[Federal Register Volume 89, Number 129 (Friday, July 5, 2024)]
[Rules and Regulations]
[Pages 55511-55520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14696]


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DEPARTMENT OF JUSTICE

28 CFR Part 15

[Docket No. CIV 150; AG Order No. 5968-2024]
RIN 1105-AB37


Process for Determining That an Individual Shall Not Be Deemed an 
Employee of the Public Health Service

AGENCY: Department of Justice.

ACTION: Final rule.

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SUMMARY: This rule sets forth a process by which the Attorney General 
or a designee may determine that an individual shall not be deemed an 
employee of the Public Health Service for purposes of medical 
malpractice coverage under the Public Health Service Act. The process 
described in this rule applies to individuals who are deemed to be 
Public Health Service employees, as well as any other individuals 
deemed to be Public Health Service employees under different statutory 
provisions to which the procedures set out in the Public Health Service 
Act have been made applicable.

DATES: This rule is effective on August 5, 2024.

FOR FURTHER INFORMATION CONTACT: James G. Touhey, Jr., Director, Torts 
Branch, Civil Division, Department of Justice, Washington, DC 20530, 
(202) 616-4400.

SUPPLEMENTARY INFORMATION: This rule finalizes, with some changes, a 
proposed rule that the Department of Justice (``Department'') published 
on this subject on March 6, 2015, at 80 FR 12104. In brief, the 
following changes were made to the text of the proposed rule:
    In Sec.  15.11, a sentence was added to clarify that an individual 
who is no longer ``deemed'' to be an employee of the Public Health 
Service pursuant to section 224(i) of the Public Health Service Act, 42 
U.S.C. 233(i), is excluded from medical malpractice protections 
otherwise available to individuals ``deemed'' to be Public Health 
Service employees under the

[[Page 55512]]

statute that conferred the ``deemed'' employee status.
    In Sec.  15.12, the definition of ``Attorney General'' for purposes 
of the rule was deleted as vague and unnecessary in light of the more 
specifically defined roles and responsibilities of the initiating 
official, the adjudicating official, and the administrative law judge 
involved in proceedings under this subpart.
    In Sec.  15.13, a change was made to clarify that the initiating 
official's notice to an individual is intended to comply with the 
Administrative Procedure Act (``APA''), 5 U.S.C. 551, et seq., by 
furnishing a statement of the factual allegations and law asserted in 
support of the proposed action.
    In Sec.  15.14, a change was made to clarify that the 
administrative law judge assigned to conduct a hearing under this 
subpart must, consistent with the APA, conduct proceedings in an 
impartial manner. In addition, Sec.  15.14 now incorporates the grounds 
and procedure for seeking disqualification of an administrative law 
judge set forth in 5 U.S.C. 556(b).
    In Sec. Sec.  15.16 and 15.20, a change was made to clarify that 
the administrative law judge, consistent with the APA, must certify the 
record to the adjudicating official for a final determination.
    A change was made to Sec.  15.17 to clarify that the adjudicating 
official will consult with the Secretary of Health and Human Services 
(``Secretary'') in making a final determination. A subsection (d) was 
added to clarify that the Attorney General, consistent with the 
traditional authority of agency heads, possesses discretion to review 
any final determination within 30 days of its issuance.
    In addition, minor clarifications were made to Sec.  15.19 to make 
clear that final determinations, whether upholding or rejecting the 
initiating official's proposed action, will be distributed to the 
parties in the same way.
    Changes were also made to the reinstatement procedures in Sec.  
15.20. Petitions for reinstatement must be submitted to the initiating 
official, who is responsible for forwarding the petition, along with a 
recommendation on whether the petition makes a prima facie case for 
reinstatement, to the adjudicating official. The adjudicating official 
is responsible for determining whether a prima facie case for 
reinstatement has been made. If the adjudicating official determines 
that a prima facie case has been made for reinstatement, an 
administrative law judge is appointed to conduct such proceedings as 
are deemed necessary to make a formal recommendation to the 
adjudicating official. This procedure was revised to avoid having the 
initiating official--who might be viewed as the adverse party in an 
original proceeding to de-deem an individual--exercise an unfettered 
gatekeeping role in determining whether that same individual's petition 
for reinstatement should receive a hearing.
    Finally, the Department notes that since the date of publication of 
the proposed rule on March 6, 2015, the Supreme Court held in Lucia v. 
SEC, 138 S. Ct. 2044 (2018), that administrative law judges assigned by 
the Securities and Exchange Commission to preside over enforcement 
proceedings are inferior officers of the United States who must, 
consistent with Article II, sec. 2, cl. 2 of the United States 
Constitution, be appointed by the President, a court of law, or a 
department head. Administrative law judges appointed to preside over 
proceedings under this rule are to be appointed pursuant to 5 U.S.C. 
3105, which authorizes each agency to appoint as many administrative 
law judges as are necessary for proceedings to be conducted in 
accordance with 5 U.S.C. 556 and 557. Administrative law judges 
appointed to preside over proceedings under this rule will be appointed 
in a manner consistent with Lucia, that is, appointed by an agency 
head.

Discussion

    The Federally Supported Health Centers Assistance Acts of 1992 
(Pub. L. 102-501) (``FSHCAA'') and 1995 (Pub. L. 104-73) amended 
section 224 of the Public Health Service Act (42 U.S.C. 233) to make 
the Federal Tort Claims Act (``FTCA'') (28 U.S.C. 1346(b), 2672) the 
exclusive remedy for medical malpractice claims for personal injury or 
death brought against qualifying federally supported health centers and 
certain statutorily identified categories of individuals, to the extent 
that the centers and these individuals, as the case may be, have been 
``deemed'' by the Department of Health and Human Services to be 
eligible for FTCA coverage and the conditions for such coverage have 
been satisfied. 42 U.S.C. 233(g).
    In 1996, the Health Insurance Portability and Accountability Act 
(Pub. L. 104-191) amended section 224 of the Public Health Service Act 
to provide that, subject to certain conditions, a ``free clinic health 
professional'' providing ``a qualifying health service'' for the free 
clinic may be ``deemed'' to be a Public Health Service employee 
eligible for FTCA coverage to the same extent as persons ``deemed'' to 
be Public Health Service employees under 42 U.S.C. 233(g). In 2010, the 
Patient Protection and Affordable Care Act (Pub. L. 111-148) further 
amended section 224 of the Public Health Service Act to add ``an 
officer, governing board member, employee, or contractor of a free 
clinic . . . in providing services for the free clinic'' to the 
statutorily identified categories of eligible individuals for this 
purpose. 42 U.S.C. 233(o)(1).
    And in 2016, the 21st Century Cures Act (Pub. L. 114-225) amended 
section 224 of the Public Health Service Act to provide that, subject 
to certain conditions, a ``health professional volunteer'' at an entity 
``deemed'' to be a Public Health Service employee by virtue of 42 
U.S.C. 233(g) may be ``deemed'' to be a Public Health Service employee 
eligible for FTCA coverage to the same extent as persons ``deemed'' to 
be Public Health Service employees under 42 U.S.C. 233(g). 42 U.S.C. 
233(q).
    This rule will apply to any individual ``deemed'' to be a Public 
Health Service employee, regardless of the statutory provision under 
which the deemed status is obtained, provided that Congress has made 
the individual's ``deemed'' Public Health Service employee status 
subject to the procedures set out in 42 U.S.C. 233(i).
    Section 233(i) of title 42 provides that the Attorney General, in 
consultation with the Secretary, may, on the record, determine, after 
notice and an opportunity for a full and fair hearing, that an 
individual physician or other licensed or certified health care 
practitioner who is an officer, employee, or contractor of an entity 
described in 42 U.S.C. 233(g)(4) shall not be deemed to be an employee 
of the Public Health Service for purposes of 42 U.S.C. 233 if 
``treating such individual as such an employee would expose the 
Government to an unreasonably high degree of risk of loss'' based on 
one or more of the following enumerated statutory criteria: (1) the 
individual does not comply with the policies and procedures that the 
entity has implemented pursuant to 42 U.S.C. 233(h)(1); (2) the 
individual has a history of claims filed against him or her as provided 
for under 42 U.S.C. 233 that is outside the norm for licensed or 
certified health care practitioners within the same specialty; (3) the 
individual refused to reasonably cooperate with the Attorney General in 
defending against any such claim; (4) the individual provided false 
information relevant to the individual's performance of his or her 
duties to the Secretary, the Attorney General, or an applicant for or 
recipient

