Union Calendar No. 204

104TH CONGRESS

1ST SESSION H. R. 1747

[Report No. 104–398]

A BILL

To amend the Public Health Service Act to permafor health centers, and for other purposes. nently extend and clarify malpractice coverage

DECEMBER 12, 1995

Reported with amendments, committed to the Committee

dered to be printedof the Whole House on the State of the Union, and or-
IB

Union Calendar No. 204

104TH CONGRESS

1ST SESSION H. R. 1747

[Report No. 104–398]

To amend the Public Health Service Act to permanently extend and clarify

malpractice coverage for health centers, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 6, 1995

Mrs. JOHNSON of Connecticut (for herself, Mr. WYDEN, and Mr. FRANK of

Massachusetts) introduced the following bill; which was referred to the

Committee on Commerce

DECEMBER 12, 1995

Additional sponsors: Mr. GOSS, Mr. SANDERS, Mr. BARRETT of Wisconsin,

Mr. CALLAHAN, Mr. EHLERS, Mr. WILLIAMS, Mr. STUPAK, Mr. MASCARA, Mr. HASTERT, Mr. KOLBE, Mr. GUTIERREZ, Mr. TAUZIN, Mrs.

COLLINS of Illinois, Mr. WAXMAN, Mr. SERRANO, Mr. ENGEL, Mr. WICKER, Mr. MOORHEAD, Mr. GREENWOOD, Ms. PELOSI, Ms. MOLINARI, Mr.

DINGELL, Mr. TEJEDA, Mr. PAYNE of Virginia, Mr. BONIOR, Mr. DELLUMS, Mr. BLUTE, Mr. STENHOLM, Mrs. KELLY, Mr. KILDEE, Mr. PASTOR, and Mr. KENNEDY of Rhode Island

DECEMBER 12, 1995

Reported with amendments, committed to the Committee of the Whole House

on the State of the Union, and ordered to be printed

[Strike out all after the enacting clause and insert the part printed in italic]

[For text of introduced bill, see copy of bill as introduced on June 6, 1995]

A BILL

To amend the Public Health Service Act to permanently
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extend and clarify malpractice coverage for health centers, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; REFERENCES.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Federally Supported Health Centers Assistance Act of

6 1995’’.

7 (b) REFERENCES.—Except as otherwise expressly pro8 vided, whenever in this Act an amendment or repeal is ex9 pressed in terms of an amendment to, or repeal of, a section

10 or other provision, the reference shall be considered to be

11 made to a section or other provision of the Public Health

12 Service Act.

13 SEC. 2. EXTENSION OF PROGRAM.

14 (a) IN GENERAL.—Section 224(g)(3) (42 U.S.C.

15 233(g)(3)) is amended in the last sentence by striking ‘‘Jan16 uary 1, 1996’’ and inserting ‘‘January 1, 1999’’.

17 (b) CONFORMING AMENDMENTS.—Section 224(k) (42

18 U.S.C. 233(k)) is amended—

19 (1) in paragraph (1)(A), by striking ‘‘each of the

20 fiscal years 1993, 1994, and 1995’’ and inserting

21 ‘‘each of the fiscal years 1996 through 1998’’; and

22 (2) in paragraph (2), by striking ‘‘each of the

23 fiscal years 1993, 1994, and 1995’’ and inserting

24 ‘‘each of the fiscal years 1996 through 1998’’.
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1 SEC. 3. CLARIFICATION OF COVERAGE.

2 Section 224(g)(1) (42 U.S.C. 233(g)(1)) is amended—

3 (1) in the first sentence, by striking ‘‘officer, em4 ployee, or contractor’’ and inserting ‘‘officer, govern5 ing board member, or employee of such an entity, and

6 any contractor’’; and

7 (2) in the second sentence, by inserting after ‘‘of8 ficer,’’ the following ‘‘governing board member,’’.

9 SEC. 4. COVERAGE FOR SERVICES FURNISHED TO INDIVID10 UALS OTHER THAN CENTER PATIENTS.

11 Section 224(g)(1) (42 U.S.C. 233(g)) is amended—

12 (1) by redesignating paragraph (1) as para13 graph (1)(A); and

14 (2) by adding at the end thereof the following:

15 ‘‘(B) The deeming of any entity or officer, governing

16 board member, employee, or contractor of the entity to be

17 an employee of the Public Health Service under subpara18 graph (A) shall apply with respect to services provided—

19 ‘‘(i) to all patients of the entity, and

20 ‘‘(ii) subject to subparagraph (C), to individuals

21 who are not patients of the entity.

