I. PURPOSE

On May 8, 1995, the Department of Health and Human Services, with the concurrence of the Department of Justice, published final regulations for the Federally Supported Health Centers Assistance Act of 1992 (Attachment A). The final rule sets forth information whereby an entity or an individual can determine when, and the extent to which, it can reasonably expect to be protected under the Act.

This Bureau of Primary Health Care (BPHC) Policy Information Notice (PIN) updates BPHC PINs 93-07, issued April 27, 1993, Policies and Procedures for Federal Tort Claims Act Coverage Pursuant to the Federally Supported Health Centers Assistance Act of 1992 (Pub.L. 102-501) and 93-17, issued July 2, 1993, Financial Issues surrounding Federal Tort Claims Act Medical Liability Coverage for Section 329, 330, 340, and 340A Deemed Centers.

II. INTRODUCTION

The Federally Supported Health Centers Assistance Act of 1992 (Pub.L. 102-501) amends Section 224(a) of the Public Health Service (PHS) Act (42 U.S.C. 233) to extend eligibility for malpractice liability protection under the Federal Tort Claims Act (FTCA) to public or private, nonprofit entities receiving Federal funds pursuant to Section 329, 330, 340, or 340A of the PHS Act, as well as their officers, employees, and certain contractors.

III. FTCA COVERAGE

Section 6.6 of the final regulations elaborates on the scope of the statutory protection for deemed entities and individuals. Basically, only acts or omissions within the scope of the entity's approved Federal project and the individual's scope of employment (or contract for services, in the case of covered contractors) are covered. Thus, the rule makes clear that any "moonlighting" activities of health care practitioners at covered entities are not covered.

Furthermore, Section 6.6(d) and the attached Federal Register Notice published makes clear that certain activities involving non-patients of the deemed entity are coverable under FTCA (Attachment B). If the covered entity is unsure whether its particular arrangement falls within the scope of the examples, it may apply to the Director, BPHC for a particularized determination as to that arrangement. Entities should be painstakingly exact in this regard. If any element of the activity or arrangement in question does not fit squarely into the examples a particularized determination on coverage should be sought. As to situations that may fall within the scope of 6.6(d), but are not described in the examples, covered entities are expected to apply for particularized determinations.

IV. CLARIFICATION OF LICENSURE/CERTIFICATION

Acceptable licensure or certification are those conferred by State entities or nationally recognized professional credentialing organizations.

V. CLARIFICATION OF SUBRECIPIENTS

A subrecipient is defined as an entity which receives a contract from a deemed entity to provide a full range of health services on behalf of the deemed entity and only for those services carried out under the scope of the approved Federal project. Consequently, subrecipients are organizations and not individual contractors. Individual contractors must meet the statutory requirements for coverage as outlined in BPHC PIN 93-7, issued April 27, 1993. Subrecipients must also meet the same deeming requirements for FTCA coverage eligibility as the grantee as specified in BPHC PIN 93-7 (e.g., malpractice risk reduction policies, implementation of a health care practitioner credentialing system, etc.). This can be accomplished either separately or by participating collaboratively with the deemed entity.

VI. ALLOWABLE COSTS

Clarification provided by Section 6.6 of the regulations of the acts coverable under the FTCA will likely have the effect of providing more comprehensive malpractice liability protection for deemed centers for activities within the scope of their approved Federal project. Due to the timing of the publication of the regulations and the possiblesunset of the program on December 31, 1995, it may not be cost-effective for a deemed health center to drop an existing private comprehensive or gap malpractice insurance policy due to factors such as the cost for tail insurance, termination penalty on policy, or policies prepaid beyond December 31, 1995. However, in light of the issued regulations, deemed centers with gap policies may be able to terminate them if that coverage was applicable to the examples cited in the rule. To further evaluate the financial implications of the program, grantees are required to submit the malpractice cost worksheet (Attachment C) and forward it to the Regional Grants Management Officer by September 30, 1995.

