How E-health Companies Seek to Protect Themselves From Liability

  Pacific West Law Group

To protect themselves from liability, e-health companies have utilized various disclaimers in the form of user agreements that attempt to limit the potential liability of e-health companies.  These user agreements are extensive and attempt to cover every conceivable possible ground of liability against an e-health company.  They are often prominently displayed in e-health websites and the use of a “clickwrap” to force users to acknowledge the agreement have been liberally utilized.  The enforceability of user agreements has not been extensively tested in courts.


E-health websites often use mandatory arbitration clauses and/or forum selection clauses in their user agreements in an attempt to minimize liability



Safety and Standards

2001 Report to Congress on Telemedicine, Office for Advancement of TeleHealth, (Last visited: March 17, 2003)


***FDA Regulatory Role bulletBox 4:States Enacting Legislation Requiring Physical Examination Before Prescribing Medication

***FTC, Consumers and the Internet bulletBox 5:Excerpts from FTC Report: Protecting Consumers Online: A Federal Trade Commission Report on the First Five Years of Its Internet Law Enforcement Program

***Medical Errors

***Next Steps  Overview

Thanks to advances in technology, telemedicine practitioners have shifted easily from the phone to the personal computer to the Internet to wireless handheld devices. Yet, the full potential of these advances cannot be reached without clinical and technical standards and guidelines.

In the past few years, the need for standards has taken on greater importance, not only in the world of telemedicine, but also in the world at large. Without widely adopted standards and guidelines, interoperability and interconnection are not possible and the great potential of telemedicine will be difficult to achieve. Older equipment often will not connect with newer versions of the same machine; different brands do not operate with one another, making networking across projects and sometimes within a project expensive and frustrating.

In addition to technical standards, clinical protocols and guidelines are needed. Clinical protocols for telemedicine practice include preliminary scheduling procedures, actual consult procedures and telemedicine equipment operation procedures (such as telecommunications transmission specifications). The clinical technical standard for image quality in a video transmission would specify the technical standards needed by a specialist such as a dermatologist to achieve the high levels of image clarity and color required to correctly diagnose a patient.

Unlike most clinical health professional groups, U.S. telemedicine practitioners have not formally developed and adopted many clinical protocols or technical standards for telehealth applications. However, a few professional associations have adopted some clinical practice protocols.


*** The American Telemedicine Association recently adopted Telehomecare Clinical Guidelines, posted on their Web site at Additionally, the Association has posted a May 1999 working draft of its Clinical Guidelines for Telepathology.

***The American Psychological Association has posted clinical guidelines on its Web site to guide in the practice of telepsychiatry.

*** The American Dermatology Association has drafted proposals for clinical protocols for teledermatology.

***The American Nurses Association, assisted by the Interdisciplinary Telehealth Standards Working Group, developed the "Core Principles on Telehealth" in March 1998 and "Competencies in Telehealth Technologies in Nursing in March 1999.

The following is a short list of technical standards and guidelines that have been adopted or have been proposed that relate directly or indirectly to telemedicine and telehealth.

*** The American College of Radiology and the National Electronic Manufacturers Association created a uniform set of communication standards called DICOM (Digital Imaging and Communications in Medicine).

***HL 75: standard for data exchange. The most widely used HL7 specification is the Application Protocol for Electronic Data Exchange in Healthcare Environments. This is a messaging standard that enables disparate healthcare applications to exchange data.

*** Kennedy-Kassebaum Health Insurance Portability and Accountability Act of 1996 (HIPAA) mandated the development and adoption of standards for electronic exchange of health information for administrative purposes. As of December, 2000 DHHS released its final rule on privacy practices for covered entities such as health plans, clearing houses and providers who engage in electronic transactions.

***OAT and the JWGT organized a workshop in September 1999 to address the need for guidelines in the area of technical standards for telemedicine practice. Several guidelines have already been completed for telecardiology, teledermatology, telerehabilitation, teleopthamology and tele-psychiatry. (See: Additionally, OAT has funded a grant to the Advanced Technology Institute to develop a technical assessment center. This Telehealth Deployment Research Test bed will establish a national distributed test bed that will evaluate the effectiveness and practical utility of telehealth technologies by providing laboratory and "real world" evaluations. FDA Regulatory Role

Widely adopted standards and guidelines not only serve as a foundation for interoperability and interconnection but also to protect public health. The US Federal Food and Drug Administration (FDA) plays a critical regulatory role in ensuring the safety and effectiveness of telemedicine medical devices and software with the Center for Devices and Radiological Health (CDRH) acting as lead agency. This role was discussed at length in the Department of Commerce's 1997 Report to Congress on Telemedicine (See Appendix 5).

