By Justin Cox
Killeen Daily Herald
Bell County's largest city is considering litigation against its largest private employer.
The Killeen City Council is discussing legal alternatives to resolve a dispute with Scott & White over the hospital's rate increase in health coverage for city employees.
Minutes after members of the City Council voiced their displeasure with the tactics used by Scott & White, the council – at the urging of City Attorney Kathy Davis – entered into executive session at the close of its workshop Tuesday.
Davis told the council Scott & White had guaranteed its insurance rate offer to the city, but failed to live up to its legal obligation. Davis gave the lengthy account without looking at her notes, describing for the council a thoroughly documented series of conversations. She spoke of e-mails and faxes, noting the time and date of each interaction between each city employee who took part in the discussion.
Davis said the guarantee was lifted upon a decision by the Scott & White board of directors.
Following the executive session, Davis said she is hopeful the dispute between the city and Scott & White will be resolved amicably, but much remains unknown.
"We are considering all options right now," she said after the meeting.
Davis noted that the health care provider made the rate increase without allowing the city ample time to respond, made an offer of a guarantee it later said wasn't an offer at all, and finally made the decision using data that is unreliable, namely abnormal spikes in coverage costs.
The whispers of a possible suit against Scott & White didn't just come from members of the audience as the council prepared to adjourn to executive session.
"I think what I heard was litigation boiling here," said Councilman Scott Cosper, who peered across the table to each of the council members sitting silently.
Lee B. Green, who works as Scott & White's associate director of sales and marketing, was on hand to address the council. He said they reevaluated the rate at an 11 percent increase, which still is much lower than if the city bid the service out.
"We're taking a significant loss even at the rate increase we're proposing," Green said. "We saw the loss ratio was skyrocketing, to be quite frank with you."
Green said the three-tiered system they use for rate adjustment would have put the city at a 74 percent increase had they not had any rate guarantee. He said the use of coverage has led to substantial losses, and the insurance industry adjusts the estimates accordingly.
Councilman Juan Rivera, himself an insurance agent for more than 20 years, was anything but silent in his vocal assessment of the insurance rate increase after Scott & White allegedly failed to live up to its guarantee.
"It's a shame we utilize something like this," Rivera said in the meeting. "How can we just let this go?"
Contact Justin Cox at email@example.com or (254) 501-7568.