[[Page 55513]]

of funds under chapter 6A of title 42; or (5) the individual was the 
subject of disciplinary action taken by a State medical licensing 
authority or a State or national professional society. 42 U.S.C. 
233(i)(1).
    A final determination by the Attorney General under 42 U.S.C. 
233(i) that an individual physician or other licensed or certified 
health care professional shall not be deemed to be an employee of the 
Public Health Service is effective when the entity employing such 
individual receives notice of such determination, and the determination 
applies only to acts or omissions occurring after the date such notice 
is received. 42 U.S.C. 233(i)(2).
    This rule establishes a process for creating the record and 
providing the full and fair hearing before the Attorney General makes a 
final determination under 42 U.S.C. 233(i).
    The first step, pursuant to Sec.  15.13(a), is a finding by the 
``initiating official,'' in consultation with the Secretary, that 
treating an individual as an employee of the Public Health Service may 
expose the Government to an unreasonably high degree of risk of loss 
for one or more of the statutorily enumerated reasons in 42 U.S.C. 
233(i). Under Sec.  15.12(d), the initiating official is a Deputy 
Assistant Attorney General of the Department of Justice's Civil 
Division or a designee of a Deputy Assistant Attorney General.
    Section 15.13(a) requires the initiating official to provide notice 
to the individual in question that an administrative hearing will be 
held to determine whether treating the individual as an employee of the 
Public Health Service would expose the Government to an unreasonably 
high degree of risk of loss based upon one or more of the statutory 
criteria enumerated in 42 U.S.C. 233(i). Following a period for 
discovery and depositions, to the extent determined appropriate by an 
administrative law judge under Sec.  15.15, the hearing is then 
conducted by the administrative law judge in the manner prescribed in 
Sec.  15.14. After the hearing is conducted and the record is closed, 
Sec.  15.16 requires the administrative law judge to certify the record 
and submit written findings of fact, conclusions of law, and a 
recommended decision to the ``adjudicating official,'' who is the 
Assistant Attorney General for the Department of Justice's Civil 
Division or a designee of the Assistant Attorney General. Section 15.16 
provides that copies of the findings of fact, conclusions of law, and 
recommended decision are made available to the parties and to the 
Secretary. Section 15.17(b) then gives the parties 30 days to submit 
certain additional materials, including exceptions to the 
administrative law judge's recommended decision, to the adjudicating 
official, who then must, in consultation with the Secretary, make a 
final determination whether treating the individual as an employee of 
the Public Health Service for purposes of 42 U.S.C. 233 would expose 
the Government to an unreasonably high degree of risk of loss based on 
one or more of the criteria specified in 42 U.S.C. 233(i). The Attorney 
General may exercise discretion to review any final determination 
within 30 days of its issuance.
    Section 15.18 provides that an individual who is dissatisfied with 
the final determination may seek rehearing within 30 days after notice 
of the determination is sent, and Sec.  15.20 allows individuals who 
have been determined to expose the United States to an unreasonably 
high degree of risk of loss to apply for reinstatement after a period 
of time. Consistent with 42 U.S.C. 1320a-7e(a) and 45 CFR 60.3, 60.5(h) 
and 60.16, the rule also provides that the Department will notify the 
National Practitioner Data Bank (``NPDB'') of the issuance of the 
Attorney General's final determination that an individual provider 
shall not be deemed to be an employee of the Public Health Service 
under this rule. The NPDB, which is maintained by the Health Resources 
and Services Administration within the Department of Health and Human 
Services, is a confidential information clearinghouse created by 
Congress with primary goals of improving health care quality and 
protecting the public.

Discussion of Comments

    The Department received ten public comments on the proposed rule 
during the comment period, which closed on May 6, 2015. Several 
commenters generally supported the proposed rule as providing adequate 
notice and process to reach fair decisions on whether to de-deem 
individual practitioners who pose an unreasonably high degree of risk 
of loss to the Government. The Department is grateful for the feedback.
    Several comments were received from membership organizations of 
federally supported health centers that receive Federal grant money 
under 42 U.S.C. 254b, as well as one federally supported health center 
that offered comments on its own behalf. These comments generally 
sought additional guidance on how the rules and criteria set forth in 
42 U.S.C. 233(i)(1) would be applied. A few other commenters expressed 
more general concerns about the consequences of de-deeming 
determinations. Summaries of these comments and the Department's 
responses to them are set forth below.
    1. Some commenters requested that the Department provide additional 
guidance on how the statutory criteria for determining whether treating 
an individual physician or certified health care provider as a Public 
Health Service employee exposes the Government to an ``unreasonably 
high degree of risk of loss'' will be applied. These commenters 
requested that clearer definitions be adopted and that specific 
examples be provided for how each of the criteria set forth in 42 
U.S.C. 233(i)(A)-(E) will be weighed and considered.
    Response: The Department does not adopt the changes suggested in 
these comments. The purpose of these regulations is procedural: to 
establish the process and procedures used to create a record and 
provide an individual medical provider the opportunity for the ``full 
and fair hearing'' required by section 233(i)(1) before the Attorney 
General makes a ``final determination'' that an individual ``shall not 
be deemed to be'' an employee of the Public Health Service for purposes 
of 42 U.S.C. 233. The Department is not undertaking, at this time, a 
regulatory effort to interpret or re-interpret the statutory criteria 
that Congress established more than 20 years ago to govern such 
determinations.
    Section 233(i) requires a full and fair hearing to determine 
whether any one of these factors or combination of factors supports a 
determination that treating an individual physician or certified health 
care provider as a Public Health Service employee poses an 
``unreasonably high degree of risk of loss'' to the Government.
    The commenters recognized that ``strict definitions'' for these 
criteria would be impracticable. The Department agrees with the 
commenters. In addition to the impracticality of adopting strict 
definitions, the Department also observes that the application of the 
criteria set forth in the statute will necessarily depend on the 
specific facts and circumstances of each individual case.
    2. Some commenters requested that the Department expand the scope 
of the regulations to specify the form and substance of the 
consultation that the Attorney General undertakes with the Secretary 
before finding that an individual should be provided notice of a 
hearing to determine whether treating

