Appendix H, Claim Payment Process

RFP #6100022526

Workers’ Compensation Claims Administration Services

Overview

The Awarded Offeror(contractor) does not prepare checks. Checks or Automated Clearing House(ACH) payments are paid by the Pennsylvania Treasury Department afterauthorizations for payments are received from the contractor. To meet statutory deadlines for payments, the payment processing times and schedules established by the Bureau of Workers’ Compensation (Bureau) must be met. This process is not negotiable.

Separate interface files (depending on the paying account)will be transmitted weekly or more often as directed by the Bureau to the Office of Comptroller Operations. When the interface file is sent, a reportof the information provided on the interface must be provided to the Bureau and ComptrollerOperations. Examples of possible reports are included with this Appendix.

The interface files are validated and released to the Treasury Department for payment by checkor ACH payment. The Treasury Department retains and exercises its pre-audit authority under all circumstances; therefore, additional documentation on certain payments may be requested prior to releasing the payment.

If errors to the authorized payments are discovered after the file has been interfaced, but before the Treasury Department has mailed the payment, authorizations may be voided (or deleted or rejected. Only voids are possible; payment amounts cannot be changed.

File Details

Electronic files will be used to transfer authorized payment data to the Commonwealth. Delivery of payment authorization files occurs by FTP transfer to the Commonwealth’s Public FTP Server, using credentials provided by the Commonwealth. Files will be in an XML format provided by the Commonwealth, and named according to Commonwealth specifications. Files must be encrypted. Exact file formats and specifications will be provided by OA upon execution of the contract. Fields that will need to be included are at least those from the information provided on the sample reports below. Current sample of the possible file specifications is provided inAppendix E, Sample Interface XML File Formatfor informational purposes, but these shall not be considered to be final requirements.

More than one file may be required each day of transmission with data split between files by applicable payment accounts.

Processing Information
Indemnity Deletions. After the Indemnity Treasury Check Payment File interface is sent by the contractor and before the checks are mailed by the Treasury Department, there is a window when checks can be deleted/voided and not sent. The contractor must provide to OA the deletion information in a Microsoft Excel attachment to an e-mail on Tuesday and Wednesday mornings of the week the checks are scheduled to be mailed. Only deletions (also known as voids or redlines) are possible; payment amounts cannot be changed. A copy of the deletion report is provided with this Appendix.

Supporting Reports. Paymentreports must be provided by the contractor to the Bureau and Comptroller Operations at the same time the interface file is transferred. These must be provided in a readable/writable PDF format.

Explanation of Reimbursement (EOR). The contractor must mail the EOR to the provider within 10 business days of transmission of the interface file to ensure receipt within two days of the date the check is issued by the Treasury Department.

Direct Deposit. Direct deposit will beoffered to claimants and their attorneys and to medical and specialized services aproviders. The contractor shall gather and securely maintain all bank routing numbers, account numbers, and checking or savings data. Such data must be included in the Indemnity Treasury Check Payment interface file. The contractor must also file the required LIBC form with the Bureau of Workers’ Compensation.

Vendor Record Synchronization. The contractor shall utilize Commonwealth vendor numbers for payments to claimants, attorneys, providers, or other payees. Payee records from the contractor will be interfaced to the Commonwealth to obtain vendor numbers and ensure synchronization of data. The vendor identification number shall be required to be provided with the interface. Details about this process will be provided upon award of the contract.

1099 Requirements. An IRS form W-9 shall be obtained for all non-claimant payments. If a payment is made to a name other than the IRS recognized name as shown on the W-9, a copy of the W-9 associated with the other name shall be provided. To the extent possible the payee name and address data remains fixed for a payee from payment to payment. Changes to payee information, for both indemnity and medical payments after an initial payment is processed, shall be limited to material changes to the payee name/address data. The Office of the Budget, Bureau of Comptroller Operations Office will maintain all payee, address, and W-9 data. The Internal Revenue Services assesses a $30, $60 or $100 fine for each 1099 form that is reported where the name/SS number or FID combination does not agree with their records. Any fines assessed against the Commonwealth for such infractions which are the fault of the contractor will be paid by the contractor.

Testing Requirements. Commonwealth testing standards require Unit Testing along with end-to-end Integration testing by the Office of Administration, Bureau of Integrated Enterprise Systems to ensure all functionality and interfaces work properly. A formal signoff by OA on full system testing is required to assure a quality implementation. The contractor shall plan on all testing to be completed with formal signoff on system interfaces by March 1, 2013. Shall testing not be completed by this date due to contractor delays, daily negotiations to solve the problems will begin between OA and the contractor’s project manager. Upon completion of successful system testing OA will provide formal notification that system functionality and interface testing is complete and the system is acceptable.

Page 1 of 4

Sample Indemnity Treasury Check Payments Report

W8144R / COMMONWEALTH OF PENNSYLVANIA
PREPARED BY: COMPSERVICES, INC. / OFFICE OF ADMINISTRATION / PAGE NO: 1
DATE PREPARED: / 8/12/2011 / CYCLE NO: 1122400
INDEMNITY PAYMENT AUTHORIZATION REPORT - TREASURY CHECK PAYMENTS
CLAIM DEPARTMENT: 002 AUDITOR GENERAL
ITEM / CLAIM / INJURY / PAYMENT / VOUCHER PAY
NO / PAYEE NAME AND ADDRESS / TYPE / DATE / CLAIM NUMBER / AMOUNT / PERIOD COVERED / NUMBER / TYPE EFT
0001 / JAMES SMITH / DL/IL / 12/11/1991 / 0000000000000 / 615.34 / 8/13/2011- 8/26/2011 / 2180001 / 001 Y
111 APPLE TREE LANE
FRUITVILLE, PA 198889999
*****1234 / PV1: TT
0002 / MICHAEL BROWN / DL/IL / 1/13/1988 / 0000000000000 / 617.00 / 8/13/2011- 8/26/2011 / 2180005 / 01
3456 GREEN STREET
BLUE MOUNTAIN, PA 123459999
*****0123 / PV1: TT
0003 / KIMBERLY KAY, ESQUIRE / DL/IL / 2/08/1996 / 0000000000000 / 1,054.00 / 7/30/2011- 8/12/2011 / 2180008 / 01
22 STATE LANE
CENTERTOWN, PA 147859999
*****3210 / for: ANNIE SMITH / PV1:TT
0004 / MARY JOE / DL/IL / 6/05/1986 / 0000000000000 / 477.50 / 8/13/2011- 8/26/2011 / 2180009 / 01
951 ONE WAY ROAD
REDBURG, PA 199999999
*****2103 / PV1: TT

Sample Indemnity Deletion Report

______

Date 7/26/11 / Commonwealth of Pennsylvania / Cycle11196
For Run: / 7/15/2011 / Indemnity Deletion Report
Item / Claim / Injury / Payment / Voucher
No / Claimant Name / Type / Date / Claim Number / Amount / Number
461 / Jane Doe / DL/IL / 7/2/2010 / 000000000000 / $352.60 / 2589632
462 / Smith & Smith / DL/IL / 7/2/2010 / 000000000000 / $88.16 / 2589636
for Jane Doe
580 / Tom Doe / DL/IL / 10/8/2010 / 000000000000 / $845.00 / 2589665
15 / Rick Doe / H&L / 12/11/2010 / 000000000000 / $1,690.00 / 2589645
387 / Rachel Doe / ACT / 3/24/2011 / 000000000000 / $887.38 / 2589639

Page 1 of 4