22 ‘‘(C) Subparagraph (B)(ii) applies to services provided

23 to individuals who are not patients of an entity if the Sec24 retary determines, after reviewing an application submitted

25 under subparagraph (D), that the provision of the services

26 to such individuals—
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1 ‘‘(i) benefits patients of the entity and general

2 populations that could be served by the entity through

3 community-wide intervention efforts within the com4 munities served by such entity;

5 ‘‘(ii) facilitates the provision of services to pa6 tients of the entity; or

7 ‘‘(iii) are otherwise required under an employ8 ment contract (or similar arrangement) between the

9 entity and an officer, governing board member, em10 ployee, or contractor of the entity.’’.

11 SEC. 5. APPLICATION PROCESS.

12 (a) APPLICATION REQUIREMENT.—Section 224(g)(1)

13 (42 U.S.C. 233(g)(1)) (as amended by section 4) is further

14 amended—

15 (1) in subparagraph (A), by inserting ‘‘and sub16 ject to the approval by the Secretary of an applica17 tion under subparagraph (D)’’ after ‘‘For purposes of

18 this section’’; and

19 (2) by adding at the end thereof the following:

20 ‘‘(D) The Secretary may not deem an entity or an offi21 cer, governing board member, employee, or contractor of the

22 entity to be an employee of the Public Health Service under

23 subparagraph (A), and may not apply such deeming to

24 services described in subparagraph (B)(ii), unless the entity

25 has submitted an application for such deeming to the Sec-
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1 retary in such form and such manner as the Secretary shall

2 prescribe. The application shall contain detailed informa3 tion, along with supporting documentation, to verify that

4 the entity, and the officer, governing board member, em5 ployee, or contractor of the entity, as the case may be, meets

6 the requirements of subparagraphs (B) and (C) of this

7 paragraph and that the entity meets the requirements of

8 paragraphs (1) through (4) of subsection (h).

9 ‘‘(E) The Secretary shall make a determination of

10 whether an entity or an officer, governing board member,

11 employee, or contractor of the entity is deemed to be an

12 employee of the Public Health Service for purposes of this

13 section within 30 days after the receipt of an application

14 under subparagraph (D). The determination of the Sec15 retary that an entity or an officer, governing board mem16 ber, employee, or contractor of the entity is deemed to be

17 an employee of the Public Health Service for purposes of

18 this section shall apply for the period specified by the Sec19 retary under subparagraph (A).

20 ‘‘(F) Once the Secretary makes a determination that

21 an entity or an officer, governing board member, employee,

22 or contractor of an entity is deemed to be an employee of

23 the Public Health Service for purposes of this section, the

24 determination shall be final and binding upon the Sec25 retary and the Attorney General and other parties to any
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1 civil action or proceeding. Except as provided in subsection

2 (i), the Secretary and the Attorney General may not deter3 mine that the provision of services which are the subject

4 of such a determination are not covered under this section.’’.

5 (b) APPROVAL PROCESS.—Section 224(h) (42 U.S.C.

6 233(h)) is amended—

7 (1) in the matter preceding paragraph (1), by

8 striking ‘‘Notwithstanding’’ and all that follows

9 through ‘‘entity—’’ and inserting the following: ‘‘The

10 Secretary may not approve an application under sub11 section (g)(1)(D) unless the Secretary determines that

12 the entity—’’; and

13 (2) by striking ‘‘has fully cooperated’’ in para14 graph (4) and inserting ‘‘will fully cooperate’’.

15 SEC. 6. TIMELY RESPONSE TO FILING OF ACTION OR PRO16 CEEDING.

17 Section 224 (42 U.S.C. 233) is amended by adding

18 at the end thereof the following subsection:

19 ‘‘(l)(1) If a civil action or proceeding is filed in a State

20 court against any entity described in subsection (g)(4) or

21 any officer, governing board member, employee, or any con22 tractor of such an entity for damages described in sub23 section (a), the Attorney General, within 15 days after

24 being notified of such filing, shall make an appearance in

25 such court and advise such court as to whether the Secretary
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1 has determined under subsections (g) and (h), that such en2 tity, officer, governing board member, employee, or contrac3 tor of the entity is deemed to be an employee of the Public

4 Health Service for purposes of this section with respect to

5 the actions or omissions that are the subject of such civil

6 action or proceeding. Such advice shall be deemed to satisfy

7 the provisions of subsection (c) that the Attorney General

8 certify that an entity, officer, governing board member, em9 ployee, or contractor of the entity was acting within the

10 scope of their employment or responsibility.