[[Page 55514]]

that individual as an employee of the Public Health Service poses an 
unreasonable risk of loss to the Government.
    Response: The Department does not adopt the change suggested in 
these comments. The statute does not require that the Department's 
regulations specify the form and substance of the Attorney General's 
consultation with the Secretary. Moreover, a requirement for public 
disclosure of such consultations would not be warranted given the 
predecisional, deliberative nature of the consultation process between 
agencies.
    3. Some commenters requested that the Department, when notifying an 
individual that a proceeding has been initiated under 42 U.S.C. 233(i), 
be required to provide both the specific information upon which the 
Department will rely and the standards that will apply for evaluating 
the criteria set forth in 42 U.S.C. 233(i). The commenters suggested 
that providing such information in the hearing notice would reduce 
discovery costs and increase efficiency of the hearing process.
    Response: In response to these comments, the Department has added 
language in Sec.  15.13(c) to clarify that the notice provided to 
individuals will set forth the factual allegations supporting the 
initiating official's proposed action, consistent with the requirements 
for notice under 5 U.S.C. 554(b). Thus, in addition to providing a 
statement of the nature and purpose of the hearing, the name of the 
administrative law judge who will preside, a statement of the nature of 
the action proposed to be taken, and a statement of the time, date, and 
location of the hearing for the individual to be heard, the notice will 
also provide a statement of the facts and, where appropriate, the law 
asserted in support of the proposed action. 28 CFR 15.13(c). The 
administrative law judge is vested with all powers necessary to reduce 
discovery costs and increase the efficiency of the process through 
exchanges of information and narrowing of issues. 28 CFR 15.14-.15. As 
for the further comment requesting additional information about the 
standards that will apply for evaluating the criteria set forth in 42 
U.S.C. 233(i), the Department does not adopt the change requested in 
this comment for the reasons already expressed above.
    4. One commenter requested that the Department state the period of 
time after which a de-deemed practitioner may apply for reinstatement.
    Response: The final rule provides that a de-deemed practitioner may 
apply for reinstatement not sooner than five years after the time for 
seeking rehearing of the initial determination to de-deem a 
practitioner has expired. 28 CFR 15.20(a).
    5. One commenter requested that the Department clarify the events 
and informational exchanges that will or could set into the motion the 
de-deeming process.
    Response: The statute and final rule provide this information. When 
the Department's initiating official, in consultation with the 
Secretary, finds, based upon a review of available information, that 
treating an individual as an employee of the Public Health Service may 
expose the Government to an unreasonably high degree of risk of loss 
based on one or more of the criteria enumerated in 42 U.S.C. 233(i), 
the de-deeming process is initiated by issuing a notice for an 
administrative hearing to determine whether that individual should be 
de-deemed. 42 U.S.C. 233(i)(1); 28 CFR 15.13. The notice will set forth 
the facts, and where applicable, the law upon which the proposed action 
is based.
    6. A few commenters expressed concern that the de-deeming process 
could be initiated to rescind FTCA coverage while a lawsuit was pending 
and requested that the rule allow only for prospective de-deeming. 
Another commenter suggested adoption of a ``safety period''--a 
designated period of time during which a ``deemed'' employee cannot be 
subject to ``de-deeming''--that would apply where litigation is 
anticipated involving acts or omissions of a practitioner who has been 
deemed to be an employee of the Public Health Service.
    Response: The Department agrees that de-deeming should be 
prospective only (as the statute requires) but does not adopt the 
``safety period'' suggestion. The statute provides that the Attorney 
General's decision to de-deem an individual shall apply only to acts or 
omissions occurring after the date that notice of the Attorney 
General's final determination that an individual not be deemed to be a 
Public Health Service employee is received. 42 U.S.C. 233(i)(2). The 
final regulations therefore provide in Sec.  15.19(c) that a final 
agency determination that an individual provider shall not be deemed to 
be an employee of the Public Health Service shall apply to all acts or 
omissions of the individual occurring after the date the adverse final 
determination is received by the relevant entity or free clinic. The 
final regulations similarly provide in Sec.  15.20(f) that a 
determination that an individual is reinstated pursuant to this section 
. . . shall apply only to acts or omissions of the individual occurring 
after the date of the final reinstatement determination. There is no 
need to adopt the suggested ``safety period.'' If a lawsuit is pending, 
or even anticipated, then the acts or omissions giving rise to that 
pending or anticipated suit will already have occurred. The Attorney 
General's ``de-deeming'' determination does not apply to acts or 
omissions that occurred before the de-deeming determination becomes 
final, and reinstatement determinations similarly apply only to acts or 
omissions that occur after reinstatement.
    7. One commenter expressed concern that the proposed rule might 
have untoward consequences, such as difficulty in securing quality 
replacement personnel or loss of liability coverage while a lawsuit is 
pending.
    Response: The Department does not adopt further changes in response 
to these comments. There should be no loss of liability coverage while 
a lawsuit is pending, as the Attorney General's final determination 
that a practitioner is de-deemed is effective only as to acts or 
omissions that occur after such a determination is received by the 
entity employing that practitioner. 42 U.S.C. 233(i)(2). Moreover, a 
final de-deeming determination is applicable only to the individual who 
was subject to the hearing and final determination.
    The Attorney General's de-deeming determination does not require or 
compel a health center to terminate a practitioner. Entities may choose 
to employ ``de-deemed'' practitioners, but they can no longer rely on 
the protections of 42 U.S.C. 233(g) or similar statutes, as the case 
may be, as a substitute for medical malpractice liability coverage for 
that practitioner if that practitioner is subject to a medical 
malpractice claim for acts or omissions occurring after receipt of a 
final de-deeming determination, for so long as the final determination 
remains effective. Congress's decision to authorize the Attorney 
General to de-deem individual practitioners reflects a policy judgment 
that, if an individual practitioner exposes the Government to an 
unreasonably high degree of risk of loss based on any of the statutory 
criteria enumerated in 42 U.S.C. 233(i), insuring against that risk or 
finding a suitable replacement should fall upon the entity responsible 
for hiring and retaining the practitioners or the sponsoring free 
clinic, not the United States. Qualifying health centers that receive 
Federal grants pursuant to 42 U.S.C. 254b may purchase ``tail,'' 
``gap,'' or ``wrap-around'' insurance to cover claims for which 
liability protections under 42 U.S.C. 233(g) or similar

