II

104TH CONGRESS

1ST SESSION S. 1471

To make permanent the program of malpractice coverage for health centers

under the Federal Tort Claims Act, and for other purposes.

IN THE SENATE OF THE UNITED STATES

DECEMBER 12, 1995

Mr. HATCH (for himself and Mr. KENNEDY) introduced the following bill;

which was read twice and referred to the Committee on the Judiciary

A BILL

To make permanent the program of malpractice coverage

for health centers under the Federal Tort Claims Act,

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; FINDINGS; REFERENCE.

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

5 ‘‘Federal Tort Claims Act Malpractice Coverage for

6 Health Centers Extension Act of 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

10 section or other provision, the reference shall be consid-
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1 ered to be made to a section or other provision of the Pub2 lic Health Service Act.

3 SEC. 2. PERMANENT EXTENSION OF PROGRAM.

4 (a) IN GENERAL.—Section 224(g) (42 U.S.C. 233

5 (g)) is amended by striking the last sentence of paragraph

6 (3).

7 (b) CONFORMING AMENDMENTS.—

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

9 233(k)(1)(A)) is amended by striking ‘‘each of the

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

11 ‘‘each fiscal year’’.

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

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

14 1994, and 1995’’ and inserting ‘‘each fiscal year’’.

15 SEC. 3. CLARIFICATION OF COVERAGE.

16 Section 224(g)(1) (42 U.S.C. 233(g)(1)) is amend17 ed—

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

19 employee, or contractor’’ and inserting ‘‘officer, gov20 erning board member, or employee of such an entity,

21 and any contractor’’; and

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

23 ‘‘officer,’’ the following ‘‘governing board member,’’.
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1 SEC. 4. COVERAGE FOR SERVICES FURNISHED TO INDIVID2 UALS OTHER THAN CENTER PATIENTS.

3 Section 224(g) (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, governing

8 board member, employee, or contractor of the entity to

9 be an employee of the Public Health Service under sub10 paragraph (A) shall apply with respect to services pro11 vided—

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

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

14 who are not patients of the entity.

15 ‘‘(C) Subparagraph (B)(ii) applies to services pro16 vided to individuals who are not patients of an entity if

17 the Secretary determines, after reviewing an application

18 submitted under subparagraph (D), that the provision of

19 the services to such individuals—

20 ‘‘(i) benefits patients of the entity and general

21 populations that could be served by the entity

22 through community-wide intervention efforts within

23 the communities served by such entity;

24 ‘‘(ii) facilitates the provision of services to pa25 tients of the entity; or
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1 ‘‘(iii) are otherwise required under an employ2 ment contract (or similar arrangement) between the

3 entity and an officer, governing board member, em4 ployee, 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 new subparagraphs:

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

16 officer, governing board member, employee, or contractor

17 of the entity to be an employee of the Public Health Serv18 ice under subparagraph (A), and may not apply such

19 deeming to services described in subparagraph (B)(ii), un20 less the entity has submitted an application for such deem21 ing to the Secretary in such form and such manner as

22 the Secretary shall prescribe. The application shall contain

23 detailed information, along with supporting documenta24 tion, to verify that the entity, and the officer, governing

25 board member, employee, or contractor of the entity, as
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1 the case may be, meets the requirements of subparagraphs

2 (B) and (C) of this paragraph and that the entity meets

3 the requirements of paragraphs (1) through (4) of sub4 section (h).

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

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

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

8 employee of the Public Health Service for purposes of this

9 section within 30 days after the receipt of an application

10 under subparagraph (D). The determination of the Sec11 retary that an entity or an officer, governing board mem12 ber, employee, or contractor of the entity is deemed to be

13 an employee of the Public Health Service for purposes of

14 this section shall apply for the period specified by the Sec15 retary under subparagraph (A).

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

17 an entity or an officer, governing board member, em18 ployee, or contractor of an entity is deemed to be an em19 ployee of the Public Health Service for purposes of this

20 section, the determination shall be final and binding upon

21 the Secretary and the Attorney General and other parties

22 to any civil action or proceeding. Except as provided in

23 subsection (i), the Secretary and the Attorney General

24 may not determine that the provision of services which are
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1 the subject of such a determination are not covered under

2 this section.’’.

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

4 233(h)) is amended—

5 (1) by striking the matter preceding paragraph

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

7 not approve an application under subsection

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

9 entity—’’; and

10 (2) by striking ‘‘has fully cooperated’’ in para11 graph (4) and inserting ‘‘will fully cooperate’’.

