Subject: FW: Mystery Insurance Audit Results In - And Is Still a Mystery
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Date: Thu, 19 Aug 2010 13:29:57 -0700
From: riskmanager@sbcglobal.net
Subject: Mystery Insurance Audit Results In - And Is Still a Mystery
To: JOHN Q. PUBLIC
August 19, 2010
Brownsville ISD Insurance Audit Discussed Behind Closed Doors
The BISD long awaited health insurance audit is apparently in the hands of the members of the School Board.
In a recent board meeting, the audit was discussed behind closed doors (Executive Session) with a note regarding possible litigation.
We are hopeful that the BISD will release the findings to the public expeditiously.
By Juan Montoya
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 would cover 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.
That decision 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.
At the time, HealthSmart has claimed it did not receive fair consideration during the bidding process and that BISD health care costs would be lower under HealthSmart's proposal.
Under BISD's self-funded plan, the TPA arranges contracts with doctors, hospitals and other health care providers through a Preferred Provider Organization, or PPO, which in turn provides discounts for using those services.
The discounts, among other factors, help determine the dollar amount of claims paid by the plan, said Tony Fuller , now BISD's Chief Financial Officer.
Fuller, said at the time that claims totals for BISD's plan for the past six years were:
Under Mutual of Omaha as the TPA, claims totaled $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, claims totaled $34.769 million for 2007-2008 and
* were projected to total about $40 million for 2008-2009.
However, HealthSmart representatives at the time disputed the consulants' conclusions saying that the figures were manipulated to make MMA's proposal more attractive than theirs.
The local broker for MMA is Johnny Cavazos, who has contributed heavily to the campaigns of the board's majority. If claims total $40 million, he stands to earn a 10 percent commission, or about $4 million.
Will the board's majority – as they did with the investigation reports into former AD Joe Rodriguez – wait until they get sued before they release the results of the audit?
Or will they continue using the threat of potential litigation over the audit's contents as an excuse to cover their tracks in the awarding of the contract to Cavazos?
--------------------------------------------------------------------------------
Date: Thu, 19 Aug 2010 13:29:57 -0700
From: riskmanager@sbcglobal.net
Subject: Mystery Insurance Audit Results In - And Is Still a Mystery
To: JOHN Q. PUBLIC
August 19, 2010
Brownsville ISD Insurance Audit Discussed Behind Closed Doors
The BISD long awaited health insurance audit is apparently in the hands of the members of the School Board.
In a recent board meeting, the audit was discussed behind closed doors (Executive Session) with a note regarding possible litigation.
We are hopeful that the BISD will release the findings to the public expeditiously.
By Juan Montoya
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 would cover 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.
That decision 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.
At the time, HealthSmart has claimed it did not receive fair consideration during the bidding process and that BISD health care costs would be lower under HealthSmart's proposal.
Under BISD's self-funded plan, the TPA arranges contracts with doctors, hospitals and other health care providers through a Preferred Provider Organization, or PPO, which in turn provides discounts for using those services.
The discounts, among other factors, help determine the dollar amount of claims paid by the plan, said Tony Fuller , now BISD's Chief Financial Officer.
Fuller, said at the time that claims totals for BISD's plan for the past six years were:
Under Mutual of Omaha as the TPA, claims totaled $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, claims totaled $34.769 million for 2007-2008 and
* were projected to total about $40 million for 2008-2009.
However, HealthSmart representatives at the time disputed the consulants' conclusions saying that the figures were manipulated to make MMA's proposal more attractive than theirs.
The local broker for MMA is Johnny Cavazos, who has contributed heavily to the campaigns of the board's majority. If claims total $40 million, he stands to earn a 10 percent commission, or about $4 million.
Will the board's majority – as they did with the investigation reports into former AD Joe Rodriguez – wait until they get sued before they release the results of the audit?
Or will they continue using the threat of potential litigation over the audit's contents as an excuse to cover their tracks in the awarding of the contract to Cavazos?
6 comments:
The owner of Health Smart has a history of providing contribution and other perks to board members.
Ask Otis and Pat how it works - I mean the perks? Now we have some more coming into and wanting a piece of the pie. "But, he uses the $4 million to give $300 scholarships to the athletes!" Whoopee! How are they able to get away with this without having TEA question the practice? Someone is not doing their job!
I did not see the entire meeting on Tuesday, I was busy putting down sod. It is only this morning I am learning the city commission voted to allow BCIC to borrow money for the sports park. They just do not get it. You cannot keep on putting the people into debt against our wishes. While I recognize it will be highly unlikely that three qualified people will announce against Troiani, Atkinson, and Longoria, I also recognize the people are mad and mad as hell. Given the mood in Brownsville to end the contempt the city commission has for the people, maybe just maybe three highly qualified candidates will run. The debt spending has to end.
Ren
Juan, well, I am loving the new place. Today I will go to the flea market in search of another 100 pieces of sod. My dogs love the new grass. Given the heat I am happy with how it is taking.
Renolds
you forgot to mention the Compadre Johnny Cavazos and that nice fat commission, wonder what the ones who receive health coverage say about the MAA, a small company with less than 1,000 participants getting a whopping contract for more than 7,000 participants, hmmm or is it hmmmmmmmmmmmmmmmmmmmmmmmmmmmmm bet Cortez and Zayas have their fingers in the cookie jar.
The owner of Health Smart is forced to contribute campain money everytime the Caveman passes the envelope.
The Health Smart Employees
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