Visit regularly for up-to-date information on relevant news, firm announcements and additions to our AZ Health Law Blog.
On April 30th, 2018, Dr. Rita Luthra was convicted of violating the HIPAA Privacy Rule and of obstruction of a criminal health care investigation. A federal jury found that Dr. Luthra allowed a pharmaceutical sales representative to access her patient records and lied to federal investigators. Criminal charges under the federal Anti-Kickback Statute (“AKS”) were alleged initially but subsequently dropped.
Dr. Luthra’s conviction stems from her involvement with a pharmaceutical sales representative with Warner Chilcott. Warner Chilcott was the subject of a criminal investigation by the U.S. Department of Justice (DOJ) in 2015. The investigation resulted in Warner Chilcott pleading guilty to a felony charge of health care fraud and agreeing to pay $125 million to resolve criminal and civil liability arising from alleged illegal marketing practices of certain drugs.
According to the government, the Warner Chilcott sales representative asked Dr. Luthra to participate in the company’s speaker program because Dr. Luthra prescribed a high volume of osteoporosis medication. Dr. Luthra agreed and spoke at medical education and speaker training events held in her office. The events involved Dr. Luthra speaking to the sales representative for about thirty minutes while she ate food provided by the representative for Luthra and her office staff. Warner Chilcott paid Dr. Luthra approximately $23,500 for her services.
In January 2011, Warner Chilcott launched a new osteoporosis drug which Dr. Luthra prescribed. Many insurance companies required a prior authorization before covering the new drug. In response to receiving numerous denials for Dr. Luthra’s prescriptions for the new drug, she asked the sales representative to assist one of her medical assistants with obtaining prior authorizations. The sales representative agreed, was given access to Dr. Luthra’s medical records to complete the prior authorizations, and filled out the prior authorizations.
Dr. Luthra later provided false information to OIG investigators when interviewed about her relationship with Warner Chilcott. She was convicted of a criminal violation of HIPAA for the improper disclosure of her patients’ protected health information to the sales representative. It is illegal to knowingly disclose protected health information in violation of the Privacy Rule. Most HIPAA enforcement activities are in the form of civil enforcement. However, the Privacy Rule also establishes criminal penalties for certain wrongful disclosures of protected health information.
Dr. Luthra’s sentencing has not yet been scheduled. Nonetheless, Dr. Luthra’s HIPAA violation provides for a sentence of up to one year in prison and/or a fine of up to $50,000. The obstruction conviction carries a higher potential penalty of up to five years in prison and a fine of up to $250,000.
While criminal prosecutions of HIPAA violations are rare, this case serves as a reminder that HIPAA is more than a series of privacy and security rules; HIPAA establishes criminal liability and potential jail time for HIPAA violations. This case reflects the DOJ’s continuing scrutiny of physician-pharmaceutical manufacturer relationships, particularly those that can affect health care decision making. Providers should be mindful of their relationships with pharmaceutical companies, and third parties who may have access to protected health information. Moreover, if a provider is the subject of an investigation, he or she should be truthful and engage competent counsel at the early stages of the investigation.
For more information, or if you need assistance with an investigation or evaluating whether your relationships comply with HIPAA, please contact Miranda Preston or another health care attorney at Milligan Lawless.
The law mandates that, beginning October 1, 2017, physicians must consult a prescription monitoring program (PMP) prior to prescribing an opioid analgesics or benzodiazepine in schedules II-IV.
Under the new regulations, Arizona health care institutions must establish and implement more comprehensive plans and procedures for prescribing or ordering an opioid or administering an opioid.
Physicians who prescribe opioids, and health care institutions licensed by Arizona’s Department of Health Services, should be aware of this new law, and new rule. If you have any questions regarding these new laws, or would like assistance with updating your policies and procedures to conform to these requirements, please feel free to contact Milligan Lawless.
 SB 1283 (2016), signed by Arizona Governor Doug Ducey in 2016 amended A. R. S. § 36-2606.
 9 AZ Adc. Ch.10, Ariz. Admin. Code R9-10-120.
In November 2016, Arizona voters passed a ballot initiative (Proposition 206) for a statewide sick time law and annual increases to the minimum wage. The new law, entitled the Fair Wages and Healthy Families Act, takes effect on July 1, 2017. The purpose of this article is to provide an overview of the law’s paid sick time requirements and the steps employers should be taking to ensure compliance with those requirements.
Take note that the following information is intended as a summary only. Employers are strongly encouraged to seek legal counsel should they have additional questions regarding the new law’s requirements. Additionally, employers should be aware that certain requirements may be subject to changes or further clarification as the courts and the Industrial Commission provide additional guidance on the new law.
What is Paid Sick Time?
