Owner of abandoned hospital settles lawsuit over patient records

Arkansas Attorney General Leslie Rutledge said a search of the former hospital in Cherokee...
Arkansas Attorney General Leslie Rutledge said a search of the former hospital in Cherokee Village uncovered mounds of employee and medical records from the hospital's history.(Source: Arkansas Attorney General's office)
Published: Dec. 2, 2022 at 6:44 PM CST
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CHEROKEE VILLAGE, Ark. (KAIT) - A now-defunct Northeast Arkansas hospital accused of failing to protect sensitive patient information has agreed to a $770,000 settlement.

Attorney General Leslie Rutledge announced Friday, Dec. 2, that the owners of Country Medical Services of Arkansas, Inc., which owned Eastern Ozarks Hospital in Cherokee Village, agreed to the settlement.

“The settlement outlines a civil penalty of $730,000 that will be suspended as long as the terms of the judgment are followed. Additionally, the agreement requires the owners to repay more than $40,000 for the costs incurred by the removal and storage of the patient and employee files,” Friday’s news release stated.

In March of this year, Rutledge filed a lawsuit against the company and its owners for violations of the Patient Information Protection Act (PIPA) and the Arkansas Deceptive Trade Practices Act (ADTPA).

The hospital closed in December of 2004, with the property transferred to the state in 2010 for failing to pay taxes.

According to Rutledge’s office, the company left “large amounts of paperwork” inside the hospital.

In April, approximately 146,000 patient and employee files were removed from the abandoned property. The files reportedly contained Social Security numbers, driver’s license numbers, account information, medical records, and biometric data.

“We must hold all companies accountable to be responsible with consumer information, especially those that handle sensitive personal and medical records,” Rutledge said Friday. “Country Medical Services and Eastern Ozarks Hospital betrayed the trust of their patients when they left their personal information unsecured and vulnerable to identity thieves.”