ORDER N0.28336
AUTHORIZE COUNTY ATTORNEY TO INVESTIGATE
FUNDS FOR HEALTH CARE SERVICES
On this the 22 day of September 2003 upon motion made by Commissioner Letz, Seconded by
Commissioner Williams, the Court unanimously approved by vote of 4-0-0 to authorizing
County Attorney to investigate or see what options are available to recover balance
of unreimbursed funds expended by Kerr County for Health Care Services
provided to former Kerr County Employee.
23
~~' ~ 3 3 (,~
COMMISSIONERS' COURT AGENDA REQUEST
PLEASE FURNISH ONE ORIGINAL AND NINE COPIES OF THIS REQUEST AND DOCUMENTS TO BE
REVIEWED BY THE COURT.
C,:
MADE BY: Pat Tinley OFFICE: County Judge
MEETING DATE: September 22, 2003 TIl1~1E PREFERRED:
SUBJECT: (PLEASE BE SPECIFIC)
Discuss and consider authorizing County Attorney to investigate and take any necessary or
appropriate action to recover balance of unreimbursed funds expended by Kerr County for
Health Care Services provided to former Kerr County Employee.
EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON)
NAME OF PERSON ADDRESSING THE COURT:
ESTIMATED LENGTH OF PRESENTATION:
IF PERSONNEL MATTER -NAME OF EMPLOYEE:
County Judge
Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter
551 and 552, Government Code, is as follows:
Meeting scheduled for Mondays:
THIS REQUEST RECEIVED BY:
THIS REQUEST RECEIVED ON:

All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been
prepared for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be
appreciated and contribute towards you request being addressed at the earliest opportunity. See Agenda Request Rules
Adopted by Commissioners' Court.
5:00 P.M. previous Tuesday.
19 MR. TOMLINSON: That's correct. The -- the
20 request is to declare an emergency, to increase the budget
21 by approximately $400,000 for -- for payment of a claim
22 relative to our health insurance to Methodist Hospital. Y
23 provided the Court with the details of -- of this situation.
24 Ray Rothwell's in the audience as we speak for any questions
25 as far as the details that, you know, the Court might have
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other than what I've explained in my memo. Essentially,
we -- we had a sizable claim that has been partially
satisfied by our stop-loss carrier, our reinsurer, in the
amount of $250,000. That -- that satisfies the claim,
except for the amount unpaid, which is -- which I explained
is -- is the $400,000. We -- we anticipate -- our plan
administrators anticipate that -- that this will ultimately
cost us $40,000.
COMMISSIONER WILLIAMS: How much?
MR. TOMLINSON: Forty. But we have -- since
our plan ends December the 31st, we -- we have to pay this
claim before that date in order for it to have any chance
whatsoever that our reinsurer will reimburse us for -- for
their part. And the reason -- one of the reasons that we
have an obligation to pay this is that -- that, in our
estimation, a majority of the costs associated with this --
with the $400,000 is outside of the -- the medical procedure
that was performed. The medical procedure that was
performed, our stop-loss carrier had a $250,000 ceiling on,
and that -- that ceiling was expressed in our plan. So --
but there are -- there were costs involved that weren't
directly related to that procedure. So, if our -- our
stop-Toss carrier is obligated to reimburse us for any costs
that -- that's not directly associated with the procedure.
COMMISSIONER BALDWIN: My question would
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1 be -- the only question I have is the -- the legal end of
2 it. I mean, are we liable for costs that are not directly
3 related to the procedure?
4 MR. TOMLINSON: I think we are. I visited
5 prior to the meeting with -- I had that question also, and
6 the opinion of our plan administrator is that, yes, we do
7 have an obligation.
8 COMMISSIONER BALDWIN: Well, he's not a
9 lawyer, though. But, of course, if we asked our County
10 Attorney, it would be way into next year, and we'd blow the
11 other coverage before we got an answer to it. So --
12 JUDGE HENNEKE: Any other questions or
13 comments?
14 COMMISSIONER LETZ: But the -- I mean, the --
15 it•s thought that we will be reimbursed $360,000 out of the
16 $400,000?
17 MR. TOMLINSON: That's our estimate.
18 COMMISSIONER LETZ: How certain is that
19 estimate?
20 MR. TOMLINSON: That's a question for Ray, I
21 think, to explain.
22 MR. ROTHWELL: Sure. To give you a little
23 bit more of the -- of the sequence for y'all's information,
24 the claim was about a million dollars, approximately, give
25 or -- plus or minus a few dollars. We had that -- that
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claim negotiated down to about $650,000. It was a
transplant benefit, and the plan document has a $250,000
limitation on transplants. So, that 250 -- first off, the
County has a $40,000 stop-loss self-funded plan, and the
County has prefunded that $40,000 already. That's -- that
40 is paid. So, I've talked to the stop-loss carrier. They
agreed to prefund the $250,000 transplant benefit to get
some money to the hospital in a timely basis, to where we
wouldn't get into a conversation about losing that $400,000
discount. So -- so, we've done that. We've paid 250.
The sequence of events really play the
important part here. The -- the person went into the
hospital about the 1st of September here in Kerrville; was
immediately transferred to San Antonio Methodist, and
immediately transferred into their transplant -- into their
transplant unit. The costs between the 3rd of September and
the 11th of September, we believe, are not related to the
transplant, and I think the early review by the stop-loss
carrier agrees with that. We believe there's some costs
after the transplant for a couple of days before the person
died. So, we believe that we will get the majority of that
$400,000 back, if not all of it, Our track record says
we'll get it all back, and we believe we will,
The kind of contract we're on is a 12/12
contract, and that's been the most cost-effective stop-loss
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1 contract for us to be on, and it continues to be. If the
2 County elected not to prefund that $400,000 per this
3 request, we would need to buy a 15/12 contract, which would
4 cost us about $270,000 more over the next 12 months. And
5 what that 15/12 contract would do, it would pay claims
6 incurred three months prior to the end of this contract,
7 going into the 12 months. Part of those claims fall within
8 that three-month period; some of them don't. So, it's in
9 the County's best interest to prefund the $400,000, let us
10 attempt to get it back, and we will make every attempt to do
11 that. Our track record says we're 99.9 percent effective at
12 doing that. We -- we believe we'll get it all back, and we
13 think it will take 45 to 60 days to do that on -- on this
14 type of contract.
15 It's a spec contract, and we have a contract
16 in our stop-loss plan of a -- of a spec program of $40,000,
17 an aggregate program at some dollar figure. And we're not
18 going to have an aggregate claim; we're under that total
19 umbrella. But we have this one claim that's -- we've
20 actually -- actually had two, but we've had just one that's
21 in question that we need to prefund sometime in the next
22 week or 10 days. And I think the request is a budget
23 transfer to do that, and then we will pay it and immediately
24 file for reimbursement; expecting to get that back ptobably
25 in February, would be my best guess.
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JUDGE HENNEKE: Anyone have questions for
Mr. Rothwell?
COMMISSIONER BALDWIN: I have a question. Do
we -- do we approve $400,000? Do we approve "about
$400,000"? Or do we -- is the court order going to read,
"up to $400,000"? I mean, I think something needs to be
specific, doesn't it? We don't say -- in the court order,
we don't say "about $400,000."
JUDGE HENNEKE: Tommy what --
MR. TOMLINSON: I would say up to the amount,
but I don't know the exact number.
MR. ROTHWELL: And we don't know that exact
number.
COMMISSIONER BALDWIN: I understand you
don't.
MR. ROTHWELL: But I think "up to" would be
safe, or "approximately" would be safe.