Over the past five years, the FDA has continued its oversight of medical devices and software associated with telemedicine, developed guidelines, and provided assistance to industry and other regulators through the work of several telemedicine related working groups. For example, the Telemetry Working Group worked with the FCC to provide new spectrum for wireless medical service after digital TV signals interfered with wireless medical telemetry equipment in 1999. The Software Working Group has developed guidelines for software contained in Medical Devices and the Telemedicine Working Group has developed guidelines on Medical Image Management Devices, on Digital Mammography and Picture Archiving and Communications Systems and Related Devices. Given the growing importance of the home health industry, the FDA and the National Science Foundation cosponsored the "Workshop on Home Care Technologies for the 21st Century." The FDA also recently approved Tele-homecare equipment for market. Current telemedicine related FDA guidelines can be found at the following sites:

*** Guidance for the Submission of Premarket Notification for Medical Image Management Devices, (7/27/2000)

*** Guidance for Industry: Wireless Medical Telemetry Risks and Recommendations (9/27/2000)

*** FDA Talk Paper: FDA approves first digital mammography system. (1/31/2000)

*** ODE: Guidance for the Content of Premarket Submissions for Software Contained in Medical Devices. (5/27/98) or

*** MQSA Regulations relevant to new mammographic modalities are in 21CFR900: Quality Mammography Standards (as amended):



Box 4: States Enacting Legislation Requiring Physical Examination Before Prescribing Medication

Alabama, Arizona, California, Florida, Iowa, Idaho, Kansas, Maine, Mississippi, Nebraska, New York, Ohio, Virginia

Another notable change in FDA's role in telehealth is its growing involvement in the oversight of relevant Internet activities. Over the past few years, some Web sites have offered illegal drugs or prescription drugs based on questionnaires rather than a face-to-face examination by a licensed health care practitioner. Some off-shore sites offer prescription drugs with any prescription. The FDA is working with the National Association of Boards of Pharmacy (NABP), which created a program in 1999 called Verified Internet Pharmacy Practice Sites or VIPPS.

The program gives consumers a single place to check out an online pharmacy to ensure that it meets current standards. To become certified by VIPPS, an online pharmacy must meet the licensing and inspection requirements in the state where it is located and in each state to which it dispenses pharmaceuticals. The FDA has also worked with the Federation of State Medical Boards on prescribing issues. The FDA's role in this area compliments that of the Federal Trade Commission, a key player in enforcement (see below). Moreover, states remain primarily responsible for regulating and licensing of health care providers and pharmacies. About 13 states have recently passed laws that require a physical examination before prescribing medication either over the phone or over the Internet, as shown in Box 4 .

The FTC, Consumers and the Internet

A number of federal and state regulatory agencies are working together to address health-related consumer problems on the Internet. They include state health authorities, the Federal Food and Drug Administration, the Justice Department, and the Federal Trade Commission. The Federal Trade Commission plays a key oversight and enforcement role in Internet Commerce as illustrated in its December 1999 Report. In this report the Commission discusses its activities to combat general consumner fraud and deception on the Internet. Since 1994, it has focused on the largest and "most egregious" fraud and deception examples, taking action against companies in more than 100 cases. As shown in Box 5, the Commission has made false or unsubstantiated health claims online a law enforcement priority.

Box 5 Excerpts from FTC Report: Protecting Consumers Online: A Federal Trade Commission Report on the First Five Years of Its Internet Law Enforcement Program

Operation cure-all: The Commission brought four cases against the marketers of products such as magnetic therapy devices, shark cartilage and CMO. (cetymyristoleate) for their claims that these products could cure a host of serious diseases, including cancer, HIV/AIDS, multiple sclerosis and arthritis. All the companies, which used Web sites to market the products and recruit distributors, entered into settlements with the Commission.

FTC v. Slim America, Inc.: The defendants were charged with falsely advertising that their weight loss product would produce dramatic weight loss results. After a trial, the Court ordered the defendants to pay $8.3 million in consumer redress and ordered the individual defendants to post multi-million dollar bonds before engaging in the marketing of weight loss or other products and services.

