Detailed Information on the
Free Clinics Medical Malpractice Coverage Assessment

Modifying the program's original, renewal, and supplemental applications to ensure that data for measuring the program's impact can be collected.

Establishing baseline and targets for the program's long-term measure.

Measure: Patient visits provided by free clinics sponsoring volunteer FTCA-deemed clinicians.

Explanation:The Free Clinics Federal Torts Claims Act (FTCA) Medical Malpractice program offers medical malpractice protection for qualified volunteer health care professionals, such as physicians and nurses, at sponsoring free clinics. The purpose of the program is to expand access to health care services to low-income individuals who lack access to primary care by encouraging health professionals to volunteer at free clinics. Health professionals who may have refrained from volunteering because of the fear of malpractice liability might be more likely to volunteer their services with FTCA coverage. This measure seeks to determine if patient capacity is increasing at free clinics that choose to sponsor volunteer health professionals for FTCA coverage. The program will seek to revise its application materials in 2007 to collect this data.

Measure: Number of free clinics operating with FTCA-deemed volunteer clinicians.

Explanation:In order for health professionals to participate in the FTCA program they must be sponsored by a free clinic. This measure seeks to show the extent to which free clinics are participating in the program, which is an indicator of expanded access to medical services.

Measure: Number of volunteer free clinic health care providers deemed eligible for FTCA malpractice coverage.

Explanation:Participation is necessary for the program to expand access to medical services. This measure examines program participation by volunteer health professionals.

Measure: Percent of volunteer FTCA-deemed clinicians who meet certification and privileging requirements.

Explanation:There is limited value of providing low quality medical services. This measure reflects the quality of services provided by those health professionals as measured by their meeting licensing and certification requirements.

Measure: Administrative costs of the program per FTCA-covered volunteer.

Explanation:Annual administrative Program costs (numerator) as compared number of FTCA-covered volunteer clinicians deemed as a result of the program (denominator). Note: The 2006 target includes a projected increase due to new contractor costs. These costs are due to substantial redeeming application assistance, increased technical assistance, potential claim administration and outreach assistance. This one-time increase in the new program costs created is estimated to be an anomaly for 2006. Targets set in future years reflect the program's projection of a steady increase in its efficiency.

Is the program purpose clear?

Explanation: The Free Clinics Federal Torts Claims Act (FTCA) Medical Malpractice program offers medical malpractice protection for qualified volunteer health care professionals, such as physicians and nurses, at sponsoring free clinics. The purpose of the program is to expand access to health care services to low-income individuals who lack access to primary care. The Free Clinics FTCA program is intended to encourage health care providers to volunteer at free clinics. The Free Clinics FTCA program is administered by the Health Resources and Services Administration (HRSA) in the Department of Health and Human Services (HHS).

Evidence: Section 194 of the Health Insurance Portability and Accountability Act (HIPAA) extends protections of FTCA to qualified health professionals of sponsoring free clinics. Under FTCA, an individual cannot be sued for medical malpractice that he or she may have committed within the scope of his or her duties. Any medical malpractice claim that, in the absence of this provision, could have been brought against such an individual may instead be brought against the United States under FTCA. Health professionals who may have refrained from volunteering because of the fear of malpractice liability might be more likely to volunteer their services. In the Conference report to HIPAA (Conference Report 104-736) and in the Senate Report of the Consolidated Appropriations Act of 2004 (Senate Report 108-081), Congress states that the purpose of the program is: "To expand access to health care services to low-income individuals in medically underserved areas."

Does the program address a specific and existing problem, interest, or need?

Explanation: The program addresses the needs of Americans who lack health care coverage. Free clinics offer primary care and pharmaceutical assistance free of charge. The increasing costs of medical malpractice insurance could be a barrier to health care professionals who would otherwise be willing to volunteer at free clinics. The percentage of physicians providing free or reduced cost care has decreased in the past five years. Medical malpractice costs are increasing and medical liability insurance is cost-prohibitive to some free clinics and health professionals, whose malpractice coverage may not extend to volunteer activities in free clinics . To date, 1,138 free clinic health professionals at 50 free clinics have been deemed eligible for coverage.

