Medical
Management Services Charges incurred by the Contractor prior to or without
obtaining the State’s prior approval will be solely the obligation of the Contractor and
will be paid for directly by the Contractor, unless the failure to obtain prior approval is
excused in writing by the State.
E. Claim payments, Allocated Loss Expenses, and Medical Management Service Charges
are not included as part of nor shall they be paid from the Contract Amount
encumbered under this Agreement; as set forth in this Exhibit, the Contract Amount
shall only be used to make payments for allowable Basic Services Rates and Data
Conversion Rates. However, the Contractor and the State agree to the general terms
and conditions and to the cost for certain Allocated Loss Expenses and Medical
Management Service Charges attributable to individual Workers’ Compensation
Claims that are paid by the Contractor from the Trust Account, as set forth in this
Exhibit. Such costs and terms and conditions shall be honored by the Contractor
during the Term(s) of this Agreement.
F. The Contractor shall computer-generate the checks and print the State’s name on the
check to personalize it. The Contractor shall:
i. Provide the Program Manager with a weekly check register detailing checks
issued, including the check date, check number, payee name, payment method,
and payment amount.
ii. Provide the Program Manager, on a monthly basis, a copy of each check issued
on the State’s behalf.
iii. Invoice the Program Manager for charges the Contractor paid from the Trust
Account, at the address set forth below. The Contractor will invoice the State

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for Trust Account charges on a weekly basis. With each invoice requesting
reimbursement for Trust Account charges, the Contractor shall submit a check
register. The total amount of a check register must be equal to the amount
requested for reimbursement on the accompanying Trust Account invoice.

c/o ________________, Program Manager
iv. Deposit funds provided by the State solely for the Trust Account into the Trust
Account.
v. Place stop pay orders at the bank as necessary.
G. In the event the Trust Account falls below an amount that is required to enable the
Contractor to make timely payments of (i) all Claims, Allocated Loss Expenses,
Medical Management Service Charges, (ii) any single Claim equal to or greater than
$500,000.00, and (iii) all other amounts which the Contractor is authorized or is
required to make, pursuant to this Agreement or otherwise on behalf of the State, the
Contractor shall request the State, by Notice, to make funds available to the Contractor
for the sole purpose of replenishing the Trust Account. For each such Notice, the
Contractor shall include the current Trust Account amount; the amount of pending
request(s) for reimbursement form the Trust Account, including copies of the check
register and invoices(s); and, the amount of the additional funding requested to
replenish the Trust Account. The State shall provide funding to the Contractor for the
purposes of replenishing the Trust Account within three (3) weeks of receipt of the
Contractor’s Notice. Upon receipt of the additional Trust Account funding, the
Contractor shall complete and return to the State a Form For Receipt of Trust Account
Funds, included herein as Form 1.
H. The Contractor shall ensure the security of all check supplies.
I. The Contractor shall provide the Program Manager with a Claim summary report on a
monthly basis which identifies monthly reconciliations of the Trust Account, including
when requested, reconciliations of loss runs for amounts expended from the Trust
Account and identification of the amounts paid on behalf of each AOC Group
member.
J. The Contractor will also forward copies of the weekly check register, each check
issued on the State’s behalf, and the monthly Claim summary report to the State’s
Accounts Payable Supervisor, at the address set forth below.

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c/o Finance Division, Accounts Payable Supervisor
9. Payment for Allocated Loss Expenses
As further set forth under this Exhibit’s paragraph 8, Trust Account - Funding,
Maintenance, and Method of Payment, the Contractor shall make payments for Allocated
Loss Expenses, if authorized and approved by the State, from the Trust Account and not
from funding encumbered as the Contract Amount. The State shall provide funding for the
Contractor to replenish the Trust Account for Allocated Loss Expenses paid, after the
Contractor has provided the State with Notice requesting such funding.
10. Payment for Medical Management Service Charges
A. As further set forth under this Exhibit’s paragraph 8, Trust Account - Funding,
Maintenance, and Method of Payment, the Contractor shall make payments for
Medical Management Services Charges, if authorized and approved by the State, from
the Trust Account and not from funding encumbered as the Contract Amount. The
State shall provide funding for the Contractor to replenish the Trust Account for
Medical Management Service Charges paid, after the Contractor has provided the
State with Notice requesting such funding. Allowable Medical Management Service
Chargess shall include the following only:
i. PPO Network: $TBD______________flat fee per non-duplicated bill review.
ii. Medical Bill Review: either $TBD________________flat fee per non-

duplicated bill review or $TBD______________ flat fee per billed line item.
iii. Hospital Bill Audit: $TBD_______ flat fee for all non-duplicated bill reviews.
iv. Utilization Review: $TBD_____________ per review, including pre-

certification and concurrent UR during hospitalization, but not applicable to
MPN provider.
v. Telephonic Case Management: $TBD______________ flat fee per Claim.
vi. Field Case Management: $TBD______________ per hour.
vii. Peer Review: $TBD______________ per half hour, billed in 15-minute

increments; but not applicable to MPN provider.
B. The Contractor shall not invoice the State nor shall the State pay for review of
duplicated bill reviews.

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11. Allowable Costs and Expenses
A. All rates, fees and charges noted in this Agreement are inclusive of any and all
anticipated travel, lodging, transportation, clerical support, materials, fees, overhead,
profits, and other costs and/or expenses incidental to the performance of the specified
requirements under this Agreement. The State shall not consider reimbursement for
costs not defined as allowable in this Agreement, including but not limited to any
administrative, operating, travel, meals, and lodging expenses incurred during the
performance of this Agreement.
B. The Contractor shall not request nor shall the State consider any reimbursement for
non-production work including but not limited to time spent traveling to and from the
job site or any living expenses.
12. Most Favorable Price
The Contractor agrees that no other customer will receive better rates for substantially
similar services offered under substantially similar terms and conditions when the volume of
business from such other customers is equal to or less than the volume of business the State
delivers under this Agreement.
13. Taxes
The State is exempt from federal excise taxes and no payment will be made for any taxes
levied on the Contractor’s or any Subcontractor’s employees’ wages. The State will pay for
any applicable state of California or local sales or use taxes on the services rendered or
equipment or parts supplied pursuant to this Agreement.
14. Payment Does Not Imply Acceptance of Work
The granting of any payment by the State as provided in this Exhibit shall in no way lessen
the liability of the Contractor to replace unsatisfactory Work or Material, even if the
unsatisfactory character of such Work or Material may not have been apparent or detected at
the time such payment was made. Materials, Data, components, or workmanship that do not
conform to Exhibit D, Work to Be Performed, shall be rejected and shall be replaced by the
Contractor without delay.
15. Disallowance
If the Contractor claims or receives payment from the State for a service or reimbursement
that is later disallowed by the State, the Contractor shall promptly refund the disallowed
amount to the State upon the State's request. At its option, the State may offset the amount
disallowed from any payment due or that may become due to the Contractor under this
Agreement or any other agreement.

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EXHIBIT D
WORK TO BE PERFORMED
1. Background
A. The Judicial Council of California, chaired by the Chief Justice of California, is the
chief policy making agency of the California judicial system. The Administrative
Office of the Courts (“AOC”) is the staff agency for the Council and assists both the
Council and its chair in performing their duties. Courts provide a forum for
resolution of criminal and civil cases under state and local laws.
B. AB433 and SB2140 legislation merged the municipal courts and superior courts of
California into one (1) superior court system of Trial Courts. The superior court
system in California is comprised of fifty-eight (58) Trial Courts, one (1) in each
county, with from one (1) to fifty (50) branches, located throughout the state.
Trial Courts have been insured or self-insured for Workers’ Compensation alone or
as a part of a master program with their respective counties in which they are
located. The legislation establishes the Trial Courts as separate public entities from
the counties and requires the AOC to develop a Workers’ Compensation alternative
for the Trial Courts. There are approximately 19,958 employees in the California
Trial Courts. The Trial Courts range in size from six to more than 5,300 employees
(full–time equivalent (FTE) basis).
C. Members of the Judiciary program are primarily located in San Francisco with the
exception of the Trial Court judges, who reside in their respective courts, and the
Second through Sixth Appellate Districts of the Courts of Appeal, who are located
in respective order in Los Angeles, Sacramento, San Diego, Riverside, Santa Ana,
Fresno, and San Jose. The First Appellate District is in San Francisco. The
Judiciary provides coverage for approximately 1,600 judicial branch employees,
111 justices and approximately 1,500 Trial Court judges. In addition, the AOC
maintains three (3) regional offices in San Francisco, Sacramento, and Burbank.

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D. Under this Agreement, the consolidated Judicial Branch Workers’ Compensation

Program (JBWCP) will combine the two (2) separate programs, currently in
existence for the judicial branch of the state of California, including: (1) the
Judiciary program (Judiciary) which includes the State Supreme Court and the six
Courts of Appeal, Commission on Judicial Performance, Habeas Corpus Resource
Center, Judicial Library, the Judicial Council of California, Administrative Office
of the Courts, and Trial Court judges; and (2) the Trial Court Workers’
Compensation program (TCWCP) which includes the employees and subordinate
judicial officers of fifty-four active courts and the potential for an additional four
courts, including Los Angeles, Mono, Inyo, and Yuba, which are not part of the
Program at this time, and any Runoff Claims that may exist with the respective
counties with injury dates of 1/1/01 to the date of inception into the TCWCP, as
follows:
i. The date of inception into TCWCP was 1/1/03 for the following trial courts:
Alpine, Amador, Del Norte, Lake, Mariposa, Riverside, and San Bernardino.
ii. The date of inception into TCWCP was 7/1/03 for the following trial courts:
Alameda, Butte, Calaveras, Colusa, Contra Costa, El Dorado, Fresno,
Humboldt, Imperial, Kings, Lassen, Madera, Marin, Mendocino, Merced,
Modoc, Monterey, Napa, Nevada, Orange, Placer, Sacramento, San Benito,
San Francisco, San Joaquin, San Mateo, Santa Barbara, Santa Cruz, Shasta,
Sierra, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Tehama, Trinity, Tulare,
Tuolumne, and Ventura.
iii. The date of inception into TCWCP was 7/1/04 for the following trial courts:
Kern, Plumas, San Diego, San Luis Obispo, Santa Clara, and Yolo.
iv. The date of inception into TCWCP was 7/1/05 for the following trial court:
Glenn.
E. Prior to the effective date of this Agreement, the incumbent Third Party
Administrator for the Judiciary program was JT2 Integrated Resources (JT2) and the
incumbent TPA for the TCWCP was Tristar Risk Management (Tristar). Judiciary
program’s claims, prior to JT2, was adjusted by the State Compensation Insurance
Fund (SCIF). Various TPAs have been used by the California counties.
2. Objectives of the Agreement
A. The Contractor shall serve as a Third Party Administrator for all the AOC Group
located throughout the state of California for the entire Judicial Branch Workers’
Compensation Program, which is a consolidation of both the TCWCP and Judiciary
program into one joint Program. The JBWCP may consist of as many as fifty-eight
Trial Courts and their respective Runoff Claims, transferred from their respective
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California counties, transfer of Existing Claims from the incumbents, and New
Claims. The Contractor will provide appropriate Workers’ Compensation Claims
services that will include analysis of losses, development of methods of reducing
WC costs while improving Program efficiencies and effectiveness. The TPA shall
also support the individual members of the JBWCP with their WC inquiries and
participate and assist in any AOC training programs.
B. The Contractor shall provide quality service that will meet the needs of AOC Group
and injured workers. The Contractor’s experienced management team will integrate
comprehensive management systems plus managed medical care techniques to
deliver appropriate care and guarantees that valuable funds will be spent wisely.
C. Further, the Contractor shall provide Workers’ Compensation Program to AOC

