Exhibit 1- Agenda Information SheetCity of Denton
_____________________________________________________________________________________
AGENDA INFORMATION SHEET
DEPARTMENT: Procurement & Compliance
ACM: David Gaines
DATE: March 22, 2022
SUBJECT
Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation,
authorizing the City Manager to execute a contract with Marathon Health, LLC, for clinical operations and
management services for the City of Denton Employee Health Center; providing for the expenditure of
funds therefor; and providing an effective date (RFP 7789 – awarded to Marathon Health, LLC, for three
(3) years, with the option for two (2) additional one (1) year extensions, in the total five (5) year not-to-
exceed amount of $6,466,075.01).
INFORMATION/BACKGROUND
The Employee Health Clinic
Please note that there are two (2) separate agreements that relate to the operation of the City of Denton
Employee Health Center (“Clinic”): a contract with Premise Health (formerly CareHere, LLC) for the
clinical operation and management of the Clinic which expires on April 1, 2022, and the lease with HCA
for the lease of the medical office space at Medical City Denton which will expire in October 2022. This
Agenda item is for the Clinic operations and management only. The clinic lease renewal will be brought to
City Council later this year.
In December of 2011, the City opened the Clinic. The Clinic is located in the professional building attached
to Medical City Denton. The lease for the clinic space will go out for RFP later in 2022. The Clinic is an
essential tool in the City’s overall goal of improving the health and wellness of the employees, retirees, and
dependents; however, since the City is self-funded, the City benefits directly from the activities of the Clinic
that work to lower costs and improve health, instead of benefiting an insurance company that may, or may
not, pass on some of that savings to the City in the form of reduced premiums.
The Clinic is available to all City employees, retirees, and dependents covered under the City’s medical
insurance plan, and retirees and spouses over the age of 65 enrolled in the City’s Medicare Supplement plan
(“members”). The Clinic essentially provides all services that a family practice physician performs, in
addition to various lab draws that are sent to an outside laboratory for processing.
In December 2011, through a Request for Proposal (RFP) process, the City contracted with CareHere, LLC
(“CareHere”), to oversee the Clinic operations and manage the medical staff, who are employees of
CareHere, not the City. In 2018, at the expiration of the initial contract with CareHere, through the RFP
process, CareHere was again selected to continue to provide the clinical operations and management
services for the Clinic. In 2020, CareHere merged with Premise Health (“Premise”). The City’s current
contract with Premise will expire on April 1, 2022.
City Hall
215 E. McKinney Street
Denton, Texas
www.cityofdenton.com
Request for Proposals
As a result of the impending expiration of the Premise contract, the City submitted an RFP for clinical
operations and management services for the Clinic to 308 prospective suppliers. In addition, specifications
were placed on the Materials Management website for prospective suppliers to download and advertised in
the local newspaper. The City received three (3) responses from interested companies that met our minimum
specifications.
It is important to note that the services requested in the RFP were for the clinical operations and management
services of our existing Clinic, utilizing our current Clinic location and all of the equipment and supplies
currently owned by the City. In addition, the RFP made clear that the City expected that the existing medical
staff, who are employees of the incumbent vendor, be retained to ensure continuity of care, if possible.
Marathon is not the least expensive of the two finalists; however, Marathon’s fixed annual pricing includes
Marathon providing telephony (hardware and service), internet, computers, office supplies, medical waste
management, staff overtime, and other expenses that Premise either passes through to the City or does not
provide. Marathon’s ardent focus on patient experience and service, health outcomes, the City’s culture,
and microcultures, outreach and engagement, and willingness to be as flexible and agile as needed to meet
the needs of the organization and their employee-customers where we are, resulted in a higher overall score
for Marathon. Marathon is the clinic management provider for the Denton County clinic and the employee
clinics for the cities of Lewisville, Coppell, and The Colony. In addition to family practice services, all
these clinics have expanded their services to include behavioral health counseling. The references provided
by the county and representatives from these cities were exceptional. Based upon an evaluation of all of the
components, despite not being the lowest priced bid, Marathon was ranked the highest and determined to
be the best provider for the City.