Evidence: The U.S. Census reports that in 2005, 45.8 million people in the United States, 15.7 percent of the population, lacked health insurance. In its report to Congress, "A Review of the Free Clinic Network," HRSA identified 1,718 unique, self-defined free clinics in 49 States and the District of Columbia with an estimated 8.2 million patient visits in 2003. In "Free Clinics Helping Patch the Safety Net," Geller et al. (2004) found that, on average, 93 percent of free clinic patients lacked health insurance. In "A Growing Hole in the Safety Net: Physician Charity Care Declines Again," Cunningham and May (2006) found that the overall charity care hours per 100 uninsured persons declined by 18 percent, from 7.7 hours in 1996-7 to 6.3 in 2004-2005. A 2003 Government Accountability Office report (GAO 03-702) found that 2002 premiums for internal medicine physicians in seven selected States ranged from around $3,000 over $30,000. The average annual increase for these premiums was 16 percent over 2001-2003.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: No other program offers the same scope of malpractice coverage to free clinic health professions volunteers and makes it available in every State. There are other State and Federal efforts that attempt to limit the malpractice exposure of health professional volunteers. These protections vary in scope and by State. Many States offer have laws that increase the level of negligence required for liability. However, under those laws volunteers must pay for their legal expenses and are still liable for acts of gross negligence. The FCTA free clinic protects volunteers from both of those risks. Ten States indemnify volunteer providers by extending to them protections that State employees receive. These protections most resemble the protections offered by the FCTA free clinic program, but they are not available in every State. A few States provide funds to purchase malpractice insurance for volunteers or require that insurance sold in the State include coverage of volunteer services. The Volunteer Protection Act (VPA), which protects against claims for simple negligence for certain volunteers, is a Federal law that the health professions can use in defending themselves in a malpractice suit. This protection differs from the Free Clinics' FTCA malpractice coverage in two ways: It does not cover allegations of gross negligence, and the volunteers have to assume the legal fees and litigation costs incurred in his or her defense in a lawsuit. In contrast, if a lawsuit were filed against a deemed volunteer at a free clinic, the federal government would substitute itself for the volunteer, who would be dismissed as a defendant and that the United States government takes the place of the defendant in the case.

Evidence: In "Overcoming Barriers to Physician Volunteerism," Hattis (2005) reports that 43 States and the District of Columbia have laws that provide varying levels of protection to health professional volunteers. Thirty-six States and the District of Columbia require that a health professional volunteer commit gross negligence to be legally liable. (Under this standard of care, the injured person must show that the volunteer had conscious indifference of his or her actions). Ten States indemnify volunteer providers by extending to them protections that State employees receive. Other States provide funds to purchase malpractice insurance for volunteers or require that insurance sold in the State include coverage of volunteer services. (These state laws are subject to amendment or to potentially being overturned by a court on a due process claim.) In addition, the VPA (P.L. 105-19) provides all qualifying volunteers, including qualifying health professional volunteers, a defense from liability for simple negligence, so long as the action in question is within the scope of the volunteer's duties. It applies only to clinicians who volunteer their services for a 501(c)(3) or 501(c)(4) nonprofit corporation that is in good standing and is otherwise qualified under state laws. The VPA does not affect the liability of the non-profit or government entity for the action of its volunteers, nor does it affect such an entity's ability to file an action against a volunteer. States can choose to opt out of the VPA and may impose laws that would require volunteer employers to assume liability similar to employers of regular employees or other financial requirements. The position of the U.S. Government is that the government, when defending an FTCA suit, stands in the place of the named defendant, and thus may avail itself of any defenses or immunities available to the defendant under applicable state or federal law, including the limited VPA.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: There is no evidence of design flaws that limit the program's ability to meet its objective. The program facilitates the provision of malpractice coverage for volunteer health care providers by having the sponsoring free clinic submit original and annual renewal deeming applications on their behalf.

Evidence: The Health Resources and Services Administration Bureau of Primary Health Care Program Information Notice 2004-24 describes the process by which free clinics can apply to sponsor a volunteer clinician for FTCA coverage.

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: The program is targeted so that only free clinic health professionals who do not receive compensation for their services are eligible for coverage. Free clinics can sponsor a volunteer health professional for FTCA coverage only if they do not charge those patients and if the volunteers are licensed or certified to provide health services in accordance with applicable law. HHS will deem a volunteer health professional to be eligible for malpractice protection only if the volunteer is licensed or certified.

Evidence: Under HIPAA, "free clinics" are health care facilities operated by non-profit entities that must be licensed or certified in accordance with applicable laws regarding the provision of health services. They also must not accept any payments from third party payors (including reimbursement under any insurance policy or health plan, or under any Federal or State health benefits program including Medicare or Medicaid). In addition, they cannot charge fees to patients. Program Information Notice 2004-24 describes credentialing and privileging requirements needed for volunteer health professionals to be eligible for FTCA coverage.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The program has developed two long-term outcome measures that meaningfully reflect the purpose of the program. The purpose of the program is to encourage health professionals to volunteer to expand access to medical services to low-income individuals. The first measures the impact of the program on health professions decisions to volunteer. The second seeks to determine if patient capacity is increasing at free clinics that choose to sponsor volunteer health professionals for FTCA coverage.

