HEALTHSMART SETTLED?: PEANUTS FOR BISD, $$$ 4 LAWYERS

B Juan Montoya
Last November we made an information request to the Brownsville Independent School District inquiring about the rumored settlement between HealthSmart Benefits Solutions Inc. and the district over an alleged $14.5 million in overcharges on its employees health payments.
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, and the contingency lawyers (and referrals) got the lion's share of the booty.
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."
Since there will apparently be a delay in the "school board attorney (read Baltazar Salazar)" allowing the information to filter out, here's what the legal sieve network is saying.
First: The settlement was negotiated by the McAllen civil law firm of Garcia & Karam, a firm which was hired by the BISD on a contingency basis last March 2014. As such, they stand to gain a nice chunk of change (more than 45 percent plus expenses) for reaching the settlement. Board counsel Salazar referred the case to that law firm and handed over legal confidential information even before he had gotten approval from the board to contract them.
Second: BISD at first withdrew from the lawsuit on 2001, but a new board reinstated it three years later. The HealthSmart lawsuit was based on the board majority's contention that the rising costs of its employee health plan was based on overcharges by that company. But consider this: Under HealthSmart, from 2007-2008 to 2009-1010 BISD's health costs rose from $34 million to $41 million ($7 million). Under MMA (its replacement), costs were projected to increase from 2009-2010's $37.8 million to 2011-2012's $51 million ($14 million, twice as much). MMA hasn't gotten sued, as was HealthSmart, for fraud and breach of contract...yet.
Third: The scuttlebutt is that the settlement will be less than $3 million, far less than the $14.5 million that those proposing the initial filing and then the reinstatement of the lawsuit were claiming. Those $14.5 million were dangled in front of the electorate when candidates against former trustee Lucy Longoria and current trustee Catalina Presas-Garcia ran against them. Both women joined the then-majority to withdraw from the lawsuit.
Fourth: If the McAllen civil law firm Garcia & Karam collect their half of the settlement, the BISD will be lucky to get $1.5 million for its troubles. Garcia & Karam will get the rest, or more. And get this, we understand that HealthSmart can only come up with $1.2 million as a lump sum cash payment and is negotiating to make the rest of the settlement up in annual payments.
Given these rumors (and we repeat, these are rumors in the legal community), it is plain to see that the main beneficiaries aren't "the children of Brownsville" as political candidates liked to say. Rather, it has fattened up the wallets of conniving lawyers from here to McAllen and beyond.