HealthSmart Seeks Court Case Dismissal

Lawyers for Ted Parker company’s ask a judge to dismiss the City of Lubbock’s lawsuit to audit past health plan records.

The city filed the complaint more than two years ago. It involves Covenant Health Systems and the Ted Parker Group PPO Healthsmart Preferred Care.

In its 2003 contract with the city Healthsmart promised better discounts than the city’s previous provider.

Healthsmart and Covenant then entered into an agreement that set up a process for the city to verify the promised discounts.

Shortly after the city parted ways with the Parker Group. Covenant refused to hand over documents for an audit citing concerns about the potential for violating federal patient privacy laws.

Healthsmart adding its concerns about disclosure of competitive business information.

In January of 2008 the city filed a complaint asking Amarillo federal Judge Mary Lou Robinson to rule on the dispute.

But four months later the litigation was suspended after FBI agents carried away dozens of boxes of records in a search warrant for city documents concerning its health insurance benefits contracts.

Filings in related litigation pending in other courts indicate the FBI investigation is continuing.

On Wednesday Healthsmart’s lawyers filed a motion to dismiss the city’s civil suit that’s still pending in Amarillo federal court.

In it they argue that the court lacks jurisdiction over the subject matter of this case and that the city’s complaint quote: “Is nothing more than an end-run around the discovery procedures that are available to it in related litigation.”

Healthsmart’s lawyers suggest that this document disclosure dispute should instead be addressed in arbitration already underway with the city over related contractual disputes.

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