Key Legal Considerations at the Crossroads of Healthcare and Technology
Technology has rapidly transformed healthcare, creating both opportunities and complex legal challenges. As the healthcare industry integrates innovations, organizations must collaborate with technology specialists, data security experts, and legal counsel proficient in the legal and regulatory realms governing this dynamic intersection.
Healthcare providers, whether implementing cutting-edge medical devices, data analytics, or routine administrative functions, must engage various third-party technology vendors. Establishing legally sound agreements with these vendors is crucial for compliance and risk management. Attorneys specializing in healthcare technology offer significant value in several key areas.
Executing Agreements with Third-Party Vendors
Agreements with technology vendors often involve industry-specific language and address complex issues.
Information Technology (IT)
IT covers systems and devices used to store, retrieve, and process information. Service providers often bundle services like IT maintenance, system monitoring, data backup, and web development. Critical agreement areas include:
- Project definitions
- Technical specifications
- Delivery milestones
- Data access rights
- Cybersecurity obligations
- Service levels
- Self-help mechanisms
Supply Chain
A supply chain encompasses the logistics for sourcing services, materials, and commodities to provide finished products to end users. Given the multiple participants, it is critical that the agreements contain detailed plans for:
- Planning
- Sourcing
- Production
- Distribution
- Returns
Attention to common ‘boilerplate’ provisions, such as force majeure clauses, is also critical.
Websites and Apps
Websites, mobile applications, and telehealth are now essential for healthcare organizations. These platforms can attract and inform patients, connect providers, and share resources. Whether used for sharing protected health information (PHI) or general information, most healthcare providers engage external parties for these services, implicating:
- Legal enforceability
- Patient privacy
- Data collection, sharing, and storage
Cloud-Based Services
Cloud-based services, existing on the Internet rather than on hardware or software, are common in the healthcare industry. Vendor agreements for these services require attention to the following:
- Warranties
- Cybersecurity protections
- Data breach processes and notifications
- Limitations of liability
- Indemnities
- Regulatory compliance.
Drafting and Analyzing Terms for Websites, Apps, and Wearables
Healthcare providers utilize technology to enhance their offerings and make their services as accessible as possible. Given the type of sensitive information often exchanged, terms and conditions and privacy statements should ensure proper user protection and data handling. The following agreements should always be considered.
Terms and Conditions
Terms, also known as ‘terms of use’ or ‘terms of service,’ define the duties and rights of parties hosting or visiting a website. A mobile application or licensed software will use an end-user license agreement (EULA) to communicate license conditions. Terms and conditions often outline permitted and prohibited activities concerning privacy and data security and can be crucial for ensuring user privacy, securing data.
Privacy Policies
A privacy policy provides users with information about how data is collected, stored, and used, with whom the data is shared, and their rights regarding the data. Even though there are no federal laws requiring a website or platform to provide a privacy policy, a detailed privacy policy may insulate a business from potential legal issues arising from disputes over data-handling practices. Furthermore, a privacy policy can build trust with users by being transparent about data-handling practices.
Data Collection, Machine Learning, and Artificial Intelligence (AI)
Healthcare data is collected and analyzed to improve patient outcomes, reduce costs, and guide decision-making processes. The use of machine learning, large language models (LLMs), and other AI tools brings opportunities for data analysis but presents privacy and data security complications.
Examples of technologies used to collect data include:
- Web Scraping: Employing automated tools to extract large volumes of information from the Internet is employed, but how the scraping is performed can greatly affect risk.
- Artificial Intelligence: A machine-based system making predictions or recommendations. Healthcare providers must ensure users of platforms know how their data may be used for training AI models and where data is stored for analytical purposes. Federal and state agencies are developing regulations regarding the use of AI in healthcare.
Protecting and Monetizing Intellectual Property
Intellectual Property (IP) which refers to intangible creations of the mind, is a cornerstone of technological advancements. Legal issues related to IP management may involve doctors, employees, contractors, and consultants. The main types of IP recognized in the United States include:
- Patents: Government-granted monopolies to build, sell, and use an invention.
- Trademarks: Words, phrases, symbols, or designs that distinguish a good or service.
- Copyrights: The legal right to copy an original product.
- Trade Secrets: Information a business has made significant efforts to keep confidential.
Software in Healthcare
Software serves various functions in the healthcare industry. Electronic Health Records (EHR) and electronic medical record software (EMR) are widely adopted solutions. Software also supports research, diagnosis, and imaging by leveraging medical databases. Increasingly, it manages insurance coding and billing, electronic prescribing, telemedicine, and appointment scheduling. Management software helps with day-to-day administration of equipment and inventory.
Healthcare providers must address the following issues:
- Open-Source Software: This software is available for use, modification, and distribution, subject to an applicable open-source license. Open-source software presents significant security vulnerabilities where improvements developed by a healthcare provider may have to be freely distributed to other users. Open-source can also present serious challenges for healthcare companies in adhering to HIPAA.
- Developing, acquiring, or licensing software assets: These scenarios should be closely evaluated by legal counsel to ensure compliance with legal and regulatory regimes.
Experienced legal counsel is essential for navigating the complex landscape of healthcare technology.
Nixon Peabody’s attorneys have extensive experience that can be leveraged to:
- Answer questions
- Educate teams
- Prepare policies and procedures
- Draft and negotiate agreements
This helps organizations:
- Navigate compliance
- Mitigate risk
- Avoid liability