JUDGE HENNEKE: Not to exceed $400,000?
COMMISSIONER BALDWIN: Not to exceed.
JUDGE HENNEKE: Barbara, you had a question?
MS. NEMEC: I just wanted to kind of answer
Commissioner Baldwin's question about the legality of us
having to pay for it. If -- the reason that we`re having to
pay this amount over and above the 250, it's because it's
not a trans -- the procedures that were done is not for the
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transplant. We've paid the maximum that the transplant
benefit offered, so, you know, these other charges just go
into the regular benefits that we allow. That's the reason
that we're having to pay for it. If it was just all
transplant, then we would have paid the maximum; we wouldn't
be here today. But that's the reason, if that explains that
a little bit better.
COMMISSIONER BALDWIN: It does. Thank you.
COMMISSIONER LETZ: On the -- the question I
have for Tommy is, to declare an emergency for the full
$400,000, and then we get a refund, it seems like we're
going to be inflating the budget in future years to look
like we have a lot larger budget. I mean, the money's going
to go back into reserves, but still, it will increase the
budget. Is there a way that we can find the money in the
budget, you know, for, like, four or five months, and then
do the budget amendment to take the actual amount that's,
you know, not anticipated, and increase the budget by that
amount in the future, rather than do it a lot more than we
think we're going to end up needing?
MR. TOMLINSON: I hadn't thought of it that
way, but there`s -- I think there's funds in -- well,
there's 500 -- like, $530,000 budgeted in -- in our Indigent
Health Care Fund. I don't know -- the only thing, I guess,
if we had to have the funds in there between now and the
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1 time we`re reimbursed, then we could transfer cash into that
2 -- into that fund. I don't know of anything large enough in
3 the General Fund budget to handle that.
4 COMMISSIONER LETZ: I don't know how the rest
S of the Court feels. It just seems that it's -- it's -- when
6 we look back at our budget, it`s a better way to do it this
7 way.
8 COMMISSIONER GRIFFIN: In other words, take
9 the hit when you know you got a hit that you got to take.
10 COMMISSIONER WILLIAMS: I kind of like that
11 approach. We got 530 in the Indigent Health Care?
12 MR. TOMLINSON: That's close.
13 COMMISSIONER WILLIAMS: Roughly?
14 MR. TOMLINSON: I don't know exactly.
15 JUDGE HENNEKE: That`s what we started out
lb the year with. I don't know what we have now.
17 MR. TOMLINSON: I don't know exactly what we
18 have right now.
19 COMMISSIONER WILLIAMS: And then, when this
20 comes back, we'd reimburse the Indigent Health Care line
21 item?
22 MR. TOMLINSON: Yes.
23 JUDGE HENNEKE: Good idea. And then
24 reimbursement would go in the General E'und. Then it would
25 have to be a budget amendment to take it --
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MR. TOMLINSON: To transfer it.
JUDGE HENNEKE: General Fund, not Indigent
Health Care.
COMMISSIONER LETZ: Right.
MR. TOMLINSON: We could -- I mean, we could
increase the revenue budget part of it so we have an equal
amount of change in -- in the revenues as well as
expenditures.
COMMISSIONER LETZ: Right, but there's still
that --
MR. TOMLINSON: I mean, still -- it still --
COMMISSIONER LETZ: Increases the budget.
MR. TOMLINSON: Yes, it does.
COMMISSIONER LETZ: That`s the -- you know,
and we`re really not increasing the budget, we don't think.
I mean, we have may have to do -- you know --
COMMISSIONER GRIFFIN: We can still do that
later. I mean, if you had to.
COMMISSIONER LETZ: I think we -- in any
event, we have to do the -- well, it depends. If we didn't,
I would rather take it out of Indigent Health Care or some
other fund right now, until we have --
MR. TOMLINSON: I think there`s probably
enough there.
JUDGE HENNEKE: Okay. I think that's a good
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1 idea. Do we have a motion to that effect?
2 COMMISSIONER LETZ: So moved.
3 COMMISSIONER BALDWIN: Second.
4 JUDGE HENNEKE: Motion by Commissioner Letz,
5 second by Commissioner Baldwin, th e Commissioners Court
6 transfer not to exceed $400,000 from the Indigent Health
7 Care budget for purposes of paying the medical reimbursement
8 claim that's been presented for the health care of the
9 person -- whatever. Any other questions or comments? If
10 not, all in favor, raise your right hand.
11 (The motion carried by unanimous vote.)
12 JUDGE HENNEKE: Opposed, same sign.
__-~
13 (No response.)
14 JUDGE HENNEKE: Motion carries. Do we have
15 any late bills?
76
1 of conversations about benefit changes going forward -- for
2 the most part, those benefit changes have been in the form
3 of increasing deductibles, increasing co-pays, not dealing
4 particularly with the structure of the -- of the benefits
5 themselves. And those -- some of those things have been
6 discussed to try to keep the premiums down.
7 The -- the claim in question, the benefit
8 related to it has a $250,000 plan benefit maximum for that
9 particular benefit, and when we started getting the bills in
10 for -- from the providers for this sequence of events that
11 happened in early September last year, it became clear to
12 us, and I started some conversations with -- with a number
13 of folks in the county that we worked with, and our agents,
14 and -- and a little later with the Court. We knew the --
15 the claims were going to be substantially above $250,000.
16 We also felt very strongly, and still today feel very
17 strongly, that some of those dollars should not relate to
18 that specific benefit structure; that -- that we should be
19 able to file those as reinsurance claims.
20 When the benefit of $250,000 was paid by the
21 reinsurance company, it was paid 250, minus the 40 specific,
22 plus about $6,200 of some minor claims that happened leading
23 up to that hospital stay. This was kind of a unique
24 situation, in that this individual had had virtually no
25 medical bills prior to -- prior to -- to the problems he
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subsequently had. Anyway, the 250 was paid right off --
right on the front end, very quickly by the reinsurance
company. Again, minus the 40, plus $6,000 or so, they paid
$216,000. I visited with the Court, after visiting with
some County staff, that it would require a budget amendment
to advance some funds if we -- if we and the Commissioners
Court deemed that to be an appropriate action. It was
deemed that because we didn't really know the dollar
values -- I mean, we were getting claims in and that sort of
thing, so it was deemed to -- the County Commissioners Court
approved an advance of up to $400,000 to cover bills that we
felt should be covered -- we, as the administrators, felt
should be covered in that -- in that process.
So, we got -- we had a subsequent meeting
after the Commissioners Court to -- with the then County
Judge, with the Auditor, the Treasurer, and one of the
representatives from the insurance agency, and the County
did in fact give us a $400,000 check to be used for this
specific set of events. Part of the good news is, this
morning I gave the Treasurer $141,900 and change back out of
the 400. We've kept that isolated, so we have returned
141 -- almost $142,000 of that $400,000 back as of today_
We actually have paid out about $258,000 out of that 400. I
kept that isolated in a separate fund within our -- under
our fiduciary control, and we've paid out that 258. We have
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1 appealed with the reinsurance carrier twice, and in both
2 cases they've deemed all of the bills to be related to that
3 specific benefit. We still disagree with that. We have the
4 Methodist Hospital in San Antonio that, about a month and a
5 half ago, agreed to join us in the appeal. We finally got,
6 last week on Wednesday, I believe -- it could have been
7 Tuesday, but I believe it was Wednesday -- the Methodist
8 outline of the sequence of events from September 3rd through
9 September 11th, and they are a little more ambitious
10 about -- about where the -- what categories those moneys
11 should be applied to than probably we are. We felt like
12 through about the 6th or potentially the 7th of September,
13 we could justify those moneys, those days, and the costs
14 related to those days as being not related to that specific
15 benefit, but to -- to a general set of benefits that would
16 be lifesaving, just hospital stay due to the conditions, and
17 that's why we paid 258 rather than 400 or some other number.
