Risk managers should recognize several types of potential liabilities and exposures related to the COVID-19 pandemic response. Some compliance and regulatory burdens have been eased, but risks remain.
- Telehealth rules were relaxed, but there still are requirements to meet.
- Questions remain about malpractice exposure.
- Federal legislation may offer some relief from potential liability exposures.
The COVID-19 pandemic is creating potential liability and compliance risks, even as government regulators and accreditors move to ease some impediments to providing care. Risk managers should monitor several areas of exposure and take steps to avoid adding more burdens to hospitals and health systems responding to the pandemic.
Many potential risks have emerged, related to issues such as telemedicine, relaxed state credentialing requirements, and failures to meet standard of care because of overcrowding and understaffing.
Risk managers must be vigilant for potential problems, even though the Centers for Medicare & Medicaid Services (CMS), other federal entities, and states are making allowances for the unusual demands placed on the U.S. healthcare system by the pandemic.
“It’s really an extraordinary time. Most physicians, hospitals, and other healthcare organizations are focused first and foremost on treating the patients that come in and responding to the shortages of equipment and personnel,” says Richard J. Zall, JD, partner with Proskauer in New York City. “The government is responding with some regulatory flexibility, which bears on risk management, by easing many of the rules that apply in terms of whether you are specifically approved for this many beds or this type of services, whether people are credentialed properly, the ability to render telehealth services in ways that were not previously permitted. I think that’s been very helpful, but nonetheless there will be mistakes made and people who make judgment calls that prove to be wrong.”
That means the liability risk for providers, hospitals, and other healthcare organizations does not disappear just because regulators and the nation as a whole are making a good faith effort to remove barriers to care, Zall says.
Claims Likely After Pandemic
Despite best intentions, there likely will be claims that patients were misdiagnosed or provided the wrong treatment, particularly with uncertainty about using hydroxychloroquine to treat some COVID-19 patients, Zall explains.
“Some will try it and it will work for some, and some will have bad results. Whether or not mistakes were made, there will be finger-pointing and second-guessing, because we are a litigious society,” Zall says. “We are advising that hospitals develop a protocol for making these judgments on the use of medications so they are not just made ad hoc by individual practitioners but by the institution. Most hospitals are doing that, consulting with hospitals at other institutions, following the CDC guidelines, doing the best they can in a very tense, crisis atmosphere.”
Zall expects that in the aftermath of the pandemic, if claims of negligence come weeks or months later, they will be met with some acknowledgment they occurred in extraordinary circumstances and should not be judged in the same way as errors that occur in the normal course of healthcare.
“In this time of national emergency, I expect there will be a lot of room given to those who act in good faith, and I think that’s appropriate,” Zall says.
Some organizations will try to take unfair advantage of relief programs, such as the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act, offered by the federal government, Zall says. Some will falsely certify that they are eligible or try to claim more money than they are entitled to, he says.
“I think there will be false claim investigations after the fact about whether people operated in good faith,” Zall says. “Most people will act in a responsible manner, but for those who try to push it too far and commit unscrupulous acts, I think there will be consequences down the road. That becomes a financial risk management issue when you are aware of someone in your organization taking that approach.”
Credentialing Changes Raise Questions
Physician credentialing became an issue when many states lifted some restrictions on clinician licensing to allow hospitals to more quickly and easily call up clinicians to assist with the increased patient load. The Federation of State Medical Boards (FSMB) reports that it typically can take hospitals weeks to verify training and licensing for a physician, acknowledging that such a delay threatens the COVID-19 response.
The relaxed state rules were welcomed by many hospitals seeking to bring in physicians from out of state, but risk managers should ensure the remaining rules are followed, says Kyle A. Vasquez, JD, shareholder with Polsinelli in Chicago. States have changed their licensing requirements in a patchwork of different rules and orders, and there is no overarching allowance to bring in physicians out of state without concerns, he notes.
“You have to look at the state in which your patient is sitting and determine if the existing medical board rules, practice acts, any governor-declared emergencies, or any supplemental documents to those declared emergencies indicate that out-of-state physicians require a license, some sort of interim license, or a notice to the state that they’re going to practice medicine in your state,” Vasquez says. “Even in the states that have said they welcome out-of-state physicians, there may still be a requirement that they file notice with the state that they’re going to be practicing there.”
Each hospital has a responsibility to meet its own credentialing and licensing requirements, Vasquez says, although most will use a temporary or emergency process in which physicians can be brought on board quickly.
In addition, some states already had provisions allowing physicians from other states to continue caring for their existing patients who travel into the state, Vasquez notes. That can help, but it is not a perfect solution.
“The flip side of that is there are many states who are behind from a practice act standpoint. If there is a new patient or new condition, they restrict that to an in-state doctor only,” Vasquez explains. “CMS issued a waiver for telehealth saying that they don’t care if it’s a new patient or an existing patient — they’ll pay you either way — but we still have states with licensing requirements that won’t allow that to happen if the doctor is out of state. Just because CMS says they’ll pay for it — unfortunately, you can’t just go with that without looking at your state licensing requirements.”
There has been some discussion about the federal government overriding state laws on licensing or issuing some type of national license, but it is unclear whether that can be done at a national level, says Matthew R. Fisher, JD, partner with Mirick O’Connell in Worcester, MA.
“Licensing is determined under state laws, and Medicare requires that the doctor be licensed in the state in which the care is provided. Medicare might waive that requirement for a temporary period in order to have more physicians providing care where the virus is hitting the hardest, but that probably would not be enough,” Fisher explains. “You would need some action on the state level because that’s where the licensing requirements lie. It is not clear that the federal government has any authority or any mechanism to override those state laws and just take over the licensing of physicians, even for a short time in an emergency.”
