Health Technology Contracting: Avoiding Liability for Medical Decisions

By Mark Fischer and Ron Lefebvre

Our firm has developed a niche practice, over the past twenty years, representing technology companies in the healthcare and health benefits space. Client solutions include benefits administration platforms, a healthcare exchange, a health data aggregator, provider practice tools, and other similar tools. In the course of representing our clients with respect to these solutions, we also regularly negotiate with large carriers, providers, wellness vendors and data management solutions.

Healthcare technology contracts raise numerous issues, some typical to the technology world, and some specific to the healthcare and health benefits world. Through the use of healthcare technology tools, a person may be choosing healthcare coverage, interacting with a wellness vendor, communicating with a physician, obtaining information on physical therapy, providing personal health information, or obtaining access to personal medical records.

As would be expected, the liability issues are carefully negotiated in the contracting process. However one basic issue is sometimes neglected in these solution contracts: liability for medical decisions and medical outcomes. Our practice, which we believe should be the standard, is to address this liability directly.

We stress to our clients that, while their tools are utilized in connection with healthcare or health benefits, they are neither healthcare providers or insurers; they are software and technology companies. Accordingly, they should not accept liability for medical decisions or outcomes in most circumstances.

Their contracts should include plain liability disclaimers, which make their role as a software provider clear and which exclude liability for injuries or damages arising out of the provision of healthcare or otherwise related to medical decisions or outcomes. This type of disclaimer also should be included in any end user terms for web-based  healthcare solutions or cellphone applications, and the disclaimer should be conspicuous.

We sometimes receive pushback from healthcare providers, who resist such disclaimers on the basis that some of these solutions are intended to be integrated with a healthcare provider’s provision of medical care. Ultimately, however, it is the medical provider’s professional responsibility to ensure the proper delivery of medical care. If the solution will provide information in connection with care—for instance, information on post-treatment activities—the software company should consider including an acceptance protocol, where the provider acknowledges that it has reviewed and approved protocols and information made available to their patients through the solution.

In addition to including a liability disclaimer in these contracts, we believe that the providers or other licensees should indemnify the software company with respect to any liability for medical decisions and outcomes arising out of use of the solution.

One way to think about this issue is to remember that we use information and calendar tools in all facets of our lives. We would not expect Microsoft to accept liability for an attorney missing a crucial court hearing, due to a malfunction of Outlook’s calendar application. But sometimes, when a software company provides similar functionality to a specific market—i.e., a calendar solution for medical appointments—the parties assume that the software company’s liability should extend to medical outcomes. Our practice is to push back against these assumptions.

We believe that this approach is fair and reasonable and places our clients in the best position possible to avoid unnecessary risk. Of course, every contract negotiation is unique, and there could be circumstances which would impact the above philosophy.

Please contact us if you are starting a healthcare or health benefits technology company or if you would like a review of current contracts and user terms.

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Notice: This article is for informational purposes only. None of the information contained in the article constitutes legal advice. No reader should act on such information without first seeking legal advice from an attorney.