Stay Granted In Crittenden Regional Hospital Cases, Interest In Property Cited

The attorneys working on a pair of lawsuits involving Crittenden Regional Hospital will have a little more time to address several issues in their cases before moving forward, a federal judge ruled late Friday.

U.S. District Judge D.P. Marshall gave a 60-day stay after a three-and-a-half hour hearing at the federal courthouse in Jonesboro.

The cases stem over allegations that the hospital, which closed in August, was negligent in paying insurance premiums for hospital employees.

Attorney Denny Sumpter of West Memphis filed a suit in Crittenden County Circuit Court in September against Crittenden Hospital Association, hospital CEO Gene Cashman, hospital board president David Raines and CIGNA Insurance on behalf of his mother, Deloris Sumpter.

In the state court filing, Sumpter said his mother worked for the hospital for 35 years and that CIGNA became the third party administrator for the hospital’s insurance plan in early 2014.

The second suit filed in federal court involved employee Wanda Goodfellow, who alleged her premiums were not paid, attorneys said in court Friday.

The Sumpter case, which had 171 plaintiffs, was given class action status by a circuit judge in October but was later filed in federal court at Jonesboro.

ISSUES
Marshall, Sumpter and nearly a dozen attorneys for CIGNA, Crittenden Hospital Association and Goodfellow went over several issues at the hearing Friday.

Some of the issues brought up Friday included whether or not the Sumpter and Goodfellow cases should be consolidated; how quickly CIGNA could provide a list of claims to attorneys for Sumpter and Goodfellow; and whether or not Crittenden Regional had put enough money into a fund to help pay the claims for employees in the years leading up to the hospital’s closing.

On the consolidation issue, Marshall told the attorneys for Sumpter and Goodfellow they needed to work together to provide a clearer picture of where the suit will go.

“I know this is Christmas. But I am hopeful that everyone will sit down in a room, with food and drink, and collaborate,” Marshall said.

The judge also wanted the attorneys to complete a joint status report on the case by the end of the 60-day period, noting he wanted a “more focused complaint.”

The attorneys for the hospital and CIGNA also battled it out on the records and money issue.

On the subject of records, CIGNA attorney Dan Ryan said the insurance provider was working through some technological issues to try to get the records ready for review.

There may be as many as 4,500 claims in a computer for Crittenden Regional alone, Ryan said. However, Ryan said privacy issues involving healthcare records needed to be addressed.

Marshall told the attorneys that the claims “are very important to it” and issued a protective order to seek the records.

As for money, both Ryan and Mark Peters, an attorney for the hospital, argued over whether or not the hospital paid CIGNA to complete the work.

“The account was never funded, so the process (of completing the claims) was never done,” Ryan said.

Peters countered that the hospital attempted to pay the provider.

“CIGNA made a decision to terminate the ASO (administrative service order) for non-payment and non-funding. The hospital delivered a check for $32,000 but CIGNA refused the check,” Peters said, noting the hospital had been behind on payments but that all of the claims submitted for 2011 and 2012 (the time period mentioned in both the Sumpter and Goodfellow cases) were fully paid.

Later in the hearing, Ryan said a bank account did exist to cover prescription costs but nothing else.

“None of the medical claims were paid. There was a small amount paid (on the prescriptions). But not enough to turn the engine on,” Ryan said.

BANKRUPTCY UPDATE
Marshall also heard from Jan Thomas, a bankruptcy trustee handling the hospital’s Chapter 7 bankruptcy.

Thomas said an outlying property near the hospital was recently sold and that nearly $636,000 has been raised to help cover the hospital’s debt.

As for the hospital, Thomas said there has been some interest in re-opening it.

While not discussing the name of the company, Thomas said a Nashville, Tenn., group recently met with officials to discuss the sale and re-opening of the hospital.

The group took a tour of the hospital grounds, even testing some of the medical equipment on site, Thomas told Marshall.