Group throughout the state of California, which may be added to the Program
during the Term(s) of the Agreement.
3. State Responsibilities
A. The State’s Program Manager will be responsible for managing, scheduling, and
coordinating all Program activities, including Program plans, timelines, and
resources, and escalating issues for resolution to AOC management.
B. The State will provide the Contractor with funding specifically for the Trust
Account which shall at all times contain sufficient funds to enable the Contractor to
make timely payments of all Allocated Loss Expenses, Claims, and all other
amounts which the Contractor is authorized or required to make pursuant to this
Agreement or otherwise on behalf of the State.
4. Coordination with Other AOC Contractors
The Contractor will be required to collaborate with Third Parties in order to effectively
execute the Work of this Agreement. During the implementation, it will be necessary for
the Contractor to collaborate with other TPA’s, such as JT2, Tristar, and some adjusting
on behalf of the California counties, to ensure a thorough and effective transition of the
Judiciary and TCWCP programs into the one joint Program of this Agreement.
Additionally, upon direction from the Program Manager, the Contractor will be instructed
to work with the AOC’s insurance broker to ensure resolution of identified issues. At the
commencement of this Agreement, the AOC’s insurance broker is Marsh Risk &
Insurance Services.
5. Activities of the AOC Group

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A. The AOC Group will promptly report all employee injuries and forward to the
Contractor the Employer’s Report of Occupational Injury or Illness (Labor Code
§4850), all letters, correspondence or any other information, oral or written,
received by the State which is or could be relevant to the efficient and proper
handling of any reported injury.
B. The AOC Group will provide the Contractor with all payroll, financial and other
Data and information necessary or appropriate to enable the Contractor to perform
under this Agreement and to otherwise cooperate with the Contractor in its
performance of this Agreement.
6. Descriptions and Responsibilities of Contractor’s Key Personnel Positions
A. Key Personnel, Account Manager, shall have the following responsibilities:
i. Overall responsibility to ensure quality service for the AOC Group on a

statewide basis;
ii. Conduct internal audits for state compliance and client service requirements.
iii. Develop and maintain special client service instructions (“CSI’s”).
iv. Provide client services when needed/training, problem solving.
v. Oversee transition of new accounts.
vi. Liaison with information technology department on Claims management
system/security levels.
vii. Account manage is responsible for the enforcement of the managed care
protocol to be agreed upon between the parties.
B. Key Personnel, Claims Supervisor, shall have the following responsibilities:
i. Develop and maintain requirements for timely Claims processing and

adherence to the Contract and Labor Code.
ii. Supervise Claims Examiners and Claims Representatives in the daily Work
processes, providing training and performance management.
iii. Interview and make recommendations for hiring new employees, subject to
the approval of a designated representative of the State; prepare written
performance evaluations; recommend promotion, retention, and salary
adjustments.
iv. Communicate with Claims Manager and the State regarding overall
performance and progress in unit.
v. Maintain positive client relationships; attend meetings with the State, Claim
reviews, annual program management reviews and/or sessions.
vi. Identify, resolve, and prevent problem areas.
vii. Work effectively with in-house counsel and designated departmental
representatives.

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7. Descriptions and Responsibilities of Contractor’s Program Staff
A. The Claims Manager shall have the following responsibilities:
i. Actively recruit and retain qualified personnel, subject to the State’s approval.
ii. Formulate and update Workers’ Compensation procedures and provide
direction to Contractor’s staff regarding implementation of the procedures.
iii. Develop and maintain high level of customer service, client relationships, and
open communication with Contractor’s staff, attorneys, and vendors.
iv. Communicate with Contractor’s senior management and the State regarding
overall performance and progress in unit.
v. Monitor and control production and caseloads of Contractor’s staff.
vi. Audit Claim files to ensure compliance with the Contract and Labor Code.
vii. Direct and participate in AOC quarterly file reviews, annual reviews, Contract
renewals, and/or program management evaluations.
B. The Senior Claims Examiner shall have the following responsibilities:
i. Manage litigated and non-litigated Claims according to established Claims

procedures, the Contract, and Labor Code, with minimal supervision.
ii. Act as liaison among Claimants, clients, and attorneys in the resolution of
Indemnity and Medical Claims.
iii. Maintain diary system; prepare file documentation reports on assigned
Claims; monitor Claim reset reserves and recommend adjustment when
necessary; report potentially large-exposure Claims to excess carrier timely.
iv. Rate medical reports for permanent disability.
v. Oversee prompt delivery of benefits to injured worker; manage medical
treatment; provide authorizations, review and approve bills.
vi. Review and approve Indemnity Claim payments to injured employees for
temporary or permanent disability.
vii. Negotiate settlements with the State and Claims Supervisor’s approval for
amounts in excess of delegated authority level; prepare settlements and attend
conferences and Workers’ Compensation Appeals Board (“WCAB”) hearings
as necessary.
viii. Responsible for benefit notices and rehabilitation unit forms; review and
approve vocational rehabilitation plans; attend rehabilitation conferences as
necessary.
ix. Initiate litigation activities and direct legal counsel; identify potential
subrogation Claims and coordinate recovery activities.
x. Attend educational seminars to supplement knowledge of case law or recent
decisions and to enhance skills as requested by Claims Supervisor.
xi. Maintain communication with the State and keep the State informed
regarding status and direction of Claims; respond to concerns and inquiries
from injured workers, attorneys, vendors, and others.
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C. The Claims Examiner shall have the following responsibilities:
i. Manage litigated and non-litigated Claims according to established Claims

procedures, the Contract, and Labor Code, with required supervision.
ii. Act as liaison among Claimants, clients, and attorneys in the resolution of
Indemnity and Medical Claims.
iii. Initiate litigation activities and direct legal counsel; identify potential
subrogation Claims and coordinate recovery activities.
iv. Provide strong direction while working with applicant’s attorneys, outside
vendors, and other support services.
v. Prepare materials and attend Claim review meetings with clients.
vi. Oversee the prompt delivery of benefits to the injured worker; manage
medical treatment and provide authorizations.
D. The Claims Representative shall have the following responsibilities:
i. Receive Claims and process for payment of Medical or Indemnity Claim

expenses in accordance with established guidelines for payment and
timeliness.
ii. Manage Medical Only Claim caseload from inception to
conclusion/conversion.
iii. Complete first pay worksheets or pending set-up screens.
iv. Initiate immediate contact within twenty-four (24) hours, with injured
workers.
v. Verify lost time, wage, medical treatment, diagnosis, and return-to-work.
vi. Refer delays or denials to Claims Examiner.
vii. Communicate with Claimants, service vendors, medical providers, employers,
and State staff, as necessary, in writing or by telephone.
viii. Compute temporary disability payments due and complete payment input
forms.
ix. Document file notes.
x. Request information from treating physicians.
xi. Use form letters or dictate memos.
xii. Transmit records and information to medical personnel, attorneys, WCAB.
xiii. Monitor on-going disability status (by telephone or in writing).
xiv. Arrange medical appointments for Claimants.
xv. Prepare vendor referrals under the direction of the Claims Examiner.
xvi. Prepare Benefit Notices.
xvii. Copy work.
xviii. Subpoena medical records.
xix. Request wage statements.

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8. Qualifications of Contractor’s Key Personnel Positions
A. Key Personnel, Account Manager, shall have the following qualifications:
i. A four-year college degree or combination of work experience and education.

ii. Ten (10) or more years of experience related to administration of self-insured
Workers’ Compensation Claims.
iii. Experience as a branch manager or five (5) years Claims Manager experience.
iv. Previous experience implementing/transitioning and managing public agency
Claims/clients.
v. Self-Insured Plans Certification as required by California law.
vi. Thorough knowledge of state Labor Code and Workers’ Compensation laws.
vii. Organizational and prioritization skills.
viii. Ability to plan and direct the activities of personnel reporting to this position.
B. Key Personnel, Claims Supervisor, will have the following qualifications:

iii. Three (3) years supervisory experience.
iv. Self-Insured Plans Certification.
v. Ability to convey technical details to Claimants, clients, and staff.
vi. Ability to communicate effectively, orally and in writing, with persons at all
levels in the business environment.
vii. Thorough knowledge of state Labor Code, applications, litigation procedures,
defenses, subrogation, investigation and provision of laws governing
administration of Workers’ Compensation Claims.
ix. Organizational and prioritization skills.
x. Candidate must be performing at a satisfactory or above average level in their
current position.
9. Qualifications of Contractor’s Program Staff Positions
A. The Claims Manager shall have the following qualifications:

iii. Five (5) years supervisory experience.
iv. Previous experience managing public agency Claims/clients.
v. Self-Insured Plans Certification as required by California law.
vi. Thorough knowledge of state Labor Code and Workers’ Compensation laws.
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vii. Organizational and prioritization skills.

