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Concept 58

Health Care Law

Nikki Austin

Ours is a government of liberty, by, through and under the law. No man is above it, and no man is below it.

—Theodore Roosevelt

Health care and the systems in which health care is delivered are constantly evolving, highly regulated, and increasingly complex for all disciplines, including nursing. The underlying reasons for this complexity can be understood through the lens of health care law. The rule of law has a profound impact on health care in the United States. Thus, health care law is a fundamental concept for all health care professionals. Nurses must be aware of health care law as it applies to health care in general and specifically the impact and consequences of these laws on nursing practice.

Definition

In a civilized society, laws are enacted for purposes of regulating behavior and guiding conduct. A law is a rule or a set of principles enacted by a government or government agency that details how an individual or group must behave in a given circumstance. A law may be prescriptive—it defines something that must be done—or proscriptive—it prohibits something from being done. As a concept, health care law represents both prescriptive and proscriptive principles covering a wide spectrum of topics. Just as the health care industry is composed of a vast network of people, places, and things, health care law is likewise broad in its definition and scope. There are many ways to define and examine health care law. For the purposes of this concept presentation, health care law is defined as the collection of laws that have a direct impact on the delivery of health care or on the relationships among those in the business of health care or between the providers and recipients of health care.

Scope

Health care law is a complex concept representing a wide spectrum of both creation and application of laws. The executive, legislative, and judicial branches of federal and state governments hold the authority for the creation of law. The process for creating law is through legislation, litigation, or through regulatory activities by government agencies. These processes are not linear; rather, they represent an interwoven process that fosters a continuing evolution in health care law (Figure 58-1). For example, laws may begin by a legislature identifying an issue and drafting a law to address the issue. Authority may be given to an existing federal agency to draft rules that support compliance with the policy goals of the initial law. If a situation arises that does not completely fit within the law as drafted by the legislature or an individual affected by the law believes that the law is unconstitutional or in conflict with other laws, a legal challenge in court may be presented. Sometimes the judicial ruling will stand alone as a law, and sometimes the legislature will revise the law to be consistent with the court's ruling. Or perhaps the legal challenge preceded the legislation and the legislature may or may not decide to make a formal declaration of law.

Sources of Law

Health care law is derived from primary and secondary sources of law, including constitutional law, statutory law, administrative law, tort law, common law, contract law, and criminal law (Figure 58-2).

FIGURE 58-2 Sources of Law

Constitutional Law

The powers of the federal government are specifically defined in Article I Section 8 of the U.S. Constitution. The powers specifically given to the federal government do not have a direct relationship to health care, so a link to the Constitution (e.g., due process or equal protection) creates the necessary authority to draft federal health care laws. For example, the due process clause of the Fourteenth Amendment was the constitutional legal principle under which the Supreme Court decided the landmark 1973 case of Roe v. Wade,1 which forbid states from criminalizing or otherwise banning first-trimester abortions and recognized a constitutional right to privacy inclusive of a woman's right to terminate her pregnancy, and the 1990 case of Cruzan v. Missouri,2 which clarified a competent patient's right to refuse treatment. State constitutional authority bears a more direct relationship to health care than the federal powers and influences areas such as public health and public safety.

Statutory (Legislative) Law

Statutory law is an important source of health care law. Statutes are laws enacted by a legislative body. Many laws at both the federal and

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the state level have been enacted with the intent to directly impact the business or relationships of health care. Some laws have evolved with time. Other laws may not have been enacted with the intent to directly affect health care, but they may have an effect on the business of health care nonetheless. Each of the 50 states has independent legislative bodies, so the laws that are enacted by the states may vary in title, but the underlying authority to legislate for the general health and welfare of the people is the same.

