WASHINGTON -- In addition to being Y2K ready in medical equipment and information systems, hospitals also must be ready for Y2K litigation next year, says Albert Shay, an attorney in the Y2K Task Force of Sonnenschein, Nath and Rosenthal. 'The plaintiff's bar is looking at Y2K with bulging eyes,' Shay says.

Hospitals and other health providers are at a significant risk of liability as a result of the Y2K problem, Shay says, and many will be involved in Y2K litigation due to Y2K failure. 'This is a very serious problem for hospitals,' he said, adding: 'Most hospitals anticipate being involved in Y2K litigation.'

Right now, hospitals should be well on their way in testing medical equipment and information systems for Y2K readiness and contacting vendors of equipment. They also should be documenting in detail what has been tested and when. 'Hospitals will need proof that they were reasonable and diligent in preparing for Y2K,' in the event of a lawsuit Shay says.

Four steps Shay recommends for hospitals:

1. Access the liability risk in all its internal equipment and external vendors (including critical supplies, blood banks, pharmacy suppliers and all vendors).

2. Pinpoint the vulnerabilities: Who are the likely plaintiffs? What are some likely litigation scenarios? 'Hospitals need to develop a strategy on how to address these issues now,' Shay said.

3. Document all Y2K readiness efforts. 'This goes from everything to board minutes to project planning, triage decisions and rationale, scheduled reports of work done, vendor communication and test dates,' Shay said.

Hospitals could receive some relief from proposed legislation to limit Y2K law suits and impose shared liability on all companies responsible for computer failures. The measure, already passed by the House, was approved by the U.S. Senate on June 15. However, the Senate's 62-37 vote fell short of the two-thirds majority needed to override President Clinton's promised veto.

If there is litigation, Shay said, it is important that a hospital have all its records handy. 'It would be unfortunate if a facility did all the right things, but didn't have the documentation to prove it.'

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