B. The Senior Claims Examiner will have the following qualifications:

ii. Five (5) or more years experience managing full caseload of Workers’
Compensation Claims.
iii. Must have satisfactory past work history.
iv. Ability to communicate effectively, orally and in writing, with persons at all
levels in the business environment; including ability to convey technical
details to Claimants, clients, and staff.
v. Inherent negotiation skills and ability to make good decisions in resolution of
Claims.
vi. Self-Insured Plans Certification as required by California law.
vii. Organizational and prioritization skills with ability to meet deadlines.
viii. Thorough knowledge of state Labor Code, applications, litigation procedures,
ix. Ability to work independently as well as in cooperation with a work group.
C. The Claims Examiner will have the following qualifications:

ii. Two (2) or more years experience managing full caseload of Workers’
Compensation Claims.
iii. Must have satisfactory past work history.
iv. Ability to communicate effectively, orally and in writing, with persons at all
levels in the business environment; including ability to convey technical
details to Claimants, clients, and staff.
v. Inherent negotiation skills and ability to make good decisions in resolution of
Claims.
vi. Self-Insured Plans Certification as required by California law.
vii. Organizational and prioritization skills with ability to meet deadlines.
viii. Thorough knowledge of state Labor Code, applications, litigation procedures,
ix. Ability to work independently as well as in cooperation with a work group.
D. The Claims Representative shall have the following qualifications:
i. High School Diploma or equivalent necessary; AA degree preferred.

ii. Must have one (1) year in administration of Workers’ Compensation Claims
preferably with the Contractor.
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iii. Completion of Basic Workers’ Compensation Claims (internal or external

course) and Medical Coordination of Workers’ Compensation Claims
(internal or external course), and Customer Service training (internal) if
desired.
iv. Ability to analyze facts and determine required action using a wide range of
procedures in accordance with established guidelines; ability to read technical
documents, to extract relevant information, and form appropriate conclusions.
v. Strong customer service skills.
vi. Ability to communicate effectively, orally and in writing, with persons at all
levels in the business environment with ability to convey technical details to
Claimants and clients.
vii. Organizational skills; ability to prioritize and to meet deadlines without
reduction in work quality.
viii. Working knowledge of medical/legal terminology.
ix. Proficiency in ten-key operation; familiarity with dictating equipment.
Keyboarding skills including ability to input information accurately into a
personal computer; ability to proofread and correct errors.
x. Aptitude for detailed work.
xi. Ability to follow written and spoken instructions.
xii. Ability to work independently as well as in cooperation with work group.
xiii. Must have reading, writing and math skills necessary to master all
requirements listed above.
xiv. Satisfactory work history as necessary.
10. Other Staffing Requirements
A. The Contractor will provide services from the offices identified below for northern
and southern California locations, until and unless volume requires that the
Contractor provide more localized services via its multiple offices in California, at
which time additional Claims Adjusting locations will be provided. In any event, a
single point of contact for the AOC would be provided, staffed as follows:
i. Claims Supervisors do not carry caseloads and do not supervise more than six
(6) Claims Examiners.
ii. One (1) Claims Examiner for every 150 open and active Indemnity Claims.
iii. One (1) Claims Representative for every three (3) Claims Examiners.
B. All Claims Examiners assigned to handle the AOC will have caseloads that do not
exceed 150 Claims per Claims Examiner. Caseloads will include all Indemnity
Claims including future/lifetime Medical Claims.
C. By the time a full caseload is established by a Claims Examiner, that Claims

Examiner shall be dedicated to this Program’s Claims.

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D. Claims Representatives are responsible for all Medical Only Claims up to the
designated thresholds at which time they would be converted to an Indemnity Claim
and transferred to a Claims Examiner. Medical Only Claim caseloads average fifty
(50) Claims per Claims Representative.
E. There will be the appropriate Claims Supervisors staffing at one or more for the
Northern California units and one or more for the Southern California unit. Each
will interact on a regular basis with all locations in their geographic area sufficient
to ensure effective communications and coordination of services among the
servicing offices as needed.
F. Examiners and Claims Representatives will be assigned responsibility for individual

locations to provide continuity and consistency in service to each location.
Caseloads will not exceed 150 per Claims Examiner.
G. If a location requires multiple Claims Examiners assigned to handle the Claims

volume, the best manner in which to split the Claims will be discussed with and
agreed upon with that AOC Group location. For example a straight alpha split may
be better suited for one location, whereas for another location, a departmental split
may prove more effective.
H. Each AOC Group will be advised of their Service Team. Each AOC Group
location will be provided reference documents identifying the Service Team
assigned to their location and providing contact information specific to that Service
Team.
11. Summary of Claims Administration Services
A. The Contractor will review, on behalf of the AOC Group, all reports of injury as
defined by California Labor Code Sections 3208 and 3208.1 that are reported by the
AOC Group to the Contractor.
B. On behalf of the AOC Group, the Contractor will determine, for each reported
employee injury, those benefits, if any, that should be paid or rendered under the
California Workers’ Compensation laws.
C. The Contractor will establish and maintain a Claims file on each reported Claim,
which file shall be available for inspection to the AOC Group and its member
public agencies and its designees, private employers, employees or agents. The
maintenance of such files shall exhibit handling practices, which meet or exceed
minimum industry standards for California Workers’ Compensation Claims.
Medical Confidential Information, subject to California Civil Code Section 56.05(f)
as further defined by Labor Code Section 3762, shall not be disclosed.
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D. The Contractor will maintain current cost-benefit figures and an estimate of the
total costs of all reasonable and foreseeable benefits and related expenses on each
Claim.
E. On behalf of the AOC Group, the Contractor will prepare and file all legally
required forms and reports with the AOC Group’s Executive Director and the
Rehabilitation Unit of the California Division of Industrial Accidents.
F. On behalf of the State, the Contractor will make payment from a segregated bank
Trust Account funded by the State, as further described in Exhibit C, Payment
Provisions, those sums that should reasonably be paid for Claims and Claim-related
expenses under the Workers’ Compensation laws for each reported Claim.
G. The Contractor will refer cases, where an employee of an AOC Group files an
application with the state of California Workers’ Compensation Appeals Board or
any other activity involving litigation, to attorneys selected and approved by the
AOC Group and not to any other attorneys without the prior written consent of the
AOC Group.
H. The Contractor will render assistance as is reasonably necessary in the preparation

of litigated cases.
I. The Contractor will provide an electronic loss analysis and financial and Claim
detail reports within ten (10) days following the end of the month. At no additional
charge, the Contractor will provide the following reports:
i. Graphic reports semi-annually reflecting the highest cost department and loss
types.
ii. Semi-annual recaps of costs, reported Claims, accident numbers, litigated
Claims and other mutually accepted categories.
iii. Consolidated reports showing total costs and Claim counts for all participants
by year.
iv. Monthly tape edits, semi-annual reports and annual reports.
v. Other reports as the AOC Group deems necessary.
J. As appropriate, the Contractor will provide and make Claims reports to excess
carriers and collect excess recoveries, including the return of excess recoveries to
the AOC Group, and identify the policy numbers and the parties to whom reports
are to be directed.
K. The Contractor will attend meetings, as requested.

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L. The Contractor will advise the AOC Group on any material problems or need for
improvement in the Claims reporting, administration or other aspects of the
Workers’ Compensation Program.
M. The Contractor will employ, as necessary, outside vendors subject to obtaining the
State’s prior written approval of all vendors eligible to provide services, directly or
indirectly, on behalf of or for the AOC Group pursuant to this Agreement.
N. The Contractor will review safety and loss control programs and suggest needed
cost containment measures for Program control.
12. Program Implementation Services
A. General Overview: upon and after commencement of the Initial Term of this
Agreement, the Contractor will provide the following assistance to each AOC
Group in establishing and implementing its programs and procedures for self-
insurance:
i. Develop, print, and distribute copies of Claim reporting procedure manual,

including the latest Workers’ Compensation reform information, for
distribution to the AOC Group.
ii. Initial Program implementation and training visits with the AOC Group to
distribute the Claim reporting procedure manuals and discuss self-insurance
and the Contractor’s services with AOC Group Representatives.
iii. Program the database for New Claims, Existing Claims, and Runoff Claims
and design all necessary reports.
B. Program Steps: The parties recognize that the process of selecting a Claims
administrator requires that all elements of Program implementation will be
thoughtfully planned and coordinated. The following elements of the process will
be completed by the Contractor during the implementation process prior to transfer:
i. Establish training guidelines and timelines with the AOC Group to cover
Claims reporting and duties.
ii. Meet with the AOC Group to coordinate a timely and efficient transition.
iii. Design appropriate accounting procedures and standards for Trust Account,
including Allocated Loss Expenses, Medical Management Service Charges,
and the Contract Amount, including Basic Service Rates and Data Conversion
Rates, as required.
iv. Select appropriate staff, subject to the State’s approval, to handle the files on
behalf of the AOC Group.
v. Select, with the State, appropriate vendors to be used as medical treating
facilities, defense attorneys, and vocational rehabilitation counselors.

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vi. Design loss analysis information to produce personalized safety and risk
management reports.
vii. Train employees on utilization of Claims database for inquiry and printing on
their own computer.
viii. Develop and print a basic Workers’ Compensation information and reporting
procedure manual.
ix. Set schedule for meetings for Claims and Program review, loss control,
legislative updates, and on-site education programs.
x. Converting data from all Existing Claims residing with Tristar and JT2. The
Contractor will assume all adjusting responsibility for these files effective
3/1/06.
xi. Ensure that these Claims conversions are correct with respects to data
integrity-to include but not limited to data mapping, historical financial
transactions, payment history and classification.
C. Start-Up: Within the first ninety (90) days of the Contract, the Contractor will:
i. Provide training to the AOC Group regarding Claims reporting and Claims
monitoring procedures, and introduce the Contractor’s personnel.
ii. Send letters of introduction to injured workers, service providers, and other
interested parties on each active Claim.
iii. Prepare narrative reports and new reserve worksheets on every open active
Indemnity Claim.
13. Claims Management Information System Capabilities
A. The Contractor will utilize a Workers’ Compensation Claims Administration

information system that meets the risk management needs of both self-insured and
insured businesses. The cost of the Claims management information system,
including software licensing fees for AOC Group online access, is included in the
Contractor’s Basic Service Rate(s), as set forth in Exhibit C, Payment Provisions.
The system will include the following capabilities:
i. Comprehensive Claims management and tracking.

ii. On-line access to all Claims Data via a user-friendly menu driven system.
iii. Flexible reporting capabilities.
iv. System documentation, training, and a technical help desk.
v. Systematic management of indemnity payments to insure timely and correct
transactions.
vi. Electronic interface with various medical management systems.
vii. Check and system security.
viii. Capability to respond to the constantly changing regulatory environment and
to evolving risk management philosophies.

