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Arkansas AG Sues Defunct Health Provider for Mishandling Patient Records

2 min read

Arkansas Attorney General Leslie Rutledge on Thursday announced a lawsuit against the defunct Eastern Ozarks Regional Health for failing to protect sensitive patient information after it closed.

The former hospital in Cherokee Village is accused of leaving behind thousands of unsecured patient and employee records that contain social security numbers, driver’s license numbers, account information, medical information and biometric data. Doors were unlocked and windows were broken when the Attorney General’s Office inspected the facility in September. It found the building had been vandalized and trespassers had apparently gone through many of the files, the lawsuit says.

The lawsuit, filed in Sharp County Circuit Court, says there was no evidence that the hospital took any reasonable measures to destroy or secure the files. It alleges violations of the Personal Information Protection Act and the Arkansas Deceptive Trade Practices Act. 

Hospital operator Country Medical Services Inc. and owners Robert Becht of Hartsville, Tennessee, and Theresa Hanson of Deland, Florida, are listed as defendants in the lawsuit. They face civil penalties up to $10,000 for each violation of the laws.

“Consumers must be able to trust their healthcare providers and employers to protect their personal information,” Rutledge said in a news release. “Eastern Ozarks Regional Health System betrayed that trust and left patients and employees vulnerable to scams and identity theft.”

More: Read the lawsuit here.

Country Medical Services Inc. had been running the 40-bed hospital for nine years when it abruptly closed in 2004. More than 100 employees lost their jobs.

The closure came after the Arkansas Department of Health found at least 33 possible violations of the Emergency Medical Treatment and Labor Act, based on the hospital’s inability to provide emergency services.

The hospital could have faced fines of up to $50,000 per violation, but it voluntarily terminated its hospital license. Its license was permanently suspended in 2006 and the state took ownership of the property in 2010 for nonpayment of taxes.

The property still faces multiple judgements and tax liens, including about $127,000 due to the state for taxes, penalties and fees, the lawsuit says.

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