[[Page 55515]]

statutes, as the case may be, are inapplicable.
    8. One commenter expressed concern that final determinations are 
vested in the Attorney General or the Attorney General's designee and 
suggested that the recommendations of the presiding administrative law 
judge be binding or that three-judge panels be established for purposes 
of making final determinations.
    Response: The Department does not adopt the changes requested in 
this comment. Under 42 U.S.C. 233(i), the ``final determination'' on 
whether to de-deem an individual ``under this subsection'' is vested in 
the ``Attorney General.'' The Department is not free to re-write the 
statute. Moreover, because section 233(i) provides that the Attorney 
General's final determination shall be made ``on the record'' ``after 
notice and an opportunity for a full and fair hearing,'' the provisions 
of sections 554, 556, and 557 of the APA are applicable to these 
hearings. See 5 U.S.C. 554(a), (c)(2) (section 554 applies ``in every 
case of adjudication required by statute to be determined on the record 
after opportunity for an agency hearing''; such hearings and decisions 
on contested issues are to be conducted ``in accordance with sections 
556 and 557''). This rule provides for a hearing and recommended 
decision by an administrative law judge and a final determination by 
the agency, consistent with the foregoing provisions of the APA. Any 
review of the Attorney General's ``final determination'' is governed by 
the APA, so further review of that final determination by an Article 
III court is possible. The Department also declines to render the 
presiding administrative law judge's decision binding. Providing for a 
recommended decision that is further reviewed by the adjudicating 
official, with discretionary review by the Attorney General, adds 
further layers of review and therefore reduces the risk of an erroneous 
determination.

Regulatory Flexibility Act

    The Attorney General, in accordance with the Regulatory Flexibility 
Act, 5 U.S.C. 605(b), has reviewed this final rule and, by approving 
it, certifies that it will not have a significant economic impact on a 
substantial number of small entities because it pertains to personnel 
and administrative matters affecting the Department. This rule merely 
sets forth the process for a hearing used to determine whether certain 
individual health care providers should no longer be ``deemed'' to be 
``employees of the Public Health Service,'' thus excluding such 
individual health care providers from eligibility for the medical 
malpractice liability protections under 42 U.S.C. 233(g), (o), or (q). 
The rule does not adopt substantive standards and therefore will not 
have a significant impact on regulated parties.

Executive Orders 12866, 13563, and 14094: Regulatory Planning and 
Review

    This final rule has been drafted and reviewed in accordance with 
Executive Order 12866, ``Regulatory Planning and Review,'' Executive 
Order 13563, ``Improving Regulation and Regulatory Review,'' and 
Executive Order 14094, ``Modernizing Regulatory Review.'' The Office of 
Management and Budget has determined that this final rule is a 
``significant regulatory action'' under Executive Order 12866, section 
3(f), and accordingly this final rule has been reviewed by the Office 
of Management and Budget. Executive Orders 12866 and 13563 direct 
agencies to assess all costs and benefits of available regulatory 
alternatives and, if regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health and safety, and other advantages; 
distributive impacts; and equity). Executive Order 13563 emphasizes the 
importance of quantifying both costs and benefits, of reducing costs, 
of harmonizing rules, and of promoting flexibility.
    The Department has assessed the costs and benefits of this final 
rule and believes that its benefits justify its costs.
    As an initial matter, this final rule only establishes a process 
for removing a statutorily conferred deemed status applicable to an 
individual provider who is determined to expose the Government to an 
unreasonably high degree of risk of loss for one or more statutorily 
enumerated reasons. As further explained below, Congress expressly 
granted the Attorney General the authority to de-deem certain 
individual physicians or other licensed or certified health care 
practitioners, provided that certain procedural safeguards were in 
place. This rule establishes those safeguards. The process will impose 
some costs on both the government and the individuals who are subject 
to proceedings under 42 U.S.C. 233(i). But the net benefit is to reduce 
the potential for incorrect de-deeming decisions, to ensure that a de-
deeming decision is based upon a developed record, and to provide the 
individual provider an opportunity to participate in the process. On 
balance, the Department believes these benefits outweigh the costs and 
will contribute to just decisions.
    Congress expressly provided the Attorney General with the authority 
to exclude individuals who expose the Government to an unreasonably 
high degree of risk of loss based upon one or more statutory criteria 
from the malpractice protections afforded under 42 U.S.C. 233(g) and 
similar statutes. A statutory provision granting the Attorney General 
authority to exclude an individual provider has existed since the 
FSHCAA was first enacted in 1992. This provision was specifically 
designed to ``assure that FTCA coverage is not extended to individual 
practitioners that do not provide care of acceptable quality'' when the 
Attorney General determines that such individuals ``expose the U.S. to 
an unreasonably high degree of risk of loss.'' H.R. Rep. No. 102-823, 
pt. 2, at 8 (1992).
    When the FSHCAA was amended and extended in 1995, Congress 
continued to include the provision authorizing the Attorney General to 
exclude an individual provider, adding language to clarify that an 
individual provider's ``coverage'' under the FSHCAA would be removed 
only after receiving notice and an opportunity for a full and fair 
hearing, with all decisions to be made ``on the record.'' H.R. Rep. No. 
104-398, at 13 (1995); Public Law 104-73, sec. 9, 109 Stat. 777, 781 
(1995).
    In light of the foregoing, this final rule assures the procedural 
protections Congress intended, without altering Congress's objective 
that certain individual providers be subject to exclusion from the 
malpractice liability protections under 42 U.S.C. 233 if they expose 
the Government to an unreasonably high degree of risk of loss based on 
the enumerated statutory criteria. Congress already has established 
that the benefits of excluding certain providers outweigh the costs if 
procedural protections are afforded and the final decision is supported 
by one or more of the criteria specified in 42 U.S.C. 233(i).
    The Department does not expect that the process created by the 
final rule will have systemic or large-scale costs because it is only 
the rare individual provider who would be subject to the procedures 
under this rule based on the statutory criteria of 42 U.S.C. 233(i); 
proceedings against an individual provider under this rule are expected 
to be infrequent and will, therefore, affect only a small fraction of 
providers, health centers, or, potentially, their patients.
    The majority of costs associated with the final rule, then, would 
come in the individual instances of its application, which are not 
feasible to predict. The

