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MANAGED CARE AND MEDICAL CALL CENTERS: A TELEMEDICINE CASE STUDY

By: Alan S. Goldberg

A. Introduction

Legal issues relating to licensure, reimbursement, liability and privacy and confidentiality are especially challenging and timely in the field of medical call centers or “telephone triage,” a telemedicine application in which nurses and others evaluate patients’ symptoms and recommend professional assistance or simple treatments over the telephone. These call centers are proliferating nationwide as managed care plans seek ways to satisfy patients and customers while keeping costs down. According to a recent Wall Street Journal article, over 35 million Americans currently have access to such services, and the rapid growth of the industry suggests that over 100 million Americans will be covered by the year 2000.(1) At the same time, the policies and procedures governing the use of call centers have become increasingly varied and sophisticated. This article will describe the basic features of such centers and provide an analysis of some of the legal issues implicated by these services.

B. Description of Policies and Procedures

Despite recent innovations, the basic organization of medical call centers remains relatively simple. In a typical setting, several nurses staff phone lines at a hospital or other health care facility. These phone lines are available to members of the hospital or specified health plans (and sometimes the public at large) having questions about any medical condition. When a call comes in, the nurse assists the caller with the help of computer algorithms--essentially, predetermined lines of inquiry developed by physicians--for hundreds of common symptoms. The nurse’s questions, prompted by the computer program, narrow the range of possible ailments and conditions, and the nurse can then instruct the caller about the urgency of receiving professional care or recommend simple home care if professional assistance is unnecessary. The entire conversation typically might take only five to ten minutes.(2)

In a common scenario, a parent calls worried about a child’s headache. The nurse types in “pediatric headache,” and the computer initiates a series of questions relating to this condition. Some questions test for specific ailments that require immediate attention; the nurse might ask, for example, if the child also has a high fever and a stiff neck, signs of meningitis. Other questions assess the caller’s medical history; if the child recently suffered head trauma, the computer might advise a visit to the doctor within 12 hours. In some cases, the computer finds no specific ailment nor a need for professional help, and the nurse simply recommends sleep and a watchful parental eye.

In recent years, this basic procedure has evolved to include different types of providers (from unlicensed phone operators to emergency room physicians), computer programs, access policies, and reimbursement plans. As the services become more varied and complicated, the legal issues become increasingly challenging as well. The following paragraphs will discuss some of the most important of these issues, including licensure, payment and reimbursement, liability, and confidentiality concerns.

C. Licensure Requirements for Call Center Employees

The licensure issues implicated by medical call centers arise from the power of the states to regulate the practice of medicine within their borders. Nearly all states have statutes defining the practice of medicine, and most stipulate that only medical doctors with valid licenses may engage in the practice. Illinois law, for example, provides that only physicians with medical licenses may “diagnose or attempt to diagnose, . . . prescribe for, or otherwise treat any ailment or condition, or supposed ailment or condition, of another”(3); Pennsylvania statutes prescribe that no person other than a medical doctor may practice “the art and science of which the objectives are the cure of diseases and the preservation of the health of man.”(4)

These and similar state statutes present formidable obstacles for medical call centers. The nurses or other individuals staffing such centers usually do not possess medical licenses, yet would seem to diagnose and treat medical problems (with the help of the computer algorithms). If a court determines that the nurses’ activities amounts to the practice of medicine, the nurses and perhaps their employers could be subject to civil and criminal penalties for practicing medicine without a license.

Call centers have devised several strategies for dealing with this problem. Most importantly, nearly all centers insist that nurses follow the instructions of the physician-created computer algorithms; never explicitly diagnose an ailment or formally outline a treatment plan; and recommend rather than prescribe certain courses of action. The Director of Utah’s Intermountain Health Care TeleHealth Services, for example, confirms that nurses make no diagnoses, and merely instruct callers on the advisability of seeking professional assistance.(5) Executives of a phone bank run by Access Health Inc. in Colorado stress that nurses may not diagnose ailments nor even improvise answers; they must follow guidelines that appear on their computer monitors.(6)

Even this careful regulation of the call centers leaves many legal questions unanswered. According to one source, the fine line between suggesting a course of action and making a medical diagnosis or recommendation is “just playing with the English language.”(7) Many callers, particularly those in an emotional state, might not distinguish between information and advice, and juries might not recognize the distinction either. The situation is further complicated by the fact that nursing duties have expanded greatly in recent years, and the limits of the authority of nurses are increasingly unclear.

