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Defunct Hospital Reaches Settlement Over Mishandled Records

1 min read

The owners of a defunct hospital in Cherokee Village have agreed to a $770,000 settlement with the state after being accused of mishandling patient and employee records, the state Attorney General’s Office announced.

Country Medical Services of Arkansas Inc. abruptly closed the 40-bed Eastern Ozarks Regional Health in 2004 but took no reasonable measures to destroy or protect patient records, the lawsuit alleged. Investigators said they visited the abandoned property and found thousands of unsecured documents that contained social security numbers, driver’s license numbers, account information, medical information and biometric data.

Doors were allegedly unlocked and windows were broken when the investigators visited in September 2021. State authorities later arranged for the removal of approximately 146,000 patient and employee files.

Country Medical Services owners Robert Becht of Hartsville, Tennessee, and Theresa Hanson of Deland, Florida, were listed as defendants in the lawsuit. The Attorney General’s Office sued them for alleged violations of the Patient Information Protection Act and the Arkansas Deceptive Trade Practices Act.

The settlement requires the owners to repay more than $40,000 for the costs of removing and storing the files. The settlement provides for the lawful destruction of the documents and will prevent Country Medical Services from owning or operating a business in Arkansas in the future.

The settlement also includes a civil penalty of $730,000 that will be suspended as long as the terms of the judgment are followed.

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