Federally Supported Health Centers Assistance Act of 1992

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Public Health Service

42 CFR Part 6

Federally Supported Health Centers Assistance Act of 1992

AGENCY: Public Health Service, HHS.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Secretary of Health and Human Services (the

``Secretary''), in consultation with the Attorney General, proposes to

issue rules under the ``Federally Supported Health Centers Assistance

Act of 1992''. The Act provides for liability protection for certain

health care professionals and entities. This proposed rule sets forth

information whereby an entity or a person can determine when, and the

extent to which, it is likely to be protected under the Act.

DATES: The public is invited to submit comments on this proposed rule

until September 19, 1994.

ADDRESSES: Comments should be submitted to:

Libby Merrill, Office of Program Policy and Development, Bureau of

Primary Health Care, 4350 East-West Highway, Rockville, Maryland

20857.

FOR FURTHER INFORMATION CONTACT:

Richard C. Bohrer, Director, Division of Community and Migrant

Health, Phone: (301) 594-4300.

SUPPLEMENTARY INFORMATION:

I. Introduction

Section 224(a) of the Public Health Service Act (the Act), (section

233(a) of Title 42 of the United States Code), provides that the remedy

against the United States provided under the Federal Tort Claims Act

(FTCA) resulting from the performance of medical, surgical, dental or

related functions by any commissioned officer or employee of the Public

Health Service while acting within the scope of his office or

employment shall be exclusive of any other civil action or proceeding.

Public Law 102-501 provides that, subject to its provisions, certain

entities and officers, employees and contractors of entities shall be

deemed to be employees of the Public Health Service within the

exclusive remedy provision of section 224(a). This proposed rule

implements certain provisions of Pub. L. 102-501.

II. Entities

An entity will be deemed to be an employee of the Public Health

Service pursuant to Pub. L. 102-501 only if HHS, in consultation with

the Attorney General, has determined, and has advised the entity, that

the entity--

(A) receives Federal funds under any of the following grant

programs:

(1) Section 329 of the Act, 42 U.S.C. 254b (relating to grants for

migrant health centers);

(2) Section 330 of the Act, 42 U.S.C. 254c (relating to grants for

community health centers);

(3) Section 340 of the Act, 42 U.S.C. 256 (relating to grants for

health services for the homeless); and

(4) Section 340A of the Act, 42 U.S.C. 256a (relating to grants for

health services for residents of public housing); and

(B) meets the following requirements:

(1) has implemented appropriate policies and procedures to reduce

the risk of malpractice and the risk of lawsuits arising out of any

health or health-related functions performed by the entity;

(2) has reviewed and verified the professional credentials,

references, claims history, fitness, progressional review organization

findings, and license status of its physicians and other licensed or

certified health care practitioners, and, where necessary, has obtained

the permission from these individuals to gain access to this

information;

(3) has no history of claims having been filed against the United

States as a result of the application of section 224 to the entity of

its officers, employees, of contractors as provided for under this

section, or, is such a history exists, has fully cooperated with the

Attorney General in defending against any such claims and either has

taken, or will take, any necessary corrective steps to assure against

such claims in the future; and

(4) has fully cooperated with the Attorney General in providing

information relating to an estimate described under section 224(k) of

the Act.

Proposed Sec. 6.5 provides that an entity will be deemed to be an

entity described in section 224(g) as of the effective date of the

notice which it receives from the Department of Health and Human

Services that it has been deemed to be an entity as described for

purposes of the Act. Each notice shall be effective only as to acts and

omissions occurring on and after the date specified in the notice and

prior to January 1, 1996, the statutory sunset date for this program.

(Proposed Sec. 6.6(a).)

In some cases, grantees contract with other entities (as opposed to

individual contractors--see section III below) for the provision of

health services. The typical situation is a subgrant or contract for

the provision of the full range of health services. For example, the

legislative history of Pub. L. 102-501 describes the case of a grantee

in the Los Angeles area which itself has no clinical staff, but which

contracts with three primary care clinics for the actual delivery of

services. If one (or more) of these clinics provides the full range of

services mandated under section 330 to its own medically undeserved

population, in accordance with other applicable requirements under

section 330, it would be eligible for a determination by the Secretary

that it too is a covered entity. (H.R. Rep. No. 102-823, Part 2, p. 7,

102d Cong. 2d Sess., Sept. 14, 1992.) Proposed Sec. 6.3(b) provides

that the Secretary will identify those contracting entities that will

be subject to coverage under section 224(g) in notices issued pursuant

to Sec. 6.5.

III. Covered Individuals

In addition to the entity itself, section 224(g) provides that

certain individuals may be covered under the FTCA. Officers and

employees are subject to coverage, as well as certain contractors.

