News and Insights

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Arizona’s Declaration of a Public Health Emergency ended on May 29, 2018, but the Arizona Opioid Epidemic Act is still in full effect.

Written by: Chelsea Gulison

Arizona issued its “Opioid Overdose Epidemic Declaration of Emergency” on June 5, 2017.  The Emergency lasted for just under a year until May 29, 2018.  Seven months into the Emergency, the Arizona legislature passed the Arizona Opioid Epidemic Act (SB 1001) (the “Act”) on January 25, 2018.  Several provisions of the Act apply directly to healthcare workers who prescribe, dispense, or administer opioids:

  • Opioids must be prescribed electronically;
  • Pharmacists must check the Controlled Substances Prescription Monitoring Program before dispensing an opioid or a benzodiazepine (Ariz. Rev. Stat. § 36-2606);
  • At least one form of Medication Assisted Treatment must be available without prior authorization from a patient’s insurance company;
  • Hospitals and emergency departments must refer patients to overdose treatment programs; and
  • An opioid naïve patient’s first opioid prescription must be limited to five days, and dosage levels must be limited according to federal prescribing guidelines.

There are exceptions to the 5-day opioid prescription limitation, particularly for patients with chronic pain, cancer, trauma, burns, hospice or end-of-life patients, and patients receiving Medication Assisted Treatment for substance use disorder.

Arizona Department of Health Services Director Cara Christ, M.D. signed a standing order to allow pharmacists to dispense naloxone to any person in the state without a prescription.  In addition, the Act also included a Good Samaritan provision to protect persons who call for emergency services for a potential opioid overdose from being prosecuted for other drug violations.  Access to Naloxone has also been expanded to law enforcement.

Doctors are being prosecuted for prescribing decisions.

Although most of the litigation regarding the opioid epidemic generally concerns drug manufacturers and pharmaceutical companies, physicians are increasingly being held responsible for overprescribing opioids, especially where overprescribing leads to a patient’s death.  For example: 

  • A Virginia physician was recently convicted of 861 federal drug charges and sentenced to 40 years in prison for over-prescribing opioids over the course of two years.
  • A Virginia dentist was recently sentenced to 8 years in prison for “running a scheme to prescribe opioids for himself, fellow doctors and other individuals who didn’t medically need them.”
  • A Northern California physician was recently charged with second-degree murder for four patient deaths resulting from overprescribing opioids and narcotics.
  • An Oklahoma physician and two of the physician’s employees were recently charged with conspiracy to distribute opioids, prescribing opioids to patients without a valid medical purpose.  Prosecutors allege the physician prescribed opioids to patients who had no valid need for the medications.  Three patients died, allegedly as a result of the physician’s over-prescribing. 

Pennsylvania Judge Rules that Supervised Injection Facilities do not Violate the Controlled Substances Act

The Federal Controlled Substances Act (“CSA”) makes it unlawful for any person to “manage or control any place . . . and knowingly and intentionally . . . make available for use, with or without compensation, the place for the purpose of unlawfully . . . using a controlled substance.”  U.S. District Judge Gerald McHugh recently held that facilities which provide safe havens for drug injection, overdose prevention, counseling, and treatment referral services do not violate the CSA. 

These facilities, often called Supervised Injection Facilities (“SIFs”), have been operating internationally since the 1980s, and are associated with decreased drug overdoses and overdose deaths among patrons and surrounding communities.  Clandestine SIFs exist in the United States, but many localities seek to openly operate SIFs.  Judge McHugh found that Congress did not intend to criminalize harm-reduction strategies such as SIFs in enacting the CSA, which, strictly construed, mainly targets “crack-houses” and other spaces that enable and encourage the market for unlawful drug use.  Although this single ruling will likely be appealed, it could eventually lead to opportunities for business ventures seeking to open SIFs in local communities.


*For more information about these topics, and for source material, please contact Chelsea Gulinson at Chelsea@MilliganLawless.com.

Written by: Miranda Preston

On May 13, 2019, the Supreme Court decided Cochise Consultancy, Inc. v. United States ex rel. Hunt, No. 18-315.  The case has implications for all individuals and entities contracting with the government, including all health care providers who submit claims to the government for payment (e.g., Medicare, Medicaid, and other Federal healthcare programs).  As explained below, the case expanded the time available under some circumstances for relators to bring qui tam (or “whistle-blower”) actions under the False Claims Act (“FCA”), and confirmed that relators (i.e., whistle-blowers) may take advantage of the FCA’s second (and lengthier) statute of limitations.  The decision also clarifies the question of whose knowledge of the alleged fraud (the relator’s or the government’s) starts the clock ticking.    

