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Warning about the threat of imprisonment for breaking the HIPPA Law

11/4/2022


If prosecutors find that providers disregarded PIR (protected information rules) in a way that warrants more punishment than fines and penalties - the doctor faces up to a year in prison on charges of violating the HIPPA rules. It does not happen very often, but you should concern about getting into such a situation, especially if your practice involves the prescription of compounded drugs.  


What is meant by a violation of HIPPA?

Let's look at an example.

On October 6, 2022, the verdict was handed down to Frank Alario. He was accused of a conspiracy to wrongfully obtain and disclose individually identifiable health information. At sentencing, he faced up to a year in prison and a $50,000 fine.     

Alario was charged along with the pharmaceutical executive. It includes several counts: conspiracy to commit healthcare fraud and wire fraud, conspiracy to commit money laundering, and HIPPA charges. 

The charges were brought because of prescription drugs that are made to order. 

A physician Alario who had offices in New Jersey, Florida, and New York, worked with a pharmaceutical executive Keith Ritson, the founder of the now-defunct Life Sciences Medical LLC, and unindicted but named co-conspirator William Hickman a pharmaceutical representative, to get these drugs at a retail pharmacy Central Rexall in Louisiana, which is now out of business. It is a legitimate practice to compound these drugs, but because of significant growth in spending in that area, OIG kept track of such prescriptions in recent years and made a work plan item on the subject with a report due in 2023.

Alario and Ritson conspired to fraudulently obtain "thousands of dollars for a month's supply of certain prescription drugs." That is how the original complaint sounded. Moreover, Alario signed prescriptions for patients even without consultations with them. He also allowed Ritson to have access to patients' confidential, individually identifiable PHI. Prosecutors argued that Alario introduced Ritson to patients as his nephew, and Ritson was able to obtain additional information under the guise of a healthcare worker.


Is compounding a problem?

Compounding drug is legitimate, and even can be useful. But unfortunately, this practice can lead to abuse, making the relevant authorities suspicious. Because compounding is not FDA-approved, providers try to get familiar with compound pharmacies that can be hard to vet. That is why they have to rely on the reps, which are really useful in such cases. However, it is hard to explain the medical necessity of compound drugs (e.g. creams with lidocaine and gabapentin). Medicare does not want to pay $2.000 for them without making sure the provider prescribes it out of an urgent need, not because it is working for a patient but because there is less irritation. 


Which HIPPA breaches earn prison?

It is not known whether Alario will go to prison. In the superseding indictment, many of the fraud charges originally brought against Alario and Ritson are absent, suggesting they can avoid the worst. Alario may be reclassified from a principal defendant to a lesser party.

While most non-compliance charges carry only fines, charges that carry actual imprisonment are a growing threat.  

When in 2010, an ex-worker at the University of California at Los Angeles Health System who looked up celebrities PHI was sentenced to 4 months and a $2,000 fine, healthcare workers have been on notice that HIPPA violations can mean prison.

 

To avoid the penalty threat, take these pieces of advice:


Compounding? Be clear take it clean!

While pharma reps can be helpful to doctors in busy offices they can turn these relationships into something problematic sometimes. Doctors that prescribe compound drugs must be particularly clear in the notes of their choice.   

Before using a compounding pharmacy, prescribers should conduct due diligence into the pharmacy's licenses and certifications, safety record, and reputation for quality, as well as understand the environment in which drugs are being compounded and whether there have been contamination issues in the past.  

In order to know if there are some issues with the prescriber your representative recommends, visit public sources such as FDA's warning letters and violation notices library.


Do not neglect HIPPA risk.

Make sure that you have a HIPPA officer in your office who is "familiar with the criminal provisions of HIPPA and maintain responsibility for ensuring consistent compliance throughout the practice.

 

Remember, that you can lose more than just money!

Source: Medicare Part B News



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