Evidence: The program's two long-term performance measures are: 1) Percent of FTCA-deemed clinicians whose decision to work at the free clinic was significantly influenced by the availability of FTCA coverage. 2) Patient visits provided by free clinics sponsoring volunteer FTCA-deemed clinicians.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The program was recently created and has no data on its two developmental long-term measures. Timeframes for establishing targets for the two developmental measures have been set.

Evidence: The program intends to revise its applications in 2007 to begin the process of collecting data on outcome performance measures. Once it is able to establish a baseline, it will begin to set targets and timeframes.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The program's annual output measures contribute to the long-term goals. The first measure examines program participation by volunteer health professionals. Participation is necessary to expand access to medical services. The second measure seeks to show the extent to which free clinics are participating in the program. The third measure reflects the quality of services provided by those health professionals as measured by their meeting licensing and certification requirements. There is limited value of providing low quality medical services.

Evidence: The program's annual measures are: (1) Number of volunteer free clinic health care providers deemed eligible for FTCA malpractice coverage, (2) Number of free clinics operating with FTCA-deemed volunteer clinicians. (3) Percentage of volunteer FTCA-deemed clinicians who meet certification and privileging requirements.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The program has baselines and targets for its annual measures that are ambitious given the recent performance of the program.

Evidence: The program's targets for 2008 are: 100 percent of health profession volunteers receiving FTCA coverage to meet certification and privileging requirements; 2,500 volunteer clinicians receiving FTCA coverage; and 85 free clinics operating with FTCA-deemed volunteer clinicians.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: Free clinics that sponsor health professional volunteers for malpractice coverage commit to the program's annual goal that 100 percent of FTCA-deemed clinicians meet certification and privileging requirements.

Evidence: Free clinics are held accountable through the requirements of their applications and in their deeming letters. Under the application, the free clinic certifies the qualifications of the sponsored health professional and agrees to maintain risk management systems.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: No recent evaluations have been performed to determine if the program is effective in encouraging health professionals to provide medical services to low-income individuals. It is not positively known how the provision of FTCA coverage affects health professionals' decisions to volunteer and whether it expands low-income individuals' access to medical services. The program contracted out an evaluation that provided a qualitative description of free clinics and a baseline of the potential number of free clinics that might sponsor their providers for FTCA medical malpractice coverage and the estimated federal liability of the program. In addition, the Department of Justice sends an annual Report to Congress for which the program provided the following information: the number of FTCA clinics and providers, FTCA claims filed, past non-FTCA malpractice claims filed against the now deemed providers, and an estimate of future claims.

Evidence: In its 2005 evaluation and Report to Congress, "A Review of the Free Clinic Network," HRSA identified 1,718 unique, self-defined free clinics. DS Actuarial Associates estimates that if all these clinics were to deem their volunteer health professionals, the cost to the Federal government would be approximately $30 million annually. However, the Report also states that many of the 1,718 clinics may not meet FTCA eligibility criteria, and thus far less than 4% of the 1,718 clinics have requested to join the program. Many of those clinics that were identified as not meeting the FTCA Program's eligibility criteria are the same clinics that would be most risky to cover; if they were to apply to the FTCA Program they would not meet the Program's risk management and quality assessment standards. Therefore the $30 million estimate, which includes the risk for these clinics, may be inflated. To date, zero claims have been filed against the program, and the program estimates that it will pay its first potential claim in FY2008 or later. The Department of Justice sends annual reports to Congress in accordance with 42 USC 233(o)(6)(c) and 42 USC 233(k)(1)(B).

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: Budgets have not been explicitly tied to accomplishments of annual and long-term goals. Specifically, the relationship between annual and long-term targets and budget resources is not clear. The program has not requested additional funds in 2007. This is partly due to the fact that no claims have been filed to date and the program doesn't expect to pay the first claim until 2008 or beyond.

Evidence: The budget justifications for the Free Clinics FTCA Program are included in the Health Resources Administration Fiscal Year Justification of Estimates for Appropriation Committees.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The program, which became active in January 2005, recently developed outcome-oriented long-term performance measures and has taken steps to collect data that can demonstrate progress on these measures. These measures will be reported in addition to measures reflecting the program's daily operations that are already reported to the Department of Justice and Congress on an annual basis.