Administrative Law and Regulation

In general, administrative agencies protect a public interest and act as agents for the executive branches of the federal and state government. Many government agencies have the power to make laws in the form of rules and regulations to promote public health. Examples of administrative agencies that have a significant effect on health care law are the U.S. Department of Health and Human Services (USDHHS) and state licensing boards. Federal and state regulations aim to address several health care system objectives, such as protecting the public's health by preventing and controlling communicable disease and protecting the public against bioterrorism; promote quality of health care services; reduce health care costs and promote access to care; and protect consumers in the market for health insurance and other types of coverage.3

Tort Law

The most common basis for liability of nurses, physicians, and other health care providers is rooted in tort law. A civil tort refers to an action or omission that results in harm to a person. Tort law has been responsible for shaping and defining many health care quality and safety standards. The tort must cause an injury that the law believes entitles the injured party to compensation. Tort law includes unintentional and intentional conduct. An unintentional tort, such as negligence, is based on the concept of fault, meaning that liability (fault) attaches to an incorrect act or mistaken omission that caused harm even if the act or omission was unintentional. An intentional tort is based on the perspective that the wrongdoer acted intentionally to harm the patient or violate the patient's rights and should be held responsible. Examples of intentional torts include assault and battery, false imprisonment, invasion of privacy, defamation, intentional infliction of emotional distress, abuse of process, and malicious prosecution.

Common Law

The role of the judge or the judicial branch of government is to interpret the law, but often their interpretation of the law leads to law itself. This type of law is referred to as common law (or case law) whereby

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statutory laws, applicable regulations, and legal precedents are analyzed in the context of the situation under review. A decision is made based on this analysis. Sometimes the decision is limited to the exact facts of a case or limited to a specific state or area of the country, and sometimes the decision impacts the country as a whole. Sometimes one area of the country may not have addressed a question that another area of the country has already answered in the courts, and it may adopt the ruling of another area without going through the process of litigating the question in the courts.

Contract Law

Contract law has also shaped and influenced health care law. To some degree, routine conditions of admission and consent forms represent a contract between the patient and the health care facility or the health care provider. Principles of contract are also used to define the work agreements of those who provide services of health care, such as an employment contract between a nurse and a health care organization.

Criminal Law

Criminal penalties have increasingly influenced health care laws, with felonies associated with Medicare or insurance reimbursement fraud, misrepresentation of qualifications, or even purposeful breaches of protected health information becoming more commonplace.4 There are specific situations in which the act of negligence is so reckless or done with such purposeful disregard that the act may be considered criminal. Criminal liability considers the nature of the action, not necessarily the resultant harm, and can attach even when there is no resulting injury or harm. Health care professionals have been found guilty of criminal neglect or abuse when they have shown extreme indifference to the needs of their patients, such as restraining patients and then ignoring their cries for help or needs for repositioning, toileting, or other care. In Arizona, a physician was found guilty of manslaughter for refusing to return to attend to a patient after she developed complications from an elective procedure.5

Attributes and Criteria

There are many accreditation requirements, social expectations, and customs that can influence and have an effect on the delivery of health care decision making and organizational behavior. However, these are not the same as health care laws. For example, health care standards such as The Joint Commission accreditation standards can influence health care law, but these standards are not laws. Health care law can be distinguished and differentiated from accreditation requirements, social expectations, and customs by considering major and minor attributes presented in Box 58-1.

Box 58-1

Attributes of Health Care Law

Major Attributes

• Created by a government body with appropriate authority, such as a legislature, agency, or judiciary

• Usually has enforceable sanctions (e.g., fines or imprisonment)

• Publicly available and accessible by any individual or group

• Consistent with national and state constitutions

• Can be modified, changed, or upheld through authoritative action

Minor Attributes

• May contain incentives

• May be self-limited, expiring after some time period

• May vary in scope (some are wide and sweeping, but some are small and narrowly focused)

• May be established to promote a policy goal

Context to Nursing and Health Care

Many state and federal laws have been enacted that impact health care and thus also affect nurses. This section discusses some of the most important laws that impact the professional practice of nurses and health care.

Federal Statutory Laws Impacting Health Care

Throughout the years, a number of federal laws have had sweeping effects on the delivery of health care. The Social Security Act of 19656 and 1983 amendment,7 the Patient Self-Determination Act of 1981,8 the Health Insurance Portability and Accountability Act,4 the Patient Protection and Affordable Care Act,9 and the Controlled Substance Act are several such laws. Implementation of these laws requires significant effort in the development of policy and in monitoring to ensure compliance.