[[Page 55516]]

administrative process will impose some defense costs on the particular 
individual who is the subject of the hearing, but Sec. Sec.  15.14 and 
15.15 provide flexibility that may enable the parties and 
administrative law judges to avoid unduly burdensome costs when those 
costs are unnecessary.
    While it is not feasible to estimate these costs with precision, 
the Department notes that the litigation costs incurred in defending 
medical malpractice suits in court frequently exceed $100,000 per case. 
The potential costs associated with a section 233(i) proceeding, by 
contrast, are expected to be a small fraction of the cost of litigating 
malpractice actions brought against individual providers. If even one 
provider is excluded from malpractice protections under 42 U.S.C. 
233(g) or similar statutes, potentially resulting in at least one fewer 
malpractice action that the United States otherwise might have been 
required to defend, the potential cost savings to the United States 
will be tens of thousands of dollars on litigation expenses alone.
    The Department also observes that losses in covered medical 
malpractice actions against deemed centers and their personnel are 
borne by the public fisc through the payment of judgments and 
settlements and other expenses. Each year, the Department transmits to 
the Secretary and Congress an estimate of the dollar amount of claims 
and litigation for which payments are expected to be made during the 
upcoming fiscal year, along with related fees and expenses. Although in 
1996, it was estimated that only 14,234 individual providers were 
deemed to be Public Health Service employees for purposes of 
malpractice claims, that number has steadily risen, reaching in excess 
of 250,000 ``deemed'' providers as of April 2022.
    In addition to the increasing numbers of providers eligible for 
malpractice protections under 42 U.S.C. 233(g) and similar statutes, 
the amount of money paid by the United States as a result of judgments 
and settlements and litigation expenses has steadily increased as well. 
Since fiscal year 2014, the average annual amount sought by claimants 
in malpractice losses against deemed providers has been approximately 
$35 billion. To be sure, the United States pays substantially less than 
the amount claimed in the majority of cases, but it still paid in 
excess of $100 million in fiscal years 2017, 2018, and 2019, 
respectively, including a then-record amount of $135,047,091 in 2019 
alone. Fiscal years 2020 and 2021 saw a slight downturn in the number 
of claims paid, likely the result of delays in court proceedings during 
the COVID-19 pandemic and related restrictions. In fiscal year 2022, 
with restrictions largely lifted, the United States paid 
$158,338,182.79 in judgments and settlements, a new record amount.
    Neither the criteria set forth in 42 U.S.C. 233(i) nor the final 
rule contemplates that an individual provider subjects the Government 
to an unreasonably high degree of risk of loss merely by subjecting the 
United States to suit on malpractice claims that result in losses. That 
is a potential basis for de-deeming only to the extent that a single 
provider's care has resulted in claims outside the norm for a licensed 
or certified practitioner in the same specialty. If a single provider, 
for example, exposed the United States to several meritorious claims, 
each costing the United States $1 million, and that provider's history 
of claims was outside the norm for a practitioner in the same 
specialty, then excluding that provider from the malpractice liability 
protections of 42 U.S.C. 233(g) or another statute, as the case may be, 
may result in substantial savings to the United States in the future. 
That is because de-deeming the provider will reduce the number of 
claims and the amount of losses the United States would otherwise have 
incurred as a result of that provider's care and treatment.
    The Department further notes that, unlike with actual Federal 
employees, over whom Federal agencies exercise plenary control and have 
various means of addressing risk through disciplinary action or 
termination, individual providers deemed to be Public Health Service 
employees for purposes of covered malpractice claims remain under the 
exclusive control and supervision of the public or non-profit private 
entity that employs them. The Government has no role in the day-to-day 
operations of health centers or free clinics and no involvement in the 
employment or disciplinary decisions of such entities.
    The Attorney General's authority to exclude an individual provider 
who poses an unreasonably high degree of risk of loss through a section 
233(i) proceeding provides the United States some small measure of risk 
control. Moreover, the authority granted to the Attorney General under 
section 233(i) is, in practice, no different from the authority that a 
private insurance carrier could exercise to refuse to insure an 
individual provider who poses an unreasonably high degree of risk of 
loss. A section 233(i) proceeding to exclude an individual provider 
from coverage under 42 U.S.C. 233(g) or similar statutes, if it is 
determined that the individual provider poses an unreasonably high 
degree or risk of loss, is similar to the ability that a private 
insurer possesses to exclude from coverage individual providers for the 
same reasons.
    In the event that treating an individual provider as a Public 
Health Service employee is ultimately determined to expose the United 
States to an unreasonably high degree of risk of loss, the Department 
acknowledges that there will be certain costs to that provider. An 
individual provider who is no longer deemed to be an employee of the 
Public Health Service for purposes of malpractice claims may, for 
example, be required to obtain personal medical malpractice insurance 
to continue practicing. The provider may also experience negative 
employment consequences as a result of the Attorney General's 
determination.
    For several reasons, it is not feasible to estimate the costs to 
specific, individual providers of having to procure malpractice 
insurance in lieu of relying on deemed Public Health Service employee 
status for malpractice protection. Malpractice insurance rates vary 
greatly depending on factors like specialty and location, insurance 
provider, loss history, coverage requirements, policy limits, and 
policy type.\1\ Even within States, coverage costs can vary from county 
to county depending on factors like population density and the density 
of the physician population in a given area.
---------------------------------------------------------------------------

    \1\ See Gallagher Healthcare, How Much Does Medical Malpractice 
Insurance Cost? (March 19, 2020), https://www.gallaghermalpractice.com/blog/post/how-much-does-medical-malpractice-insurance-cost.
---------------------------------------------------------------------------

    For example, State-filed malpractice premiums, before applied 
insurer discounts, average between roughly $2,486 and $15,949 in 
Nebraska, but between roughly $10,560 and $161,942 in New York, with 
higher premiums for higher-risk specialties.\2\ Compared to the average 
loss to the United States in malpractice actions brought under 42 
U.S.C. 233(g) and related statutes, which in the first half of fiscal 
year 2022 averaged $1,064,767 per claim paid, the net benefit to the 
United States of excluding an individual provider who poses an 
unreasonably high degree of risk of loss to the United States justifies

[[Page 55517]]

the potential costs to that provider of procuring personal insurance.
---------------------------------------------------------------------------

    \2\ Compare Gallagher Health Care, Nebraska Medical Malpractice 
Insurance, https://www.gallaghermalpractice.com/state-resources/nebraska-medical-malpractice-insurance (last visited January 26, 
2024), with New York Medical Malpractice Insurance, 
www.gallaghermalpractice.com/state-resources/new-york-medical-malpractice-insurance (last visited January 26, 2024).
---------------------------------------------------------------------------