Evidence: The program has been involved in discussions on how it can improve its data collection tools to collect more outcome-oriented data.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: HRSA annually collects original and renewal deeming applications from free clinics containing key information on all health professionals seeking malpractice protection under FTCA. This information is used to set baselines for some performance measures. The program uses this information to manage risk by ensuring that only providers with a relatively low risk receive malpractice coverage. The program has used this information to deny coverage for 125 health professional volunteers (approximately 11 percent of volunteer applicants). Free clinics are required to submit additional information to HRSA when claims have been filed against any of their FTCA covered providers. The application also offers free clinics the opportunity to provide feedback on their experience with the application process. This feedback was used by the program to clarify the application requirements in 2006 and to evaluate the performance of the technical assistance contractor.

Evidence: The Volunteer Free Clinic Health Professional Deeming Application included in the Bureau of Primary Health Care Program Information Notice (PIN) 2004-24 requires listing of information necessary for a proper risk assessment analysis by the program such as qualification (e.g., licensure, certification, and/or registration) and previous claims history, as well as a quality control plans of the sponsoring free clinic. This information is certified by Chief Executive Officer or Free Clinic Director. Free clinics are required to renew the application with credentialing and privileging qualifications every year and to verify the National Practioners' Database data every two years.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Program managers' performance plans include schedule and performance standards related to program goals. For example, a recent contract holds the manager accountable for deeming free clinics in a timely fashion and creating a database that tracks FTCA-deemed volunteers. Performance rating standards could be better defined. Currently, there is no clear distinction of what is required to meet various levels of performance. Free clinics that sponsor providers for malpractice coverage are held accountable through the requirements of their applications and in their deeming letters. Under the application, the free clinic certifies the qualifications of the sponsored health professional and agrees to maintain risk management systems. If a free clinic fails to meet these standards or submits false information, coverage for their volunteer health professionals would not be renewed.

Evidence: The Employee Management System Summary Rating form includes a discussion of critical job elements. In the Volunteer Free Clinic Health Professional Deeming Application included in the Bureau of Primary Health Care Program Information Notice (PIN 2004-24), the free clinic government board is required to state in writing that the health professional meets HRSA's licensing and credentialing requirements. They are also required to maintain risk management systems, including maintenance of records and periodic review of patients' medical records to determine quality, completeness, and integrity. Applications are certified to be complete and accurate by the Chief Executive Officer or Free Clinic Director. Deeming letters provided to free clinics state that they must be in compliance with statutory requirements of the program.

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: The Program obligates funds in a timely manner and expends funds in accordance with applicable laws and regulations. Spending plans are developed and approved by Bureau and HRSA leadership, and the plans are monitored by HRSA program and budget officials to track costs and report status of funds. To date, there have been no malpractice claims filed against the Free Clinic FCTA program. The program carries approximately $5 million in unobligated balances to pay these claims if and when they occur in future years. The Program estimates that it would begin paying out any potential claims in 2008 or later.

Evidence: HRSA budget officials develop annual spending plans for each program. HRSA leadership reviews and approves annual spending plans, which are then used by budget officials and leadership for monitoring individual program expenditures. Throughout budget execution, HRSA officials are responsible for monitoring and tracking all daily activity and monitoring the status of funds reflected in the CORE (PSC) accounting system. Budget analysts are responsible for tracking and performing reconciliation between program and bureau data against the CORE system and, in turn, Status of Funds Reports are issued and distributed to senior management on a regular basis to ensure that obligations are appropriate and occur in a timely manner.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The program has an efficiency measure that tracks the average cost of deeming health professionals. The program also strives to operate efficiently by responding to all completed applications within 30 days of receipt. Program costs are low as it is administered by only two full-time equivalent employees. The program uses a competitive contract to provide its education and outreach services. The program saves funds on these contracts by cost-sharing with the Health Center FCTA program.

Evidence: The program's efficiency measure is: Number of FTCA-covered volunteer clinicians deemed as a result of the Program (numerator) as compared with the actual annual administrative Federal costs (denominator). The total cost of the program is estimated to be under $400,000 in fiscal year 2006.

Does the program collaborate and coordinate effectively with related programs?