VII. APPROPRIATE USE OF SAVINGS

Deemed centers that experience a net savings in malpractice insurance costs may use the savings within the scope of the approved Section 329, 330, 340, or 340A Federal project, provided that a revised program budget is submitted to the appropriate Regional Grants Management Office for approval. These savings 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 clinical quality improvements/risk management activities).

VIII. REQUIRED DOCUMENTATION FOR CLAIMS PROCESSING

In the event that a PHS administrative claim or suit in State court is filed against the health center or staff the following information should be transmitted to the Chief, Litigation Branch, Office of the General Counsel, Business and Law Division, Department of Health and Human Services, 330 Independence Avenue, S.W., Cohen Building, Room 5362, Washington, D.C. 20201:

• A copy of the entity's deeming letter;
• Evidence of the defendant's employment status with the health center. In the event the defendant is a contractor at the time of the alleged incident, provide evidence that the contractor worked an average of 32 1/2 hours per week or was providing obstetrical services;
• Evidence that the defendant was licensed or certified at the time of the incident;
• . If the act or omission occurred outside the health center's facilities, provide the name and address of the outside facility and information as to the nature of the affiliation between the outside facility and the health center and the defendant;
• Evidence as to the financial arrangements with the defendant regarding billing for the medical/dental services at issue. Specifically, verify that the defendant was not billing privately for the services or was not being paid or compensated above his or her employment/contract wages for the services;
• A copy of all medical records from the health center and any private facility that might be involved; and
• A copy of any and all insurance policies providing malpractice insurance to the health center and the defendant, whether or not the health center and defendant (or insurer) believe the policies do not provide coverage in the situation

IX. CASE MANAGEMENT

The BPHC in collaboration with the PHS Claims Office has established a data base with the pertinent information on each malpractice claim filed. Malpractice claims filed with the PHS are reviewed by the PHS Quality Review Panel for a recommendation on the merits of the claim. The findings of the panel including quality assurance issues, if appropriate, will be transmitted to the appropriate regional office for use in dialogue with the health center regarding the claim. Furthermore, the final action by the Department of Health and Human Services and/or Department of Justice will also be transmitted to each regional office when available.

Attachment A

Billing Code: 4160-15 DEPARTMENT OF HEALTH AND HUMAN SERVICES HEALTH RESOURCES AND SERVICES ADMINISTRATION NOTICE REGARDING THE FEDERALLY SUPPORTED HEALTH CENTERS ASSISTANCE ACT OF 1992

AGENCY: Health Resources and Services Administration

ACTION: Notice

SUMMARY: On May 8, 1995, the Secretary of Health and Human Services published a final rule implementing certain provisions of the Federally Supported Health Centers Assistance Act of 1992 (the Act). The Act provides for liability protection for certain grantees of the Public Health Service and for certain individuals associated with these grantees. The Health Resources and Services Administration is the agency within the Department responsible for administering certain aspects of the Act. This notice provides further guidance regarding the final rule.

FOR FURTHER INFORMATION CONTACT: Division of Community and Migrant Health Bureau of Primary Health Care Health Resources and Services Administration 4350 East West Highway Bethesda, Maryland 20814 Phone: (301) 594-4300.

SUPPLEMENTARY INFORMATION: Section 224 (a) of the Public Health Service (PHS) Act (42 U.S.C. 233 (a) provides that the remedy against the United States provided under the Federal Tort Claims Act (FTCA) resulting from the performance of medical, surgical, dental or related functions by any commissioned officer or employee of the PHS while acting within the scope of his office or employment shall be exclusive of any other civil action or proceeding. The Federally Supported Health Centers Assistance Act of 1992 (Public Law 102-501) provides that, subject to its provisions, certain entities and officers, employees and contractors of entities shall be deemed to be employees of the PHS within exclusive remedy provision of section 224

