Liability waivers can be effective in some cases, but they’re no panacea

More useful for elective procedures; enforceability still in question

You’re fed up with being dragged into every lawsuit that has even the slightest connection to your institution, so you daydream about having patients just sign a waiver up front promising to never sue you for anything. Nice fantasy, but those things don’t really hold up in court, do they?

Sometimes they do, and sometimes they don’t, say the experts. The key is knowing what situations are best for using liability waivers and which ones hardly ever are going to hold up in court, they say. Recent changes in health care practices may have opened up more opportunities for the appropriate use of liability waivers, so you could be missing an opportunity if you hardly ever use them because you still think courts automatically throw them out.

Risk managers interested in using liability waivers should do so with their eyes open. Liability waivers may be gaining popularity among risk managers but they won’t be a panacea for all that ails your department, the experts say, and you need to do a lot more than just photocopy a waiver and hand it to patients.

Liability waivers can be very an effective defense in limited situations, says Jeffrey Driver, JD, MBA, chief risk officer with Stanford (CA) University Medical Center and president of the American Society for Healthcare Risk Management in Chicago. But don’t expect them to protect you from most of the lawsuits filed against hospitals and other providers, he says. State law will vary considerably on how much you can enforce a waiver of liability, Driver says.

He says he understands risk managers’ interest in liability waivers as a defense against malpractice costs. "We’re seeing the severity of claims go up, while the frequency of claims holds steady," he says. "So people are doing whatever they can do to mitigate or offset the claims coming in. Waivers can play a role."

Driver advises using liability waivers as another tool in the risk manager’s toolbox, carefully choosing where they are most likely to be enforceable.

The problem with waivers is that sometimes they’re worthless if a plaintiff actually pushes the issue and takes you to court. In California and many other states, for instance, a waiver of liability for medical negligence is not likely to hold up in court. But a waiver of liability for other matters is more enforceable as long as you have clearly explained the terms to the patient, Driver says. Even waivers for medical negligence might hold up in some courts when they are used for elective cases.

And here’s another tip from Driver: Even when the waiver is not enforceable, there still may be reason to ask a patient to sign one. "You can still use them to set expectations. They’re a good tool to mitigate the possibility of a claim," he says. "They actually can keep people from filing claims because they understand that they accepted this risk. It sort of drives home the informed consent process even more, and they realize they knew this outcome could happen."

Informed consent on steroids

A waiver of liability goes far beyond the standard informed consent process, but it depends on the patient clearly understanding what he or she is giving up. Sort of like informed consent on steroids, a liability waiver not only asks the patient to acknowledge the known risks but also to go ahead and agree not to sue the health care provider. If it is upheld by the court system, you’re home free.

A softer alternative is to have the patient agree to arbitration of any claim, which can result in significant savings for the defendant. Driver says there is never any harm in asking for a liability waiver but courts are not likely to uphold them in situations in which the patient needed emergency care or otherwise was under duress and seeking help.

While Driver does not advise trying to get a waiver of liability in the emergency department (ED), he says an agreement for arbitration might pass muster in court. The arbitration agreement can be included in the informed consent process along with the other paperwork necessary for an ED admission, he says.

But no talk of arbitration can occur before the emergency patient has received a medical screening examination, of course. That would be a violation of the Emergency Medical Treatment and Labor Act, Driver notes. "At Stanford, we’re just beginning to look at whether we want to put arbitration clauses in our conditions of admission forms, because we’re getting nailed with lawsuits and it’s very expensive," he says.

Smith points out that some courts have challenged them on the grounds that arbitration costs money and the patient may not be in a position to pursue that path, making the agreement invalid.

Health care changes create options

Another risk manager using liability waivers is Paul English Smith, JD, CPHRM, vice president and general counsel at Cabell Huntington (VA) Hospital. He notes that many risk managers have dismissed most use of liability waivers on the assumption that they never hold up in court, but that situation is changing. "It used to be black-letter law that these waivers never held up in court, so there was no use in trying to use them," Smith recalls. "But a lot of things in health care are changing, and there are a lot more health care services now that are more choice-driven and money-driven. That creates new scenarios in which waivers might be seen as enforceable by the courts."

With that development in mind, Smith says he is "pushing the envelope a little" in choosing when to use them. For general health care in which the patient is not seeking treatment by choice, he agrees with Driver that liability waivers won’t be of much use because state courts are unlikely to support them.

Kentucky courts have sent clear signals in recent years that such waivers would not be enforceable because the patient had no real choice in whether to be treated and so did not enter into the agreement willfully.

Waiver covers affirmative acts

But for any other situation in which patients voluntarily seek out treatment and could reasonably go elsewhere if they don’t like your requirements, a liability waiver is an option, Smith says. For example, his hospital offers an in vitro fertilization program and requires that participants sign a liability waiver as part of the consent process.

The agreement states that the couple "understand and agree that the parties involved do not assume responsibility for the physical and mental characteristics of any child or children born as a result of artificial insemination." Then later it goes on to say that "We hereby absolve, release, indemnify, protect, and hold harmless from liability for the mental or physical nature of the character of any child, and for any affirmative acts or omissions which may arise during the performance of the agreement."

"We explain thoroughly what we can and can’t do and explain all the risks, and then we ask them to agree to hold us harmless if they have a child that has problems related to an anonymous donor or something like that," Smith says. "We’re dealing with couples who have investigated their options and know a lot about what is going on, and we’re talking about a contractual agreement for which we don’t want to risk any liability."

Smith notes that though the waiver language absolves the provider of any liability for "affirmative acts or omissions" during treatment, he does not expect it to shield the hospital or physicians for claims of gross negligence. But it doesn’t hurt to add that line either, he says. "I do think it would shield you against claims you made a guarantee that the child would be perfect," Smith says. "The rest is something you might have to find out if they try to sue you."

Smith and Driver say none of their liability waivers have been challenged yet in court, but they both think they have used them judiciously so that they would be likely to withstand a court challenge.

"I think it’s something that risk managers should look at and see if you have areas where they could be of use," Driver says. "At the very least, they give you the opportunity to point out to people that we had a discussion about this and you even agreed not to sue us. You can argue that this was more than just health care per se, that this was a contractual relationship between the parties."