In September 2014, Crittenden Regional Hospital filed for bankruptcy and closed its doors to the public. A few months later, Yolanda Goodman (a former employee from the hospital) sued the West Memphis, Arkansas-based hospital. She stood her ground on the lawsuit on behalf of around 600 other hospital employees who had taken part in the self-sponsored health plan offered by the hospital. The health plan was available from January 2012 until the facility's bankruptcy filing.
According to Goodman, she and the other hospital employees who filed the lawsuit were forced to quit their jobs without receiving payment for medical bills. This was after the facility started to divert its share of health plan contributions as early as 2012. Together with her lawyers, Goodman is fighting the hospital as it had violated the Employee Retirement Income Security Act. The lawsuit was filed against Crittenden and its directors and officers. Since Cigna Health & Life Insurance was the third-party administrator for the health plan, the company is part of the lawsuit as a defendant.
Earlier this week, a US district court judge has ruled that part of the lawsuit against the hospital can be proceeded as a class-action lawsuit. This comes as good news to Goodman and the other former hospital employees who have been waiting for an update on the lawsuit.
Before its sudden close, voters had approved a 1 percent sales tax to provide funding for Crittenden Regional hospital in June 2014. It was supposed to use the money to renovate inpatient rooms and the emergency department, as well as to recruit doctors. Unfortunately, the hospital closed abruptly in September when it no longer had any money to continue with its operations. When they closed, they had reported having a debt of $33.3 million and only $27.75 million in assets.
