Brownsville Independent School District To Dismiss HealthSmart Lawsuit


“Any fool with a $150 filing fee can sue a Ham Sandwich these days………..”

Brownsville Independent School District trustees have voted to dismiss a lawsuit claiming that HealthSmart Benefit Solutions Inc. cost BISD $14.5 million in higher medical claims during the two years it administered the district’s self-funded employee health plan.

“It was a difficult call for the board, but I think there were real issues with regard both to proving liability and then proving damages,” district counsel Arturo Michel said Wednesday. “I think the board felt that in these tough financial times there was a question whether the time and money to prove the case would be worth the effort.”

Michel said his law firm had interviewed school officials in a position to know about “whether the evidence you would need in order to prove a claim was actually there” and had concluded “that there were real issues” with regard to prevailing in the case.

“There was real concern whether at the end of the day there would be any real recovery,” he said. “You can prove your case and still not prove damages.”

The vote Tuesday night to dismiss was 4-3, with Trustees Catalina Presas-Garcia, Enrique Escobedo, Luci Longoria and Christina Saavedra voting in favor and Rolando Aguilar, Joe Colunga and Minerva Peña against.

The lawsuit had been under scrutiny ever since BISD’s current Board of Trustees took office after the November 2010 election. It was filed in August 2010.

BISD maintains a self-funded employee health benefits plan and contracts with a third-party administrator or TPA to administer the plan on its behalf. HealthSmart lost its TPA contract to Oklahoma City-based Mutual Assurance Administrators, Inc. shortly before the lawsuit was filed.

“We’ve been deliberating this for awhile,” Escobedo, who was elected board president Tuesday night, said. “It was not a spur of the moment decision. Finally, last night we came to the conclusion that this was probably the right move to make.”

In a statement, BISD said the board chose not to pursue the case because the money could be better spent elsewhere.

“The board believes that with the reduction of school funding facing all Texas school districts, it should not expend further funds in pursuing this case under these circumstances when Brownsville ISD monies can be used for direct educational needs,” the statement said.

Editor’s Note: It is our opinion this lawsuit was politcal and filed without due consideration of the facts. As an experienced insurance expert, after reading the original pleadings we concluded early on that the BISD would have a very difficult time proving a financial loss. How do you prove a loss when there’s not one? The purported $14,000,000 that was “lost “was never there to be lost in the first place. Neither was the $9,000,000 “savings” the first year the district moved away from Healthsmart and went with another vendor. This is a classic case of PPO smoke and mirrors at it’s best.