Additional issues arise when nurses give advice to callers in different states. As outlined above, health providers may risk sanctions by rendering services to a patient in a state where the health provider is not licensed. Although no reported licensure action against a national call center for operating without a license has been found, at least one managed care provider has been penalized for providing services in several jurisdictions without the appropriate licenses.(8) Until the states, with the assistance of the Federation of State Medical Boards and federal agencies, clarify licensing requirements for telemedicine projects, call centers would be wise to ensure that nurses are licensed in all of the jurisdictions in which they could be considered to be practicing.

Even if nurses are licensed to practice in other states, they may risk sanctions by taking calls from patients in such other states. Each state has a different definition of what constitutes the practice of medicine and practice of nursing. Even if a nurse’s advice is within the purview of nursing powers in one state, the same advice might not be permitted under the nurse’s license in another state and might instead constitute an unlawful practice.(9) Call centers should also ensure that nurses assisting callers from other states are authorized to provide such services under all applicable state laws.

D. Payment and Reimbursement Issues

The reimbursement issues relating to call centers are less important than they are in other telemedicine applications, because the very purpose of call centers is to eliminate health care payments and reimbursements. According to industry estimates, a typical phone call from a health plan member may cost $10 to $20, compared to hundreds of dollars in medical charges if the caller goes to a hospital.(10) This savings is especially striking in light of recent estimates that over one-half of all emergency room visits are unnecessary, costing insurers, hospitals, and patients over $5 billion a year.(11)

However, payment issues do still exist. Even inexpensive phone calls amount to a considerable expense in the aggregate; the call center run by San Diego’s Paradise Valley Hospital, for example, took over 50,000 calls at a cost of nearly one-half million dollars in 1995.(12) Such costs may be covered in part by government grants and reimbursements. Normally, however, physician subscribers and hospitals are willing to fund the service themselves. Physicians enjoy relief from patients’ calls after hours, while a hospital can obtain additional admissions when nurses develop rapports with callers and refer them to the hospital’s physicians and facilities.

This desire on the part of health care facilities to attract new patients and have callers referred to specified physicians and facilities, however, creates substantial legal risks. For example, a telephone-triage nurse working for Kaiser Permanente recommended that a sick infant be taken to a hospital 42 miles from home because closer medical centers were not part of the HMO’s discount plan. The baby suffered a crippling heart attack en route, and in 1995 a jury found Kaiser Permanente liable for bad medical advice and awarded the child’s parents $46 million.(13)

E. Liability Issues

As the Kaiser Permanente case illustrates, nurses and other individuals staffing advice lines may be liable for negligent or unlawful advice or conduct. The following two sections will consider this issue in detail, first analyzing liability issues relating to nurses and other employees who field calls, and then liability concerns of those who employ such individuals.

1. Employees’ Liability for Negligence and Malpractice

The same considerations outlined above in relation to physician malpractice applies to nurses as well. In order to hold a nurse or call center operator liable for malpractice, the caller must establish that the nurse owed the caller a duty of care, that the nurse breached this duty, and that the resulting harm was the proximate cause of the beach.

The most interesting aspects of this cause of action in the context of medical call centers is the establishment of the duty of care and the scope of this duty. A nurse might argue that no relationship sufficient to create a duty of care is created since the nurse only reads questions and recommendations from a computer screen, and never sees the callers. A judge or jury might reject this claim, however, because there is significant verbal interaction between the nurse and caller, and the caller relies on the nurse’s comforting and authoritative words and recommendations.(14)

Once this relationship is established, it becomes important to define the duty owed to the caller. Generally, a nurse is expected to use the skill and care possessed and employed by other members of the nursing profession, especially those in a similar locality. Specialists are held to a standard of care common among other specialists.(15) It is likely that nurse practitioners and other nurses with advanced training would be considered specialists subject to a different standard of care; it is unclear whether nurses providing telemedicine services would be considered to have special skills (for example, facility with computer and telecommunications technology). In any event, the question whether the nurse’s conduct measures up to the appropriate standard of care is usually a case-by-case determination reserved for the finder of fact.

2. Vicarious or Corporate Liability

If a caller successfully asserts malpractice or negligence against a call center operator, can the caller also hold the call center or the hospital employer liable? In general, the modern trend does allow recovery from the hospital or call center employer as well as the employee. Most often, the aggrieved caller establishes the liability of the call center or hospital through the doctrine of vicarious liability or respondeat superior. This doctrine holds that employers are responsible for the acts of their employees, because, among other things, the employer can best control the risks and consequences of employee misconduct and cannot act except through its employees. If a nurse or other operator is an employee of a call center or hospital, therefore, these facilities risk being liable for the nurse’s negligence or malpractice as well.

