Rutledge Announces $770,000 Settlement with Defunct North Arkansas

By Leslie Rutledge, Arkansas Attorney General

Arkansas Attorney General Leslie Rutledge today announced a settlement with the owners of Country Medical Services of Arkansas, Inc—the parent company of Eastern Ozarks Hospital in Cherokee Village—for failing to protect sensitive patient information after the hospital closed eight years ago. On March 17, 2022, the Attorney General 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). In 2004, the hospital shut its doors overnight, leaving behind thousands of unsecured employee files and patient records, including copies of Social Security cards, drivers licenses and medical test results. Upon investigation of the property, many of these documents appeared to have been rummaged through, likely by trespassers, seeking to steal personal information.
“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. “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 2022, the Attorney General’s Office, in coordination with the Arkansas Department of Health, arranged for the removal of approximately 146,000 patient and employee files on the abandoned property. 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. 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.

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