18 We -- we had -- I had the claim reviewed
19 twice after the fact internally in out shop by a senior
20 processor and by our claims manager, and we felt like the
21 258 was a -- was a sound number that we could justify
22 getting most of the money back from. The -- the reinsurance
23 carrier -- and I have other business with them; they're very
24 strong. They're -- it's Union Labor Life Insurance Company.
25 They're an extremely solvent, very, very healthy company.
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1 They've taken the position, because of the facility that the
2 person was transferred into and the type of equipment and
3 procedures used, they were all related to that specific
4 benefit, and that's been their position on two occasions.
5 We, last week, received from Methodist Hospital kind of a
6 sequential listing of what they felt like they were doing,
7 and their feeling was all the way up to the 11th should not
8 be related to that benefit. To me, that's not realistic.
9 We -- I don't think that the outline and the opinion they've
10 put -- that they have expressed would -- would be a true and
11 accurate set of -- set of events that would be used to
12 determine the -- the procedures they did as non-related to
13 the benefits that we're specifically talking about.
14 I suspect that within the next 30 days, we
15 should hear back from this third appeal. I would hope that
16 we could get some portion or the majority of the $258,000
17 back. But at the meeting we had where we got the $400,000
18 released after the Commissioners Court meeting, I again
19 emphasized that while we've got a great track record on
20 recovering reinsurance dollars, there's no guarantees in
21 this, because it's a very specific sequence of events
22 related to a very specific benefit, not as general as many
23 of them are. And -- and I think, at that meeting, it was
24 again voiced from the Commissioners Court meeting that the
25 County had some responsibilities, had some -- had some
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reasons to pay the money and hope to get it back and that
sort of thing. With that, I'm open to questions, if anyone
has anything more specific that they'd like to -- yes, sir?
COMMISSIONER WILLIAMS: Ray, we appropriated
$400,000 --
MR. ROTHWELL: Yes, sir.
COMMISSIONER WILLIAMS: -- thus far. You
have spent 258 of the 400; is that correct?
MR. ROTHWELL: And returned the 141, 9 back
to the County, yes, sir.
COMMISSIONER WILLIAMS: Which leaves 142
unspent from the original 400; is that correct?
MR. ROTHWELL: That's true, and that's the
moneys returned today.
COMMISSIONER WILLIAMS: What is the
disposition of that 142?
MR. ROTHWELL: It's back in your County
treasury as of today.
COMMISSIONER WILLIAMS: Plus the 191?
MR. ROTHWELL: I'm not sure where the 191 is
coming from.
COMMISSIONER WILLIAMS: You said you
reimbursed $191,000, sir. Isn't that what you said?
MR. ROTHWELL: No, sir. I said that -- that
the reinsurance company paid the $250,000 benefit, minus the
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1	$40,000 specific, plus about	$6,200 of earlier claims. So,
2	they've -- the reinsurance company has paid about -- paid
3	216 thousand --	
4	MS. NEMEC: 285.
5	MR. ROTHWELL:	That $216,285, the reinsurance
6	company paid. We have, in addition to that, paid
7	$258,084.02.	
8	COMMISSIONER WILLIAMS: Okay.
9	MR. ROTHWELL:	And that's the money -- that
10	$258,000 is the money in question now that we are appealing
11	for a third time.	
12	COMMISSIONER WILLIAMS: Okay.
13	JUDGE TINLEY:	Let me see if I --
14	MR. ROTHWELL:	Okay.
15	JUDGE TINLEY:	-- if I understand this.
16	MR. ROTHWELL:	Okay.
17	JUDGE TINLEY:	The Court authorized the
18	payment of $400,000 at -- at	your suggestion.
19	MR. ROTHWELL:	That's right.
20	JUDGE TINLEY:	Back in December, I believe. it
21	was. Is that correct?	
22	MR. ROTHWELL:	Yes, sir.
23	COMMISSIONER	LETZ: The 9th.
24	MR. ROTHWELL:	That suggestion -- may I
25	comment on that?	
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JUDGE TINLEY: Surely.
MR. ROTHWELL: That suggestion was -- we -- I
presented two options. I said, one, if we wanted to buy a
-- an insurance contract that was approximately $270,000
lower, we could fund this money in advance and pay it prior
to January 1st. If we didn't want to fund the money, then
it was my recommendation for us to spend an extra $270,000
for this 12-month period to pick up that gap, that -- that
gap of coverage.
JUDGE TINLEY: That would have purchased an
additional three months in which to attempt to negotiate
the --
MR. ROTHWELL: No, it would have purchased
claims that were incurred during that time period. That
would roll forward into the current contract. It would be a
15/12 type contract -- we talked about that with
Commissioners Letz -- back then, rather than a 12/12
contract that the County has traditionally purchased. And
the County Judge runs -- typically runs 75 to 100 -- about
$150,000 reserve in their insurance account, so it's always
been deemed and approved by the Court to be -- to be the
best buy for the County, would be that 12/12 contract, and
that's the reason I -- you know, one way of looking at that
is we're about $20,000 better off than we would have been if
we'd have spent the 270.
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JUDGE TINLEY: But, at the time it occurred
and the decision was made to expend the $400,000 with the
hopes of getting it back, you indicated at that time that
you thought that we will get the majority of that $400,000
back, if not all of it; that your track record said that
you'll get it all back, and that you believed that you
would.
MR. ROTHWELL: And I still believe we'll get
some of that money back.
JUDGE TINLEY: So, you paid the $400,000.
MR. ROTHWELL: No, sir, we paid $258,000.
JUDGE TINLEY: So, you never actually paid
the 400; you only paid 258?
MR. ROTHWELL: Right.
JUDGE TINLEY: Okay.
MR. ROTHWELL: Yeah. When we went through --
when we -- when I said, "Okay, guys, this is the deal," back
in our shop, "I want to make sure that what we're paying is,
in our opinion, not specific benefits related to this
restricted benefit," and so when we did that, rather than
$400,000, we needed $258,000 and change.
JUDGE TINLEY: So, the 142 was never actually
paid out?
MR. ROTHWELL: It was never paid out; it's
been maintained in a -- in your account with us.
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1 JUDGE TINLEY: Okay. Okay. We transferred
2 it into the reserve account with you as third party
3 administrator?
4 MR. ROTHWELL: Yes, sir.
5 JUDGE TINLEY: Okay. Now, you mentioned
6 we're now on the third appeal, I believe?
7 MR. ROTHWELL: That's right.
8 JUDGE TINLEY: Okay.
9 MR. ROTHWELL: And we've finally got the
10 hospital to join in with us and give us more substantive
11 data than they provide in medical records.
12 JUDGE TINLEY: Explain to me the appeals
13 process and the levels of appeals and where those take
14 place, before whom they take place, and the time frames
15 under which they take place, if you would, please.
