The embattled Teachers Health Trust has been hit with another lawsuit, this one filed by a company hired to process medical claims for the insurance provider for thousands of licensed Clark County School District employees.
The complaint by Tristar Health Administrators of Nevada alleges that the trust and WellHealth, which manages its network of medical providers, violated contracts with the company by requiring Tristar to perform work without compensation.
It also claims that WellHealth was “wholly unequipped” to manage the trust’s network of doctors.
It’s the latest in a series of unrelated legal cases filed in the last year against the trust, which is run by a board of union-appointed teachers. It also faces a class-action lawsuit filed by teachers claiming breach of contract and unpaid claims. A third lawsuit filed by former executives of the trust was dismissed by a District Court in April.
Meanwhile, teachers and the union continue to fight to force the school district to increase its monthly health-care contributions — part of an arbitration award that was recently upheld by a District Court judge.
Operations in ‘complete disarray’
Tristar entered into a series of agreements with the trust and WellHealth in 2016 to oversee claims administration.
Yet when Tristar began the work, it found that “the operations of the plans run by the trust and the WellHealth entities were in complete disarray,” according to the complaint filed in June.
It also discovered that it had inherited a previously undisclosed backlog of over 75,000 claims that had not been processed, including some dating to 2012, the lawsuit stated.
In addition, Tristar was forced to handle a large number of claims appeals that it did not anticipate, it said.
“These appeals were much higher than the industry standard due to the failures of the WellHealth entities to, among other things, implement network provider contract uniformity,” the complaint said, referring to numerous units affiliated with the medical group.
WellHealth also failed to hire a medical director experienced in claims administration to assist Tristar as stipulated in the contract, it said.
The lawsuit names the trust, MedSource Management Group, WellHealth Quality Care and WellHealth Medical Group, as well as entities of DaVita Inc., which acquired WellHealth Quality Care through its Healthcare Partners Nevada division last year.
WellHealth Quality Care declined to comment.
Trust COO Kim Phillips and the teachers union, the Clark County Education Association, did not respond to a request for comment.
Nor did attorneys for Tristar.
Another legal battle dropped
The latest lawsuit was filed after another legal battle quietly ended.
The trust’s lawsuit and a counterlawsuit filed by former members of its executive team and others were voluntarily dismissed with prejudice — meaning they cannot be refiled — in District Court in April.
It’s unclear why both parties agreed to drop the case.
The trust’s lawsuit against the former CEO, COO, director of operations and executive assistant claimed the former executives leaked confidential information and that some had made personal purchases on trust credit cards.
But the former executives filed a counterclaim, alleging that the trust entered into costly no-bid contracts and breached its fiduciary obligation to teachers. It also accused with Clark County Education Association Executive Director John Vellardita of financial wrongdoing.
Neither the teachers union nor Andre Lagomarsino, attorney for the former executive team, responded to requests for comment.
Meanwhile, the class action lawsuit against the trust was dismissed and filed again in District Court in May, adding the Clark County Education Association and the school district to the list of defendants.