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This Policy Information Notice (PIN) supercedes PINS 93-07, 93-19, and 96-07. This PIN (1) describes the process
for applying and reapplying for coverage under the
program, (2) describes the type of coverage and
requirements, (3) describes the procedures deemed
grantees must comply with when faced with a medical
malpractice claim or suit, and (4) provides other updated
information related to The Federal Tort Claims Act (FTCA)
and The Federally Supported Health Centers Assistance
Acts (FSHCAA) of 1992 and 1995.
Federal Tort Claims Act coverage for eligible Bureau of
Primary Health Care (BPHC) grantees was initially
legislated through the FSHCAA of 1992 (Public Law 102-
501) by amending section 224 of the Public Health Service
(PHS) Act. The eligible entities ("Health Centers") are
Migrant Health Centers, Community Health Centers, Health
Care for the Homeless grantees, and Health Services for
Public Housing Residents grantees. The FSHCAA of 1995,
signed into law by the President on December 26, 1995,
clarified the 1992 Act and eliminated its sunset
provision, making the program permanent.
The intent of the law was to increase the availability of
funds for the provision of primary health care services
by reducing the expenditure of Health Center funds for
malpractice insurance premiums. The FSHCAAs accomplish
this by making deemed Health Centers (and their officers,
directors, employees and certain contractors) Federal
employees for the purpose of medical malpractice. As
Federal employees these organizations and individuals are
immune from medical malpractice suits for actions within
the scope of their employment. Potential plaintiffs must
follow the requirements of the FTCA for relief (see
Paragraph XIV below). The FTCA applies to acts or
omissions of covered entities in the performance of
covered activities.
A grantee must be deemed by the Secretary of Health and
Human Services (Secretary) in order for it to be covered
under the FTCA. Grantees eligible to be deemed are:
- Community Health Centers [section 330(e)].
- Migrant Health Centers [section 330(g)].
- Health Care for the Homeless [section 330(h)].
- Health Care for Residents of Public Housing
[section 330(i)].
To be deemed a grantee must complete an initial
application that demonstrates that the grantee:
- Has implemented appropriate policies and procedures
to reduce the risk of malpractice and the risk of
lawsuits arising out of any health or health related
functions performed by the entity.
- Has implemented a system whereby professional
credentials, references, claims history, fitness,
professional review organization findings, and
licensure status of its health professionals are
reviewed and verified.
- Will fully cooperate with the Department of Justice
(DOJ) in the event of a claim under section 224 and
will take necessary steps to assure against such
claims in the future.
- Will cooperate with the DOJ in providing information
related to previous malpractice claims history.
The FSHCAA of 1995 clarified that section 224 covers any
officer, governing board member, or employee of the
Health Center. Employees are covered by the FTCA whether
they are full-time or part-time. Furthermore, licensed
or certified health care practitioner contractors working
full-time (i.e., on average at least 32 2 hours per week)
or part-time providers of services in the fields of
family practice, general internal medicine, general
pediatrics, or obstetrics and gynecology are also covered
under the FTCA. (Note: for contract providers, the
contract must be between the Health Center and the
individual provider. All payments for service must be
from the Health Center to the individual contract
provider. A contract between a deemed Health Center and
a provider's corporation does not confer FTCA coverage on
the provider.)
Volunteers are neither employees nor contractors and
therefore, are not eligible for FTCA coverage.
Typically, the Internal Revenue Service views an employee
as an individual who receives a "salary" on a regular
basis, with applicable taxes and benefits deducted along
with coverage for unemployment compensation. Health
Centers are cautioned against considering individuals not
meeting these salary and withholding tests as employees.
The FTCA coverage is restricted to acts or omissions
which: (1) occur on or after the effective date that the
Secretary has determined that the Health Center has met
the requirements for FTCA coverage (i.e., approval of
deeming application); (2) are within the approved scope
of the project; and (3) are within the scope of
employment, contract for services, or duties as an
officer or director of the corporation.
A. SCOPE OF THE PROJECT
Only acts and omissions related to activities within
the scope of the approved Federal project, as
defined in the Health Center's approved grant
application, may be covered. The FTCA coverage for
new health services or additional health delivery
sites is dependent on BPHC approval of a change in
the scope of the project. The request for a change
in scope should be submitted to the BPHC for
approval. Consult PIN 96-14 for policies and
procedures related to Health Center on Scope of
Project.
