Last week, in addition to the President of Warner Chilcott being arrested and the company pleading guilty to Medicare fraud, in a related case a Springfield, MA gynecologist was arrested in connection with allegedly accepting free meals and speaker fees from a pharmaceutical company in return for prescribing its osteoporosis drugs, allowing pharmaceutical sales representatives to access patient records, and lying to federal investigators.
Rita Luthra, M.D., of Longmeadow, Massachusetts, was indicted on one count of violating the Anti-Kickback Statute, one count of wrongful disclosure of individually identifiable health information, and one count of obstructing a criminal health care investigation by lying to federal agents and directing an employee to do the same. The indictment also seeks $23,500 in criminal forfeiture. Criminal forfeiture is an action brought as a part of a criminal prosecution of the defendant and requires that the government indict the property used or derived from the crime, along with the defendant.
According to court documents, Warner Chilcott, a pharmaceutical company, allegedly paid Rita Luthra $23,500 to prescribe its osteoporosis drugs (Actonel and Atelvia) from October 2010 through November 2011. On thirty-one occasions, a Warner Chilcott representative allegedly brought food to Luthra’s medical office for her and her staff, and paid $750 to speak with Luthra for roughly thirty minutes, while she ate. Warner Chilcott also paid to cater a barbeque hosted by Luthra at her home, and paid Luthra $250 for speaker training, despite the fact that there are no records where she spoke to any other physicians.
The United States Attorneys prosecuting the case further allege that Luthra’s rate of prescribing Warner Chilcott’s osteoporosis drugs increased during the time she was paid by the company, and abruptly declined once she stopped being paid by Warner Chilcott. Additionally, it is alleged that Luthra allowed Warner Chilcott to access protected health information in her patients’ medical files without appropriate authorizations.
When Luthra was interviewed about her relationship with Warner Chilcott by federal agents, she provided false information to those federal agents and allegedly instructed at least one of her employees to also lie and provide false information to the federal agents.
While actual sentences for federal crimes tend to be less than the maximum penalties allotted by statute, the charges Luthra is facing each come with stiff potential penalties. Luthra’s potential violation of the Anti-Kickback Statute comes with a sentence of no greater than five years in prison, three years of supervised release, and a fine of $25,000. The charge of disclosure of individually identifiable health information provides a sentence of no greater than one year in prison and/or a fine of $50,000 and one year of supervised release. The charge of obstructing a criminal health care investigation provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. Any sentence imposed by a federal district court judge against Luthra will be based upon the United States Sentencing Guidelines and other permissible statutory factors.
This indictment of Rita Luthra acts as a reminder as to how broad and far-reaching the Anti-Kickback Statute is. While the current indictment only implicates Luthra, a violation of the Anti-Kickback Statute can result in penalties for individuals on both sides of the prohibited transaction. Additionally, absent a conviction, individuals who violate the Anti-Kickback Statute may still face exclusion from federal health care programs at the discretion of the Secretary of Health and Human Services. It is unclear from the information on the DOJ website, but Massachusetts has had public disclosure of payments to healthcare providers since 2009, it is possible that the DOJ used those records to support their case.
The constantly changing landscape of the health care industry makes it difficult to predict the interpretation and application of the Anti-Kickback Statute. New safe harbor provisions can be enacted at any time in response to providers’ business practices and relationships and advances in information technology. Additionally, courts can continue to refine the intended scope and required scienter of the Anti-Kickback Statute. For now, we wait and see how the legal process plays out in the Luthra case.