The False Claims Act

            The FCA is one of the federal government’s principal enforcement tools in “fraud and abuse” cases, and it has been used to recover billions of dollars from health care providers.  It imposes civil liability on any person who knowingly presents or causes to be presented false or fraudulent claims for payment by the government.[1]  The FCA permits a private person, known as a “relator,” to bring a civil action for violations of the FCA (known as qui tam actions) against the alleged false claimant in the name of the United States.[2]  If the United States intervenes, it assumes primary responsibility for prosecuting the case.  If the United States declines to intervene, however, the relator can still pursue the action on the United States’ behalf.[3]  Relators receive a percentage of the total recovery, ranging between 15% and 30% depending on whether the United States intervenes, plus attorney’s fees and costs.  

FCA Statute of Limitations

There are two statutory limitation periods governing civil FCA actions.  The first, §3731(b)(1), requires a case to be brought within six years of the date on which the FCA violation was allegedly committed.  The second, §3731(b)(2), requires the case to be brought within three years after the date the United States official charged with responsibility to act in the circumstances knew or should have known the facts material to the right of action, but not more than ten years after the date on which the violation was allegedly committed.  The later of these dates serves as the limitations period.

Cochise Consultancy, Inc. v. U.S. ex rel. Hunt 

Cochise Consultancy, Inc. v. U.S. ex rel. Hunt  In Cochise, a former defense contractor, Hunt, alleged that two other defense contractors (collectively, “Cochise”) submitted false claims for payment under a subcontract to provide security services in Iraq in 2006 and 2007.  Hunt revealed the alleged fraud to government investigators in 2010 and, just shy of three years later, he filed a qui tam action against Cochise.  The United States declined to intervene in Hunt’s action, and Cochise moved to dismiss the suit as barred by the statute of limitations. [4]  Hunt conceded his suit was barred by § 3731(b)(1)’s six-year limitation period, but he argued it was timely under § 3731(b)(2) because he filed it within three years of disclosing the alleged fraud to the government.  

The District Court disagreed, dismissing Hunt’s action as barred by the statute of limitations.  On appeal, the Eleventh Circuit reversed and remanded, holding that § 3731(b)(2)’s limitation period applies tonon-intervened actions and that Hunt’s action was timely.  Specifically, the Court found that Hunt’s knowledge of the alleged fraud did not trigger § 3731(b)(2)’s three-year limitation period because Hunt was not “the official of the United States charged with responsibility to act in the circumstances.”  Rather, Hunt’s revelation of the alleged fraud to government officials in 2010 started the three-year limitation period.

Implications of Cochise

Cochise resolved a circuit court split on the application of the FCA’s statute of limitations, and is in line with the approach taken by the Ninth Circuit Court of Appeals (the Court with appellate jurisdiction over the District of Arizona), in applying §3731(b)(2) even when the United States has not intervened.  However, contrary to Ninth Circuit precedent, Cochise provides that §3731(b)(2)’s three-year limitations period does not start to run when the relator knows of the material facts – it starts to run only when the “official of the United States charged with the responsibility to act in the circumstances” knew or should have known of the material facts.  When a relator knows of alleged fraud, but the government does not, the relator can theoretically wait up to ten years to bring suit.  

Those contracting with the government, including health care providers participating in Medicare and Medicaid programs, should be prepared to defend against fraud claims dating back for as many as ten years.  In anticipation of a need to defend against such claims, providers should review and, if necessary, update their document retention policies and practices to preserve records for at least ten years.  


[1] This includes certain third parties acting on behalf of the government.  31 U.S.C. § 3729(b)(2).
[2] 31 U.S.C. § 3730(b)(1)
[3] 31 U.S.C. §3730(c)(1)
[4] If the government had intervened in Hunt’s suit, § 3731(b)(2) plainly would have applied.

Written by: Ashley Petefish

Healthcare providers, practices, and companies today have a multitude of ways to reach consumers and patients. A provider can utilize Facebook, Instagram, Twitter, and other social media websites to target advertisements, post information about their practice, and attract new patients. This mass sharing of information, however, provides trademark infringers a prime opportunity to infringe on your trademark rights.