16 MR. ROTHWELL: Okay. There's really no time
17 frame for stopping it, as long as you keep it active. The
18 appeals are all done by letter, phone conversations and that
19 sort of thing. At this -- at this point, the first two
20 appeals have been at a management level within -- within
21 Union Labor Life below the vice president level. This third
22 appeal will be appealed with -- with that person involved in
23 it. When we sent our first appeal, they went out to their
24 medical peer review that would -- that are specialists in
25 this particular set of benefits, and their review came back
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1 and said, "We think all those dollars, because of where they
2 put that person and the type equipment and providers they
3 were using, were related specifically to that benefit." We
4 had -- prior to us paying the 258, I sent that off to
5 another utilization company that we use a lot, and just
6 asked them for a cursory review; not an in-depth, we're
7 going to pay some money to do this review. Their opinion
8 was the guy was very definitely a candidate for that
9 procedure. That they felt like the procedure itself was
10 done appropriately, and that they weren't going to make a
11 comment on the costs related to the benefit -- restricted
12 benefit level, since they weren't being involved in that
13 kind of a review. Methodist Hospital has come back with an
14 independent peer review that says they believe the majority
15 of the dollars, at least those dollars we're asking for,
16 were not directly related to the benefit, even though the
17 person was in that specific unit and things were being done
18 for him that would normally be done in delivery of that
19 benefit. So --
20 JUDGE TINLEY: In anticipation of it?
21 MR. ROTHWELL: Zn anticipation of it. And
22 that's -- that's -- that's the down side of it. And that's
23 the part that -- that I was a little disappointed that the
24 hospital records came back trying to push it all the way up
25 to the day before the procedure happened. I felt like it
4-28-03
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1 would be -- I felt like we would be in a much better
2 position to push for the -- through the 6th or maybe into
3 the 7th day of September, and try to get those dollars back.
4 That's what we've paid. We haven`t paid anything past that.
5 We felt like that 250 picked up at that point and went
6 forward.
7 COMMISSIONER LETZ: Are you finished, Judge?
8 JUDGE TINLEY: Go ahead.
9 COMMISSIONER LETZ: The question I have is --
10 I think you've gone over this in December, but if you'd go
11 over it again?
12 MR. ROTHWELL: Yeah.
13 COMMISSIONER LETZ: Explain how the $250,000
14 stop-loss works.
15 MR. ROTHWELL: The $250,000 stop-loss -- it's
16 really a $1 million stop-loss, or it's a spec of 40 and
17 above in this one case; 40 with no cap on it, actually. The
18 plan document in the -- in the benefit plan documents that
19 Kerr County has for their employees has a specific
20 limitation of $250,000 total for the benefit related to this
21 set of -- this sequential set of events.
22 COMMISSIONER LETZ: That limit -- that's the
23 limit that our --
24 MR. ROTHWELL: That's not a stop-loss limit,
25 per se. That's the limit your plan -- your policy --
4-28-03
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1		JUDGE TINLEY:	All right. Contract limit.
2		MR. ROTHWELL:	-- your contract with your
3	employees ha	s. That's where	that's arrived at.
4		COMMISSIONER	LETZ: Okay.
5		COMMISSIONER	WILLIAMS: Ray, help me out one
6	more time.		
7		MR. ROTHWELL:	Okay.
8		COMMISSIONER	WILLIAMS: We originally
9	appropriated	$400,000.	
10		MR. ROTHWELL:	Yes, sir.
11		COMMISSIONER	WILLIAMS: You paid out in
12	claims $258,	000?	
13		MR. ROTHWELL:	Yes, sir.
14		COMMISSIONER	WILLIAMS: And you said you
15	delivered a	check back to the Treasurer today for?
16		MR. ROTHWELL:	$141,915.02, or something like
17	that.		
18		COMMISSIONER	WILLIAMS: 141, thank you.
19		MR. ROTHWELL:	Yes, sir.
20		COMMISSIONER	WILLIAMS: That represents the
21	un --		
22		MR. ROTHWELL:	That's the $400,000.
23		COMMISSIONER	WILLIAMS: -- unspent portion?
24		MR. ROTHWELL:	Yes, sir.
25		COMMISSIONER	WILLIAMS: Okay, thank you.
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1 JUDGE TINLEY: What -- had the -- had that
2 $400,000 not been placed into the reserve account back in
3 December, what would be the situation today?
4 MR. ROTHWELL: The situation today is, on
5 December the 31st at midnight, those funds would not have
6 been chargeable to the reinsurance carrier. The County
7 would not have paid them, so your employee's spouse would be
8 -- would have a debt of $258,000 or $400,000. That person
9 has a debt, in my opinion, whether they're being chased or
10 not. We've heard nothing from them. I don't believe the
11 County staff has heard from them. But that person
12 technically has a debt of $300,000 or $400,000 currently.
13 Again, I don't know if any medical folks are chasing them or
14 whatever. I'm not --
15	JUDGE TINLEY:	Well, they've been	-- the
16	employee would have had that	debt?	
17	MR. ROTHWELL:	Yes, the employee's spouse.
18	JUDGE TINLEY:	Why the employee's	spouse?
19	MR. ROTHWELL:	Well, the employee	deceased.
20	The employee would have had	the debt; I'll leave	it there.
21	JUDGE TINLEY:	And/or his estate,	if he
22	became deceased?		
23	MR. ROTHWELL:	Yes:	
24	JUDGE TINLEY:	Thank you.	
25	COMMISSIONER	WILLIAMS: And that'	s basically
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the underlying reason that the -- that --
JUDGE TINLEY: There would have been no
residual liability to Kerr County?
MR. ROTHWELL: No.
JUDGE TINLEY: Okay, thank you.
COMMISSIONER NICHOLSON: Who do we contract
with for this coverage?
MR. ROTHWELL: I'm sorry?
COMMISSIONER NICHOLSON: Who do we contract
with for this coverage?
MR. ROTHWELL: It's a self-funded plan. We,
Employee Benefit Administrators, are the third-party
administrator to administer your health insurance plan. We
annually go out and shop the market for reinsurance coverage
to get the best price available for the reinsurance, and we
shop with eight or nine carriers.
COMMISSIONER NICHOLSON: We have a
contractual relationship with that reinsurance carrier?
MR. ROTHWELL: Yes, you do.
JUDGE TINLEY: Sure.
MR. ROTHWELL: Any other questions?
JUDGE TINLEY: That's the contractual
relationship that we're under appeal on now to try and
recover from.
MR. ROTHWELL: That's right.
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JUDGE TINLEY: The 258.
MR. ROTHWELL: That's right. Yeah, that --
that reinsurance contract is -- is not with my company; it's
directly with the County. The County signs that contract
each year.
COMMISSIONER NICHOLSON: So, if we have a
quarrel about this $258,000 -- I guess that's what the issue
is -- it's the reinsurance company that we would look to,
to --
MR. ROTHWELL: Well, I guess, yeah, there's
two options. That would be one of them. The other one
would be to ask the hospital for a refund of those
overpayments, and -- and see if we can get those
overpayments back. At that point, they're denied as
benefits by the reinsurance carrier. Then we might consider
going back -- and, again, that would be something we would
discuss with y'all, the various options available. But --
but that would be one of the two options. The other would
be Kerr County's legal assault on Union labor Life
Insurance.
COMMISSIONER WILLIAMS: So, what's your best
assessment now as to our ability to recover any part of the
258?
MR. ROTHWELL: I'm not sure I want to make a
best assessment. I believe that we have a strong position
4-28-03
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1 to get some of those moneys back, now that the hospital has
2 joined us in -- joined with us. I wish the hospital hadn't
3 done it the way they did, but that's what they did and
4 that's what they wanted to do and that's all they would do,
5 would be to push it all the way through the 11th of
6 September, and I think that's a stretch. That may put us
7 into a negotiating place with Union Labor, so -- you know,
8 we have a great relationship with Union Labor. I mean, it's
9 unfortunate that we had this here, but we've got some other
10 groups with them, and we do have a -- a very open, candid
11 relationship with Union Labor Life.