    The Department further observes that, while premiums may vary by 
location or specialty, an individual provider subject to a proceeding 
governed by this rule could come from any location or specialty; the 
only factor common to a provider subject to a proceeding under this 
rule will be a threshold finding, triggering the process under this 
rule, that the provider may expose the United States to an unreasonably 
high degree of risk of loss. Any provider who is excluded from coverage 
by a final determination made under 42 U.S.C. 233(i) would merely be 
placed in the position that provider would have occupied but for the 
existence of these statutes--that of a provider who must procure 
personal insurance. If a provider turns out to be uninsurable in the 
private insurance market, that provider's inability to procure 
insurance merely underscores that the provider poses an unreasonably 
high degree of risk of loss. Congress conferred upon the Attorney 
General the authority to de-deem certain individuals in order to 
protect against such an unreasonably high risk of loss. 42 U.S.C. 
233(i); H.R. Rep. No. 102-823, pt. 2, at 8 (1992).
    The Department acknowledges as well that if an individual provider 
is no longer deemed to be an employee of the Public Health Service and 
leaves the practice, the health center or free clinic may incur costs 
to find a new provider. Replacing providers, however, may occur even 
absent this final rule establishing a process for de-deeming individual 
providers, and the costs to entities of filling positions may not be 
readily traceable to the process established by this final rule.
    In any event, the Department expects that substantial benefits will 
justify any costs incurred in finding replacements, as any individual 
who is replaced after being excluded from coverage following a 
proceeding under this rule will be one who has been determined to 
create an unreasonably high degree of risk of loss on claims for 
malpractice. It is anticipated that, in the usual case, the 
individual's replacement will provide reduced risk of loss for the 
United States and better care for patients. While there may be 
instances in which an individual who presented such a risk of loss 
cannot be replaced, the Department believes that these costs are 
justified by the benefits of implementing this rule to carry out 
Congress's stated objectives. Congress enacted 42 U.S.C. 233(i) ``to 
assure that FTCA coverage is not extended to individual practitioners 
that do not provide care of acceptable quality'' by providing a process 
whereby the Attorney General may exclude individuals based on a 
determination that such individuals ``expose the U.S. to an 
unreasonably high degree of risk of loss.'' H.R. Rep. No. 102-823, pt. 
2, at 8 (1992). Implementing the process for section 233(i) proceedings 
through this final rule is a procedural step toward effectuating 
Congress's purpose in enacting section 233(i).
    Based on the expectation that the process will be used sparingly 
and only for an individual provider who exposes the United States to an 
unreasonably high degree of risk of loss on medical malpractice claims 
for personal injury or death, the Department has concluded that the net 
benefits of improved patient care and reduced losses to the United 
States traceable to malpractice claims justify the potential costs of 
implementing a process to carry out 42 U.S.C. 233(i).

Executive Order 13132: Federalism

    This final rule will not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 13132, the Department of Justice has determined that this final 
rule will not have sufficient federalism implications to warrant the 
preparation of a federalism summary impact statement.

Executive Order 12988: Civil Justice Reform

    This final rule meets the applicable standards provided in sections 
3(a) and 3(b)(2) of Executive Order 12988.

Unfunded Mandates Reform Act of 1995

    This final rule will not result in the expenditure by State, local, 
and Tribal governments, in the aggregate, or by the private sector, of 
$100 million or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions are deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995, 2 U.S.C. 1501 et seq.

Small Business Regulatory Enforcement Fairness Act of 1996

    This final rule is not a major rule as defined by section 251 of 
the Small Business Regulatory Enforcement Fairness Act of 1996, 5 
U.S.C. 804. This final rule will not result in an annual effect on the 
economy of $100 million or more; a major increase in cost or prices; 
significant adverse effects on competition, employment, investment, 
productivity, or innovation; or significant adverse effects on the 
ability of United States-based enterprises to compete with foreign-
based enterprises in domestic and export markets.

List of Subjects in 28 CFR Part 15

    Claims, Government contracts, Government employees, Health care, 
Immunization, Nuclear energy.

    For the reasons set forth in the preamble, the Attorney General 
amends part 15 of title 28 of the Code of Federal Regulations as 
follows:

PART 15--CERTIFICATIONS, DECERTIFICATIONS, AND NON-DEEMING 
DETERMINATIONS FOR PURPOSES OF THE FEDERAL TORT CLAIMS ACT

0
1. The authority citation for part 15 is revised to read as follows:

    Authority: 5 U.S.C. 301, 554, 556, 557, and 8477(e)(4); 10 
U.S.C. 1054, 1089; 22 U.S.C. 2702, 28 U.S.C. 509, 510, and 2679; 38 
U.S.C. 7316; 42 U.S.C. 233, 2212, 2458a, and 5055(f); and sec. 2, 
Pub. L. 94-380, 90 Stat. 1113 (1976).


0
2. The heading for part 15 is revised to read as set forth above.

0
3. Designate Sec. Sec.  15.1 through 15.4 as subpart A under the 
following heading:

Subpart A--Certification and Decertification in Connection With 
Certain Suits Based Upon Acts or Omissions of Federal Employees and 
Other Persons


Sec.  Sec.  15.5  through 15.10 [Reserved]

0
4. Add reserved Sec. Sec.  15.5 through 15.10 to newly designated 
subpart A.

0
5. Add subpart B to read as follows:

Subpart B--Determination of Individuals Deemed Not To Be Employees 
of the Public Health Service

Sec.
15.11 Purpose.
15.12 Definitions.
15.13 Notice of hearing.
15.14 Conduct of hearing.
15.15 Discovery.
15.16 Recommended decision.
15.17 Final determination.
15.18 Rehearing.
15.19 Effective date of a final determination.
15.20 Reinstatement.

Subpart B--Determination of Individuals Deemed Not To Be Employees 
of the Public Health Service


Sec.  15.11  Purpose.

    (a) The purpose of this subpart is to implement the notice and 
hearing

[[Page 55518]]

procedures applicable to a determination by the Attorney General or the 
Attorney General's designee under 42 U.S.C. 233(i) that an individual 
health care provider shall not be deemed an employee of the Public 
Health Service for purposes of 42 U.S.C. 233(g) or any other statute 
that confers deemed Public Health Service employee status to which 42 
U.S.C. 233(i) has been made applicable. Under 42 U.S.C. 233(i), an 
individual health care provider who is no longer deemed to be an 
employee of the Public Health Service is excluded from any malpractice 
protections otherwise made statutorily available to individuals deemed 
to be Public Health Service employees.
    (b) Section 233(i) of title 42 provides that the Attorney General, 
in consultation with the Secretary of Health and Human Services, may on 
the record determine, after notice and an opportunity for a full and 
fair hearing, that an individual physician or other licensed or 
certified health care practitioner who is an officer, employee, or 
contractor of an entity described in 42 U.S.C. 233(g)(4) shall not be 
deemed to be an employee of the Public Health Service for purposes of 
42 U.S.C. 233 if treating such individual as such an employee would 
expose the Government to an unreasonably high degree of risk of loss.


Sec.  15.12  Definitions.

