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Jury returns guilty verdict in first HIPAA trial
The owner of a Florida claims handling company has been convicted of conspiracy to commit fraud, computer fraud, identity theft related to the use patient information from a local medical clinic, and violating the Health Insurance Portability and Accountability Act (HIPAA) through wrongful disclosure of personally identifiable health information. This HIPAA prosecution was the first HIPAA violation case that has gone to trial in the U.S., according to the Department of Justice (DOJ).

Identity theft and Medicare fraud. Fernando Ferrer, Jr., the owner of Advanced Medical Claims, Inc., purchased patient information from a former Cleveland Clinic employee. According to the indictment, the clinic employee accessed the clinic's computer system to download the personal identification information of more than 1,100 of the clinic's patients and sold the information to Ferrer. Ferrer then provided the information to others who used it to file fraudulent claims for Medicare reimbursement. The theft resulted in the submission of more than $7 million in fraudulent Medicare claims, with approximately $2.5 million paid to providers and suppliers.

Possible sentence. At sentencing, Ferrer faces statutory maximum prison terms of five years on the conspiracy count, five years on the computer fraud count, ten years on the wrongful disclosure of individually identifiable health information count, and two years on each count of aggravated identity theft. In addition, he may be required to pay fines totaling $750,000.

DOJ Press Release, Jan. 24, 2007. From CCH Healthcare.