To: HONORABLE MAYOR AND From: Mark Danaj

CITY COUNCIL

Subject: APPROVAL OF AMENDMENTS TO Date: 09-17-03

CONTRACTS WITH PROVIDER OF

EMPLOYEE ASSISTANCE PROGRAM

RECOMMENDATION

1. Approval of an Amendment to the Agreement with Managed Health Network (MHN) to add processing and payment of claims for substance abuse treatment to the current employee assistance contract covering non-sworn classifications.

2. Approval of an Amendment to the Agreement with Managed Health Network (MHN) to add processing and payment of claims for substance abuse treatment to our current employee assistance contract covering sworn classifications.

BACKGROUND

The Employee Assistance Program is an employer-paid benefit that provides free counseling, consultation services and training designed to help employees and their eligible family members with a wide range of personal and job-related issues. The City currently has three agreements with MHN to provide these services—one for firefighters and sworn police officers, a second for non-sworn employees including public safe dispatchers, and a third that provides critical incident stress management on an hourly basis for sworn police officers and firefighters, following catastrophic events. The recommended amendments apply to the two agreements with MHN relating to the Employee Assistance Program.

As part of the these agreements, MHN also serves as the “gatekeeper” for the City’s drug treatment program in accordance with bargaining unit agreements. Depending on the specifics of each case and the location of the employee, MHN refers employees to the most appropriate treatment facilities. MHN also facilitates invoices and payments between the City and the treatment facility.

ANALYSIS

The nature of drug treatment programs is such that they must be implemented immediately for health and safety reasons. Given that MHN as the gatekeeper selects the facility and facilitates an expeditious placement, payment arrangements cannot be finalized in a timely fashion through the City’s procurement process. Therefore, using MHN to directly pay the treatment facilities instead of the City would ensure timely payments for services.

As a resolution, this memorandum recommends that MHN be used as the City’s claims administrator for the drug treatment program. The City’s agreement with MHN would be modified so that MHN would be authorized to pay the treatment facilities, then would be reimbursed by the City upon presenting proof of payment. This arrangement would retain the gatekeeper role for quality control, would continue the expeditious placement of patients, and would ensure timely payments to the treatment facilities.

MHN has agreed to perform this additional service at no additional cost to the City, the employee or the treatment facility.

PUBLIC OUTREACH

Not applicable.

COORDINATION

This amendment request has been coordinated with the Finance Department and the Office of the City Attorney.

COST IMPLICATIONS

No additional costs are associated with this amendment.

CEQA

Not a project.

MARK DANAJ

Director, Employee Services