I

104TH CONGRESS

1ST SESSION H. R. 1747

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

A BILL

To amend the Public Health Service Act to permanently

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; REFERENCE.

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

5 ‘‘Federally Supported Health Centers Assistance Act of

6 1995’’.

7 (b) REFERENCE.—Except as otherwise expressly pro8 vided, whenever in this Act an amendment or repeal is

9 expressed in terms of an amendment to, or repeal of, a
2

•HR 1747 IH

1 section or other provision, the reference shall be consid2 ered to be made to a section or other provision of the Pub3 lic Health Service Act.

4 SEC. 2. PERMANENT EXTENSION OF PROGRAM.

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

6 233(g)) is amended by striking the last sentence of para7 graph (3).

8 (b) CONFORMING AMENDMENTS.—

9 (1) Section 224(k)(1)(A) (42 U.S.C.

10 233(k)(1)(A)) is amended by striking ‘‘each of the

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

12 ‘‘each fiscal year’’.

13 (2) Section 224(k)(2) (42 U.S.C. 233(k)(2)) is

14 amended by striking ‘‘each of the fiscal years 1993,

15 1994, and 1995’’ and inserting ‘‘each fiscal year’’.

16 SEC. 3. CLARIFICATION OF COVERAGE.

17 Section 224(g)(1) (42 U.S.C. 233(g)(1)) is amend18 ed—

19 (1) in the first sentence, by striking ‘‘officer,

20 employee, or contractor’’ and inserting ‘‘officer, gov21 erning board member, or employee of such an entity,

22 and any contractor’’; and

23 (2) in the second sentence, by inserting after

24 ‘‘officer,’’ the following ‘‘governing board member,’’.
3

•HR 1747 IH

1 SEC. 4. COVERAGE FOR SERVICES FURNISHED TO INDIVID2 UALS OTHER THAN CENTER PATIENTS.

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

4 (1) by redesignating paragraph (1) as para5 graph (1)(A); and

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

7 ‘‘(B) The deeming of any entity or officer, gov8 erning board member, employee, or contractor of the

9 entity to be an employee of the Public Health Serv10 ice under subparagraph (A) shall apply with respect

11 to services provided—

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

13 ‘‘(ii) subject to subparagraph (C), to indi14 viduals who are not patients of the entity.

15 ‘‘(C) Subparagraph (B)(ii) applies to services

16 provided to individuals who are not patients of an

17 entity if the Secretary determines, after reviewing an

18 application submitted under subparagraph (D), that

19 the provision of the services to such individuals—

20 ‘‘(i) benefits patients of the entity and gen21 eral populations that could be served by the en22 tity through community-wide intervention ef23 forts within the communities served by such en24 tity;

25 ‘‘(ii) facilitates the provision of services to

26 patients of the entity; or
4

•HR 1747 IH

1 ‘‘(iii) are otherwise required under an em2 ployment contract (or similar arrangement) be3 tween the entity and an officer, governing board

4 member, employee, or contractor of the entity.’’.

5 SEC. 5. APPLICATION PROCESS.

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

7 (42 U.S.C. 233(g)(1)) (as amended by section 4) is fur8 ther amended—

9 (1) in subparagraph (A), by inserting ‘‘and sub10 ject to the approval by the Secretary of an applica11 tion under subparagraph (D)’’ after ‘‘For purposes

12 of this section’’; and

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

14 ‘‘(D) The Secretary may not deem an entity or

15 an officer, governing board member, employee, or

16 contractor of the entity to be an employee of the

17 Public Health Service under subparagraph (A), and

18 may not apply such deeming to services described in

19 subparagraph (B)(ii), unless the entity has submit20 ted an application for such deeming to the Secretary

21 in such form and such manner as the Secretary shall

22 prescribe. The application shall contain detailed in23 formation, along with supporting documentation, to

24 verify that the entity, and the officer, governing

25 board member, employee, or contractor of the entity,
5

•HR 1747 IH

1 as the case may be, meets the requirements of sub2 paragraphs (B) and (C) of this paragraph and that

3 the entity meets the requirements of paragraphs (1)

4 through (4) of subsection (h).

5 ‘‘(E) The Secretary shall make a determination

6 of whether an entity or an officer, governing board

7 member, employee, or contractor of the entity is

8 deemed to be an employee of the Public Health

9 Service for purposes of this section within 30 days

10 after the receipt of an application under subpara11 graph (D). The determination of the Secretary that

12 an entity or an officer, governing board member,

13 employee, or contractor of the entity is deemed to be

14 an employee of the Public Health Service for pur15 poses of this section shall apply for the period speci16 fied by the Secretary under subparagraph (A).