12 JUDGE TINLEY: Any further questions about
13 this matter of Mr. Rothwell? Mr. Finley, do you have any
14 comments that you wish to make with regard to this? I guess
15 technically you're the representative, as the agent for
16 the -- the reinsurance carrier; is that correct?
17 MR. FINLEY: We are the ones that brought
18 E.B.A. and the County together to serve as third-party
19 administrators. The only comment I have is that, having
20 worked with E.B.A. for, oh, 12 to 15 years now, I can say
21 that they've gone to bat for clients in every -- every
22 occasion where there's been any event where we needed a
23 negotiator. They've been very good at pushing the insurance
24 companies to the limit of the contract. We have complete
25 confidence in their ability. The policy has, obviously, a
4-26-03
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1 limitation within it. It's this gray area of interpretation
2 about how much of that was actually related to the event and
3 how much of the expenses could have actually been covered
4 under other policy provisions. And this third appeal that
5 is being made at this time, I think, will be the -- possibly
6 the final resolution of that.
7 JUDGE TINLEX: Anybody have any questions for
8 Mr. Finley? Thank you. We appreciate you being here today.
9 Is there any further -- any further discussion or questions
10 concerning this?
11 COMMISSIONER NICHOLSON: Just an observation,
12 Judge. This -- this seems irregular, I guess, is the right
13 term. As an employee, if I have an insurance claim and the
14 insurance company doesn't pay it, I can't look to my
15 employer to pay it. I have to look to the insurance company
16 to pay it. Why do we take on the -- the responsibility of
17 paying this claim?
18 JUDGE TINLEY: Anybody have a response to
19 that question?
20 COMMISSIONER WILLIAMS: Well, I'd like to
21 hear again from either Tommy or Mr. Bothwell, who made the
22 original presentation. It's a fair question. You need to
23 hear the answer. What were the compelling reasons why we
24 had to do it?
25 MR. ROTHWELL: I guess I'll do that, since
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you didn't jump up and offer, Tommy.
MR. TOMLINSON: I don't remember the details
of it.
MR. ROTHWELL: I'm kidding. I guess the
compelling reasons was probably two, and I'm going to say
"probably," because I can't answer that any more
definitively than that. Number one, we were looking at a
renewal insurance policy that gave us two options. One of
the options was about $270,000 less cost for the exact same
coverage with -- but a -- but not that three-month run-in
period. We felt comfortable because of the funds available
in that -- in the -- in the insurance account at that time,
that we didn't really need to worry about the three-month
run-in. We had money available in reserves, and that had
stayed in that account. And that account is a trust fund;
it's got employment mixed with employer money, and it's an
employee benefit account, so it's a trust fund. It can't be
used for dump trucks and things like that. So, one option
was to spend $270,000 to pick up some of that money, or to
advance up to $400,000, with the intent of getting the
majority of it back. And I think the County, on the other
hand, including the Commissioners, and -- and there's at
least three of you still here, and maybe y'all can remember
some of that. There was a feeling of County responsibility
for paying its employees' debts to the maximum extent
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possible to the level of benefits. We then believed, and I
continue to believe, that all of those dollars that were
billed were not related to -- to that particular set of
benefits. Unfortunately, the reinsurer has taken the
position that they believe it's all related, and a case can
be made for that because of where the fellow was and the
type equipment and procedures used. A case can be made for
it.
JUDGE TINLEY: In fact, they had -- they had
taken that position when the decision was made for the
advancement of the $400,000, I think, had they not?
MR. ROTHWELL: Not officially. They -- they
had not officially taken that position, but they had
indicated that they might. We didn't have an official
opinion from them until we provided all the records, which
were after the fact.
JUDGE TINLEY: Of course, the third option at
the time it was presented, other than extending the coverage
or paying the claim --
MR. ROTHWELL: Right.
JUDGE TINLEY: -- would have been to do
nothing.
MR. ROTHWELL: To do nothing. And that --
JUDGE TINLEY: And then the employee and/or
his family and/or estate, as the case may be --
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MR. ROTHWELL: Right.
JUDGE TINLEY: -- would then be in the
position of being in a dispute with that -- as a covered
employee under that reinsurance contract.
MR. ROTHWELL: Yeah. And I really -- Judge,
I don't really believe that option was discussed much at
all. I mean, I don't have a -- a memory of that being
discussed as a third option.
COMMISSIONER WILLIAMS: It wasn't.
MR. ROTHWELL: Yeah, I don't think so.
JUDGE TINLEY: But it was an option.
MR. ROTHWELL: But it would have been an
option, yes, had it have been brought forward.
JUDGE TINLEY: In your experience, has it
been customary in -- in acting as third party administrator
for groups in which there is reinsurance such as this, with
claims-paid coverage, for the employer, in the event of a
disputed claim, to step forward and pay the claim on behalf
of the employee, as it were, and to then seek reimbursement?
Is that usual and customary, in your experience?
MR. ROTHWELL: It happens. One of the -- one
of the advantages of a self-funded plan versus a fully
insured plan is the employers -- employers have the ability
to make some decisions related to claims outside of that
contract arena, and it happens frequently. It -- it happens
4-28-03
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1 very frequently that employer units will advance funds,
2 because in the reinsurance business, to file a specific
3 insurance claim -- and I think we covered this back
4 earlier -- the claim has to be prepaid. You can't not pay
5 the claim and then try to get reinsurance to pay it. You
6 have to prepay it, and that's the reason -- that's one of
7 the reasons we came forward and asked the County to consider
8 advancing the money. Compounded with that was, we were --
9 we were in the -- in the late November, early December stage
10 where the contract was going to be ending December 31, and
11 if we didn't do anything, that third option would -- would
12 have automatically invoked itself.
13 JUDGE TINLEY: But it's your experience that
14 in -- in self-funded plans where there's reinsurance
15 contracts
16 MR. RQTHWELL: Mm-hmm.
17 JUDGE TINLEY: -- that it is quite common for
18 the employer to pay the disputed portion on behalf of the
19 employee?
20 MR. ROTHWELL: No. In my memory of the last
21 several years, we've never -- we, my company, has never had
22 a disputed claim of this nature with a restricted benefit
23 that we would ask to be paid for, that we would ask for
24 consideration on it. So, that's not a common, everyday
25 occurrence. Advanced funding and filing for reinsurance on
4-28-03
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1 benefit structures is a very common, everyday occurrence.
2 But, to use your words, disputed benefits of disputed
3 claims, that's not --
4 JUDGE TINLEY: Well, maybe my terminology is
5 not correct. I think what I'm trying to get to is
6 Commissioner Nicholson's question --
7 MR. ROTHWELL: Yes.
8 JUDGE TINLEY: -- about the employer stepping
9 into the breach where, rather than the employee suffering
10 the loss if there is an ultimate determination that it is
11 not a covered expense, which means it's not covered under
12 the plan or under the contract in this case, the employer is
13 suffering that.
14 MR. ROTHWELL: Yes. And -- I'm sorry, go
15 ahead.
16 JUDGE TINLEY: And, like Commissioner
17 Nicholson said, that doesn't seem like a normal thing. If
18 the plan covers it, fine. If it doesn't, you're on your
19 own.
20 MR. ROTHWELL: Well, that's what I've said.
21 In response to your direct question, that's not -- on a
22 disputed claims issue, that's not something you would
23 normally do. In our opinion at the time, and in our opinion
24 today, some of those dollars should not be disputed. Some
25 of them are. And I think I made that pretty reasonably
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clear, that we've had a great track record on recovering
dollars. If we don't recover the majority of this, it will
be the first for us. We run into a 90 to 100 percent
bracket virtually always, but we also aren't into the kind
of gray area with the kinds of procedures that were done
during a very short period of time.
