News and Insights
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Since HIPAA’s creation almost 25 years ago, many have long suspected that, eventually, a provider’s failure to comply with HIPAA might result in a patient’s recovery of economic damages as a result. Although HIPAA violations can lead to economic penalties imposed by the U.S. Department of Health and Human Services Office for Civil Rights, HIPAA does not include a mechanism for patients to seek economic damages from non-compliant providers. However, the Arizona Supreme Court recently determined that HIPAA standards can be used in the context of a patient’s claim against a provider for negligently disclosing protected information.
Understanding when and how a provider may disclose a patient’s information is tricky. Typically, a provider discloses an individual’s protected health information to the individual, the individual’s family or specifically-authorized representatives, or pursuant to a subpoena. However, in each instance, a provider can only disclose such information pursuant to Arizona’s medical records statute and HIPAA.
In a case decided earlier this month, the Arizona Supreme Court clarified that Arizona’s medical records statute “affords healthcare providers immunity from liability for damages if they acted in good faith when disclosing medical information pursuant to applicable law.” However, although HIPAA does not include a private right of action, the Court concluded that HIPAA is applicable to defining the standard of care in a state law negligence claim. Thus, although Arizona law may protect against liability for good faith disclosures of a patient’s protected information, understanding when and how disclosures are allowed under HIPAA and Arizona’s medical records statute is essential.
For any questions on the above, please contact Jim Taylor or Chelsea Gulinson at 602-792-3500.
 A.R.S. § 12-2296.
 Shepherd v. Costco Wholesale Corp., 2021 WL 941432.
Hot Topics in Risk Management | Considerations for Requiring
COVID-19 Vaccinations for Medical Practice Staff
As COVID-19 vaccines become more widely available, health care organizations, medical practices, and other employers may consider whether, and under what circumstances, they will require employees to be vaccinated. Employers who address this issue must balance the interests of patients and employees, who have a right to a safe office environment, with the interests of employees who have or claim to have legitimate objections to being vaccinated. Finding balance will raise legal, ethical, and policy issues.
As to the legal issues, the U.S. Equal Employment Opportunity Commission (EEOC) recently released guidance regarding the extent to which federal laws permit employers to require employees to be vaccinated. The general rule is pretty straightforward: subject to certain exceptions, employers may require employees to be vaccinated. As you might expect, the exceptions are less straightforward, relying on terminology that is susceptible to conflicting interpretations.
The Americans with Disabilities Act (ADA) permits employers to impose “a requirement that an individual shall not pose a direct threat to the health or safety of individuals in the workplace.” However, if requiring vaccinations “tends to screen out an individual with a disability,” the employer must show that (a) an unvaccinated employee would pose a “direct threat” due to a significant risk of substantial harm to the health and safety of the individual or others, and (b) the threat cannot be eliminated or reduced by a “reasonable accommodation” (which may include remote work or a temporary leave of absence).
Title VII of the Civil Rights Act of 1964 (Title VII) imposes a religious belief exception, which requires employers to provide “a reasonable accommodation” for an employee’s “sincerely held religious belief, practice or observance,” unless the accommodation would pose an “undue hardship.” For purposes of this religious belief exception, undue hardship is defined as “more than a de minimis cost or burden to the employer.”
If an employee cites a medical or religious basis for objecting to the vaccine, the employer must engage in a “flexible, interactive process” to determine whether it is possible to accommodate the employer’s and the employee’s interests. This will not be a simple or clear-cut exercise, given the vagaries of the words and phrases used in the ADA, Title VII, and the EEOC guidance, all of which call to mind Humpty Dumpty’s comments about what words mean.
Unfortunately, there is no easy way out for employers deciding on whether and how to require employees to get vaccinated. Employers who do not require vaccinations may face claims by patients and employees who contract, or are concerned about contracting, COVID-19; employers who require vaccinations may face claims by employees who object to that requirement. Imposing a vaccination requirement seems to be a relatively low-risk option. Significant difficulties will arise, however, if an employee claims a medical or religious exemption to the requirement. At that point, seek legal advice to divine the meaning and application of the terms used in the ADA and Title VII, e.g., is a particular accommodation “reasonable,” is a burden “de minimis,” etc.
This article is informational only and is not, nor should it be taken as, a substitute for, legal advice.
 Gostin, L., et al., Mandating COVID-19 Vaccines, JAMA. Published online Dec. 29, 2020. doi:10.1001/jama.2020.26553.
 The Importance of COVID-19 Vaccination for Healthcare Personnel, Centers for Disease Control and Prevention, December 28, 2020; https://www.cdc.gov/coronavirus/2019-ncov/vaccines/recommendations/hcp.html.