B. SCOPE OF EMPLOYMENT
Only acts and omissions related to activities within
the scope of employment may be covered. Health
Center personnel should have clearly defined,
written job descriptions (includes employment
agreements, contracts for services, etc.) carefully
delineating the duties of the individual. For
health care practitioners, it is important to
specify what type of services and where the
individual would deliver such services. Although it
is not necessary to be overly specific, it must be
sufficient to determine whether, on any particular
occasion, the individual was acting within the scope
of his/her employment (or contract) with the Health
Center, as opposed to, for example, moonlighting.
C. SERVICES TO NON-HEALTH CENTER PATIENTS
The FSHCAA of 1995 reflects section 6.6(d) of the
final rule published in the Federal Register (Vol.
60, pages 22530-32) on May 8, 1995, which provides
FTCA coverage for services to non-Health Center
patients in certain situations. The Federal
Register Notice (Vol. 60 pages 49417-18) issued
September 25, 1995, provided examples of the type of
activities within the scope of section 6.6(d) that
are approved for FTCA coverage. Those examples
include school-based clinics, health fairs,
immunization campaigns, migrant camp outreach,
homeless outreach, periodic hospital call if
required for privileges, and formal after hours
coverage arrangements.
The applicability of FTCA to a particular claim or case
will depend upon the certification by the Attorney
General that the (1) individual or grantee is covered by
the Act, (2) the individual was acting within the scope
of employment, and (3) that the act or omission giving
rise to the claim was within the scope of project of the
entity. Such a certification or failure to certify is
subject to judicial review.
A subrecipient (subgrantee) is an entity (not an
individual contractor) that receives a grant or a
contract from a deemed Health Center to provide the full
range of health services on behalf of the deemed Health
Center and only for those services under the scope of the
project. Subrecipients can be eligible for FTCA
coverage. Contractual relationships with other entities
for individual services (e.g., laboratory, pharmacy,
physician services) are not subject to FTCA coverage.
Subrecipients are required to meet the same deeming
requirements as the eligible Health Center.
Consequently, each subrecipient shall be required to
submit a deeming application, through the eligible Health
Center, in order to qualify for FTCA coverage. Ideally,
the Health Center should submit its application and that
of any subrecipient(s) at the same time. However, a
future application from a subrecipient can be reviewed
independently.
If a deemed Health Center is unsure whether an activity
falls within the scope of section 6.6(d) of the Federal
Register (Vol 60, pp 22530-32) on May 8, 1995, it may
apply to the Director, BPHC, for a determination of
coverage. The request must be of sufficient detail to
determine: (1) what services are provided, (2) who
provides the services, (3) where the services are
provided, and (4) why Health Center personnel are
providing such services.
The FSHCAA of 1995 amendments provide a Health Center the
option of choosing to meet its malpractice liability
protection through the FTCA or the purchase of private
insurance policies. Health Centers that have chosen not
to apply for, or have terminated FTCA coverage, may use
Federal grant funds for the purchase of private
malpractice insurance.
In general, dual coverage (both FTCA and private
malpractice insurance covering the same activities) is
not permitted and any such expenditures will be
disallowed by the BPHC. However, it is recognized that
some Health Centers may have purchased malpractice
insurance for health care practitioners with differing
policy expiration dates as a means to stagger required
tail insurance expenditures. In these situations,
temporary dual coverage is allowable.
The combined use of FTCA and gap coverage (i.e., private
insurance for activities not subject to FTCA coverage) is
allowable. This can be accomplished by purchase of a
policy for discrete activities or as a wrap-around (gap)
policy that clearly delineates that coverage is only for
activities not subject to FTCA coverage.
Deemed Health Centers are authorized to use the savings
in malpractice insurance costs for activities within the
scope of the project, provided that a revised program
budget is submitted to the appropriate Grants Management
Office for approval. For example, these funds may be
used to increase the number of users, increase the range
of services provided (including case management and
activities or programs aimed at reducing language and
cultural barriers to care), or to implement
administrative improvements (including clinician
compensation, clinical quality improvements/risk
management activities).