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ix. Monitoring and maintenance seven (7) Days a week, twenty-four (24) hours a
day.
x. Daily back-ups.
B. The Contractor’s Claims management information system will also include a

disaster recovery/contingency plan is to help ensure the continued operation by
providing the ability to successfully recover computer services in the event of a
disaster. Specific goals of the plan relative to an emergency include:
i. To detail the correct course of action to follow.

ii. To minimize confusion, errors and expenses.
iii. To effect a quick and complete recovery of services.
iv. To reduce the risk of loss of services.
v. To provide ongoing protection of both parties’ assets
vi. To ensure the continued viability of this plan.
14. On-Line Access
A. The Contractor shall provide Client On-Line Access to the State and AOC Group so
that users may create and print or download reports for use on personal computers,
seven (7) Days a week, twenty-four (24) hours a day.
i. On-Line Electronic Mail. The Contractor shall make its proprietary electronic
mail (e-mail) available to all users with Client On-Line Access. E-mail
messages relevant to a particular Claim can be transferred directly to the
Claim’s file notes by the Claims staff.
ii. On-Line Entry of Employer’s First Report. The Contractor shall make an
optional service available with Client On-Line Access to allow users the
ability to enter the employer’s first report at the client location and transmit it
electronically to a pending Claim file. The Contractor shall review the Claim
for accuracy and completeness and establish it in the Claims management
information system.
iii. Claim Notes Look-up. Documented Claim file notes can be accessed using
the automated file note screens on the computer. The AOC Group will have
access, within confidentiality limits, to this documentation by accessing the
file activity notes section of the Contractor’s Claims management information
system.
iv. User Support. The Contractor’s shall provide on-going user support,
including installation assistance, easy to use system manuals, training and
regular documentation updates. The Contractor shall make technical support
and guidance, in report requests, available by telephone through its user
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support desk. This service is operational Monday through Friday, 8:30 A.M.
to 5:00 P.M., Pacific Time.
B. The Contractor shall provide Client On-Line Access, and the proprietary software
necessary for Client On-Line Access, at no additional cost to the State or to the
AOC Group. The Contractor shall provide installation support, user manuals and
updates, on-site training, and a user support desk for questions that come up as the
AOC Group are using the system.
15. Standard Reports
A. At no additional cost to State or the AOC Group, the Contractor shall produce
standard reports weekly, monthly, quarterly, or annually, depending on the report
type and need. Reports will be provided electronically. Monthly reports will
include all information entered through the last day of the month. Reports will be
prepared and mailed within five (5) workdays after the end of the report period.
B. The Contractor shall provide two (2) copies each of the following standard monthly
reports:
i. “Management Summary,” a one (1) page summary of loss information by

reporting location.
ii. “Policy Period Analysis,” a summary of financial and Claim Data by policy
periods.
iii. “Check Register,” a detailed listing of all payments made within the reporting
period.
iv. “Cost Analysis,” a summary of payments, reserves and a description of the
injury for Claims within the specified period.
v. “Claim Inquiry (Detailed Claim List),” a detailed listing of all Claims within
the specified period.
vi. “OSHA 300 Log - the Summary of Occupational Injuries and Losses (year to
date),” as required by OSHA.
C. The Contractor shall provide two (2) copies each of the following standard
quarterly reports:
i. “Payment Analysis,” a summary of all payment transactions by payment

category.
ii. “Stratification Listing,” a detailed incurred or paid listing of Claims in
descending or ascending dollar sequence.
D. The Contractor shall provide two (2) copies each of the following standard annual
reports:

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i. “Claim Analysis (Histogram),” a comparative summary of fourteen (14)

major injury categories by frequency/severity
ii. “Social Security Number Listing,” a report, identifying employees with
multiple Claims within a specified time frame.
iii. “OSHA 300 Log - the Annual Summary of Occupational Injuries and
Losses,” as required by OSHA.
iv. “1099 Miscellaneous Forms,” sent to each provider with annual payments in
excess of $600.00.
v. “State Annual Report (California),” a report that satisfies the annual State
reporting requirements for self-insured clients.
16. Custom Reports
The Contractor shall provide ad hoc report capability through the Client On-Line Access
System that will provide a wide range of user specified selection criteria, including
multiple data ranges (calendar, fiscal, or user specified time periods), multiple location
levels of reporting, and extensive additional criteria to filter the Data selected for reports.
17. Optional Reports
A. The Contractor will make optional reports available that can be provided on a
monthly, quarterly, annual, or one-time basis, to meet specific needs. Reports will
be provided electronically. Monthly reports will include all information entered
through the last day of the month. Reports will be prepared and mailed within five
(5) workdays after the end of the report period.
B. The following are some optional reports that will be available:
i. “Awards Claim Inquiry,” a detailed listing of Claimants receiving awards

within a specified date frame.
ii. “Claim Inquiry Summary,” a summary of Claim information for each reserve
category: indemnity expenses, medical expenses, and Allocated Loss
Expenses.
iii. “Changed Claims Listing,” a listing of all Claims that have had changes
entered within a specified date frame.
iv. “Comparative Analysis,” a summary that provides five (5) years financial
Data by month for Medical and Indemnity Claims.
v. “Cost Allocation,” a report that details payment totals by date of loss by
department.
vi. “Loss Development Report (I B N R),” a report that provides a trend analysis
for ten (10) specific Claim activity categories for annual reporting periods (up
to ten (10) years of Data).
vii. “Lost Work Days Summary Report,” a report that details by twelve (12)
ranges of lost days, the number of open and total Claims, average lost days
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per Claim, payment and reserve amounts, average paid, and the percent of
total each category represents.
viii. “Managed Care Reports,” information regarding net savings, Medical Bill
Review, PPO Network services, and Utilization and Peer Reviews.
ix. “Modified Duty Report,” a detailed listing of Claimants on modified or
restricted duty within a given date frame with the estimated release to return
to full duty.
x. “Office Production Report,” a report that provides monthly Claim activity for
Indemnity and Medical Claims and Claim inventory at the beginning and end
of the month.
xi. “Provider Check Register,” a listing of each provider that has received
payments within a specified date frame.
xii. “Results Report,” a comparison summary of current month, prior month,
fiscal year to date, and prior fiscal year to date.
xiii. “Return-to-work Report,” a detailed listing of Claimants that are currently
being paid a benefit or a detailed listing of Claimants with a return-to-work
date or estimated return-to-work date.
xiv. “Special Request Report,” information requests to meet a specific client need
that cannot be satisfied through pre-established reports.
xv. “Historical Valuation,” a report that provides the value of Claims as of a
specified date.
xvi. “Reserve Change Report,” a report that identifies which Claims have had a
reserve change within a specified period and identifies the amount of the
change.
xvii. “Loss Triangle,” a report that contains multiple valuations points for multiple
Claims periods.
xviii. “Loss by Cause Codes,” a report that lists Claims by injury by the following
cause code descriptions: Miscellaneous Burn or Scald; Caught in/bet Object;
Cut/Puncture/Scrape Injury; Fall/Slip; Motor Vehicle: Miscellaneous; Lifted
or Handled Object; Bending; Stooping/Squatting; Lifting; Pushing/Pulling;
Reaching; Twisting; Hit Stationary Object; Falling/Flying Object; Repetitive
Motion; Illness; and Stress/Psych.
xix. “Loss by Location Code,” a report that lists Claims for a specific AOC Group
location, in accordance with location codes to be provided to the Contractor
by the Program Manager.
xx. “Loss by Body Part Code,” a report that lists Claims by injury by the
following body part code descriptions: Skull; Brain; Ear(s); Eye(s); Nose;
Teeth; Mouth; Face; Neck; Elbow(s); Wrist(s); Hand(s); Finger(s); Thumb(s);
Shoulder(s); Back; Chest; Sacrum & Coccyx; Pelvis; Spinal Cord (Back);
Internal Organs; Buttocks; Groin: Hip(s); Thigh(s); Knee(s); Ankle(s);
Foot/Feet; Toe(s); and Artificial Appliance.
xxi. “Loss Frequency,” a report that identifies how many times a particular type of
injury has occurred for a specified period.
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xxii. “Loss Stratification,” a report that identifies the frequency of occurrence of a

particular type of injury for a specified period.
C. The following extensive on-line reporting capabilities are also available through the
Contractor’s Client On-Line Access:
i. “Management Summary, Policy Period Analysis.”

ii. “Histograms, Stratifications.”
iii. “Check Registers and Payment Analysis.”
18. OSHA Data Reporting
A. The Contractor’s Claims management information system shall capture the

following basic data elements for Workers’ Compensation Claims to ensure
adequate information for the Occupational Safety and Health Administration
(“OSHA”) Claims management and risk management reporting:
i. “Claim Status Indicators”: delayed flag, denied flag.

ii. “Claimant Demographics”: last name, first name, middle initial, social
security number, sex, address.
iii. “Claim Details”: location, date of injury, description of injury, date reported,
occupation.
iv. “Administrative Details”: office and Claims Examiner handling the Claim.
v. “Financials”: Reserves (indemnity expenses, medical expenses, Allocated
Loss Expense), Average Weekly Wage (“AWW”).
vi. “All Payments.”
B. The Contractor shall provide OSHA 300 log reports, by the 15th of each month, at
no additional cost to the State or the AOC Group, that summarize all reportable
injuries/illnesses for each separate department and are provided both with and
without employee names. The Contractor shall provide this Data on diskette or via
Client On-Line Access.
19. Reporting of New Claims
A. The prompt reporting of Claims plays a critical role in the timely investigation and
delivery of Workers’ Compensation benefits to injured workers. To assist in this
process, the Contractor will provide the Intake and Referral system. In addition to
the Intake & Referral system, the Contractor shall provide the following reporting
options for New Claims: (a) internet, (b) fax, or (c) mail.

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i. By utilizing the Intake and Referral system, an AOC Group supervisor may
initially report injury and/or illness information by telephone. The Intake
technician will collect and record the information required in the “Employer’s
First Report of Injury” from the caller. The Intake technician will
immediately refer the employee to a medical provider or emergency facility
based on the employee’s geographic location, medical needs, client-preferred
clinic, and available appointment time. Multi-lingual translation services will
be included; reporting will include the following benefits:
 Ease of reporting will mean prompt Claims reporting.

 Prompt and appropriate medical care.
 Greater PPO Network penetration.
 Prompt Claims investigation.
 Referral for Utilization Review or Telephonic Case Management based
on agreed upon referral criteria.
 Contact made to Claimant within twenty-four (24) hours of injury on
Claims referred to Utilization Review or Telephonic Case
Management.
ii. The Contractor will follow the following Intake and Referral process:
 The AOC Group will have their own 1-800 client-specific telephone
number for reporting purposes.
 Clients will have custom handling instructions such as referral to certain
clinics or immediate referral on stress or cumulative trauma Claims.
Tailored to the AOC Group’s specifications.
 The Claim report will is sent to the Contractor for immediate processing.
 Training will be provided to the supervisor of an AOC Group as to why
prompt reporting is important, what information is required, and the
reporting process.
 All calls will be recorded.
 Where appropriate, Intake and Referral will utilize the translation line,
which allows for clear concise communication for all parties.
 “First Report of Injury” forms will be faxed to the AOC Group each
night and hard copies will be sent daily.
 The Contractor will obtain all information required on the “Employer’s
First Report.”
 Immediate referral to doctor within two (2) hours, not to exceed twenty-
four (24) hours.
 When referrals are made to a provider, the provider will be called to
confirm appointment.