JUDGE TINLEY: Does that answer your
question? Any further questions?
COMMISSIONER BALDWIN: What is the
resolution?
MR. ROTHWELL: I suppose the resolution --
we're waiting for the results of this third appeal.
Depending on that, and depending on where I can take that in
a short period of time afterwards, I guess the resolution
would be coming back to this body and saying, "Here's the
situation. What do you guys want to do?"
COMMISSIONER BALDWIN: Ray, are we talking
about 2003? 2012?
MR. ROTHWELL: Well, you know, one of the
resolutions to this specific thing that we tried to do last
year was to buy a fully insured policy for that specific
benefit, but at that time we had someone on the same list,
and so there was not a policy purchasable for that, quote,
transplant benefit list. Now we're in a position of where,
at renewal time, we will be recommending to the County that
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we package with this reinsurance umbrella a fully insured
transplant policy.
COMMISSIONER BALDWIN: When is it renewable?
MR. ROTHWELL: January 1.
COMMISSIONER BALDWIN: January 1. Will we
know if we're going to get our money back before January 1?
MR. ROTHWELL: Oh, yes.
COMMISSIONER BALDWIN: We're talking about
2003, possibly knowing what the resolution is going to be.
Talking about 30 days from now? Or --
MR. ROTHWELL: I'm hoping we'll know
something, Commissioner, in 30 days.
COMMISSIONER BALDWIN: In 30 days.
MR. ROTHWELL: I mean, I can't guarantee 30
days, but I will tell you that we're pushing it very, very
hard. And I've got a phone conference -- phone schedule to
talk to one of the upper management -- upper echelon
management folks with Union Labor hopefully today or
tomorrow. He was out last week and the week before.
COMMISSIONER WILLIAMS: I have a question,
Judge, question to the County Auditor. These moneys came
from the Indigent Health Care line?
23 MR. TOMLINSON: No, they didn't.
24 COMMISSIONER WILLIAMS: No?
25 MR. TOMLINSON: No.
4-28-03
100
1 COMMISSIONER WILLIAMS: Where'd they come
2 from?
3 MR. TOMLINSON: They -- the funds came from
4 surplus funds out of the -- out of the General Fund.
5 COMMISSIONER NICHOLSON: Did you say General
6 Fund?
7 MR. TOMLINSON: Yes.
8 COMMISSIONER LETZ: I thought they were going
9 to come -- were coming out of Indigent funds.
10 COMMISSIONER WILLIAMS: I thought so, too.
11 The minutes reflect that.
12 MR. TOMLINSON: At that time, we didn't have
13 the cash to pay $400,000, so we had no choice but to pay it
14 out of -- out of -- we actually -- we wrote the check from
15 the clearing account for -- for claims -- or for the
16 County's portion of our health insurance coverage. It shows
17 up in our balance sheet as receivable right now, is what it
18 amounts to.
19 COMMISSIONER WILLIAMS: Well, this is kind of
20 confusing, because the motion that this Court adopted, made
21 by Commissioner Letz and seconded by Commissioner Baldwin
22 and approved by the Court, was the transfer not to exceed
23 $400,000 from Indigent Health Care budget for purposes of
24 paying the medical reimbursement. So --
25 MR. TOMLINSON: The --
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1 COMMISSIONER WILLIAMS: Indigent Health Care.
2 MR. TOMLINSON: The funds weren't there.
3 COMMISSIONER WILLIAMS: They weren't there?
4 MR. TOMLINSON: They weren't there. The --
5 we did not -- we had not collected enough taxes at that
6 point to have the cash available to make a payment from
7 medical --
8 COMMISSIONER LETZ: I mean, if that was the
9 case, I think -- and I think we still need to do this. This
10 needs to go back and be corrected, because there's no
11 authority to take the money out of any other fund. I mean,
12 'cause our motion was very -- my motion was very specific,
13 and I think that needs to be -- from an audit standpoint, we
14 need to go back, then, at our next meeting and, you know,
15 change where the money came from.
16 JUDGE TINLEY: Why -- why would we have to do
17 that at the next meeting? Now that there -- now that the
18 resources are available, which I assume they are, should not
19 it be corrected and done in accordance with the court order
20 that was passed? I'm -- my question is, do we need to take
21 any further action on it?
22 MR. TOMLINSON: Well, there's a way to
23 correct that. We can transfer the -- we would have had to
24 transfer the funds from the General Fund to Indigent Health
25 Care anyway. I mean, that -- and, essentially, that's what
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1 happened. We just -- we just didn't transfer the money. We
2 would have had to come back to court to get authority to
3 transfer the funds from the General Fund to the Indigent
4 Health Care.
5 COMMISSIONER LETZ: I see that. I just -- it
6 just seems to me that I -- one, the Court's order was very
7 -- very specific, so it's got to be corrected to fit what
8 was -- you know, what we were able to do. But the -- and
9 I'm going on memory, 'cause I really didn't read that
10 carefully this part of the minutes, but the reason we did
11 that was to keep from increasing the budget artificially.
12 It appears now we may need to -- it won't be artificially
13 increasing the budget; we will be increasing the budget,
14 possibly. But the reason we took it out of Indigent Health
15 Care was to keep from, in the future years, when we go back
16 and look at the budget, of having a $400,000 blip that
17 really was not a real expenditure item, and I think it -- in
18 my mind, it inflates the budget.
19 MR. TOMLINSON: Well, I don't see the need
20 to -- to change -- to inflate the budget until we know the
21 outcome. I mean, I look at this $400,000 as a -- as a
22 deposit -- as a -- and not as an expenditure until we know
23 the final outcome of the -- you know, the situation.
24 COMMISSIONER LETZ: I can --
25 COMMISSIONER WILLIAMS: However, in the
9-28-03
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1 meantime, if Indigent Health Care line item is overextended,
2 does that create a problem?
3 MR. TOMLINSON: It would at the end of the
4 year. We'd have -- we'd have to -- we need to -- we either
5 need to have the money back, or increase the budget by the
6 end of the year.
7 COMMISSIONER LETZ: Well, if the money's not
8 coming out of Indigent Health Care, we need to get it on the
9 agenda to fix the court order that was passed. Or --
10 JUDGE TINLEY: Either that, or the
11 appropriate --
12 COMMISSIONER LETZ: Or take the money out of
13 Indigent Health Care now.
14 JUDGE TINLEY: Yeah.
15 COMMISSIONER LETZ: Those are the only
16 options.
17 MR. TOMLINSON: I don't have a -- my balance
18 sheet with me, but I don't think the money's there now,
19 either.
20 JUDGE TINLEY: When this was first brought to
21 my attention, Commissioner, I -- I remembered the $400,000
22 from Indigent Health Care, and as I continued to see the
23 expenditures for Indigent Health Care, I thought we're bound
24 to be out of money, so I called and verified the balance,
25 and we were a long way from being out of money. That's what
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1 ran up the red flag. That's how we got to where we are
2 today.
3 COMMISSIONER LETZ: I mean, I don`t have a
4 problem. I think, clearly, counting it as receivable makes
5 sense. My concern is that we make sure the court order
6 and -- and where the money -- you know, match what was done.
7 Otherwise -- 'cause I have a hard time remembering what
8 happened in December already, much less a year from now when
9 we're trying to figure out what was done. But I'll leave it
10 up -- I'll put it in the Judge's hands, if we need to do
11 anything at the next meeting to adjust the funds.