The FTCA provides protection only for personal injury,
including death, resulting from the performance of
medical, surgical, dental, or related functions (i.e.,
malpractice). Consequently, even with FTCA coverage,
Health Centers will continue to need other types of
insurance (e.g., directors and officers liability,
general liability, auto insurance).
The FSHCAA of 1995 requires all Health Centers (including
those previously deemed under the FSHCAA of 1992) to
apply for deemed status in order for FTCA coverage to be
effective. Health Centers can make application at any
time and BPHC will act upon the application within 30
days.
The deeming application targets the statutory
requirements for deeming including the Health Center's
credentialing, risk management systems, and past claims
history. A checklist is provided where possible for ease
of completion and review. In addition, the on-going
monitoring system of the BPHC will continue to focus on
the quality of care in funded Health Centers through the
Primary Care Effectiveness Review, mid-year assessment,
etc.
Health Centers (and subrecipients) applying for deemed
status must submit the following to the appropriate
Division Director or Branch Chief in the appropriate
Health Resources and Services Administration (HRSA) Field
Office (Attachment A):
- A completed application (Attachment B) with a
proposed effective date.
- A listing of the Health Center's current health care
practitioner staff (employee and contractor) with
the start work date, date of initial credentialing,
and date of re-credentialing, as appropriate. This
listing is for deeming purposes only. It is
supporting documentation that shows the Health
Center has implemented a system for the
credentialing of its practitioners. It is not
intended to be a list of the health care
practitioners covered under the FTCA. The BPHC does
not maintain any database of individual providers
covered by the FTCA.
- A listing of the claims or suits brought against the
Health Center during the past 12 months and a
statement as to the steps taken to ensure against
such claims in the future.
Failure to submit any of the required documents will
render the application incomplete and will delay its
consideration until the missing information is provided.
Completed applications will be initially reviewed by
personnel in the HRSA Field Office and a recommendation
forwarded through the BPHC Center for Risk Management to
the Director, BPHC. The Director, BPHC will make the
final decision regarding the deeming request within 30
days and the Health Center will be officially notified in writing.
Note that initial deeming applications cannot be part of
any grant application. Only the application in this PIN,
submitted on its own, will be reviewed.
Health Centers must periodically apply for renewal of
their deemed status. This occurs at the end of the
Health Centers project period. An application for
renewal of deemed status ("redeeming") is included as part
of the single grant application for project period
renewals. This must be completed as part of the project
period renewal application in order for coverage under
the FTCA to continue beyond the end of the project
period. Health Centers will be informed of the renewal
of their deeming via the Notice of Grant Award.
A "deemed" Health Center, its officers, directors,
employees, and certain contractors are considered to be
Federal employees for the purpose of medical malpractice.
As such they are immune from lawsuit. Actions for
relief of negligent acts of medical malpractice must be
maintained against the United States and follow the
procedures outlined in the FTCA. In general, this Act
requires the alleged injured party to first seek an
administrative remedy by filing a claim with the PHS. If
the claim is denied or a settlement is not reached within
6 months, the claimant can then sue the United States.
Cases are heard in Federal Court without a jury, and are
defended by the DOJ with the assistance of the Office of
General Counsel, Department of Health and Human Services.
No punitive damages are allowed.
Section 224 of the PHS Act provides that a covered
individual cannot be denied hospital admitting privileges
solely because the individual's malpractice protection is
provided by the FTCA, so long as the appropriate
professional qualifications and agreement to abide by the
policies and bylaws of the hospital are met. The FSHCAA
of 1995 further amended section 224 by providing that
managed care plans (including health maintenance
organizations and similar entities) must accept FTCA
coverage as meeting whatever malpractice insurance
coverage requirements they may have for contracting
providers. Hospitals or managed care plans that fail to
comply with these provisions will be in jeopardy of
losing their provider status and ability to collect
payment under Medicare and Medicaid.
The BPHC receives numerous requests for verification of
coverage under the FTCA for individual health care
practitioners. Since FTCA coverage is conveyed to the
individual practitioner by virtue of employment or
certain contractual relationships with the Health Center,
the name of the Health Center would expedite these
requests. The health care practitioner should write the
name of their employing Health Center on the "Release of
Information" form provided by the hospital, managed care
organization, etc. Requests for verification of coverage
should be sent to the appropriate HRSA Field Office FTCA
Coordinator.
