Bankrupt Arkansas hospital hit with employee class-action lawsuit

A U.S. district court judge has ruled part of a lawsuit against bankrupt West Memphis, Ark.-based Crittenden Regional Hospital can proceed as a class-action lawsuit, according to an Arkansas Business report.

Crittenden Regional Hospital filed for bankruptcy and closed in September 2014. Later that year, a former hospital employee, Yolanda Goodman, sued Crittenden. She filed her lawsuit on behalf of approximately 600 former hospital employees who participated in the hospital's self-sponsored health plan from January 2012 until the facility filed for bankruptcy.

Ms. Goodman claims that she and other former hospital employees were left with unpaid medical bills after Crittenden began diverting its share of health plan contributions in 2012.

In her lawsuit, Ms. Goodman claims the hospital violated the Employee Retirement Income Security Act. She filed her lawsuit against Crittenden and its officers and directors. Cigna Health & Life Insurance is also a defendant in the lawsuit because the company was a third-party administrator for the health plan.

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