12 JUDGE TINLEY; Guess we'll discuss that as an
13 agenda item, won't we? Any further questions on this
14 matter? Let's move on, then, to the next item, Number 16,
15 consider and discuss Mandated Provider Agreement for
16 physicians, pharmacies, and other agencies providing
17 services to the Indigent Health Care program, and authorize
16 County Judge to sign same. I put this on the agenda because
19 we had a contract come in for -- under the Indigent Health
20 Care program for provider care, and that prompted me to take
21 a look at what we had in the way of contracts in being, and
22 I did find a contract in being for the hospital, but it was
23 wide-open everywhere else. And I think -- and this is going
24 to tie in with the HIPAA thing a little bit later, and
25 probably real strongly in the future, but I -- I think what
4-28-03
~~~Bo31. i5 ~
COMM~~SIONERS' COURT AGENDA ~.EOUEST
PLEASE FURNISH ONE ORIGINAL AND NINE COPIES OF THIS REQUEST AND DOCUMENTS T_ O BE
REVIEWED BY THE COURT.
ODE BY: Pat Tinley OFFICE: County Judges
:EYING DATE: Apri128, 2003 TIME PREFERRED:
EJECT: (PLEASE BE SPECIFIC)
Discuss and consider review and report from Third Party Administrator and Insurance
Representatives on pending reimbursement for claim paid by Kerr County on behalf of
employee.
~CUTIVE SESSION REQUESTED: (PLEASE STATE REASON)
MME OF PERSON ADDRESSING THE COURT:
County JudgeRay RothwelUFinley Insurance)
~TIlVIATED LENGTH OF PRESENTATION:
PERSONNEL MATTER -NAME OF EMPLOYEE:
Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter
551 and 552, Government Code, is as follows:
Meeting scheduled for Mondays:
EBS REQUEST RECEIVED BY:
EIIS REQUEST RECEIVED ON:
5:00 P.M. previous Tuesday.

li Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been
~epazed for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be
~preciated and contribute towards you request being addressed at the earliest opportunity. See Agenda Request Rules
.dopted by Commissioners' Court.
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can come out of there.
MS. PIEPER: Okay.
JUDGE TINLEY: Solved that problem. Next
item, consider and discuss a review and report from
third-party administrator on pending reimbursement for claim
paid by Kerr County on behalf of employee. Mr. Rothwell.
MR. ROTHWELL: I'm here.
JUDGE TINLEY: There you are.
MR. ROTHWELL: Got up here before you looked
up. I'm Ray Rothwel_1. Commissioners and Judge, thank y'all
for inviting me back on this subject again. We have now
filed and received, in my opinion, probably all the funds
we're going to get from the reinsurance company on this --
on this claim. As you know, there was about $400,000
transferred from a reserve account of some type, and I'm not
really sure what type, and we have received slightly over
$200,000 back, leaving $200,000 outstanding. The final --
the final appeal and response to that appeal from -- on my
company's behalf was that, due to the nature of the
procedures on the 5th of September -- and I guess you'll
recall that this person was in the hospital, transferred to
a transplant unit about the 3rd of -- about the 29th of
August, and on the 5th of September, there was a device
implanted or hooked up to a device that was -- was totally
set to continue the -- the life's blood flowing for a period
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of time until the transplant procedure was actually
completed.
The reinsurance carrier, under their
insurance contract, believes, and I think I tend to agree
with them at this point, that the 5th of September was the
magic date that they would pay through, and they have paid
through that date. From the 5th to the 11th, or to the --
when the transplant -- when the procedure was actually done,
it was strictly a life support system that was -- that kept
this person living, waiting on the -- on the procedure.
There was -- and we kept going back. There was a variety of
things happening during that 5th to 11th. There was some
diabetes control management. There was some other life
systems necessary to be -- to be supplemented. Their
opinion has come back, and we've had a third party look at
it, and the opinion came back that, yeah, there was diabetes
problems and there was this and that, but it still was a --
they were on this support system that -- that, had they
turned it off, there wouldn't have been a need for anything
else.
So, I think the -- the County has about
$200,000 that we had hoped to get the majority of back. We
are apparently not going to be able to. I have discussed
with the Judge some -- some options that I would like for
y'all to discuss amongst yourselves, and at some point come
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back with a recommendation to the Court on how we want to
proceed with that. And I think that's probably the end of
my report, unless there's some specific questions. And,
under the circumstances, I'd as soon not be real specific.
COMMISSIONER LETZ: I guess I'm confused.
And I don't want to get into specifics of this case. So --
and a transplant took place after -- at some point, correct?
MR. ROTHWELL: Yes.
COMMISSIONER LETZ: So, if an employee, you
know, gets injured and gets put under some sort of life
support waiting for some other procedure, as soon as they
get put on that life support --
MR. ROTHWELL: No.
COMMISSIONER LETZ: -- they no longer have
insurance coverage?
MR. ROTHWELL: No. This particular procedure
has -- has forever had a $250,000 maximum benefit with it.
That's not true with -- with cancer or other kinds of
procedures, but with a transplant of any type, the County's
plan has always had -- it's one we inherited at E.B.A.
We've asked a few times, do we want to change any of the
benefits. We've talked specifically on one occasion about
that one. We've never changed that benefit. It only
relates to transplants, and there's a specific $250,000 cap
on that benefit.
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COMMISSIONER LETZ: Are there -- I have no
idea. I mean, is that a reasonable maximum for transplants?
MR. ROTHWELL: Yes, when it's handled
properly through a transplant network, it is.
COMMISSIONER LETZ: What's that mean?
MR. ROTHWELL: Well, it means, like, in our
program with the County, we have Lifetrack Transplant
Network, and Lifetrack is a large transplant network --
P.P.O., if you will -- that has fixed rates all over the
country. At Johns Hopkins, at Baylor, at Anderson, at
Stanford, they've got fixed rates for varying kinds of
transplants. This happened so quickly and in such a short
time period with someone ghat was not on a transplant list
to start with, that Lifetrack did not have the ability to
enter into that. The reinsurance company actually uses
Lifetrack also, but the procedures were so rapid and did
unfolded so rapidly that my company actually didn't know
about the transplant until the 10th, that it was -- that the
transplant was going to take place.
COMMISSIONER LETZ: I guess the other
question is, and the root of the -- from a dollar
standpoint, why wasn't the Court told this in December?
MR. ROTHWELL: Well, I think the Court was
told that, that -- that we felt like we would get a large
percentage of the money back. We've ended up getting about
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50 percent of it back.
COMMISSIONER LETZ: But, I mean, there's -- I
mean, it seems that it's pretty -- I was under the
impression that there was a strong likelihood of getting
most of it, if not all of it, back. And it seems that the
-- because of the transplant rule for this procedure,
whatever, that it wo~~ld be real obvious way before December
that this was going to be the maximum the County was going
to be able to get back.
MR. ROTHWELL: We felt like, when we -- when
I made that presentation, and again at the smaller meeting
that took place prior -- prior to that happening, that we
would. We -- we had talked to the reinsurance company, and
we felt like we would get the majority of it back, based on
-- at that point in time, our understanding, we thought that
this -- this piece of equipment was being used from the 9th
forward. That was t}~e early report that we got. When we
got all the records and started really looking at them, he
was put onto a support system on the 5th, about 10 o'clock
in the morning, and we were going under the impression that
that -- that all happened on the 9th.
COMMISSIONER LETZ: Well, I mean --
MR. ROTHWELL: And we felt like we would get
paid through the 9th.
COMMISSIONER LETZ: But, as I recall, this
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came through in December. And, I mean, certainly we would
have records, or should have records on this type of an
expenditure, in a two-month period.