Explanation: The program coordinates with the Health Center FTCA program, also administered by the HRSA, to share program expertise. For example, the program worked with the Health Center FTCA program in developing guidance to the Free Clinic FTCA program. In addition, the two programs control costs by sharing a contract to process future claims, and by providing technical support and outreach. The program also coordinates with non-profit free clinic-related umbrella groups on issues related to program information dissemination and outreach. The Department of Justice (DOJ) with the HHS Office of General Counsel (HHSOGC) assisted in drafting items including the deeming applications, the PIN 2004-24 and the Patient Information Notice and the HHSOGC assists in answering legal technical assistance issues raised by the free clinics in the program and clinics interested in joining the program.

Evidence: "Elements of the FTCA Contractor's Work" document, which includes tasks for both the Free Clinic FTCA and the Health Center FTCA programs. The Free Clinics FTCA Program gave a presentation and answered over an hour of questions during a 12/2/04 teleconference sponsored by Volunteers in Health Care which included over 120 organizations. Volunteers in Health Care lists the teleworkshop on their website: www.volunteersinhealthcare.org. PIN 2004-24 was written with input from the Department of Justice.

Does the program use strong financial management practices?

Explanation: In 2005, HHS received a material control weakness for its financial systems and processes. HRSA contributed to the material internal control weakness identified in the 2005 HHS audit. HHS is in the process of resolving these weaknesses by replacing existing accounting systems within HHS with the Unified Financial Management System (UFMS). UFMS is scheduled to be operational for HRSA in October 2006.

Evidence: Since 2003, HRSA has been not been included in a consolidated HHS audit. In a 2005 audit of HHS, Ernest and Young found a material weakness in HHS financial systems and processes. In particular, the audit found: Documentation regarding significant accounting events, recording of non-routine transactions and post-closing adjustments, as well as correction and other adjustments made in connection with data conversion issues must be strengthened. Processes to prepare financial statements need improvement. Financial systems are not FFMIA compliant. Weaknesses were identified in Department/Operating Division Periodic Analysis, Oversight and Reconciliations In addition, the audit found PSC's DFP CORE accounting system, which supports the activities of HRSA, did not facilitate the preparation of timely financial statements and did not have an efficient mechanism in place to compile accounting statements.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: HRSA is in the process of switching over to the UFMS to improve its financial management. The UFMS will improve funds control and monitoring and provide real-time data.

Evidence: HHS documents indicate that HRSA will adopt the UFMS system in 2006.

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The program does not currently collect data that can demonstrate progress on its long-term goals. The program was implemented in 2005 and has limited data to date.

Evidence: The program is exploring methods to collect data on its two other outcome performance measures. Once it is able to establish a baseline, the program will begin to set targets and timeframes.

Does the program (including program partners) achieve its annual performance goals?

Explanation: The program is achieving its annual goal of the percentage of volunteer FTCA-deemed clinicians who meet certification and privileging requirements. The program began operations in 2005, and thus only has one year of data on its other annual measures.

Evidence: In 2005, 100 percent of volunteer FTCA-deemed clinicians met certification and privileging requirements.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The program met its internal time efficiency goal in 2005 of reviewing applications within 30 days of receipt. The program has developed a cost efficiency measure of the administrative costs of the program per FTCA-covered volunteer, for which it has one year of data. The total administrative costs of the program was $153,878 in 2005.

Evidence: In 2005, the program took an average of 17 days to review completed applications for FTCA coverage. This review time occurred in spite of the events surrounding Hurricane Katrina, which required temporary reallocation of staff resources needed for other emergency response-related activities. In 2005, the administrative cost of the program was $221 per FTCA-covered volunteer. The program estimates these costs to go up in 2006 due to a new contract to provide technical assistance to free clinics that are participating or who wish to participate in the program, but expects increased efficiencies in years thereafter. .

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: There are no evaluations that compare the Free Clinic FTCA program with other efforts to provide medical malpractice protections. There is no other program that offers the same scope of malpractice coverage to free clinic health professions volunteers and makes it available in every State. However many States have laws that offer limited-scope malpractice protection to these volunteers. Evaluations could help determine if these other protections are sufficient to encourage health professionals to volunteer or if the wider-scope protections of the Free Clinic FTCA program are more effective.

Evidence: Question 1.3 discusses other efforts to provide malpractice protections to health professional volunteers.

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: There have been no independent evaluations of the program that measure its impact on encouraging health professionals to volunteer or its impact on expanding access to medical care for low-income individuals.

Evidence: An independent evaluation is be needed to determine if the program is successful at expanding access to health care services to low-income individuals who lack access to primary care. It is not positively known how important FTCA coverage is in influencing health professions' decisions to volunteer.