Did BISD Sign A Non-Compete With A Vendor?


Readers of this weblog will know that we are investigating the recent award of a $40,000,000 health insurance contract at the Brownsville Independent School District.  We have requested information from the BISD through the Open Records Act and to date have received very little from the district – BISD has refused to provide us with all the information we have requested and has asked the Texas Attorney General to intercede.

One of the items requested from BISD are copies of all contracts with vendors associated with the self-funded health plan. Various vendors include the third party administrator (TPA), pharmacy benefit manager (PBM), preferred provider organization (PPO), and stop-loss carrier. 

We know that the BISD has signed a contract with the TPA because we have obtained a copy of that contract (see posting below). So, we assume that the BISD has signed all the other contracts as well. But, did someone in the BISD read these contracts before signing, and did anyone, including the hired consultant for BISD, compare the contracts to original and final proposals submitted by vendors during the RFP process?

Do any of these contracts include a stipulation that the BISD will not compete with the vendor? For example, should the BISD wish to directly contract with area medical providers, will they be able to do so or will they be prevented from doing so for a two year period upon termination of the vendor contract? If that is the case, which we are confident is the case, then the BISD will be prohibited from negotiating directly with interested medical care providers for the next three years.

An example of a non-compete clause in contracts can be found in the San Benito ISD contract with an on-site medical clinic for employees. Several years ago the SBISD contracted with a third party to administer their on-site clinic. But, the contract contained a non-compete clause prohibiting the SBISD from retaining the on-site clinc physician upon termination of the contract. After two years on board with SBISD, the physician became extremely popular with SBISD patients who developed a strong trust with him. A change in clinic administrators last year brought the non-compete section of the contract to light. Although SBISD wanted to retain their beloved physician, they were prevented from doing so and had to go out and find a replacement.

So, is anyone reading the contracts at the BISD, or just signing them without question?

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