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Protect Your Patients' Information

Three pharma reps sentenced for HIPAA violations as part of larger fraud investigation.

Three former sales representatives of the pharmaceutical giant Warner Chilcott were recently sentenced for criminal violations of the Health Insurance Portability and Accountability Act (HIPAA). Landon Eckles, Timothy Garcia and Jeff Podolsky each pleaded guilty to charges of illegally accessing the protected health information of patients in order to complete prior authorization forms for Warner Chilcott's osteoporosis drug.

According to the Department of Justice (DOJ) press release, many insurance companies would not cover Warner Chilcott's more expensive osteoporosis drug without the prescribing physician completing a detailed prior authorization form explaining the need for the more expensive medication. Presumably, the prescribing physicians were only ordering the more expensive drug when absolutely necessary in part due to the added time and trouble required to complete the prior authorization forms. The sales representatives wanted to boost sales of the company's drug, and their commissions, so the sales representatives accessed patient records and filled out the prior authorization forms themselves. The sales representatives also accessed numerous patient records in order to place reminders in the charts so the physicians would be more likely to prescribe the Warner Chilcott drug. None of the patients consented to the disclosure of their protected health information to the sales representatives, so the sales representatives were accessing the protected health information of patients in violation of HIPAA.

Landon Eckles was sentenced to 1 year of probation and a $10,000 fine. Timothy Garcia was sentenced to 8 months of home confinement, and ordered to forfeit $21,000. Jeff Podolsky was sentenced to 8 months of home confinement, a $10,000 fine and required to forfeit $28,237. The penalties imposed could have been much worse. The maximum penalty for each individual could have been a sentence of 10 years in prison, 3 years of supervision following release, a fine of $250,000 and exclusion from all Federal healthcare programs.

As yet, none of the prescribing physicians has been criminally charged with violating HIPAA for allowing the Warner Chilcott's sales representatives to access patient information. Physicians are "covered entities" under HIPAA, and those physicians have an obligation not to disclose the protected health information of their patients except as permitted by the HIPAA regulations. The HIPAA regulations include numerous provisions for the disclosure of protected health information, including disclosures without the consent of the patient. However, a physician allowing a pharmaceutical sales representative to access patient records in order to complete prior authorization forms and boost sales would not be permitted under the HIPAA regulations.

The charges against the individual sales representatives for criminal HIPAA violations were part of a larger fraud investigation of Warner Chilcott involving the payment of kickbacks to prescribing physicians. Warner Chilcott previously pleaded guilty to healthcare fraud as part of the investigation and agreed to pay $125 million to settle the DOJ's civil and criminal claims. Warner Chilcott's former president was also charged, but acquitted of the criminal charges against him. One physician in Massachusetts has been formally charged with receiving kickbacks as part of the investigation, and is awaiting trial.

Warner Chilcott is only one of several pharmaceutical companies that have been accused of engaging in numerous schemes to pay illegal kickbacks to prescribing physicians. The illegal kickbacks often take the form of expensive dinners, or vacations given to prescribing physicians. Another scheme for paying illegal kickbacks involves paying bogus speaking fees to prescribing physicians for presentations that are perfunctory at best, or never given at all.

Unfortunately, pharmaceutical companies are not unique in using questionable tactics - or downright illegal schemes - to increase product sales. Medical device manufacturers have been the targets of similar investigations into the marketing of their products for several years. In fact, the Food and Drug Administration (FDA) has created a special webpage devoted to reporting regulatory violations involving medical devices, including the illegal marketing of those medical devices.

Healthcare providers need to be vigilant with regards to the protected health information of their patients, and they need to be cautious about their financial arrangements with industry representatives.

Michael L. Smith, JD, RRT is board certified in health law by The Florida Bar and practices at The Health Law Firm in Altamonte Springs, Fla. This article is for general information only and is not a substitute for formal legal advice.

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