17 ‘‘(F) Once the Secretary makes a determination

18 that an entity or an officer, governing board mem19 ber, employee, or contractor of an entity is deemed

20 to be an employee of the Public Health Service for

21 purposes of this section, the determination shall be

22 final and binding upon the Secretary and the Attor23 ney General and other parties to any civil action or

24 proceeding. Except as provided in subsection (i), the

25 Secretary and the Attorney General may not deter-
6

•HR 1747 IH

1 mine that the provision of services which are the

2 subject of such a determination are not covered

3 under this section or are not within the scope of em4 ployment or responsibility of the entity or its offi5 cers, governing board members, employees, or con6 tractors.

7 ‘‘(G) The Secretary, for good cause shown, may

8 reverse a determination under subparagraph (E).

9 The decision of the Secretary to reverse such a de10 termination shall be made on the record after oppor11 tunity for a full and fair hearing. Any such reversal

12 by the Secretary shall apply only after the entity re13 ceives notice of such reversal and shall only apply to

14 acts and omissions occurring after the date on which

15 such notice was received.’’.

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

17 233(h)) is amended—

18 (1) by striking the matter preceding paragraph

19 (1) and inserting the following: ‘‘The Secretary may

20 not approve an application under subsection

21 (g)(1)(D) unless the Secretary determines that the

22 entity—’’; and

23 (2) by striking ‘‘has fully cooperated’’ in para24 graph (4) and inserting ‘‘will fully cooperate’’.
7

•HR 1747 IH

1 SEC. 6. TIMELY RESPONSE TO FILING OF ACTION OR PRO2 CEEDING.

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

4 at the end thereof the following:

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

6 State court against any entity described in subsection

7 (g)(4) or any officer, governing board member, employee,

8 or any contractor of such an entity for damages described

9 in subsection (a), the Attorney General, within 15 days

10 after being notified of such filing, shall make an appear11 ance in such court and advise such court as to whether

12 the Secretary has determined under subsections (g) and

13 (h), that such entity, officer, governing board member,

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

15 employee of the Public Health Service for purposes of this

16 section with respect to the actions or omissions that are

17 the subject of such civil action or proceeding. Such advice

18 shall be deemed to satisfy the provisions of subsection (c)

19 that the Attorney General certify that an entity, officer,

20 governing board member, employee, or contractor of the

21 entity was acting within the scope of their employment or

22 responsibility.

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

24 court within the time period prescribed under paragraph

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

26 member, employee, or contractor of the entity named, the
8

•HR 1747 IH

1 civil action or proceeding shall be removed to the appro2 priate United States district court. The civil action or pro3 ceeding shall be stayed in such court until such court con4 ducts a hearing, and makes a determination, as to the ap5 propriate forum or procedure for the assertion of the claim

6 for damages described in subsection (a) and issues an

7 order consistent with such determination.’’.

8 SEC. 7. APPLICATION OF COVERAGE TO MANAGED CARE

9 PLANS.

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

11 6) is amended by adding at the end the following:

12 ‘‘(m)(1) An entity or officer, governing board mem13 ber, employee, or contractor of an entity described in sub14 section (g)(1) shall, for purposes of this section, be deemed

15 to be an employee of the Public Health Service with re16 spect to services provided to individuals who are enrollees

17 of a managed care plan if the entity contracts with such

18 managed care plan for the provision of services.

19 ‘‘(2) Each managed care plan which enters into a

20 contract with an entity described in subsection (g)(4) shall

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

22 employee, or contractor of the entity as meeting whatever

23 malpractice coverage requirements such plan may require

24 of contracting providers for a calendar year if such entity

25 or officer, governing board member, employee, or contrac-
9

•HR 1747 IH

1 tor of the entity has been deemed to be an employee of

2 the Public Health Service for purposes of this section for

3 such calendar year. Any plan which is found by the Sec4 retary on the record, after notice and an opportunity for

5 a full and fair hearing, to have violated this subsection

6 shall upon such finding cease, for a period to be deter7 mined by the Secretary, to receive and to be eligible to

8 receive any Federal funds under titles XVIII or XIX of

9 the Social Security Act.

10 ‘‘(3) For purposes of this subsection, the term ‘man11 aged care plan’ shall mean health maintenance organiza12 tions and similar entities that contract at-risk with payors

13 for the provision of health services or plan enrollees and

14 which contract with providers (such as entities described

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

16 plan enrollees.’’.

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

18 CONTRACTS.

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

20 amended to read as follows:

21 ‘‘(B) in the case of an individual who normally performs an average of less than 321 22 ⁄2

23 hours of services per week for the entity for the

24 period of the contract, the individual is a li25 censed or certified provider of services in the
10

•HR 1747 IH

1 fields of family practice, general internal medi2 cine, general pediatrics, or obstetrics and gyne3 cology.’’.

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

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

6 by striking ‘‘may determine, after notice and opportunity

7 for a hearing’’ and inserting ‘‘may on the record deter8 mine, after notice and opportunity for a full and fair hear9 ing’’.

10 SEC. 10. AMOUNT OF RESERVE FUND.

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

12 by striking ‘‘$30,000,000’’ and inserting ‘‘$10,000,000’’.

Æ