The new law requires employers to provide paid sick time to all full-time, part-time, and temporary employees. Paid sick time, which must be compensated at the employee’s current pay rate, may be used for the following reasons:
The law broadly defines “family member” to include children and stepchildren of any age, parents and stepparents, spouses and domestic partners, grandparents, siblings, in-laws, and other individuals related by either blood or affinity whose close association with the employee is the equivalent of a family relationship.
What Arizona employers are subject to the paid sick time requirements?
Virtually all employers, including small businesses, are subject to the law’s requirements. State and federal employers are exempt.
How much sick time does the law provide employees?
Regardless of the size of the employer, employees must accrue paid sick time at the rate of no less than one hour for every 30 hours worked.
Employees working for employers with 15 or more employees are entitled to accrue and use up to a maximum of 40 hours of paid sick time per year.
Employees working for employers with less than 15 employees are entitled to accrue and use up to a maximum of 24 hours of paid sick time per year.
Accrual of paid sick time begins July 1, 2017. Employees may use paid sick time as soon as it is accrued; however, employers may require employees hired after July 1, 2017 to wait 90 calendar days after the start of employment before using accrued paid sick time.
What if an employer already provides paid time off to employees?
If employers already have policies that provide paid time off in an amount that meets or exceeds the law’s minimum requirements (and that can be used for the same purposes specified by the law), they are not required to provide additional paid sick time to employees.
Additionally, the law does not prohibit or discourage employers from implementing more generous paid leave policies, i.e., providing employees with paid time off above the law’s minimum requirements.
What if an employee has unused paid sick time at the end of the year?
The new law provides employers with two options regarding an employee’s accrued, unused paid sick time:
Regardless of what option an employer chooses, employees are still only entitled to use the amount of paid sick time required under the law (up to a maximum of 40 hours per year) unless the employer has provided a higher limit.
Employers are not required to pay an employee for any accrued, unused paid sick time upon termination of the employee’s employment. If the employee is rehired by the employer within nine months of the termination of employment, however, the employee’s previously-accrued paid sick time must be reinstated.
How does an employee request use of paid sick time?
Employees may submit requests to use paid sick time orally, in writing, electronically, or by any other means acceptable to the employer. When the need to use paid sick time is foreseeable, an employee must make a good faith effort to provide advance notice and should attempt to schedule such time in a manner that is not unduly burdensome to the employer’s operations. When the need to use paid sick time is not foreseeable, an employer may only require advance notice if it has previously given the employee a written policy outlining the procedures for providing advance notice.
Employers cannot require that employees find a replacement worker when requesting use of paid sick time.
Can employers require employees to document or discuss the details of a need to use paid sick time?
In the event that an employee uses paid sick time for three or more consecutive work days, employers may require reasonable documentation that the paid sick time was used for one of the reasons specified under the law.
Employers cannot require employees to specify the relevant health issue or the details of domestic violence, sexual violence, abuse, or stalking that gave rise to the need to use paid sick time.
Are employers required to give employees notice of their rights under the new law?
At the commencement of an employee’s employment or by July 1, 2017, whichever is later, employers must provide employees written notice of the following:
Industrial Commission Labor Department
800 West Washington Street
Phoenix, Arizona 85007
The notice should be posted alongside other required workplace notices/posters.
Are there other recordkeeping requirements?
Employers must provide employees with the following information either in or on an attachment to the employee’s paycheck:
What are the consequences for failing to comply with the law’s requirements?
The law prohibits discrimination and retaliation against employees who use or request paid sick time. Paid sick time counts as a protected absence and cannot lead to any disciplinary or adverse action against an employee. The law creates a rebuttable presumption that any adverse employment action taken within 90 days of an employee’s use of paid sick time is retaliatory. An employer must show by clear and convincing evidence that the adverse employment action was not in retaliation for the employee’s use of paid sick time.
Employers who fail to comply with the law’s requirements are subject to the following:
What should employers do to prepare for the new law?
Steven T. Lawrence recently had the opportunity to discuss the current state of the M&A climate with Jordan Geotas and George Odden of CP Capital Advisory Services.
In an article entitled “Failure in an M&A Transaction for the Physician Owner,” Milligan Lawless partner Steve Lawrence provides tips on how to avoid pitfalls during the M&A Transaction Process.
To read the full article Click Here.
On June 16, 2016, the U.S. Supreme Court issued a long-awaited decision addressing the
scope of liability under the False Claims Act (“FCA”). In Universal Health Services, Inc. v. U.S. ex rel. Escobar, the Court unanimously held that the FCA may impose liability when a party falsely implies that specific services were provided in compliance with all material payment requirements. The decision is important to any healthcare provider participating in federal healthcare programs.