 What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws
Technical Assistance Questions and Answers, US Equal Employment Opportunity Commission; updated Dec. 16, 2020, https://www.eeoc.gov/wysk/what-you-should-know-about-covid-19-and-ada-rehabilitation-act-and-other-eeo-laws?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=.
 42 U.S.C. § 12113(b).
 42 U.S.C. § 12112(b)(6); 42 U.S.C. § 12113(a).
 42 U.S.C. § 12111(3).
 42 U.S.C. § 12111(9); 42 U.S.C. § 12113(a).
 42 U.S.C. § 2000e-2(a); 42 U.S.C. § 2000e(j); Commission Guidelines, 29 C.F.R. § 1605.2(c).
 Commission Guidelines, 29 C.F.R. § 1605.2(e)(1).
 29 C.F.R. § 1630.2(o)(3); see 29 C.F.R. pt. 1630 app. § 1630.9.
 “When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.”
Just coming out of a lazy daze? Arizona voters recently puff-puff-passed Proposition 207, the “Smart and Safe Arizona Act,” legalizing the possession and recreational use of marijuana for users over age 21. Individuals are also permitted to grow no more than 6 marijuana plants in their residences, so long as the plants are contained in a lockable area and outside public view. Marijuana sales will now be taxed at 16% in addition to existing transaction privilege tax and use tax. Revenue from marijuana sales will be distributed to community college districts, municipal police departments, municipal fire departments, county sheriffs’ departments, the Arizona Highway User Revenue Fund, the Justice Reinvestment Fund, and the Attorney General.
The Arizona Department of Health Services is directed to adopt rules to regulate marijuana, including licensing of retail stores, cultivation facilities, and production facilities. Although existing nonprofit medical marijuana dispensaries might be first in line to hold for-profit marijuana licenses, Prop 107 established the Social Equity Ownership Program, which will issue licenses to entities whose owners are from communities that have been disproportionately impacted by previous marijuana laws. Jack pot!
In the interests of “efficient use of law enforcement resources, enhancing revenue for public purposes, and individual freedom,” Arizona is now one of 15 states that gives flower to the people. Talk about blazing a trail! But, don’t get lost in the weeds. You can still take a hit for selling, transferring, or providing marijuana to individuals under age 21. And, it’s still illegal to drive, fly, or boat while impaired.
Further, while the Arizona Medical Marijuana Act prohibits employers from discriminating against medical marijuana card holders, Prop 207 does not include the same protections for users of recreational marijuana: employers may still enjoy their rights to maintain drug-and-alcohol-free places of employment through workplace policies restricting the use of marijuana by current and prospective employees. Employers can require current and prospective employees to submit to drug tests based on written testing policies. And, employers may take adverse employment actions based on a positive drug test, including suspension, termination, or refusal to hire a prospective employee. Because marijuana is still a controlled substance under federal law, federal drug free workplace rules still apply to use of recreational marijuana.
Beginning July 12, 2021, an individual who was arrested for, charged with, or convicted for marijuana-related crimes can pipe up and petition the courts to expunge their record. And, Maricopa prosecutors plan to dismiss all pending and unfiled charges of possession of marijuana, and any associated paraphernalia charges.
Prop 207 will take effect on or before April 5, 2021.
For more information, contact Milligan Lawless at 602-792-3500.
 See A.R.S. §§ 23-492 et seq.
 See 21 U.S.C. § 812; https://www.samhsa.gov/workplace/legal/federal-laws/contractors-grantees.
UPDATE ON THE FAMILIES FIRST CORONAVIRUS RESPONSE ACT: REVISIONS TO PAID LEAVE BENEFITS, INCLUDING HEALTHCARE PROVIDER EXEMPTION
The United States Department of Labor’s (DOL) Wage and Hour Division has issued revisions to the regulations implementing the paid leave provisions of the “Families First Coronavirus Response Act” (FFCRA). Responding to a recent federal court decision striking down key provisions of the DOL’s previously-issued regulations, the DOL has reaffirmed certain regulations, amended other regulations, and further explained the rationale behind its positions. The revised regulations went into effect on September 16, 2020.
FFCRA PAID LEAVE BASICS
Signed into law on March 18, 2020, the FFCRA authorized an emergency relief package providing support for individuals impacted by the COVID-19 public health emergency, including temporary paid sick and emergency family leave for eligible employees. The law applies to private sector employers with fewer than 500 employees as well as government entities, though certain exceptions may apply.
The FFCRA became effective on April 1, 2020 and is designated to expire on December 31, 2020.
