II
104TH CONGRESS
1ST SESSION
H. R. 1747
IN THE SENATE OF THE UNITED STATES
DECEMBER 13, 1995
Received
AN ACT
To amend the Public Health Service Act to permanently
extend and clarify malpractice coverage for health cen-
ters, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE; REFERENCES.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Federally Supported Health Centers Assistance Act of
1995’’.
(b) REFERENCES.—Except as otherwise expressly
provided, whenever in this Act an amendment or repeal
is expressed in terms of an amendment to, or repeal of,
a section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the Pub-
lic Health Service Act.
SEC. 2. PERMANENT EXTENSION OF PROGRAM.
(a) IN GENERAL.—Section 224(g)(3) (42 U.S.C.
233(g)(3)) is amended by striking the last sentence.
(b) CONFORMING AMENDMENTS.—Section 224(k)
(42 U.S.C. 233(k)) is amended—
(1) in paragraph (1)(A)—
(A) by striking ‘‘For each of the fiscal
years 1993, 1994, and 1995’’ and inserting
‘‘For each fiscal year’’; and
(B) by striking ‘‘(except’’ and all that fol-
lows through ‘‘thereafter)’’; and
(2) in paragraph (2), by striking ‘‘for each of
the fiscal years 1993, 1994, and 1995’’ and insert-
ing ‘‘for each fiscal year’’.
SEC. 3. CLARIFICATION OF COVERAGE.
Section 224 (42 U.S.C. 233) is amended—
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(1) in subsection (g)(1), by striking ‘‘an entity
described in paragraph (4)’’ in the first sentence and
all that follows through ‘‘contractor’’ in the second
sentence and inserting the following: ‘‘an entity de-
scribed in paragraph (4), and any officer, governing
board member, or employee of such an entity, and
any contractor of such an entity who is a physician
or other licensed or certified health care practitioner
(subject to paragraph (5)), shall be deemed to be an
employee of the Public Health Service for a calendar
year that begins during a fiscal year for which a
transfer was made under subsection (k)(3) (subject
to paragraph (3)). The remedy against the United
States for an entity described in paragraph (4) and
any officer, governing board member, employee, or
contractor’’; and
(2) in subsection (k)(3), by inserting ‘‘govern-
ing board member,’’ after ‘‘officer,’’.
SEC. 4. COVERAGE FOR SERVICES FURNISHED TO INDIVID-
UALS OTHER THAN CENTER PATIENTS.
Section 224(g)(1) (42 U.S.C. 233(g)) is amended—
(1) by redesignating paragraph (1) as para-
graph (1)(A); and
(2) by adding at the end thereof the following:
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‘‘(B) The deeming of any entity or officer, governing
board member, employee, or contractor of the entity to
be an employee of the Public Health Service for purposes
of this section shall apply with respect to services pro-
vided—
‘‘(i) to all patients of the entity, and
‘‘(ii) subject to subparagraph (C), to individuals
who are not patients of the entity.
‘‘(C) Subparagraph (B)(ii) applies to services pro-
vided to individuals who are not patients of an entity if
the Secretary determines, after reviewing an application
submitted under subparagraph (D), that the provision of
the services to such individuals—
‘‘(i) 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;
‘‘(ii) facilitates the provision of services to pa-
tients of the entity; or
‘‘(iii) are otherwise required under an employ-
ment contract (or similar arrangement) between the
entity and an officer, governing board member, em-
ployee, or contractor of the entity.’’.
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SEC. 5. APPLICATION PROCESS.