Public Law 102-501 provides that an individual may be considered to

be a contractor of an entity described in Pub. L. 102-501 only if--

(A) the individual normally performs on average at least 32\1/2\

hours of service per week for the entity for the period of the

contract; or

(B) in the case of an individual who normally performs on average

less than 32\1/2\ hours of services per week for the entity for the

period of the contract and is a licensed or certified provider of

obstetrical services--

(1) the individual's medical malpractice liability insurance

coverage does not extend to services performed by the individual for

the entity under the contract; or

(2) the Secretary finds that patients to whom the entity furnishes

services will be deprived of obstetrical services if such individual is

not considered a contractor of the entity for purposes of paragraph

(1).

Coverage of individuals, whether employees of contractors, does not

extend to acts or omissions that are not related to the grant supported

activity. The covered entity itself (assuming it meets the statutory

requirements for FTCA coverage) will be covered for claims against it,

even if an individual health care practitioner is not covered in a

particular case. Thus, for example, if a contractor works fewer than

32\1/2\ hours and is not a provider of obstetrical services, the

contractor would not be covered for services related to the grant, but

the grantee itself would be covered.

IV. Covered Acts and Omissions

Proposed Sec. 6.6 provides elaboration on the scope of the

statutory protection for covered entities and individuals. Paragraph

(a) states the relevant dates of coverage. Paragraph (b) repeats the

provision of section 224(a) that limits coverage to claims for damage

for personal injury or death resulting from the performance of medical,

surgical, dental, or related functions. Paragraph (c) states that for

covered individuals, only acts or omissions within the scope of their

employment (or contract for services, in the case of covered

contractors) are covered. Thus, for example, ``moonlighting''

activities of a physician employed by a covered grantee would not be

covered.

Paragraph (d) of proposed Sec. 6.6 addresses the limitation that

only acts or omissions related to the grant-supported activity are

covered. The Department is aware that there has been some confusion

since the enactment of section 224(g) about the types of activities

that would be covered. In particular, there have been questions about

the issue of when coverage is available where individuals who are not

registered patients of the grantee are treated. This paragraph provides

clear standards for answering these questions. Coverage will be

available for the treatment of non-patients of the covered entities

only when the Secretary determines either that (1) the provision of the

services to such individuals 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

the entity, or (2) the provision of services to such individuals

facilitates the provision of services to patients of the entity, or (3)

such services are otherwise required to be provided to such individuals

under an employment contract or similar arrangement between the entity

and the covered individual. Examples of situations within the scope of

proposed Sec. 6.6(d) are as follows:

A community health center deemed to be a covered entity

establishes a school-based or school-linked health program as part of

its grant supported activity. Even though the students treated are not

necessarily registered patients of the center, the center and its

health care practitioners will be covered for services provided, if the

Secretary makes the determination in subparagraph (1).

A migrant health center requires its physicians to obtain

staff privileges at a community hospital. As a condition of obtaining

such privileges, and thus being able to admit the center's patients to

the hospital, the physicians must agree to provide occasional coverage

of the hospital's emergency room. The Secretary would be authorized to

determine that this coverage is necessary to facilitate the provision

of services to the grantee's patients, and that it would therefore be

covered by subparagraph (2).

A homeless health services grantee makes arrangements with

local community providers for after-hours coverage of its patients. The

grantee's physicians are required by their employment contracts to

provide periodic cross-coverage for patients of these providers, in

order to make this arrangement feasible. The Secretary may determine

that the arrangement is within the scope of subparagraph (3). Again,

however, it should be understood that this would not extend the scope

of coverage under Pub. L. 102-501 to ``moonlighting'' activities by

center health care practitioners.

This proposed rule is not intended to constitute, and does not

constitute, a comprehensive notice pertaining to any provision of Pub.

L. 102-501 except to the extent that procedures pertaining to

implementation of Pub. L. 102-501 are described explicitly above. The

applicability of Pub. L. 102-501 and 42 U.S.C. 233(a) to a particular

claim or case will depend upon the determination or certification (as

appropriate) by the Attorney General that the individual or entity is

covered by Pub. L. 102-501 and was acting within the scope of

employment, in accordance with normal Department of Justice procedures.

A determination or certification by the Attorney General is subject to

judicial review.

Economic Impact

Executive Order 12866 requires that all regulations reflect

consideration of alternatives, of costs, benefits, incentives, equity,

and availability of information. Regulations which are ``significant''

because of cost, adverse effects on the economy, inconsistency with

other agency actions, effects on the budget, or novel legal or policy

issues, require special analysis. In addition, the Regulatory

Flexibility Act of 1980 requires that we include an analysis of all

rules the significantly impact small businesses.

These proposed regulations provide information whereby health care

entities or individual scan determine when, and to what extent they are

likely to be protected for medical malpractice under the Federal Tort

Claims Act (FTCA). Therefore, the Secretary certifies that the proposed

regulations will not have a significant effect on a substantial number

of small entities.

For this reason, a regulatory analysis is not required.

