[Congressional Record Volume 141, Number 89 (Friday, May 26, 1995)]
[Extensions of Remarks]
[Pages E1149-E1151]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


      THE FEDERALLY SUPPORTED HEALTH CENTERS ASSISTANCE ACT OF 1995

                                 ______


                         HON. NANCY L. JOHNSON

                             of connecticut

                    in the house of representatives

                         Thursday, May 25, 1995
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I plan to introduce 
shortly, with Congressman Wyden of Oregon, the Federally Supported 
Health Centers Assistance Act of 1995 and commend the following 
background and summary of the legislation to the House of 
Representatives.
     The Federally Supported Health Centers Assistance Act of 1995


  Extending Malpractice Coverage for Health Centers Under the Federal 
                            Tort Claims Act

                               Background

       Community, migrant and homeless health centers are eligible 
     for coverage for medical malpractice under the Federal Tort 
     Claims Act [FTCA]. Health centers were brought under the FTCA 
     in 1993 by the Federally Supported Health Centers Assistance 
     Act of 1992. Health centers are covered for malpractice 
     claims in the same manner as employees of the Public Health 
     Service who provide medical care. The law provided this 
     coverage for health centers for a three-year 
     ``demonstration'' period, which expires December 31, 1995.
       Private malpractice insurance is a significant expense for 
     health centers. Prior to the enactment of FTCA coverage, 
     health centers spent $60 million of their federal grant funds 
     each year for private malpractice coverage. Health centers 
     covered under the FTCA has saved an estimated $14.3 million 
     in malpractice insurance costs over the past two years--funds 
     which were channelled back into patient care to serve an 
     estimated 75,000 additional clients.
       During the last two years, FTCA coverage for health centers 
     has been only partially implemented. Final regulations were 
     only recently issued on May 8, 1995. This lengthy period of 
     uncertainty regarding the law's scope has made it necessary 
     for many health centers to continue their private malpractice 
     coverage. To date, 542 health centers have been ``deemed'' by 
     HHS for malpractice coverage under FTCA, and 119 
     [[Page E1150]] health centers have dropped private 
     malpractice insurance for one or more of their clinician. 
     Only 29 percent of health center clinicians are currently 
     covered by FTCA.
       The number of claims against health centers under FTCA is 
     remarkably low. Since autumn of 1993, only eight claims have 
     been filed nationwide against the 542 health centers approved 
     for FTCA coverage. This low rate of malpractice claims is 
     consistent with the low rate of claims filed against health 
     centers under private insurance. To date, a total of $11 
     million of health center appropriations have been set aside 
     over the last three years for FTCA judgment costs. None of 
     these funds have been obligated or expended thus far.


                         Summary of Legislation

       H.R.  makes malpractice coverage for health centers under 
     the FTCA permanent. Based on information gained during the 
     demonstration period, H.R.  makes several clarifications and 
     procedural modifications in the law to improve the efficiency 
     and operation of the program. The bill:
       Codifies provisions of the final regulations defining the 
     coverage of officers, employees and contractors of health 
     centers under FTCA, and clarifies that health center 
     governing board members are also covered.
       Provides for coverage under FTCA of part-time health center 
     clinicians who practice in the primary care ares of family 
     practice, general internal medicine, general pediatrics, and 
     obstetrics and gynecology.
       Codifies provisions of the final regulations which clarify 
     that FTCA malpractice coverage applies to certain health 
     services health center clinicians may provide to patients who 
     are not registered with the center. For example, health 
     center practitioners participating in community-wide 
     immunization efforts will have FTCA coverage when providing 
     immunizations.
       Establishes procedures for health centers to apply for and 
     receive malpractice coverage under FTCA. Clarifies that once 
     an application for coverage under FTCA is approved, the 
     coverage applies to claims for services provided during the 
     period for which the coverage determination has been made and 
     is binding on all parties to a malpractice claim.
       Provides for a full and fair hearing on the record before a 
     health center can be decertified from previously approved 
     FTCA coverage.
       Provides for timely action by the Department of Justice to 
     remove a malpractice case filed in state court when the case 
     is covered under FTCA.
       Applies FTCA coverage to health services provided by 
     centers to enrollees of managed care plans who have chosen 
     the managed care plan as their provider. Establishes that 
     FTCA coverage must be accepted by managed care plans as 
     meeting the requirements for malpractice coverage for health 
     centers who contract to be providers for managed care plans.
       Sets the maximum amount that may be held aside from health 
     center grant appropriations for the FTCA malpractice claim 
     reserve fund at $10 million annually.
                                H.R. --
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
     SECTION 1. SHORT TITLE; REFERENCE.

       (a) Short Title.--This Act may be cited as the ``Federally 
     Supported Health Centers Assistance Act of 1995''.
       (b) Reference.--Except as otherwise expressly provided, 
     whenever in this Act an amendment or repeal is expressed in 
     terms of an amendment to, or repeal of, a section or other 
     provision, the reference shall be considered to be made to a 
     section or other provision of the Public Health Service Act.