Administration and Regulation

Federal Regulation

The USDHHS is the federal government's principal agency for the administration and regulation of federal laws associated with health care. It is also charged with providing essential human services, especially for those who are least able to help themselves.10 The Secretary of USDHHS is a member of the President's Cabinet. There are 11 divisions within USDHHS, including the Centers for Disease Control and Prevention, the U.S. Food and Drug Administration, the National Institutes of Health, the Agency for Healthcare Research and Quality, and the Centers for Medicare & Medicaid Services (CMS). CMS has been given broad authority to draft the Medicaid and Medicare Conditions of Participation for Hospitals (CoPs), which are safety and health standards that define quality and patient safety expectations for health care organizations participating in Medicaid and Medicare programs. For example, when CMS became concerned about patients dying while in restraints or in seclusion, it enacted a regulation that delineates specific rules regarding the use of restraints and seclusion in participating hospitals. This regulation also requires hospitals to report any deaths that occur during or are reasonably assumed to have resulted from restraint or seclusion.11 The CoPs regulations are now a part of the restraint policy for any hospital that expects to receive Medicare and Medicaid funding.

Licensing and Scope of Practice

The area of health care law that has an immediate and direct impact on nurses and health care providers is state licensing laws. Licensure grants permission to a person to perform professional services and/or activities of an occupation based upon the person's demonstrated qualifications and competency to perform such activities, which are illegal if performed without a license.12 Licensure laws are commonly referred to as practice acts. Practice acts create regulatory bodies, such as a state board of nursing, that are responsible for several functions, including creating and enforcing rules consistent with the state practice act, investigating and deciding cases involving violations of the state practice act, and licensure. In addition to establishing the educational, examination, and competence requirements necessary to obtain a license in a particular health-related discipline, practice acts and regulatory agencies also establish and enforce the context and scope of licensure within which regulated professionals must comply in order to retain their status as licensees in good standing. The scope of practice for professional nursing is the range of permissible activity as defined by the law; in essence, it defines what nurses can and, sometimes more important, what nurses cannot do.13

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Because the scope of nursing practice is defined by state legislation, there is great variation from state to state both in specificity and in the range of activities that are legally authorized. Many state legislatures have enacted very specific scope of practice statements, whereas others have drafted very vague and broad scope of practice statements and have left the task of describing the specific activities to the state board of nursing. Some state scope of practice statements are very restrictive, whereas others allow a much broader range of activities. It is important that a nurse become very familiar with the practice act and the scope of practice as defined by the legislature or the state board of nursing in the state in which he or she intends to practice. Although there is general consistency for the scope of practice for the professional registered nurse, there is significant variability for the scope of practice of licensed practical or vocational nurses and even more variability for the scope of practice for advanced practice registered nurses (APRNs).13

In The Future of Nursing: Leading Change, Advancing Health, the Institute of Medicine identified the variability of scope of practice for APRNs as one of the barriers to transforming practice and meeting the health care needs of the 21st century.14 Because of the restrictive nature of the scope of practice statements of many states, all APRNs are not able to practice to the full extent of their education and training. However, there is evidence that when nurses play an integral role in the delivery of primary care, there are improvements in quality, access to care, patient satisfaction, and value. Allowing nurses to practice to the full extent of their education and training would likely benefit patients and the health care system as a whole.

Licensure is an important privilege that should not be taken lightly due to the enormous responsibility borne by licensees and certificate holders. When a health care professional demonstrates that he or she is in violation of the practice act by virtue of mental or physical incompetence, substance abuse or impairment, criminal violations, practice deficiencies, or a variety of other concerns established in the practice acts, the state board exercises its power to discipline the licensee to a degree consistent with the board's assessment of the severity of the problem and potential risk to the public. Disciplinary actions can range from censure and penalties to progressively more undesirable consequences, such as probation, suspension, and revocation or denial of licensure. Boards are required to report disciplinary actions to the Healthcare Integrity and Protection Data Bank and the National Practitioner Data Bank, two federal companion data banks established for public protection. Unlicensed practice is a criminal violation and, if a person is convicted, may result in fines and/or imprisonment in most states.15

Licensing of Health Care Institutions

In addition to licensing individual practice, states also have the authority to license and regulate health care institutions. Licensure requirements vary in terms of building size, structure, safety requirements, staffing requirements, duties of the administrators, and types of services that can be offered. These requirements can become entangled with municipal (city) building and fire codes as well as federal laws such as CMS regulations that outline requirements that hospitals must meet in order to participate in Medicare and Medicaid services.