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20. Processing of New and Runoff Claims and Existing Claims
A. Within one (1) working business day of receipt, the Contractor will index Claims
and enter them into the pending Claim system and assigned a Claim number. This
procedure will prevent the creation of duplicate Claims and enable the Claims
Supervisor to track the timely determination of Workers’ Compensation benefits
using automation.
B. The pending Claims will be delivered to the Claims Supervisor for an initial
assessment of severity, compensability, and subrogation issues. The Claims
Supervisor will determine the due date of the Claim, assign the Claims Examiner,
and determine the Claim type.
C. Using the file note screen, the Claims Supervisor will provide appropriate written
instructions and forward the Claim to the Claims Examiner to complete the
preliminary investigation, which will consist of a three-point contact with the
injured worker, the employee's supervisor, and the treating physician. A reserve
analysis with a plan of action will then be developed and the Claim will be returned
to the Claims Supervisor to approve the plan and the initiation, delay or denial of
benefits.
D. The Contractor will determine compensability of injuries and illnesses in

accordance with state Workers’ Compensation laws. Questionable Claims will be
placed on a delayed status and appropriate notices will be sent within the State
mandated timeframes. The Contractor will forward copies of these notices to the
AOC Group, if desired. All delay notices will be approved by the Claims
Supervisor, who works with the Claims Examiner in developing a plan of action,
which may involve additional investigation and/or medical consultation.
E. During the delay period, the Claims Supervisor will ensure the compensability issue
is resolved in accordance with state laws. Claim denials must be approved by both
the Claims Supervisor and Claims Manager. If desired, the Contractor will keep the
AOC Group advised of developments during this period.
F. The computer system will be updated to reflect Claims in a delayed or denied

status, and as a quality control measure, will not allow any payments to be made
without Claims Examiner over-ride.
21. On-going Claim Processing
A. The Contractor’s file room personnel will open and date stamp all mail received
within the same day.

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B. Bills will be forwarded to the Contractor’s staff responsible for indexing and
payment. Medical bills will be forwarded to the bill review agency selected by the
State. All other correspondence will be delivered to the Claims Supervisor.
C. The Claims Supervisor will review the legal correspondence and calendars court
appearances, award payments, due dates, etc. The mail will then be forwarded to
the Claims Examiner for appropriate action.
D. The Claims Examiner will review all incoming mail and enter changes in medical
status, disability status, and legal status directly into the Claims system without the
need to pull the actual Claim files.
E. The Claims Examiner will note whether the correspondence is a “rush,” “pull,” or
“drop” file, and return the mail to the Contractor’s file room personnel for
attachment to the Claim.
F. Medical bills will be adjusted to the contracted rate or fee schedule and paid within
thirty (30) Days unless there is a supportable dispute.
G. In cases of continuing disability, the Contractor will make regular contact with the
injured worker to help maintain a positive rapport and avoid litigation.
H. In cases of continuing disability, the Contractor will obtain a medical report from
the treating physician at least every forty-five (45) Days to evaluate continuing
indemnity payments.
I. All telephone calls will be returned within one (1) working business day. A 1-800
number will be available to all AOC Group employees.
22. Investigation
A. The Claims Supervisor will complete an initial review of all new cases. Claims will
be evaluated against compensability standards; that is, the injury must be covered
under the state Workers’ Compensation laws.
B. Thorough investigation of Claims to identify all compensability issues as well as

potential loss prevention opportunities is critical to the Claim handling process.
The Contractor’s representatives will investigate questionable or improper Claims
by obtaining statements from individuals with knowledge of the injury, including
the injured worker, witnesses, and supervisor. Information developed will be
utilized in making the compensability determination.

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i. Employee Contact. Within one (1) working business day, the Contractor will
contact all employees losing time from work, unless represented by an
attorney. During these telephone calls, employees will be questioned
regarding the specifics of the injury, their medical history, outside
employment, witnesses, etc. Employees will also be informed of their rights
and benefits. Employees will be assured that their employer wishes to do as
much as possible to return them to health and work at the earliest possible
date. Questions will be answered and a positive rapport with the employee
will be developed to eliminate uncertainty and avoid litigation.
ii. Employer Contact. Within one (1) working business day, the Contractor will
contact the AOC Group to substantiate the employee's Claim or to present any
additional or conflicting information. When notice of the Claim is from
another source, the Contractor will verify that the Claimant is the AOC
Group’s employee prior to authorizing benefits. The Contractor shall
maintain a close liaison with the AOC Group to ensure that all opportunities
for returning an injured employee to productive status are maximized. The
Contractor will also provide the AOC Group with disability status updates
and let the AOC Group know when employees are expected to return-to-
work.
iii. Medical Facility Contact. Within one (1) working business day, the
Contractor will contract the medical facility prior to making the initial
indemnity payment and discuss modified work programs in relation to work
abilities. In cases of continuing disability, the Contractor will obtain a medical
report at least every forty-five (45) Days to evaluate continuing disability
payments and to explore all opportunities for return-to-work.
iv. Investigation Criteria. Claims involving any of the following conditions may
be identified for further investigation:
 Delay in reporting Claim.

 Recent date of hire.
 Injury coincides with lay-off, termination, or disciplinary action.
 Cumulative trauma.
 Claim involves alleged stress, heart condition, stroke, or death.
 Notice of legal representation is first notice.
 Subrogation potential.
 Co-employment.
 All affirmative defenses.
 Symptoms inconsistent with injury.
 History of prior injury or awards to same body part.
 Potential fraud.

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v. Field Investigation. Field investigations may be necessary in cases of

questionable compensability, catastrophic injuries, environmental issues, or
Third Party negligence. An approved vendor list will be developed with the
AOC Group and adhered to by the Contractor’s staff. Investigators utilized by
the Contractor can provide the following services:
 AOE/COE investigation.
 Interviews.
 Recorded statements.
 Photographs/diagrams.
 Inspection at accident sites.
 Fraud investigation.
 Background checks.
 Subrosa (flat rates available based on volume).
vi. Activity Check/Surveillance. Where the length of disability is questioned, the

Contractor may assign the case to a field activity check or surveillance to
determine if there is any work capacity. Outside services will be used only
where necessary, and on a limited investigation basis. The file documentation
will be used to support the reason for outside assignment and direction and
control will be exercised by the Claims Examiner. Outside investigators will be
chosen from a pre-approved list derived from a panel of professional
investigators presented by the Contractor to the State. The Claims Examiner
will obtain authorization from the Claims Supervisor and the AOC Group
prior to initiating any outside field investigation or subrosa activity. As
needed, the investigator or Claims Examiner will contact a designated
employer representative to ensure the cooperation of an employee, witness, or
supervisor who might otherwise be concerned about the investigation.
vii. Index Bureau. The Contractor will report all indemnity cases to the Index
Bureau upon file creation. The Index System is a national clearinghouse for
bodily injury Claims - the unique effort of 1,450 property-casualty insurance
companies representing over ninety-three percent (93%) of the industry in
premium volume, 1,500 self-insurers, and 120 Claims administrators. The
Index System will assist subscribers in mitigating bodily-injury Claims
payments by providing information to help them research prior Claims and
identify duplicate or possibly fraudulent Claims. The Contractor’s Claims
management information system, which may help identify Claims patterns that
indicate fraudulent or suspicious activity, may initiate or be used as part of a
further investigation.
23. Reserves
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A. As the Claims administrator for both self-insured and insured clients, the Contractor
will have the responsibility to properly establish and maintain case reserves. In
order to achieve consistent case reserves, which reflect the probable total future
costs, it will be important that these principles are followed.
B. Establishing proper reserves ensures that funds will be available to meet the AOC
Group’s financial obligations to pay Claims incurred during the policy period or
during the period of self-insurance. It will also allow the State to have sufficient
information in a timely fashion for financial planning purposes.
C. The Contractor’s objective will be to establish an initial reserve that sufficiently

reflects the ultimate exposure. Each Claim will be evaluated after information is
collected in the initial Claims set-up/investigation process. Claim reserves will be
entered in the Claims management information system within five (5) working
business days following notification of a loss. Exceptions may be authorized by a
Claims Supervisor or Claims Manager for Claims which are extremely complicated
and require additional investigation in order to properly assign reserves. Exceptions
will require an explanation and approval documented within the Claims file.
D. Revisions to outstanding case reserves must be made immediately when significant

developments occur that change the established ultimate value of a Claim.
Reserves will be reviewed every time a file is worked. Reserve analysis will be
required at 45, 120, and 180 Day intervals on all cases.
E. Individual cases must be evaluated by applying applicable statutes, regulations,

benefit provision and legal principles to the facts gathered in a timely and thorough
investigation and applying the experienced judgment of a Senior Claims Examiner
or Claims Examiner from similar, recent cases. Investigations will be completed
within five (5) working days so that an adequate reserve may be established. Case
reserves will anticipate neither the best nor the worst possible result, but will reflect
the most probable or realistic outcome for the life of the file.
24. Diary
A. The Contractor’s diary system was designed for use by Claims Examiners as well as
the Contractor’s management to assure that the various timelines for successfully
managing Workers’ Compensation Claims are met.
B. The Claims Examiners will review all cases every thirty (30) Days, if temporary
disability is being paid, and at least every fourteen (14) Days in cases where
compensability has not been determined. All medical only cases will be reviewed
for closure at least every thirty (30) Days.

