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Malpractice and Telemedicine Liability: The Uncharted Waters of Medical Risk

By Glenn W. Wachter, July, 2002

Part of the spiraling cost of healthcare is the increasing cost of medical errors-which goes hand in hand with the spiraling cost of malpractice insurance. Admittedly, doctors, hospitals and health insurers ought to be held accountable for truly negligent behavior that results in harm to a patient. However, now more than ever, soaring costs for liability insurance is changing the way medicine is practiced. The addition of telemedicine technology to healthcare delivery has had positive effects on the practice of medicine, particularly for providing access to specialty health care to geographically or otherwise isolated patients. Yet, it is telemedicine's effect on medical liability-the focus of this article-that requires some examination if its eventual assimilation is to be ubiquitous or just a footnote to modern healthcare.

Liability: Telemedicine's lesser known roadblock

Anyone familiar with telemedicine knows the several roadblocks that discourage its practice in the U.S. Most commercial insurance carriers will not reimburse for telemedicine consultations, and while some practitioners do not get reimbursed for telemedicine as the 'cost of doing business', most are hesitant to provide medical expertise without compensation. Practitioners are also constrained by an overwhelming number of interstate licensure statutes, where individual states have laws ranging from reasonable to very restrictive. Most professional associations have not developed standards or practice guidelines for certain telemedical applications, and regulatory agencies have simply not kept pace with innovations in delivering healthcare services using telecommunication technologies (
Kuszler, 1999).

Patient-physician relationship

Traditionally-at least in a Norman Rockwellian sense-a patient-physician relationship was formed face-to-face in the physician's exam room, or even further back, from physician house calls. The introduction of the telephone complicated this relationship somewhat; e-mail and telemedicine muddy the waters even further. For instance, in Bienz v. Central
Suffolk Hospital (557 NY.S.2d 139, 1990), the court held that a telephone conversation in which a physician provided advice over the phone on which the patient relied, could constitute a patient-physician relationship. As long as a physician agrees to 'see' the patient (or even agrees to examine an x-ray or pathology specimen) and provides some level of evaluation of the patient's condition, and the patient relies upon the advice given by the physician, there is a relationship formed and a duty exists (
Miller, 1999).

Does real coverage exist?

There remains significant uncertainty regarding whether malpractice insurance policies cover services provided by telemedicine. This question has been of import to telemedicine practitioners for years, dating back to the work of the Western Governors' Association (

Any discussion of telemedicine malpractice insurance should also include a mention of interstate licensure in medical practice. Most malpractice policies exclude coverage for unlicensed activities. Thus, if a physician provides telemedicine services in a state in which he or she is unlicensed and that state requires full licensure, the company would deny coverage. Practitioners who choose to practice telemedicine without formal coverage from their malpractice insurer should at least make sure they are licensed to practice medicine in every state in which they practice.

There does exist a fair amount of anecdotal evidence of practicing physicians who consider extending their practice through telemedicine or teleradiology in some capacity. The technology, they find, is the easy part of setting up a telemedicine network or practice. It is wringing the decision out of the malpractice insurers that is frustrating, as well as jumping through the hoops for state licensure. Many physicians have found that their insurers will not touch telemedicine insurance as a rider to an existing policy. Others have found that insurers simply have not considered the implications of a malpractice suit involving telemedicine technology. It seems that it would be beneficial to provide malpractice insurers some form of education about telemedicine and its growing use in this country. Rejecting the coverage outright without considering the future ramifications seems shortsighted.

Where to go from here?

Unfortunately, there do not appear to be many more answers today than there were in 1995, when the Western Governors' Association proposed three recommendations which still seem applicable, including: 1) governors should direct their state insurance commissions to review the current policies of the malpractice insurance industry with regards to telemedicine and develop clear and consistent coverage policies; 2) since choice of venue and law questions will be decided by the courts, governors should request that appropriate legal bodies such as the American Bar Association draft legal policy opinions that review federal procedures and state statutes, and give guidance to the courts to assist in the resolution of venue and choice of law issues in a telemedicine malpractice lawsuit; and 3) governors should introduce legislation to amend their state malpractice liability limitation statute so it applies to out-of-state telemedicine physicians and other healthcare practitioners.

It is apparent that more research and education needs to be done on this issue. Malpractice coverage for telemedicine has taken a back seat to other more pressing and obvious barriers mentioned above. However, as more and more healthcare practitioners in individual and group practice outside of grant-funded research programs become interested in telemedicine, lack of malpractice coverage will deter many from trying. A survey of malpractice insurers would be helpful to gain an understanding of what they perceive as the major issues so they can then be educated about them, and to find out which companies will provide this coverage. Until we have more information, those in the telemedicine community are left hoping that their existing malpractice policy will cover the uncharted waters of telemedicine risk.

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