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Class Action Approved Against Crittenden Hospital Association

2 min read

A U.S. District Court judge ruled last month that part of a lawsuit against the bankrupt Crittenden Hospital Association Inc. can proceed as a class action.

Yolanda Goodman of Memphis sued the West Memphis hospital in 2014 on behalf of approximately 600 former employees who participated in the company’s self-sponsored health plan from January 2012 until the hospital filed for bankruptcy on Sept. 12, 2014, according to her lawsuit, filed in U.S. District Court in Jonesboro.

“The Hospital began diverting its share of Plan contributions in 2012 when money got tight,” U.S. District Judge D.P. Marshall Jr. said in his Dec. 10 order. “In 2014 the Plan, and then the Hospital, went under. Goodman was left with unpaid medical bills; others were too.”

The total amount of unpaid medical claims? $6.6 million, according to a filing by Frank Watson III, of Watson Burns PLLC of Memphis, who is an attorney representing Goodman.

Some of the unpaid claims date back to 2013. As a result of the medical bills not being paid, “the Plan participants are now personally responsible for these claims,” Watson wrote.

Goodman filed the lawsuit against the hospital, its officers and directors, accusing them of violations of the Employee Retirement Income Security Act. Cigna Health & Life Insurance Co. also was named as a defendant because it was a third-party administrator for the plan.

“Cigna doesn’t dispute that many claims were denied for lack of money, rather than lack of coverage,” Marshall wrote.

Denny Sumpter, an attorney with Fogleman Rogers & Coe of West Memphis, who also is representing Goodman, said the total damages are to be determined. “We believe it’s pretty straightforward,” he said.

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