The pharmacy assured Paulette Goldstein that her insulin refill would be ready on the Fourth of July, temporarily easing her worries ahead of the holiday weekend.

But when Goldstein, a Type 1 diabetic whose body doesn’t produce insulin, went to pick up her prescription, her fears returned. The pharmacist told her they had discovered a problem: Her insurer, the Teachers Health Trust, was requiring a prior authorization for that particular medication.

“This protocol was not communicated to me,” said Goldstein, a speech-language pathologist with the Clark County School District. “I had no knowledge.”

The insurance snafu forced the 52-year-old to ration her food and insulin intake for almost two days. She drank water and protein shakes and ate some dried tuna, avoiding carbohydrates. Still, her blood-sugar levels shot up to 428 milligrams per deciliter — well above her target range of staying in the low 100s.

It wasn’t the first time Goldstein has dealt with an insurance hangup that prevented her from obtaining crucial diabetic medications in a timely manner. The educator says it happens three or four times a year, endangering her overall health as she scrimps on dosages until receiving insurance approval.

“I don’t know what the logic is anymore except saving money and putting me and people like me at risk,” she said. “The bottom line is there’s always a roadblock for me getting the proper medication I need.”

Goldstein is part of a growing number of educators fed up with insurance hassles associated with the Teachers Health Trust, the nonprofit organization that oversees health care for roughly 18,000 Clark County teachers and licensed professionals and their 22,000 dependents. But officials from the teachers union, which established the trust more than three decades ago, argue they can fix those problems — and ensure quality care once more — if the school district appropriately funds the health care organization.

Contract negotiations between the two parties haven’t proved successful so far. They’re headed in late August to arbitration, where a decision could determine the fate of educators’ health care. Meanwhile, a contentious legal battle is shaping up — pitting the trust’s former leadership against its Board of Trustees and the teachers union.

The thorny issue has divided teachers, some of whom blame the school district and say more funding would alleviate problems. Others aren’t so sure.

Declining revenue and a bailout

On a hot day in late May, more than a dozen teachers picketed outside of the building that hosts school board meetings. They toted homemade signs with messages such as “#SupportTeachers,” “More $$$ for health care!” and “Shame on you CCSD!”

Their message was unified: Save the beleaguered health trust.

Earlier that month, the school district had proposed transferring teachers to fully-insured UnitedHealthcare plans like the ones it provides for support staff and school police. The Clark County Education Association, in turn, cried foul, calling it a “substandard plan.”

John Vellardita, the executive director of CCEA, summed up the benefit of the health trust in one word — control.

Whereas private insurance companies focus on the bottom line, the health trust is a nonprofit not motivated by return on investment, he said. Licensed district employees appointed by the union make up its Board of Trustees and direct operations, with an eye toward making sure every dollar is used for health care.

For years, the health trust provided a “Cadillac plan” rich in benefits to teachers, who paid considerably less out of pocket than private-sector employees, Vellardita said. But it couldn’t last forever. Rising health care costs paired with an aging population put a squeeze on the trust’s finances, he said, at a time when the school district would not put any more money toward teachers’ premiums.

“I think what we’re going through is part and parcel of what the national experience is around health care — escalating costs, difficult deliverables in terms of health care outcomes and how to get a handle around that stuff,” Vellardita said.

Ultimately, the trust drew down on its reserves to subsidize the growing costs that outpaced revenue. The result: The fund burned through $28 million to $35 million in its reserves over the course of four years and was facing a multi-million-dollar deficit heading into 2016, he said.

The dire situation prompted the Clark County School Board of Trustees to approve a one-time, $9.8 million bailout for the trust. It brought the school district’s health care contribution for teachers and licensed professionals to $583.87 per employee, up from $538.87, but it came with a caveat. The increase was only in effect for 2016.

The agreement was hinged on an understanding that the trust would make changes to its business model to cut costs — a move Vellardita said he knew needed to happen.

“We were out of date,” he said. “It was like a mom-and-pop shop surrounded by Walmarts.”