FTC v. American Urological Clinic: The defendants touted "Vaegra," a sham "Viagra" and other impotence treatment products, claiming that the products had been developed by legitimate medical enterprises and proven effective. The Commission obtained an $18.5 million judgment. that requires the defendants to post a $6 million bond before they promote any impotence treatment in the future.

Despite the actions of regulators, consumers must bear the major burden of determining the safety and privacy of health related Web sites that they use. Several US Government-sponsored Web sites for consumer health information are reviewed and links are carefully selected, with the selection criteria described on each site. Several years ago, DHHS introduced its Web based "healthfinder®" - an Internet Web site ( that provides search capabilities on health information. Healthfinder® includes links to other important government health sources such as Medlineplus (, created by the National Library of Health. Other links to the Center for Disease Control, the FDA and the National Cancer Institute name just a few of the myriad Federal government health information sources. While the Federal government has made credible health information more accessible to consumers on the Web, private and non-profit company Web sites have also proliferated. These health-oriented Web sites range widely from those providing general health information to those selling pharmaceuticals to those that provide a medical opinion for a fee.

For any such Web site, consumers may find it difficult to determine the "quality" of the site. Consequently, the DHHS' national Healthy People 2010 initiative includes the goal of increasing the number of health related Web sites that disclose quality standards information. "Quality"6 here is defined as more than just the quality of information at the site, including among other things, elements that relate to reliability, value and user protections. Outlined below is the information DHHS recommends be disclosed to users on health related Web sites:

*** Identity of Web site developers

*** Site Owner's/Developer's contact information

*** Potential conflicts of interest/bias

*** Purpose of the site

*** Original sources of content

*** Privacy and confidentiality protection of personal information

*** Site evaluation methodology

*** Content updates

A recent article, Proposed Frameworks to Improve the Quality of Health Web Sites, reviews and compares this DHHS framework to three other frameworks for the Quality of Health Sites. (http://www.medscape.Medscape/GeneralMedicine/journal/2000/v02.n05)

Medical Errors

The Institute of Medicine's report, To Err is Human: Building a Safer Health System, brought to public attention data known in the medical community for some time.7 Extrapolating results from a number of studies, the report concluded that 44,000 to 98,000 Americans die each year as a result of medical error. National costs range between $17 billion and $29 billion. Of note, is that these data deal almost exclusively with hospitalized patients. The consensus opinion of experts on human error is that many medical errors are the result of systemic problems rather than specific actions by individuals. Complexity of systems has been repeatedly shown to increase the likelihood that errors will occur.

This relationship between complexity and error may have implications for telemedicine practice. As noted in the Institute of Medicine Report, Telemedicine: A Guide to Assessing Telecommunications in Health Care, published in 1996:

"Telemedicine is not a single technology or a discrete set of related technologies; it is rather, a large and very heterogeneous collection of clinical practices, technologies and organizational arrangements. In addition, widespread adoption of effective telemedicine applications depends on a complex, broadly distributed human infrastructure that is only partly in place and is being profoundly affected by rapid changes in health care, information and communications systems."

This statement clearly identifies and articulates the rationale for a careful, robust and proactive approach to the identification, reporting and analysis of medical errors encountered in the practice of Telemedicine activities.

 Next Steps


*** OAT will work with its grantees, the American Telemedicine Association (ATA) and other groups to expand its clinical and technical guidelines. (See for current guidelines.)

***OAT will continue to support the work of the Advanced Technology Institute, in developing a Telehealth Deployment Research Testbed. This work is being conducted in conjunction with the Medical University of South Carolina, West Virginia University Concurrent Engineering Research Center, Arthur D. Little, Oak Ridge National Laboratory, the Low country Healthcare Network and the CPRI-HOST consortium. The testbed will evaluate the effectiveness and practical utility of telehealth technologies by providing both laboratory and "real-world" evaluations.

***OAT will develop a series of measures to be included in its performance measurement data collection system with common data elements to be collected by all OAT grantees. These measures should help document the contribution of telemedicine technologies in reducing the incidence of medical errors. Footnotes

5Health Level Seven is one of several ANSI-accredited Standards Developing Organizations (SDOs) operating in the healthcare arena. Health Level Seven's domain is clinical and administrative data.

6Proposed Frameworks to Improve the Quality of Health Web Sites: Review C. Baur, PhD, M.J. Deering, PhD, MedGenMed, Sept. 26, 2000.

7Institute of Medicine, To Err is Human: Building a Safer Health System, 2000