Paid Sick Leave
The FFCRA provides paid sick leave to employees who are unable to work (or telework) due to the following COVID-19-related reasons:
1) The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
2) The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
3) The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
4) The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in subparagraph (2).
5) The employee is caring for their son or daughter if the school or place of care of the son or daughter has been closed, or the childcare provider of the son or daughter is unavailable, due to COVID-19 precautions.
6) The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and the Secretary of Labor.
Under the law, full-time employees are entitled to 80 hours of immediately-available paid sick leave. Part-time employees are entitled to paid sick leave in an amount that is equivalent to their normal work hours in a two-week period.
Employees must be paid their normal rate of pay or minimum wage – whichever is greater. With respect to self-care, paid sick leave is capped at $511/day and $5,110 in the aggregate. In cases in which an employee uses paid sick leave to care for others, the cap is $200/day and $2,000 in the aggregate.
Emergency Family Leave
The FFCRA (as an expansion of the Family Medical Leave Act or “FMLA”) provides up to 12 weeks of emergency family leave (or ten weeks of emergency family leave and two weeks of paid sick leave) to eligible employees who are unable to work (or telework) due to a need to care for a minor child whose school/daycare is closed or because the child’s childcare provider is unavailable due to COVID-19.
Eligible employees are any part-time or full-time employee who has been on the job for at least 30 days.
An employer is permitted to designate the first ten days of emergency family leave as unpaid (although an employee can opt to use vacation time or other paid time off, including paid sick leave provided under the FFCRA, to cover the unpaid time).
Beyond the first ten days, emergency family leave is paid at two-thirds the employee’s normal rate of pay with a cap of $200/day and $10,000 in the aggregate.
Emergency family leave does not change the overall amount of FMLA leave available to employees during an applicable FMLA 12-month period.
THE REVISED REGULATIONS
Narrowing the definition of “healthcare provider”
Under the FFCRA, employers of “healthcare providers” may elect to exclude such employees from taking paid leave. While the initial regulations broadly defined “healthcare provider” to include nearly any person employed in a doctor’s office, hospital, or clinic, the revised regulations significantly narrow this definition to the following:
1) A “healthcare provider” as defined by the FMLA. The definition includes doctors (M.D.s and D.O.s), podiatrists, dentists, clinical psychologists, optometrists, chiropractors, nurse practitioners, nurse-midwives, clinical social workers, physician assistants, certain Christian Science Practitioners, and other limited health care providers; or
2) Any other employee of a covered employer who is capable of providing health care services, “meaning he or she is employed to provide diagnostic services, preventive services, treatment services or other services that are integrated with and necessary to the provision of patient care and, if not provided, would adversely impact patient care.” This category of “healthcare providers” includes nurses, nurse assistants, medical technicians, and laboratory technicians.
The revised regulations provide examples of employees who will not be considered a “healthcare provider” for purposes of the FFCRA, including IT professionals, maintenance staff, human resources personnel, records managers, billers, and consultants.
Relaxing the requirement for providing notice and supporting documentation
The initial regulations required employees to provide employers with notice and documentation establishing the need for paid leave prior to taking the leave.
The revised regulations relax that standard. Rather than dictating that employees provide notice and documentation before taking leave, the revised regulations clarify that employees may provide documentation “as soon as practicable.”
In cases in which the need for leave is foreseeable, e.g., an employee knows that his or her child’s school is closed in advance, the DOL anticipates that the employee generally will provide notice before taking leave.
Reiterating paid leave is only available to employees “unable” to work/telework
An employee’s reason for taking paid leave must be the sole reason the employee is unable to work/telework (i.e., “but-for” the employee’s need to take leave, the employee would otherwise be working).
This means that an employee cannot use paid leave if his or her employer closes its worksite or otherwise does not have work available for the employee for reasons other than the employee’s need to take leave (i.e., paid leave is not available to employees who are furloughed, laid off, or on a reduced schedule due to lack of work or business).
With that said, the revised regulations underscore that employers may not arbitrarily withhold work or reduce an employee’s hours to prevent the employee from taking paid leave. An unavailability of work must be due to legitimate, non-discriminatory business reasons and not simply that an employer is attempting to thwart an employee’s ability to take paid leave.
Clarifying when an employee can take intermittent leave
For employees who are teleworking or working onsite, the revised regulations reiterate that employees may take intermittent emergency family leave or paid sick leave only with the consent of their employer.
With respect to employees who work onsite, the revised regulations also reaffirm that employees can only take intermittent paid sick leave because of a need to care for a minor child whose school/daycare is closed or because the child’s childcare provider is unavailable due to COVID-19 (i.e., employees who work onsite cannot take intermittent paid sick leave for any other qualifying reasons).