     SEC. 2. PERMANENT EXTENSION OF PROGRAM.

       (a) In General.--Section 224(g) (42 U.S.C. 233(g)) is 
     amended by striking the last sentence of paragraph (3).
       (b) Conforming Amendments.--
       (1) Section 224(k)(1)(A) (42 U.S.C. 233(k)(1)(A)) is 
     amended by striking ``each of the fiscal years 1993, 1994, 
     and 1995'' and inserting ``each fiscal year''.
       (2) Section 224(k)(2) (42 U.S.C. 233(k)(2)) is amended by 
     striking ``each of the fiscal years 1993, 1994, and 1995'' 
     and inserting ``each fiscal year''.

     SEC. 3. CLARIFICATION OF COVERAGE.

       Section 224(g)(1) (42 U.S.C. 233(g)(1)) is amended--
       (1) in the first sentence, by striking ``officer, employee, 
     or contractor'' and inserting ``officer, governing board 
     member, or employee of such an entity, and any contractor''; 
     and
       (2) in the second sentence, by inserting after ``officer,'' 
     the following``governing board member,''.

     SEC. 4. COVERAGE FOR SERVICES FURNISHED TO INDIVIDUALS OTHER 
                   THAN CENTER PATIENTS.

       Section 224(g)(1) (42 U.S.C. 233(g)) is amended--
       (1) by redesignating paragraph (1) as paragraph (1)(A); and
       (2) by adding at the end thereof the following:
       ``(B) The deeming of any entity or officer, governing board 
     member, employee, or contractor of the entity to be an 
     employee of the Public Health Service under subparagraph (A) 
     shall apply with respect to services provided--
       ``(i) to all patients of the entity, and
       ``(ii) subject to subparagraph (C), to individuals who are 
     not patients of the entity.
       ``(C) Subparagraph (B)(ii) applies to services provided to 
     individuals who are not patients of an entity if the 
     Secretary determines, after reviewing an application 
     submitted under subparagraph (D), that the provision of the 
     services to such individuals--
       ``(i) benefits patients of the entity and general 
     populations that could be served by the entity through 
     community-wide intervention efforts within the communities 
     served by such entity;
       ``(ii) facilitates the provision of services to patients of 
     the entity; or
       ``(iii) are otherwise required under an employment contract 
     (or similar arrangement) between the entity and an officer, 
     governing board member, employee, or contractor of the 
     entity.''.

     SEC. 5. APPLICATION PROCESS.

       (a) Application Requirement.--Section 224(g)(1) (42 U.S.C. 
     233(g)(1)) (as amended by section 4) is further amended--
       (1) in subparagraph (A), by inserting ``and subject to the 
     approval by the Secretary of an application under 
     subparagraph (D)'' after ``For purposes of this section''; 
     and
       (2) by adding at the end thereof the following:
       ``(D) The Secretary may not deem an entity or an officer, 
     governing board member, employee, or contractor of the entity 
     to be an employee of the Public Health Service under 
     subparagraph (A), and may not apply such deeming to services 
     described in subparagraph (B)(ii), unless the entity has 
     submitted an application for such deeming to the Secretary in 
     such form and such manner as the Secretary shall prescribe. 
     The application shall contain detailed information, along 
     with supporting documentation, to verify that the entity, and 
     the officer, governing board member, employee, or contractor 
     of the entity, as the case may be, meets the requirements of 
     subparagraphs (B) and (C) of this paragraph and that the 
     entity meets the requirements of paragraphs (1) through (4) 
     of subsection (h).
       ``(E) The Secretary shall make a determination of whether 
     an entity or an officer, governing board member, employee, or 
     contractor of the entity is deemed to be an employee of the 
     Public Health Service for purposes of this section within 30 
     days after the receipt of an application under subparagraph 
     (D). The determination of the Secretary that an entity or an 
     officer, governing board member, employee, or contractor of 
     the entity is deemed to be an employee of the Public Health 
     Service for purposes of this section shall apply for the 
     period specified by the Secretary under subparagraph (A).
       ``(F) Once the Secretary makes a determination that an 
     entity or an officer, governing board member, employee, or 
     contractor of an entity is deemed to be an employee of the 
     Public Health Service for purposes of this section, the 
     determination shall be final and binding upon the Secretary 
     and the Attorney General and other parties to any civil 
     action or proceeding. Except as provided in subsection (i), 
     the Secretary and the Attorney General may not determine that 
     the provision of services which are the subject of such a 
     determination are not covered under this section or are not 
     within the scope of employment or responsibility of the 
     entity or its officers, governing board members, employees, 
     or contractors.
       ``(G) The Secretary, for good cause shown, may reverse a 
     determination under subparagraph (E). The decision of the 
     Secretary to reverse such a determination shall be made on 
     the record after opportunity for a full and fair hearing. Any 
     such reversal by the Secretary shall apply only after the 
     entity receives notice of such reversal and shall only apply 
     to acts and omissions occurring after the date on which such 
     notice was received.''.
       (b) Approval Process.--Section 224(h) (42 U.S.C. 233(h)) is 
     amended--
       (1) by striking the matter preceding paragraph (1) and 
     inserting the following: ``The Secretary may not approve an 
     application under subsection (g)(1)(D) unless the Secretary 
     determines that the entity--''; and
       (2) by striking ``has fully cooperated'' in paragraph (4) 
     and inserting ``will fully cooperate''.