One of the City Council’s priorities in 2021 is to “pursue organizational excellence,” including “enhancing
benefits and staffing levels to provide a workforce that delivers outstanding services to Denton.” The City’s
current benefits package includes an Employee Assistance Program (EAP) which provides for telephonic
counseling and six (6) face-to-face visits per incident at no cost to the member. Upon completion of the free
six visits, if additional visits are needed, the care is covered under the member’s medical insurance, and the
member is responsible for their portion of the financial responsibility (e.g., deductible, copay, coinsurance).
In response to the need for behavioral health services, staff recommends expanding the Clinic’s services by
adding an onsite behavioral health counselor on a part-time basis (20 hours per week). The Clinic is a trusted
resource for city employees, retirees, and covered dependents for family practice-related health services.
By adding an onsite behavioral health counselor, members will have greater access to these vital services
while removing the barrier of the financial burden on the member.
Project Description Est* 1 Year
Expenditure
Est* 2 Year
Expenditure
Est* 3 Year
Expenditure
Est* 4 Year
Expenditure Est* 5 Year
Expenditure
Annual Fixed Service Fee
(annual 3% increase for years
2-5)
$1,000,016.00 $1,030,016.48 $1,060,916.97 $1,092,744.48 $1,125,526.81
Behavioral Health Counselor
(20 hrs./week; $45,584.00 per
year; annual 3% increase for
years 2-5)
$45,584.00 $46,951.52 $48,360.06 $49,810.87 $51,305.20
Contingency for additional
clinical or operational costs,
fluctuation in employee count*,
(approx. 4% of total)
$41,824.00 $43,078.72 $44,371.08 $45,702.21 $47,073.28
Contingency for pass-through
costs of services & other
medical supplies (e.g.,
externally processed lab tests,
prescription medications,
vaccines) of 12% of each year’s
estimated expenditure
$130,490.88 $134,405.61 $138,437.77 $142,590.91 $146,868.64
Total $1,217,914.88 $1,254,451.85 $1,292,085.88 $1,330,848.47 $1,370,773.93
Estimated 5-year Total: $6,466,075.01
*Note: pricing is based on $24.55 per employee per month (PEPM). As the City’s employee population fluctuates,
monthly/annual pricing will adjust accordingly.
Request for Proposals was sent to 308 prospective suppliers, including 16 Denton firms. In addition,
specifications were placed on the Procurement and Compliance website for prospective suppliers to
download and advertised in the local newspaper. Three (3) proposals were received, references were
checked, and proposals were evaluated based upon published criteria including compliance with
specifications, probable performance, and price. Best and Final Offers (BAFO) were requested from the top
firm. Based upon this evaluation, Marathon Health, LLC was ranked the highest and determined to be the
best value for the City.
NIGP Code Used for Solicitation: 948-(Service Only)-Health Related
Services (For Human Services See
Class 952) & 958-(Service Only)-
Management Services
Notifications sent for Solicitation sent in IonWave: 308
Number of Suppliers that viewed Solicitation in IonWave: 9
HUB-Historically Underutilized Business Invitations sent out: 23
SBE-Small Business Enterprise Invitations sent out: 153
Responses from Solicitation: 3
RECOMMENDATION
Award a contract with Marathon Health, LLC, for clinical operations and management services for the City
of Denton Employee Health Center, in a three (3) year, with the option for two (2) additional one (1) year
extensions, in the total five (5) year not-to-exceed amount of $6,466,075.01.
PRINCIPAL PLACE OF BUSINESS
Marathon Health, LLC
Winooski, VT
ESTIMATED SCHEDULE OF PROJECT
This is an initial three (3) year contract with options to extend the contract for two (2) additional one (1)
year periods, with all terms and conditions remaining the same.
FISCAL INFORMATION
Funding is budgeted in the Health Insurance Fund.
EXHIBITS
Exhibit 1: Agenda Information Sheet
Exhibit 2: Pricing Evaluation
Exhibit 3: LLC Members
Exhibit 4: Ordinance and Contract
Respectfully submitted:
Lori Hewell, 940-349-7100
Purchasing Manager
For information concerning this acquisition, contact: Deby Skawinski, 940-349-7810.
Legal point of contact: Marcella Lunn at 940-349-8333.