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C. Additionally, the diary system will include diaries for subrogation timelines,
delay/denial timelines, excess reporting limits, and vocational rehabilitation
maximums. All Claims Examiners will utilize the diary system to enter their own
proactive case management diaries – focused on case resolution.
25. File Documentation
A. All Claims will be reviewed by the Claims Supervisor. The Claims Supervisor will
provide appropriate and specific direction regarding the investigation and handling
of all cases upon receipt of the Claim. The instructions and plan of action will be
clearly evidenced in the electronic file notes.
B. Estimates of the cost of all anticipated benefits and expenses will be maintained on
each individual case. The basis for all reserve revisions will be documented on
reserve analysis worksheets.
C. The basis for all payments will be clearly documented and supported in the file.
D. All telephone conversations will be documented in writing in the Contractor’s

Claim files by using the automated file note screens on the computer. The AOC
Group will have full access, within Confidential Information limits, to this
documentation by accessing the file activity notes section of the Contractor’s
Claims management information system.
E. Claims files will be available to the AOC Group for review at all times, with the
exception of medical Confidential Information subject to California Civil Code
Section 56.05(f) as further defined by Labor Code Section 3762.
F. The Contractor’s “Policy and Technical Guide” will be available for review by
appropriate AOC Group staff or a designated representative.
G. Claims Supervisors will review files on a regular basis. Their comments and
instructions will be documented in the Claim file.
H. All records, files, transcripts, computer tapes, and other Material on Workers’
Compensation Claims Adjusting activity developed on the Workers’ Compensation
Claims will be the property of the AOC Group and the State and will be
relinquished in good order and condition, upon expiration or termination of the
Agreement, in accordance with its terms and conditions and applicable Workers’
Compensation laws. All costs incurred by the Contractor, to relinquish and transfer
such Data, shall be borne by the Contractor and shall not be reimbursable by the
State or any AOC Group.
26. Litigation Management

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A. The Contractor will work closely with the AOC Group to develop an aggressive
litigation management and control program.
B. The Contractor will not automatically assign cases to counsel, when the injured
worker is represented by counsel. Defense referrals will be made only as necessary,
and with prior approval of the State, to evaluate complex legal issues or to complete
discovery that cannot be performed by non-legal personnel.
C. The Contractor’s Claims Examiners will be trained to handle routine litigation

matters, that will be coordinated with legal counsel designated by the AOC Group in
a cooperative exchange of information, including:
i. Subpoena medical records.

ii. File and serve medical reports.
iii. Schedule defense medical appointments and complete cover letter.
iv. Provide letter of directed assignments to counsel and monitor completion of
each assignment as the litigation process proceeds.
v. Rate the level of permanent disability outlined in medical reports.
vi. Object to liens.
vii. Support legal efforts on subrogation matters.
D. All legal and medical-legal mail will be reviewed by a Claims Supervisor. Court
dates, award payments, etc. will be entered in to the Contractor’s computer diary
system. All legal diaries will be provided to the Claims Examiners via the
computer diary system on a daily basis. This diary system will allow for planning
of settlements and legal defense in advance of hearing dates.
27. Legal Referral
A. The Claims Examiners will obtain authorization from the AOC Group prior to
making a legal referral.
B. A litigation referral form will be completed, which outlines the specific activities to
be completed by the attorney. The referral will summarize the history of the case,
issues in dispute, and disability and medical payments. Copies of all pertinent
medical reports and documents will be included. Summaries of records will also be
provided, as appropriate. Defense counsel will be instructed to minimize
duplication when reporting.

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C. The Contractor will provide the AOC Group with all correspondence and legal
documents on a regular basis. The Contractor will request the defense counsel to
copy the AOC Group directly on all correspondence and provide the AOC Group
with copies of all communications from the courts and applicant’s counsel.
D. A litigation calendar will be maintained in which upcoming hearings, conference

dates, and trials will be documented. The litigation calendar will be the
responsibility of the Claims Supervisor, who will use this information to make sure
counsel has been assigned, as appropriate, and that the AOC Group are represented.
28. Settlement
Subject to the limits of the settlement authorizations established for each AOC Group
and/or by the State, the Contactor shall conduct settlement of Claims as follows:
A. The nature and extent of permanent disability or need for further medical care will
be determined as soon as possible. Permanent disability advances will be made in
accordance with state law.
B. Settlement evaluations will be made promptly, based on information included in the

file, as well as other criteria by which a value may be determined.
C. The Contractor will document maximum settlement authority amounts by position.

Within the ranges, the Claims Manager will assign a specific level for each
individual based on experience, education, length of service with the Contractor,
and State requirements.
D. The Claims Supervisor will approve all requests for settlement authority prior to
discussion with the AOC Group, if the settlement amount is above the individual
Claims Examiner's authority. Claims Supervisors will also approve all decisions by
the Claims Examiners to bring a case to trial.
E. The settlement authority requests and approvals will be documented in the Claim
file. The date of the approval will be indicated as well as the identities of the
specific individuals involved in the approval process.
F. A settlement request form will be provided to the AOC Group, which outlines
pertinent file information, a statement of the issues, and the Contractor’s
recommendations for case resolution. The settlement request will be reviewed by
the Claims Supervisor and approved, if in order. It will then be submitted to the
AOC Group for review and discussion. The settlement request will need to be
signed and approved by the AOC Group before resolution.

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G. Requests for authorization from defense counsel will be accompanied by exposure

analysis to support settlement recommendations.
29. Subrogation
A. All Claims will be evaluated for the subrogation issue by the Claims Supervisor,
when the Claim is first reported, and by the Claims Examiner, when developing
case action plans. If subrogation is identified as an issue, the Contractor will obtain
authorization from the AOC Group before proceeding. The Contractor’s system
will be capable of providing a diary for the statute of limitations and tracking
recoveries and credits. The Contractor’s computer diary system will enable the
Claims Examiner to manage the subrogation aspect of the case as well as statute
and filing dates. The Contractor has developed a specific subrogation module for
its Claims management information system, which allows the Claims Examiner the
ability to document the subrogation aspect of the case and plan for successful
resolution.
B. When the Contractor attempts to resolve Claims with subrogation involvement, the
Contractor will attempt to do so for the best possible results for the AOC Group.
Sometimes the best possible result will involve seeking the highest possible
recovery. Other times, it may mean negotiating for credit against future Claim
benefits.
30. Special Investigative Unit
A. The Contractor’s special investigative unit will assist the State in the identification,
investigation, and referral of fraudulent Workers’ Compensation or liability Claims
to the appropriate local state or federal agencies. The Contractor’s special
investigative unit (“SIU”) will consist of local SIU coordinators and home office
investigative specialists.
B. Cases will be identified by the Contractor’s Claims staff, informants, and clients.
The Contractor will not pursue a fraud investigation independently without the
State’s acknowledgment. All requests made directly by the State will be reviewed.
31. Vendor Selection
A. The Contractor will identify and select a legal vendor panel with the approval of the
AOC Group and the State.
B. The Contractor will maintain approved vendor panels for law firms, which are
reviewed every six (6) months to identify those vendors that can provide the best
services.

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32. Quality Assurance
A. The Contractor’s “Policy and Technical Guide,” supported by edits built into its
proprietary Claims management system, will provide for extensive, supervisory
review. The Contractor’s Claims Supervisors will not carry a caseload, allowing
them to concentrate on their primary function: assisting the Claims Examiners in
developing action plans to move files to closure. Files will be reviewed on both a
random and systematic basis.
B. Files will be selected weekly by the Contractor’s computer system for supervisory /
management review, focusing on the following:
i. Plan of action.
ii. Appropriate determination of benefits.
iii. Compliance with the State’s requirements.
iv. Compliance with state rules and regulations.
v. Timely delivery of benefits.
vi. Reserves.
vii. Focus on case resolution.
viii. Compliance with the Contractor’s policies and procedures.
C. Results will be documented and reviewed with each Claims Examiner, noting areas
requiring improvement, and providing direction.
D. Critical Claims functions will be monitored by the Claims Supervisor and Claims
Manager through systematic Claims audits, including the following:
i. All cases where benefits are delayed.

ii. All denied cases.
iii. Reserves over Claims Examiner authority level.
iv. Settlements or payments over Claims Examiner authority level.
v. All Indemnity Claims closures.
vi. Cases proceeding to trial.
vii. Award payments.
viii. Supervisory review of benefit changes.
E. The Contractor’s computer system will include automatic diaries, which are
generated, based on specific data elements entered in to the computer Claims file.
Each diary is assigned to a specific examiner and/or supervisor / manager for
review, activity or response. Supervisory approval, comments, and direction will be
documented in the Claims files.
F. The Claims Examiners will perform self-audits on their files. Utilizing the closure
checklist, the Claims Examiners will use this self-audit to address items such as the
Page 63 of 78
processing of appropriate forms, correct calculation of benefits, resolution of

permanent disability and vocational rehabilitation issues, and any unpaid or
disputed medical bills or liens.
G. The Contractor will dedicate a director-level corporate quality assurance function

responsible for internal audit. Individual office reviews will be conducted annually
for each Claims operation to ensure compliance to the Contractor’s policies and
procedures as well as the State’s and all state regulatory requirements. This process
will also identify best practices and areas for improvement in procedure, management,
and technical aspects of Claims handling and assures standardization throughout. The
audit process will address:
i. File documentation.
ii. Adherence to the State’s specific handling instructions.
iii. Excess reporting.
iv. Third Party subrogation.
v. Potential fraud situations.
vi. Internal settlement authority levels.
vii. Overall Claims handling practices.
viii. Appropriate reserving.
ix. Disability management.
x. Payment accuracy and timeliness.
xi. Medical management.
xii. State and regulatory requirements.
xiii. The Contractor’s internal policies and procedures.
H. Individual Claimants will be discussed in terms of disability and work restrictions,

whether temporary or permanent. Dairying will be maintained for indemnity
benefits as well as with medical appointments and procedures. The Contractor will
provide the AOC Group with very timely information about an injured worker with
return-to-work and restriction information.
I. The Contractor will work with the AOC Group on a case-by-case basis in those
situations involving ADA issues.
33. Meetings with the AOC Group

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A. The frequency of meetings between the Contractor and the AOC Group will vary
according to State’s instructions and agreements. Meetings will include orientation
meetings with State personnel directly or indirectly involved in the processing of
industrial injury cases. These meetings will foster strong communication and
promote teamwork between the Contractor and the AOC Group. A schedule of
routine and special request meetings will be maintained and documented by the
Claims Manager or Claims Supervisor. The meeting reports will be documented to
include:
i. Parties in attendance.
ii. Purpose of meeting.
iii. Follow-up on activity from prior meetings.
iv. Summary of discussion.
v. Procedural changes, if any.
vi. Activity to be completed.
vii. Written status reports.
B. Copies of meeting reports will be distributed to appropriate team members and a

copy will be maintained in the Contractor’s corporate client file.
C. Additionally, the Contractor will conduct or assist in conducting orientation

meetings for the AOC Group personnel directly involved in processing Claims.
34. Assistance in the Development of Programs
The Contractor will assist the AOC Group with the development of programs such as the
following:
A. Modified Job/Return-to-Work. The Contractor will assist the AOC Group in

designing and implementing return-to-work programs to fit the AOC Group’s needs
or will work with the AOC Group to enhance current programs. Returning disabled
employees to temporary modified jobs can have a positive impact on the AOC
Group’s programs and will save money and increase productivity.
B. Training. The Contractor’s staff will be available to provide training to the AOC
Group’s supervisors on the reporting of Claims, identification of fraudulent Claims,
and legislative changes.

