The recently enacted federal Y2K Act is meant to protect businesses from frivolous litigation related to computer malfunctions and resulting grievances. But it could put providers between a rock and a hard place.
The new law, signed by President Clinton late last month, makes it more difficult for healthcare organizations to sue software vendors or others for economic losses suffered as a result of Y2K-related glitches.
But as defendants, providers won't get a break in the area of liability that could matter the most. The law pointedly excludes protection from claims of personal injury or wrongful death stemming from Y2K problems, a primary litigation risk in healthcare.
"The vendor has all the protections under the act, and the provider has all the burdens," said Steven Goldberg, a Needham, Mass.-based consultant on Y2K risk-management issues.
Congress said it intended the law to curb a potential flood of lawsuits over computer data-change problems-many of them insubstantial-that would waste time and clog the courts.
But the result was a series of protections taking the vendor's point of view, said Richard Marks, a lawyer in the Washington office of Vinson & Elkins. Hospitals rely heavily on information systems and medical devices to provide a standard of care to patients, he said. Problems with those systems and devices increase the risk of patient lawsuits, but attempts to recover losses from the vendors are subject to these burdens:
* Before a lawsuit can be filed, a defendant has 30 days to respond to a plaintiff-supplied description of the Y2K problem and propose a resolution. Then the defendant has 60 days to fix the problem.
* The burden is on a provider or other plaintiff to show that it tried to limit damages that could result from Y2K problems by acting on any information provided by the vendor or generally available. For example, if a vendor informed a provider that a component from a medical device needed to be replaced to be Y2K compliant, the provider would have to prove that it acted on the notice.
* A plaintiff can recover the costs of replacing or fixing a malfunctioning product but not losses that result from the system or device's failure, such as business interruption or lost profits.
Marks said the lack of protection from patient lawsuits underscores the importance of following a formal Y2K remediation and contingency plan, and showing due diligence in troubleshooting before the end of the year.