11 ‘‘(2) If the Attorney General fails to appear in State

12 court within the time period prescribed under paragraph

13 (1), upon petition of any entity or officer, governing board

14 member, employee, or contractor of the entity named, the

15 civil action or proceeding shall be removed to the appro16 priate United States district court. The civil action or pro17 ceeding shall be stayed in such court until such court con18 ducts a hearing, and makes a determination, as to the ap19 propriate forum or procedure for the assertion of the claim

20 for damages described in subsection (a) and issues an order

21 consistent with such determination.’’.
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1 SEC. 7. APPLICATION OF COVERAGE TO MANAGED CARE

2 PLANS.

3 Section 224 (42 U.S.C. 223) (as amended by section

4 6) is amended by adding at the end thereof the following

5 subsection:

6 ‘‘(m)(1) An entity or officer, governing board member,

7 employee, or contractor of an entity described in subsection

8 (g)(1) shall, for purposes of this section, be deemed to be

9 an employee of the Public Health Service with respect to

10 services provided to individuals who are enrollees of a man11 aged care plan if the entity contracts with such managed

12 care plan for the provision of services.

13 ‘‘(2) Each managed care plan which enters into a con14 tract with an entity described in subsection (g)(4) shall

15 deem the entity and any officer, governing board member,

16 employee, or contractor of the entity as meeting whatever

17 malpractice coverage requirements such plan may require

18 of contracting providers for a calendar year if such entity

19 or officer, governing board member, employee, or contractor

20 of the entity has been deemed to be an employee of the Pub21 lic Health Service for purposes of this section for such cal22 endar year. Any plan which is found by the Secretary on

23 the record, after notice and an opportunity for a full and

24 fair hearing, to have violated this subsection shall upon

25 such finding cease, for a period to be determined by the

26 Secretary, to receive and to be eligible to receive any Fed-
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1 eral funds under titles XVIII or XIX of the Social Security

2 Act.

3 ‘‘(3) For purposes of this subsection, the term ‘man4 aged care plan’ shall mean health maintenance organiza5 tions and similar entities that contract at-risk with payors

6 for the provision of health services or plan enrollees and

7 which contract with providers (such as entities described

8 in subsection (g)(4)) for the delivery of such services to plan

9 enrollees.’’.

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

11 CONTRACTS.

12 Section 224(g)(5)(B) (42 U.S.C. 223(g)(5)(B)) is

13 amended to read as follows:

14 ‘‘(B) in the case of an individual who normally

performs an average of less than 321 15 ⁄2 hours of serv16 ices per week for the entity for the period of the con17 tract, the individual is a licensed or certified provider

18 of services in the fields of family practice, general in19 ternal medicine, general pediatrics, or obstetrics and

20 gynecology.’’.

21 SEC. 9. DUE PROCESS FOR LOSS OF COVERAGE.

22 Section 224(i)(1) (42 U.S.C. 233(i)(1)) is amended by

23 striking ‘‘may determine, after notice and opportunity for

24 a hearing’’ and inserting ‘‘may on the record determine,

25 after notice and opportunity for a full and fair hearing’’.
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1 SEC. 10. AMOUNT OF RESERVE FUND.

2 Section 224(k)(2) (42 U.S.C. 223(k)(2)) is amended by

3 striking ‘‘$30,000,000’’ and inserting ‘‘$10,000,000’’.

4 SEC. 11. REPORT ON RISK EXPOSURE OF COVERED ENTI5 TIES.

6 Section 224 (as amended by section 7) is amended by

7 adding at the end thereof the following subsection:

8 ‘‘(n)(1) Not later than April 1, 1997, the Secretary,

9 in consultation with the Attorney General, shall submit to

10 the Congress a report on the medical malpractice liability

11 claims experience of entities that have been deemed to be

12 employees for purposes of this section, and the risk exposure

13 associated with such entities.

14 ‘‘(2) The report under paragraph (1) shall include an

15 analysis by the Secretary comparing—

16 ‘‘(A) the Secretary’s estimate of the aggregate

17 amounts that such entities (together with the officers,

18 governing board members, employees, and contractors

19 of such entities who have been deemed to be employees

20 for purposes of this section) would have directly or in21 directly paid to obtain medical malpractice liability

22 insurance coverage if this section were not in effect;

23 with

24 ‘‘(B) the aggregate amounts by which the grants

25 received by such entities under this Act were reduced

26 pursuant to subsection (k)(2).
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1 ‘‘(3) In preparing the report under paragraph (1), the

2 Secretary shall consult with public and private entities

3 with expertise on the matters with which the report is

4 concerned.’’.

Amend the title so as to read: ‘‘A bill to amend the

Public Health Service Act to extend and clarify

malpractice coverage for health centers, and for other

purposes.’’.