The revised regulations also elaborate on the meaning of “intermittent.” The DOL provides an example of an employee’s child who is participating in hybrid learning in which the child attends school only certain days during the week and is at home the remaining days. In this case, the DOL clarifies that an employee who takes emergency family leave, for example, Mondays and Wednesdays (when the employee’s child is not in school) and then works Tuesdays, Thursdays, and Fridays (when the employee’s child is in school) is not considered to be taking intermittent leave (and therefore does not require consent of his or her employer).
TAKEAWAYS FOR EMPLOYERS
Employers should make necessary adjustments to their FFCRA paid leave policies and procedures to ensure compliance with the revised regulations. Importantly, healthcare employers should take note of the DOL’s updated (and much narrower) definition of “healthcare provider” when determining which employees can be exempted from the FFCRA’s paid leave benefits.
The attorneys at Milligan Lawless will continue to update employers on various workplace issues arising from the COVID-19 public health emergency.
If you have any questions regarding how the FFCRA’s paid sick leave or emergency leave requirements affect your workplace, please contact John Conley or Kylie Mote at (602) 792-3500.
Part 1 of this series explained the changed landscape of M&A due to the COVID-19 pandemic, and discussed five areas where the pandemic has affected the terms of M&A transactions. In this segment, we will discuss practical considerations for entities who are contemplating a sale, whether during or after the pandemic.
- Attend to the Details. The operations of many healthcare practices impacted by the pandemic have rightly turned to focus on the delivery services. But, now is the time to make sure that the details of business are in order. As compliance is frequently a starting place for buyers, sellers should thoroughly review the company’s compliance efforts and systems, and update such compliance programs as needed. Intellectual property is sometimes an afterthought, but the pandemic may present unique opportunities for the pursuit of intellectual property protection or the development of new intellectual property. This is also a good time to ensure that corporate formalities are observed and the company’s books and records are in order. Prospective sellers should examine their existing organization and operations and make adjustments as needed in an effort to be ready for sale. Prioritizing the details of the business in advance of a sale pays dividends during the due diligence process.
- Consider CARES Act Relief. From the outset of any potential transaction, sellers should consider the impact that the acquisition may have on any CARES Act relief the seller has received or is seeking. Buyers will be paying particular attention to these issues, and both parties should take care to structure any transaction in a way that does not inadvertently alter the seller’s eligibility status or violate any program requirements. There are a number of certifications borrowers must make during the application and forgiveness process, including certifications related to the use of funds, the borrower’s organizational structure, and the information provided to support the forgiveness application. Inaccurate certifications are subject to criminal and civil fraud claims. Sellers who have received PPP loans should consider how a potential transaction effects the Seller’s ability to participate in PPP loan forgiveness. Sellers should thoroughly review their loan documents for provisions related to changes of ownership or control, which provisions are usually broadly defined. Typically, the seller will need to obtain the consent of the lender before entering into any transaction that results in a change of control.
- Be Creative. Many businesses that have been successful in the pandemic have pivoted using existing products or service offerings in a new way. From an M&A perspective, those new lines of business may become spin-off candidates and the source of joint ventures in the future. Buyers will be looking for sellers that are creative and have sought new markets even in the face of the pandemic.
- Ready Your Team. The pandemic has unfortunately seen a massive loss of employment. While the rate of unemployment claims is slowing, there are still significant opportunities to bring on new talent to your organization to lead the way in the post-pandemic landscape. Sellers should retain knowledgeable consultants and advisors, such as legal counsel and accounts.
The COVID-19 pandemic has dramatically changed the M&A market. However, the pandemic also presents an opportunity for prospective sellers to improve their position for a future M&A sale. If you have any questions regarding any M&A issues, the business transactions team at Milligan Lawless is here to assist. Please contact Steve Lawrence at 602-792-3635 or firstname.lastname@example.org or Miranda Preston at 602-792-3511 or email@example.com.
 The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020 and created the Paycheck Protection Program (“PPP”), a forgivable small business loan program; and authorized additional funding for the Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL) program, among other features.
 Additional information from Milligan Lawless on the CARES Act and PPP is available here: The CARES Act – Paycheck Protection Program Loan (Mar. 28, 2020); Paycheck Protection Program Loan Forgiveness (Mar. 29, 2020); Update on CARES Act: SBA Implements Interim Final Rule for Paycheck Protection Program Loans (Apr. 3, 2020); CARES Act Provider Relief Fund Distributions (Apr. 14, 2020); Update on CARES Act Provider Relief Fund General Distributions (Apr. 30, 2020); and Congress Passes Favorable Amendments to the Payroll Protection Program (Jun. 5, 2020).