HEALTHSMART LAWSUIT EXPOSED FOR WHAT IT WAS: A POLITICAL PLOY

"We are the hollow men...

This is the way the world ends
Not with a bang but a whimper..."
From T.S. Eliot's, The Hollow Men

By Juan Montoya
And so in the end, the election ploy to sue HealthSmart claiming overcharges and waving the carrot of a $14.5 million payoff on the eve of the 2010 Brownsville Independent School District elections has been shown for what it was: a ploy by the eventual losers in that election to sway voters to re-elect them.
On Sept. 18, 2009, the board of trustees of the Brownsville Independent School District directed then-interim superintendent Brett Springston to go our for proposals to audit the performance of AAG HealthSmart Inc., the outgoing third-party administrator (TPA) of the district's self-funded group health insurance plan.
The audit covered the two years HealthSmart was TPA, plan years 2007-2008 and 2008-2009, as well as the two previous years when Mutual of Omaha administered the plan.
Trustees awarded the contract for third-party administration of the district's health plan for 2009-2010 to Oklahoma-based Mutual Assurance Administrators (MMA), Inc. for $181,275 per month. The agent of record for MMA is longtime insurance mogul Johnny Cavazos who had enjoyed a near-monopoly of the insurance contracts with the district for many years and counted on the majority of the board to swing them his way.
That decision to ward the MMA was made in spite of a recommendation by then-Chief Financial Officer Tony Juarez that the contract be awarded to AAG HealthSmart.
That firm's contract was for $196,000 per month and expired Oct. 1, 2009.
Eventual election losers Ruben Cortez and Rick Zayas along with Joe Colunga and Rolando Aguilar contended that the increase in TPA costs from 2007-2008 to 2009-1010 from $34 million to $41 million ($7 million) were the result of HealthSmart "taking advantage" of the district.
And so, some $70,000 to $80,000 in legal fees later, the current legal counsel for the BISD admitted that the chances of the district prevailing in court and being able to prove that HelathSmart had overcharged the district were slim to none. Further, the lawyers said that proving damages was even iffier still. The myth that under MMA health-care costs would go down dissipated like a pipe dream when the board hired a consultant to analyze the matter.
The new majority on the board (Catalina Presas-Garcia, Lucy Longoria, Christina Saavedra and Enrique Escobedo) earlier this year heard that for the present budget-year the contract to MAA, it will cost the district $46.5 million to provide the same services that HealthSmart got sued because costs rose to $41 million.
What's more, for this next year (2011-2012), that figure is projected to rise to $51.1 under MMA.
BISD is self-insured and its 7,733 employees are covered by the plans.
When the former board majority sued HealthSmart, it did so because some trustees said the sudden increases in the district's health insurance were so obvious that anyone could see.
“Basically, it just seemed to me that they were taking advantage of us, that the TPA (third-party administrator) was putting profits ahead of district needs,” said Cortez in the heat of the election that he ultimately lost to Enrique Escobedo. “That was why I asked for (an)audit ... and now the audit has confirmed what we believed to be true.”
Tony Fuller, then BISD's Chief Financial Officer, said at the time that claims totals for BISD's plan for the past six years were:
Under Mutual of Omaha:
*$26.025 million for 2003-2004;
*$23.605 million for 2004-2005;
*$26.862 million for 2005-2006 and
*$28.655 million for 2006-2007.
Under HealthSmart:
*$34.769 million for 2007-2008 and
*$41 million for 2008-2009.
Then, back to MMA:
*$46 million for 2010-2011
*$51 million for 2011-2012
Now the questions that are begging to be answered are:
1. If the former majority sued HealthSmart because costs increased from $34 to to $41 million from 2007-2008 to 2008-2009, shouldn't there be a lawsuit against MMA because they rose from $41 million to $46 million the following year (2010-2011), and then to $51 million a year later (2011-2012)?
2. Where are the savings that Cortez, Zayas and Aguilar said were coming as a result of changing TPAs and giving the business to their benefactor Cavazos?
3. Is it possible that BISD voters cannot see through the political smokescreen that Aguilar, Colunga and Minerva Peña are perpetrating to cover up the fact that they supported this political ploy at the expense of the very BISD taxpayers they are supposed to represent?