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 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,
SECTION 1. SHORT TITLE; REFERENCE.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Federally Supported Health Centers Assistance Act of
1995’’.
(b) REFERENCE.—Except as otherwise expressly pro-
vided, 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) (42 U.S.C.
233(g)) is amended by striking the last sentence of para-
graph (3).
(b) CONFORMING AMENDMENTS.—
(1) 
Section 
224(k)(1)(A) 
(42 
U.S.C.
233(k)(1)(A)) is amended by striking ‘‘each of the
fiscal years 1993, 1994, and 1995’’ and inserting
‘‘each fiscal year’’.
(2) Section 224(k)(2) (42 U.S.C. 233(k)(2)) is
amended by striking ‘‘each of the fiscal years 1993,
1994, and 1995’’ and inserting ‘‘each fiscal year’’.
SEC. 3. CLARIFICATION OF COVERAGE.
Section 224(g)(1) (42 U.S.C. 233(g)(1)) is amend-
ed—
(1) in the first sentence, by striking ‘‘officer,
employee, or contractor’’ and inserting ‘‘officer, gov-
erning board member, or employee of such an entity,
and any contractor’’; and
(2) in the second sentence, by inserting after
‘‘officer,’’ the following ‘‘governing board member,’’.
‘‘(iii) are otherwise required under an em-
ployment contract (or similar arrangement) be-
tween the entity and an officer, governing board
member, employee, or contractor of the entity.’’.
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 ‘‘and sub-
ject to the approval by the Secretary of an applica-
tion under subparagraph (D)’’ after ‘‘For purposes
of this section’’; and
(2) by adding at the end thereof the following:
‘‘(D) The Secretary may not deem an entity or
an officer, governing board member, employee, or
contractor of the entity to be an employee of the
Public Health Service under subparagraph (A), and
may not apply such deeming to services described in
subparagraph (B)(ii), unless the entity has submit-
ted an application for such deeming to the Secretary
in such form and such manner as the Secretary shall
prescribe. The application shall contain detailed in-
formation, along with supporting documentation, to
verify that the entity, and the officer, governing
board member, employee, or contractor of the entity,
as the case may be, meets the requirements of sub-
paragraphs (B) and (C) of this paragraph and that
the entity meets the requirements of paragraphs (1)
through (4) of subsection (h).
‘‘(E) The Secretary shall make a determination
of whether an entity or an 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 within 30 days
after the receipt of an application under subpara-
graph (D). The determination of the Secretary that
an entity or an officer, governing board member,
employee, or contractor of the entity is deemed to be
an employee of the Public Health Service for pur-
poses of this section shall apply for the period speci-
fied by the Secretary under subparagraph (A).
‘‘(F) Once the Secretary makes a determination
that an entity or an officer, governing board mem-
ber, employee, or contractor of an entity is deemed
to be an employee of the Public Health Service for
purposes of this section, the determination shall be
final and binding upon the Secretary and the Attor-
ney General and other parties to any civil action or
proceeding. Except as provided in subsection (i), the
Secretary and the Attorney General may not deter-
mine that the provision of services which are the
subject of such a determination are not covered
under this section or are not within the scope of em-
ployment or responsibility of the entity or its offi-
cers, governing board members, employees, or con-
tractors.
‘‘(G) The Secretary, for good cause shown, may
reverse a determination under subparagraph (E).
The decision of the Secretary to reverse such a de-
termination shall be made on the record after oppor-
tunity for a full and fair hearing. Any such reversal
by the Secretary shall apply only after the entity re-
ceives notice of such reversal and shall only apply to
acts and omissions occurring after the date on which
such notice was received.’’.
(b) APPROVAL PROCESS.—Section 224(h) (42 U.S.C.
233(h)) is amended—
(1) by striking the matter preceding paragraph
(1) and inserting the following: ‘‘The Secretary may
not 
approve 
an 
application 
under 
subsection
(g)(1)(D) unless the Secretary determines that the
entity—’’; and
(2) by striking ‘‘has fully cooperated’’ in para-
graph (4) and inserting ‘‘will fully cooperate’’.
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:
‘‘(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
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 the following:
‘‘(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
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 nor-
mally performs an average of less than 321⁄2
hours of services per week for the entity for the
period of the contract, the individual is a li-
censed or certified provider of services in the
fields of family practice, general internal medi-
cine, general pediatrics, or obstetrics and gyne-
cology.’’.
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’’.
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