The trust outsourced its operations to TRISTAR, a third-party administrator to handle medical claims, and WellHealth Quality Care, a health care delivery system to manage the provider network and population health. The transition involved a change to a “patient-centered medical home model,” meaning an enrollee’s primary physician coordinates his or her care to achieve better health outcomes.

The new model debuted in January 2016, several months after school trustees approved the $9.8 million contribution to the trust.

“You’re talking about conversion from one kind of plan to a radically different plan,” Vellardita said, adding that such conversions sometimes take companies 12 to 18 months to complete. “We literally had a lightswitch.”

The rollout hasn’t exactly gone smoothly. Now, the union is lobbying the district for another $9.8 million to supplement the trust and a promise to re-evaluate health care costs and the district’s contributions on an annual basis.

Because the district’s previous cash infusion expired at the beginning of this year, Vellardita said the trust is dipping into its reserves again to offset the $800,000-some dollars not coming in each month.

Teachers weigh in

When Vicki Kreidel contemplated leaving Southern California and accepting a teaching job in Clark County, she first looked at the benefits. A former hospital employee, she considers herself a good judge of insurance plans.

What Kreidel saw gave her enough confidence to uproot her family. They moved here in 2013.

“When I came here, I saw that there was a lot of freedom for us in the plan that other people didn’t have,” said Kreidel, a second-grade teacher at Fredric Watson Elementary School in North Las Vegas. “I kind of knew it was too good to be true.”

Fast forward four years. Kreidel, 54, has delayed a routine colonoscopy because she can’t get a clear answer about how much it will cost. The plan now includes 20 percent coinsurance for most services above and beyond the physician consultation.

If something goes wrong during the procedure, Kreidel said she fears being saddled with an expensive medical bill. Kreidel already has spent time correcting overcharges on other medical bills — a task she said is cumbersome for teachers who can’t freely leave the classroom to make insurance-related calls during the week.

Even so, she’s not keen on joining a UnitedHealthcare plan. Kreidel worries the private insurer doesn’t have enough physicians contracted in their network to absorb thousands of teachers and their families.

Health care costs naturally climb over time, she acknowledged, but the school district needs to sink more money into its educators’ health and well-being.

“Having access to good health care is really important because we need to be in that classroom,” she said. “It costs the district more money when we’re not.”

Cathy Giovenco, however, decided she didn’t want to wait on the health trust. The 56-year-old teacher has been experiencing headaches and tingling in her fingers and toes for a month, prompting her doctor to order a CAT scan. She waited a week for the insurance authorization.

It never came. So Giovenco went ahead and paid $200 out of pocket — $150 more than if she had waited for the trust to clear the diagnostic test.

“I don’t want to be gloom and doom, but I’m not feeling well,” she said the day of her CAT scan.

Frustrated by the trust’s lack of customer service and medical billing mistakes, Giovenco said she’s open to other health care options. She misses the days when seeing a doctor or obtaining a medical referral didn’t involve jumping through a series of hoops.

“I don’t expect Teachers Health Trust to pay for all my medical bills,” said Giovenco, who teaches humanities at Ries Elementary School in Las Vegas. “But I expect (them) to pay their portion on time and answer the phone.”

The insurance woes have become frequent fodder in an online group devoted to Clark County teachers. A Nevada Independent inquiry unleashed a flurry of additional responses, with teachers bemoaning skyrocketing costs for having a baby, long waits for referral authorizations or pricing information, and unpaid medical bills winding up in collection agencies, among other issues.

The trust even assigned one male teacher a gynecologist as his coordinating doctor. That teacher — 25-year-old William Freeman — expressed frustration with the school district’s meager funding but also said educators should be open to the fair marketplace.

He still hasn’t found a primary-care physician. Freeman said he has scheduled appointments, only to have them canceled because the doctors stopped accepting teachers’ insurance.

“It’s just a joke at this point,” he said.

