Federally Supported Health Centers Assistance Act of 1995
PL 104-73 (H.R.1747), enacted 12/26/1995

PUBLIC LAW 104-73—DEC. 26, 1995 
109 STAT. 777 
Public Law 104-73 
104th Congress 
An Act 
To amend the Public Health Service Act to permanently extend and clarify 
malpractice coverage for health centers, and for other purposes. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
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 considered to be made to a section or other 
provision of the Public 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 follows through 
"thereafter)"; and 
(2) in paragraph (2), by striking "for each of the fiscal 
years 1993, 1994, and 1995" and inserting "for each fiscal 
year". 
SEC. 3. CLARIFICATION OF COVERAGE. 
Section 224 (42 U.S.C. 233) is amended— 
(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 described 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 para-
graph (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 
Dec. 26, 1995 
[H.R. 1747] 
Federally 
Supported 
Health Centers 
Assistance Act of 
1995 
42 u s e 201 note. 
109 STAT. 778 
PUBLIC LAW 104-73—DEC. 26, 1995 
(2) in subsection (k)(3), by inserting "governing board mem-
ber," after "officer,". 
SEC. 4. COVERAGE FOR SERVICES FURNISHED TO INDIVIDUALS OTHER 
THAN CENTER PATIENTS. 
Section 224(g)(1) (42 U.S.C. 233(g)) is amended— 
(1) by redesignating paragraph (1) as paragraph (1)(A); 
and 
(2) by adding at the end thereof the following: 
"(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 provided— 
"(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 provided to individ-
uals 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 patients of the 
entity; or 
"(iii) are otherwise required under an emplo3mient contract 
(or similar arrangement) between 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 further 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 application 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, employee, 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 subparagraph (B)(ii), unless the entity has 
submitted an api^ication for such deeming to the Secretary in 
such form and such manner as the Secretary shall prescribe. The 
application shall contain detailed information, along with support-
ing documentation, to verify that the entity, and the officer, govern-
ing board member, employee, or contractor of the entity, as the 
case may be, meets the requirements of subparagraphs (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 subparagraph (D). The deter-
mination of the Secretary that an entity or an officer, governing 
board member, employee, or contractor of the entity is deemed 
PUBLIC LAW 104-73—DEC. 26, 1995 
109 STAT. 779 
to be an employee of the Public Health Service for purposes of 
this section shall apply for the period specified by the Secretary 
under subparagraph (A). 
"(F) Once the Secretary makes a determination that an entity 
or an officer, governing board member, 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 Attorney General 
and other parties to any civil action or proceeding. Except as pro-
vided 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 subparagraph (D): 
"(i) The Secretary may not consider the entity in making 
estimates under subsection (k)(l). 
"(ii) This section does not affect any authority of the entity 
to purchase medical malpractice liability 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 subsection to the entity. With respect to 
such election by the entity: 
"(i) The election is effective upon the expiration of the Effective date. 
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 submitted an application under subpara-
graph (D). 
"(iv) If after making the election the entity submits an 
application under subparagraph (D), the election does not pre-
clude the Secretary from approving the application (and thereby 
restoring the applicability of this subsection to the entity and 
each officer, governing board member, employee, and contractor 
of the entity, subject to the provisions of this subsection and 
the subsequent provisions of this section.". 
(b) APPROVAL PROCESS.—Section 224(h) (42 U.S.C. 233(h)) is 
amended— 
(1) in the matter preceding paragraph (1), by striking "Not-
withstanding" 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 
determines that the entity—"; and 
(2) by striking "has fully cooperated" in paragraph (4) and 
inserting "will fully cooperate". 
(c) DELAYED APPLICABILITY FOR CURRENT PARTICIPANTS.—If, 42 use 233 note. 
on the day before the date of the enactment 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 
109 STAT. 780 
PUBLIC LAW 104-73—DEC. 26, 1995 
condition under paragraph (1)(D) of such section (as added by 
subsection (a) of this section) that an appHcation be approved with 
respect to the entity does not apply until the expiration of the 
180-day period beginning on such date. 
SEC. 6. TIMELY RESPONSE TO FILING OF ACTION OR PROCEEDING. 