(a) APPLICATION REQUIREMENT.—Section 224(g)(1)
(42 U.S.C. 233(g)(1)) (as amended by section 4) is fur-
ther amended—
(1) in subparagraph (A), by inserting after
‘‘For purposes of this section’’ the following: ‘‘and
subject to the approval by the Secretary of an appli-
cation under subparagraph (D)’’; and
(2) by adding at the end thereof the following:
‘‘(D) The Secretary may not under subparagraph (A)
deem an entity or an officer, governing board member, em-
ployee, or contractor of the entity to be an employee of
the Public Health Service for purposes of this section, and
may not apply such deeming to services described in sub-
paragraph (B)(ii), unless the entity has submitted an ap-
plication for such deeming to the Secretary in such form
and such manner as the Secretary shall prescribe. The ap-
plication shall contain detailed information, along with
supporting documentation, to verify that the entity, and
the officer, governing board member, employee, or con-
tractor of the entity, as the case may be, meets the re-
quirements of subparagraphs (B) and (C) of this para-
graph and that the entity meets the requirements of para-
graphs (1) through (4) of subsection (h).
‘‘(E) The Secretary shall make a determination of
whether an entity or an officer, governing board member,
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employee, or contractor of the entity is deemed to be an
employee of the Public Health Service for purposes of this
section within 30 days after the receipt of an application
under subparagraph (D). The determination of the Sec-
retary that an entity or an officer, governing board mem-
ber, employee, or contractor of the entity is deemed to be
an employee of the Public Health Service for purposes of
this section shall apply for the period specified by the Sec-
retary under subparagraph (A).
‘‘(F) Once the Secretary makes a determination that
an entity or an officer, governing board member, em-
ployee, or contractor of an entity is deemed to be an em-
ployee of the Public Health Service for purposes of this
section, the determination shall be final and binding upon
the Secretary and the Attorney General and other parties
to any civil action or proceeding. Except as provided in
subsection (i), the Secretary and the Attorney General
may not determine that the provision of services which are
the subject of such a determination are not covered under
this section.
‘‘(G) In the case of an entity described in paragraph
(4) that has not submitted an application under subpara-
graph (D):
‘‘(i) The Secretary may not consider the entity
in making estimates under subsection (k)(1).
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‘‘(ii) This section does not affect any authority
of the entity to purchase medical malpractice liabil-
ity insurance coverage with Federal funds provided
to the entity under section 329, 330, 340, or 340A.
‘‘(H) In the case of an entity described in paragraph
(4) for which an application under subparagraph (D) is
in effect, the entity may, through notifying the Secretary
in writing, elect to terminate the applicability of this sub-
section to the entity. With respect to such election by the
entity:
‘‘(i) The election is effective upon the expiration
of the 30-day period beginning on the date on which
the entity submits such notification.
‘‘(ii) Upon taking effect, the election terminates
the applicability of this subsection to the entity and
each officer, governing board member, employee, and
contractor of the entity.
‘‘(iii) Upon the effective date for the election,
clauses (i) and (ii) of subparagraph (G) apply to the
entity to the same extent and in the same manner
as such clauses apply to an entity that has not sub-
mitted an application under subparagraph (D).
‘‘(iv) If after making the election the entity
submits an application under subparagraph (D), the
election does not preclude the Secretary from ap-
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proving the application (and thereby restoring the
applicability of this subsection to the entity and each
officer, governing board member, employee, and con-
tractor of the entity, subject to the provisions of this
subsection and the subsequent provisions of this sec-
tion.’’.
(b) APPROVAL PROCESS.—Section 224(h) (42 U.S.C.
233(h)) is amended—
(1) in the matter preceding paragraph (1), by
striking ‘‘Notwithstanding’’ and all that follows
through ‘‘entity—’’ and inserting the following:
‘‘The Secretary may not approve an application
under subsection (g)(1)(D) unless the Secretary de-
termines that the entity—’’; and
(2) by striking ‘‘has fully cooperated’’ in para-
graph (4) and inserting ‘‘will fully cooperate’’.
(c) DELAYED APPLICABILITY FOR CURRENT PAR-
TICIPANTS.—If, on the day before the date of the enact-
ment of this Act, an entity was deemed to be an employee
of the Public Health Service for purposes of section 224(g)
of the Public Health Service Act, the condition under
paragraph (1)(D) of such section (as added by subsection
(a) of this section) that an application be approved with
respect to the entity does not apply until the expiration
of the 180-day period beginning on such date.