Page 65 of 78
C. Injury Management. This program will reduce the frequency and severity of
Workers’ Compensation Claims by involving middle management in the AOC
Group’s safety and injury prevention programs. Through an analysis of historical
losses, Claims Supervisors or Claims Managers can identify injury trends, establish
goals for reduction, and develop specific action plans to achieve desired results.
Several of the more common customer evaluation measurements will include:
i. New Claim creation.

ii. Documentation.
iii. Promptness of payment.
iv. Diary maintenance.
v. Settlements, closures.
D. Monthly Meetings and Reports. Monthly meetings and reports will provide
opportunity for the AOC Group to evaluate the Contractor’s performance in these
areas or any other that will be agreed upon.
E. Annual Program Review. The Contractor will provide an annual program review
that documents the past and present year’s performance and establishes goals for
the coming year. Topics covered will include:
i. Reporting trends.
ii. Injury analysis.
iii. Payment Analysis.
iv. Cash flow analysis.
v. Litigation summary.
vi. Vocational rehabilitation summary.
F. Customization. The Contractor will assist the AOC Group in creating a customized
return-to-work or transitional programs.
35. Transitional Work
A. The transitional work programs will consist of the assignment of transitional work
to employees who have been injured on the job and have an accepted or delayed
Workers’ Compensation Claim. The services will be initiated when the employee
cannot perform the full range of duties required of their usual and customary
position and they will not yet be medically permanent and stationary. Transitional
work assignments will be productive projects that benefit the efficient operation of
the AOC Group.
B. The objectives of the transitional work programs will be:

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i. To transition an injured employee to full duty through placement into

valuable interim assignments.
ii. To minimize the costs incurred for injuries by reducing the length of time an
employee must remain away from work.
iii. To minimize the negative impact of an injury or illness upon the affected
department.
iv. To improve the morale of the AOC Group’s staff.
36. Loss Control and Safety
A. The Contractor’s goal, in loss control consulting, will be to assist the AOC Group in
the development of loss control action plans for accident prevention that works.
B. The Contractor will assist the AOC Group in coordinating its own loss prevention
programs. The Contractor will work to create an action-oriented loss control
counsel and act as the AOC Group’s safety and health resource and staff advisor as
well as participate as a committee member.
C. The Contractor will provide a formal annual program evaluation to review the past
and present year's performance and to establish program goals for the coming year.
The program evaluation format will be customized to meet the AOC Group’s
specific requirements.
D. The Contractor will also participate in meetings with the AOC Group’s location
safety committees. If desired, the Contractor will critique the meetings and provide
a report to management. The Contractor will assume the responsibility for
providing the necessary statistical Claim information to the individual location for
analysis by the loss control committee. If a location does not have well defined
safety committees, the Contractor will assist in establishing and structuring such
programs.
E. From accident investigation and Claims Supervisor’s reporting to ADA, fraud and
OSHA requirement, the Contractor’s staff will show the AOC Group’s managers
and supervisors how to implement and maintain their own internal programs.
37. Training
A. The Contractor will obtain a list of key contacts/program coordinator(s) for each
location.
B. The Contractor will schedule and conduct orientation meetings for each location,
focusing on the following:
i. Introduce the Contractor and the Service Team to each AOC Group location.
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ii. Provide the AOC Group location with a list of appropriate names, phone
numbers, key contacts, etc.
iii. Provide overview of responsibilities for the Contractor and the AOC Group,
to ensure a successful program.
iv. Provide basic overview of Workers’ Compensation.
v. Review Claim reporting procedures, stressing importance of timely reporting.
vi. Address communication issues, stressing importance of frequent, open
communications.
vii. Confirm key AOC Group contacts for each location necessary in the
administration of a Claim, i.e. employment information, supervisor contacts,
payroll information, etc.
viii. Schedule future regular meetings and training sessions with each location.
C. The Contractor will obtain input from AOC Group locations to assist in identifying
training needs. From that plan and schedule, the Contractor will conduct future
training sessions during the course of the twelve (12) months following.
D. The Contractor will schedule and coordinate on-line access training.
38. Medical Management Services
A. The State shall reimburse the Contractor for Medical Management Services, as set
forth in Exhibit C, Payment Provisions.
B. The Contractor shall create and maintain a Medical Provider Network (MPN) on
behalf of the JBWCP with providers that can service all member locations. The
Contractor shall also maintain a PPO Network for those costs that are not associated
with the MPN.
C. The Contractor will provide for Early Intervention services to minimize medical,
disability, and litigation costs. These savings provide the employer the opportunity
to reallocate these expenditures and include the following protocol:
i. Case manager’s responsibilities:

 Documents receipt of referral in system.
 Completes 3-point contact on assigned cases.
 Re-routes employee to preferred provider when feasible (except stress).
 Authorizes all consults, diagnostic, and physical therapy.
 Provides follow-up with doctor and update plan of action after each
appointment, unless already completed by Claims Examiner.
 Completes all surgery pre-certifications; when surgery is indicated, the
case manager will transfer service to Telephonic Case Management.
 Provides all restriction information to return-to-work coordinator.

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 Maintains contact with Claims Examiner with updated information as

deemed necessary.
 Follows case until return-to-work (within first sixty (60) days).
 Maintains diary.
ii. AOC Group’s responsibilities:

 Reports all injuries to 1-800 number (except stress).
 Completes Claim form and “Employer’s First Report of Injury.”
 Completes investigation form.
 Provides all disability slips to the Contractor.
iii. Claims Examiner’s responsibilities:

 All “Employer First Reports of Injury” and “Doctor’s First Reports of
Injury” are referred to the Early Intervention program.
 Checks pre-designated information and provides the case manager with
the same.
 Provides all appropriate benefits due.
 Refers all request for authorization to the case manager on Early
Intervention Claims.
 Documents all medical information into system for the case manager’s
review.
 Corresponds/communicates with the case manager as necessary.
 Provides current diary on every open Early Intervention file.
 Following completion of the 60-day early intervention services, the case
manager will collaborate with the Claims Examiner to discuss ongoing
case management services. The Claim will be transitioned to contracted
Utilization Review or Telephonic Case Management for ongoing case
management.
 The case manager will discuss and collaborate recommendations and
strategies to bring Claim to resolution.
D. The Contractor will provide, through its PPO Networks, for a dedicated Medical
Bill Review. Along with the Medical Bill Review, the Contractor shall integrate
Utilization Review, Telephonic Case Management, and Field Case Management
products/services. The bill review analyst will review the nurse’s notes and will not
recommend payment for treatment outside those parameters.
E. The Contractor will provide for and document a Hospital Bill Audit. Services
billed but not delivered will also be documented.

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F. The Contractor will conduct a Peer Review. If no contact is made, the Peer
Reviewer will make a recommendation based on the medical records.
G. The Contractor will provide for a Medical Reserve Estimate. The Claims Examiner
will be provided with a detailed report outlining the Medical Reserve Estimate. The
service will assist the Claims Examiners in setting their medical reserves as well as
establishing a medical dollar value for settlement of future medical care based on
the diagnosis at the time of the settlement.
39. Data Conversion Services
A. The State shall reimburse the Contractor for Data Conversion Services, as set forth
in Exhibit C, Payment Provisions.
B. The Contractor will complete all necessary Automated Data Conversions and
Manual Data Conversions for Runoff Claims and Existing Claims, including
implementation of the Program. The Contractor will seek to obtain a prior Claims
administrator’s Claims data in an electronic format along with the appropriate
corresponding documentation for mapping the data to the Contractor’s Claims
administration system. Once received, the Contractor will complete a manual
mapping of codes. The Contractor will then enter the Claims manually along with
the individual transactions and reserves utilizing appropriate codes. Quality
assurance and reconciliation tasks will be performed to ensure the accuracy of the
Automated Data Conversions and Manual Data Conversions.
40. Minimum Performance Standards
The performance criteria set forth below will be used as indicators of successful
performance. The State will perform an audit of the Contractor, measuring the
performance of the Contractor in each criterion. The State’s audit will include an
evaluation of the Contractor’s actual percentage score in each area, based upon 100%.
Success of the Contractor in achieving targeted criteria will be a factor in the State’s
decision to exercise options to extend the Agreement.
A. File Organization
i. All files are the property of the AOC Group and/or the State and will be
maintained in an organized (bradded), chronological order with appropriate
separation, i.e. privileged information is segregated from regular
correspondence and medical and rehabilitation material are each in a separate
section of the file.
B. File Documentation

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i. A Claims status report including an action plan will be in each Indemnity

Claim file (paper and/or on-line). This will include steps taken to move the
file to conclusion in accordance with the proposed plan of action. The report
will identify issues and the actions taken to finalize the Claim.
ii. All activities will be documented with appropriate detail, identify the author,
date stamped, and be legible.
iii. File reviews will be conducted at the request of the AOC Group or the State
at a mutually agreed location and time.
C. Diary
i. Every active indemnity file (which includes maintenance files with

outstanding liens, legal issues, rehabilitation, or active medical treatment) will
be reviewed and documented by the Senior Claims Examiner or Claims
Examiner at least once every thirty (30) Days. Review of file may include
follow-up contact with the injured worker.
ii. Consistent policies and procedures will include diaries for all Claims
Adjusting personnel assigned under this Agreement.
iii. Files of employees on Industrial Disability Leave (“IDL”) and Temporary

Disability (“TD”) will be reviewed every fourteen (14) Days.
D. Supervision
i. Active files will contain evidence of participation by supervisors in the

development of case strategy, quality control, and case management guidance
as appropriate, or when requested by Claims Examiners or Claims
Representatives.
ii. Delayed cases will be reviewed at a minimum at thirty (30), sixty (60), and
ninety (90) Day intervals.
iii. Active cases will be reviewed every ninety (90) Days or sooner if requested.
iv. Case loads for each Senior Claims Examiner and Claims Examiner assigned
to the AOC Group will be reviewed by the supervisor every ninety (90) Days.
v. Supervisors will review and decide which cases are to be assigned to outside
counsel.

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vi. The Contractor will notify the AOC Group and the State monthly of any
cumulative change in reserves of $5,000.00 or more per Claim.
E. Medical Control and Direction
i. The Contractor is responsible for coordinating the provision of prompt,

appropriate and effective medical treatment for the injured workers.
ii. At the request of the AOC Group, the Contractor will send to any physician
(with proof of service) a copy of 8 California Code of Regulations Section
9785 within five (5) Days.
iii. The Contractor will exercise all reasonable efforts to obtain necessary
physician reports in accordance with 8 California Code of Regulations
Section 9785.
iv. Within fourteen (14) Days of notification of change of treating physician, the
Contractor will send the complete medical file with the 8 California Code of
Regulations Section 9785 notification, a copy of the AOC Group’s return-to-
work policy, and a written description of the injured worker's essential day-to-
day job duties, tasks, and responsibilities.
v. The Contractor will provide Medical Management Services. The

Contractor’s compensation for these services are outlined in Exhibit C.
vi. The Contractor will respond to requests for authorization of treatment and
surgery on accepted cases within two (2) working days.
vii. The Contractor will pay all bills within thirty (30) Days.
viii. Files will be reconciled for accuracy of payments at least once every twelve
(12) months, and at the time the file is closed.
F. Reserves
i. Reserves will be set for probable outcome within the Contractor’s guidelines.
Reserve amounts will be evaluated and adjusted on a regular basis, but at a
minimum, any time the medical prognosis changes.
ii. The AOC Group will be specifically notified within thirty (30) Days when
incurred costs on any Claim reach $25,000.00.