Negligence

Tort is the area of law under which cases of negligence are argued. Negligence is the failure to use reasonably prudent care in the same or similar circumstances. Also referred to as malpractice, negligence is the most common tort holding nurses, physicians, and other health care providers liable to patients for damages. For tort liability to attach to negligent conduct, the individual actor must have done more than simply act in a negligent manner. There are four elements that must be satisfied to establish liability: duty, breach, injury, and causation.

Duty

All persons owe a duty to exercise ordinary care to avoid harming another person, place, or thing. When negligence is alleged by a patient, however, the evidence must establish that the nurse or health care provider owed a professional duty to the person harmed beyond the duty to exercise ordinary care. This higher standard and professional duty arises from a special relationship between health care providers and patients. In relation to health care law, the physician–patient relationship or nurse–patient relationship is traditionally viewed as a special relationship that gives rise to a professional duty of care. Nurses owe a professional duty of reasonable care to all of their assigned patients.

The evidence must also establish the standard of care, which refers to an approved behavior or conduct established by the profession. The standard of care for nurses is the degree of care that would be exercised by a “reasonably prudent nurse” acting under the same or similar circumstances. From a legal standpoint, the nurse in a rural setting might be held accountable to a different standard of care than the nurse in an urban, tertiary care setting. Likewise, a nurse is held accountable to a different standard of care than other health professionals (e.g., a physician), and nurses with different areas of expertise or specialty practice are held accountable to the standard of care applicable to that specialty.

The practice of nursing often involves the exercise of professional judgment as well as the application of advanced clinical and scientific knowledge. Because it may be confusing for a jury of laypersons to determine how a nurse violated the standard of care, the standard of care is a critical element that must be established by common sense, expert testimony, evidence-based standards, and/or other published standards, such as accreditation or licensing regulation standards. Several states have laws that require expert witnesses to have the same or a similar clinical background as that of the defendant. In Arizona, for example, the law requires that an expert witness in a medical malpractice action be licensed as a health professional in the state of Arizona and have devoted a majority of professional time to active clinical practice of the same health profession as the defendant in the same specialty if the defendant claims to be a specialist.16 Several state courts have held that nurses may be used as experts to establish the standard of care for nurses instead of physicians, who historically testified as expert witnesses on the standard of nursing care.

Breach of Duty

The second element that must be satisfied to establish liability is breach of duty. Health care providers breach their duty to patients when they fall below the standard of care or deviate from the standard in a manner that causes injury. It is important to remember that not all deviations from the standard of care will result in negligent tort liability. For example, it is below the standard of care for a nursing professional to administer the wrong dose of medication to a patient. If the medication error does not result in harm or injury to the patient, the nurse will not face tort liability for his or her actions but may face termination from employment or licensure discipline depending on the circumstances.

Causation

Causation is the link between breach and injury. Would the injury have not occurred “but for” the defendant's actions? Causation answers this question and establishes that the breach of duty legally caused injury

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to the patient. The breach of duty or violation of standard of care must be the direct or proximate cause of the harm that the patient experienced; in other words, if the breach had not occurred, no harm would have come to the patient. In many instances, causation can be difficult to prove in negligence cases.

Injury or Harm

The final element to be satisfied in a negligence action is proof of injury or harm. The resultant harm may be physical or a combination of physical, mental, emotional, or financial harm. In other words, in some states, a patient cannot recover from emotional harm alone without an accompanying physical disability. After injury is established by a preponderance of the evidence, there is often considerable disagreement among the parties to the lawsuit about the monetary value to be placed on the injury.

Employer/Employee Liability

Professional liability can attach to an employer for the negligent acts of its employee. This is known as vicarious liability, and it arises from the common law doctrine of respondeat superior, a Latin term that means “let the master answer.” Under vicarious liability, an employer can be liable for the acts of its employee if the employee was acting as the agent of the employer and the actions that resulted in injury occurred within the scope of employment. Thus, an employer would not be liable for injury that happened while the employee was not at work or injury that resulted from activities that were outside of the employee's scope of practice.

