The Arkansas attorney general's office on Friday announced a $770,000 settlement with Country Medical Services of Arkansas Inc., which is said to have abandoned its Cherokee Village hospital in 2004.
In a lawsuit filed in Pike County Circuit Court in March, the attorney general's office had accused the company of violating the Patient Information Protection Act and the Arkansas Deceptive Trade Practices Act. The defendant was Robert Becht of Hartsville, Tenn., who was the president, vice president, treasurer and controller of Country Medical Services.
In December 2004, Country Medical Services of Arkansas is said to have abandoned its Eastern Ozarks Hospital in Cherokee Village, about 45 miles north of Batesville.
According to the lawsuit, the company left behind roughly 146,000 unsecured employee and patient files, including copies of Social Security cards, drivers licenses and medical test results. Investigators at the scene years later reported that the records had been rummaged through.
“We must hold all companies accountable to be responsible with consumer information, especially those that handle sensitive personal and medical records,” said Attorney General Leslie Rutledge in a press release. “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.”
In April, the attorney general's office arranged with the Arkansas Department of Health to have the surviving files removed from the property.
The settlement announced Friday allows for the lawful destruction of the files and prevents Country Medical Services from owning or operating a business in Arkansas in the future.
A civil penalty of $730,000 will be suspended as long as the terms of the judgment are followed. That total is equal to $5 for each of the files removed from the former hospital.
The company must repay more than $40,000 for the costs incurred by the removal and storage of the patient and employee files. The money can be paid in installments of $5,000 on July 1 of each year until the judgment has been paid off.