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SEC. 6. TIMELY RESPONSE TO FILING OF ACTION OR PRO-
CEEDING.
Section 224 (42 U.S.C. 233) is amended by adding
at the end thereof the following subsection:
‘‘(l)(1) If a civil action or proceeding is filed in a
State court against any entity described in subsection
(g)(4) or any officer, governing board member, employee,
or any contractor of such an entity for damages described
in subsection (a), the Attorney General, within 15 days
after being notified of such filing, shall make an appear-
ance in such court and advise such court as to whether
the Secretary has determined under subsections (g) and
(h), that such entity, officer, governing board member,
employee, or contractor of the entity is deemed to be an
employee of the Public Health Service for purposes of this
section with respect to the actions or omissions that are
the subject of such civil action or proceeding. Such advice
shall be deemed to satisfy the provisions of subsection (c)
that the Attorney General certify that an entity, officer,
governing board member, employee, or contractor of the
entity was acting within the scope of their employment or
responsibility.
‘‘(2) If the Attorney General fails to appear in State
court within the time period prescribed under paragraph
(1), upon petition of any entity or officer, governing board
member, employee, or contractor of the entity named, the
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civil action or proceeding shall be removed to the appro-
priate United States district court. The civil action or pro-
ceeding shall be stayed in such court until such court con-
ducts a hearing, and makes a determination, as to the ap-
propriate forum or procedure for the assertion of the claim
for damages described in subsection (a) and issues an
order consistent with such determination.’’.
SEC. 7. APPLICATION OF COVERAGE TO MANAGED CARE
PLANS.
Section 224 (42 U.S.C. 223) (as amended by section
6) is amended by adding at the end thereof the following
subsection:
‘‘(m)(1) An entity or officer, governing board mem-
ber, employee, or contractor of an entity described in sub-
section (g)(1) shall, for purposes of this section, be deemed
to be an employee of the Public Health Service with re-
spect to services provided to individuals who are enrollees
of a managed care plan if the entity contracts with such
managed care plan for the provision of services.
‘‘(2) Each managed care plan which enters into a
contract with an entity described in subsection (g)(4) shall
deem the entity and any officer, governing board member,
employee, or contractor of the entity as meeting whatever
malpractice coverage requirements such plan may require
of contracting providers for a calendar year if such entity
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or officer, governing board member, employee, or contrac-
tor of the entity has been deemed to be an employee of
the Public Health Service for purposes of this section for
such calendar year. Any plan which is found by the Sec-
retary on the record, after notice and an opportunity for
a full and fair hearing, to have violated this subsection
shall upon such finding cease, for a period to be deter-
mined by the Secretary, to receive and to be eligible to
receive any Federal funds under titles XVIII or XIX of
the Social Security Act.
‘‘(3) For purposes of this subsection, the term ‘man-
aged care plan’ shall mean health maintenance organiza-
tions and similar entities that contract at-risk with payors
for the provision of health services or plan enrollees and
which contract with providers (such as entities described
in subsection (g)(4)) for the delivery of such services to
plan enrollees.’’.
SEC. 8. COVERAGE FOR PART-TIME PROVIDERS UNDER
CONTRACTS.
Section 224(g)(5)(B) (42 U.S.C. 223(g)(5)(B)) is
amended to read as follows:
‘‘(B) in the case of an individual who normally
performs an average of less than 321⁄2 hours of serv-
ices per week for the entity for the period of the con-
tract, the individual is a licensed or certified pro-
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vider of services in the fields of family practice, gen-
eral internal medicine, general pediatrics, or obstet-
rics and gynecology.’’.
SEC. 9. DUE PROCESS FOR LOSS OF COVERAGE.