(a). The final rule implementing Public Law 102-501 was published in the Federal Register (60 FR 22530) on May 8, 1995, and adds a new Part 6 to 42 CFR Chapter 1. Part 6 describes the eligible entities and the covered individuals who are within the scope of the FTCA protection afforded by the Act. Section 6.6 of the final rule describes the acts and omissions that are covered by the Act. Paragraph (d) of that section states that only acts and omissions related to the grantsupported activity of covered entities are covered. That paragraph goes on to provide that: Acts and omissions related to services provided to individuals who are not patients of a covered entity will be covered only if the Secretary determines that

• The provision of the services to such individuals benefits patients of the entity and general populations that could be served by the entity through communitywide intervention efforts within the communities served by such entity;
• The provision of the services to such individuals facilitates the provision of services to patients of the entity; or
• Such services are otherwise required to be provided to such individuals under an employment contract or similar arrangement between the entity and the covered individual. Paragraph (e) of 6.6 provides examples of situations within the scope of paragraph (d). Questions have been raised, however, about the specific situations encompassed by 6.6(d) and about the process for the Secretary to make the determinations provided by that paragraph. The purpose of this notice is to address those questions. We have decided that it would be impractical and burdensome to require a separate application and determination of coverage for the situations described in the examples set forth in 6.6(e). Accordingly, for the specific cases described in those examples, and discussed further below, the Department hereby determines that coverage is provided under 6.6(d), without the need for specific application. (This determination assumes, of course, that other requirements of coverage have been met, such as a determination that the entity is a covered entity and a determination that the individual is a covered individual. Furthermore, we reiterate the statement in the preamble to the final rule that acts or omissions by individuals that are not within the scope of employment, e.g., moonlighting activities, are not covered.) While the situations described below have hereby been determined to be within the scope of 6.6(d), covered entities may apply for specific determinations of coverage under that section. If, for example, the covered entity is unsure whether its particular arrangement falls within the scope of example 2, it may apply for a particularized determination as to that arrangement. Entities should be painstakingly exact in this regard. If any element of the activity or arrangement in question does not fit squarely into the examples below, a particularized determination on coverage should be sought. As to situations that may fall within the scope of 6.6(d), but are not described in the three examples, covered entities are expected to apply for particularized determinations.

Example I. Community-Wide Interventions

• School-Based Clinics: Health center staff provide primary and preventive health care services at a facility located in a school or on school grounds. The health center has a written affiliation agreement with the school.
• School-Linked Clinics: Health center staff provide primary and preventive health care services, at a site not located on school grounds, to students of one or more schools. The health center has a written affiliation agreement with each school.
• Health Fairs: Health center staff conduct an event to attract community members for purposes of performing health assessments. Such events may be held in the health center, outside on its grounds, or elsewhere in the community.
• Immunization Campaign: Health center staff conduct an event to immunize children against infectious childhood illnesses. The event may be held at the health center, schools, or elsewhere in the community.
• Migrant Camp Outreach: Health center staff travel to a migrant farmworker residence camp to conduct intake screening to determine those in need of clinic services (which may mean health care is provided at the time of such intake activity or during subsequent clinic staff visits to the camp).
• Homeless Outreach: Health center staff travel to a shelter for homeless persons, or a street location where homeless persons congregate, to conduct intake screening to determine those in need of clinic services (which may mean health care is provided at the time of such intake activity or during subsequent clinic staff visits to that location).

Example II. Hospital-Related Activities

Periodic hospital call or hospital emergency room coverage, as required by the hospital as a condition for obtaining hospital admitting privileges. There must also be documentation for the particular health care provider that this coverage is a condition of employment at the health center. Example III. Coverage-Related Activities As part of a health center's arrangement with local community providers for after-hours coverage of its patients, the health center's providers are required by their employment contract to provide periodic or occasional cross-coverage for patients of these providers.

Issued September 19 , 1995 - Last reviewed November 22, 2006