HUNTSVILLE — Spending money to save money.
That might most appropriately describe the action that Scott County is about to take to resolve a lawsuit in U.S. Bankruptcy Court in Jackson, Miss.
By an unanimous vote on Monday, Scott County Commission authorized County Mayor Jeff Tibbals and County Attorney John Beaty to resolve a lawsuit that was filed against the county earlier this year as part of the bankruptcy that Pioneer Health Services is currently embroiled in.
According to Beaty, Scott County is prepared to pay $2,700 to pay a firm to destroy a portion of medical records that were transferred from Scott County Hospital by Pioneer Health Services.
That is a small price to pay to resolve the lawsuit, in which Scott County was named as a party earlier this year, and put a stop to the legal fees that the county is incurring as a result of its defense of the lawsuit. Beaty described those fees as a spigot, later indicating that the county is paying nearly $20,000 each month in legal fees to combat the lawsuit.
Saying “it is an issue that never goes away for County Commission even though we have conveyed the hospital,” Beaty told commissioners that the county was named in the lawsuit in May, and was forced to employee a law firm in Mississippi that specializes in bankruptcy law.
At issue are thousands of hospital records — both medical and financial in nature — that were stored by a private firm after Pioneer assumed ownership of the hospital from Scott County in 2013. Fees for the storage of the records have exceeded $40,000, and have not been paid. At issue is who is responsible for those storage fees, as well as who is responsible for continuing to maintain the medical records. Not all of the records can be destroyed; federal law requires medical records for minors to be stored until the patients reach 18 years of age.
While saying the county “clearly has no liability in all of this,” Beaty said the significant legal fees are still being incurred. “Those legal fees can go on and on, unless we can resolve this.”
Beaty said he initially attempted to represent the county himself, but was not permitted by the court to do so because he is not licensed in Mississippi and does not specialize in bankruptcy law.
“I don’t think we have any liability but we’ve got to turn the spigot off,” Beaty said. “If we can resolve for another $2,700, I would strongly recommend to do that.”
Fifth District Commissioner Paul Strunk, who made the motion to approve Beaty’s recommendation, has been intricately familiar with the court proceedings. He was the commission’s chairman pro tem in 2013 when negotiations were ongoing with Pioneer, and both he and County Mayor Jeff Tibbals, who led those 2013 negotiations as the county mayor at that time, were deposed as part of the lawsuit.
“However frivolous (the lawsuit) may have been, we were incurring tremendous legal costs,” Strunk told his fellow commissioners. “This was by far the least expensive alternative for the county.”