Section 224 (42 U.S.C. 233) is amended by adding at the end 
thereof the following subsection: 
"(1)(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 
appearance 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 contrac-
tor 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, govern-
ing board member, employee, or contractor of the entity was acting 
within the scope of their emplo3anent 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 appropriate United States district court. The 
civil action or proceeding shall be stayed in such court until such 
court conducts a hearing, and makes a determination, as to the 
appropriate 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. 
42 use 233. 
Section 224 (42 U.S.C. 223) (as amended by section 6) is amend-
ed by adding at the end thereof the following subsection: 
"(m)(l) An entity or officer, governing board member, employee, 
or contractor of an entity described in subsection (g)(1) shall, for 
purposes of this section, be deemed to be an employee of the 
Public Health Service with respect to services provided to individ-
uals who are enroUees 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 require-
ments such plan may require of contracting providers for a calendar 
year if such entity or officer, governing board member, employee, 
or contractor 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 Secretary 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 determined by the Secretary, to receive and 
to be eligible to receive any Federal funds under titles XVIII or 
XIX of the Social Security Act. 
PUBLIC LAW 104-73—DEC. 26, 1995 
109 STAT. 781 
"(3) For purposes of this subsection, the term 'managed care 
plan' shall mean health maintenance organizations 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 PROVTOERS UNDER CONTRACTS. 
Section 224(g)(5)(B) (42 U.S.C. 223(g)(5)(B)) is amended to read 42 USC 233. 
as follows: 
"(B) in the case of an individual who normally performs 
an average of less than 32 V2 hours of services per week for 
the entity for the period of the contract, the individual is 
a licensed or certified provider of services in the fields of family 
practice, general internal medicine, general pediatrics, or 
obstetrics and gynecology.". 
SEC. 
9
. 
DUE 
PROCESS 
FOR 
LOSS 
OF 
COVERAGE. 
Section 224(i)(l) (42 U.S.C. 233(i)(l)) is amended by striking 
"may determine, after notice and opportunity for a hearing" and 
inserting "may on the record determine, after notice and opportunity 
for a full and fair hearing". 
SEC. 10. AMOUNT OF RESERVE FUND. 
Section 224(k)(2) (42 U.S.C. 223(k)(2)) is amended by striking 42 USC 233. 
"$30,000,000" and inserting "$ 10,000,000". 
SEC. 11. REPORT ON RISK EXPOSURE OF COVERED ENTITIES. 
Section 224 (as amended by section 7) is amended by adding 
at the end thereof the following subsection: 
"(n)(l) Not later than one year after the date of the enactment 
of the Federally Supported Health Centers Assistance Act of 1995, 
the Comptroller General of the United 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. 
"(C) The value of private sector risk-management 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 liability 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 malpractice liability insur-
ance with the cost of coverage pursuant to this section; 
and 
"(ii) an analysis of whether the cost of premiums for 
private medical malpractice liability insurance coverage 
is consistent with the liability 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 mem-
bers, employees, and contractors of such entities who have 
109 STAT. 782 
PUBLIC LAW 104-73—DEC. 26, 1995 
been deemed to be employees for purposes of this section) 
would have directly or indirectly paid in premiums to obtain 
medical malpractice liability insurance coverage if this sec-
tion 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 (together with the offi-
cers, governing board members, employees, and contractors 
of such entities 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 insurance that 
such entities (together with the officers, 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 enactment of 
the Federally Supported Health Centers Assistance Act 
of 1995. 
"(C) An estimate of the medical malpractice liability 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 medical 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 experience of entities that have been 
deemed as employees for purposes of this section. 
"(3) In preparing the report under paragraph (1), the Comptrol-
ler General of the United States shall consult with public and 
PUBLIC LAW 104-73—DEC. 26, 1995 
109 STAT. 783 
private entities with expertise on the matters with which the report 
is concerned.". 
Approved December 26, 1995. 
LEGISLATIVE HISTORY—H.R. 1747: 
HOUSE REPORTS: No. 104-398 (Comm. on Commerce). 
CONGRESSIONAL RECORD, Vol. 141 (1995): 
Dec. 12, considered and passed House. 
Dec. 14, considered and passed Senate.