January 10, 2003

TO: Packet Recipient

FROM: Bill Bazan, Vice President
Laura Leitch, Vice President and General Counsel

SUBJECT: Liability issues concerning the smallpox vaccine

In order to comply with a directive from the federal government, the Wisconsin Department of Health and Family Services ("DHFS") is requesting that Wisconsin hospitals provide the names of employees who have volunteered to be vaccinated against the smallpox virus as part of the state’s smallpox vaccination plan. In response to this request from DHFS, WHA members have raised a number of important questions concerning liability issues that may result from their participation in the state plan. Some questions do not have clear answers at this time, but WHA will continue to work with the necessary entities to resolve these issues.

The CDC has stated that up to one out of three people who receive the smallpox vaccine will suffer an adverse reaction severe enough to cause them to miss work for a short period of time. Some people may suffer serious adverse reactions to the vaccine (according to the CDC, the likelihood of a serious adverse reaction is slight). Hospitals have asked the following question concerning compensation for their employees who receive the smallpox vaccine and suffer an adverse reaction that is treated and may cause missed time from work.

The answer is unclear. An administrative law judge from the Workers Compensation Bureau within the Department of Workforce Development provided the following guidance:

If someone has an adverse reaction to an inoculation, it would need to be medically verifiable as such to be covered under worker's compensation.  Usually in worker's compensation cases, the issue of compensability will be whether the inoculation was related to the employment.  If employers require workers to receive inoculations, any reaction is compensable.  There is a strong argument for compensability where employers actively encourage employees to get inoculations even though they are not required to do so.

Factors considered here are:  whether the employer gave paid time off from work to receive the inoculation, provided the inoculation, or provided reimbursement for the cost of the inoculation.  In occupations where employees have possible contact with patients with smallpox, such as health care occupations, employees may have a stronger argument for compensability even though the employer did not require or encourage the inoculations.  There is a high likelihood that those claims would be paid.

Please keep in mind that individual claims would turn on the facts.¹

Under federal law, employers may not require their employees to receive the smallpox vaccine. Given that any employee who receives the vaccine will do so voluntarily and the above interpretation of Wisconsin’s Workers Compensation law, coverage by Workers Compensation, while likely, currently cannot be assured. DHFS is working with DWD to obtain a more definitive written statement concerning coverage for hospital employees.

The AHA has taken the position that, "[I]n order for the smallpox vaccination program to move forward, hospitals and health care workers must be shielded from liability for adverse events related to the vaccine." AHA has been working with the Bush Administration and Congress on the liability issues presented by the vaccination plan and has made progress. Hospitals have asked the following questions concerning potential liability.

Are hospitals protected from liability in the smallpox vaccination plan?

Given a recent letter from HHS Secretary Tommy Thompson, it appears the answer is yes. Section 304 of the Homeland Security Act provides liability protection for the manufacturers and distributors of the vaccine as well as for the health care entities and medical personnel who administer the vaccine in certain circumstances. The Section 304 protections go into effect January 24, 2003, but are not triggered until there is a declaration by the Secretary of HHS. According to guidance provided by the CDC, it appears that your staff would be protected by Section 304 only: (1) if your staff administers the vaccine; (2) pursuant to a declaration by the Secretary of HHS; (3) to the categories of persons outlined in the declaration.² If protected by Section 304, persons who administer the vaccine, the entities under whose auspices the vaccine is administered, and their employees are considered federal employees or entities for purposes of the Federal Tort Claims Act and an injured person would pursue a claim through the process provided by that law. It is important to note that this is not a no-fault law; the injured person must demonstrate a negligent or wrongful act in order to recover.

On January 9, 2003, HHS Secretary Thompson sent a letter to the AHA attempting to address hospitals’ liability concerns. Secretary Thompson stated, "It is our intention to word the Section 304 Declaration to include the Secretary’s determination that hospitals that designate employees to receive smallpox countermeasures under the state’s smallpox vaccination plan are participants in the program and thus are healthcare entities under whose auspices the countermeasure is administered."

The CDC memo cited above provides the following direct answer concerning liability protection for hospitals that are not operating as a vaccine clinic:

Q.16. Will hospitals or other institutions that employ vaccines but do not operate as a clinic administering countermeasures be covered by Section 304 protections?

A.16. Generally, no. Only hospitals and institutions under whose auspices countermeasures are administered are covered by Section 304 protections.

While the CDC interpretation is disconcerting, indicating that hospital staff must administer the vaccine to be protected, Secretary Thompson’s letter indicates that, through his Section 304 Declaration, hospitals and their employees will be protected from liability whether their employees administer or receive the vaccine under the state plan.

The Wisconsin state plan currently calls for the vaccines to be administered by public health workers, not hospital staff. The state, however, is considering an amendment that would permit hospital staff to administer the vaccine to other hospital staff at the hospital, in effect making those hospitals vaccine clinics, providing a stronger argument that the protections in Section 304 apply to such hospitals.

If, as a result of the unresolved liability or worker’s compensation issues you choose not to participate in the state smallpox vaccination plan at this time, WHA encourages you to continue to cooperate with DHFS to ensure that you are prepared to respond quickly, if you choose, once the liability issues have been resolved.

¹ Janell M. Knutson, Administrative Law Judge, Madison Section Chief, Wisconsin Department of Workforce Development; December 20, 2002 e-mail message.
² CDC memo: Smallpox Questions and Answers, Section 304 of the Homeland Security Act.