HHS

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Elizabeth Holmes barred from federal health programs for 90 years

Excluded —

The former Theranos CEO is barred from receiving payments from federal health program.

Theranos CEO and founder Elizabeth Holmes.

Theranos CEO and founder Elizabeth Holmes.

Elizabeth Holmes—the disgraced and incarcerated founder of the infamous blood-testing startup Theranos—is barred from participating in federal health programs for nine decades, according to an announcement from the health department Friday.

The exclusion means that Holmes is barred from receiving payments from federal health programs for services or products, which significantly restricts her ability to work in the health care sector. It also prevents her from participating in Medicare, Medicaid, and other federal health care programs. With a 90-year term, the exclusion is lifelong for Holmes, who is currently 39.

The exclusion was announced by Inspector General Christi Grimm of the Department of Health and Human Services’ Office of Inspector General.

Holmes is serving an 11-year, three-month sentence for defrauding investors of her blood-testing startup, Theranos, which she founded in 2003. At the time, Holmes claimed to have developed proprietary technology that could perform hundreds of medical tests using just a small drop of blood from a finger prick. The remarkable claim helped her drive the company’s valuation to a stunning $9 billion in 2014, and set up lucrative partnerships. But, in reality, the technology never worked. The company collapsed in 2018, and she was convicted of fraud in 2022.

In today’s announcement, the health department noted that the statutory minimum on exclusions for convictions like Holmes’ is just five years. But other factors are considered when determining the term, including how long the fraud took place, the length of the prison sentence, and the amount of restitution ordered. In addition to her 11-year prison sentence, Holmes was ordered to pay approximately $452,047,200 in restitution, the HHS-OIG noted.

“Accurate and dependable diagnostic testing technology is imperative to our public health infrastructure. False statements related to the reliability of these medical products can endanger the health of patients and sow distrust in our health care system,” Grimm said. “As technology evolves, so do our efforts to safeguard the health and safety of patients, and HHS-OIG will continue to use its exclusion authority to protect the public from bad actors.”

HHS-OIG also excluded former Theranos President Ramesh Balwani from federal health programs for 90 years. Balwani was also convicted of fraud and is serving a nearly 13-year sentence.

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CVS, Rite Aid, Walgreens hand out medical records to cops without warrants

prescription for privacy —

Lawmakers want HHS to revise health privacy law to require warrants.

CVS, Rite Aid, Walgreens hand out medical records to cops without warrants

All of the big pharmacy chains in the US hand over sensitive medical records to law enforcement without a warrant—and some will do so without even running the requests by a legal professional, according to a congressional investigation.

The revelation raises grave medical privacy concerns, particularly in a post-Dobbs era in which many states are working to criminalize reproductive health care. Even if people in states with restrictive laws cross state lines for care, pharmacists in massive chains, such as CVS, can access records across borders.

Lawmakers noted the pharmacies’ policies for releasing medical records in a letter dated Tuesday to the Department of Health and Human Services (HHS) Secretary Xavier Becerra. The letter—signed by Sen. Ron Wyden (D-Ore.), Rep. Pramila Jayapal (D-Wash.), and Rep. Sara Jacobs (D-Calif.)—said their investigation pulled information from briefings with eight big prescription drug suppliers.

They include the seven largest pharmacy chains in the country: CVS Health, Walgreens Boots Alliance, Cigna, Optum Rx, Walmart Stores, Inc., The Kroger Company, and Rite Aid Corporation. The lawmakers also spoke with Amazon Pharmacy.

All eight of the pharmacies said they do not require law enforcement to have a warrant prior to sharing private and sensitive medical records, which can include the prescription drugs a person used or uses and their medical conditions. Instead, all the pharmacies hand over such information with nothing more than a subpoena, which can be issued by government agencies and does not require review or approval by a judge.

Three pharmacies—CVS Health, The Kroger Company, and Rite Aid Corporation—told lawmakers they didn’t even require their pharmacy staff to consult legal professionals before responding to law enforcement requests at pharmacy counters. According to the lawmakers, CVS, Kroger, and Rite Aid said that “their pharmacy staff face extreme pressure to immediately respond to law enforcement demands and, as such, the companies instruct their staff to process those requests in store.”

The rest of the pharmacies—Amazon, Cigna, Optum Rx, Walmart, and Walgreens Boots Alliance—at least require that law enforcement requests be reviewed by legal professionals before pharmacists respond. But, only Amazon said it had a policy of notifying customers of law enforcement demands for pharmacy records unless there were legal prohibitions to doing so, such as a gag order.

HIPAA and transparency

The lawmakers note that the pharmacies aren’t violating regulations under the Health Insurance Portability and Accountability Act (HIPAA). The pharmacies pointed to language in HIPAA regulations that allow health care providers, including pharmacists, to provide medical records if required by law, with subpoenas being a sufficient legal process for such a request. However, the lawmakers note that the HHS has discretion in determining the legal standard here—that is, it has the power to strengthen the regulation to require a warrant, which the lawmakers say it should do.

“We urge HHS to consider further strengthening its HIPAA regulations to more closely align them with Americans’ reasonable expectations of privacy and Constitutional principles,” the three lawmakers wrote.

They also pushed for pharmacies to do better, encouraging them to follow the lead of tech companies. “Pharmacies can and should insist on a warrant, and invite law enforcement agencies that insist on demanding patient medical records with solely a subpoena to go to court to enforce that demand. The requirement for a warrant is exactly the approach taken by tech companies to protect customer privacy.” The trio noted that Google, Microsoft, and Yahoo have since 2010 required law enforcement to have a warrant to obtain customers’ emails.

Also noting tech companies’ lead, the lawmakers encouraged pharmacies to publish annual transparency reports. In the course of the investigation, only CVS Health said it planned to do so.

“Americans deserve to have their private medical information protected at the pharmacy counter and a full picture of pharmacies’ privacy practices, so they can make informed choices about where to get their prescriptions filled,” the lawmakers wrote.

For now, HIPAA regulations grant patients the right to know who is accessing their health records. But, to do so, patients have to specifically request that information—and almost no one does that. “Last year, CVS Health, the largest pharmacy in the nation by total prescription revenue, only received a single-digit number of such consumer requests,” the lawmakers noted.

“The average American is likely unaware that this is even a problem,” the lawmakers said.

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