An ongoing tug-of-war

The troubles aren’t lost on the school district. The administration and trustees have received 87 calls or emails from educators complaining about insurance problems since Dec. 7, 2016, officials said.

“The Trustees and District leadership are very concerned about reports from teachers that they are receiving substandard health insurance,” Board President Deanna Wright said in a statement. “We care about the health and well being of the employees in our CCSD family. This is also a concern because we are working hard to recruit new teachers to fill our teacher shortage, and we understand that potential employees take benefits into account when they decide where to teach.”

The district and board cited those reasons as their rationale for offering to place teachers and other licensed professionals on a fully-insured health plan.

Union officials and some teachers, however, say it’s been a years-long effort on behalf of the school district to starve the ailing trust. They point to the district’s health care contributions to employee groups as proof.

The district’s per-employee contribution each month is $733.62 for administrators, $576.65 for support staff, $549.65 for school police and $538.87 for teachers.

School officials attribute the lower contribution toward teachers to the union’s bargaining strategies.

“Other associations have chosen to direct new funds toward health care costs, which is why CCSD provides more money toward their health care contributions,” district officials stated in a May 10 memo to staff. “The CCEA has chosen to allocate most of the new funds provided through negotiations into teacher salaries, instead of contributions toward health care coverage for teachers.”

Vellardita adamantly denied the assertion and said the district even rejected a union proposal several years ago that would have increased teachers’ contribution to their health insurance.

His message to educators experiencing insurance frustrations: “We’re brutally honest in the sense that this is part of the conversion plan, and we’re making improvements,” he said, adding that teachers should contact the trust with problems.

Christina Hollowood, a special education teacher, defended the trust from the recent backlash. She and her husband, who sits on the board of the teachers union, have a diabetic son.

While the system doesn’t always work perfectly, Hollowood said navigating the trust for care has been manageable.

“That is not a Teachers Health Trust issue,” she said, referring to insurance struggles. “That is a medical health care in America issue.”

A brewing legal battle

The trust’s current state of affairs doesn’t surprise its former CEO Gary Earl.

A veteran of the health care industry, Earl joined the trust as it top executive in March 2016. His first order of business: Meet with all the employees and get a sense of the organization’s needs and concerns. Thirty days into the job, Earl said he saw warning signs indicating a financially unstable trust.

“It became evident that something was off,” Earl said last week. “I was literally being told, ‘You need to dig deep.’”

So who is ultimately responsible for the trust’s poor financial health? It depends whom you ask.

The trust transitioned to WellHealth on “good faith” without signed contracts in January 2016 to keep its promise to the district regarding a new business model, Vellardita said. The union leader contends it was Earl’s job to negotiate and sign the actual contracts once he was hired several months later.

“He had authority, power, knowledge and knew what he was doing,” Vellardita said.

Early flatly denied having any power to change course at that point. The former CEO said he quickly realized the trust’s administrative costs had more than doubled — from $7.5 million to roughly $17 million — because of its transition to WellHealth.

“I told the board there’s no way in hell they should be paying this money,” Earl said.

The board didn’t heed his concerns or give him leeway to find new vendors, Earl said, so he begrudgingly signed the contract under protest. He said the situation reflects a pattern that played out over the course of his 14-month tenure at the trust: Any concerns or warnings brought to the nonprofit's Board of Trustees and Vellardita were met with resistance.

The trust’s board terminated Earl and Philip DiGiacomo, the director of operations, in May. Two other staff members — the chief financial officer, Felipe Danglapin, and an administrative employee, Michael Ielpi — resigned voluntarily around the same time.

Late last month, the trust filed a lawsuit against the four men, accusing them of misdeeds such as making unauthorized purchases, taking trust property and breaching confidentiality agreements.

The complaint characterizes Earl as a “Svengali-like figure” to the co-defendants. It accuses him of frequently disclosing confidential board discussions and undermining the trustees, which created an “‘us’ versus ‘them’ mentality.”