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G. Excess Carrier Notification
i. If the AOC Group procures excess coverage, the Contractor will comply with
the excess carrier's notification procedures.
H. Investigation
i. The Contractor will conduct a thorough investigation to determine if the

Claim is a result of Arising Out of Employment/during the Course Of
Employment (“AOE/COE”) immediately upon receipt of the Claim.
ii. If additional investigation is necessary, the case will be assigned to a licensed

investigator with Errors & Omissions Liability coverage limits of not less
than $1,000,000.00 and must be coordinated through the AOC Group.
iii. The AOC Group must be notified of any investigation prior to the initiation of
the investigation.
iv. Copies of investigation reports will be sent to the AOC Group.
I. Communication
i. The Contractor will complete three-point contact (injured employee,

physician, AOC Group Representative) within one (1) working day of receipt
of notice of injury. If contact is not made on the first day, subsequent calls
will be made daily until the injured employee is contacted.
ii. The Contractor will return all telephone calls within one (1) working day.
iii. All medical reports and copies of all correspondence will be mailed to the
AOC Group Representative within three (3) working days.
iv. The Contractor will request medical releases within five (5) working days of
file make-up, and will follow-up every thirty (30) Days until received.
v. Accurate Claim information, including the current status report, will be

available to the AOC Group and the State on-line.
vi. Communication with the injured worker will be available in the worker's
primary language or translation available upon request.

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J. Office of Benefit Administration and Enforcement (“OBAE”) Requirements
i. All AOC Group Claims will be administered in compliance with all OBAE
standards.
K. Litigation
i. Cases will be assigned to those defense firms selected by the AOC Group
from the approved vendor panel.
ii. The Contractor will follow up with defense counsel if a case analysis is not
completed within thirty (30) Days from date of referral.
iii. All notices of medical appointments are to be sent by the Contractor.
iv. The Contractor will attend all hearings unless the AOC Group waives
attendance.
v. Attorney bills will be audited for accuracy by the Contractor.
vi. Subrogation will be pursued unless otherwise indicated by the AOC Group.
L. Finalization
i. A request for authority will be sent to the AOC Group thirty (30) Days after
receipt of the final permanent and stationary report on non-litigated cases.
ii. In litigated cases, a request for authority will be sent to the AOC Group thirty
(30) Days prior to defense counsel filing a Declaration of Readiness (“DOR”)
to proceed, or five (5) Days after receipt of the DOR from applicant's counsel.
M. Rehabilitation
i. The Contractor will provide copies of all rehabilitation reports to AOC

Group.
N. Confidentiality
i. Adherence to the Contractor's own internal confidentiality policy is required

at all times.
O. Reports
i. The Contractor will provide monthly reports as specified in the Agreement.

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ii. The Contractor will produce an annual loss run, with reserves valued at a date
specified by the AOC Group for the AOC Group’s annual actuarial report.
P. Fraud
i. Every Claim will be reviewed prior to assignment for compensability. If the

Contractor believes that the facts merit delay, investigation will be initiated
with the AOC Group’s approval.
ii. Complex Claims requiring outside investigators will be assigned to vendors

approved by the AOC Group and the State.
iii. All assignments will be limited and specific. The costs will be a portion of
the Claim file’s Allocated Loss Expense. Upon submission, the AOC Group
Representatives will identify Claims that require delay and investigation
procedures to be initiated. Additionally the Contractor’s staff will
communicate with the AOC Group Representatives to identify submitted
Claims that appear inappropriate.
iv. Upon mutual agreement and with the AOC Group’s approval, the Contractor
will initiate and complete the appropriate investigation.
Q. Case Closures
i. The Contractor’s management will closely monitor performance in this area.
The Contractor’s cost is directly related to making sure that all efficiencies
are maintained and that closure ratios meet or exceed 100% monthly.
Management reports by desk, office, and region will be produced monthly,
and reviewed by the Contractor’s management to ensure that the goals are
met. Cases will be closed consistent with the Labor Code and best Claim
practices.
R. Ethical Standards
i. All decisions involving the management or administration of the Program

will be based on what is right, fair, and honest, not what is simply profitable.
The good of the Contractor’s business and of the AOC Group will not be at
odds.
S. Highest Standards of Fiscal Responsibility and Accountability
i. The Contractor will adhere to sound business practices and standards similar
to the standards of a CPA firm.

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T. Vendor Selectivity
i. To protect the AOC Group’s best interests, the Contractor will regularly
explore and compare “like vendors” and maintain professional relationships
with those vendors that provide the best combination of quality and price, and
share results with the State.
U. Program Management
i. Provide a detailed transition plan, which will ensure uninterrupted services to

the AOC Group and its employees. Include in this plan the name and title of
the primary and alternate contact person(s), transition timeline, and necessary
resources for efficient transition and transition costs.
ii. Provide the AOC Group with quarterly and annual status reports.
41. Termination Assistance Services
A. The Contractor shall provide the State and AOC Group with the following services
(i) upon Notice to the Contractor (that the Agreement shall be terminated or (ii) if
the State notifies the Contractor to commence such services, since the State does
not intend to extend the Agreement past the current Term.
i. Developing, with the assistance of the State, or its designee, a plan for the
transition of the Work-in-progress at the end of the Agreement from the
Contractor to the State, or its designee.
ii. Reviewing completed and partially completed Work with the State, or its
designee, and transitioning responsibility or ownership to the State, or its
designee, including, without limitation, a recommended sequence for review
and establishment of a series of briefings to accomplish knowledge transfer.
iii. Providing copies of the completed and partially completed Work, including,
without limitation, indexing and defining location and form (electronic, paper
copy, etc.) of such Work.
iv. Providing overall Program workplan status at point of Contract termination

with State’s Program management, or designee.
v. Conducting meetings to discuss status and Work-in-progress/to-do’s with

State’s team or designee(s).
vi. Reviewing status of Program risks, issues, and corresponding action plans
with State’s Program management, or designee.

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vii. Providing information and assistance as the State, or its designee, may
reasonably request relating to the function of the Key Personnel employed or
contracted by the Contractor to perform the Work under this Agreement.
viii. Providing bi-weekly status reports during transition period - task oriented
status reports including, without limitation: week back and week forward
status of tasks and other commitments, resolved and unresolved issues and
risks, resource availability.
ix. Assessing the status of all Work-in-progress at the time of the applicable
termination including, without limitation, identifying the status of the Work in
process, identifying the extent of completion of the partially completed Work,
estimating requirements to complete the Work, and identifying the
contingencies or dependencies of the Work on other currently on-going or
completed Work.

Page 77 of 78
FORM 1
FORM FOR RECEIPT OF TRUST ACCOUNT FUNDS
The Contractor,____________________________, hereby acknowledges receipt of
$________________________
(_______________________________________________________________________
____) of public funds to be deposited into the Trust Account pursuant to Contract
Number ___________ (“Agreement”) between the Judicial Council of California,
Administrative Office of the Courts (“the State”) and
__________________________________ (“the Contractor”). Such amount is to be used
solely for the purposes described in the Agreement.
Authorized Representative of the Contractor:
_______________________________________________________________________
Signature
Print Name: _____________________________________________________________
Title: __________________________________________________________________
Date: __________________________________________________________________
END OF SECTION

Page 78 of 78

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Judicial Council of California

Administrative Office of the Courts

3. Termination for Cause

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

Time is of the essence in this Agreement.

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

[the remainder of this page left blank intentionally]

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

A. “Administrative Director” refers to that individual, or authorized designee,

E. “AOC Group Representative(s)” refers to the individual(s), as identified by each

i. Intake and Referral;

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

iii. Full automation of the Claims Administration process;

G. “Claim” means a demand by an employee who claims to have sustained an injury or an

I. “Claims Adjusting” or “Claims Administration” means the processing of Claims,

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

L. “Confidential Information” means trade secrets, financial, statistical, personnel,

M. The “Contract” or “Contract Documents” constitute the entire integrated agreement

O. The “Contractor” means the individual, association, partnership, firm, company,

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

Q. “Data Conversion” refers to the conversion of a Workers’ Compensation Claim from

i. “Automated Data Conversion” refers to a process wherein a new software

ii. “Manual Data Conversion” refers to a system wherein the Workers’

S. “Day” means calendar day, unless otherwise specified.

V. “Field Case Management” or “FCM” refers to the Medical Management Service

i. Acts of God or the public enemy;

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

Y. “Incident” means a communication to the Contractor in any form relating to a

Z. “Indemnity” or “Lost Time” refers to a Workers’ Compensation Claim as defined in

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

i. Depositing in the U. S. Mail (or approved commercial express carrier) prepaid to

ii. Hand-delivered to the other party’s authorized representative, which shall be

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

NN. “Preferred Provider Organizations Network” or “PPO Network” refers to the

TT. “Subcontractor” shall mean an individual, firm, partnership, or corporation having a

UU. “Telephonic Case Management” or “TCM” refers to the Medical Management

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

XX. “Third Party Administrator” or “TPA” refers to a contractor certified to provide

CCC. “Work” or “Work to be Performed” or “Contract Work” may be used

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

DDD. “Workers’ Compensation” or “WC” refers to the employer’s responsibility to

EEE. “Workers’ Compensation Program” or “Program” or “Judicial Branch Workers’

A. In addition to termination for cause under Exhibit A, Standard Provisions, paragraph 3,

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

i. Cancel the Stop Work Order; or

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

A. Under this Agreement, the Program Manager, _______________, or any designee or

________________, Program Manager

B. Notice to the Contractor shall be directed in writing to:

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

10. Contractor's Personnel and Replacement of Personnel

C. The individuals assigned as Key Personnel at the time of agreement, with

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

16. Trade Secret, Patent and Copyright Indemnification

i. The combination or utilization of Data and/or Materials furnished hereunder

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

17. Protection of Proprietary Software and Other Proprietary Data

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

22. AOC Group Representation, Beneficiary

Workers’ Compensation TPA Program Consolidation, RFP No. HR 0502

i. Workers’ Compensation at statutory requirements of the state of residency.

v. Professional Liability: Errors and Omissions; $1,000,000.00 single occurrence

vi. Comprehensive Crime Insurance, including Employee Dishonesty / Fidelity

i. _ through _ (“First Option Term”).