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KFYO News Learns New Details About Pending City of Lubbock- HealthSmart Settlement

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Through City of Lubbock sources outside of City Hall, KFYO News this afternoon has learned new details concerning the pending lawsuit settlement between HealthSmart and the City of Lubbock.

Mayor Tom Martin (pictured) has called a special city council meeting for Monday at 9am.  The agenda for the special council meeting includes time for the council to meet in Executive Session and then vote on a resolution for the proposed settlement.

HealthSmart is the company that bought the Ted Parker company, AAG.  AAG and the city got into a contract dispute back in 2006 concerning overpayment of city health insurance money for doctors’ and hospital claims.

KFYO News has learned that the settlement amount from HealthSmart is approximately $4 million.  Once the settlement is approved by the Lubbock City Council, HealthSmart will immediately pay the city $3 million, with the remainder of the settlement balance to be paid within 60 days.

In addition to the pending settlement with HealthSmart, the City of Lubbock has also recovered approximately $1.35 million in money from various insurance companies, including Travelers.

As part of the settlement, HealthSmart has agreed to help the City of Lubbock recover overpayments made to Lubbock healthcare providers, while AAG was administering the city’s healthcare insurance program.

The pending settlement with HealthSmart covers the following lawsuits and legal matters, according to the agenda posted by the City of Lubbock.

i) Case No. 71 193 Y 00084 08
HealthSmart Holdings, Inc., Formerly The Parker Group, ICON Benefit Administrators II, L.P.,
HealthSmart Preferred Care II, L.P., and HealthSmart Benefit Solutions, Inc., Formerly American
Administrative Group, Inc., v. City of Lubbock, Texas v. Q Elements, LTD., and its General Partner
Q-Elements Management Services, LLC; HealthSmart Information Systems, Inc., Formerly CareVu
Corporation, Care ARC Texas, L.P. Formerly Care ATC Texas Corp. and its General Partner Parker
Group GP, LLC. HealthSmart Holdings, Inc., d/b/a Free First Healthcare Clinics, Parker GP, LLC as
general partner of ICON Benefit Administrators, II, L.P., HealthSmart Preferred Care II, L.P., and its
General Partner Parker GP, LLC;

ii) Cause No. 141 241783 09, Ted Parker v. City of Lubbock, in the 141st District Court of Tarrant County, Texas;

iii) Cause No. D-1GN-11-001866, Travis County – ICON
Benefit Administrators II, L.P. v. Greg Abbott, City of Lubbock v. Lubbock Avalanche Journal,
Intervenor;

iv) No 2007-540,024, ICON Benefit Administrators II, L.P., and American Administrative
Group, Inc., in the 72nd District Court of Lubbock County, Texas;

v) No. 2007-538,383, City of
Lubbock, Texas v. The Parker Group, Inc., d/b/a TPG The Parker Group, ICON Benefit Administrators
II, L.P.; American Administrative Group, Inc., and HealthSmart Preferred Care, II, L.P., in the 72nd
District Court of Lubbock County, Texas; and

vi) CC-08-01067-B, ICON Benefit Administrators II,
L.P., and American Administrative Group, Inc. v. Joella Mullin, Stanley Self, Andrea Davenport, Lee
Ann Dumbauld, Scott Snider, Leisa Hutcheson, and Unknown Others in the County Court at Law No. 2
of Dallas County, Texas.

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