MR. ROTHWELL: We frequently don't get claims
in -- the full claims in and all the records that we request
within 90, 120 days. When we start requesting details from
hospital providers, that's not over the line.
COMMISSIONER LETZ: I suspect that you would
get that very quickly if they weren't going to get the
money.
COMMISSIONER NICHOLSON: Mr. Rothwell, I came
into this issue in the middle of it, so I probably don't
have the background the others do. What is your role here?
MR. ROTHWELL: We are the T.P.A.,
administrator of the County-sponsored plan.
COMMISSIONER NICHOLSON: So -- so you're --
you're representing us? You're not --
MR. ROTHWELL: Yes. We don't represent the
insurance company, we represent you.
COMMISSIONER NICHOLSON: Okay. So, I -- I'm
also ignorant about .insurance, so help me out here a little
bit.
MR. ROTHWELL: Okay.
COMMISSIONER NICHOLSON: One, I'm -- I'm
surprised about two things. I'm surprised that I could run
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up a medical bill that would be underpaid by $200,000, and
that the provider would be looking to me to pay $200,000 in
addition to my county insurance. And I'm also surprised
that -- that my employer, Kerr County, is out $200,000 after
having purchased an insurance policy. And can you help me
with those two?
MR. ROTHWELL: I'll try. First off, this
claim was slightly under a million dollars; it was $982,000
or something like that. As I said, it unfolded rapidly. It
was one of those -- it's one of those rare things that --
that one thing led to another to another to another. You
know, it's very infrequent that a person gets a transplant
of that type without being on a list for a period of time,
and this person was not. Now, to address the insurance
plan, Kerr County uses a -- what we call a fully funded
self-insured plan. Rather than going out and buying an
insurance policy from -- from Allstate or Blue Cross or
someone, we go out and we shop and we buy the reinsurance.
And in the County's case, it's set at $50,000, and we have
the ability to -- to structure the benefits under that kind
of a plan, kind of the way we want it to be structured, and
we can add benefits or delete benefits or change benefits
as -- as you go along from one year -- you know, at renewal
time. It allows an employer a lot of flexibility in
designing the kind o:E plan they want. The $250,000
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transplant benefit, handled appropriately, in my opinion, is
still more than 80 percent of most transplant costs. The
costs related to this particular one was just astronomical,
not particularly related to the transplant, but all the
things that happened during that period of time were deemed
to be related at the time. I do know that -- that the --
the estate -- or I'm led to believe that the estate is not
being chased for the balance of the money, around $600,000
or so.
COMMI:~SIONER NICHOLSON: I understand that if
I -- as a county employee, if I got caught up in these same
set of circumstances, somebody would be trying to bill my
estate for either $200,000 or $400,000?
MR. ROTHWELL: If you -- yes. If -- if,
under the same set of circumstances, and your estate had
some value in it that made chasing worthwhile.
COMMISSIONER NICHOLSON: Okay.
COMMISSIONER LETZ: More than that. It would
be more like $750,000 they'd be looking for.
COMMISSIONER NICHOLSON: That's scary. So,
then, the -- the only remaining question is, we -- the
Commissioners Court put the County at risk for over $400,000
that we didn't -- didn't have to?
COMMISSIONER LETZ: We weren't required to do
it.
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MR. ROTHWELL: Weren't required to. I think
the -- I personally think the decision the Commissioners
Court made at the time was a very good, very valid decision.
And I do think that -- that there is -- and I think that
Judge Tinley will hopefully discuss it with y'all, a method
of getting the majority of the money back, back into that
reserve account.
COMMISSIONER NICHOLSON: Okay. Thank you.
JUDGE TINLEY: It may be something that we
have to discuss in executive session because of potential
litigation aspects and so forth, but Kerr County was put at
risk to the tune of $400,000.
MR. ROTHWELL: That's right.
JUDGE TINLEY: Kerr County has no legal
liability to pay that on behalf of the employee, correct?
MR. ROTHWELL: That's true.
JUDGE TINLEY: But we've gotten half of it
back, and we now stand out $200,000.
MR. ROTHWELL: That's true.
JUDGE TINLEY: That's where we are.
SHERIFF HIERHOLZER: If I can make a comment,
the only comment I'd like is, on the September 5th to
September 10th, have you visited with the other employee
that this was -- that was involved in this to see if those
dates are really accurate?
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MR. ROTHWELL: We know the dates are accurate
SHERIFF HIERHOLZER: But, I mean, as far as
being a life support situation on that date to the next
time, I'm not -- I'm not positive. And I think the employee
that's still with us ought to be interviewed to see if
there's a different type of appeal on when that date was
going into effect.
MR. ROTHWELL: According to all of the
medical records, the -- the device that was used kept the
organ that was going to be transplanted operational.
Without that device, at 10 o'clock on the morning of the
5th, that that organ was gone. That's where the decision
was made.
SHERIFF HIERHOLZER: And I'm not so sure that
other part to that -- or agree to that, the way that all
went down. I was there too a lot of that time and during
that time, and I'm not -- you know, I'd just like to -- at
least the employee interviewed to see if there's an appeal
on that part of it as to those dates, 'cause that could get
back a lot of that other money. I'm not so sure that's
accurate.
JUDGE TINLEY: Well, it may well be that
Mr. Rothwell will want to talk to that individual that
you're referring to, Sheriff, and that -- that may be -- may
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be another option that we have, as far as trying to pursue
the balance of the $200,000 that Kerr County was not legally
obligated to pay, but at this point is out.
SHERIFF HIERHOLZER: Right.
JUDGE TINLEY: But I think, at this point,
the consideration of further avenues, we'll probably looking
at executive session because of the potential litigation or
other administrative legal recommendation aspect.
COMMISSIONER LETZ: Does what you're talking
about -- I mean, litigation -- all relate to what the
Sheriff is talking about? It seems to me what he's -- if
what he's saying is correct, there may be action the County
could take or employee could take -- or the employee's
estate could take against the hospital.
JUDGE TINLEY: I hope the Sheriff has
somebody with some information to give the --
SHERIFF HIERHOLZER: I have no problem
setting up a meeting between Mr. Bothwell and that employee,
because I think hearing it from that employee -- you know, I
may be wrong. I'm trying to recall. All of that did happen
so fast and al.l of a sudden, but I don't think there was a
life support situation for a week.
JUDGE TINLEY: I'd be tickled to death to get
any leverage that we can, and I'll leave you gentlemen to
pursue that avenue. But as to if and how and when we go
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forward, I think that's a matter that's going to have to be
-- we need to get the County Attorney involved and get into
executive session. Thank you very much.
COMMISSIONER BALDWIN: Are you talking about
executive session today, maybe?
JUDGE TINLEY: Well, the County Attorney's
not here. And --
COMMISSIONER BALDWIN: I recognize that.
JUDGE TINLEY: -- there wasn't a suggestion
of an executive session till just the last little bit.
COMMISSIONER BALDWIN: Okay.
JUDGE TINLEY: Thank you, Mr. Rothwell.
MR. ROTHWELL: Thank you.
JUDGE TINLEY: Next item on the agenda,
consider and discuss an update on status of worker's comp
cost and claims. Ms. Nemec? I asked Ms. Nemec to be here
today because it's been brought to my attention that since
January 1, we've had had 26, I believe was the number,
quote, claims, unquote, that were filed under our worker's
compensation program, and I thought maybe we needed some
clarification as to if, in fact, these are claims in the
sense that they are pending claims or have been adjudicated
before the Workers Compensation Commission, or they were
merely the first notice of accident or injury or incident
reports required by our internal policies or whatever it is.
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