12 SEC. 6. TIMELY RESPONSE TO FILING OF ACTION OR PRO13 CEEDING.

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

15 at the end thereof the following new subsection:

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

17 State court against any entity described in subsection

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

19 or any contractor of such an entity for damages described

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

21 after being notified of such filing, shall make an appear22 ance in such court and advise such court as to whether

23 the Secretary has determined under subsections (g) and

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

25 employee, or contractor of the entity is deemed to be an
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1 employee of the Public Health Service for purposes of this

2 section with respect to the actions or omissions that are

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

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

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

6 governing board member, employee, or contractor of the

7 entity was acting within the scope of their employment or

8 responsibility.

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

10 court within the time period prescribed under paragraph

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

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

13 civil action or proceeding shall be removed to the appro14 priate United States district court. The civil action or pro15 ceeding shall be stayed in such court until such court con16 ducts a hearing, and makes a determination, as to the ap17 propriate forum or procedure for the assertion of the claim

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

19 order consistent with such determination.’’.

20 SEC. 7. APPLICATION OF COVERAGE TO MANAGED CARE

21 PLANS.

22 Section 224 (42 U.S.C. 233) (as amended by section

23 6) is further amended by adding at the end the following

24 new subsection:
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1 ‘‘(m)(1) An entity described in subsection (g)(4) or

2 an officer, governing board member, employee, or contrac3 tor of such an entity shall, for purposes of this section,

4 be deemed to be an employee of the Public Health Service

5 with respect to services provided to individuals who are

6 enrollees of a managed care plan if the entity contracts

7 with such managed care plan for the provision of services.

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

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

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

11 employee, or contractor of the entity as meeting whatever

12 malpractice coverage requirements such plan may require

13 of contracting providers for a calendar year if such entity

14 or officer, governing board member, employee, or contrac15 tor of the entity has been deemed to be an employee of

16 the Public Health Service for purposes of this section for

17 such calendar year. Any plan which is found by the Sec18 retary on the record, after notice and an opportunity for

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

20 shall, upon such finding cease, for a period to be deter21 mined by the Secretary, to receive and to be eligible to

22 receive any Federal funds under title XVIII or XIX of

23 the Social Security Act.

24 ‘‘(3) For purposes of this subsection, the term ‘man25 aged care plan’ shall mean health maintenance organiza-
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1 tions and similar entities that contract at-risk with payors

2 for the provision of health services to plan enrollees and

3 which contract with providers (such as entities described

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

5 plan enrollees.’’.

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

7 CONTRACTS.

8 Subparagraph (B) of section 224(g)(5) (42 U.S.C.

9 233 (g)(5)(B)) is amended to read as follows:

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

performs an average of less than 321 11 ⁄2 hours of serv12 ices per week for the entity for the period of the con13 tract, the individual is a licensed or certified pro14 vider of services in the fields of family practice, gen15 eral internal medicine, general pediatrics, or obstet16 rics and gynecology.’’.

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

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

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

20 for a hearing’’ and inserting ‘‘may on the record deter21 mine, after notice and opportunity for a full and fair hear22 ing’’.
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1 SEC. 10. REPORT ON RISK EXPOSURE OF COVERED ENTI2 TIES.

3 (a) IN GENERAL.—Not later than December 31,

4 1997, the General Accounting Office shall submit to the

5 Congress a report on the medical malpractice liability

6 claims experience of entities that have been deemed to be

7 employees for purposes of section 224 of the Public Health

8 Service Act and the risk exposure associated with such en9 tities.

10 (b) CONTENTS OF REPORT.—The report required

11 under subsection (a) shall include an analysis by the Gen12 eral Accounting Office comparing—

13 (1) the estimate of the General Accounting Of14 fice of the aggregate amounts that entities described

15 in subsection (a) (together with the officers, govern16 ing board members, employees, and contractors of

17 such entities who have been deemed to be employees

18 for purposes of section 224 of the Public Health

19 Service Act) would have paid to obtain medical mal20 practice liability insurance coverage if such section

21 224 were not in effect; with

22 (2) the aggregate amounts by which the grants

23 received by such entities under such section 224

24 were reduced pursuant to subsection (k)(2) of such

25 section 224.
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1 (c) CONSULTATION.—In preparing the report under

2 subsection (a), the General Accounting Office shall consult

3 with public and private entities with expertise on the mat4 ters with which the report is concerned.

5 SEC. 11. AMOUNT OF RESERVE FUND.

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

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

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