The trust further alleges that the group used company credit cards to pay for meals, alcohol and personal gifts in addition to disclosing “proprietary and confidential” data about the trust’s enrollees to the school district.

“This was done despite the fact that Earl and his co-Defendants knew that the School District would use the confidential and proprietary data to gain leverage in collective bargaining negotiations with the Teachers Union and that it would result in the School District advocating for dissolution of the Trust in favor of teachers being insured through the commercial market,” the lawsuit states.

Earl disputed the allegations levied against him and the other staff members, labeling them “not factual.” DiGiacomo and Danglapin had worked at the trust for nine and 18 years, respectively.

“Simply put, it is an act of retaliation for exposing the poor, unethical and illegal activities that they have committed,” he said.

Earl’s termination occurred a day after Attorney Andre Lagomarsino, who is representing the four men, sent a letter to the board stating the defendants have “whistleblower protection” because of their knowledge and disclosure of activities occurring at the trust.

The group voiced concerns about financial issues, including $37 million from the Retirees Health Trust that it says the board and union never secured for future liabilities, Earl said. (The Retirees Health Trust was dissolved several years ago and its members folded into the Teachers Health Trust.)

Another concern: Vellardita seemed bent on hiring a company called miCare to operate a series of primary-care clinics to serve teachers and their families, Earl said.

Brent Husson — president of the local education group Nevada Succeeds — was the person representing miCare at a meeting. Earl said he researched the clinic proposal and determined that two other nationally known companies could provide the same services at a cheaper cost.

Again, Earl said Vellardita and the board brushed aside his concerns.

“I am totally convinced that my termination as well as that of some of my staff is the direct result of my unwillingness to concede to their insistence that we manage the trust in a certain way — meaning their way,” he said.

Husson told The Nevada Independent that he owns a company that contracts with miCare, a subsidiary of Employee Benefit Management Services, Inc. Husson said he has made several presentations to the trust’s board on behalf of miCare, but the company has not been awarded a contract.

“When we’re contacted and asked for a bid, we provide bids,” he said. “What they do with that or how else they go about their business is not up to us.”

Earl said his goal all along was to ensure the trust provided quality health care to educators and their families. He gave them his cell phone number and asked them to contact him if they encountered problems. They called often, he said, or showed up in tears at his office because of insurance problems.

DiGiacomo echoed the sentiment, saying the group spoke out and took action despite expecting retaliation.

“Nonetheless, we were faced with a decision, accept the consequences or become complicit in illegal actions that we knew would ultimately ruin the Trust and, more importantly, put the health and lives of the teachers we served at risk,” he wrote in an email.

The dispute seems destined to unfold in a courtroom. Earl and his co-defendants filed a 36-page answer and counterclaim Thursday in Clark County District Court. The court filing lists the following counter defendants: the Teachers Health Trust, the Clark County Education Association, Vellardita and Michael Steinbrink, who chairs the health fund’s Board of Trustees.

“The whistleblowing conduct of the Defendants arose after it became clear that the THT Board refused to follow the recommendations of staff and became complicit in John Vellardita’s abuse and waste of millions of CCSD and teacher dollars,” the counterclaim states.

Steinbrink did not return several calls seeking comment. Vellardita rebutted the allegations regarding financial mismanagement by the board and union, calling them “totally disingenuous.”

What happens next

Frustrated teachers.

An ailing health fund.

Fiery lawsuits.

And bitter negotiations between the school district and teachers union.

The explosive combination could lead to a health care showdown that’s been years in the making. Unless the school district and CCEA reach an agreement sooner, an arbitration hearing is set for Aug. 21 through Aug. 23.

“It’s absolutely critical,” Vellardita said, referring to the health care piece of negotiations. “It’s clear to us the district wants to eliminate the Teachers Health Trust. We’re going to have to demonstrate that the trust is a viable organization and that it has been underfunded on the part of the school district.”

As for what might happen if negotiations slide in favor of the school district, the union leader wouldn’t go there.

“We’re going to win,” he said.