     SEC. 6. TIMELY RESPONSE TO FILING OF ACTION OR PROCEEDING.

       Section 224 (42 U.S.C. 233) is amended by adding at the end 
     thereof the following:
       ``(l)(1) If a civil action or proceeding is filed in a 
     State court against any entity described in subsection (g)(4) 
     or any officer, governing board member, employee, or any 
     contractor of such an entity for damages described in 
     subsection (a), the Attorney General, within 15 days after 
     being notified of such filing, shall make an appearance in 
     such court and advise such court as to whether the Secretary 
     has determined under subsections (g) and (h), that such 
     entity, officer, governing board member, employee, or 
     contractor of the entity is deemed to be an employee of the 
     Public Health Service for purposes of this section with 
     respect to the actions or omissions that are the subject of 
     such civil action or proceeding. Such advice shall be deemed 
     to satisfy the provisions of subsection (c) that the Attorney 
     General certify that an entity, officer, governing board 
     member, employee, or contractor of the entity was acting 
     within the scope of their employment or responsibility.
       ``(2) If the Attorney General fails to appear in State 
     court within the time period prescribed under paragraph (1), 
     upon petition of [[Page E1151]] any entity or officer, 
     governing board member, employee, or contractor of the entity 
     named, the civil action or proceeding shall be removed to the 
     appropriate United States district court. The civil action or 
     proceeding shall be stayed in such court until such court 
     conducts a hearing, and makes a determination, as to the 
     appropriate forum or procedure for the assertion of the claim 
     for damages described in subsection (a) and issues an order 
     consistent with such determination.''.

     SEC. 7. APPLICATION OF COVERAGE TO MANAGED CARE PLANS.

       Section 224 (42 U.S.C. 223) (as amended by section 6) is 
     amended by adding at the end the following:
       ``(m)(1) An entity or officer, governing board member, 
     employee, or contractor of an entity described in subsection 
     (g)(1) shall, for purposes of this section, be deemed to be 
     an employee of the Public Health Service with respect to 
     services provided to individuals who are enrollees of a 
     managed care plan if the entity contracts with such managed 
     care plan for the provision of services.
       ``(2) Each managed care plan which enters into a contract 
     with an entity described in subsection (g)(4) shall deem the 
     entity and any officer, governing board member, employee, or 
     contractor of the entity as meeting whatever malpractice 
     coverage requirements such plan may require of contracting 
     providers for a calendar year if such entity or officer, 
     governing board member, employee, or contractor of the entity 
     has been deemed to be an employee of the Public Health 
     Service for purposes of this section for such calendar year. 
     Any plan which is found by the Secretary on the record, after 
     notice and an opportunity for a full and fair hearing, to 
     have violated this subsection shall upon such finding cease, 
     for a period to be determined by the Secretary, to receive 
     and to be eligible to receive any Federal funds under titles 
     XVIII or XIX of the Social Security Act.
       ``(3) For purposes of this subsection, the term `managed 
     care plan' shall mean health maintenance organizations and 
     similar entities that contract at-risk with payors for the 
     provision of health services or plan enrollees and which 
     contract with providers (such as entities described in 
     subsection (g)(4)) for the delivery of such services to plan 
     enrollees.''.

     SEC. 8. COVERAGE FOR PART-TIME PROVIDERS UNDER CONTRACTS.

       Section 224(g)(5)(B) (42 U.S.C. 223(g)(5)(B)) is amended to 
     read as follows:
       ``(B) in the case of an individual who normally performs an 
     average of less than 32\1/2\ hours of services per week for 
     the entity for the period of the contract, the individual is 
     a licensed or certified provider of services in the fields of 
     family practice, general internal medicine, general 
     pediatrics, or obstetrics and gynecology.''.

     SEC. 9. DUE PROCESS FOR LOSS OF COVERAGE.

       Section 224(i)(1) (42 U.S.C. 233(i)(1)) is amended by 
     striking ``may determine, after notice and opportunity for a 
     hearing'' and inserting ``may on the record determine, after 
     notice and opportunity for a full and fair hearing''.

     SEC. 10. AMOUNT OF RESERVE FUND.

       Section 224(k)(2) (42 U.S.C. 223(k)(2)) is amended by 
     striking ``$30,000,000'' and inserting ``$10,000,000''.
     

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