The FCA, generally, imposes liability upon any party who knowingly presents, or causes to be presented, false or fraudulent claims for payment to the federal government. The FCA may be enforced by the U.S. Department of Justice or by private parties (whistleblowers) who bring civil qui tam suits in “the name of the government.” Parties found liable under the FCA may be subject to treble damages and up to $10,000 per claim.
 Universal Health Services, Inc. v. U.S. ex rel. Escobar, 136 S.Ct. 1989 (2016)
 31 U.S.C. § 3729(a)(1)(A)
 31 U.S.C. § 3730
 31 U.S.C. § 3729(a)
We are pleased to announce today that Chambers USA ranked Milligan Lawless, P.C. and 3 of our attorneys among the best in Arizona for 2016. Among Arizona law firms, Milligan Lawless achieved a Band 1 ranking, Chambers USA’s highest recognition, in the Healthcare practice area.
The firm received the following “Leading Individual” rankings for Phoenix attorneys:
Chambers USA is an annual ranking that assesses each law firm and attorney on technical legal ability, professional conduct, client service, commercial awareness/astuteness, diligence, commitment and other qualities most valued by their clients. Additionally, independent interviews with clients and confidential submissions of law firms are part of the Chambers research and evaluation process.
We are pleased to announce the arrival of Attorney Robert J. Itri as our newest shareholder. Bob is an experienced attorney whose practice areas include Litigation and Intellectual Property. Bob represents clients in matters before the United States Securities and Exchange Commission, the Financial Industry Regulatory Authority (FINRA) and the Arizona Corporation Commission. He also brings a high level of experience in business matters to the firm, representing both start-up and existing businesses in complex litigation matters encompassing intellectual property and securities, arbitration and enforcement actions, contract, trade secret, business tort and shareholder litigation.
We are pleased to announce that three of the Firm’s attorneys have been recognized as 2016 Southwest Super Lawyers. Annually, only the top five percent of attorneys in Arizona and New Mexico are selected by Southwest Super Lawyers to receive this honor.
The following Milligan Lawless attorneys are named 2016 Southwest Super Lawyers in Arizona:
Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a multiphase process that includes a statewide survey of lawyers, independent research and peer reviews by practice area.
Milligan Lawless, P.C. and The Northern Trust Company
“Avoiding Snares and Traps in 2016 Mergers and Acquisitions”
March 9, 2016
7:30 AM Registration and Continental Breakfast
8:00 AM – 9:00 AM Presentation
The Northern Trust Company
2398 East Camelback Road, Suite 1100
Phoenix, Arizona 85016
The issues facing companies on both the sell side and the buy side in the Mergers & Acquisitions (M&A) market today are varied and changing. A misstep along the way can cause an otherwise successful venture to be quickly derailed. Steven T. Lawrence from Milligan Lawless, P.C. and Curtiss C. Smith and Patty Park from Northern Trust will share important perspectives on the key issues in today’s market. The seminar will be followed by a time for networking with panelists and attendees.
Cost to Attend: Free
RSVP to Mary Reimann at Milligan Lawless:
Steven T. Lawrence is a business lawyer. Steve is a shareholder in Milligan Lawless, and focuses his practice on commercial transactions, including mergers and acquisitions, finance and intellectual property licensing. Steve has substantial experience in matters ranging from complex commercial transactions to securities offerings. Steve is listed in The Best Lawyers in America for Corporate Law and Chambers USA for Corporate/M&A Law. Steve holds a Master of Laws (LL.M.) from Loyola University Chicago, a J.D. With Distinction from the University of the Pacific McGeorge School of Law, a M.B.A. from the W.P. Carey School of Business at Arizona State University and a B.S. in Business Administration from California State University, Sacramento.
Curtiss C. Smith is Senior Vice President in the Banking Practice at Northern Trust. In addition to credit and portfolio management responsibilities for the market, he is also charged with growing the bank’s lending business in Phoenix. Curt joined Northern Trust in 2015 and has more than 20 years of experience in various commercial banking roles in Arizona and California including commercial and industrial lending, commercial real estate, asset-based lending, private banking, and credit risk management. Curt holds a BS in accounting from Santa Clara University and an MBA from Arizona State University.
Patty Park is a Vice President at Northern Trust. Patty provides comprehensive planning services and administrative advice to high net worth individuals encompassing areas such as cash flow analysis, risk management, income tax and transfer tax planning, retirement planning, education funding, estate planning, and charitable giving. Before joining Northern Trust, Patty was Director of Financial Planning at Keats, Connelly & Associates, a comprehensive financial planning firm specializing in assisting Canadians who were moving to the US. She began her career as an auditor with Deloitte & Touche in Cleveland and Phoenix. Patty earned a bachelor’s degree in accountancy from Case Western Reserve University in Cleveland, and a master’s degree in International Management from Thunderbird School of Global Management in Glendale, Arizona.