The Department of Justice (DOJ) does not pursue many criminal penalties for HIPAA violations. But in cases of serious patient privacy violation, such as when the protected health information (PHI) is impermissibly disclosed with malicious intent or financial profit, the DOJ will make sure that the guilty party will pay for their acts of violation.
Warner Chilcott, a pharmaceutical company, was involved in cases of healthcare fraud resulting to two criminal convictions. The first case, which occurred in 2015, is a clear violation of the Health Insurance Portability and Accountability Act. Warner Chilcott admitted that it paid some money to doctors who would prescribe its healthcare products or would manipulate authorizations so that medical insurance companies will pay for the purchase of their prescription medications. Warner Chilcott had to pay $125 million to settle the case with the DOJ.
The second case is an obstruction of a criminal healthcare investigation. Allegedly, a Massachusetts gynecologist, Rita Luthra, M.D., violated HIPAA rules when she allowed a Warner Chilcott sales consultant to access the PHI of patients for 10 months from January 2011 to November 2011. Because of this, the firm was able to target patients with certain health conditions and facilitated their receipt of Warner Chilcott pharmaceutical products with proper authorizations. When interviewed by federal agents about her relationship with Warner Chilcott, Luthra provided false information that obstructed the investigation.
Luthra was formerly charged for receiving kickbacks from Warner Chilcott amounting to roughly $23,500. The money were documented as payment for speaker costs during trainings and educational events which didn’t really happen.. The DOJ at some point ditched the charges, even though the case against the doctor continued to be targeted, leading to the 2 convictions.
Luthra faces prison time and a big fine. The maximum fine for the HIPAA infringement is a custodial sentence of at most 1 year, one year of monitored release, and a maximum penalty of $50,000. The greatest penalty for obstructing a criminal health investigation is no more than 5 years in jail, three years of supervised release, and a fine of up to $250,000.