F. Issues of Privacy and Confidentiality

At first glance, it might appear that medical call centers present few of the privacy and confidentiality concerns raised by other telemedicine fields; after all, the call centers rely primarily on conversations rather than medical records or documents to exchange information and ideas. But call centers do rely heavily on documentation and exchanges of written and electronic information, practices which raise privacy and confidentiality concerns.

As soon as a call comes in, many phone centers initiate a recording of the entire conversation. The administrative director of Ochsner-On-Call in Louisiana, for example, recently confirmed that her center makes and saves a tape of every phone call, largely to ensure that documentation is available in case of a lawsuit against the center.(16) As the call proceeds, a nurse may retrieve the caller’s medical records to check on past treatments and prescriptions, and at the end of the call typically faxes a report of the conversation to the caller’s regular physician. Finally, as part of review and quality control programs, nearly all call centers hire physicians and other professionals to review documentation and even occasionally listen in on phone conversations. All of these policies raise the risk of improper use or disclosure of confidential information.

The recommendations outlined above, therefore, should apply to call centers as well. Callers should be made aware of privacy concerns; indeed, this may be mandated by state wiretapping laws if phone calls are recorded. Furthermore, information should only be made available to parties with a bone fide interest in the data. One source notes that health insurers sometimes fund call centers in hopes of obtaining lists of potential new patients who will be subjected to unsolicited mailings;(17) call centers should be wary of such practices, and generally provide information only to appropriate physicians, review committees, and individuals monitoring the quality of the services provided. (18)


(1) George Anders, “Telephone Triage: How Nurses Take Calls and Control the Care of Patients from Afar,” The Wall Street Journal, February 4, 1997, page A1.

(2) Many newspaper and journal articles describe the organization in more detail. For one description including a sample triage protocol, see Deborah Grandinetti, “Patient Phone Calls Driving You Crazy? Here’s Relief,” Medical Economics, June 24, 1996, page 72.

(3) 225 Ill. Code §60-49 (1992).

(4) 63 P.S. §§422.2, 422.10 (1996).

(5) Norma Wagner, “Hold the Phone; Nurses’ Hot Line a Cure for Medical Panic Attacks,” The Salt Lake Tribune, September 25, 1997, page C1.

(6) George Anders, “Nursing by Telephone: Cheaper, but Flying Blind,” The Orange County Register, February 9, 1997, page A18.

(7) Quoted in Jim Connolly, “More Managed Care Plans Add Nurse Phone Lines,” National Underwriter Life & Health, April 29, 1996.

(8) A medical director of a Florida HMO with presence in other states was charged with practicing without a license. See Marie Infante, “The Legal Risks of Managed Care, Legally Speaking,” RN, March 1996.

(9) Penalties range from license revocation to fines to incarceration. See, e.g., Cal. Bus. & Prof. Code §2052 (classifying the practice of medicine without a license as a misdemeanor); Fla. Stat. §921.0012 (classifying the practice of medicine without a license as a felony); 63 P.S. §422.39 (authorizing civil and criminal penalties for practicing medicine without a license).

(10) George Anders, “Nursing by Telephone: Cheaper, but Flying Blind,” The Orange County Register, February 9, 1997, page A18.

(11) George Anders, “Telephone Triage: How Nurses Take Calls and Control the Care of Patients from Afar,” The Wall Street Journal, February 4, 1997, page A1.

(12) Susan Duerksen, “Free Ask-A-Nurse Phone Service Comes to an End at Paradise Valley Hospital,” The San Diego Union-Tribune, August 31, 1996, page B3.

(13) The case is discussed in numerous newspaper and journal articles, including Deborah Grandinetti, “Patient Phone Calls Driving You Crazy? Here’s Relief,” Medical Economics, June 24, 1996, page 72.

(14) Although this issue has not been treated explicitly by the courts, in Starkey v. St. Rita’s Medical Center, 1997 Ohio App. LEXIS 137 (Ohio Ct. App. Jan. 8, 1997), involving a malpractice claim against the operator of a call center, the call center seems to have conceded that a duty was created and focused its claims on the issue of causation.

(15) See Mvles v. Laffitte, 1993 U.S. App. LEXIS 3274, *6 (4th Cir. Feb. 16, 1993) (approving the general consensus that specialists are held to a different standard of care than that required of general practitioners).

(16) Deborah Grandinetti, “Patient Phone Calls Driving You Crazy? Here’s Relief,” Medical Economics, June 24, 1996, page 72.

(17) Id.

(18) See http://www.healthlawyer.com for general information relating to telemedicine and the law.


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Last revised: 12/1/97