    As used in this subpart:
    Adjudicating official means the Assistant Attorney General for the 
Civil Division of the Department of Justice or a designee of the 
Assistant Attorney General.
    Entity means an entity described in 42 U.S.C. 233(g)(4).
    Individual means an individual physician or other licensed or 
certified health care practitioner who is or was an officer, employee, 
or contractor of an entity described in 42 U.S.C. 233(g)(4); a health 
professional, officer, employee, or contractor of a free clinic as 
described in 42 U.S.C. 233(o); or a health professional volunteer as 
described in 42 U.S.C. 233(q).
    Initiating official means a Deputy Assistant Attorney General of 
the Civil Division of the Department of Justice or a designee of a 
Deputy Assistant Attorney General.
    Parties means an individual, as defined in paragraph (c) of this 
section, and the initiating official, as defined in paragraph (d) of 
this section.
    Public Health Service means the Public Health Service or an 
operating division or component of the Public Health Service.
    Secretary means the Secretary of Health and Human Services or the 
Secretary's designee.
    Unreasonably high degree of risk of loss is a determination based 
on consideration of one or more of the following statutory criteria--
    (1) The individual does not comply with the policies and procedures 
that the entity or the sponsoring free clinic has implemented pursuant 
to 42 U.S.C. 233(h)(1);
    (2) The individual has a history of claims filed against him or her 
as provided for under 42 U.S.C. 233 that is outside the norm for 
licensed or certified health care practitioners within the same 
specialty;
    (3) The individual refused to reasonably cooperate with the 
Attorney General in defending against any such claim;
    (4) The individual provided false information relevant to the 
individual's performance of his or her duties to the Secretary, the 
Attorney General, or an applicant for or recipient of funds under title 
42, chapter 6A, United States Code; or
    (5) The individual was the subject of disciplinary action taken by 
a State medical licensing authority or a State or national professional 
society.


Sec.  15.13  Notice of hearing.

    (a) Whenever the initiating official, in consultation with the 
Secretary, finds, based upon available information gathered or 
provided, that treating an individual as an employee of the Public 
Health Service may expose the Government to an unreasonably high degree 
of risk of loss, the initiating official shall notify the individual 
that an administrative hearing will be conducted for the purpose of 
determining whether treating the individual as an employee of the 
Public Health Service for purposes of 42 U.S.C. 233 would expose the 
United States to an unreasonably high degree of risk of loss.
    (b) The notice of hearing shall be in writing and shall be sent by 
registered or certified mail to the individual at the individual's last 
known address, or to the individual's attorney in the event the 
Attorney General has received written notice that the individual has 
retained counsel.
    (c) The notice shall contain:
    (1) A statement of the nature and purpose of the hearing;
    (2) The factual allegations and, where appropriate, the law 
asserted in support of the proposed action;
    (3) The name of the administrative law judge;
    (4) A statement of the nature of the action proposed to be taken; 
and
    (5) A statement of the time, date, and location of the hearing.
    (d) The hearing shall be initiated not sooner than 60 days of the 
date on the written notice of hearing.


Sec.  15.14  Conduct of hearing.

    (a) An administrative law judge appointed in accordance with 5 
U.S.C. 3105 shall preside over the hearing.
    (b) Pursuant to 5 U.S.C. 556(b), the administrative law judge is to 
conduct all proceedings in an impartial manner. The administrative law 
judge may disqualify himself at any time. An individual may move to 
disqualify the appointed administrative law judge only upon the filing, 
in good faith, of a timely and sufficient affidavit of personal bias or 
other ground for disqualification of the administrative law judge, such 
as conflict of interest or financial interest. If such affidavit is 
timely filed, the adjudicating official shall determine the matter as 
part of the record and final determination in the case.
    (c) The administrative law judge shall have the following powers:
    (1) Administer oaths and affirmations;
    (2) Issue subpoenas authorized by law;
    (3) Rule on offers of proof and receive relevant evidence;
    (4) Take depositions or have depositions taken when the ends of 
justice would be served;
    (5) Regulate the course of the hearing;
    (6) Hold conferences for the settlement or simplification of the 
issues by consent of the parties or by the use of alternative means of 
dispute resolution;
    (7) Inform the parties as to the availability of one or more 
alternative means of dispute resolution, and encourage use of such 
methods;
    (8) Dispose of procedural requests or similar matters;
    (9) Make or recommend decisions;
    (10) Require and, in the discretion of the administrative law 
judge, adopt proposed findings of fact, conclusions of law, and orders;
    (11) Take any other action that administrative law judges are 
authorized by statute to take; and
    (12) All powers and duties reasonably necessary to perform the 
functions enumerated in paragraphs (c)(1) through (11) of this section.
    (d) The administrative law judge may call upon the parties to 
consider:
    (1) Simplification or clarification of the issues;
    (2) Stipulations, admissions, agreements on documents, or other 
understandings that will expedite conduct of the hearing;

[[Page 55519]]

    (3) Limitation of the number of witnesses and of cumulative 
evidence; and
    (4) Such other matters as may aid in the disposition of the case.
    (e) At the discretion of the administrative law judge, parties or 
witnesses may participate in hearings by video conference.
    (f) All hearings under this subpart shall be public unless 
otherwise ordered by the administrative law judge.
    (g) The hearing shall be conducted in conformity with 5 U.S.C. 554-
557 (sections 5-8 of the Administrative Procedure Act).
    (h) The initiating official shall have the burden of going forward 
with the evidence and shall generally present the Government's evidence 
first.
    (i) Technical rules of evidence shall not apply to hearings 
conducted pursuant to this subpart, but rules designed to assure 
production of the most credible evidence available and to subject 
testimony to cross-examination shall be applied where reasonably 
necessary by the administrative law judge. The administrative law judge 
may exclude irrelevant, immaterial, or unduly repetitious evidence. All 
documents and other evidence offered or taken for the record shall be 
open to examination by the parties, and opportunity shall be given to 
refute facts and arguments advanced on either side of the issues. A 
transcript shall be made of the oral evidence except to the extent the 
substance thereof is stipulated for the record.
    (j) During the time a proceeding is pending before an 
administrative law judge, all motions shall be addressed to the 
administrative law judge and, if within the administrative law judge's 
delegated authority, shall be ruled upon. Any motion upon which the 
administrative law judge has no authority to rule shall be certified to 
the adjudicating official with a recommendation. The opposing party may 
answer within such time as may be designated by the administrative law 
judge. The administrative law judge may permit further replies by both 
parties.


Sec.  15.15  Discovery.

    (a) At any time after the initiation of the proceeding, the 
administrative law judge may order, by subpoena if necessary, the 
taking of a deposition and the production of relevant documents by the 
deponent. Such order may be entered upon a showing that the deposition 
is necessary for discovery purposes and that such discovery could not 
be accomplished by voluntary methods. Such an order may also be entered 
in extraordinary circumstances to preserve relevant evidence upon a 
showing that there is substantial reason to believe that such evidence 
could not be presented through a witness at the hearing. The decisive 
factors for a determination under this subsection, however, shall be 
fairness to all parties and the requirements of due process. A 
deposition may be taken orally or upon written questions before any 
person who has the power to administer oaths and shall not exceed one 
day of seven hours.
    (b) Each deponent shall be duly sworn, and any adverse party shall 
have the right to cross-examine. Objections to questions or documents 
shall be in short form, stating the grounds upon which objections are 
made. The questions propounded and the answers thereto, together with 
all objections made (but not including argument or debate), shall be 
reduced to writing and certified by the person before whom the 
deposition was taken. Thereafter, the person taking the deposition 
shall forward the deposition and one copy thereof to the party at whose 
instance the deposition was taken and shall forward one copy to the 
representative of the other party.
    (c) A deposition may be admitted into evidence as against any party 
who was present or represented at the taking of the deposition, or who 
had due notice thereof, if the administrative law judge finds that 
there are sufficient reasons for admission and that the admission of 
the evidence would be fair to all parties and comport with the 
requirements of due process.