Paperwork Reduction Act of 1980

This proposed rule contains no information collection or reporting

requirements which are subject to review by the Office of Management

and Budget (OMB) under the Paperwork Reduction Act of 1980.

List of Subjects in 42 CFR Part 6

Grant Programs--Health.

Dated: May 9, 1994.

Philip R. Lee,

Assistant Secretary for Health.

Approved: June 16, 1994.

Donna E. Shalala,

Secretary.

Part 6 is added to Chapter I of Title 42 to read as follows:

PART 6--FEDERAL TORT CLAIMS ACT COVERAGE OF CERTAIN GRANTEES AND

INDIVIDUALS

Sec.

6.1 Applicability.

6.2 Definitions.

6.3 Eligible Entities.

6.4 Covered Individuals.

6.5 Deeming Process for Eligible Entities.

6.6 Covered Acts and Omissions.

Authority: Sections 215 and 224 of the Public Health Service

Act, 42 U.S.C. 216 and 233.

Sec. 6.1 Applicability.

This part applies to entities and individuals whose acts and

omissions related to the performance of medical, surgical, dental, or

related functions are covered by the Federal Tort Claims Act (28 U.S.C.

1346(b) and 2671-2680) in accordance with the provisions of section

224(g) of the Public Health Service Act (42 U.S.C. 233(g)).

Sec. 6.2 Definitions.

Act means the Public Health Service Act, as amended.

Attorney General means the Attorney General of the United States

and any other officer or employee of the Department of Justice to whom

the authority involved has been delegated.

Covered entity means an entity described in Sec. 6.3 which has been

deemed by the Secretary, in accordance with Sec. 6.5, to be covered by

this part.

Covered individual means an individual described in Sec. 6.4.

Effective date as used in Sec. 6.5 and Sec. 6.6 refers to the date

of the Secretary's determination that an entity is a covered entity.

Secretary means the Secretary of Health and Human Services (HHS)

and any other officer or employee of the Department of HHS to whom the

authority involved has been delegated.

Subrecipient means an entity which receives a grant or a contract

from a covered entity to provide a full range of health services on

behalf of the covered entity.

Sec. 6.3 Eligible entities.

(a) Grantees. Entities eligible for coverage under this part are

public and nonprofit private entities receiving Federal funds under any

of the following grant programs:

(1) Section 329 of the Act (relating to grants for migrant health

centers);

(2) Section 330 of the Act (relating to grants for community health

centers);

(3) Section 340 of the Act (relating to grants for health services

for the homeless); and

(4) Section 340A of the Act (relating to grants for health services

for residents of public housing).

(b) Subrecipients. Entities that are subrecipients of grant funds

described in paragraph (a) of this section are eligible for coverage

only if they provide a full range of health care services on behalf of

an eligible grantee and only for those services carried out under the

grant funded project.

Sec. 6.4 Covered individuals.

(a) Officers and employees of a covered entity are eligible for

coverage under this part.

(b) Contractors of a covered entity who are physicians or other

licensed or certified health care practitioners are eligible for

coverage under this part if they meet the requirements of section

224(g)(5) of the Act.

(c) An individual physician or other licensed or certified health

care practitioner who is an officer, employee, or contractor of a

covered entity will not be covered for acts or omissions occurring

after receipt by the entity employing such individual of notice of a

final determination by the Attorney General that he or she is no longer

covered by this part, in accordance with section 224(i) of the Act.

Sec. 6.5 Deeming process for eligible entities.

Eligible entities will be covered by this part only on and after

the effective date of a determination by the Secretary that they meet

the requirements of section 224(h) of the Act. In making such

determination, the Secretary will receive such assurances and conduct

such investigations as he or she deems necessary.

Sec. 6.6 Covered acts and omissions.

(a) Only acts and omissions occurring on and after the effective

date of the Secretary's determination under Sec. 6.5 and before January

1, 1996, are covered by this part.

(b) Only claims for damage for personal injury, including death,

resulting from the performance of medical, surgical, dental, or related

functions are covered by this part.

(c) With respect to covered individuals, only acts and omissions

within the scope of their employment (or contract for services) are

covered. If a covered individual is providing services which are not on

behalf of the covered entity, such as on a volunteer basis or on behalf

of a third-party (except as described in paragraph (d) of this

section), whether for pay or otherwise, acts or omissions which are

related to such services are not covered.

(d) Only acts and omissions related to the grant-supported activity

of entities are covered. Acts and omissions related to services

provided to individuals who are not patients of a covered entity will

be covered only if the Secretary determines that:

(1) the provision of the services to such individuals 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;

(2) the provision of the services to such individuals facilitates

the provision of services to patients of the entity; or

(3) such services are otherwise required to be provided to such

individuals under an employment contract or similar arrangement between

the entity and the covered individual.

[FR Doc. 94-20361 Filed 8-18-94; 8:45 am]

BILLING CODE 4160-15-M