Start-up businesses and consumer products are not the only companies capitalizing on the social media boom. For example, Dr. Howard Luks, an orthopedic surgeon and sports medicine specialist in New York, has an active presence on all social media channels. Dr. Luks uploads videos to YouTube to market and attract patients. In one video, Luks explains why meniscal tears are so common and whether surgery is always necessary for this type of injury. This video has been viewed almost 200,000 times. Dr. Luks is a prime example of a physician utilizing social media to market his medical practice. However, with social media marketing, healthcare providers, practices, and businesses need to ensure they protect their trademark rights.

What exactly are my “trademark rights”?

A trademark is a word, symbol, or phrase used to identify a particular manufacturer or seller’s products and distinguish them from the products of another. 15 U.S.C. § 1127. When such marks are used to identify services rather than products, they are called service marks, although they are generally treated just the same as trademarks. A trademark identifies the source of products or services and distinguishes them from the products or services of others. Trademark infringement occurs when there is confusion as to the source of products or services. Trademark rights are acquired through use, and owners can have common law rights even without a registration.

Where does social media come into play?

If a word, phrase, or design in a social media post is confusingly similar to another’s trademark and is used to promote similar or related products or services, the trademark owner having prior rights can object to the use (whether its mark is registered or not). This includes use of words and phrases in hashtags, captions, stories, and other platform-specific features. In healthcare, the importance of protecting your mark not only relates to your business or practice, but it also affects your professional reputation.

An interesting tale of a physician and his trademark.

In 2015, Dr. Draion M. Burch, known to patients as “Dr. Drai”, applied for the “Dr. Drai” trademark and requested protection for “educational and entertainment services,” with products to include books, audiobooks, webinars, podcasts and various other media related to his medical practice. Dr. Drai is a Pennsylvania-based gynecologist and media personality. On his website, he touts himself as “One of America’s Top Women’s Health Experts.” Surprisingly, Dr. Dre, the Grammy award-winning rapper, objected to the physician’s registration of the mark stating there was a likelihood of confusion.

  Earlier this year, the USPTO’s Trademark Trial and Appeal Board (TTAB) sided with Dr. Drai, writing, “the issue is not whether purchasers would confuse the goods or services but whether there is a likelihood of confusion as to the source of the goods or services.” The Board found “no evidence of record” showing that “consumers would likely believe the parties’ goods and services would emanate from the same source” and dismissed Dr. Dre’s opposition to the trademark application. Dr. Drai not only won his right to utilize his mark to advertise his brand, but Dr. Drai is now protected from future infringers in the medical field.

How do I protect my brand?

To maximize protection of your brand, you should consider registering your trademarks with the U.S. Patent and Trademark Office. This protects your business and gives you an edge in legal situations. If your business or medical practice utilizes social media for marketing, to interact with patients or customers, or to reach consumers, you may have certain trademark rights that need protection. Additionally, if you have acquired usage of a word or phrase used to describe your business or practice, you likely would benefit from registering that word or phrase as a trademark. To determine if you have trademark rights that should be protected, or if you have questions about the best way to protect your company or practice’s brand, contact the Milligan Lawless attorney with whom you usually work.

      Earlier this year, the EEOC’s Phoenix District Office filed suit against Community Care Health Network, Inc., doing business as Matrix Medical Network in Arizona, alleging Matrix violated federal law. The EEOC’s suit alleges Matrix rescinded a job offer to Patricia Pogue after discovering Ms. Pogue was pregnant.

      Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act of 1978, the (“PDA”), prohibits employment discrimination based on sex, including pregnancy. Acts of pregnancy discrimination may include:

  • Firing a pregnant employee;
  • Laying off a pregnant employee;
  • Refusing to hire a pregnant employee;
  • Harassing a pregnant employee;
  • Refusing to provide accommodations for a pregnant employee;
  • Demoting a pregnant employee;
  • Forcing a pregnant employee to change positions or take time off.

     The PDA, which applies to employers with 15 or more employees, protects employees who go on leave due to pregnancy, childbirth, or a related medical condition. Employers must hold an employee’s job open on the same basis as it does for other employees who go on leave.

     According to the EEOC’s suit, Matrix offered Ms. Pogue a position as credentialing manager. After Ms. Pogue accepted the offer, she informed Matrix she was pregnant and would need maternity leave. Approximately one week later, Matrix asked Ms. Pogue why she did not disclose her pregnancy during the job interview. Matrix then rescinded the job offer. 

Written by: Ashley Petefish

     The EEOC’s suit against Matrix seeks back wages, compensatory, and punitive damages for Ms. Pogue. Further, the EEOC is seeking a permanent injunction enjoining Matrix from engaging in any discriminatory practices based on a person’s sex, including pregnancy.