Sec.  15.16  Recommended decision.

    Within a reasonable time after the close of the record of the 
hearings conducted under Sec.  15.14, the administrative law judge 
shall certify the record to the adjudicating official and shall submit 
to the adjudicating official written findings of fact, conclusions of 
law, and a recommended decision. The administrative law judge shall 
promptly make copies of the findings of fact, conclusions of law, and 
recommended decision available to the parties and the Secretary.


Sec.  15.17  Final determination.

    (a) In hearings conducted under Sec.  15.14, the adjudicating 
official shall, subject to subsection (d), make the final determination 
on the basis of the certified record, findings, conclusions, and 
recommendations presented by the administrative law judge.
    (b) Prior to making a final determination, the adjudicating 
official shall give the parties an opportunity to submit the following, 
within thirty days after the submission of the administrative law 
judge's recommendations:
    (1) Proposed findings and determinations;
    (2) Exceptions to the recommendations of the administrative law 
judge;
    (3) Supporting reasons for the exceptions or proposed findings or 
determinations; and
    (4) Final briefs summarizing the arguments presented at the 
hearing.
    (c) The adjudicating official shall, within a reasonable time after 
receiving the parties' submissions, consult with the Secretary and then 
make a final determination. Copies of the final determination shall be 
served upon each party to the proceeding. Subject to paragraph (d) of 
this section, the final determination made by the adjudicating official 
under this rule shall constitute the final agency action.
    (d) Within 30 days of any final determination made by the 
adjudicating official, the Attorney General may exercise discretion to 
review the final determination. In the event the Attorney General 
exercises discretion to review a decision, the Attorney General's final 
determination shall constitute the final agency action.


Sec.  15.18  Rehearing.

    (a) An individual dissatisfied with a final determination under 
Sec.  15.17 may, within 30 days after the notice of the final 
determination is sent, request the adjudicating official to re-review 
the record.
    (b) The adjudicating official may require that another oral hearing 
be held on one or more of the issues in controversy, or permit the 
dissatisfied party to present further evidence or argument in writing, 
if the adjudicating official finds that the individual has:
    (1) Presented evidence or argument that is sufficiently significant 
to require the conduct of further proceedings; or
    (2) Shown some defect in the conduct of the adjudication under this 
subpart sufficient to cause substantial unfairness or an erroneous 
finding in that adjudication.
    (c) Any rehearing ordered by the adjudicating official shall be 
conducted pursuant to Sec.  Sec.  15.14 through 15.16.


Sec.  15.19  Effective date of a final determination.

    (a) A final determination under Sec.  15.17 shall be provided to 
the Department of Health and Human Services and sent by certified or 
registered mail to the individual and to the entity employing or 
sponsoring such individual if the individual is currently

[[Page 55520]]

an officer, employee, contractor, or health professional volunteer of 
an entity described in 42 U.S.C. 233(g)(4) or a health professional, 
officer, employee, or contractor of a free clinic described in 42 
U.S.C. 233(o). In the event the individual is no longer an officer, 
employee, contractor, or health professional volunteer of an entity 
described in 42 U.S.C. 233(g)(4), or a health professional, officer, 
employee, or contractor of a free clinic described in 42 U.S.C. 233(o), 
the determination shall be sent by certified or registered mail to the 
individual and to the last entity described in 42 U.S.C. 233(g)(4) or 
free clinic described in 42 U.S.C. 233(o) at which such individual was 
an officer, employee, contractor, health professional volunteer, or 
health professional.
    (b) A final determination shall be effective upon the date the 
written determination is received by such entity or free clinic.
    (c) A final determination that an individual provider shall not be 
deemed to be an employee of the Public Health Service shall apply to 
all acts or omissions of the individual occurring after the date the 
adverse final determination is received by such entity or free clinic.
    (d) The Attorney General will inform the National Practitioner Data 
Bank of any final determination under Sec.  15.17 that an individual 
shall not be deemed to be an employee of the Public Health Service for 
purposes of 42 U.S.C. 233.


Sec.  15.20  Reinstatement.

    (a) Not sooner than five years after the time for rehearing has 
expired, and no more often than once every five years thereafter, an 
individual who has been the subject of a final determination under 
Sec.  15.17 may petition the initiating official for reconsideration of 
that determination and for reinstatement. The individual bears the 
burden of proof and persuasion.
    (b) In support of the petition for reinstatement, the individual 
shall submit relevant evidence relating to the period since the 
original proceedings under this subpart and a statement demonstrating 
and explaining why treating the individual as an employee of the Public 
Health Service for purposes of 42 U.S.C. 233 would no longer expose the 
United States to an unreasonably high degree of risk of loss.
    (c) Upon receiving a petition for reinstatement, the initiating 
official shall forward the petition, together with an evaluation and 
recommendation on whether the petition makes a prima facie case for 
reinstatement, to the adjudicating official. The adjudicating official 
shall determine, in the adjudicating official's discretion, whether the 
petition makes a prima facie case that the individual provider no 
longer would expose the United States to an unreasonably high degree of 
risk of loss. The adjudicating official's determination that a petition 
does not make a prima facie case for reinstatement is not subject to 
further review.
    (d) If the adjudicating official determines that a prima facie case 
has been made for reinstatement, an administrative law judge shall be 
appointed in accordance with 5 U.S.C. 3105 and shall conduct such 
proceedings pursuant to Sec. Sec.  15.14 through 15.16 as the 
administrative law judge deems necessary, in the administrative law 
judge's discretion, to determine whether the individual has established 
that treating the individual as an employee of the Public Health 
Service for purposes of 42 U.S.C. 233 would no longer expose the United 
States to an unreasonably high degree of risk of loss. After conducting 
such proceedings as the administrative law judge deems necessary, the 
administrative law judge shall certify the record to the adjudicating 
official and shall submit written findings of fact, conclusions of law, 
and a recommended decision to the adjudicating official pursuant to 
Sec.  15.16.
    (e) Following proceedings conducted under paragraph (d) of this 
section, the adjudicating official shall make the final determination 
on the basis of the record, findings, conclusions, and recommendations 
presented by the administrative law judge, which shall include the 
record from the original determination and any petition for rehearing. 
Copies of the adjudicating official's final determination shall be 
furnished to the parties. The adjudicating official's final 
determination shall constitute the final agency action.
    (f) A determination that an individual is reinstated pursuant to 
this section shall be distributed in the same manner as provided in 
Sec.  15.19 and shall apply only to acts or omissions of the individual 
occurring after the date of the final reinstatement determination.

    Dated: June 28, 2024.
Merrick B. Garland,
Attorney General.
[FR Doc. 2024-14696 Filed 7-3-24; 8:45 am]
BILLING CODE 4410-12-P