Glenn Puit December 23, 2000 Saturday Final Edition Copyright 2000 DR Partners d/b Las Vegas Review-Journal Las Vegas Review-Journal (Las Vegas, NV) December 23, 2000 Saturday Final Edition
By Glenn Puit Review-Journal
(LAS VEGAS) -- The dispute over the Las Vegas police union's health insurance plan took another ugly turn this month when the union's insurance company filed a defamation lawsuit against four former union leaders.
The lawsuit by Las Vegas-based Managed Care Consultants is just the latest development in the 20-month-old controversy, which now threatens the existence of the largest police union in Southern Nevada.
In its lawsuit, Managed Care Consultants claims four officers' public criticism of its health insurance contract with the union -- the Las Vegas Police Protective Association -- was both unfounded and 'was willful, malicious and intentional.'
One of the officers being sued, police Sgt. Toby Maldonado, said Friday he thinks the lawsuit has no merit.
Maldonado added that he stands by his criticisms of the union's health insurance contract. Those criticisms included what he and his colleagues said were high administrative costs and the inability of the union to get many officers' medical bills paid promptly.
'We are being sued for trying to help officers get better health insurance,' Maldonado said.
An attorney who filed the lawsuit on behalf of Managed Care Consultants did not return a phone message seeking comment Friday. Managed Care Consultants also administers to the health insurance program that serves employees at the Review-Journal.
The Police Protective Association represents most Las Vegas officers, and their $15 million-a-year health plan is financed primarily with taxpayer money. The officers' health care program provides health insurance for 9,000 people, the majority of them officers and their families.
The controversy started in May 1999, when the Metropolitan Police Department became alarmed about the financial stability of the plan. Particularly troublesome, the department said, was a dip in the plan's financial reserves from $3 million to $100,000.
The drop in funding and complaints about delays in payments of claims set off red flags within the union's membership. Many members claimed union President Andy Anderson had mismanaged the health fund, in part by paying Managed Care Consultants too much money in administrative and consulting fees.
Anderson disputed the claims, saying that while the health plan is underfunded, it was being run properly and that Managed Care Consultants was serving the officers well. An audit of the plan commissioned by the Police Department and released in September disputed the criticisms, but warned the plan is badly underfunded.
A subsequent attempt by the union's board of directors to oust Anderson in April failed, prompting a mass exodus of membership from the union. As many as 500 members already have left the organization.
The rebellion was led by Maldonado, former union Vice President Dan Holley, officer John Yacek and others. Holley, Maldonado and Yacek subsequently aired their concerns about the health insurance plan publicly, criticizing the union in several news articles for not putting the health insurance contract out to bid.
'In six years on the board, I never saw an outside bid for those services,' Yacek told the Review-Journal in a previous article. 'I challenge you to find one business in the private or public sector which operates this way. You won't find one.'
To support the lawsuit, Managed Care Consultants included as evidence in their court filings two Review-Journal news articles, although the newspaper was not named in the litigation.
John Dean Harper, the attorney for the police union, said Friday the union has nothing to do with the lawsuit. A spokesman for the Police Department did not return a phone call seeking comment Friday.
Yacek said he, too, stands by his criticisms and that he was simply speaking out of concern for his fellow officers. To support their criticism, Yacek and Maldonado both pointed to the contents of a financial review of the health plan.
That review, which was paid for by the union and crafted by financial expert Kelly LeGrow, determined the contract's cost of administrative services were 'substantially higher than the industry and local standards.'
The group of officers who were ousted from the union have formed a new labor organization _ the Las Vegas Law Enforcement Association. The group is trying to decertify the Police Protective Association by gathering signatures from disgruntled officers.
Maldonado said Friday that they already have gathered 700 signatures from officers seeking to dissolve the police union.
Harper said he doesn't think the group has any chance of disbanding the union. If they do succeed, however, Harper claimed that 'our officers will be without a contract and subject to the whims of the department and the city.'