Laws That Empower Patient Decision Making

Consent for Treatment

Although consent laws have been largely shaped by the common law, many states have enacted laws that designate who can consent or make decisions for an incapacitated patient if the patient has not already designated someone. The concept of consent arises from the ethical principle of autonomy and the fundamentally accepted tenet that patients have a right to be involved in decisions about their health care. It is also a protective response to the tort of battery, which is the purposeful, unwelcome, harmful touching of another. Performing a procedure without patient consent could constitute battery even if the procedure was done competently and the outcome was good.

To obtain a valid consent, the provider who will be performing the procedure must provide the patient with a description of the procedure, an explanation of the risks and benefits of the procedure, and a discussion of any alternatives to the proposed procedure. Consent by the patient must be voluntarily given, and the person who consents must have the capacity to consent. Capacity can be determined by the health care provider and may be affected by drugs or the current/underlying medical condition. In short, the provider must be sure that the patient understands the information provided and the consent is voluntarily given. If the patient is unable to give consent directly, he or she may designate a person who can give consent on his or her behalf. If such a person is not designated by the patient, most states provide a statutory solution, a law that lists “statutory surrogates”—individuals who, based on their relationship to the patient, would be given priority to consent on the patient's behalf.

Advance Directives

All states have laws that provide guidelines for the execution and enforcement of health care directives. These directives include living wills, medical power of attorney for health care decisions, and prehospital do not resuscitate orders. These directives identify how a patient wishes to be treated in the event of certain medical conditions and also identify who the patient wants to make decisions on his or her behalf in the event that the patient is unable do so. These laws encourage compliance with the patient's directive by giving health care providers who act in reliance on these documents immunity from civil or criminal liability, and some states impose criminal liability if a patient's advance directives are not followed.

Death with Dignity Laws

National discussion regarding whether mentally competent but terminally ill patients should have the right to hasten their death has been a topic of health care law since Jack Kevorkian championed the issue in the early 1990s. In the midst of the so-called “right to die” or “assisted suicide” movement, Oregon enacted the nation's first Death with Dignity Act in 1997.17 Washington passed a similar initiative in 2008,18 the Montana Supreme Court ruled in favor of physician-assisted death by lethal medication dose in 2009,19 and Vermont passed the state's Patient Choice and Controls at End of Life Act in 2013.20 These laws allow physicians to write a prescription for a lethal dose of medication that a mentally competent but terminally ill patient can use to end his or her life if the patient has less than 6 months to live. Each state's law contains various safeguards and protocols to be followed by the prescribing physician. For instance, Oregon's Death with Dignity Act requires, in part, that the patient make two oral requests at least 15 days apart to the physician followed by a written request signed in the presence of two witnesses, one of whom cannot be a relative of the patient. It also requires two physicians to confirm the patient's diagnosis and prognosis and assess the patient's competency and mental health. In the landmark case of Gonzales v. Oregon, the U.S. Supreme Court upheld Oregon's Death with Dignity Act and ruled that the federal government's Controlled Substances Act did not bestow upon the Attorney General of the United States the authority to ban physicians from prescribing lethal doses of controlled substances for use in physician-assisted suicide under state law permitting the procedure.21

Interrelated Concepts

Three concepts are closely interrelated to health care law: health policy, ethics, and health care economics, as shown in Figure 58-3. At its most basic level, a law is a set of rules that is designed to help meet a specific policy or goal. Analogizing to the nursing process, Health Policy is the goal or expected outcome, and health care laws are the interventions that are intended to affect the expected outcome. Ethics are the framework or boundaries in which many of those policies and laws are made. In other words, adherence to an ethical principle may drive a desire to adopt a policy and create laws that promote the policy.

Another concept that is closely interrelated is Health Care Economics. As previously described, many laws have a financial incentive to compel compliance with the law. There are organizations and departments within health care organizations whose job it is to ensure compliance with many health care laws and regulations. Within a health care organization or hospital, this task may be the responsibility of the compliance officer or compliance department. The compliance officer monitors the organization's activities so that the organization can continue to receive payments from the government and is not subject to any fines.

Clinical Exemplars

There are a multitude of exemplars of health care law; the most common and important of these are presented in Box 58-2. Some

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exemplars are listed in more than one category; this illustrates the intertwined nature of the source of laws. Some of these are featured here.

