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Warner Chilcott District Managers Sentenced for HIPAA Violations and Healthcare Fraud

The United States Attorney’s Office for the District of Massachusetts has announced three former district managers of the pharmaceutical firm Warner Chilcott have been sentenced for violating the Health Insurance Portability and Accountability Act and committing healthcare fraud.

The offenses date back to 2011, when Warner Chilcott launched the osteoporosis drug Atelvia®. The drug was not covered by many insurance companies due to a generic alternative being available. Coverage would only be provided if prior authorizations were filled out by physicians.

In an effort to drive sales, Landon Eckles, a mid-Atlantic district manager in the osteoporosis division of Warner Chilcott, directed certain sales representatives to fill out prior authorizations for the drug, even if physicians refused to do so. Completing those prior authorizations required the representatives to access the protected health information of patients; a violation of HIPAA Rules.

Patients diagnosed with osteoporosis also had Atelvia® brochures added to their medical charts to remind physicians to prescribe the drug. According to the Department of Justice, Eckles received a bonus of $60,000 in 2011 as a result of the scheme.

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In November last year, Eckles pleaded guilty to violating HIPAA Rules and wrongfully disclosing PHI. He faced a maximum prison term of 10 years with three years of supervised release and a fine of up to $250,000. Last week, U.S. District Court Judge George A. O’Toole, Jr., sentenced Eckles to a year of probation and fined him $10,000.

Timothy Garcia, a district manager for the San Francisco Bay area, pushed his sales representatives to complete prior authorizations for Atelvia® when physicians were reluctant to do so. Garcia also “stressed the importance of concealing the misconduct of his sales representatives,” according to the Department of Justice. Garcia also received a bonus of $60,000 for boosting sales, in addition to being promoted to senior district manager. Garcia was sentenced to serve eight months of home confinement by U.S. District Court Chief Judge Patti B. Sari last month. He is also required to forfeit $21,500 in payments.

New York City and Long Island district manager Jeff Podolsky also directed sales representatives to fill out prior authorizations for Atelvia® and its predecessor Actonel® for physicians who prescribed the drugs. He also submitted false clinical justifications as to why those specific medications were required by patients. Those activities saw Podolsky become the top grossing district manager for Warner Chilcott and resulted in him receiving a $100,000 bonus and a promotion. According to the DOJ, as a result of Podolsky’s actions insurance companies paid at least $200,000 for Atelvia® and Actonel® prescriptions.

In July last year, Podolsky pleaded guilty to conspiracy to commit healthcare fraud. On Oct. 11, 2016, Chief Judge Sari sentenced Podolsky to serve 8 months of home confinement, pay a $10,000 fine, and forfeit $28,237.

Author: Steve Alder is the editor-in-chief of HIPAA Journal. Steve is responsible for editorial policy regarding the topics covered on HIPAA Journal. He is a specialist on healthcare industry legal and regulatory affairs, and has several years of experience writing about HIPAA and other related legal topics. Steve has developed a deep understanding of regulatory issues surrounding the use of information technology in the healthcare industry and has written hundreds of articles on HIPAA-related topics.