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August 27, 2020

Physician Convicted on HIPAA Criminal Charges

It’s unusual when a physician is criminally charged with a HIPAA offense, and rarer still when there’s a conviction after a jury trial. When a case like this occurs, it’s a warning to all physicians who treat Medicare patients or who are governed by HIPAA privacy.

The recent decision in United States v. Luthra (US Court of Appeals for the First Circuit, Aug. 6, 2020) presents an egregious violation of federal laws. In Luthra, the criminal charges arose from a gynecologist’s relationship with Warner Chilcott, a pharmaceutical company that sold Actonel and Atelvia, drugs prescribed to prevent and treat osteoporosis. The physician, Dr. Luthra, was a high-volume prescriber of these drugs, so a sales representative for the company asked her to participate in its speaker program to promote sales. Dr. Luthra spoke at events where food was provided by the sales representative, and it was also delivered to her home. During the time she was paid for speaker training and educational events, she significantly increased the number of prescriptions she wrote for Actonel and Atelvia, some of which were covered by Medicare. When the sales representative left Warner Chilcott’s employ, the doctor’s prescriptions for these drugs decreased.

In addition, because a less-expensive generic alternative to Actonel and Atelvia was available on the market, the majority of insurance plans wouldn’t cover the branded drug without prior authorization to show medical necessity. Obtaining prior authorization was a time-consuming process, so Dr. Luthra asked a sales representative from Warner Chilcott to help her medical assistant complete the prior authorization forms. The sales representative was allowed to access patient medical records to do so.

The Office of the Inspector General for the Department of Health and Human Services began investigating Warner Chilcott for potential kickback violations and health care fraud. In the course of this investigation, federal law enforcement agents interviewed Dr. Luthra about her speaking compensation and relationship with Warner Chilcott. She told the agents she was paid to read studies and write papers. She also claimed the sales representative didn’t have access to patient medical information. She instructed her medical assistant to tell the federal agents the sales representative didn’t have access to medical records because “there is a HIPAA law and there would be hefty fines for them both” if the investigators learned that unauthorized individuals had access to the records.

The agents were convinced of the doctor’s wrongdoing. The government brought criminal charges against her, and Dr. Luthra was tried in federal court. After a jury trial, she was convicted of aiding and abetting the wrongful disclosure of individually identifiable health information to the sales representative and obstructing a criminal investigation because she lied to investigators about the purpose of the payments she received from Warner Chilcott. She was acquitted of a charge of witness tampering. Even though the offenses were serious, Dr. Luthra received a lenient sentence of one year’s probation. The court recognized, however, that the criminal conviction itself would likely have serious and lasting effects upon the physician’s professional license and ability to practice. On appeal, the appellate court upheld the verdict and sentence.

The Luthra case is a warning to practitioners to not let down their guard on medical privacy. Modern medical practice involves endless regulation and penalties, and there could be a tendency on the part of overworked providers to become complacent in day-to-day dealings with their suppliers, sales representatives, and vendors. Whenever patient medical information is involved, providers need to remain vigilant that it’s disclosed for a permissible purpose under both federal and state law. In addition, this case illustrates why a provider should never speak to any federal or state government investigator without first consulting legal counsel. Had Dr. Luthra sought counsel immediately upon being contacted by federal agents, it’s likely that she never would have made the statements that lead to the charges of obstruction and witness tampering.

It’s unsettling, to say the least, when government personnel make an unannounced visit to the office or request an interview or other information. It’s wise to give some thought to your response if the unexpected occurs. In the case of an unannounced visit, ask the investigator or agent for their identification and make a copy. Inform the investigator that you’re more than willing to cooperate, but you would like to speak to your attorney before answering any questions. Larger facilities should have policies and procedures in place for addressing unannounced visits, and front desk staff must be trained to respond appropriately. Although the presence of government agents can be intimidating, the best course is to simply take a deep breath and call your attorney.

If you have any questions regarding the content of this alert, please contact Fran Ciardullo, special counsel, at fciardullo@barclaydamon.com or another member of the firm’s Health Care & Human Services Practice Area.

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