     The EEOC has focused in on PDA discrimination cases during the past couple of years. The EEOC receives, on average, more than 3,500 charges of pregnancy discrimination each year. In 2017, the EEOC settled multiple pregnancy discrimination cases for a total amount of $15 million in monetary damages.

     All employers, including medical practices, should institute and carry out policies and practices to prevent pregnancy discrimination in the workplace. Employers that would like more information about pregnancy discrimination, including advice on creating and implementing effective anti-discrimination policies, may contact the attorneys at Milligan Lawless for assistance.

Written by: Kylie Mote

    Effective January 1, 2019, Arizona-based small employers will be required to provide continuation of employer-sponsored health plan benefits to qualifying former employees and their covered dependents. Currently, employers who employ at least 20 employees (as calculated by determining the number of employees employed on more than fifty percent of the employer’s typical business days in the previous calendar year) are required to offer continuing group coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA or “federal COBRA”). Arizona’s new law, referred to as a “mini-COBRA,” will apply to employers with at least one but not more than 20 employees during the preceding calendar year.

              Under the law, former employees who elect to continue coverage will receive benefits at the group cost, including the employer’s contribution and administrative fee (capped at five percent of the premium). To be eligible for continued coverage under the new law, employees and their covered dependents must 1) be enrolled in a group medical insurance plan for a minimum of three months, 2) be ineligible for Medicare coverage, and 3) experience a “Qualifying Event” thereafter losing coverage.  The law defines a “Qualifying Event” as follows: voluntary or involuntary termination of employment for a reason other than gross misconduct or reduction of hours required to quality for coverage;divorce or separation from the employee; death of the employee; the employee becomes eligible for Medicare coverage; a dependent child ceases to be a dependent child under the insurance plan; a retired former employee and his or her dependents lose coverage within one year before or after the employer files for bankruptcy.  

            Within 30 days of the occurrence of a Qualifying Event, mandated employers must provide written notification to an employee of his or her right to continue coverage(though the law considers a written notice timely if it is postmarked within 44 days of the Qualifying Event and mailed to the employee’s last known address).In the event that a covered dependent resides at a different address than the employee, the employer must deliver a separate written notice to the dependent. The written notice must inform the employee and his or her dependents of their right to continue coverage, the amount of the full cost of coverage (including the employer’s administrative fee), the process and deadlines for electing continuation of coverage, the dates and times for making payments, and the consequence for failure to pay in a timely manner (i.e., loss of coverage). For those employees and/or dependents receiving mini-COBRA coverage, employers are also required to provide at least 30 days advance notice of any changes to coverage (e.g., rates, plan, benefits,etc.).

            To continue coverage, employees must provide written notification to the employer within 60 days of the date of the employer’s notice. After electing coverage, employees have 45 days to submit the initial premium to the employer. Mini-COBRA coverage terminates upon the earliest of the following events: 18 months following the commencement of coverage; the employee’s failure to timely pay premiums; the date on which the employee or a covered dependent becomes eligible for coverage under Medicare, Medicaid, or any other health benefit plan (with respect only to that person); the date on which an employer terminates coverage under the health benefit plan for all employees (the employee and covered dependents are eligible to participate in a replacement plan); or the date a dependent child would otherwise lose coverage under the terms of the health benefit plan due to age (with respect only to that dependent child). In the event that a covered dependent is deemed disabled at the time of the Qualifying Event, the dependent may be eligible for extended coverage.

Mini-COBRA Broken Down

Continued Coverage: Employees and their covered dependents receive continued employer-sponsored health plan benefits at the group cost.

Mandated Employers: Employers with at least one but no more than 20 employees during the preceding calendar year.

Eligible Employees: Employees must be covered under a group medical insurance plan for a minimum of three months; ineligible for Medicare coverage; experience a Qualifying Event. 

Notification Requirements: Employer’s notice required within 30 days of the Qualifying Event. Separate notice required if a covered dependent resides at a different address.

Employer’s Administrative Fee: Capped at five percent.

Election of Coverage: Employees have 60 days from the date of employer’s notice to submit written notice of their desire to continue coverage. Initial premium is due within 45 days of electing coverage.

How Long Does Coverage Last: Generally 18 months, though coverage time may vary under certain circumstances.

 Employers who would like more information about Arizona’s mini-COBRA law are encouraged to contact the attorneys at Milligan Lawless for assistance.

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