Many managed care organizations, State/local governments,
etc., insist upon hold harmless or indemnification
clauses in contracts with potential providers. There is
no statutory basis for extending FTCA coverage to those
other entities. Health Centers should be very cautious
in entering into such agreements. Section 7 of the
FSHCAA of 1995 which requires, under penalty of losing
Medicare and Medicaid reimbursement, managed care plans
to accept FTCA as meeting whatever malpractice coverage
such plans require, may assist the Health Center in
resolving any such matters.
On-going risk management is essential to the provision of
quality health care services. Private malpractice
insurance companies have traditionally provided risk
management services ranging from minimal to
comprehensive. As deemed Health Centers have migrated to
FTCA coverage as the means of malpractice liability
protection, there has been concern of the potential loss
of risk management services. The BPHC is committed to
assuring that Health Centers continue to have the
availability of risk management services. However, the
BPHC is unable to bear the full burden of this cost and
expects, as Health Centers begin to realize savings in
malpractice insurance costs due to coverage under the
FTCA, Centers will reinvest some of the savings to target
malpractice risk reduction.
Although the BPHC is aware that the majority of private
malpractice insurers are bundling risk management
services with "gap or wrap-around" policies sold to Health
Centers as a companion to FTCA coverage, the following
are some specific steps taken by BPHC:
- . The BPHC has entered into an Interagency Agreement
with the Armed Forces Institute of Pathology,
Division of Legal Medicine, for the dissemination to
all Health Centers of their periodical named the
"Open File." This document, which is published once a
year, is devoted solely to the discussion of risk
management issues and offers five credits of
continuing medical education.
- Individually tailored risk management assessment and
assistance is available, on a very limited basis,
through the BPHC Technical Assistance program.
Specific requests should be relayed to the Division
of Health Service Delivery in the appropriate HRSA
Field Office.
- The BPHC has provided funding to the National
Association of Community Health Centers to provide
Health Centers with:
(1) risk management training and education: Risk Management Training and
Education Seminars have been held around the country. These seminars can be
arranged through your State Primary Care Association or the National
Association of Community Health Centers.
(2) limited risk management consultation services via telephone. The risk
management telephone consultation is provided by experienced staff from a
major malpractice insurance company. They can provide guidance on general
risk management issues. They will not provide legal advice. To access this
service call (toll free) 888-800-3772.
- The BPHC will work directly with Health Centers that
have had claims filed in an effort to help improve
systems and provide assistance in reducing the risk
of future malpractice claims. In addition, BPHC
will support, as an allowable cost, the purchase of
separate private risk management services on the
open market by Health Centers.
Under the FTCA, all claims must be filed with the PHS Claims Office before a Federal suit may
be filed. Many attorneys are unaware of the fact that certain Health Centers and their providers
are Federal employees for the purposes of medical malpractice. On numerous occasions,
plaintiff's attorneys have filed actions against deemed Health Centers in state court. If this
occurs the Health Center should take the following steps:
- All state court complaints
and notices of intent should be sent
immediately upon receipt to:
Department of Health & Human Services
Office of the General Counsel Business
and Administrative Law, Room 4760, Cohen
Building 330 Independence Avenue, SW
Washington, DC 20201 Phone: 202-619-2155.
Fax: 202-619-2922
- The Health Center will be requested
to send two copies of the following
documents to the above address.
- 1. Deeming Letters.
- 2. Wage & Tax: W-2 forms
for each individual involved in
the incident who was working for
the Health Center at the time of
the alleged negligence. If the individual
was a contractor, please send the
1099 form and an employment contract
covering the period of the alleged
negligence. If the Health Center
does not store W-2 or 1099 forms,
then the Health Center must retrieve
and provide them to verify the status
of the individual.
- 3. Declaration: A declaration
signed by the practitioner that
the practitioner is licensed to
practice medicine and that the practitioner
was not billing privately. It should
include the statement, "I certify
this is true under penalty of perjury,"
but it need not be notarized. A
separate declaration must be signed
by each practitioner named in the
complaint or in the notice of intent
to file suit. If the employee is
no longer working at a Health Center,
then the Health Center must provide
a separate statement that (1) it
has made a good faith attempt to
locate the employee, (2) they are
unable to do so, and (3) that to
the best of the Health Center's
knowledge, the employee did not
bill privately for treatment.
