When the new majority on the Brownsville Independent School District board opted to resurrect the lawsuit the district had dismissed against HealthSmart alleging that the third-party health administrator of the health benefits plan had overcharged, they spoke of recovering $14.5 million.
The claim was made in the waning days of the 2010 election cycle when two board members facing stiff election challenges convinced the majority to file the lawsuit.
Rick Zayas and Ruben Cortez lost nonetheless, and the new board voted to dismiss the lawsuit., BISD at first withdrew from the lawsuit on 2010, but a new board majority reinstated it four years later.
The HealthSmart lawsuit was based on the new board majority's contention that the rising costs of its employee health plan was based on overcharges by that company.
A settlement was negotiated by Karam, a firm which was hired by the BISD on a contingency basis March 2014. As such, they staood to gain a nice chunk of change (more than 45 percent plus expenses) for reaching the settlement.
We heard of a possible settlement last November and made a public inquiry of the district.
When we inquired, we had information from within the legal community that the settlement was for far less than what those proposing the reinstatement of the lawsuit against HealthSmart. The legal community has more holes than a sieve and – if the indications we get are credible – the district ended up with far less than it anticipated, we had a suspicion that contingency lawyers (and referrals) got the lion's share of the booty.We got his response:
Date: December 9, 2014
"This is the district’s response to Public Information Request #7735 which was received on November 18, 2014.
As per the BISD School Board Attorney, the district does not have documents responsive to this request at this time because the agreement between Health Smart and BISD has not been fully signed and executed. Therefore, the documents are not yet available. This concludes the district’s response."
In reality, the settlement had become final Nov. 14, as later documentation the BISD released would show.
Then, after the delay in the "school board attorney (read Baltazar Salazar)" allowing the information to filter out, we made yet another request for the documentation and asked on March 30 of this year for "the final terms and settlement for the BISD vs. HealthSmart lawsuit including attorneys' fees and the terms of cash payments made to the district."Well, we finally got the AG decision for BISD to turn over the info on June 16.
That was seven months after the settlement was signed. These are the terms:
1.HealthSmart will pay BISD $2 million in three payments (Not $14.5 million. Not $7 million.
2.The first payment was made within 30 days
after the November 14 signing for $1,200,000.
*3. The second payment for $400,000 will be made one year from the first payment.
*4. The third and final payment for $400,000 will be made a year from the second payment, that is two years from the initial payment.
Why the asterisk*?
The final two payments are predicted in HealthSmart not going into insolvency. That is, if it filed for Chapter 7 within the first year, BISD will have to take its place in line with other creditors.5. Each party is responsible for paying its own legal costs and expenses.
6. Since the contingency fees in these cases can go as high as 45 percent and the legal costs and expenses can cover the other 5 percent, BISD will probably share the initial $1,200,000 fifty-fifty with the lawyers and get a total of, not $14.5, not $7 million, not $3.5 million, but (drumroll) how about $600,000?
If the lawyers being lawyers want to get their cut from the ephemeral $800,000 to be paid (unless bankruptcy interferes) in the next two years, they will insist on getting another $400,000 up front and leave BISD with a total of (drumroll) $200,000.
Did BISD counsel Salazar get a referral from Karam? That would probably take another six months of prying so never mind.
No wonder they didn't want anyone to know. In fact, keeping the details from the public was part of the settlement. Unless someone went through a formal request for information under the Texas Open Records Act, the parties agreed to the stock answer "the matter has been resolved."
If someone actually persisted and made a formal request, the BISD was to delay and ask for a Texas Attorney General's opinion on whether the terms of the settlement were exempt from disclosure,
In other words, they knew the information was public, but reached an agreement to conspire, manipulate the release of information to the taxpayers of BISD and the public, to delay releasing it to let thing cool off.
Is everyone cool with that?
11 comments:
No matter what the BISD Trustees do, it costs the tax payers big time. When will we ever get elected officials who respect the tax payers...and aren't willing to hand over our money to the fastest talking attorney or contractor who is willing to provide kickbacks to the elected officials, while the tax payer gets screwed.
CUANDO SE VA ACABAR TANTO RATERISMO.
I was at HEB the other day and saw a dude who looked like Blimp (Bobby Wightman) playing with the cucumbers. What an idiot!
El Culo, Unido, Nunca Sera Vencido.
HEY, is Da Blimp getting fatter? Just asking.
It will stop when people start voting for the right candidate, not because you know their family or work with them or they promise you something. 8th order words stop voting for corrupt idiots!
Balthazar forgot he accused the prior attorneys using BISD as a cash cow. Seems he is now draining the cash cow! Pathetic dirty scumbag!
Don't forget Insurance Gate! They apparantely rigged that contract.
Rigged I.S.D.
El raterismo se acabará cuando este pueblo analfabeto Naco saliese a votar.
The perception that BISD was screwed by HealthSmart over so called provider "pricing discounts" demonstrates common ignorance. This is understandable since the general public has no understanding whatsoever how our health care delivery system is structured.
BISD, a political subdivision supported by taxpayers, has historically relied upon secretive managed care contracts as the pricing basis for health care claims. These contracts are between health care providers and third party intermediaries who cut deals in smoke filled rooms. BISD is a third party beneficiary only and will never be able to review these contracts. If they did, they would be aghast. For example, BISD has limited or no ability to audit claims.
Entering into these secretive managed care contracts no one ever sees is akin to gifting public moneys without any scrutiny at all.
Since both hospitals in town are "in-network" there is little of no incentive to be competitive. Each hospital earns +200-500% of Medicare reimbursement rates from Brownsville taxpayers, year after year. With annual escalator clause found in these contracts of adhesion, BISD is assured of increasing costs year after year.
BISD is the biggest employer in town. They should walk away from these so called "deep PPO discounts" and instead negotiate direct contracts with the local provider community. The savings would be immediate and impressive.
Conclusion: BISD vs Healthsmart was based on an ill informed plaintiff.
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