Exemplars of Health Care Law

Federal Statutory Laws

• Social Security Act of 1965

• Social Security Amendment of 1983

• Emergency Medical Treatment and Active Labor Act of 1986 (EMTALA)

• Patient Self-Determination Act of 1991

• Health Insurance Portability and Accountability Act of 1996 (HIPAA)

• Patient Protection and Affordable Care Act of 2010

• Americans with Disabilities Act of 1990 (ADA)

State Statutory Laws

• Licensing boards/practice acts

• Immunizations

• Public health and safety—disease surveillance, sanitation

• Consent/statutory surrogates

• Advance directives

• Death with dignity or aid-in-dying

• Good Samaritan acts

• CMS Conditions of Participation for Hospitals

• Practice acts

• Scope of practice

Torts

• Negligence/malpractice

• Standard of care

• Breach of duty

• Abandonment

Criminal Liability

• Insurance fraud

• Active euthanasia

• Sexual assault

Featured Exemplars

Social Security Act of 1965 (Medicaid and Medicare)

The Social Security Act of 1965 created a trust fund for the establishment of Medicaid and Medicare, a form of health insurance for those who do not have medical insurance through employment (retired individuals and the unemployed).6 Reimbursement under the Medicare program has undergone many changes since it was initially enacted, and the federal government can decide what rules the health care organizations must follow to be eligible for reimbursement. One of the most significant changes was the adoption of payment based on diagnosis-related groups in 1983,7 which was also eventually adopted by insurance companies as a means to compensate health care organizations for the care of those patients.

Emergency Medical Treatment and Active Labor Act of 1986

The Emergency Medical Treatment and Active Labor Act (EMTALA) was a provision of the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986.22 The policy underlying EMTALA is that hospitals that have emergency departments have a duty to care for those requiring emergency medical services irrespective of patients' ability to pay. Any Medicare-participating hospital that offers emergency services must provide an appropriate medical screening exam to any person who presents for treatment of an emergency medical condition and must stabilize any emergency medical condition before transfer to another facility.23,24 At the patient's request, or if the hospital is unable to stabilize the patient's condition, the hospital can arrange for transfer to appropriate level of care.

Patient Self-Determination Act of 1991

The Patient Self-Determination Act was enacted to promote discourse about end-of-life medical treatment and to ensure that patients received appropriate education about their right to decide future care in the event of incapacitation. A health care organization (not individual physicians) that participates in Medicare is required to (1) provide patients, upon admission, information regarding advance directives (medical power of attorney and living will) and advise patients of their right to participate in medical decision making; and (2) document in the medical record whether or not a patient has completed an advance directive.8 The Patient Self-Determination Act prohibits a Medicare-participating health care organization from discrimination against patients based on the presence or absence of an advance directive.8

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Health Insurance Portability and Accountability Act of 1996

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 was enacted to provide individuals with preexisting medical conditions access to health insurance specifically if they changed or lost their job. The other element of HIPAA was to prevent health care fraud and abuse and medical liability reform. The act also included a provision (known as the Privacy Rule) for health information privacy requirements for individually identifiable health information. The Privacy Rule protects the confidentiality of health information relating to the provision or payment of health care for a past, present, or future physical or mental health condition but does permit the “minimum necessary” use and disclosure of protected health information without patient authorization for purposes of treatment, payment, and health care operations.25

Health Information Technology for Economic and Clinical Health Act

The Health Information Technology for Economic and Clinical Health (HITECH) Act was enacted as part of the American Recovery and Reinvestment Act of 2009. HITECH broadened the scope of HIPAA's Privacy Rule and provided for more enforcement of noncompliance by establishing increased levels of culpability and raising penalty amounts for compliance violations.26 In addition, HITECH includes specific requirements for notifying individuals when their protected health information has been breached or improperly used or disclosed without authorization.26

Patient Protection and Affordable Care Act of 2010

The Patient Protection and Affordable Care Act includes provisions to enable Americans with preexisting conditions to more easily afford insurance, the creation of health insurance exchanges to make insurance coverage more accessible and affordable for some individuals and small businesses, and the elimination of insurance co-pays for preventive care.9 The law also requires that every American have minimum essential health insurance.9 This controversial provision of the law (whether or not it is constitutional for the government to compel individuals to purchase insurance) was upheld by the U.S. Supreme Court.