Consider Liability Coverage
Some of the same concerns apply when allowing midlevel practitioners to take on more responsibility, Vasquez says. For instance, even though some requirements may be eased to allow nurse practitioners to act more independently, risk managers must check the different state and federal regulations that may apply. (For more on risk management concerns and regulation modifications, see the story in this issue.)
Liability coverage should be considered for these physicians credentialed through an expedited process, Vasquez says. This applies especially to any hospital or health system considering sending its physicians to another state that is hard hit by the pandemic.
“There’s a big emphasis on whether the physician is authorized to practice in a certain bordering state, but there is less thought given to whether your practitioners are covered for liability when they practice in those states,” Vasquez notes. “Assuring there is appropriate medical liability coverage that extends beyond state lines is another key thing for people to think about, and that also applies to institutions that accept physicians from other states.”
PPE Shortage Creates Risk
A lack of personal protective equipment (PPE) also can lead to potential liability, Zall says.
“This is an area where I expect we will see some legal activity. In this crisis time, we’re seeing workers complain of not having adequate equipment, trying to reuse single-use items. As a result I think employers may see claims from workers who fell ill,” Zall says. “Employers have to do the best they can within their capacity, but in some cases it is not enough and there will be contact with people getting the virus. Where there are instances in which employees don’t have the right equipment and they are simply told they must work anyway, I think you will see some legal issues later.”
Some healthcare employees have complained publicly, as well as to regulators and employee unions, about the lack of PPE. Risk managers should work to ensure there is no whistleblower retaliation, says Benjamin J. Fenton, JD, partner with Fenton Law Group in Los Angeles.
“There are some stories about hospitals retaliating, so there is potential liability there. If hospitals terminate medical professionals for complaining about safety issues, they will face potential liability in the form of whistleblower lawsuits,” Fenton explains. “The hospital may not be sued or held accountable immediately while everyone is dealing with the crisis, but they could find themselves served with whistleblower lawsuits months down the road. Avoid that kind of knee-jerk reaction to employees complaining about their working conditions.”
There also have been unofficial reports of hospitals declaring universal do not resuscitate (DNR) orders for all COVID-19 patients to conserve staff and physician resources, PPE, and other supplies that can be used in large volume on a resuscitation. Zall says such orders, even if never written or approved by the hospital, could prompt claims after the pandemic.
Similarly, some physicians and hospitals are forced to make difficult decisions about the use of ventilators, he notes.
“There are tremendous ethical and legal issues around who to triage when you don’t have enough resources. I have been part of a number of discussions around how to properly triage. And in this current environment, patients are often kept separate from their loved ones, so there is not the same opportunity to consult family members about their wishes,” Zall says. “There is risk, but we have never been in a situation like this where decisions are being made for two patients who both have conditions warranting use of the resource but there is not enough to go around. This is a situation we have not had to deal with in the United States very much, and it is a strange new world, very troubling.”
As with other difficult decisions during the pandemic, Zall says he expects physicians and hospitals will be given the benefit of the doubt as long as they were acting in good faith. Fisher agrees, adding that he does not expect federal or state regulators to go searching for technical or minor violations that may have occurred during the pandemic response.
“The enforcement discretion that we’re seeing from a lot of different regulatory bodies suggests that they are taking a practical approach to the challenges that everyone is facing now, and not looking at it as an opportunity to catch someone in a mistake,” Fisher says. “I expect they will continue that approach when things settle down and they have a chance to look back on what you did during the emergency.”
Vasquez says that during a crisis like the COVID-19 pandemic that stretches healthcare resources, including the abilities of risk managers and compliance officers, it can be reasonable to choose battles and focus on the most important issues. In some cases, he says, that might mean risking relatively minor enforcement actions or lower reimbursement.
“There are some states, for instance, that have not fully taken down those barriers to licensure, and people are thinking they can’t sit and wait around. They’re going to do their advocacy work to get the rules changes, but they’re deciding to just treat the patients and if they don’t get paid, they don’t get paid,” he says.
Risk managers also have expressed concern about the potential malpractice liability from calling up retired clinicians, expanding the abilities of nonlicensed personnel, and using medical students for some tasks normally performed by employees. For instance, New York Gov. Andrew Cuomo issued an executive order stating that medical students near graduation could be called to assist in hospitals. (More information is available at: https://www.governor.ny.gov/news/amid-ongoing-covid-19-pandemic-governor-cuomo-announces-1000-ventilators-donated-new-york-state.)
Hospitals may need to take advantage of such tactics, Zall says, but they should monitor and limit those activities carefully. With rules and regulations modified at a rapid pace, Zall says risk managers should use a mechanism for monitoring and staying abreast of exactly what is entailed in the modifications, as well as when those modifications expire.
“The main risk is assuming that anything goes, which is not the case. Federal agencies, state agencies, and other regulatory bodies have loosened the requirements, but there are still rules,” Zall says. “The primary goal is to be informed about what those rules are and what they allow, without making assumptions. If you had decided on your own before the governor’s order to enlist medical students to help with the surge in virus patients, you would not have had the protection afforded by that executive order, and even now you could still go beyond the scope of that order.”
- Benjamin J. Fenton, JD, Partner, Fenton Law Group, Los Angeles. Phone: (310) 444-5244. Email: email@example.com.
- Matthew R. Fisher, JD, Partner, Mirick O’Connell, Worcester, MA. Phone: (508) 768-0733. Email: firstname.lastname@example.org.
- Kyle A. Vasquez, JD, Shareholder, Polsinelli, Chicago. Phone: (312) 463-6338. Email: email@example.com.
- Richard J. Zall, JD, Partner, Proskauer, New York City. Phone: (212) 969-3945. Email: firstname.lastname@example.org.