- 4. Medical Records: All of the
plaintiff's medical records from
the Health Center and any private
facility that might be involved.
- 5. Insurance Policies: The declaration
page of any professional liability
(including "gap" or "wrap-
around"), general liability,
and directors and officers liability
insurance policies. If the Health
Center does not have any of these
policies please provide a separate
statement to that effect.
- 6. Narrative Statement: A narrative
statement regarding the facts of
the alleged incident, by the practitioner
or the medical director.
For further information contact the FTCA Coordinator in your HRSA Field Office.
Application
For Medical/Dental Professional Liability Protection
FEDERAL TORT CLAIMS ACT
SECTION I B APPLICANT INFORMATION
NAME: __________
[ ] Migrant Health
[ ] Community Health
[ ] Health Care for the Homeless
[ ] Health Services for Residents of Public Housing
[ ] Subrecipient/subgrantee
ADDRESS:
PHONE #:__________ FAX #:__________
EXECUTIVE DIRECTOR:__________
MEDICAL DIRECTOR: __________
SECTION II B: CREDENTIALING SYSTEM
Answer YES or NO to the following questions by marking the
appropriate box. NO answers require explanation on a separate sheet.
Is professional educational background and postgraduate training
verified?
Is primary source verification of licensure, certification, and/or
registration performed?
Is board certification verified for physicians?
Is a copy of current licensure, certification, and/or registration on file?
Is a copy of hospital privileges on file, if applicable?
Are professional references obtained and reviewed?
Is a history of previous malpractice liability claims and adverse actions
reviewed?
Are health care practitioners required to submit a personal statement or
other evidence of health fitness at the time of credentialing?
Is the Health Center involved in peer review activities?
If yes, is it a formal process?
(Formal means written procedures on peer review activities are
formally adopted by the governing body and provide for adequate
notice and opportunity for a fair hearing on any adverse
recommendations.)
Is the National Practitioner Databank queried in credentialing your
health care practitioners?
SECTION III - RISK MANAGEMENT POLICIES/PROCEDURES
Answer YES or NO to the following questions by marking the
appropriate box. NO answers require explanation on a separate sheet.
Are there policies/procedures on the appropriate supervision and
back-up of clinical staff?
Is a medical record maintained for every patient receiving care at the
Health Center?
Are there policies/procedures that address triage, walk-in patients, and
telephone triage?
Are there clinical protocols that define appropriate treatment and
diagnostic procedures for selected medical conditions?
Is there a tracking system for patients who require follow-up of
specialty referrals, hospitalization, x-ray, and lab results?
Are medical records periodically reviewed to determine quality,
completeness, and legibility.
Is there a written Quality Assurance Plan approved by the governing
body? If yes, attach a copy of the most recent or annual Quality
Assurance report to the Health Center administration or
governing body.
Are quality assurance findings used to modify policies/procedures in
order to improve quality of care?
SECTION IV - CURRENT SERVICES AND SITES
Attach a copy of Exhibit B from the Health Center's most recent BPHC Single Grant
Application.
SECTION V - SERVICES TO NON-HEALTH CENTER PATIENTS
Are services provided to non-Health Center patients? If yes, check all that apply based on the
examples listed in the Federal Register Notice (Vol. 60, pages 49417-18) issued September 25,
1995.
COMMUNITY-WIDE INTERVENTIONS
[ ] School-based clinics
[ ] School-linked clinics
[ ] Health Fairs
[ ] Immunization Campaign
[ ] Outreach
HOSPITAL-RELATED ACTIVITIES
[ ] Hospital call as required for privileges
[ ] Emergency Room coverage as required for privileges
COVERAGE-RELATED ACTIVITIES
[ ] Cross-coverage with community providers
If the services do not appear to fall under the examples cited, then the Health Center should
submit a separate request to the Director, BPHC, for a determination of the applicability of
FTCA coverage as outlined in Section V of this BPHC PIN.
SECTION VI - SIGNATURES
Requested Effective Date of FTCA Coverage:__________
EXECUTIVE DIRECTOR NAME:
(Print or Type) ________________
SIGNATURE: ____________ DATE:______
MEDICAL DIRECTOR NAME:______________
SIGNATURE: _______________ DATE:______
Date Issued: April 12, 1999. Last reviewed November 22, 2006 |