Section 224(i)(1) (42 U.S.C. 233(i)(1)) is amended
by striking ‘‘may determine, after notice and opportunity
for a hearing’’ and inserting ‘‘may on the record deter-
mine, after notice and opportunity for a full and fair hear-
ing’’.
SEC. 10. AMOUNT OF RESERVE FUND.
Section 224(k)(2) (42 U.S.C. 223(k)(2)) is amended
by striking ‘‘$30,000,000’’ and inserting ‘‘$10,000,000’’.
SEC. 11. REPORT ON RISK EXPOSURE OF COVERED ENTI-
TIES.
Section 224 (as amended by section 7) is amended
by adding at the end thereof the following subsection:
‘‘(n)(1) Not later than one year after the date of the
enactment of the Federally Supported Health Centers As-
sistance Act of 1995, the Comptroller General of the Unit-
ed States shall submit to the Congress a report on the
following:
‘‘(A) The medical malpractice liability claims
experience of entities that have been deemed to be
employees for purposes of this section.
‘‘(B) The risk exposure of such entities.
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‘‘(C) The value of private sector risk-manage-
ment services, and the value of risk-management
services and procedures required as a condition of
receiving a grant under section 329, 330, 340, or
340A.
‘‘(D) A comparison of the costs and the benefits
to taxpayers of maintaining medical malpractice li-
ability coverage for such entities pursuant to this
section, taking into account—
‘‘(i) a comparison of the costs of premiums
paid by such entities for private medical mal-
practice liability insurance with the cost of cov-
erage pursuant to this section; and
‘‘(ii) an analysis of whether the cost of pre-
miums for private medical malpractice liability
insurance coverage is consistent with the liabil-
ity claims experience of such entities.
‘‘(2) The report under paragraph (1) shall include the
following:
‘‘(A) A comparison of—
‘‘(i) an estimate of the aggregate amounts
that such entities (together with the officers,
governing board members, employees, and con-
tractors of such entities who have been deemed
to be employees for purposes of this section)
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would have directly or indirectly paid in pre-
miums to obtain medical malpractice liability
insurance coverage if this section were not in
effect; with
‘‘(ii) the aggregate amounts by which the
grants received by such entities under this Act
were reduced pursuant to subsection (k)(2).
‘‘(B) A comparison of—
‘‘(i) an estimate of the amount of privately
offered such insurance that such entities (to-
gether with the officers, governing board mem-
bers, employees, and contractors of such enti-
ties who have been deemed to be employees for
purposes of this section) purchased during the
three-year period beginning on January 1,
1993; with
‘‘(ii) an estimate of the amount of such in-
surance that such entities (together with the of-
ficers, governing board members, employees,
and contractors of such entities who have been
deemed to be employees for purposes of this
section) will purchase after the date of the en-
actment of the Federally Supported Health
Centers Assistance Act of 1995.
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‘‘(C) An estimate of the medical malpractice li-
ability loss history of such entities for the 10-year
period preceding October 1, 1996, including but not
limited to the following:
‘‘(i) Claims that have been paid and that
are estimated to be paid, and legal expenses to
handle such claims that have been paid and
that are estimated to be paid, by the Federal
Government pursuant to deeming entities as
employees for purposes of this section.
‘‘(ii) Claims that have been paid and that
are estimated to be paid, and legal expenses to
handle such claims that have been paid and
that are estimated to be paid, by private medi-
cal malpractice liability insurance.
‘‘(D) An analysis of whether the cost of premiums
for private medical malpractice liability insurance
coverage is consistent with the liability claims experi-
ence of entities that have been deemed as employees
for purposes of this section.
‘‘(3) In preparing the report under paragraph (1), the
Comptroller General of the United States shall consult
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with public and private entities with expertise on the mat-
ters with which the report is concerned.’’.
Passed the House of Representatives December 12,
1995.
Attest:
ROBIN H. CARLE,
Clerk.